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TRANSCRIPT
Global Megatrends
Marisa Drew
Global Summit of Women
May 2011
2 / 40
Introduction
Megatrend "Multipolar World“
Megatrend "Sustainability"
Woman’s Role in Facing the 21st
Century Megatrend Challenges
Response: Innovation
Megatrend "Demographics"
Agenda
3 / 40
What is a megatrend?
A major and lasting alteration of society
Progressive change lasting several decades or centuries
The source can often be rooted in a major technological breakthrough, a geopolitical rebalancing, or demographic or environmental shift
Slide 4 / 40
Multipolar world
Slide 5 / 40
From a bi-polar world…
1981
Slide 6 / 40
... to a multi-polar world
1981
1990s | G7
Slide 7 / 40
... to a multi-polar world
2009 | G201990s | G7
1981
Slide 8 / 40
Multipolar world
–
The
world
economy
1980, share of world GDP
Emerging MarketsDeveloped Markets
44%56%
Source: IMF, Credit Suisse
Slide 9 / 40
Multipolar world
–
The
world
economy
1980 // 2030, share of world GDP
Emerging MarketsDeveloped Markets
63%37%
Source: IMF, Credit Suisse
Slide 10 / 40
Top 10 | GDP ranking
in USD (IMF est)
2009: 11th
2009: 12th
2009: 9th
Slide 11 / 40
Average GDP growth 2009 to 2014
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
Advancedeconomies
Central andEastern Europe
LatinAmerica Emergingeconomies
Developing Asia Commonwealthof Independent
StatesSource: IMF estimates
GDP growth
Slide 12 / 40
0% 20% 40% 60% 80% 100%
Population
Land mass
Foreign exchange reserves
Energy consumption
GDP at PPP
Exports
GDP at market rates
Market cap (full market)
Market cap (float adjusted)
Emerging Markets Developed markets
Emerging economies as % of world total
Emerging markets accounts for:
–
More than 80 % of world’s population
–
Around three quarters of the land mass
–
Around 50 % of exports
However, the economic performance amount only to one-third of global GDP
Emerging Markets –
too big to ignore
Economic output of emerging economies tripled over the last 10 years and there is much more to come.
The IMF expects emerging markets to grow by another 50 % in the coming 5 years.
Source: Bloomberg, Credit Suisse / IDC, 2010
Global importance & economic strengths: EM are likely to thrive & grow in the future
Slide 13 / 40
Going forward, over the next five years, emerging market economies are poised to outpace the developed market growth by around four percentage points*, driven by strong fundamentals, such as:
–
Demographic dividend
–
Growing middle class
–
Under-penetrated consumer market
–
Low credit penetration
–
Low labour costs and high productivity growth
–
Resource richness with control of majority of resources
–
Solid balance sheets with low and growth supportive debt/GDP ratios
–
Significant need for infrastructure build-up
Fundamentals of Emerging Markets remain robust
*source: International Monetary Fund (IMF)
Slide 14 / 40
Consumption shifts to emerging markets
Source: IMF, CEIC, Credit Suisse
An expected strong economic growth, increasing wages, and higher per capita income, growth generators in emerging markets are likely to shift from exports and investments to consumption.
As this happens, poverty rates typically decrease and purchasing power rises.
This will lead to a massive expansion of the global middle class, possibly becoming the main driver for consumption in this decade.
Slide 15 / 40
Rapidly growing middle class in China
Source: McKinsey, UN
Annualincome
300 mn
0
20
40
60
80
100
20152005 20251985 1995Poor Global affluent Lower middle class Upper middle class Mass affluent
< 25,000 RMB(< 3662 USD)
25,000 –
40,000 RMB(3662 -
5859 USD)40,000 –
100,000 RMB(5859 -
14648 USD)100,000 –
200,000 RMB(14648 -
29295 USD)> 200,000 RMB(> 29295 USD)
300 mln
Slide 16 / 40
Emerging
brands: Shifts to innovations and brand building
Emerging
brands
With the trend towards a multipolar world and the rise of the emerging market consumer, we now see the emergence of new global brands that have their origins in emerging markets.
The main advantages of emerging brands compared to developed market brands are their lower cost structures, a “fresher” image and national pride.
Source:
BrandZ
Slide 17 / 40
Frontier markets
What
are Frontier
Markets
Frontier markets are smaller, less developed emerging markets. These economies tend to be at an earlier stage of development than established emerging markets like China or India. In this sense, we consider them to be the next generation of emerging markets.
The investment case
The premise of the frontier markets investment case is that, with time, frontier markets will graduate to emerging or even developed market status.
Today’s frontier markets from Nigeria to Sri Lanka have similar growth prospects, given their large and growing populations, technological catch-up potential, large output gaps and consumer markets that are still in their infancy.
Slide 18 / 40
Sustainability
Slide 19 / 40
Per Capita Consumption Known Raw Material Reserves (rhs)
Sustainability
1975 20101950
in current USD
Years50
25
30000
10000
Source: Bloomberg, Credit Suisse
Slide 20 / 40
OilOil
Oil Oil
Oil
Oil
Oil
1000 AD 1800 1950 20101 AD
Population:
2.5x
Population Growth
Pre
ssur
e on
Res
ourc
es
Energy:
+600% since 1950
Increased consumption and demand
Sustainability
Source: IEA, UN, Credit Suisse
Slide 21 / 40
0
20
40
60
80
100
120
140
Jan 90 Jan 92 Jan 94 Jan 96 Jan 98 Jan 00 Jan 02 Jan 04 Jan 06 Jan 08 Jan 10
Oil Price
Oil Price
15
30
Source: Factset, Credit Suisse
USD/barrel
Oil moved out of the USD 15 –
30 Band
Last data point: 02.05.2011
Slide 22 / 40
Water
Water losses from urban water networks as % of water supply
> 60% of world
population will be
affected by water
scarcity by 2025
according to a UN
study
> 50% of fresh water
reserves are polluted
Source: UN0 5 10 15 20 25 30 35 40 45 50
Bulgaria
Slovenia
Hungary
Ireland
Czech Rep.
