The McKinsey Quarterly recently included a web-only article on ten trends for the coming years. You can subscribe for free to their online version if you are interested. I thought it would be worth mentioning these trends to help identify an investment. Implications
Trend 1: Centers of economic activity will shift deep, not only globally, but also regionally. Asia GDP (excluding Japan accounts for 13 percent of global GDP, while Western Europe for more than 30 percent good) will catch up with Western Europe in the next 20 years. As a result, we should look for consumer goods as the people in these countries have more disposable income. Growing demand
Investment idea: Consumer companies with a strong presence in Asia and transportation companies that have a strong presence in the region, and have a global reach.
Trend 2: Public-sector activities will balloon, making productivity gains essential. The unprecedented aging population in the developed world requires new levels of efficiency and creativity in the public sector. The demand for health care and retirement security, the ability of a country to support these services through taxes overwhelm. Proven private sector approaches will likely become ubiquitous in the provision of social services in both the developed and the developing worlds.
Investment idea: Companies that can deliver these services in a cost effective manner, companies can use technology to outsource these services to low-wage countries.
Trend 3: The consumer landscape will change and expand significantly. Almost a billion new consumers will enter the global market in the next decade, economic growth in emerging markets pushes them beyond the threshold of $ 5,000 in annual household income - a time when people generally begin to spend on discretionary goods . By 2015 consumer spending power in emerging economies will almost match the purchasing power of Western Europe. It is estimated that 100 million Chinese households European income levels will reach in 2020. Furthermore, the Hispanic population in the United States will have purchasing power equal to that of 60 percent of all Chinese consumers.
Investment ideas: Consumer & luxury goods companies with strong presence in Asia and other developing countries to achieve economic success. Companies are able to the consumer market niches that will continue to evolve identify and target. Transport companies that are able to provide raw materials and finished goods to move easily around the world.
Trend 4: Technological connectivity will transform the way people live and communicate transform. We are still in the early stages of this revolution. Geography is no longer the main obstacle to social and economic organization. As new developments in biotechnology and nanotechnology come forward, people all over the world find new ways to leverage their promise. More than transformational technology itself is the shift in behavior that enables. We work not only globally but also instantaneously. We are forming communities and relationships in new ways (in fact, 12 percent of U.S. newlyweds last year met online). More than two billion people now use mobile phones. We will send 9000000000000 emails per year. We do a billion Google searches per day, more than half in languages other than English. Perhaps for the first time in history, geography is not the primary constraint on the limits of social and economic organization.
Investment ideas: Software companies with expertise in uniting various opportunities to create new products and services.
Trend 5. Continuous shifts in labor and talent will be much deeper than the widely observed migration of jobs to low-wage countries. The shift to knowledge-intensive industries highlights the importance and scarcity of skilled talent. The growing integration of the global labor market, however, the opening of vast new talent sources. The 33 million highly educated young professionals in developing countries is more than double the number in developed countries. For many companies and governments, global labor and talent strategies become as important as global sourcing and production strategies.
Investment ideas: Outsourcing of all types of professional talent, not just low-wage workers trained talent pools in India, China and other places and educated talent pool.
Trend 6. The role and behavior of big business will include close supervision. As companies expand their global reach, and as to intensify the economic demands on the environment the level of societal suspicion about big business is likely to increase. The teachings of the current global business ideology - for example, shareholder value, free trade, intellectual property rights, and the repatriation of profits - is not understood, let alone accepted, in many parts of the world. Scandals and environmental mishaps seem as inevitable as the likelihood that these incidents is then inflated, thereby fueling resentment and creating a political and regulatory backlash. This trend is not only the last 5 years but the last 250 years. The increasing pace and scale of global business, and the emergence of truly giant global corporations, the pressure will worsen in the next 10 years. Businesses, especially large companies, will never be loved. It may be more appreciated. Business leaders need to discuss and demonstrate the powerful intellectual, social and economic arguments for business in society and the massive contributions business makes to social welfare.
Investment ideas: Companies ways to make a good profit and find socially responsible.
Trend 7. Demand for natural resources will grow, as well as the pressure on the environment. As economic growth accelerates - especially in emerging markets - we are using natural resources at an unprecedented rate. Oil demand is expected to grow by 50 percent over the next two decades, and without major new discoveries or radical innovations supply is keeping. Unlikely We see similar spikes in demand across a wide range of raw materials. In China, for example, the demand for copper, steel and aluminum has almost tripled in the past decade. The world's resources are increasingly limited. Water shortages will be the main obstacle to growth in many countries. And one of our most valuable natural resources - the atmosphere - will require dramatic shifts in human behavior to avoid further depleted. Innovation in technology, regulation, and the use of resources will be crucial for creating a world that can both drive robust economic growth and support environmental requirements.
