Documenti di Didattica
Documenti di Professioni
Documenti di Cultura
Custom Research
1
RISING POWERS: THE CHANGING GEOPOLITICAL LANDSCAPE
2
THE POWER OF CHINA, INDIA AND OTHER EMERGING MARKET
ECONOMIES
3
THE POTENTIAL “FAULT LINES” OF
CHINA’S GROWTH
4
LONG TERM PROSPECTS – INDIA VS. CHINA
5
LONG TERM PROSPECTS – INDIA VS. CHINA
• China’s ability to sustain its current pace and is probably more at risk than India’s. Should China’s
growth slow by several percentage points, India could emerge as the world’s fastest growing
economy in 2020.
6
POTENTIAL GROWTH OF OTHER COUNTRIES AND REGIONS
• US vs. Other Regions of the World: Over the last 60 years, manufacturing
employment in the US has plummeted as these industries went abroad – yet average
American incomes have risen to the highest in the world.
• Latin America: During the past three years, the Latin American economies have
improved.
• Brazil: viewed as a “pivotal state” with a vibrant democratic and diversified economy
and an entrepreneurial population, and solid economic institutions.
• Brazil must balance pro-growth with an ambitions social agenda that reduces poverty
and generates income inequality.
• China has been aggressively “courting” Brazil as a trading partner.
• The Brazilian ;president hopes that China and Russia would join the “G3” group of
emerging nations formed by Brazil, India and South Africa, to counterbalance US and
EU dominance of global trade.
• Argentina: has recovered from its “financial meltdown’ earlier this decade, however,
must monitor its inflation.
7
POTENTIAL GROWTH OF OTHER
COUNTRIES AND REGIONS [cont’d.]
• Mexico: After experiencing many years for cyclical crisis, the Mexican economy has
proved to be the most sound and reliable in Latin America.
• Indonesia: may revert to a growth rate of 6-7 percent, along with its population growth
to 250 million, would make it one of the world’s largest developing countries.
Using CI Behind the Scenes:
– Companies must have “on the ground” CI contacts in these countries to conduct
the research
– Test the “credibility factor” in these local markets as the information may be
conflicting and/or inconsistent
– Hire a local consultant to “test the validity” of your team’s findings
8
POTENTIAL GROWTH OF OTHER
COUNTRIES AND REGIONS [cont’d]
• Russia: Russia’s energy resources will give a boost to economic growth –yet low birth
rates, poor medical care, and potential explosive AIDS situation.
• Northeast vs. Southeast Asia:
• Northeast Asia [Non-Islamic – e.g. Japan, China and South Korea etc] will become
wealthier and powerful.
• Southeast Asia [Islamic fundamentalists e.g. Indonesia, Malaysia, and parts of the
Philippines] will face deep ethnic and religious cleavages.
• Bottom Line: The roles of China, Japan and the US will undergo significant change
by 2020.
Using CI Behind the Scenes:
– The CI analysis must be researched within a global context including North
America, EU, Asia and Latin America
– Competitors must be research and analyzed on a global, regional and country by
country basis.
– Matrices must be develop to benchmark competitors on this basis.
9
THE “DRILL DOWN ON CHINA”
Why China?
• Number 1 FDI in 2003; No 6 trading nation, No 2 by 2009
• 50% of it its imports are destined for exports
• 230+ mobile phone users and rising
• Will be the No 2 car market by 2007
• Manufacturers 37% of the world’s disk drives; 70% of the world’s photocopiers and 80% of the
world’s Christmas trees
• China is one of America’s chief creditors; America will continue to fuel China’s growth by buying
Chinese goods
The Challenges
• Communist party struggles
• Private sector lacks funding
• Tax hikes
• Economic disparity
• Taiwan issue
10
THE “DRILL DOWN ON CHINA” [cont’d]
– Research the risk of the intellectual property issue in China [short, medium and long term]
– Research the long term economic environment of China for remitting profits back to North
America or the EU
– Quantify the long term financial gains vis-à-vis the potential for a potential “domestic market
share” in this fast growing, dynamic market.
