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Category: MegaTrends & Research

Nov 24 2010

Global MegaTrends Part 2 – Tech, Health Care and Global Business Cravings

Night lights and the spread of economic growth.

This is part 2 of longer overview of the 12 leading global business & economic megatrends effecting US associations prepared by MCI’s Global Association Management & Consulting Practice. Part 1 of of this article can be found here. Using the latest research findings from leading global institutions, MCI assembled these megatrends to help with client 2011 strategy and planning.  Here then is a short excerpt from this more in-depth client analysis covering trends.

Megatrend #4 – Tech Explosion Meets Population Explosion

Forecasts predict that Brazil, Russia, India, China and Indonesia will be the sources of the most dynamic growth in digital consumption.  Already more than 610 million residents in these countries are regular Internet users and are expected to grow to 1.2 billion by 2015.  Over 60% of these users are under the age of 35 years old. As they earn even higher incomes as the middle class continues to expand, they will require more complex needs that will offer massive business potential of consumer electronics, Internet, and mobile communication.

Online usage in emerging markets is different than in developed countries and varies by age demographic segment than economic status although Brazil and Russia are far more advanced in usage sophistication than India or Indonesia. While China is far beyond them all with Internet and mobile phone usage deeply embedded in the lives of hundreds of millions of Chinese.

But by far the online device of choice is and will continue to be – the smartphone.  PC’s are and will remain a platform with smaller adoption outside businesses.

Megatrend #5 – Health Care Offers Challenges & Opportunities for All

Innovation & Demand Soar in Emerging Markets – Spending on health care will continue to rise in line with economic growth and key markets will become big opportunities for health care companies. Yet serving them will require new models that can adapt to local needs. Demand for treatments for traditionally “Western” diseases will soar in these countries.

Greater Incidents of Global Pandemics – The world has become more sophisticated at coping with potential pandemics, but urban sprawl, population growth, global travel, and rudimentary delivery systems in poor countries ensure that global pandemics will remain a serious threat.

Environmental Quality Erodes Health – The effects of poor water and air quality, pathogens in food supply, and urban sprawl and congestion will cause dramatic health care challenges for decades to come.

Medical Tourism Goes Mainstream – The allure of good care at much lower prices will cause increasing numbers of people to go abroad for cheaper treatment. Americans traveling abroad for treatment will soar to more than 1.6 million in 2012.

Megatrend #6 – Acceleration of Demand for Generally Accepted Practices, Standards and Codes

As globalization affects industry and professions, its impact on a profession is felt through the definition and acceptance by industry of job roles, levels of skill mastery and principles of practice.  They become the means by which to standardize knowledge transfer from one part of the globe to the other and make managing complicated projects easier.

A recent management study by a US and UK business school identified that one important explanation for the large differences in productivity between firms and countries is variations in management practices. Their work suggests that implementing new practices may be easier when the workforce is more knowledgeable.  So more basic business education could help improve management in many nations, especially in developing nations.

And given emerging markets are only becoming aware of non-formal education (what we call professional development offered by associations) outside of university systems in recent times, the potential for certifications, accreditation and professional training that has generally accepted status outside their homemarkets have unique opportunities to tackle this new demand.

Emerging market governments want a good local supply of 21st Century workers to help their domestic companies compete.

Next up in Part 3 (found here) – Governments Get Intrusive, Massive Global Labor Shortages, & Massive Population Growth at Either End of the Pyramid

Nov 19 2010

Global MegaTrends to Rock Your World – Part 1

As we enter the 2010 Holiday Season,  what is clear to us at MCI’s global Association Management & Consulting Practice is that US-based associations need to redouble their efforts to strengthen their positions in emerging markets.  Inaction, denial, or under resourcing one’s international efforts is the most risky of strategies at a time when our world is going through fundamental change.

In 2010,  our clients have asked us to better define some possible options to help grow their brands,  membership, and product demand outside home markets.   We began this effort in part by conducting a global environmental scan to identify the leading global business and economic trends, their underlying context, implications arising from their ascension, and the questions that need answers in order to chart the proper course.

Using the latest research findings from leading global institutions, we assembled the following twelve megatrends that  associations need to factor in their 2011 strategy and planning.  Here then is a short excerpt from this analysis.

Megatrend #1 – New World Order – US, EU and Japan in a Catch Up Race

Since 2001, the economies of the US, EU, Japan have not only underperformed but they are now no longer driving global growth.  Leadership is now squarely on the shoulders of emerging market leaders – China, India, Brazil and others.  Among Emerging Market Economies, the recent recessionary downturn was brief or didn’t even exist.  And today many have returned with strong growth.  Confidence in these markets is high and attracting greater business and investment while local consumer demand is building in volume and sophistication.

Meanwhile, the US & EU recovery arrived without any bounce in jobs and credit remains tight.   Companies hoard cash as hungover consumers focus on paying off debts and contributing to savings.  The risk of insolvency among member states in EU from Greece, Ireland, Portugal, and Spain undermine confidence in the future.

Today’s reality is likely to remain the same without substantial reductions in public debt, improved job growth, and investments to improve competitiveness.

Megatrend #2Innovators and Knowledge Creators Increasingly Reside in Emerging Markets

So you’ve been seeing more and more foreign contributors to your journals, conferences, and other products?  Emerging Market governments are investing in innovation hubs that have attracted funding from sovereign wealth funds & venture capital while Developed Market innovation centers are weakening with less support from private equity markets.

Sources that track contribution to science and technology using such measures as peer-review papers, patent applications or awards across various country markets find that the depth and spread of non-Western contributors is accelerating.   For instance in 1990, less than a tenth of international patent applications had a foreign co-inventor while that number has risen to 25% in 2010.  Today, 40% of US patent applications include foreigners as part of the research team.

Megatrend #3Commercialization of Innovation in the Age of Austerity

While we in the West equate innovation as breakthroughs creating new paradigms embodied in revolutionary (read expensive) products like the iPad or iPhone, many of the most important innovations coming from emerging markets consist of incremental improvements to products and processes aimed at the middle or the bottom of the income pyramid.

New innovative product design strategy using “frugal innovation” (or reverse innovation) is creating more locally relevant products aligned to the special needs of developing world consumers, and potentially, the more cash-strapped Western consumers who prefer “cost effective function” over “cutting edge, nice to have features.”

Emerging market countries are becoming hotbeds of business innovation in much the same way as Japan from the 1950s onwards. They are coming up with new products and services that are dramatically cheaper than their Western equivalents: $2,200 car, $500 portable ECG machine, or the $70 refrigerator.  Emerging market innovators are reinventing systems of production and distribution, and they are experimenting with entirely new business models.

Next up in Part 2 – Tech Explosion Meets Population Explosion, Health Care – More Than A US Problem, Global Business Craves Standards, Codes & Practices