mega trends in latin america: a future outlook for the “next-generation” continent
TRANSCRIPT
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Mega Trends In Latin America: A Future Outlook for the “Next-Generation” Continent
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For Additional Information
Lorena IslaResearch ManagerLatin America
+52 55 5524 8624
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Executive Summary
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Business Process Outsourcing
Health, Wellness and Well Being
Definition of Mega Trends
4
Trends Covered In This Report
Urbanization – City as a Customer
Social Trends
Innovating to Zero
New Business Models
Economic Trends
Connectivity and Convergence
Future Infrastructure Development
Future of Renewable Power
What is a Mega Trend?
Mega trends are transformative, global forces that define the future world with their
far reaching impact on business, societies, economies, cultures and
personal lives.
Why do Mega Trends Matter?
• Mega trends have diverse meanings and impacts for different industries, companies, and individuals. An analysis of these mega trends and their implications forms an important component of a company’s future strategy, development, and innovation process, and impacts product and technology planning.
• The following document sets the stage for visionary thinking by identifying the most important global mega trends in China, potential scenarios of specific trends in 2025, and the implications of these mega trends in transforming society, markets, and cultures.
Social Program
Multilatinas
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Top 10 Fast Forward Facts for Latin America: Did You Know That…
1. Around 86 percent of the total population (566.5 million) in Latin America will live in urban areas in 2025 and that
some cities like Santiago in Chile will account for up to 75 percent of country’s GDP in 2025
2. Latin America is to have 5 Mega Cities, 4 Mega Regions, 11 Sustainable Cities, and 2 Mega Corridors by 2025
3. Latin America’s population is expected to reach 661 million people by 2025. People between 35 and 64 years of
age will represent around 36.5 percent of the total population to make it one of the youngest regions globally.
4. Population over-60 will reach almost 71 million people. This segment is likely to represent an emerging
consumer segment as its purchasing power is expected to increase 55% from 2010 to 2020.
5. Due to the “She-conomy,” women are to account for 53 percent of the Latin American working population and
35.3 percent of decision-maker positions in 2025
6. Latin America’s GDP is to reach $15.14 trillion in 2025 and Brazil and Mexico will continue to be the biggest
economies of the region.
7. Broadband subscribers will grow at a 16.6% CAGR to reach more than 77 million subscriber base by 2016.
8. Major airport projects in Latin America with investments of about $401.0 billion by 2020 are likely to boost the
flow of people between countries, and increase commercial trade.
9. Healthcare expenditure in Latin America to grow 30 percent from 2011 to 2015, to reach $580.00 billion
10.Latin America’s goal is to produce 35GW of renewable energy by 2020 across the region, out of which wind
power is likely to represent 25GW
Source: Frost & Sullivan Analysis.
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Mega Cities: By 2025, it is expected that 85.7% of the population (566.5 million people) in Latin America will be living in urban areas
People per Square Kilometre
Highly Urban Countries More than 200 people
Medium-High Urban Countries
100 – 200 people
Medium Urban Countries 50 – 100 people
Low-Medium Urban Countries 10 – 50 people
Low Urban Countries Less than 10 people
Mexico CityPopulation
2025:24.6 millionGDP 2025:
$713.5 billion
BogotaPopulation
2025:11.4 millionGDP 2025:
$298.0 billion
Rio de JaneiroPopulation
2025:13.6 millionGDP 2025:
$327.1 billion
Buenos Aires
Population 2025:
15.5 millionGDP 2025:
$327.1 billion
Sao PauloPopulation
2025:23.2 millionGDP 2025:
$643.9 billion
Mega Cities in 2025
Emerging Mega Cities (4-8 million population in 2025)
SantiagoPopulation
2025:7.1 million
Belo HorizontePopulation
2025:6.6 million
GuadalajaraPopulation
2025:5.7 million
Source: United Nations, Department of Economic and Social Affairs Statistics, Frost & Sullivan and other regional and country level statistics bureau
LimaPopulation
2025:11.5 million
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Mega Corridors: Latin America to See 3 Mega Corridors by 2025 with almost 80 million inhabitants
Photo credits: Google MapsSource: Frost & Sullivan
Rio de Janeiro - Sao Paulo – Campinas
Corridor
Distance: 511 km
Population: 44.3 million
GDP Contribution: 57% of Brazil’s GDP
Toluca - Mexico City – Puebla Corridor
Distance: 198 Km
Population: 31.8 million
GDP Contribution: 39% of Mexico’s GDP
Buenos Aires – Rosario – Cordoba Corridor
Distance: 710 Km
Population: 21.1 million
GDP Contribution: 49% of Argentina’s GDP
Mega Corridors in 2025Emerging Mega Corridors in 2025
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2.6%5.5%
6.7%
8.4%(17.2)
18.4%(37.7)
31.9%(65.4)
26.5%(54.3)
Generation Y - Latin America to Have Almost 31% of Its Population (204.9 million) in Gen Y (15–34 years) in 2025
Total Population = 661 million
65 years and above 35–64 years 15–34 years 0–14 yearsChileVenezuela
Argentina
Colombia
Mexico
Brazil
Rest of LA
Note: Figures in brackets denote million of people Source: CEPALSTAT 2012, Frost & Sullivan Analysis.
