Author Archives: Christel K. Stoklund

October 2013: The geopolitical landscape has changed dramatically since 9/11 and the global financial crisis. These two events have driven dramatic government action from West to East and North to South, changing the perception of what’s normal procedure in international politics and economy. The words “political risk” now dominate thinking across the globe – not always with positive results.

At the same time local and global political systems are becoming more diverse, reflecting global economic and power shifts, for example the move from the G8 to the G20 forum. Economic power is shifting to BRICS plus a next tier of rapidly developing economies, due to a combination of increasing financial power, resources, knowledge base, population, and consumer affluence – leading to a much more multipolar market landscape. But it’s one where resource balances are critical for continued development. Access to and control of resources, whether from the Arctic or the South China Sea, continues to be a source of tensions between nations.

Add to this a wave of civil unrest that has hit the world challenging political systems – democratic as well as authoritarian – craving economic, social, and political changes. Government weaknesses – and new communications technologies – have led to a dramatic shift in the balance of power within societies. The voice of the people is being heard and it is clear now that enough motivated people can achieve change.

The sum of these changes gives us a more diverse and less predictable world. From a business perspective the geopolitical shifts of the last decade need to be reflected in a company’s strategy because not doing so equals risky business. Understanding and mitigating geopolitical trends and risk as well as political and social changes is fairly new to many corporations and businesses. With this in mind, this briefing explores some of the more important geopolitical shifts happening today.

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September 2013:

The global financial crisis did not end the war for talent. If anything, it is about to enter a whole new level.

The World Bank predicts that we need to create 600 million new jobs worldwide in the next 15 years, with a particular emphasis on Asia and sub-Saharan Africa, to keep up with the massive need. That could sound like there are more people seeking work than organizations wanting to employ them, but the labor market is a world of contradictions. Companies are desperate for skilled, talented workers to fill empty positions – yet unemployment rates are skyrocketing. Just what’s going on?

It’s nothing as simple as poor education, at least in the traditional sense, as each new generation is entering the workforce better qualified than the one before it. The problem is an emerging split between unemployable workers – those who do not have the specific knowledge or skills needed in the future – and the in-demand workers, who have these things in abundance. “Skill development is amongst the single biggest issues that will impact India’s growth in the future,” according to Sanjeev Asthana, Founder & Managing Partner of I-Farm Venture Advisors Private Ltd in India. “We have almost 14 million youths coming into the job market every year, and they are largely unskilled. While they can find some form of employment at the most basic level, the difference between them earning US$100 a month and US$300 a month is simple skill sets.

“It’s a huge disconnect that in a country like India with a huge pool of labor, the big issue for any industry or services sector is that they don’t have enough employable people to work, whether it is in agriculture, textiles, hotels, transport, logistics, you name it. There’s a mass of people and a mass of jobs out there but the two are simply not getting matched. There’s a difference between unemployment and unemployability. Yes, you’re available for employment, but you’re not employable because you don’t possess the skills required.”[i]

This mismatch is not just an issue for India or other high-growth countries, but one that is confronting societies and businesses around the world. The only way to close the gap is to make sure that workers are prepared to fill the jobs of the future, which means that governments, educators, and businesses need to rethink education and training, including who delivers it.

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  July/August 2013: The industrial revolution reshaped the world and built efficient and productive economies. Mass production and increasing affluence allowed us to consume an increasing range of goods and

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June 2013: The effects of the internet and associated digital technologies including mobile communications are both evolutionary and revolutionary. They have transformed the world, touching billions of lives in just two decades. Digital technologies continue to impact consumers, communities, institutions, governments and businesses worldwide, creating a completely new infrastructure that has allowed many people to gain access to a new and better life by breaking down economic, educational and social barriers. Businesses and industries, as we knew them, no longer exist as technology has spurred the creation of new types of connected and networked organizations, as well as value creation opportunities that cross traditional industry boundaries. Even more, they have spawned a deeply connected and digitized society which has created a completely new economy – the digital economy.

