Trends Identified

Economic power shift

Emerging economies are lifting millions out of poverty while also exerting more influence in the global economy. With a rebalancing of global power, both international institutions and national governments will need a greater focus on maintaining their transparency and inclusiveness.

2014

Future State 2030: The global megatrends shaping governments

KPMG

The center of economic gravity is shifting east and south, propelled by high-growth emerging economies and globally competitive companies

Emerging economies led by China and India have accounted for almost two-thirds of global GDP growth and more than half of new consumption in the past 15 years. Among emerging economies, our research has identified 18 high-growth “outperformers” that have achieved powerful and sustained long-term growth—and lifted more than one billion people out of extreme poverty since 1990. Seven of these outperformers—China, Hong Kong, Indonesia, Malaysia, Singapore, South Korea, and Thailand—have averaged GDP growth of at least 3.5 percent for the past 50 years. Eleven other countries (Azerbaijan, Belarus, Cambodia, Ethiopia, India, Kazakhstan, Laos, Myanmar, Turkmenistan, Uzbekistan, and Vietnam) have achieved faster average growth of at least 5 percent annually over the past 20 years. Underlying their performance are pro-growth policy agendas based on productivity, income, and demand, and often fueled by strong competitive dynamics. The next wave of outperformers now looms as countries from Bangladesh and Bolivia to the Philippines, Rwanda, and Sri Lanka adopt a similar agenda and achieve rapid growth. The dynamism of these economies has gone hand in hand with the rise of highly competitive emerging-market firms, which are increasingly taking on incumbents in advanced economies. On average, outperformer economies have twice as many companies with revenue over $500 million as other emerging economies. In addition to driving economic growth at home, they now play a disproportionately large role on the global stage: while they accounted for only about 25 percent of the total revenue and net income of all large public companies in 2016, they contributed about 40 percent of the revenue growth and net income growth from 2005 to 2016. More than 120 of these companies have joined the Fortune Global 500 list since 2000, and by several measures, they are already more innovative, nimble, and competitive than Western rivals. For example, our surveys show that they derive 56 percent of their revenue from new products and services, eight percentage points more than their peers in high-income economies, and make important investment decisions six to eight weeks faster. They can also earn better returns for investors. Between 2014 and 2016, the top quartile of outperformer companies generated total return to shareholders of 23 percent on average, compared with 15 percent for top-quartile firms in highincome countries (Exhibit 1).

2019

Navigating a world of disruption

McKinsey

Collectively rich, individually not so rich

Emerging markets are expected to grow faster than developed economies, and as a result developing countries such as China and India are likely to overtake current global leaders such as the US, Japan and Western Europe, while other emerging markets, such as Indonesia and Mexico, will rank among the top ten economies at market exchanges rates by 2050, overtaking economies such as Italy and Russia. By contrast, in terms of income per capita, a measure of individual spending power, today’s advanced economies are likely to continue to dominate.

2015

Long-term macroeconomic forecasts Key trends to 2050

The Economist

Dynamism in emerging markets

Emerging markets are going through the simultaneous industrial and urban revolutions that began in the 18th century in England and in the 19th century in the rest of today’s developed world. In 2009, for the first time in more than 200 years, emerging markets contributed more to global economic growth than developed ones did. By 2025, emerging markets will have been the world’s prime growth engine for more than 15 years, China will be home to more large companies than either the United States or Europe, and more than 45 percent of the companies on Fortune’s Global 500 list of major international players will hail from emerging markets—versus just 5 percent in the year 2000.

2014

Mckinsey Quarterly, Management intuition for the next 50 years

McKinsey

Growth and risk management in emerging markets

Emerging markets, with populations that are young and growing, will increasingly become not only the focus of rising consumption and production but also major providers of capital, talent, and innovation. This will make it imperative for most companies to succeed in emerging markets. However, no more than 40 percent of executives at companies headquartered in developed economies expect a quarter or more of revenues over the next five years to come from emerging markets—and 10 percent expect none.

2010

Five forces reshaping the global economy: McKinsey Global Survey results

McKinsey

Neurotechnologies

Emerging neurotechnologies offer great promise in diagnosis and therapy for healthy ageing and general human enhancement. However, some neurotechnologies raise profound ethical, legal, social and cultural issues that require policy attention.

2016

OECD Science, Technology and Innovation Outlook 2016

OECD

IoT software

Emerging platforms, standards & analytics

2018

Corum Top Ten Disruptive Technology Trends 2018

Corum

Challenges to governance

Emerging powers are increasingly challenging establishedglobalgovernanceinstitutionsandrequestinggreaterroles.Existing governance structures, particularly in weak and failing states, are not sufficiently addressing the requirements of the broader population.

2017

Strategic foresight analysis

NATO

Geopolitical dimension of resources

Emerging technologies and the exploration opportunities availed by climate change may allow the discovery of mineral and energy resources in previously inaccessible and possibly disputed regions as the High North

2017

Strategic foresight analysis

NATO

Digitalized ecosystems

Emerging technologies in general will require support from new technical foundations and more   dynamic ecosystems. These ecosystems will need new business strategies and a move to platform-based business models. “The shift from compartmentalized technical infrastructure to ecosystem-enabling platforms is laying the foundation for entirely new business models that are forming the bridge between humans and technology,” says Walker. For example, blockchain could be a game changer for data security leaders, as it has the potential to increase resilience, reliability, transparency, and trust in centralized systems. Also under this trend are digital twins, a virtual representation of a real object. This is beginning to gain adoption in maintenance, and Gartner estimates hundreds of millions of things will have digital twins within five years.

2018

5 Trends Emerge in the Gartner Hype Cycle for Emerging Technologies, 2018

Gartner