Total Population = 577 million
Population Breakdown by Age, Latin America, 2010
Population Breakdown by Age, Latin America, 2025
Gen Y : Breakdown by Country, Latin America, 2025
27.7% (159.8)
34.2%
(197.3)
31.2%
(180.0)
6.9%
(39.8) 22.0% (145.4)
31.0% (204.9)
36.5% (241.3)
10.5% (69.4)
Personalization and
Individualization
Techno Savvy and Connected
24 X 7
Civic and Environmentally
Friendly
Demanding and Impatient – “Fast and the Furious”
Gen Y Consumption Behaviour
(11.3)
(13.7)
(5.3)
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Six Degrees Apart: Social Networking Users to Reach 381 Million in Latin America by 2020
75million
137 million
Non Social Networking Users
2010 2020
381 million
Social Networking Users
Users Of Top Social Networking Sites, Latin America, 2010 and 2020
FACEBOOKNon-Internet
Users
Internet Users
108 million
212 million
172 million
2011 2020
343 million
85 million
365 million
489 million
Non Social Networking
Users
Social Networking
Users
Non-Internet Users
Internet Users
1
16 million
49 million
2011 2020
3
2011 2020
305 million
73 million
4
Total: 577 million Total: 661 million
ORKUT
45 million 39 million
2010 2020
2
Source: linkedin.com, facebook.com, twitter.in, orkut.com, Frost & Sullivan Analysis.
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Minas Gerais2011 - $121.89 billion2020 - $213.68 billion
Top 10 States Contributing to Brazil’s GDP in 2010 and 2020: Santa Catarina to Advance One Rank in 2020
Source: IBGE, Frost & Sullivan Analysis.
Sao Paulo2011 - $711.59 billion
2020 - $1,204.00 billion
Rio de Janeiro2011 - $226.20 billion
2020 - $381.04 billion
Rio Grande do Sul2011 - $127.83 billion2020 - $223.43 billion
Parana2011 - $121.89 billion2020 - $213.68 billion
Pernambuco2011 - $50.60 billion2020 - $92.87 billion
Bahia2011 - $81.94 billion
2020 - $143.12 billion
Santa Catarina2011 - $82.93 billion
2020 - $154.20 billion
Goias2011 – $56.97 billion2020 - $106.93 billion
Distrito Federal2011 - $83.38 billion
2020 - $151.23 billion
10
Note: The figures denote GDP at market prices. Arrows denote movement in ranking in 2020 compared to 2010.
