GIL 2013: Latin America - The Impact of Mega Trends on Your Company, Career and Industry

1,826 views
1,606 views

Published on

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,826
On SlideShare
0
From Embeds
0
Number of Embeds
1
Actions
Shares
0
Downloads
36
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide
  • *included HK & Macao. Matches UN World Population ProspectSource: Population numbers of each age interval: United Nations.Breakdown by provinces: calculation (see excel) by estimating fertility and immigration parameters
  • GIL 2013: Latin America - The Impact of Mega Trends on Your Company, Career and Industry

    1. 1. Rationale Optimism Issues Driving Explosive Growth in Latin America GIL Latin America 2013January 2013
    2. 2. “Only those who will risk going too far can possibly find out how far one can go.” – T.S. Eliot2
    3. 3. Mega Trends: Why we Are the “Go To” CompanyVisionary Innovation with unparalleled perspective and coverage to bring higher confidence •100+ Markets •Physicists •Scientists Technology •Theorists •Futurists etc.. •100+ Markets •Best Practices •3-7 Year Forecasts Markets Macro •Innovation •Market Players •Strategy •CI2013 Sample Clients3
    4. 4. Macro to Micro ProcessTo filter top level Mega Trends into actionable outputs for opportunity evaluation To Macro Micro Mega Trend Analysis of OpportunitiesSelected trends that impact your business and markets and Unmet Needs Sub Trend Impact on Future Product/ A sub-layer of trends that has a Technology wide ranging impact Impact to Your Industry Visualising the roadmap of these critical forces through segment identification and market level analysis 4
    5. 5. Definition of Mega Trends Impact of Mega Trends on Key Our Mega Trend Definition? Organizational Functions Marketing and Strategy “Mega Trends are global, sustained forces of development that are Innovation R&D Budget Scouting Spending transformational tobusiness, economy, society,cultures and personal lives” Product Technology Planning Planning and Development 5
    6. 6. Perspective 6
    7. 7. Motivation Motivation Infrastructure Business7
    8. 8. MOTIVATION MOTIVATION8
    9. 9. Surge in Asian Work Pool Generational Political Shift9
    10. 10. Generation Y - Latin America to Have Almost 31% of Its Population(204.9 million) in Gen Y (15–34 years) in 2025 Population Breakdown by Age, Population Breakdown by Age, Gen Y : Breakdown by Country, Latin America, 2010 Latin America, 2025 Latin America, 2025 26.5% Rest of LA (54.3) Total Population = 577 million Total Population = 661 million 27.7% 22.0%6.9% 10.5% (145.4) (159.8)(39.8) (69.4) 31.9% (65.4) Brazil 31.0% (204.9) 18.4% 31.2% 34.2% 36.5% (37.7) Mexico (180.0) (197.3) (241.3) 8.4% (17.2) Colombia 6.7% (13.7) Argentina 65 years and above 35–64 years 15–34 years 0–14 years 5.5% (11.3) Venezuela 2.6% (5.3) Chile Note: Figures in brackets denote million of people Source: CEPALSTAT 2012, Frost & Sullivan Analysis. Gen Y Consumption Behaviour Civic and Demanding and Personalization and Techno Savvy and Environmentally Impatient – “Fast Individualization Connected 24 X 7 Friendly and the Furious” 10
    11. 11. The Middle Bulge: Middle Class Individuals to Account for 69% of Latin America’s Population (461 million) in 2025 Income Pyramid, Latin America, 2010 and 2020 2011 2025 Income Per Annum 577 million Individuals 661 million Individuals 6.6% 6.9% Rich (46) (38) $100,000 10.8% Upper Middle 11.3% (62) Class (75) $60,000 17.9% Middle Class 27.2% (103) (180) $32,000 Lower Middle 31.1% 32.6% (188) Class (206) $14,600 Poverty 19.2% 13.8% (111) Poor (91) Line $3,650 12.9% Below 9.7% (74) Poverty Line (64)Note: Figures in brackets are millions of individuals.Poverty Line based on ECLAC definition of poverty - $2.5 US dollars per person per day in market prices Source: IADB, ECLAC, Frost & Sullivan Analysis. 11
    12. 12. Informal Settlements- Over 163 million people living in InformalSettlements in Latin America needing $3 trillion investments in housingby 2020 Population Living in Informal Settlements, Selected Regions, 1990 - 2020 1,000 807 800 649 600 533 420 419 400 271 123 188 200 111 128 143 163 0 1990 2001 2010 2020 Asia Africa Latin America Source: ECLAC, Frost & Sullivan Macro to Micro Implications Mini-stores and check out Sewage collection and Retail - appreciation Sanitation tratment Consumer Economic size, same quality Banking the Micro credit and pre-paid goods - less design unbanked credit card Public financing for higher Telecom Low cost and formal Pay TV Education - education &Energy adn energy services 12
