7 Reasons Why Developed Countries Are Important

Out of 195 sovereign states in the world, only 38 are considered to be fully developed. Almost all of these are located in North America, Europe or North East Asia. However, although there are actually only a few developed nations, their influence over global affairs is immense. In fact, almost all of the best-known countries in the world are developed. But why are developed countries so significant? What makes them so important? Well, let us explain…

1. Developed Countries Makeup A Huge Part Of The Global Economy

A first reason why developed countries are important is because they make up a large percentage of the global economy.

Developed nations are, by definition, the richest countries in the world. In fact, the United States and European Union alone make up over 40% of the world’s GDP. This is a prime example of the importance of developed nations.

The economic strength of developed countries means they dominate many aspects of world affairs. Global trade and investment, as well as the development of many consumer products, comes out of richer nations partly due to their economic might. Many people feel that the global economy is too dominated by develop nations. This may be true; however, it cannot be ignored that the size of the economies of the developed world makes it significant.

Developed countries play a major role in global economic affairs. What happens in the economies of rich nations directly impacts almost all other countries in the world. This is a key reason why developed nations are so important.

2. Over A Billion People Live In Developed Nations

A second reason why developed countries are important is because a significant proportion of the world’s population live in developed nations.

Around the world, over a billion people live in developed countries. This may be less than the number of people living in developing nations but it is still a major proportion of the world’s population. With around 20% of all people living in developed nations, it means these countries play a major role in global affairs and as a result are hugely significant.

The size of the population living in developed nations adds to their importance for a number of reasons. These include the economic, political and cultural might that comes with having a significant percentage of the world’s population. Having a large population across the developed world also increases the investment, as well as business and trade activities that developing countries can attract. This further adds to their importance.

Although more people live in developing countries than in developed ones, the significant proportion of the world’s population that is living in developed nations means they play a vital role in world affairs.

3. Developed Countries Lead Technological Innovation

A third reason why developed countries are important is because they lead the world in technological innovations.

The vast majority of new technologies are developed in rich countries. Many of the leading global businesses focusing on developing new mechanics, computers, and scientific engineering breakthroughs are based in developed nations. The fact that these technologies are often vital to modern economies and utilised all over the world makes developed nations hugely important.

Although some developing countries, such as India and China, are now becoming major technological hubs, in fact that majority of new innovation still comes out of developed nations. The majority of inventions and technological breakthroughs still happen in countries such as the United States, Japan and Germany, but they are then built on and adapted by companies in the developing world. This actually only goes to highlight the importance of developed countries.

The fact that the developed countries lead in technological innovations is a major factor in why they are so significant globally.

4. The Developed World Has Enormous Military Power

Another reason why the developed world is hugely important is because of its military strength.

Many of the most powerful countries militarily are in the developed world. The United States – the richest nation on earth, also has by far the most powerful armed forces. Other developed countries, such as the United Kingdom, France and South Korea, also have significant militaries. The size, and strength, of the armed forces of many developed countries is a big reason why they are important.

Although many of the very largest armies globally are actually from developing countries, richer nations are able to use their wealth to develop advanced military technologies. Developed nations generally have smaller, but more professional, better trained and better enquired armed forces. On the modern battlefield, this makes these militaries among the most powerful in the world, and further adds to the important role developed nations play in global affairs.

The size, strength and technological advancements of armed forces of developed nations is a key reason why these countries are so important.

5. Developed Countries Have Huge Global Influence

One reason why developed countries are so important is because of their huge global influence.

Although there are only 38 fully developed nations in the world, they dominate many aspects of global affairs. For starters, developed countries have significant influence over international organizations, such as the United Nations, World Bank and International Monetary Fund. An example of the influence developed countries have is that the majority of the permanent member seats on the UN security council are held by developed nations.

Alongside playing a significant role in international organizations, there are also bodies formed only by developed nations that also wield major global influence. NATO, and the European Union, are two examples of organizations that are formed primarily of developed nations and that play a major globally.

The influence of developed countries is felt all over the world. In many regions people feel that rich countries have too much sway. This may to true, however the influence developed countries have globally is perhaps one of the biggest reasons why they are important.

6. Developed Countries Effectively Utilise Soft Power

A further reason why developed nations are important is because of how they use soft power.

Soft power – in international affairs, is defined as a country using cooperation and appeal to convince other nations to act in their interest, as opposed to the use force or coercion. There are many examples of soft power, including cultural promotion, educational exchanges and humanitarian and development assistance. Soft power is often how a nation promotes itself and its image around the world.

Developed nations are highly adept at using soft power. They often dedicate a portion of their government budgets to soft power tools. Many rich countries use their embassies, or organizations such as the British Council or Institut Français, as part of their soft power. This has been very effective and has helped to ensure that developed countries remain highly relevant around the world.

Another way that developed countries use soft power is through culture. The cultural outputs of developed nations is consumed all over the world. Film, TV, music, and art from rich countries leads cultural consumption in many parts of the world. This further adds to their importance.

7. Global Finance Is Control By Developed Nations

A final reason why developed countries are important is because of their control of the global financial system.

As we’ve said, a huge proportion of the world’s wealth is held by developed nations. On top of this, major developed countries such as the United States, or blocs of developed nations like the EU, exert massive control over the world’s financial institutions, global trade and how money moves around the world.

One key example of how developed nations dominate the global financial system is the default of the US dollar to be used for trade and as a reserve currency. Vital commodities such as oil are almost exclusively traded in USD. This means people must buy US dollars in order to purchase oil, or must exchange USD from the money they gain by selling oil. This affects many nations as well as private companies and shows the huge role developed countries can play all around the world.

The influence developed nations have over global financial institutions, combined with their own immense wealth, gives them a significant role in how the world is ran.

Global Affairs Explained

Global Affairs Explained is an ongoing project aiming to provide concise guides to world events. Focusing on international relations, history, and geo-politics, Global Affairs Explained uses original research and data to answer questions often not covered by traditional media.

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