future of global mobility and international economy
TRANSCRIPT
The future of global mobility and the
international economy6 November 2015
Mark BeatsonChief Economist, CIPD
Nothing is certain, but some things (we think) we know …
Known knowns
Known unknowns
Unknown knowns
Unknown unknowns
“Prediction is very difficult, especially about the future”
Contents
• Globalisation• The international economy• Population change• Known unknowns
Globalisation
Globalisation
Freedom of movement:
GoodsServicesMoneyPeopleData
Knowledge
Proximate drivers
Tariff liberalisation
Financial liberalisation
Transport costs
Information processing
costs
Long term drivers
Political openness
Technology development
Globalisation: expansion of world trade
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
0
100
200
300
400
500
600
700
Volume of goods and services traded globally, 1980 = 100
Source: IMF
Globalisation: putting global flows in context(annual average compound growth rate)
Goods (1980-2011)
Services (2001-2011)
Money (2002-2012)
People (2001-2011)
Data (2008-2013)
7.7%11.6%
4.1% 2.7%
47.6%
Source: McKinsey Global Institute, ‘Global flows in a digital age’
Source: McKinsey Global Institute, ‘Global flows in a digital age’
Source: McKinsey Global Institute, ‘Global flows in a digital age’
Top 10 most connected nations, 2012Rank 2012 Goods Services Money People Data Flow
intensity (% of GDP)
Germany 1 3 5 7 5 2 110
Hong Kong 2 1 4 3 14 N/A N/A
USA 3 8 9 5 1 7 35
Singapore 4 2 3 4 18 5 436
UK 5 13 6 9 7 3 60
Netherlands 6 6 7 15 29 1 157
France 7 9 10 36 15 4 60
Canada 8 16 22 13 9 18 76
Russia 9 19 30 16 2 21 63
Italy 10 11 20 31 16 10 59
Source: McKinsey Global Institute, ‘Global flows in a digital age’
There are only 6 “truly connected” global cities*• London• New York• Hong Kong• Tokyo• Singapore• Dubai
Cities with at least one million residents and major hubs for at least four of the five flows.Source: McKinsey Global Institute, ‘Global flows in a digital age’
The international economy
Emerging economies have increased in relative importance
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
0
10
20
30
40
50
60
% share of global GDP (PPP basis)
G7ChinaIndiaRussian FederationBrazilSouth Africa
Source: IMF
But there are still wide gaps in living standards
1980
1983
1986
1989
1992
1995
1998
2001
2004
2007
2010
2013
0
5000
10000
15000
20000
25000
30000
35000
40000
45000
50000
GDP per capita (PPP basis, current international $)
BrazilChinaIndiaRussian FederationSouth AfricaG7
Source: IMF
The short term outlook is reasonably benign
India
China
UAEUSA UK
Worl
d
Singap
ore
German
y
South
Africa
France
Japa
nBraz
il
Russia
-6
-4
-2
0
2
4
6
8
10% GDP growth by year, constant prices, market exchange rates,
2015-2020
Source: IMF
China and India are projected to become even bigger global players by 2030
USAChin
a
Euro ar
eaInd
iaJa
pan
Russia UK
Brazil
Canad
a
Indon
esia
South
Africa
0%
5%
10%
15%
20%
25%
30%
Potential output as % share of world total, 2015-2030, 2005 PPP basis
Source: OECD
Population change
Population age structures vary
Source: Eric Kaufman, Birkbeck College.
Old-age dependency ratios will increase in most advanced economies – but not everywhere
China
Korea
Russia
Turke
ySpain
Brazil
Indone
sia USA
German
y UKIta
ly
South A
frica
Mexico Ind
ia
Franc
e
Japa
n0
10
20
30
40
50
60
70
80
(% of population 16+ aged 15-64)2011 2030
%
Source: OECD
Changes become more acute in the long term
Korea
China
Russia
Japa
nSpa
in
German
yIta
lyBraz
il
France UK
USA
Turkey
Indon
esia
Mexico Ind
ia
South
Africa
-20
-16-13 -12 -12 -11
-10-8 -8 -8 -7 -6 -6
-4
1 2
% point change in population aged 15-64 as % of population aged 16+, 2011-2060
Known unknowns
Technological innovation as the source of long-term growth• Will the USA remain the global technology
leader?• Has the pace of innovation slowed down? Or
is it set to accelerate?• Has the pace of innovation diffusion slowed
down? If so, what’s stopping it?• Impact of climate change – mitigation versus
adaptation
Global commodity prices
1960
1963
1966
1969
1972
1975
1978
1981
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
0
20
40
60
80
100
120
140
Constant prices, 2005 $, 2010=100
Source: World Bank
Energy
Non-energy
Educational attainment is on the rise everywhere – to varying extents
02468
1012141618
Mean years in education for the adult population 20102060
Source: OECD
Women’s employment can rise further
Icelan
d
Switzer
land
Netherla
nds
Canada
German
y
New Z
ealan
d
United
King
dom
Israel
(1)
Japan
France
Portuga
l
OECD-Tota
l
Irelan
d
Poland
Hunga
ryChil
e
Mexico
Turke
y0
10
20
30
40
50
60
70
80
90
Female employment rate, 2012
Source: OECD
Political stability• USA• Euro area• UK• Emerging markets:
• Brazil• China• India• Russia• South Africa
• Systemic versus country risk?
Societal values and attitudes
Jord
an
Malays
ia
Thailan
d
France
India
Russia
Turkey
South A
frica
Hong Kong
WVS ave
rage
China UK
Poland Italy
USA
German
y
Netherla
ndsSpain
Brazil
Switzer
land
Australia
Canad
a
Sweden
0%
10%
20%
30%
40%
50%
60%
70%
% of people who would not like to have immigrants/foreign workers as neighbours, 2005/06
Source: World Values Survey, wave 5
“When my information changes, I alter my conclusions. What do you do, sir?”
