Mega Trends In Latin America: A Future Outlook for the “Next-Generation” Continent

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Mega Trends In Latin America: A Future Outlook for the “Next-Generation” Continent

  1. 1. Mega Trends In Latin America: A Future Outlook for the “Next-Generation” Continent NAFD-MT NAFD-MT 1
  2. 2. For Additional Information Lorena Isla Research Manager Latin America +52 55 5524 8624 lorena.isla@frost.com NAFD-MT 2
  3. 3. Executive Summary NAFD-MT 3
  4. 4. Economic Trends Innovating to Zero Business Process Outsourcing Trends Covered In This Report Urbanization – City as a Customer Connectivity and Convergence Future of Renewable Power Health, Wellness and Well Being Definition of Mega Trends Mega trends are transformative, global forces that define the future world with their • Mega trends have diverse meanings and impacts for different industries, companies, and individuals. An analysis of these mega trends and their implications forms an important component of a company’s future strategy, development, and innovation process, and impacts product and technology planning. • The following document sets the stage for visionary thinking by identifying the most important global mega trends in China, potential scenarios of specific trends in 2025, and the implications of these mega trends in transforming society, markets, and cultures. 4 Social Trends New Business Models Future Infrastructure Development What is a Mega Trend? far reaching impact on business, societies, economies, cultures and personal lives. Why do Mega Trends Matter? Multilatinas Social Program NAFD-MT 4
  5. 5. Top 10 Fast Forward Facts for Latin America: Did You Know That… 1. Around 86 percent of the total population (566.5 million) in Latin America will live in urban areas in 2025 and that some cities like Santiago in Chile will account for up to 75 percent of country’s GDP in 2025 2. Latin America is to have 5 Mega Cities, 4 Mega Regions, 11 Sustainable Cities, and 2 Mega Corridors by 2025 3. Latin America’s population is expected to reach 661 million people by 2025. People between 35 and 64 years of age will represent around 36.5 percent of the total population to make it one of the youngest regions globally. 4. Population over-60 will reach almost 71 million people. This segment is likely to represent an emerging consumer segment as its purchasing power is expected to increase 55% from 2010 to 2020. 5. Due to the “She-conomy,” women are to account for 53 percent of the Latin American working population and 35.3 percent of decision-maker positions in 2025 6. Latin America’s GDP is to reach $15.14 trillion in 2025 and Brazil and Mexico will continue to be the biggest economies of the region. 7. Broadband subscribers will grow at a 16.6% CAGR to reach more than 77 million subscriber base by 2016. 8. Major airport projects in Latin America with investments of about $401.0 billion by 2020 are likely to boost the flow of people between countries, and increase commercial trade. 9. Healthcare expenditure in Latin America to grow 30 percent from 2011 to 2015, to reach $580.00 billion 10.Latin America’s goal is to produce 35GW of renewable energy by 2020 across the region, out of which wind power is likely to represent 25GW Source: Frost & Sullivan Analysis. NAFD-MT 5
  6. 6. 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 Mexico City Population 2025: 24.6 million GDP 2025: $713.5 billion Guadalajara Population 5.7 million People per Square Kilometre 2025: Highly Urban Countries More than 200 people Medium-High Urban Countries 100 – 200 people Medium Urban Countries 50 – 100 people Low-Medium Urban Countries 10 – 50 people Low Urban Countries Less than 10 people Bogota Population 2025: 11.4 million GDP 2025: $298.0 billion Rio de Janeiro Population 2025: 13.6 million GDP 2025: $327.1 billion Belo Horizonte Population 2025: 6.6 million Buenos Aires Population 2025: 15.5 million GDP 2025: $327.1 billion Sao Paulo Population 2025: 23.2 million GDP 2025: $643.9 billion Mega Cities in 2025 Emerging Mega Cities (4-8 million population in 2025) Lima Population 2025: 11.5 million Santiago Population 2025: 7.1 million Source: United Nations, Department of Economic and Social Affairs Statistics, Frost & Sullivan and other regional and country level statistics bureau NAFD-MT 6
