Over the last few decades American manufacturers slowly lost their competitive edge due to their policy of protecting their oligopolistic domestic markets. Always a believer in the big two theory the U.S. markets never encouraged multiple producers but relied on the few big corporations in every field despite their massive domestic markets. This made the producers enjoy more than adequate margins for comfortable growth and large scale futuristic investment but in the process they lost their competitive edge to really perform and survive in rough and tumble global markets of the emerging economies.
The situation further deteriorated since the eighties when America started consciously withdrawing its presence from the manufacturing industry and move rapidly towards the service sector, where it was much easier to create scalable businesses without soiling the hands. Whereas the service sector provided high turnovers and improved profit margins, it did not call for the complex skill sets that the manufacturing sector demanded. As a result it was only the high level of automation that made the American manufacturing industry sustain a diminished market presence in areas of competitive technologies where Asian manufacturers had made inroads.
Europe too followed suit and created a niche high margins market within the EU protecting both the companies and its people from real need of fighting bloody turf battles in the global markets where prices where low and competition intense. The EU was a large enough market for companies to grow big and prosperous but once again lost their competitive edge due to EU protections and barriers.
During this period the emerging economies started finding their footings due to the growth of the private sector after the global demise of the communist-socialist philosophy , the end of the USSR and the arrival of Deng who had the gumption and courage to steer China away from the Maoist path. This led to rapid investments in the private sector in the emerging economies particularly the very large BRIC nations Brazil, Russia, India and China , who not only accounted for a third of the of the global population and landmass but had both the highest growth rates and savings making the developed nations take initiatives to create the G20 that would eventually replace the G7 as the worlds principle decision making body.
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