Jim O'Neill, 54, is chairman of Goldman Sachs Asset Management, which has £840bn under management, and a fanatical Manchester United fan. In 2005, Gavyn Davies — his ex-boss at Goldman and a former chairman of the BBC — described him as "the top foreign-exchange economist anywhere in the world in the past decade". O'Neill, who is best known as the man who coined the term BRICs in a paper ten years ago, when he predicted that Brazil, Russia, India and China would come to dominate the world economy, this month publishes his follow-up work, The Growth Map.
My father, who was a postman, left school at 14. He came from a pretty tough background in Manchester and I think he knew the value of education because he hadn't got one. He was certainly relentless about us kids getting an education. Two of my three sisters went to private schools and he was eager for me to go to one but he couldn't really afford it and I liked football too much and you couldn't play football there.
We lived on a road that was split between Manchester and Cheshire. We were on the Manchester side and it meant that, while we lived in this nice little suburb, we lived right by a really tough area called Wythenshawe and went to the local Manchester state school. It wasn't any of my parents' doing, it was just an act of geographical fluke but it was one of the best things that ever happened to me because it meant from a young age I mixed with all forms of society on a daily basis. It prepared me for life. It's meant I'm perfectly happy dealing with lots of different people.
At the time I did my PhD, I saw it as a way of extending the fun of my time at university. I couldn't quite get the excitement of a career and all that kind of stuff. I thought, "Oh my God, this guy's suggesting I can get money to be a student for another three years!" In some ways, though, it was the best thing I ever did because it was a badge. It was a sign of achievement and, more importantly, a good test of personal mental stability because you had to sit on your own day after day. It was called, An Empirical Investigation into the Opec Surplus and its Disposal. How could I ever forget that?
Apart from Denis Law and George Best [stars of the United team in the 60s and early 70s], my greatest inspiration would be an economist called Rudi Dornbusch [Professor of Economics, MiT]. I believe the economics profession takes itself too seriously. Economists think they're far too smart. It's a social science. Rudi Dornbusch, who is a legend in economic theory — he died nine years ago — could stand there with the best of the academics but he didn't take himself seriously. He could laugh and joke and have such fun and I thought, "I want to be like that guy. If I can't be Denis or George, I want to be like that guy."
Sir Alex Ferguson [the manager of Manchester United] is not scared to be wrong, so fear doesn't put him off taking risks. I've learnt in my 30 years not to be scared of getting things wrong because I know I'm going to get things wrong. Not only does Alex have a plan B, he has all sorts of different strategies and will play the most unpredictable teams and formations because he's not scared and he knows that unless you experiment you can't get better.
If you walk down Bond Street on a day when the sun is shining, the most dynamic spenders down there will be Chinese. I happened to
be down there three weeks ago picking up a suit — not that I shop on Bond Street very often — and when I got there I struggled to walk
past Louis Vuitton because there were all these Chinese people taking pictures of their families and friends laden down with bags coming out of the shop. There are so many Western companies, but global consumption is being dominated by these people. Why are we still calling them emerging markets?
From what I can tell, economic volatility through time is a function of human nature. Booms and busts are essentially a product
of how humans behave. At the core of them — and the UK epitomises this — are housing markets. I've been through lots of crises but
at least four significant housing booms and busts in the UK. What happens is that when house prices start rising everybody believes it will go on forever, including the individuals who own a house, and politicians start to believe it's a great form of wealth creation, and encourage it. And of course it's not realistic because you get to a point where there's nobody left that wants to buy the most expensive house and that's the beginning of it all starting to cascade. In a way on a global basis — especially in the US — that's what happened in a spectacular fashion. Because it was so spectacular, we're still suffering from the consequences of it. I subscribe to the view that unless you take away the degree of potential upside you can't really stop the subsequent fallout.
Our policy makers run life based on how they perceive the immediate opinion polling responses to whatever they say and I think it's really influencing Obama. It also influences Chancellor Merkel in Germany. It influences most policy makers. It might even influence the Chinese and the way they do things. It's a whole new form of engagement for decision-making because it's certainly not leadership in the traditional sense.
Not much of the £840bn we have under management is invested in emerging markets but the most important thing is that the rate
of change is rising sharply. Linked to my appearance on the scene we have a devoted BRIC fund, we have a Next 11 fund and there are a number of what are called third-party distributors in the process of launching growth-market equity funds. In
ten years' time I'm assuming it will be the dominant part of what we're doing. I would have thought more than half.
Shine is one of the best things I've done. It stands for Support and Help In Education and it's a charity I set up with some pals now close to 12 years ago. It's like venture capital in educational charity. We try to finance projects to help the most disadvantaged kids that appear to be capable of getting somewhere get a proper and stimulating education. One of the reasons I wrote the book is because all the proceeds are going to Shine.
Interview by Dominic Midgley. The Growth Map: Economic Opportunities in the BRICs and Beyond, by Jim O'Neill (Portfolio Penguin, £25) is published this month.
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