1) Five major trends will impact the global environment in 2012 and beyond: the age of austerity in developed nations, the shift in economic gravity towards emerging markets, the impact of population aging and youth bulges, increasing global urbanization and connectivity ("global swarming"), and the rise of technology-powered hyperglobalization. 2) Emerging markets will see stronger growth and rising incomes and consumption, challenging the historic dominance of developed nations. China in particular will surpass the US in retail sales and urbanization. 3) Demographic shifts will also impact global dynamics, with emerging markets having younger populations compared to aging societies in many developed countries. Rapid urbanization will be a major driver

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

5. 1
Developed
world:
Age of
austerity

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

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

11. 2
The centre
of gravity
shifts

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

17. 4
Global
swarming

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

20. 5
Technology-powered
hyperglobalisation

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