An Indian Civilizational Perspective

Top Ten Trends in Business and Economy

McKinsey Quarterly came out with a great article “Ten Trends to watch in 2006” (free registration required to read the article), where they discussed a lot of trends from the Macroeconomic level ro Business and Social and Environmental standpoints. These are true even today!!

They made some interesting projections like – Battlefield for Talent will shift – meaning that with 33 million university educated young professionals, the developing economies have more than twice the number of developed countries. So, the future organization is not to only think of material sourcing but also talent sourcing as a major part of its business strategy!

The list of the main trends is given below followed by some “Facts and Predictions” cited by the article! Very interesting read!

THE TRENDS

Macroeconomic Trends
1. Centers of economic activity will shift profoundly, not just globally, but also regionally.
2. Public-sector activities will balloon, making productivity gains essential.
3. The consumer landscape will change and expand significantly.

Social and Evironmental Trends
4. Technological connectivity will transform the way people live and interact.
5. The battlefield for talent will shift.
6. The role and behavior of big business will come under increasingly sharp scrutiny.
7. Demand for natural resources will grow, as will the strain on the environment.

Business and Industry Trends

8. New global industry structures are emerging.
9. Management will go from art to science.
10. Ubiquitous access to information is changing the economics of knowledge.

FACTS AND PREDICTIONS

Total world cross-border trade as a percentage of global GDP
1990: 18%
2015 (estimated): 30%

Number of regional trade agreements
1990: 50
2005: 250

Change in Germany’s population over the age of 75 from 2005 to 2015: 33%

Increase in tax burden needed to maintain current benefit levels for Germany’s future generation: 90%

Change in Japan’s population over the age of 75 from 2005 to 2015: 36%

Change in Japan’s population under the age of 5 from 2005 to 2015:
-13%

Increase in tax burden needed to maintain current benefit levels for Japan’s future generation: 175%

Computational capability of an Intel processor, as measured in instructions per second
1971: 60,000
2005: 10,800,000,000

Multiple by which e-mail traffic has grown from 1997 to 2005: 215

Number of US tax returns prepared in India
2003: 25,000
2005: 400,000

Combined market cap of top 150 mega-institutions

1994: $4 trillion
2004: $11 trillion

Total capital under management by private equity firms in 2003 in the United States and Europe:
$1 trillion

Market cap of the NYSE in 2003: $11 trillion

Growth rate of the total wealth controlled by millionaires in China from 1986 to 2001: 600%

Estimated number of Chinese households to achieve European income levels by 2020 (assuming real income grows at 8 percent annually): 100 million

Total number of workers in China: 750 million

Number employed in China’s state-owned companies: 375 million

Year when the income gap in the United States between the wealthiest 5% and the bottom 10% was the widest ever recorded: 2004

Part of national GDP spent on the public sector in the United Kingdom in 2004: 20%

UK public-sector spending as a ratio of GDP when transfer payments (for example, pensions) are included: 40%

Proportion of Latin Americans who would prefer a dictator to democracy if he improved their living conditions: 50%

Muslims as a percentage of the global population

2000: 19%
2025 (estimated): 30%

Number of major violent conflicts

1991: 58
2005: 22

Number of coal-fired power plants China plans to build by 2012: 562

Estimated year China will overtake the United States as the number-one carbon emitter: 2025

Estimated year CO2 levels will hit 500 parts per million: 2050

Years since CO2 levels last hit 500 parts per million: 50 million

Average years it takes a CO2 molecule, once produced, to degrade: 100

Global CEOs who think overregulation is a threat to growth: 61%

Probability that a company in an industry’s top revenue quartile will not be there in five years: 30%

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