Growing Pains from Resource Distribution | Trust Trends 2014 Series

Through ongoing globalization, the world’s resources are slowly balancing, but not without growing pains.

Through ongoing globalization, the world’s resources are slowly balancing, but not without experiencing some standard growing pains. In America, legislation is providing further equality to homosexuals, non-whites are becoming the majority, and women are breaking through the glass ceiling. Globally, the middle class is expanding quickly, economies are weaving tighter, and resources are balancing.  Racial tensions, party polarity, brain drain, and demands for middle class privileges and representation are resulting as major growing pains.

 

Further Equality in America

America is the world’s beacon for personal liberty and equality, and its efforts for equality across race, gender, age, ethnicity, sexual preference, and other differences continue. Women are slowly breaking through the glass ceiling, with 30 set to head Fortune 500 companies by 2020. [i] According to the FarmLASTS project, women are expected to take control of as much as 75% of farmland that changes hands in the next 20 years.[ii] Along with women, non-whites are also finding increasing equality, but not without a struggle, as the demographic prosperity window quickly closes.[iii] Stories like the George Zimmerman trial have revealed pockets of strong white, black, and other racist sentiment. Regardless of conflicts, America’s racial balance is shifting. Only 47% of the population is expected to be white in 2050, compared to 67% in 2005. Also, by 2050, 29% are expected to be Hispanic, 13% black, and 9% Asian.[iv] In addition to gender and racial balancing, states across America are beginning to recognize homosexual marriage and provide marital privileges, like the ability to adopt children. And, although ageism still exists, Generation U (un-retired) and Generation Y and Millenials are co-existing in workspaces, gaining understanding for each other, and narrowing the generation gap.

 

Global Middle Class Grows

Over 1 billion people will enter the middle class by 2020, and most will live in emerging markets. As this middle class expands, its global purchasing power is estimated to more than double by 2030 to $56 trillion, equal to over 80% of global demand.[v] Many complex problems are arising from this expansion. One concern is over the increased demand for meat. Meat consumption is expected to grow by at least 1.8% annually over the next decade. A combination of current meat infrastructure, water scarcity, and increasing grain scarcity, make supplying the demand a challenge. Google’s co-founder Sergey Brin is investing $330 million into synthetic meat production via stem cell research, and other futurists are addressing middle class challenges.  Perhaps the biggest middle class trend to watch, however, is their increasing demand for representation and government accountability around the world.[vi]

 

Global Liquidity

Wealth is becoming more disconnected from assets. As the growing middle class spends more, money is sloshing around and becoming more evenly distributed, somewhat similar to how liquids fill their containers. And, the world’s super rich are getting richer and a gap is widening between everyone else. They have $21-32 trillion sitting offshore in banks that are lending it out to others, often times continuing the distribution cycle. [vii]

 

More Globalized Economy  

The developing world economies are accelerating forward, financial assets are becoming more evenly distributed, and the global economy is becoming more interwoven.[viii] 70% of world growth over the next few years is expected from emerging markets. China and India are expected to make up 40% of that growth – fitting, considering they account for 2.6 billion of the 7 billion global population. 50% of foreign direct investment inflows are in emerging markets as well. Asian markets are keeping special attention of investors, as their economic growth spurs on Reverse Brain Drain. As educated professionals return home to India, China, Indonesia, Philippines, Sri Lanka, and East Africa, they will provide leadership for further development.[ix] Brain drain back to Nigeria, Kenya and South Africa will be especially important for the development of sub-Saharan Africa. Other key factors to African development are increasing manufacturing, emerging to emerging (E2E) trade, and Chinese infrastructure and agriculture investment.[x] Across the globe, new partnerships are springing up and the global economy is becoming increasingly interwoven.