  7. 7. Mega Corridors: Latin America to See 3 Mega Corridors by 2025 with almost 80 million inhabitants Toluca - Mexico City – Puebla Corridor Distance: 198 Km Population: 31.8 million GDP Contribution: 39% of Mexico’s GDP Photo credits: Google Maps Source: Frost & Sullivan Rio de Janeiro - Sao Paulo – Campinas Corridor Distance: 511 km Population: 44.3 million GDP Contribution: 57% of Brazil’s GDP Buenos Aires – Rosario – Cordoba Corridor Distance: 710 Km Population: 21.1 million GDP Contribution: 49% of Argentina’s GDP Mega Corridors in 2025 Emerging Mega Corridors in 2025 NAFD-MT 7
  8. 8. Generation Y - Latin America to Have Almost 31% of Its Population (204.9 million) in Gen Y (15–34 years) in 2025 Gen Y : Breakdown by Country, Latin America, 2025 26.5% (54.3) 31.9% (65.4) 18.4% (37.7) 8.4% (17.2) 6.7% 5.5% 2.6% Population Breakdown by Age, Latin America, 2025 Total Population = 661 million Population Breakdown by Age, Latin America, 2010 Total Population = 577 million 27.7% (159.8) 34.2% (197.3) 6.9% (39.8) 31.2% (180.0) 22.0% (145.4) 31.0% (204.9) 10.5% (69.4) 36.5% (241.3) 65 years and above 35–64 years 15–34 years 0–14 years Rest of LA Brazil Mexico Colombia Argentina Venezuela Chile (13.7) (11.3) (5.3) Note: Figures in brackets denote million of people Source: CEPALSTAT 2012, Frost & Sullivan Analysis. Personalization and Individualization Gen Y Consumption Behaviour Techno Savvy and Connected 24 X 7 Civic and Environmentally Friendly Demanding and Impatient – “Fast and the Furious” NAFD-MT 8
  9. 9. Six Degrees Apart: Social Networking Users to Reach 381 Million in Latin America by 2020 Total: 577 million Total: 661 million Non-Internet Users 365 million 212 million Internet Users 75 million 137 million 2010 2020 Non Social Networking Users 172 million 489 million Internet Users 108 million 381 million Social Networking Users Users Of Top Social Networking Sites, Latin America, 2010 and 2020 FACEBOOK 343 million 85 million 2011 2020 Non- Internet Users Non Social Networking Users Social Networking Users 1 LinkedIn 16 million 49 million 2011 2020 3 TWITTER 305 million 73 million 2011 2020 2 4 ORKUT 45 million 39 million 2010 2020 Source: linkedin.com, facebook.com, twitter.in, orkut.com, Frost & Sullivan Analysis. NAFD-MT 9
  10. 10. Top 10 States Contributing to Brazil’s GDP in 2010 and 2020: Santa Catarina to Advance One Rank in 2020 2011 - $50.60 billion 2020 - $92.87 billion Bahia 10 2011 - $81.94 billion 2020 - $143.12 billion 6 Minas Gerais Pernambuco 2011 - $121.89 billion 2020 - $213.68 billion Rio de Janeiro 2011 - $226.20 billion 2020 - $381.04 billion Sao Paulo 2011 - $711.59 billion 2020 - $1,204.00 billion 1 Source: IBGE, Frost & Sullivan Analysis. Distrito Federal 2011 - $83.38 billion 2020 - $151.23 billion Goias 2011 – $56.97 billion 2020 - $106.93 billion Parana 8 9 2011 - $121.89 billion 2020 - $213.68 billion 5 Rio Grande do Sul 2011 - $127.83 billion 2020 - $223.43 billion 2 3 Santa Catarina 2011 - $82.93 billion 2020 - $154.20 billion TOP 5 STATES TO ACCOUNT FOR 66.2% OF COUNTRY’S GDP IN 2020 Note: The figures denote GDP at market prices. Arrows denote movement in ranking in 2020 compared to 2010. 4 7 NAFD-MT 10
  11. 11. Space Jam: Latin America to Launch 32 Satellites by 2025 ARSAT-1, 2012 Satmex 8 ARSAT-3 Unamsat 3 Mexsat 3 Mexsat 1 SAC-E ARSAT-2, 2017 SAOCOM 1-B 2016 Tronador II 2012 2012 2012 Satex 1 2013 SAOCOM 1A 2015 2014 2015 2015 2017 SAOCOM 1A 2015 Nahuelsat, 2015 CBERS-4 2012 Mexsat 2 2013 NAFD-MT 11
  12. 12. Connected World: Over 80 billion devices will be Connected Globally in Future – Latin America to have around 1.3 billion connected devices in 2016 Total Pay-TV subscribers expected to reach 61.2 million by 2015 4G Rollout is expected in 2012 reaching 28.9 million of connections in 2016 416 million 3G broadband subscribers by 2016 Broadband subscribers expected to grow at 16.6% CAGR 29.9 million (2010)* 77 million (2015)* The mobile subscriber base 705.6 million(2016) Internet users 212.4 million (2010) 311.4 million (2015) Source: Frost & Sullivan * Data for Argentina, Brazil, Chile, Colombia, Mexico and Venezuela NAFD-MT 12