Investment ideas: Water filtration, pollution prevention and energy companies, new forms of clean energy to offer in particular.
Trend 8. New global industry structures are emerging. Even basic structural principles are upended: for example, the emergence of robust private equity financing changing corporate ownership, life cycles, and performance expectations. In many industries, it is a barbell-like structure that can be seen, with a couple of giants on the top, a narrow middle, and then a flourishing of smaller, fast-moving players at the bottom. Similarly, collective boundaries are increasingly blurred as interlinked "ecosystems" are suppliers, manufacturers and customers. Even basic structural principles are upended: for example, the emergence of robust private equity financing changing corporate ownership, life cycles, and performance expectations. Winning companies, with the aid of efficiency is achieved by novel structural features, will take advantage of these transformations.
Investment ideas: Companies that offer special opportunities in key process networks and supply chains that are able to offer significant improvements and capture premium profits.
Trend 9. Management will go from art to science. Today's business leaders are using highly sophisticated software to run their organizations. Larger, more complex companies demand new tools to run and manage. Indeed, improved technology and statistical-control tools given rise to new management approaches that deal. Even mega-institutions viable Long gone is the day of the "gut feeling" management style. Today's business leaders are adopting algorithmic decision-making techniques and using highly sophisticated software to run their organizations. Scientific management is a skill that creates competitive advantage to an ante that gives companies the right to play the game.
Investment ideas: methods and tools (software) that match the job skills and training. Business software and business consulting companies that offer special features that help manage the mega-corporations.
Trend 10. Ubiquitous access to information is changing the economics of knowledge. Knowledge becoming available and, at the same time, specialized companies. The clearest manifestation of this trend is the emergence of search engines (like Google), which immediately made available. An almost infinite amount of information Access to knowledge has become almost universal. Yet the transformation is much deeper than just wide access. New models of knowledge production, access, distribution, and ownership are emerging. We see the emergence of open-source approach to knowledge as communities, not individuals, are responsible for innovations. Knowledge production itself is growing: worldwide patent applications, for example, 1990-2004 increased at a rate of 20 percent per year. Companies will need to learn how to make use of this new knowledge universe - or risk drowning in a flood of too much information.
Investment ideas: Companies new ways to capture and distribute offer specialist knowledge. Even companies that specialized knowledge that can be used to reduce costs or to create innovative ways to differentiate products or services possess.
Trend 1: Centers of economic activity will shift deep, not only globally, but also regionally. Asia GDP (excluding Japan accounts for 13 percent of global GDP, while Western Europe for more than 30 percent good) will catch up with Western Europe in the next 20 years. As a result, we should look for consumer goods as the people in these countries have more disposable income. Growing demand
Investment idea: Consumer companies with a strong presence in Asia and transportation companies that have a strong presence in the region, and have a global reach.
Trend 2: Public-sector activities will balloon, making productivity gains essential. The unprecedented aging population in the developed world requires new levels of efficiency and creativity in the public sector. The demand for health care and retirement security, the ability of a country to support these services through taxes overwhelm. Proven private sector approaches will likely become ubiquitous in the provision of social services in both the developed and the developing worlds.
Investment idea: Companies that can deliver these services in a cost effective manner, companies can use technology to outsource these services to low-wage countries.
Trend 3: The consumer landscape will change and expand significantly. Almost a billion new consumers will enter the global market in the next decade, economic growth in emerging markets pushes them beyond the threshold of $ 5,000 in annual household income - a time when people generally begin to spend on discretionary goods . By 2015 consumer spending power in emerging economies will almost match the purchasing power of Western Europe. It is estimated that 100 million Chinese households European income levels will reach in 2020. Furthermore, the Hispanic population in the United States will have purchasing power equal to that of 60 percent of all Chinese consumers.
Investment ideas: Consumer & luxury goods companies with strong presence in Asia and other developing countries to achieve economic success. Companies are able to the consumer market niches that will continue to evolve identify and target. Transport companies that are able to provide raw materials and finished goods to move easily around the world.
Trend 4: Technological connectivity will transform the way people live and communicate transform. We are still in the early stages of this revolution. Geography is no longer the main obstacle to social and economic organization. As new developments in biotechnology and nanotechnology come forward, people all over the world find new ways to leverage their promise. More than transformational technology itself is the shift in behavior that enables. We work not only globally but also instantaneously. We are forming communities and relationships in new ways (in fact, 12 percent of U.S. newlyweds last year met online). More than two billion people now use mobile phones. We will send 9000000000000 emails per year. We do a billion Google searches per day, more than half in languages other than English. Perhaps for the first time in history, geography is not the primary constraint on the limits of social and economic organization.
