Editor's Note: Throughout the week, Ruchir Sharma will be posting thought-provoking questions with answers and explanations on CNN.com/GPS. Be sure to check out his excellent new book Breakout Nations: In Pursuit of the Next Economic Miracles.
Question: What are the only two countries that have grown at an average annual pace of more than 5 percent for the last five decades in a row?
Answer: South Korea and Taiwan
Explanation: South Korea and Taiwan are the gold medalists of global competition, because their economies continued to grow at a rapid pace even after they grew rich, when the scale and difficulty of the challenge becomes much more daunting. With per capita incomes greater than $20,000, the half-century booms in South Korea and Taiwan are arguably more impressive than the now much more famous 30-year boom in China, where per capita incomes just recently surpassed $5,000.
Now, however, the gold medalists appear to be parting ways: both have succeeded mainly as manufacturing exporters, and South Korea is pushing ahead. In 2006 the total value of the Seoul stock market surpassed Taiwan for the first time, and it is now considerably larger, at $1 trillion versus $700 billion. The main reason is that, to a surprising degree, Taiwan makes its money from small and globally unknown companies that manufacture parts for PCs that run on Windows and Intel chips-a niche so narrow that the Taipei stock market has been out of favor for years now.
South Korea's corporate giants have been much more visionary and ambitious, becoming global leaders in industries as diverse as shipbuilding, petrochemicals and construction, and creating the first major global brands to rise up from an emerging market: Hyundai, Samsung and LG. Normally, manufacturing stops growing as a share of the economy when a nation hits a per capita income of $10,000, but South Korea is 15 years past that barrier and manufacturing continues to expand as a share of GDP. This unique manufacturing juggernaut can't continue forever, but it can continue for the foreseeable future-5 to 10 years.