    13. 13. Net Migration - In 2020, emigration from LATAM will be 40% lower than in2010.. Domestic market and labor force shall increase as consequence Average Net Migration per Year by Country(Latin America), 2010-2020 Mexico The region remains net exporter of 2010 2020 workforce, but the difference between Andean the number of people moving out and Region people moving in is dropping. 2010 2020 Brazil -263,000 -361,000 2010 2020 -125,000 Average Net Migration per Year -218,000 -38,000 (Latin America), 2010-2020 -100,000 2020 2010 1975 1980 1985 1990 1995 2000 2005 2015 1970 1960 1965 0 -200 Southern -400 Cone -600 2010 2020 -800 -1000 -18,000 -1200 -52,000*Net migration represents migration TO region (immigration) minus migration FROM region Source: Population Division of the Department of Economic and Social(emigration) in a given year Affairs of the United Nations Secretariat; CEPAL; Frost & Sullivan analysis. 13
    14. 14. INFRASTRUCTURE INFRASTRUCTURE14
    15. 15. 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 Guadalajara Bogota Population Population 2025: 2025: Mexico City 5.7 million 11.4 million Population 2025: GDP 2025: 24.6 million $298.0 billion GDP 2025: $713.5 billion Belo Rio de Janeiro Horizonte Population Population 2025: 2025: 13.6 million Lima 6.6 million GDP 2025: Population $327.1 billion 2025: 11.5 million Sao Paulo Population People per Square 2025: Kilometre 23.2 million GDP 2025: Santiago Highly Urban Countries More than 200 people $643.9 billion Population BuenosMedium-High Urban Countries 100 – 200 people 2025: Aires 7.1 million Population Mega Cities in 2025Medium Urban Countries 50 – 100 people 2025:Low-Medium Urban Countries 10 – 50 people 15.5 million GDP 2025: Emerging Mega Low Urban Countries Less than 10 people $327.1 billion Cities (4-8 million population in 2025) Source: United Nations, Department of Economic and Social Affairs Statistics, Frost & Sullivan and other regional and country level statistics bureau 15
    16. 16. Mega Corridors: Latin America to See 3 Mega Corridors by 2025 with almost 80 million inhabitants Toluca - Mexico City – Rio de Janeiro - Sao Puebla Corridor Paulo – Campinas Distance: 198 Km Corridor Population: 31.8 million Distance: 511 km Buenos Aires – Rosario Population: 44.3 million GDP Contribution: 39% – Cordoba Corridor of Mexico’s GDP GDP Contribution: 57% Distance: 710 Km of Brazil’s GDP Population: 21.1 million Mega Corridors in GDP Contribution: 49% 2025 of Argentina’s GDP Emerging MegaPhoto credits: Google MapsSource: Frost & Sullivan Corridors in 2025 16
    17. 17. Infrastructure in Latin America: Latin America’s infrastructure is significantly behindOECD countries, demanding significant investments Latin America has a large Latin OECD And significant amounts need infrastructure deficit… American countries* to be spent countries Roads, paved (% of total roads) 33.3% 86.5% Annual investment in infrastructure over 20 years to equal Rail lines (total route-km) 93,454 km 562,410 km the same level of South Korea (as % of GDP) Air transport, registered Country / Region % of GDP carrier departures (million) 1,838,212 18,639,951 Argentina 4.0% Oil & Gas Pipelines (length in Brazil 8.0% 26,500 All continent km) Chile 5.0% Colombia 9.0% Improved sanitation as % 87.0% 94.0% population Costa Rica 3.0% Improved water as % Mexico 2.0% urban population 97.1% 99.6% Peru 11.0% Broadband density per 100 Venezuela 4.0% people 6.6 23.8 Total LatAm 6.0% Electric power consumption (kWh per 1907 8376 capita) * Includes Chile and Mexico Source: The Worldbank WDI database, 2010; WHO World Health Statistics 2011 17
    18. 18. Investments in Infrastructure: Investments in alternate modes of transportation inBrazil are expected to drop the utilization of highways from 58% to 33% by 2025 Infrastructure: Distribution of Modals by Region Expected Distribution of Modal Transportation (Global), 2010 (Brazil), 2005-2025 58% 33% 32% 29% 25% 13% 4% 0.4% 5% 1% 2005 2025 highway railroad hidroway pipeline aerial Latin America 2010 Latin America 2025 • The lowest percentage of highway in • Focus on railroad total transportation (which is cheaper Evolution of Latin • Extensive pipeline system increasing than other modals) America the exports of liquid fuels • Low pipeline system integrating Transportation • More balanced distribution among countries modals • Countries with low integration • More integrated countries **BRIC (without Brazil) *Europe (Germany, UK and Italy) Source: Central Intelligence Agency, DNIT, Frost & Sullivan analysis 18
