new developments in the global digital economy · shares of global middle -class consumption, 2000-...

Mauro F. GuillénThe Lauder InstituteThe Wharton School

New Developmentsin the Global Digital Economy

Which country successfully launched a probe into Mars orbit

on the first attempt?

How much did it cost?

• $74 million.• Interstellar: $165 million.• The Martian: $108 million.

Which event is larger?

• Cyber Monday.• Black Friday.• Singles’ Day.

Gambling Revenue

•Vegas or Macau?•Vegas: $7 billion.•Macau: $33 billion.

By 2040, which will be the world’s largest

middle-class market?

Source: Homi Kharas.

Shares of Global Middle-Class Consumption, 2000-2030

Shares of Global Middle-Class Consumption, 2000-2050

Source: Homi Kharas.

TREND #1: SOCIAL MEDIA USERS (% POPULATION)

Source: We Are Social, 2018 Digital Yearbook.

WORLD’S LARGEST CITIES 1960

Source: United Nations Population Division, World Urbanization Prospects, the 2011 Revision.

WORLD’S LARGEST CITIES 1970

Source: United Nations Population Division, World Urbanization Prospects, the 2014 Revision.

WORLD’S LARGEST CITIES 1990

Source: United Nations Population Division, World Urbanization Prospects, the 2014 Revision.

WORLD’S LARGEST CITIES 2014

Source: United Nations Population Division, World Urbanization Prospects, the 2014 Revision.

WORLD’S LARGEST CITIES 2030

TREND #2: AIRBNB DEMOGRAPHICS

Source: https://www.bloomberg.com/technology

Wines• What’s the difference between

grape juice and wine.• Why is the standard wine bottle

750 ml?• How do you make sparkling

wine?• What’s the difference between?

– Champagne.– Cava.– Prosecco.

TREND #3: DIGITAL SALES OF WINESTotal value CAGR Value per Offtrade Offtrade Online Sales (% total offtrade volume)

Country 2016 $bn 2011-16 Liter $ value $bn vol mn l 2011 2012 2013 2014 2015 2016China 66.5 3.1 14.5 23.7 3,090.1 1.7 3.1 6.5 10.6 15.0 19.3USA 44.0 2.1 13.9 24.2 2,670.6 1.2 1.3 1.4 1.5 1.6 1.8France 29.0 0.2 12.2 10.6 1,679.5 2.9 3.1 3.3 3.7 4.1 4.3UK 20.2 0.1 14.9 12.4 1,124.3 6.7 6.8 6.8 8.1 10.1 10.3Japan 19.4 1.2 21.9 6.7 567.0 2.4 2.6 2.9 3.1 3.2 3.3Italy 15.5 0.4 6.7 7.1 1,551.4 1.4 1.5 1.7 1.8 2.0 2.0Germany 14.5 0.0 7.2 6.8 1,657.1 2.2 2.3 2.3 2.7 3.2 3.3Canada 9.5 3.5 16.6 6.8 484.7 0.2 0.2 0.3 0.3 0.3 0.3Australia 6.8 3.2 11.8 3.5 459.9 6.0 7.0 8.0 9.5 10.5 11.3Russia 5.5 -5.5 6.1 5.1 872.9 0.1 0.1 0.1 0.2 0.2 0.2Spain 5.2 -0.6 5.4 1.6 465.9 1.0 1.0 1.1 1.2 1.3 1.3Switzerland 5.0 0.1 18.6 2.8 230.2 0.6 0.6 0.6 0.6 0.7 0.7Austria 4.3 1.1 16.9 1.0 135.7 2.5 2.5 2.5 2.6 2.7 2.7Brazil 4.0 -0.4 11.7 2.5 254.9 1.6 1.8 2.1 2.3 2.4 2.5Greece 3.4 -4.7 11.7 1.0 153.9 - - - - - 0.1Argentina 3.4 6.8 3.4 2.1 834.1 1.5 1.6 1.7 1.8 1.8 1.9Belgium 3.3 1.1 11.4 1.6 219.2 6.9 7.1 7.3 7.6 7.8 8.5Sweden 3.2 3.0 14.3 2.2 202.7 1.4 1.8 2.4 2.3 2.6 2.7

LABELS VS. BRANDS

Trend #4:Sales of e-Books in the US.

http://newsroom.publishers.org/book-publishing-annual-statshot-survey-reveals-religious-crossover-and-inspirational-books-supported-trade-book-growth-in-2016/

TREND #5: REMMITANCES

Trend #6:Largest Populations Age 15-35

Source: United Nations Population Division, World Population Prospects: The 2017 Revision.