But what is the digital economy? The term has been in use since the 1990s but there is no authoritative definition. Most definitions expand on the definition of the internet economy (economic value derived from the internet) to include economic and social activities resulting from other information and communication technologies (ICT). (Source: Infocomm Development Authority of Singapore). While this latter definition is very broad, it is also very general as it could include a huge range of activities. In our work we have chosen to define the “digital economy” as social and economic activities that demonstrate the following characteristics: are enabled by internet/mobile technology platforms and ubiquitous sensors; offer an information-rich environment; are built on global, instant/real-time information flows; provide access 24/7, anywhere, i.e. are always-on and mobile; support multiple, virtual, connected networks.

Whatever definition and characteristics are chosen for the term “digital economy” the fact is that we can no longer afford not to include it as an important part of the traditional economy because it is growing rapidly every day. In this briefing we explore the impact of increasing digitization. What role does it play in the world’s economy? How does it impact growth? Where? What are the challenges and opportunities for governments, organizations and consumers in this hyper-connected world where not everyone is equally ready? 

 

The networked readiness index map

The networked readiness map highlights the new global digital divide. It is measured by using four sub-indices – environment for ICTs (information communication technologies); the readiness of a society to use ICTs; the actual usage of all main stakeholders; and, finally, the impacts that ICTs generate in the economy and in society.

 

A redraw of the networked readiness index map from WEF, “The Global Information Technology Report,” 2013

 

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May 2013: Securing adequate natural resources to meet demand is a pressing economic as well as an environmental challenge for governments, organizations and consumers worldwide. Competition is increasing and shortages of critical resources have the potential to cause social and political instability, geopolitical conflicts and irreparable environmental damage. Emerging powers such as China and India are hungry for resources in order to fulfill the needs of their growing and increasingly prosperous populations, while developed economies are also feeling the heat of the rising competition for the world’s limited resources. While most people agree that resources are limited, nations, organization and individuals are choosing to respond in different ways – for some rethinking the use of resources and innovating is the way to move forward. Others, however, are seeking to control and even fight for access to resources. For yet others, cooperation is the key.

How competition to secure resources, both today and in future, will evolve is complex and it is not yet clear which strategies will prevail. What is clear is that the quest to secure resources has already begun for many government and organizations around the world, who are seeking to control their own economic and social destinies, and to reduce dependence on other entities. As this competition plays out, the risks of possible resource-based conflict and misunderstandings between countries, organizations and people are rising worldwide.

What is your organization doing to tackle the challenge of securing resources for the future – and to manage the risks? In this briefing we explore the changing energy landscape as an example of the shifting resource environment, and examine how some of the strategies to manage resources, both today and in the future, are starting to play out.

 

 

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GT BRIEFING: April 2013 -- Realizing the Promise of New Geographic Markets

 

April 2013: How much does geography matter any more? As the world becomes increasingly urbanized and consumers become more connected across borders, as well as new geographies, there are other high growth markets to consider, whether cities, regions, or communities.

In our October 2012 briefing we talked about the rise of the BRICS and beyond and how this is giving rise to new forms of competition – as well as new competitors hungry for growth, and countless innovations. Home market competitors from BRICS markets are extending their presence on the global stage, particularly into other high growth markets, leveraging strong bases in their domestic markets. The mindset of many of these players is focused on aggressive expansion and investment, in contrast to the consolidation and risk management mindsets of many traditional, developed markets players.

But it’s not just the high growth geographic markets that business needs to focus on – the developed world will still be home to a significant amount of the world’s consumption for the forseeable future. One in particular, the U.S., is even being touted as the next “emerging” market! What’s going on?

In this briefing we take a look at some of these “new geographic” markets – some aren’t geographic, some aren’t new, but all will have a bigger role in future – and what it might take to realize the promise of growth within them. 

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