  13. 13. Broad Digital Inclusion: Brazil, Colombia and Argentina plan to invest $50 billion in broadband infrastructure before 2015 Brazil Mexico National Campaign of Digital Inclusion Vasconcelos • Include adults without internet access • Creation of “digital clubs” to teenagers Brazil National Plan of Broadband (PNBL) • Extend the access to Broad Band over the country until 2014 • Estimated costs: $45 billion Argentina Argentina Connected Program • Internet access for more than 10 Million households by 2015 • Estimated costs: $2 billion Uruguay Countries where the “One Laptop Paraguay Per Child” program has been adopted Argentina In 2011, more than 1.5 million laptops in 9 countries were part of the program “One Laptop Per Child” (less than US$ 100 computers); Latin America has 60% of the 2.5 millions of computers involved in this program worldwide Mexico Guatemala Colombia Vive Digital • Increase fourfold the number of connections • Triple the number of connected cities • Estimated costs: US$ 3 billion Peru National Plan for Expansion of Broad Band Access • Expansion of the access of Broad Band to all cities Chile Chilean Telecommunications Plan • Reach 100% of broadband penetration in all schools by 2012 • Internet coverage to expand from 71% to 92% by 2012 Nicaragua Colombia Peru Chile Source: One Laptop per Child, Government of Brazil, Argentina, Colombia, Peru and Mexico, IRSI, Frost & Sullivan Analysis Macro to Micro Implications Increase of the number of computers users Increase of Broadband Infrastructure Workforce qualification Income Increasing NAFD-MT 13
  14. 14. Renewable Power in Latin America: Market’s goal is to increase the installed capacity of renewable energy in 35GW by 2020 Latin America: 2020 Vision – Total Installed Capacity (GW) BIOMASS WIND SMALL POWER PLANTS GEOTHERMAL SOLAR By 2020, the installed capacity from renewable sources can be increased in 35 GW Market Impacts: • Development of a new “green” ecosytems • Innovation to Zero as a new trend Market Focus: 1 Wind – 25 GW by 2020 Source: Frost & Sullivan Analysis Mexico Colombia Brazil Chile Argentina NAFD-MT 14
  15. 15. Energy Infrastructure: Investments in high voltage direct current lines are expected to reach $580 billion in Latin America by 2030 CIER SIEPAC CECACIER CIER Total Trade: 300 MW Operating lines Planned/under construction lines CFE-ERCOT Total Trade: 591 MW SIEPAC Total Trade: 300 MW CECACIER Total Trade: 300 MW Supra-national mechanisms leaded by Brazil and political stability speed cross-countries strategic agreements $580 billion Estimated investment in HVDC power lines between 2010 and 2030 CIER: Regional Commission to the Electrical Integration; SIEPAC : Central American Electrical Interconnection System; CECACIER: CIER Regional Committee to the Central –American and Caribbean Regions; CFE-ERCOT: Mexico's Electric Power Company - Electric Reliability Council of Texas. Source: Frost & Sullivan analysis NAFD-MT 15
  16. 16. Research Scope, Objectives, and Methodology NAFD-MT 16
  17. 17. Research Scope Base Year 2011 Study Period 2009-2025 2012-2025 Please check the “Industries Covered” column (2012-2014 Short-term, 2015-2017 Mid-term, 2018-2025 Long-term) Forecast Period Latin America, which geographically includes Mexico, Caribbean, and all countries in Central America and South America Geographical Scope Manufacturing, Retail, Logistics, Banking, ICT, Energy, Automotive, Healthcare, Construction Source: Frost & Sullivan analysis. Industries Covered NAFD-MT 17