2015 2030 2015=100India 458.53 487.25 106.3China 413.96 323.71 78.2Indonesia 86.67 92.05 106.2Nigeria 59.68 91.34 153.1USA 87.94 89.33 101.6Pakistan 68.40 82.90 121.2Brazil 69.79 63.00 90.3Bangladesh 59.30 60.88 102.7Ethiopia 35.68 51.79 145.2Mexico 43.35 45.53 105.0Philippines 35.46 41.68 117.5DR Congo 24.35 41.27 169.5Egypt 32.16 37.92 117.9Russia 39.77 30.98 77.9Viet Nam 32.42 27.97 86.3Turkey 25.60 25.86 101.0Iran 30.89 23.79 77.0Japan 26.48 22.89 86.4South Africa 20.12 21.10 104.9Thailand 18.92 17.05 90.1

TREND #7: POPULATION 60+ YEARS OF AGE

Source: United Nations Population Division, World Population Prospects: The 2017 Revision.

2015 2030 2015=100China 214.7 361.6 168.4India 116.8 189.1 162.0USA 65.8 91.7 139.5Japan 42.0 45.2 107.7Brazil 24.4 42.5 173.8Indonesia 21.0 38.2 182.5Russia 29.0 34.4 118.7Germany 22.3 28.5 127.6Bangladesh 11.4 21.7 190.6Mexico 12.1 21.5 178.1Italy 17.0 21.2 124.9Pakistan 12.5 20.7 165.5France 16.1 20.4 126.1UK 15.4 20.0 129.8Thailand 10.7 18.7 174.1Viet Nam 9.6 18.6 193.5South Korea 9.3 16.7 179.7Spain 11.3 15.4 136.0Turkey 9.0 15.0 167.4Ukraine 10.0 10.8 107.9

CARING ROBOTS

TAKING CARE OF CHILDREN

TREND #8: Dating Services (million USD)

Source: Statista, eServices Report 2017.

• Entertainment.• Health:

− Surgery.− Mobile health.− Psychological/Psychiatric therapies.− Stimulate motor functions.− Anxiety reduction in dentistry or MRIs.− Autism treatments.

• Product design: from automobiles to buildings.

• Quality control of dangerous substances.• Employee training.

TREND #9: VIRTUAL REALITY

• Internet of Things: Physical Digital.• Virtual reality: Digital Physical.• Early applications in:

− Transportation & delivery systems.− Autonomous vehicles.− Healthcare.− Telepresence.

• The idea is to:− Make VR dynamic and adaptive.− Increase empathy.

TREND #10:INTERNET OF THINGS + VIRTUAL REALITY

TREND #11: 3D PRINTING

3D PRINTING’S IMPACT ON TRANSPORTATION

Source: http://www.strategyand.pwc.com/perspectives/2015-commercial-transportation-trends

• Manufacturing lead times reduced to minutes.

• Shorter time to market for new designs.

• More efficient use of materials, including leftover substrate powder.

• Reduced inventories.

IMPACT OF 3D PRINTING ON THE SUPPLY CHAIN

• Stronger materials.• Higher-strength composites.• Sustainability through durability and

more energy efficiency.• Nanomedicine: diagnostics and

treatment.• Nanorobotics.• Programmable matter.

TREND #12: NANOTECHNOLOGIESOR THE MANIPULATION OF MATTER ON AN ATOMIC,

MOLECULAR OR SUPRAMOLECULAR SCALE

Is the Global Digital

Economy A Tsunami?

No. It’s More Like a

Tornado!