"a4rb_speech-narrow" – 20090407 – do not delete this text object! 2009_05_localization...

2009_05_Localization World_05.pptx

Dr. Tobias Raffel

MEGA-TRENDS

Academic Affairs Manager, Roland Berger Strategy ConsultantsLocalization World Conference Berlin, June 9, 2009

Global

Contents Page


This document was created for our client. The client is entitled to use it for its own internal purposes. It must not be passed on to third parties except with the explicit prior consent of Roland Berger Strategy Consultants. This document is not complete unless supported by the underlying detailed analyses and oral presentation.

© 2009 Roland Berger Strategy Consultants GmbH

A. Beyond the current crisisWHY it is essential to discuss global mega-trends today

3

B. Global mega-trends through 2030HOW they will shape our world

8

C. Consequences for decision-makersWHAT global mega-trends mean for you

22

A. Beyond the current crisisWHY it is essential to discuss global mega-trends today


2005 2006 2007 2008 2009 2010 2011 2012

When people talk about the future today, they often use characters like V, U, W or L

1

Global GDP growth [%]

3.54.0 3.9

2.0


In the long run, however, a few years of developments don't make much difference

2

Global GDP growth [%]

1.6

TODAY'S CRISIS

1990 2030

3.0

3.64.2

1.5

4.0

2.1

3.4

2.0

2009


The future will be shaped by global mega-trends

3

Globalization

Value shifts Power shifts to the EastTertiarization

Use of new technologiesScarcity of resources

Population growth & ageingUrbanizationGlobalization Climate change

Global impact (not just regional/sectoral)

GLOBAL MEGA - TRENDS

Very large, profound, sustainable

Long-term developments (several decades)

etc.


So WHY is it essential to discuss global mega-trends today?

Because:

> Global mega-trends are shaping our future

> Only those who know about them can (re)act

> (Most) global mega-trends – won't "wait" for the current crisis and – won't change direction because of it

4

B. Global mega-trends through 2030HOW they will shape our world


Predicting the future is difficult and experts can be completely wrong

1

"Everything that can be invented has been invented."

"Heavier-than-air flying machines are impossible."

"If anything remains more or less unchanged, it will be the role of women."

CREATIVITY TRANSPORT EQUALITY

Charles Duell, US patent office, 1899

Lord Kelvin, President of the Royal Society, 1895

David Riesman, conservative American social scientist, 1967

"That virus is a pussycat."

HEALTH

Peter Duesberg, molecular biology professor at U.C. Berkeley, on HIV, 1988

"I think there is a world market for maybe five computers."

IT

Chairman of IBM,1943


What research institutes and future experts predict: The Roland Berger and World Economic Forum "Trend Compendium 2030"

2

INPUT OUTPUT

> Compilation of all relevant existing trend studies

> Hard data as well as qualitative assessments from experts

> Used for discussions and scenario development at WEF conferences in Davos, Dalian, etc.

> Sent out to over 4,000 decision-makers worldwide

> Presented at conferences, used for consulting work


Demographic mega-trends: The world population keeps on growing, ageing and moving into the cities

3.1

Population growth: World population grows from 6.6 billion to 8.3 billion, mainly in developing nations.

India overtakes China as the most heavily-populated country in the world in 2025. It now has a population of 1.51 billion, twenty times more than Germany's. And the latter is now shrinking.

Aging: The average age across the globe, now 28, is set to rise to 34 by 2030. In the industrialized nations, it will rise from around 39 to over 44.

Japan has the oldest population, at 52.1 on average, sub-Saharan Africa the youngest, at 21.7. Average age in Germany rises by over four years to 48.2.

Urbanization: More and more people will be living in urban agglomerations. Today, around 50% of the world's population lives in cities; by 2030, it will be over 60%.

Rural areas become depopulated, especially in Asia. Smaller cities with less than a million inhabitants grow particularly quickly. By 2030, the largest mega-cities are Tokyo (population 38.7 m), Delhi (37.7 m) and Lagos (33.1 m).

Source: Trend Compendium 2030

Known TRENDS 2009-2030 Lesser-known CONSEQUENCES by 2030


Population growth example

2009 2030

CHINA

NORTH AMERICA

Population growth [% p.a.]

