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Dec 06 2010

Global MegaTrends Part 3 – Govt Intrusion, Labor Shortages, Massive Population Growth

This is part 3 of an overview of the 12 leading global business & economic megatrends effecting US associations prepared from a more detailed study by MCI’s Global Association Management & Consulting Practice.  Part 1 & 2 of this article can be found here and here. Using the latest research findings from leading global institutions, MCI assembled a more indepth megatrends analysis to help clients with 2011 strategy and planning from which these posts are excerpts.

Megatrend #7 – Governments Get Intrusive

As we emerge from the worst global financial crisis since WWII, governments are considering an array of new regulations to promote more competitiveness and growth.   The fear among many in the private sector is that future regulation could seriously slow growth unless governments can focus efforts in ways that could improve the ability to conduct business.

A recent CEO Study found that governments will increasingly have more impact on their companies’ economic value than employees, investors, or suppliers.   As multinational organizations expand their operations to markets outside their home markets, they will need to build a public affairs capability as part of their market entry or expansion.

One area where trends, government and private sector converge is the need for improved 21st century infrastructure that is sustainable and capable of providing a platform for business and society in the knowledge age.

Megatrend #8 – Global Labor:  Not Enough Expertise at the Point of Need

Around the world in both developed and developing countries, there is a growing concern in governments’ ability to provide an adequate workforce for 21st century business needs.   While the challenges are different in each country, the common viewpoint is that evidence exists of a growing “Talent Gap” in regions where demand for key skills exceeds supply.   Specialists who possess “generally accepted competencies” through ongoing study and credentials remain in demand.

According to the World Economic Forum, talent shortages exist at all levels.  Skills gaps affect all industry sectors and geographic regions.   For instance, a recent report showed that fewer than 10 percent of Chinese graduates across a range of technical and professional disciplines are suitable for employment in foreign companies.  India is also not immune.  Company executives in India considered only 25% of Indian engineering graduates employable by multinational companies while some executives interviewed put the figure more at 10%.

The rise of globalization has seen the dramatic increase in the adoption of “generally accepted practices” and standards as corporations build worldwide supply chains from R&D to product design and production and service delivery. Many US and UK based professional societies have seen significant growth in demand for their professional certification programs and in some cases their certification business among foreign-based professionals or enterprises exceeds domestic demand.  Much of this growth is due to poor quality of university education in emerging markets and the appetite for adopting generally accepted standards and practices to compete effectively in an era of accelerating globalization.

Megatrend #9 – Massive Population Growth at Either End of the Pyramid

The single largest growth opportunity in the decades ahead will be in emerging market cities.  One third of the world’s population lives in these cities, but will increase by an additional 1.3 billion people (versus only 100 million in developed countries) by 2030.  Much of this urban growth will take place not in mega cities but in cities of 5 million or less in population.

This growth is fueled simultaneously from both ends of the pyramid – young and the old – causing great pressure for good jobs and elder services.   To meet the infrastructure needs of this migration to cities, an investment of 30-40 trillion USD is required by 2030.  And yet, estimates suggest that governments will have revenues to cover only half this amount.

Countries with growing younger populations will experience rising demand for business education. The risk in these countries is that bulging youth populations will overwhelm educational infrastructures.  In aging economies, the strategic challenge will be to discover ways to import students and retain graduates to accommodate work force needs.

Without a fundamental shift in the way goods and resources are consumed, the world faces the prospect of multiple, interlocking global crises for the environment, prosperity and security.  Sustainable consumption will be a prerequisite for a more prosperous, safe and equitable global future.

Part 4 (final posting) – can be found here.

About the author

Peter Turner

As MCI's Senior Advisor, Global Development Strategy, I help associations build and execute global growth strategies. Over the past 30 years I have served three associations (ASAE, MPI and IEEE Computer Society) as a leader of business, product and partnership development.

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