    19. 19. City as a Customer – Concept and Definition City as A Customer City as A Customer is an implication of urbanisation wherein cities (and not countries) are looked as potential customers and hubs of investment, wealth creation and economic growth .Every city will be highly unique in its infrastructure demands offering cross-sectoral micro implications and opportunities in following industries: • Mobility • Building • Healthcare • Energy • Materials • Automation • Security • Retail This in turn will drive: • Companies to internally revamp in house-competencies and products/services portfolio to target cities as customers • City Infrastructure market to develop into a new industry offering new white space market opportunities • Highly customized and innovative city solutions and new urban business models • Cities to wield economic and investment clout on par with countries Source: Frost & Sullivan analysis 19
    20. 20. HEALTH BUSINESS20
    21. 21. The Rise of Multilatinas: Multilatinas are poised to achieve an important role inseveral segments such as telecommunication, metals & mining and food & beverage Profile of “Multilatinas” in 2020 Number of Latin American Companies in the Forbes Global 500 List Head office in Brazil, Mexico, Chile Consolidated position in the domestic market Managed by latin directores, educated abroad 9 18 Active M&A strategy towards foreign companies 2010 2020Evolution of the marketscope for the top $732.8 billionLatin Americancompanies Global Is the stock of Regional investments from Latin American National companies outside their country of Local origin in 20101970 1980 1990 2000 2010 2020 Sources: UNCTAD, OECD; The Emergence of Latin Multinationals (Deutsche Bank Research); AméricaEconomía; Frost & Sullivan analysis. 21
    22. 22. Reverse Brain Drain: By 2020, the flow of people is likely to have become intra regionwith the development of the countries such as Mexico and Argentina The countries are expected to become specialized in some specifics areas (E.g: Mexico as a software developer and contact center hub) 2010 2020 Hot Spot: Brazil Hot Spots: Mexico, Argentina and Chile. People coming mainly from USA, UK. Increase on the intra region flow of people Source: Frost & Sullivan Analysis 22
    23. 23. Income Redistribution Programs: The most important programs for incomeredistribution in Latin America are expected to grow at a 3.3 per cent average annual rate toreach 190 million of beneficiaries by 2020 Brazil  Bolsa Família (Family Assistance Mexico Program): 52 million  Previdência Rural (Rural Pension):  Oportunidades (Opportunities, former 11 million “Progresa”): 27.5 million  BPC (Benefit of Continuous Grant for  Programa de Apoyo Alimentario (Food Old Age and Disability) and RMV Support Program): 4.1 million (Monthly Life Income for Old Age and  70 y mas (70 and Over): 4 million Disability): 3.7 million Colombia  Familias en Accion (Families in Action): 7.5 million  Juntos (Together): 1.7 million Argentina Bolivia  Programa Familias para la Inclusión Social (Families for Social Inclusion): 7.5 million  Bono “Juancito Pinto”: 9 million  Regimen de Asignaciones Familiares (Scheme of  Bono Dignidad (Dignity): 3.4 million Family Allowances): 5.7 million  Bono “Madre Niño” and “Bono Juana Azurduy de  Pensiones Asistenciales (Social Pension): 0.3 Padilla”: 1.2 million millionSources: Miguel Niño-Zarazúa, Brooks World Poverty Institute; JuliaJohannsen, BID; ILO; SEDESOL (Mexico); Ministério do Desenvolvimento *An extended compilation of income redistribution programs forSocial e Combate à Fome (Brasil); Frost & Sullivan analysis. Latin American countries is available in the appendix section 23
    24. 24. New Business Models: Latin American companies are now turning to newbusiness models that will maximize the value added of their product and services Personalization and Value for Many Individualization Collaborative Thinking and The Rise of Mobile Solutions Crowd Sourcing Source: Frost & Sullivan 24
    25. 25. Innovating to 2020 – a few careful predictions to come We will be Digital assistants Cars to have Your health will witnessing will guide our autonomous be driven robots in homes lives functions Considerable Latin America is Virtual world Designer drugs Settlement viewed as a will threaten begin to emerge Evolution growth engine Facebook 25
    26. 26. Contact DetailsRichard SearVice President – Visionary Innovation (210) 247-3840 rsear@frost.com @searrichardJoin Our Mega Trend Group OnMega Trends: Strategic Planning and Innovation Basedon Frost & Sullivan Research 26

    ×