TOP 5 STATES TO ACCOUNT FOR 66.2% OF COUNTRY’S GDP IN 2020
1
2
3
4
5
6
7
8
9
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Space Jam: Latin America to Launch 32 Satellites by 2025
ARSAT-1, 2012
Satmex 8
Unamsat 3
Mexsat 3
SAC-E
SAOCOM 1-B
Tronador II
2012
2012
2013Satex 1SAOCOM 1A
20152015
SAOCOM 1A
2015
Nahuelsat,2015
2016
CBERS-4
2012
ARSAT-2, 2017
ARSAT-32017
Mexsat 220142015
Mexsat 1
2013
2012
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Connected World: Over 80 billion devices will be Connected Globally in Future – Latin America to have around 1.3 billion connected devices in 2016
4G Rollout is expected in 2012 reaching 28.9 million of connections
in 2016
Total Pay-TV subscribers expected to
reach 61.2 million by 2015
416 million 3G broadband subscribers
by 2016
Broadband subscribers expected
to grow at 16.6% CAGR
29.9 million (2010)*
77 million (2015)*
Internet users
212.4 million (2010)
311.4 million (2015)
The mobile subscriber base
705.6 million(2016)
Source: Frost & Sullivan* Data for Argentina, Brazil, Chile, Colombia, Mexico and Venezuela
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Countries where the “One Laptop Per Child” program has been adopted
In 2011, more than 1.5 million laptops in 9 countries were part of the program “One Laptop Per Child” (less than US$ 100 computers); Latin America has 60% of the 2.5 millions
of computers involved in this program worldwide
Source: One Laptop per Child, Government of Brazil, Argentina, Colombia, Peru and Mexico, IRSI, Frost & Sullivan Analysis
Chilean Telecommunications Plan
• Reach 100% of broadband penetration in all schools by 2012
• Internet coverage to expand from 71% to 92% by 2012
National Plan for Expansion of Broad Band Access
• Expansion of the access of Broad Band to all cities
Income Increasing
Increase of the number of computers users
Increase of Broadband Infrastructure
Workforce qualification
Macro to Micro Implications
Mexico
GuatemalaNicaragua
Colombia
PeruBrazil
Argentina
Paraguay
Broad Digital Inclusion: Brazil, Colombia and Argentina plan to invest $50 billion in broadband infrastructure before 2015
Chile
Peru
National Plan of Broadband (PNBL)
• Extend the access to Broad Band over the country until 2014
• Estimated costs: $45 billion
Brazil
Argentina Connected Program• Internet access for more
than 10 Million households by 2015• Estimated costs: $2 billion
Argentina
National Campaign of Digital Inclusion Vasconcelos
• Include adults without internet access• Creation of “digital clubs”
to teenagers
Mexico
Vive Digital• Increase fourfold the
number of connections• Triple the number of connected cities• Estimated costs: US$ 3 billion
Colombia
Chile
Uruguay
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BIOMASS
WIND
SMALL POWER PLANTS
GEOTHERMAL
SOLAR
Latin America: 2020 Vision – Total Installed Capacity (GW)
By 2020, the installed capacity from renewable
sources can be increased in 35 GW
• Development of a new “green” ecosytems
• Innovation to Zero as a new trend
Market Impacts:
1Market Focus:
Wind – 25 GW by 2020
Renewable Power in Latin America: Market’s goal is to increase the installed capacity of renewable energy in 35GW by 2020
Source: Frost & Sullivan Analysis
Mexico
Colombia
Brazil
Chile
Argentina
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CECACIER
SIEPAC
CIER
Energy Infrastructure: Investments in high voltage direct current lines are expected to reach $580 billion in Latin America by 2030
Total Trade: 591 MW
CFE-ERCOT
Total Trade: 300 MW
SIEPAC
Total Trade: 300 MW
CECACIER
Total Trade: 300 MW
CIER
Planned/under construction lines
Operating lines
Estimated investment in HVDC power lines between 2010 and
2030
$580 billion
CIER: Regional Commission to the Electrical Integration;
SIEPAC : Central American Electrical Interconnection System;
CECACIER: CIER Regional Committee to the Central –American and Caribbean Regions;
CFE-ERCOT: Mexico's Electric Power Company - Electric Reliability Council of Texas.
Supra-national mechanisms leaded by Brazil and political
stability speed cross-countries strategic agreements
Source: Frost & Sullivan analysis
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Research Scope, Objectives, and Methodology
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2012-2025
(2012-2014 Short-term, 2015-2017 Mid-term, 2018-2025 Long-term)
2012-2025
(2012-2014 Short-term, 2015-2017 Mid-term, 2018-2025 Long-term)Forecast Period
2009-20252009-2025Study Period
20112011Base Year
Latin America, which geographically includes Mexico, Caribbean, and all countries in Central America and South AmericaLatin America, which geographically includes Mexico, Caribbean, and all countries in Central America and South AmericaGeographical Scope
Source: Frost & Sullivan analysis.
