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Global
PR Summit
     2012
    www.grayling.com
Five
   mega
  trends
to watch
   2012 and beyond

     Global PR Summit 2012
                31 October
The Panel:




     Michael Murphy     Justine Thody
     Grayling, Global   EIU, Editorial
     CEO                Director, Americas
The Panel:




     Jonathan Perelman       John McLaren
     Google, Global Head     Akzo Nobel, Director
     of Industry Relations   of Corporate
                             Communications
1
Developed
world:
Age of
austerity
Developed world:                                     Consumer spending volume,
                                                     pre-recession peak = 100
Post-financial                             106
crisis recoveries
are prolonged                              104                      Normal past
                                                                     recessions


                                           102
                                                                           Past recessions with
                                                                           financial crises
Typical features of a post-crisis decade
•Credit   growth: Weak                     100
•House    prices: Fall in real terms
•Unemployment:      Stubbornly high
                                           98
•GDP   growth: Weak
•Banks:   Financial repression
                                                 0                   1            2           3
                                                     Years after pre-recession peak
                                                      Source: IMF
Surging ahead…
or still digging out?




       2. The centre of gravity shifts
                        The cost of the crisis
                            Difference, in % terms, of real
                            output per head before the
                            recession started in 2007
                            compared with 2012 (forecast)



       %




                                     Sources: National governments, Haver, EIU
Fastest-growing economies:
Next five years
                    0   1   2   3        4          5         6          7         8          9
          China
           India
        Nigeria
       Vietnam
     Indonesia
     Colombia
              2. The centre of gravity shifts
          Egypt
        Turkey
          Brazil
         Russia
   South Korea                                                               BRICs
        Mexico
   South Africa                                                              CIVETS
              US
        Canada                                                               Other EMs
          Japan
              UK                                                             G7
      Germany
         France
            Italy




                                Real GDP, average annual % change, 2012-2016. Source: Economist Intelligence Unit
Income catch up
has a long way to run
GDP per head 2012 (estimated) US$



              S Korea

                Taiwan

                Russia

                 Brazil

             Argentina

                Turkey

               Mexico

           South Africa

                 China

                  India

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




                                                       Sources: Economist Intelligence Unit, CountryData
2
The centre
of gravity
shifts
But EMs are already
the world’s shoppers




                       % of global retail sales. Source: EIU Market Indicators and Forecasts
China matches US
in retail sales




     2. The centre of gravity shifts




                     Retail sales, US$ millions. Source: EIU Market Indicators and forecasts
3
The joy of
ageing and
the rise of
the youth
Emerging markets have
better demographics
     45

     40
                                                                                                                                                  2008
                                                                                                                                                  2016
     35

     30

     25

     20

     15   2. The centre of gravity shifts
     10

      5

      0
                                                      Russia




                                                                            Turkey
          Japan




                            Italy




                                                                                                 Indonesia
                                                               US




                                                                                        Brazil
                                    Greece

                                             Canada




                                                                                                                                          South Africa
                                                                    China




                                                                                                                                  India




                                                                                                                                                         Egypt
                  Germany




                                                                                                             Colombia

                                                                                                                        Vietnam

                                                                                     Old age dependency ratio: ratio of population aged over 64 to 15-64.
                                                                                     Source: Economist Intelligence Unit, Country Data.
Ageing:
needn’t be all bad news!




      2. The centre of gravity shifts
4
Global
swarming
Cities, China:
Unprecedented urbanisation

                                                                 • By 2025 around 1bn living in China’s 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 China’s urban population increases by 80m




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




                                                                 Source: China Regional Forecasting Service,Economist Intelligence Unit.
Sub-Saharan Africa will be
THE key driver of urbanisation growth

                Other

                US and Canada
    7000        Middle East

                Europe

    6000        Latam and Caribbean

                Sub-Saharan Africa

                Rest of Asia
    5000

                India

                China
                                                                     • LDCs rise to from 69 to 82%
    4000
                                                                       of global urban population
    3000                                                             • Driven by Sub-Saharan
                                                                       Africa
    2000

                                                                     • – from 7 to 17%
    1000




       0
                 2010                 2020   2030   2040   2050




           Urban population (millions)




                                                                  Source: United Nations Population Division
5
Technology-powered
hyperglobalisation
Globalisation:
The story so far
                                      3      Make anywhere, control globally

                                         •   2000s onwards
                                         •   Death of distance
                                         •   “The earth is flat”



