Emerging Macro Trends – My perspective (Year 2005)

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Macro Trends

  • The population is aging in Developed Economies but is getting younger in some Developing Economies.
  • Skill mismatch amongst countries.
  • Outsourcing / Offshoring are more prevalent.
  • Increasing Globalization and Qualitative Restrictions.
  • Increasing Regulatory Intervention.
  • The increasing role of NGOs in Global society.
  • Increase in speed of Change.
  • Free flow of Information and Ideas on real time.
  • Convergence of Industries, Competition can come from anywhere.
  • Conflict amongst Executive, Judiciary, Bureaucracy, NGOs and Corporates.
  • Collaboration and Partnership approach.
  • Over Capacity in most industries likely to stay.
  • Increasing Role of emerging economies in the growth of global GDP.
  • Rich getting richer but in some countries like India share of Rural income has also increased.
  • Piracy may be here to stay.
  • Virus attacks and hacking may continue.
  • Rising healthcare and pension costs.
  • Money power is the dominant power.
  • Literacy levels are going up.
  • Rising Unemployment/underemployment.
  • The increasing role of Corporations / NGOs / Individuals towards the development of society.
  • Role of media plays a big role in shaping society.
  • Declining role of some Global Institutions.
  • Knowledge Capital is more important than Financial Capital.
  • Unpredictable weather and Environment.
  • Consolidation and fragmentation of economies/countries continue to co exist.

Organization Structure

  • Flatter structures.
  • The innovative and agile organization will have a relatively long life.
  • Role of leader undergoing a change.
  • Merit rather than the length of service and age criteria for growth.
  • Pink Slip culture is here to stay.
  • More and more people willing to take Ownership and Accountability.
  • An organization that empathizes with people and has a transparent, open and performance driven culture will grow faster than the others that don’t.
  • Only monetary incentives will not drive performance, people will look for Affection, Attention, Appreciation, and Achievement.
  • People look for Complex solutions for simple problems.
  • CEO’s / Governments may not cut losses because of Legacy costs and Social repercussions.

Science and Technology

  • The pace of Innovation will continue to increase.
  • Technology will continue to Enable businesses to improve productivity.
  • Development cycles may continue to shorten.
  • More features and benefits will be available at a lower cost i.e better value for money.
  • More intelligence will be embedded in products.
  • Miniaturization of products.
  • Benefits of Collaboration may be maximum in Research.
  • One product for multiple consumer needs.

Lifestyle and People Behavior

  • Greater awareness and higher Aspirations.
  • Women, Young adults, and children play a bigger role in all walks of life.
  • People are more stressed than ever before, fear, frustration, anxiety, and anger may continue to increase.
  • Lower trust and confidence in relationships.
  • Greed, Ego and short term approach could drive the behavior of people.
  • People are more health conscious.
  • People may look for solace in FAITH.
  • Personal agenda could be more important than Organization’s agenda.
  • People in emerging markets have started to assume more debt.
  • Entrepreneurial Spirit and risk taking ability is on the rise.

Customer, Markets, and Products

  • Competitive intensity will increase.
  • Competition can come from a different industry or geography.
  • Need to be Globally competitive.
  • Consolidation will happen but may not yield perceived results.
  • The consumer is more aware and has much more choices.
  • A shift of power with consumer intermediaries.
  • Buyers market.
  • Quicker commoditization of products.
  • Shorter product life cycles.
  • Time to market will shorten.
  • Development of used products markets.
  • Continued focus on cost reduction.
  • Consumers may not necessarily own the assets they would be happy to pay for use.
  • Segmentation of mass media.
  • Organizations are more focused on the benefits of Ad Spend.
  • Individual solutions rather than mass market.
  • Consumer may not necessarily pay for a Brand.

Financial Markets

  • Free flow of Capital across borders.
  • Development of complex derivatives instruments.
  • Capital market expectations drive the behavior of an organization which in turn also impacts the behavior of the society.
  • Power of US $ is declining.
  • Allocation of Capital for emerging markets may increase.
  • Growth Capital is not a constraint.
  • Artificial wealth creation through inflation of assets.

Some Questions

  • Will the world really become one i.e boundaryless in a true sense?
  • Will BRIC economies be as powerful as they are perceived by Goldman Sachs?
  • Will the definition of CORE undergo a change?
  • Will there be another technology revolution that will impact Communication and Mobility?
  • Can the human brain be replaced by Computers and human actions replaced by robots?
  • How will Biotechnology impact our lives?
  • Will the industry cycles continue?
  • How long will productivity continue to improve?
  • How will the role of Institutions (including Educational institutions) impact the future of society?
  • When will there be a commercial substitute for petrol?
  • Reliance on Gold and US$ as investment options?

April 2005