Jim O'Neill, Chairman of Goldman Sachs Asset Management, on the challenges and opportunities presentend by the BRIC for London...

Jim O'Neill, Chairman of Goldman Sachs Asset Management, on the challenges and opportunities presentend by the BRIC for London...

Earlier this week, I was told by a London based Chinese official that over the extended period of the Olympics, they are anticipating some 250,000 tourists from China and Hong Kong to London. The same person told me that last Boxing Day, 26 December, Chinese tourists spent £100 million in one day in London.

A couple of years ago, Bernard Arnault, the CEO of Louis Vuitton set me a quiz as to which nationality was the biggest spending visitor to their London flagship store. I quickly answered China, but I was wrong, it was Nigeria. This week, a GS colleague of mine had been travelling in Bangladesh with his partner to various educational establishments, and he was pounced on as someone who works for Goldman Sachs. As he waited what he thought was the all too now familiar backlash, to his surprise and pleasure, he was warmly welcomed as being from the firm that included their country in its N11 acronym and recognised their exciting growth and potential.

As we approach the start of the Olympics, and many of us that live in London complain about this miserable weather we are experiencing and worry about the creaking infrastructure, never mind the dramatic soap opera known as the Euro crisis and anything else to do with economic factors, it is worth pausing to reflect on the city’s rise as the truly modern capital of this dramatically changing world. Hosting the world’s most truly global sporting event, we are about to see another angle of it, and in some ways, London is a fabulous choice for this point in time whatever the weather and outcome of the actual events.

As the developed world and our own economy continue to struggle with the post 2008 credit crisis bubble bursting challenges, observers have completely lost sight of the fact that not only has the UN goal to half global poverty by 2015, set in 1990, been met, but it was met 5 years earlier than expected. This is both a reflection and a consequence of the ongoing rise of the so called BRIC economies- Brazil, Russia, India and China- and the Next 11 countries- those with the largest populations from the emerging world after the BRIC nations, including the likes of Nigeria and the Philippines, as well as some that are perhaps a bit more developed, such as Korea, Mexico and Turkey. These 15 nations make up around 2/3 of the world’s population and what goes on in their economies and for their people, is going to be the increasing driver of the world economy and beyond. For nations eager to be in the forefront of world trade and activities of its people, including cities like London, this development is the most important influence on our futures.

With the world’s central time zone,  the remarkable use of modern technologies and forms of communication, and it being executed in our language, the opportunities are quite considerable, ranging from the luxury goods shopping outlets, through the love affair with our Premier League football, and on through our top educational establishments. No wonder there is such a passionate debate about the capacity of our London airports, and I am not going to suggest which of the competing ideas is the right answer, but being able to bring people in and out in as safe and pleasant a way as possible will also influence our ability to benefit from the rise of these economies. Sharper specialist minds that mine will be best left to offer judgement. It is frequently said that London is going to lose out more and more to the likes of New York, Dubai, Shanghai, Hong Kong and Singapore. for certain specific things, aspects of this might have some validity, but unless New York were to move its time zone by 5 hours, it’s business hours are virtually closed at the same time as all these growing nations and urban conurbations. Of the others, how many of them can offer the ease of our language, the choice of sport, (even if many of the football players are not English anymore), our culture and restaurants? Few.

In 2011, the change in the US$ value of China’s GDP was around $ 1.37 trillion, equivalent to creating nearly another Spanish economy in one year, or another Greek economy every 11 and ½ weeks. The change in the combined four BRIC economies GDP in 2011 was around $ 2.2 trillion, close to being equivalent to the size of Italy, the eight largest economies in the world. The four BRIC countries along with just four of the Next 11 economies, Indonesia, Korea, Mexico and Turkey, will create twice as much GDP for the world this decade as that of the United States and Europe combined, with China on its own creating one half of this. (and this is assuming that China will grow by a slower 8pct than the 10pct it has achieved for the past 20 plus years). For us here in London, we could probably do with an airport purely reserved for travelers to and from those countries, “The BRIC and Next 11 Airport”?

While London citizens struggle to combine the thrill of hosting the exciting events of coming weeks together with the inevitable considerable stresses of the additional burden to our daily commutes as the transport arteries are freed up for the Olympians and their dignitaries, we must remember that London’s engagement in serving this vastly changing global community is what is going to both directly and indirectly give us all our jobs and revenues for our support systems in the future, and we should enjoy our status as the world’s BRIC capital. Who knows, we might even be able to salvage our financial centre as it is certainly something the rest of the world wants.