Investment ideas: Software companies with expertise in uniting various opportunities to create new products and services.
Trend 5. Continuous shifts in labor and talent will be much deeper than the widely observed migration of jobs to low-wage countries. The shift to knowledge-intensive industries highlights the importance and scarcity of skilled talent. The growing integration of the global labor market, however, the opening of vast new talent sources. The 33 million highly educated young professionals in developing countries is more than double the number in developed countries. For many companies and governments, global labor and talent strategies become as important as global sourcing and production strategies.
Investment ideas: Outsourcing of all types of professional talent, not just low-wage workers trained talent pools in India, China and other places and educated talent pool.
Trend 6. The role and behavior of big business will include close supervision. As companies expand their global reach, and as to intensify the economic demands on the environment the level of societal suspicion about big business is likely to increase. The teachings of the current global business ideology - for example, shareholder value, free trade, intellectual property rights, and the repatriation of profits - is not understood, let alone accepted, in many parts of the world. Scandals and environmental mishaps seem as inevitable as the likelihood that these incidents is then inflated, thereby fueling resentment and creating a political and regulatory backlash. This trend is not only the last 5 years but the last 250 years. The increasing pace and scale of global business, and the emergence of truly giant global corporations, the pressure will worsen in the next 10 years. Businesses, especially large companies, will never be loved. It may be more appreciated. Business leaders need to discuss and demonstrate the powerful intellectual, social and economic arguments for business in society and the massive contributions business makes to social welfare.
Investment ideas: Companies ways to make a good profit and find socially responsible.
Trend 7. Demand for natural resources will grow, as well as the pressure on the environment. As economic growth accelerates - especially in emerging markets - we are using natural resources at an unprecedented rate. Oil demand is expected to grow by 50 percent over the next two decades, and without major new discoveries or radical innovations supply is keeping. Unlikely We see similar spikes in demand across a wide range of raw materials. In China, for example, the demand for copper, steel and aluminum has almost tripled in the past decade. The world's resources are increasingly limited. Water shortages will be the main obstacle to growth in many countries. And one of our most valuable natural resources - the atmosphere - will require dramatic shifts in human behavior to avoid further depleted. Innovation in technology, regulation, and the use of resources will be crucial for creating a world that can both drive robust economic growth and support environmental requirements.
Investment ideas: Water filtration, pollution prevention and energy companies, new forms of clean energy to offer in particular.
Trend 8. New global industry structures are emerging. Even basic structural principles are upended: for example, the emergence of robust private equity financing changing corporate ownership, life cycles, and performance expectations. In many industries, it is a barbell-like structure that can be seen, with a couple of giants on the top, a narrow middle, and then a flourishing of smaller, fast-moving players at the bottom. Similarly, collective boundaries are increasingly blurred as interlinked "ecosystems" are suppliers, manufacturers and customers. Even basic structural principles are upended: for example, the emergence of robust private equity financing changing corporate ownership, life cycles, and performance expectations. Winning companies, with the aid of efficiency is achieved by novel structural features, will take advantage of these transformations.
Investment ideas: Companies that offer special opportunities in key process networks and supply chains that are able to offer significant improvements and capture premium profits.
Trend 9. Management will go from art to science. Today's business leaders are using highly sophisticated software to run their organizations. Larger, more complex companies demand new tools to run and manage. Indeed, improved technology and statistical-control tools given rise to new management approaches that deal. Even mega-institutions viable Long gone is the day of the "gut feeling" management style. Today's business leaders are adopting algorithmic decision-making techniques and using highly sophisticated software to run their organizations. Scientific management is a skill that creates competitive advantage to an ante that gives companies the right to play the game.
Investment ideas: methods and tools (software) that match the job skills and training. Business software and business consulting companies that offer special features that help manage the mega-corporations.
Trend 10. Ubiquitous access to information is changing the economics of knowledge. Knowledge becoming available and, at the same time, specialized companies. The clearest manifestation of this trend is the emergence of search engines (like Google), which immediately made available. An almost infinite amount of information Access to knowledge has become almost universal. Yet the transformation is much deeper than just wide access. New models of knowledge production, access, distribution, and ownership are emerging. We see the emergence of open-source approach to knowledge as communities, not individuals, are responsible for innovations. Knowledge production itself is growing: worldwide patent applications, for example, 1990-2004 increased at a rate of 20 percent per year. Companies will need to learn how to make use of this new knowledge universe - or risk drowning in a flood of too much information.
Investment ideas: Companies new ways to capture and distribute offer specialist knowledge. Even companies that specialized knowledge that can be used to reduce costs or to create innovative ways to differentiate products or services possess.
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