France
Italy
Slovak Rep.
UK
Finland
Denmark
Germany
Slide 23 / 40
Demographics
Slide 24 / 40
Demographics
1800 | 1bn // 1930 | 2bn
Source: UN, Credit Suisse
Slide 25 / 40
Demographics
1800 | 1bn // 1930 | 2bn // 1975 | 4bn
Source: UN, Credit Suisse
Slide 26 / 40
Demographics
1800 | 1bn // 1930 | 2bn // 1975 | 4bn // 2025 | 8bn
Source: UN, Credit Suisse
Slide 27 / 40
The demographic transition
Source: Ronald Lee (2003): «
The Demographic Transition: Three Centuries of Population Change
»
JEP 2003
years at birth in billions
Life expectancy (in years) Population growth (in billions)
0
10
20
30
40
50
60
70
80
90
1700 1800 1900 1950 2000 2050 21000
1
2
3
4
5
6
7
8
9
10
Slide 28 / 40
Source: OECD, Credit Suisse / IDC
5
10
15
20
25
30
35
40
0-16 years 17-45 years 46-65 years 66+ years
EM EU 12
%
Population age
distribution: EM
vs. EU
Slide 29 / 40
Family & children8.0%
Unemployment6.1%
Sickness, health care &
disability36.5%
Old-age & survivors45.9%
Other3.5%
By 2045 the number of 60+ people globally will exceed those under 15
In most EU countries, old-age and survivors benefits make up the largest item of social protection expenditure
–
In Italy, nearly 60.7% of total benefits were devoted to old-age & survivors benefits
Real Health expenditure grew by 70% more than real GDP growth over the 1970-2002 period in most developed countries
Social benefits as a % of total benefits, EU-27, 2005
Source: ECP, Eurostat, Hagist
and Kotlikoff
(2005)
Demographics
& health
expenditure
Slide 30 / 40
According to the United Nations the urban population in the developing world will grow at close to one million people per week
in the next 25 years
...or at an equivalent to the population of Los Angeles per month
...or at an equivalent to the population of France per year
Urbanisation
in developing regions
The urban life style is much more resource intensive: commuting,
water infrastructure, electricity, waste
Slide 31 / 40
Limited Resources
The Megatrends triangle
More consumers
Higher per capita consumption
Slide 32 / 40
Slide 33 / 40
Innovation is fundamental to come up with solutions for the world‘s future needs and challenges.
Today‘s pace of technology diffusion coupled with the convergence of technologies is a powerful lineup for future economic growth.
Innovation
Slide 35 / 40
Challenges create innovation
Wind Farm, Nevada
Solar Panels on facade
ThyssenKrupp Building in Duisburg (Germany)
Sky Sails, reduction of emission between 10 and 35%
Slide 36 / 40
… and the motivation to action change
Cleaning polluted water reserves Build up desalination plants
Estimated global annual expenditure on Water Infrastructure (in USD bn)
Improve water distribution infrastructure
Source: OECD
In 2008, China allocated $220bn of its $586bn stimulus package to green projects
Slide 37 / 40
Robotics
The
main
drivers
for
the
use
of robots
are
safety, precision, reliability
and the
substitution
of labor
by
capital. Robots
will become
more
important
in the
next
years.
Nanotechnology
While
still at an early
stage, nanotechnology
is
set
to become
a part
of our
daily
life and has the
potential to become
one
of the
most
important
technologies
of the
21st century.
Digital World / Social media
The
internet
is
possibly
the
most
important
innovation
in recent
decades
and although
already
well advanced, it
is
far from
being
fully
utilized. Social media one example of a “world changing“
use of internet.
Genetics/Biotechnology
As a result
of occurrence
of age and an unhealthy
life-style, new
diseases
will appear. The
demand
of advanced, successfull
medical
treatment
will increase.
Innovation
Slide 38 / 40
Women’s Role in facing 21st
Century Megatrend Challenges
Slide 39 / 40
Women’s role in facing the 21st century Megatrend challenges
Closing the gender gap between male and female employment rates could boost GDP in EM countries by 14% and in the US/UK by 9%
Women perform 66% of the world’s work, produce 50% of the food but earn 10% of the income and own 1% of the property
In 2006, women constituted 85% of the poorest 93 million clients of microfinance institutions
Women control 27% of global wealth today or roughly $20.2 trillion; this is expected to grow at a rate of 8% per year through 2014
Source: World Bank, UN, Credit Suisse
Slide 40 / 40
Women’s role in facing the 21st century Megatrend challenges
“Teach a man to fish, feed him for a lifetime. Teach a woman to fish, she’ll teach her friends, start a business and pretty soon an entire village is on the mend”
–
Hilary Clinton (adapted)
“It is natural that affluence should be followed by influence”–
Augustus William Hare, 1827
“And who knows? Somewhere out there in this audience may even be someone who will one day follow in my footsteps and preside over the white house as the President’s spouse. I wish him well”
– Barbara Bush
41 / 40
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