  18. 18. Research Aims and Objectives Aims The objective of the study is to identify and understand the key mega trends in LATAM that will impact and shape the country’s economy, society, and culture. For the purpose of this study, mega trends are categorized into urbanization, social, economy, technology, energy, e-mobility, infrastructure, business, health and wellness, political shift, e-governance, sports and industry-specific trends Objectives 1. Identify mega trends in LATAM that will influence a wide range of activities, processes and perceptions, both in governments and businesses 2.Define each mega trend and understand its impact from both an quantitative and qualitative perspective and offer futuristic predictions on key economic, spatial and social trends 3. Analyse and identify the relevant sub-trends within each mega trend 4. Identify the key industries that will be impacted and influenced by mega trends 5. Assess the impact of the key mega trends and sub-trends based on the degree of importance and certainty over the next decade 6.Carry out a Macro-to-Micro analysis to understand the unmet needs or inherent business opportunities in relevant industries Source: Frost & Sullivan analysis. NAFD-MT 18
  19. 19. Research Background This research study in addition to LATAM specific trends also contains and captures content from various other regional and global studies on Mega Trends • M65B-18 World's Top Global Mega Trends To 2020 and Implications to Business, Society and Cultures – Completed (December 2010) • P5DB-MT Mega Trends in India: Macro to Micro Implications of Mega Trends to 2020 – Completed (February 2012) • M818-39 African Mega Trends: A Bright Vision for the “Growing” Continent– Completed (May 2012) • NAFD-MT Mega Trends in Latin America: A Future Outlook for the "Next-Generation" Continent – Upcoming • M847-MT Evolving Mega Trends To Transform Turkey into a Developed Economy – Upcoming • P6E3-MT Mega Trends in Indonesia: Macro to Micro Implications of Mega Trends to 2025 – Upcoming • M82C-MT World’s Top Global Mega Trends To 2020 and Implications to Business, Society and Cultures (2012 Edition) – Upcoming • NA99-13 Strategic Analysis of the Developments of Urban Logistics – Upcoming This study is also supplemented by our on-going continuous interactions with industry experts, industry players, partners and in-house industry analysts Source: Frost & Sullivan research. NAFD-MT 19
  20. 20. Research Methodology: From Macro to Micro Source: Frost & Sullivan analysis. Identify the Mega Trend Through Brainstorming Sessions Selection of unique mega trends in LATAM through macro-economic analysis through interviews and 10 brainstorming sessions with analysts globally Identify the Sub-Trend Through Scenario-Building Exercises Through a Scenario Building Exercise using data extracted through secondary and primary sources, identify unique sub-trends with implications to society, market, and other key sectors in LATAM by a Global Work Team over a period of 200 man-days Macro 1 2 NAFD-MT 20
  21. 21. Research Methodology: From Macro to Micro Source: Frost & Sullivan analysis. Assess the Impact of the Mega Trend On a Micro Level Analyse and determine how the mega trends will influence industries, businesses and people through scenario-building exercises with industry experts and secondary research inputs Opportunities Analysis Analysis of opportunities to key industries and generation of suggestions for products and solutions 3 4 Micro NAFD-MT 21
  22. 22. Definition Used in the Study NAFD-MT 22
  23. 23. Definitions Used in the Study Term Definition Mega City City with population of over 8 million and GDP of $250 Billion and above Mega Regions Cities grow and merge to become mega regions with population of over 15 million and above Mega Corridors Corridors which connects two major cities or mega regions Mega Slums 1 million urban poor living in an area measuring just 1.5 square miles Sustainable Cities Cities built on green initiative, right from buildings to transport, governance, city planning, energy and technology. These cities are either upgraded or built from scratch Multilatinas Latin American companies listed in the Global Fortune 500 rank BPO Business Process Outsourcing CC Contact Centers M-Government Use of mobile services platform for delivering government services NAFD-MT 23

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