Urban population [%]

Bubble size = Population 2009

JAPAN-1

0

1

2

3

20 30 40 50 60 70 80 90

LATIN AMERICA

EUROPE

INDIA

AFRICA

Bubble size = Population 2030

CHINA

Source: United Nations Population Division, City Mayors


Economic mega-trends: Asia is at the heart of a growing global economy and the tertiary sector becomes more important

3.2

Asia rises: With their economies growing 3-4 times faster, emerging Asian nations such as China and India catch up with the West.

In terms of purchasing power parity, the Chinese economy will be 50% larger than the US's by 2030, twice the size of India's and ten times larger than Germany's.

Global economic growth continues: The world economy will grow by 3% p.a. on average until 2030, so GDP doubles in the next 22 years.

India will lead the fast-growing economies, growing 272% by 2030, followed by China and Indonesia. Western Europe and Japan bring up the rear, behind the US.

Tertiary sector becomes more important: While the industrial sector remains stable globally, the services sector grows considerably.

Although the global population is growing and demand for biomass as an energy source is increasing, agriculture's share of GDP in the industrialized nations will fall to less than 1%. Agriculture will account for less than 3% of jobs.




GDP growth example

2009 2030

Source: Economist Intelligence Unit, TNS Infratest

0

2

4

6

8

10

12

35 45 55 65 75 85

US

CHINAINDIA

GDP growth [% p.a.]

Services[% of GDP]

GERMANYJAPANLATIN AMERICA

AFRICA

Bubble size = Real GDP 2009 Bubble size = Real GDP 2030


Healthcare mega-trends: People will be living longer, but increasingly unhealthily, and healthcare costs will rise

3.3

Life expectancy: Life expectancy rises, not least thanks to progress in hygiene and medicine. Today, the world's population lives to 67.3 on average; by 2030, it will be 72.2, nearly five years more.

The gap between men and women narrows. Women in the West may live nearly eight years longer than men today; by 2030, that will be down to just six years.

Unhealthy living: We are eating increasingly unhealthily – fattier foods, too much sugar, etc. – and not getting enough exercise. So diseases like obesity, diabetes and cancer keep on growing.

The two most prevalent diseases in 2030 have little to do with unhealthy lifestyles, however: HIV/AIDS and mental disease.

Medical care: As medicine advances and the quality of healthcare gets ever better, healthcare costs keep on soaring – soon, the West will be spending one dollar or euro in every five on healthcare.

Healthcare in the West will not be a problem in 2030; but the developing nations will be many millions of doctors and nurses short, so basic medical care cannot be guaranteed.




50

60

70

80

90

2 4 6 8

Developedcountries

Life expectancy [years]

Womenoutliving men[years]

Emergingcountries

Developingcountries

Life expectancy example

2009 2030

Source: United Nations

Bubble size = Population 2009 Bubble size = Population 2030


Environmental mega-trends: Average temperatures rise, energy consumption goes up and water gets scarcer

3.4

Temperatures rise: Average global temperature rises 0.5-1.5°C by 2030, resulting in dramatic changes in global ecosystems

The costs of global warming will rise to an unimaginable 5-20% of global GDP p.a. (source: Stern Report).

Energy consumption: We will be using more and more energy, 47% more by 2030, mainly because emerging Asian economies are hungry for energy.

China will have overtaken the US as the largest energy consumer by 2030. India's consumption is also on the rise, using more energy than all of Africa put together.

Water shortages: Clean, fresh water is becoming an increasingly scarce resource. This is mainly because rivers, lakes and seas are becoming increasingly dirty, and because of the effects of climate change, such as growing deserts.

Regional differences in water supplies increase. One of the main challenges is a modern distribution infrastructure in cities – in many Third World megacities, 40-70% of all drinking water just leaks away.




Energy consumption [quadrillion BTUs]

Year20302007

0

40

80

120

160

AFRICA

INDIARUSSIA

US

CHINA

Energy consumption example

2009 2030

Source: International Energy Agency, Institute of Energy Economics

Bubble size = Population 2009 Bubble size = Population 2030


Living standards mega-trends: Income grows inconsistently, infrastructure investment rises and fewer people go hungry

3.5

Income distribution: Differences in incomes between rich and poor countries shrink, but the income gap within countries widens.

