Saturday, November 26, 2011

Three Global Trends Shaping the World of Business – GEC Business Review

by Kelvin Wong

Today, the emerging markets play as the significant role – as the engine for world's economic growth, as the source of talent and ground-breaking approaches to the business world. Therefore, taking advantage of these emerging-market opportunities requires nowadays’ company’s attention, whether small or big.

As the emerging markets rise, so do their companies. In particular, let’s see the following trends ahead:

Emerging Markets Drive Global Growths
Studies estimate that 70% of the world growth within the next few years will be generated from emerging markets, the China, India and Indonesia markets account over 40% of such growth. The International Monetary Fund (IMF) forecasts that the total GDP of emerging markets could overtake that of the developed economies as early as 2014.

Rising Population Drives New Consumer Growth
From now and 2050, the world's population is expected to grow by 2.3 billion, thus reaching 9.1 billion as total world population. The combined purchasing power of the global middle classes is estimated to more than double by 2030 to US$56 trillion. More importantly, Asian countries account over 80% of such demand.

At that point of time, most of the world's new middle class will live in the emerging world, and almost all will live in cities of those emerging markets. This surge of urbanization will stimulate business, however, put huge strains on infrastructures such as public transport, water supply, electricity systems and many more. Studies show that addressing such concerns in Asia will require an estimated US$7.5 trillion in investments by 2020.

Emerging Local Market Leaders will become Disruptive in the Global Competitive Arena
As emerging markets enable local market players to gain in stature, these companies are likely to be critical competitors (to global players) in their home markets while increasingly making outbound investments into other emerging and developed economies.

In sum, the emerging markets will serve not only as a source of significant economic growth for local and global companies but also a source of talent, source of innovation and ground-breaking approaches to business, which they will be able to leverage on a global economic scale.

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