Research Scope
Manufacturing, Retail, Logistics, Banking, ICT, Energy, Automotive,
Healthcare, Construction
Manufacturing, Retail, Logistics, Banking, ICT, Energy, Automotive,
Healthcare, ConstructionIndustries Covered
Please check the “Industries Covered” column
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Aims
The objective of the study is to identify and understand the key mega trends in LATAM that will impact and shape the country’s economy, society, and culture. For the purpose of this study, mega trends are categorized into urbanization, social, economy, technology, energy, e-mobility, infrastructure, business, health and wellness, political shift, e-governance, sports and industry-specific trends
Objectives
1. Identify mega trends in LATAM that will influence a wide range of activities, processes and perceptions,
both in governments and businesses
2. Define each mega trend and understand its impact from both an quantitative and qualitative perspective
and offer futuristic predictions on key economic, spatial and social trends
3. Analyse and identify the relevant sub-trends within each mega trend
4. Identify the key industries that will be impacted and influenced by mega trends
5. Assess the impact of the key mega trends and sub-trends based on the degree of importance and
certainty over the next decade
6. Carry out a Macro-to-Micro analysis to understand the unmet needs or inherent business opportunities in
relevant industries
Research Aims and Objectives
Source: Frost & Sullivan analysis.
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Research Background
This research study in addition to LATAM specific trends also contains and captures content from various other regional and global studies on Mega Trends
• M65B-18 World's Top Global Mega Trends To 2020 and Implications to Business, Society and Cultures – Completed (December 2010)
• P5DB-MT Mega Trends in India: Macro to Micro Implications of Mega Trends to 2020 – Completed (February 2012)
• M818-39 African Mega Trends: A Bright Vision for the “Growing” Continent– Completed (May 2012)• NAFD-MT Mega Trends in Latin America: A Future Outlook for the "Next-Generation" Continent –
Upcoming• M847-MT Evolving Mega Trends To Transform Turkey into a Developed Economy – Upcoming• P6E3-MT Mega Trends in Indonesia: Macro to Micro Implications of Mega Trends to 2025 –
Upcoming• M82C-MT World’s Top Global Mega Trends To 2020 and Implications to Business, Society and
Cultures (2012 Edition) – Upcoming• NA99-13 Strategic Analysis of the Developments of Urban Logistics – Upcoming
This study is also supplemented by our on-going continuous interactions with industry experts, industry players, partners and in-house industry analysts
Source: Frost & Sullivan research.
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Research Methodology: From Macro to Micro
Source: Frost & Sullivan analysis.
Identify the Mega Trend Through Brainstorming SessionsSelection of unique mega trends in LATAM through macro-economic analysis through interviews and 10 brainstorming sessions with analysts globally
Identify the Sub-Trend Through Scenario-Building ExercisesThrough a Scenario Building Exercise using data extracted through secondary and primary sources, identify unique sub-trends with implications to society, market, and other key sectors in LATAM by a Global Work Team over a period of 200 man-days
1
Macro
2
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Research Methodology: From Macro to Micro
Source: Frost & Sullivan analysis.
Assess the Impact of the Mega Trend On a Micro LevelAnalyse and determine how the mega trends will influence industries, businesses and people through scenario-building exercises with industry experts and secondary research inputs
Opportunities Analysis Analysis of opportunities to key industries and generation of suggestions for products and solutions
3
4
Micro
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Definition Used in the Study
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Definitions Used in the Study
Term Definition
Mega City City with population of over 8 million and GDP of $250 Billion and above
Mega Regions Cities grow and merge to become mega regions with population of over 15 million and above
Mega Corridors Corridors which connects two major cities or mega regions
Mega Slums 1 million urban poor living in an area measuring just 1.5 square miles
Sustainable Cities Cities built on green initiative, right from buildings to transport, governance, city planning, energy and technology. These cities are either upgraded or built from scratch
Multilatinas Latin American companies listed in the Global Fortune 500 rank
BPO Business Process Outsourcing
CC Contact Centers
M-Government Use of mobile services platform for delivering government services