Six Mega Trends to watch

Global PR Summit

2012 www.grayling.com

Five mega

trends to watch

2012 and beyond

Global PR Summit 2012

31 October

Michael Murphy

Grayling, Global

CEO

The Panel:

Justine Thody

EIU, Editorial

Director, Americas

Jonathan Perelman

Google, Global Head

of Industry Relations

The Panel:

John McLaren

Akzo Nobel, Director

of Corporate

Communications

Developed world: Age of austerity

1

Typical features of a post-crisis decade

Credit growth: Weak

House prices: Fall in real terms

Unemployment: Stubbornly high

GDP growth: Weak

Banks: Financial repression

Developed world:

Post-financial

crisis recoveries

are prolonged

98

100

102

104

106

0 1 2 3

Past recessions with

financial crises

Normal past

recessions

Consumer spending volume,

pre-recession peak = 100

Years after pre-recession peak

Source: IMF

2. The centre of gravity shifts

Sources: National governments, Haver, EIU

The cost of the crisis

Difference, in % terms, of real

output per head before the

recession started in 2007

compared with 2012 (forecast)

%

Surging ahead or still digging out?

2. The centre of gravity shifts

0 1 2 3 4 5 6 7 8 9

China

India

Nigeria

Vietnam

Indonesia

Colombia

Egypt

Turkey

Brazil

Russia

SouthKorea

Mexico

SouthAfrica

US

Canada

Japan

UK

Germany

France

Italy

Real GDP, average annual % change, 2012-2016. Source: Economist Intelligence Unit

Fastest-growing economies:

Next five years

BRICs

CIVETS

Other EMs

G 7

0 5,000 10,000 15,000 20,000 25,000

India

China

South Africa

Mexico

Turkey

Argentina

Brazil

Russia

Taiwan

S Korea

Sources: Economist Intelligence Unit, CountryData

Income catch up

has a long way to run GDP per head 2012 (estimated) US$

The centre

of gravity

shifts

2

% of global retail sales. Source: EIU Market Indicators and Forecasts

But EMs are already

the worlds shoppers

2. The centre of gravity shifts

Retail sales, US$ millions. Source: EIU Market Indicators and forecasts

China matches US

in retail sales

The joy of

ageing and

the rise of

the youth

3

2. The centre of gravity shifts

0

5

10

15

20

25

30

35

40

45

Ja

pa

n

Ge

rma

ny

Ita

ly

Gre

ec

e

Ca

na

da

Ru

ss

ia

US

Ch

ina

Tu

rke

y

Bra

zil

Ind

on

es

ia

Co

lom

bia

Vie

tna

m

Ind

ia

So

uth

Afr

ica

Eg

yp

t

2008

2016

Emerging markets have

better demographics

Old age dependency ratio: ratio of population aged over 64 to 15-64.

Source: Economist Intelligence Unit, Country Data.

2. The centre of gravity shifts

Ageing:

neednt be all bad news!

Global

swarming

4

By 2025 around 1bn living in Chinas cities

By 2025 15 cities with 25m+ population

By 2025 200+ cities with 1m+ population

By 2025 170 new mass transit systems built

By 2025 40bn sq m of floor space built

By 2014 Chinas urban population increases by 80m

China urban inflows, 2010-20. Denser colour=greater inflows.

Cities, China:

Unprecedented urbanisation

Source: China Regional Forecasting Service,Economist Intelligence Unit.

0

1000

2000

3000

4000

5000

6000

7000

2010 2020 2030 2040 2050

Other

US and Canada

Middle East

Europe

Latam and Caribbean

Sub-Saharan Africa

Rest of Asia

India

China

Urban population (millions)

LDCs rise to from 69 to 82% of global urban population

Driven by Sub-Saharan Africa

from 7 to 17%

Sub-Saharan Africa will be

THE key driver of urbanisation growth

Source: United Nations Population Division

5 Technology-powered

hyperglobalisation

1 Sell abroad, manufacture at home 1960s-1980s Global markets, standard products Operations controlled from home base

2 Make globally, control at home 1990s, big rise in FDI Cost-cutting, outsourcing Rise of anti-globalists

3 Make anywhere, control globally 2000s onwards Death of distance The earth is flat

Globalisation:

The story so far

And what does

all this mean?

Frugal innovation is here to stay OECD middle class faces prolonged austerity

Emerging markets: more scale than wealth

The emerging MNCs day has come Its been good for us, now it will be good for them

Investment in other EMs as well as the old world

Complexity and speed:

technology accelerating it all Globalisation of labour market

Leapfrog technologies

Making sense of it all

Global PR Summit

2012 www.grayling.com