Trends Identified

Globalization & future markets

Globalization is a multifaceted process not limited to economic effects — political and social aspects are closely intertwined. But globalization has both proponents and critics. As the U.S. presidency of Donald Trump shows, the progress of free trade agreements and thus globalization strongly depends on the accordance and objectives of political leaders. In an interconnected world, migration constitutes one major facet of globalization with a strong impact on society and political debate.

2017

Megatrends: a bigger picture for a better strategy

Roland Berger Strategy Consultants

Globalization of financial resources

An increasingly interconnected global financial system makes it more vulnerable to attacks by both state and non-state actors

2017

Strategic foresight analysis

NATO

Globalization patterns are changing, with rapid growth in data flows and a larger role for highgrowth emerging economies

Much of the recent focus on globalization has been on trade pullbacks, rising protectionist measures, and public hostility. As a phenomenon, however, globalization has not gone into reverse; rather, it has shifted gears to become more data-driven and more focused on South- South flows. The seeming flattening of globalization that followed the 2008 financial crisis disguises new patterns of connectedness. While cross-border flows of goods and finance have lost momentum, data flows are helping drive global GDP. Cross-border data bandwidth grew by 148 times between 2005 and 2017, to more than 700 terabytes per second—a larger quantity per second than the entire US Library of Congress—and is projected to grow by another nine times in the next five years as digital flows of commerce, information, searches, video, communication, and intracompany traffic continue to surge. In line with its rising economic role, the developing world is now driving global connectedness. For the first time in history, emerging economies are counterparts on more than half of global trade flows, and South-South trade is the fastest-growing type of connection. In the MGI Connectedness Index, Singapore tops the latest rankings, followed by the Netherlands, the United States, and Germany. China has surged from number 25 to number seven. South-South and China-South trade jumped from 8 percent of the global total in 1995 to 20 percent in 2016. The shifting nature of the Chinese economy, toward a more R&D-intensive focus and away from low-cost manufacturing, plus China’s push through the Belt and Road initiative, may begin to create a new trade ecosystem with China at the core. By comparison, North-North trade and North-South trade have declined as a share of total trade, especially since the 2008 financial crisis. North-North trade is now 33 percent of the total, versus 43 percent in 2005 and 55 percent in 1995. Amid these shifts, our latest research suggests that China’s relationship with the world may be at a turning point. By 2017, China accounted for 15 percent of world GDP. It overtook the United States to become the world’s largest economy in purchasing power parity terms in 2014, according to International Monetary Fund data—for the first time since 1870. (In nominal terms, China’s GDP was 64 percent of US GDP in 2017, making it the secondlargest economy in the world). Behind these headline numbers lies a less-noticed shift: over the past decade, even as its economy has grown, China’s exposure to the world, as measured by the magnitude of flows of trade, technology, and capital with the rest of the world relative to its economy, has declined. At the same time, the world’s exposure to China (the magnitude of flows with China relative to the global economy) has increased since 2000. Metrics used to measure exposure include China’s importance as a market and supplier of goods and services; the importance of Chinese technology exports for global R&D spending; and China’s importance as a supplier of financing (Exhibit 2). Global value chains are also evolving. They are being reshaped in part by technology including automation, which could amplify the shift toward more localized production of goods near consumer markets. And they are changing along with global demand, as China and other developing countries consume more of what they produce and export a smaller share. As emerging economies build more comprehensive domestic supply chains, they are reducing their reliance on imported intermediate inputs. The result is that goods-producing value chains have become less trade-intensive, even as cross-border services are growing briskly—and generating more economic value than trade statistics capture, according to our analysis. Trade based on labor-cost arbitrage has been declining and now makes up only 20 percent of goods trade. Global value chains are becoming more knowledge-intensive and reliant on high-skill labor. Finally, goods-producing value chains (particularly automotive as well as computers and electronics) are becoming more regionally concentrated as companies increasingly establish production in proximity to demand.

2019

Navigating a world of disruption

McKinsey

Going Viral

The previous chapter looked at the emotional and psychological impact of the multiple transformations the world is undergoing. This chapter considers another set of threats being shaped by global transformations: biological pathogens. Changes in how we live have increased the risk of a devastating outbreak occurring naturally, while emerging technologies make it increasingly easy for new biological threats to be manufactured and released—either deliberately or by accident.

