Breakout Nations Book Summary - Breakout Nations Book explained in key points

Breakout Nations summary

Ruchir Sharma

In Pursuit of the Next Economic Miracles

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Breakout Nations by Ruchir Sharma is a must-read for anyone interested in global investment. It offers insights into the economies of emerging markets and identifies the countries that are poised for success in the coming decades.

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    Breakout Nations
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    To identify the next breakout nations, look at the current, local conditions in emerging markets.

    International investors are always trying to identify emerging countries that will deliver high growth on their investments. But finding countries that do this consistently is difficult. Consider, for example, that since the 1950s, only two emerging economies – Taiwan and South Korea – have managed to maintain an annual growth rate above 5% for five consecutive decades.

    This is why investors are attracted to economies with the potential to beat growth expectations, the so-called breakout nations. A breakout nation is an economy that grows faster than its economic rivals so that it competes with nations richer than itself. Economies are measured using per capita income and this figure is used to place nations into different income brackets. For example, a nation in the $5,000–$10,000 bracket that is able to compete with economies in the $10,000­–$15,000 bracket is a breakout nation: it punches above its weight.

    So how can you identify such breakout nations?

    First, forget long-term forecasts. Economic circumstances change radically every decade or so, so any forecast beyond that is automatically obsolete.

    Second, don’t follow the crowd. When everyone else is already investing in a country, opportunities there will already be overpriced due to increased demand.

    The key to discovering the next breakout nation is to look for developing or emerging economies that are healthy and adaptable enough to take advantage of future economic circumstances.

    Take a closer look at each emerging market to identify the local strengths and weaknesses. For example: What are the political conditions like? Is the leadership making the right economic reforms?  Is the economy balanced and robust, or too reliant in one particular area? Is the domestic market strong enough to maintain high growth rates?

    To identify the next breakout nations, look at the current, local conditions in emerging markets.

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    What is Breakout Nations about?

    Although many emerging markets across the globe grew at historically high rates over the past decade, for many nations these growth rates are unsustainable and are the result of a unique set of conditions in the global economy.

    Breakout Nations (2012) examines the factors likely to determine which emerging markets can take advantage of changing economic conditions and become breakout nations.

    Breakout Nations Review

    Breakout Nations (2012) by Ruchir Sharma offers a captivating analysis of emerging markets and their potential to reshape the global economy. Here's why this book is worth reading:

    • With a diverse range of case studies and data-driven insights, it provides a deep understanding of the dynamics shaping the world's fastest-growing economies.
    • Sharma's real-world experiences as an investor and his on-the-ground research lend credibility and relevance to the book's analysis.
    • The book's focus on opportunities and challenges in emerging markets keeps readers engaged, making it an informative and thought-provoking read.

    Who should read Breakout Nations?

    • Anyone who wants to predict which economies will be next to deliver unexpectedly high growth
    • Anyone who wants to understand why the growth surge experienced by developing countries cannot continue
    • Anyone worried that Western economies are doomed to fall behind the likes of China and India

    About the Author

    Ruchir Sharma is head of the Emerging Markets Equity team at Morgan Stanley Investment Management. He physically spends one week per month in emerging markets to gain key insight and a hands-on understanding of local conditions.

    He has written articles for Newsweek, The Financial Times and The New York Times.

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    Breakout Nations FAQs 

    What is the main message of Breakout Nations?

    The main message of Breakout Nations is that economic growth is driven by factors such as demographics, governance, and productivity.

    How long does it take to read Breakout Nations?

    The reading time for Breakout Nations varies depending on the reader, but it typically takes several hours. The Blinkist summary can be read in just 15 minutes.

    Is Breakout Nations a good book? Is it worth reading?

    Breakout Nations is worth reading as it provides valuable insights into emerging markets and economic development.

    Who is the author of Breakout Nations?

    The author of Breakout Nations is Ruchir Sharma.