 

Why this matters

“It has been said that arguing against globalization is like arguing against the laws of gravity.” – Kofi Anan[xi]

 

  • Disengaging and fear of engagement in the global economy can be dangerous to competency levels, business opportunity, and sustainable success.
  • The developing world and middle class will inevitably expand. How it happens is a key question. Companies and nations will remember how others interacted with them.
  • Hesitating at the surprise of balance wastes time. You know it as well as we do––far too many American business leaders waste time complaining about outsourcing challenges, China’s growing economy, and other victim-based complaints.
  • Solutions need to be designed to address the demands of the growing middle class. These will prove to be massive business opportunities.
  • How will those in power react to losing their power?
  • How will those gaining power handle their new power?

 

 

How to seize the embedded opportunities

 

  • Emphasize development of the character, consistency, and compassion pillars. These are especially important for the most influential global elites.
  • Open a foundation or new business unit that designs solutions in the developing world.
  • Build partnerships in America’s Native American reservations, many of which qualify as 3rd world nations.
  • Engage globally so as not to be swallowed by competition. The BRICs and Next 11 are excellent stepping stones. Secure a strong base with them.
  • Develop, market, and build your organization’s culture around strategic environmental, social, and corporate governance (ESG) initiatives.
  • Work for equality consistent with your organization’s values.
  • Further your understanding of other cultures, travel, learn a language, and think in a global paradigm.
  • Refresh your brand to appeal to a more diverse audience.
  • Prepare systems to sustain ongoing global financial and economic weaving.
  • Key opportunity for competitive advantage: ESG initiatives.

 



[i] Efrat, Zeev. Top Global Mega Trends to 2020 and Implications to Business, Society and Cultures. Frost & Sullivan. http://www.bar-oriyan.com/Portals/0/mega%20trands%20exec%20summary%20v3%20(1).pdf

[ii] Caldwell, Jeff. 14 Big Ag Trends for 2013. http://www.agriculture.com/news/business/14-bigtime-ag-trends-f-2013_5-sl28241

[iii] Wile, Rob. Megatrends: The 6 ‘Gamechangers that will impact the plant for decades. December 2012. Retrieved from http://www.businessinsider.com/megatrends-the-6-gamechangers-that-will-change-the-world-in-the-next-decades-2012-12?op=1

[iv] Pew Research Center, 2008. http://www.pewhispanic.org/2008/02/11/us-population-projections-2005-2050/

[v] Middle Class Purchasing Power set to triple by 2030 world-wide due to rapid growth in emerging markets. http://www.ey.com/GL/en/Newsroom/News-releases/Press-Release_Middle-class-purchasing-power-set-to-triple-by-2030-world-wide-due-to-rapid-growth-in-emerging-markets

[vi] Wile, Rob. Megatrends: The 6 ‘Gamechangers that will impact the plant for decades. December 2012. Retrieved from http://www.businessinsider.com/megatrends-the-6-gamechangers-that-will-change-the-world-in-the-next-decades-2012-12?op=1

[vii] Crouch, Andy. Ten Most Significant Cultural Trends of the Last Decade. http://www.qideas.org/blog/ten-most-significant-cultural-trends-of-the-last-decade.aspx

[viii] Wile, Rob. Megatrends: The 6 ‘Gamechangers that will impact the plant for decades. December 2012. Retrieved from http://www.businessinsider.com/megatrends-the-6-gamechangers-that-will-change-the-world-in-the-next-decades-2012-12?op=1

[ix] Reverse Brain Drain. India Brand Equity Foundation. http://www.ibef.org/download/ReverseBrainDrain_080609.pdf

[x] Middle Class Purchasing Power set to triple by 2030 world-wide due to rapid growth in emerging markets. http://www.ey.com/GL/en/Newsroom/News-releases/Press-Release_Middle-class-purchasing-power-set-to-triple-by-2030-world-wide-due-to-rapid-growth-in-emerging-markets

[xi] http://www.corpwatch.org/article.php?id=589

0 Comments

Leave a Reply

XHTML: You can use these tags: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>

Accelerate Your Performance Through Trust
Click “Receive Access” to get our COMPLIMENTARY Trust Tools and join 25,000+ leaders that are increasing their performance.
We respect your privacy. Your information is safe and will never be shared.
Don't miss out. Get FREE tools today.
×
×