11
The CI Challenges of China
• Market Research
– 1999: “Only SSB is able to release government statistics”
– 1999: Non governmental and local survey organizations are unauthorized to conduct
national market research and are not authorized to release national statistical
information.
– 1999: Each market survey’s scope; and content had to be pre-approved by the SSB.
2002: All of the above was rescinded by WTO entry.
• Intellectual Property
• Legal System
• Corruption
• Cultural
The Bottom Line: “Piracy of ideas in China is rampant. If we can make it, they can fake it.”
- Robert Zoellick, US Trade Representative, February 27, 2004
Using CI Behind the Scenes:
– Conduct “due diligence” in terms of Intellectual Property CI research
– Secure bi-lingual experts
– Provide a “realistic” CI analysis for clients in terms of the potential IP threats in China
12
INDIA RISING
• According to Goldman Sachs, over the next 50 years, India will be the fastest growing of
the world’s major economies [because its work force will not age as fast as the other
economies].
• By 2040, India will become the world’s third largest economy.
• Indian companies are growing at an annual rate of 15-25%.
• India’s growth is perceived to be “bottoms up” rather than “top down and planned.”
• India’s growth is “in spite of the government” – not because of the government.
• India’s companies use their capital more efficiently than Chinese companies.
• In India, the “individual is king.”
13
INDIA RISING [cont’d]
• Indian consumers are “gearing up for action” and are beginning to take on mortgages rather than
savings.
• Personal consumption represents 67% of GDP in India vs. 42% in China. [Only the US is higher at
70%].
• Credit card industry in India growing at 35% a year.
14
INDIA RISING [cont’d]
The Pros:
• Has a sustained democratic government for over 60 years.
• Current government is committed to economic reform.
• India’s middle class is 300 million strong.
• One million elected woman in villages in India.
The Cons:
• The United Nations Human Development Index [e.g. Income, health, literacy, etc.] ranks India 124
out of 177 countries in the world.
• While the Indian entrepreneurs and consumers are confident, the Indian state is perceived [by the
press] to be hesitant, cautious and suspicious of the changing world around them.
The Bottom Line:
• India’s society is “open, eager, and confident” to take on the world.
• The US may be “happy” to join forces with India for global dominance.
Using CI Behind the Scenes:
– Benchmark Indian firms vis-a-vis Chinese competitor firms for a realistic assessment of the future competition
on Asia
– Conduct competitive pricing scenarios vis-à-vis these countries
15
SHIFTS IN GLOBAL FOCUS
• Global Aging and Migration: Approximately one-half of the world’s population lives in countries
whose fertility rates are not sufficient to replace their populations. [e.g. Australia, North America,
East Asian countries such as Taiwan, Singapore, Hong Kong and South Korea, etc.].
• Japan’s Economic Interests in Asia have shifted from Southeast Asia toward Northeast Asia
[e.g. especially China and the China-Japan-Korean triangle].
• An “Enlarged Europe” will have the ability to increase its weight on the international scene.
• The EU’s declining fertility rate [1.4 vs. the 2.1 replacement level] over the next 15 years, will force
the EU to import several million workers, chiefly from Muslim countries].
16
SHIFTS IN GLOBAL FOCUS (contd.)
• The EU’s growing diversity of its population provides it with an ability to forge strong bonds both to
the south with the Muslim world and Africa and the east with Russia and Eurasia.
• EU’s challenge: Unlike finding Ireland, Spain, Portugal and Greece, the EU has lesser funds to
bring up countries in Central Europe and Turkey to the economic levels to the rest of the EU.
• Migration has the potential to resolve the problem of a declining work force in Europe and to a
lesser degree, Russia and Japan.
17
THE FUTURE SUPERPOWERS
THE EU: depends on whether it under takes major economic and social reforms to deal with its aging
workforce problem. The EU must initiate:
• More legal immigration and better integration of workers coming from North Africa and the Middle
East
• Increased flexibility in the workplace; e.g. encouraging young women to take a few years off to
start families in return for re-entry into the workplace in the EU
• A solution to avoid its being “dragged down” by Germany’s restrictive labor laws
• A streamlined decision making process to enable collective action
18
THE FUTURE SUPERPOWERS RUSSIA
[CONT’D]
19
CONCLUSIONS
20