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




    1   Sell abroad, manufacture at home
     •   1960s-1980s
     •   Global markets, standard products
     •   Operations controlled from home base
And what does
all this mean?
Making sense of it all

 ‘Frugal innovation’ is here to stay
 • OECD middle class faces prolonged austerity
 • Emerging markets: more scale than wealth


 The emerging MNC’s day has come
 •   It’s 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
Global
PR Summit
     2012
    www.grayling.com

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Global Megatrends at Global PR Summit 2012

  • 1. Global PR Summit 2012 www.grayling.com
  • 2. Five mega trends to watch 2012 and beyond Global PR Summit 2012 31 October
  • 3. The Panel: Michael Murphy Justine Thody Grayling, Global EIU, Editorial CEO Director, Americas
  • 4. The Panel: Jonathan Perelman John McLaren Google, Global Head Akzo Nobel, Director of Industry Relations of Corporate Communications
  • 6. Developed world: Consumer spending volume, pre-recession peak = 100 Post-financial 106 crisis recoveries are prolonged 104 Normal past recessions 102 Past recessions with financial crises Typical features of a post-crisis decade •Credit growth: Weak 100 •House prices: Fall in real terms •Unemployment: Stubbornly high 98 •GDP growth: Weak •Banks: Financial repression 0 1 2 3 Years after pre-recession peak Source: IMF
  • 7.
  • 8. Surging ahead… or still digging out? 2. The centre of gravity shifts The cost of the crisis Difference, in % terms, of real output per head before the recession started in 2007 compared with 2012 (forecast) % Sources: National governments, Haver, EIU
  • 9. Fastest-growing economies: Next five years 0 1 2 3 4 5 6 7 8 9 China India Nigeria Vietnam Indonesia Colombia 2. The centre of gravity shifts Egypt Turkey Brazil Russia South Korea BRICs Mexico South Africa CIVETS US Canada Other EMs Japan UK G7 Germany France Italy Real GDP, average annual % change, 2012-2016. Source: Economist Intelligence Unit
  • 10. Income catch up has a long way to run GDP per head 2012 (estimated) US$ S Korea Taiwan Russia Brazil Argentina Turkey Mexico South Africa China India 0 5,000 10,000 15,000 20,000 25,000 Sources: Economist Intelligence Unit, CountryData
  • 12. But EMs are already the world’s shoppers % of global retail sales. Source: EIU Market Indicators and Forecasts
  • 13. China matches US in retail sales 2. The centre of gravity shifts Retail sales, US$ millions. Source: EIU Market Indicators and forecasts
  • 14. 3 The joy of ageing and the rise of the youth
  • 15. Emerging markets have better demographics 45 40 2008 2016 35 30 25 20 15 2. The centre of gravity shifts 10 5 0 Russia Turkey Japan Italy Indonesia US Brazil Greece Canada South Africa China India Egypt Germany Colombia Vietnam Old age dependency ratio: ratio of population aged over 64 to 15-64. Source: Economist Intelligence Unit, Country Data.
  • 16. Ageing: needn’t be all bad news! 2. The centre of gravity shifts
  • 18. Cities, China: Unprecedented urbanisation • By 2025 around 1bn living in China’s 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 China’s urban population increases by 80m China urban inflows, 2010-20. Denser colour=greater inflows. Source: China Regional Forecasting Service,Economist Intelligence Unit.
  • 19. Sub-Saharan Africa will be THE key driver of urbanisation growth Other US and Canada 7000 Middle East Europe 6000 Latam and Caribbean Sub-Saharan Africa Rest of Asia 5000 India China • LDCs rise to from 69 to 82% 4000 of global urban population 3000 • Driven by Sub-Saharan Africa 2000 • – from 7 to 17% 1000 0 2010 2020 2030 2040 2050 Urban population (millions) Source: United Nations Population Division
  • 21. Globalisation: The story so far 3 Make anywhere, control globally • 2000s onwards • Death of distance • “The earth is flat” 2 Make globally, control at home • 1990s, big rise in FDI • Cost-cutting, outsourcing • Rise of anti-globalists 1 Sell abroad, manufacture at home • 1960s-1980s • Global markets, standard products • Operations controlled from home base
  • 22. And what does all this mean?
  • 23. Making sense of it all ‘Frugal innovation’ is here to stay • OECD middle class faces prolonged austerity • Emerging markets: more scale than wealth The emerging MNC’s day has come • It’s 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
  • 24. Global PR Summit 2012 www.grayling.com