2019

The Global Risks Report 2019 14th Edition

World Economic Forum (WEF)

Going, going, ... gone?

Many of the world’s natural habitats, plant species and animal species are in decline or at risk of extinction. The actions taken by human beings in the coming decades will set the scene for global biodiversity over coming millennia. The going, going ...gone? megatrend explores the perilous situation of the world’s ecological habitats and biodiversity. This megatrend also captures the issue of greenhouse
gas emissions and climate change. Much in the natural world, that humans value and depend upon, is at
risk of being lost forever. However, there is a positive story and a potentially bright future. The megatrend is purposefully posed as a question. Whilst the state
of biodiversity is in decline and the pressure is rising so too is the human response.

2012

Our future world - globla megatrends that will change the way we live

Australia, Commonwealth Scientific and Industrial Research Organisation (CSIRO)

Governance Challenges for the EU

Over the past few years, the EU has had to confront a series of crises that have put a lot of strain on its governance system and opened new fault-lines across European societies: sovereign debt issue, migration, Brexit, Ukraine, Russia's newfound assertiveness, terrorism. The outcome of the US elections will also have to be factored in over the coming months and years.

2016

Shaping the future

European Strategy and Policy Analysis System (ESPAS)

Governing is getting harder

Publics will demand governments deliver security and prosperity, but flat revenues, distrust, polarization, and a growing list of emerging issues will hamper government performance. Technology will expand the range of players who can block or circumvent political action. Managing global issues will become harder as actors multiply—to include NGOs, corporations, and empowered individuals—resulting in more ad hoc, fewer encompassing efforts.

2017

Global Trends: The Paradox of Progress

USA, US National Intelligence Council

Government

Due to massive public debt governments are recognising that they can no longer afford generous pensions and the European Union Commission has said that the average retirement age across the 27 member countries needs to rise from 60 today to 70 by 2060. Governments are rapidly turning to the ‘Cloud’ to service the needs of their citizens and today EU citizens can access 82 percent of basic public services online. The working population will start shrinking from 2012 and unless a dramatic change in migration policy is forthcoming, companies will have to deal with the consequences of older workers and fewer workers in the labour pool in the EU. The EU is setting policies towards car-free cities in Europe by 2050. This could be a boom or bust strategy. On the one-hand it may lead to innovation and the rise of cleantech and on the other it may put off investment and inward migration of companies. We will see.

2012

The future

Steria

Governments enhance ties with the private sector

The past year has been one of readjustment between developed and emerging economies, between the public and private sectors and between global institutions and nations. These adjustments will continue as governments, organizations and institutions define their roles in the post-crisis world.

2011

Tracking global trends - How six key developments are shaping the business world

EY

Governments will seize the opportunity to regulate Big Tech.

Local and national authorities are surfing on that wave to impose new taxes and regulations on the industry; Kelman points to Seattle’s head tax and San Francisco’s Proposition C, inspiring other cities across the U.S. The British government plans to introduce a “digital tax” of 2% on tech companies’ British revenue, fighting back against U.S. tech giants that evade taxes by domiciling their profits in Ireland or the Netherlands. The European Union’s attempt at a similar tax just petered out, but India, South Korea, Mexico, Chile and others are all working on the same idea, putting pressure on the OECD to advance on its own promise of global taxation reform. European governments are also likely to turn to antitrust, predicts Emily Taylor, CEO of Oxford Information Labs. “We will rediscover competition law and regulation as a way of combating over-concentration of power and distortions in the market,” she says. It’s something the U.S. has shied away from, not wanting to stifle its own innovative companies, but Europe has fewer giants and freer hands. Smarter companies will help shape regulation rather than obstinately oppose it, says Booking.com CEO Gillian Tans. “This collaboration will be the deciding factor of which sharing economy companies will see success in the future,” she says. “Regulation will be something to lean into – not fear.”

2018

50 Big Ideas for 2019: What to watch in the year ahead

LinkedIn