Over the last 20 years the world has seen the continued globalization of the labor force, rapid development of technology and an incredible rise in the value of gold, silver, and other commodities. What does that change look like from the perspective of wealth creation?
Before scrolling down, take a guess. Where would you guess the wealth of the world in concentrated? You probably placed individuals and businesses located in the United States as the wealthiest. If you guessed this, you are right. On an internationally comparable basis, individuals and businesses located in the United States were worth an estimated $129 trillion in calendar year 2011.
Which nation is second? Is it a European country like the Germany or France? Perhaps its the resurgence of the Russians? What about the Chinese or Indians?
Well, look at the following figures. (If you like data visualization, this Tableau Public link has a more detailed graphical look at the wealth of nations from 1990 to 2011, including the nations at the bottom).
The first figure contains estimated wealth by nation in 1990. It shows the wealth of individuals and businesses in the United States with a commanding lead at about $50 trillion, about $23 trillion more than its followers, the Japanese, who show a wealth of about $27 trillion.
The second figure shows the estimated wealth of nation in 2011. Individuals and businesses located in the United States still have the wealth advantage – a quite considerable advantage of about $66 trillion. Which nation is in second place? Surprisingly, its the Chinese, with a national wealth of about $63 trillion.
The last figure here is a table comparing how wealth looked in 1990 compared to 2011.
Besides the amazing growth in the Chinese wealth – from $3 trillion to $63 trillion – does anything else stand out?
Well, the data confirm a few common assumptions.
The data shows the wealth of the European countries - the Germans the wealthiest among the European countries at $31 trillion, followed by the French at $24 trillion, the British at $21 trillion, and the Italians at $19 trillion.
The data also shows the strengthening of some of the South American countries, including Brazil at an estimated $21 trillion and Mexico at an estimated $10 trillion.
Another well-known assumption that is confirmed by the data is the lack of an African country among the world’s wealthiest. The wealthiest country in Africa is South Africa at about $3.5 trillion or about the same amount of wealth in 2011 as the Chinese held in 1990.
With these historical wealth estimates as the background, what would you guess the next 50 years would look like? In doing some simple growth rate calculations, the only country with a reasonable chance to catch the Americans within the next 50 years is China.
The wealth of individuals in the United States continues to have a sizeable lead over the Chinese and smaller European countries. When another nation will catch up with the United States is anyone’s guess, although it looks like the Chinese have a reasonable chance to surpass the United States within the next 50 years.