A global middle class arises, 1.2 billion strong, involved in the global market, demanding top quality and education worldwide.

Infrastructure: Global population growth and the progress of civilization mean investment in infrastruc-ture will be huge in the coming decades. Of those funds, half will be needed by developing nations.

Almost twice as much is invested in water infrastructure as in energy infrastructure – which, in turn, is four times more than in new roads and railways.

Food: The number of undernourished people falls – from 710 million (13.5% of the world's population) today to 460 million (6.9%) by 2030.

The specter of undernourishment will still not be completely banished in the foreseeable future, however. Western nations have too much; others, Africa in particular, have too little. And climate change makes the problem much worse.




Daily food consumption [kcal/person]

Under-nourishedpeople [%]

2,200

2,400

2,600

2,800

3,000

3,200

3,400

3,600

0 5 10 15 20 25 30 35

SUB-SAHARANAFRICA

SOUTHASIA

LATINAMERICA

EASTASIA MIDDLE EAST/

NORTH AFRICA

DEVELOPED COUNTRIES

Daily food consumption example

2009 2030

Source: United Nations

Total number of undernourished people 2009 Total number of undernourished people 2030


Technological innovations will also change our lives in the decades ahead – But are also difficult to predict

4

Source: Nowandnext Innovation Timeline, BT Technology Timeline

Intelligentcosmetics

Mood-sensitivehome decor

Locationdevicesimplanted into pets

Wearablecomputer

Dreammachines

Roadreser-vationsystem

Computersthat write mostof their ownsoftware

Full voiceinteractionwith PC

Roboticsurgery

Arti-ficialeyes

Face recog-nitiondoors

Fullyauto-pilotedcars

Syntheticbacteria

Child-carerobots

Holo-graphicTV

Anti-noisetechnologyin gardens

3Dhomeprinters

Gene-baseddiets

Accele-ratedschooling

Memoryenhance-ment inhumans

Self-repairingroads

Virtualvacations

Spacefactories

Sleepsurrogates

Singleglobalcurrency

Videowallpaper

2009 2030

C. Consequences for decision-makersWHAT global mega-trends mean for you


It is necessary to analyze the impact of global mega-trends on your specific industry

1

Global localization

industry

Globalization Demographic change

Value shifts

Power shifts to the East

Climate changeUse of new technologies

…

YOU as decision-maker


The localization industry will be affected in many ways (1/2)2

GLOBAL MEGA-TRENDS Possible impact on localization industry

Globalization

Use of new technologies

> Increasing demand for localization services (globalization of businesses, terrorism surveillance, EU, etc.)

> More integrated solutions (simultaneous product launches worldwide, parallel content creation and translation, etc.)

> Translation technologies (machine translation, translation memory), language recognition software etc. will advance and help – but not replace human translation and localization

> Increased personalization of language services> Collaborative open-source services and free-of-charge

business models


The localization industry will be affected in many ways (2/2)

GLOBAL MEGA-TRENDS Possible impact on localization industry

Demographic and power shifts > From European to Asian languages; Chinese, Arabic and Spanish more important; Chinese as a second lingua franca?

> Death of languages or revitalization and re-emergence of local dialects: more or fewer languages spoken?

> "The old urban Asian customer"

Healthcare, environmental and living standards shifts

> New topics and customers emerge> Role of your industry beyond providing localization

services (addressing global inequalities, shaping trends)?


So WHAT do global mega-trends mean for you?

> Be aware of their impact: Analyze what global mega-trends mean for your industry's/your business's – value chain– service portfolio– customer base– etc.

> Prepare for challenges and opportunities: You will have to meet different customers needs in the future, develop new products and services, etc.

> Plan differently: Use scenario planning as a tool to integrate long-term developments

3

"a4rb_speech-narrow" – 20090407 – do not delete this text object! 2009_05_localization...

Documents

global slide

trends wont

global impact

text object

global gdp growth

world slide

current crisis

wont change direction