1st Annual Heidelberg College Business Conference: Strategies for Success; Planning, Marketing, Growing a Business

Global Growth Opportunities: 2008 – 2030; Major Shifts Coming

Mark BeliczkyPresident, The Glenwood Group

Washington, DC April 26, 2008

Global Growth 0pportunitites: 2008 - 2030

Global Growth 0pportunitites: 2008 - 2030

While we may not be the direct beneficiaries of the next 22 years of globalization, our children, grandchildren and current/future Heidelberg graduates certainly will

Global Growth 0pportunitites: 2008 - 2030

Globalization: growing interconnectedness reflected in expanded flows of information, technology, capital, goods, services and people throughout the world

By 2020, globalization will take on much more of a non-western face

Global Growth 0pportunitites: 2008 - 2030

Reach of globalization has substantially broadened in last 20 years

Chinese & Indian economic liberalizationCollapse of the Soviet UnionWorldwide information technology

Global Brands Abound and Will Abound

Global Growth 0pportunitites: 2008 - 2030

Globalization or “economic interdependence” has expanded the effective reach of multinationals

Smaller and emerging growth firms have a new-found ability to market across borders and bring prior non-traded goods and services into the international arena

The anticipated increases in global consumer demand (particularly a growing middle class) will require those multinationals who want to compete to have to adapt their profiles and business practices to the demands of these cultures

Identify and access new and relevant technologies, competencies and knowledge of lead markets emerging in the world Effectiveness of speed with which companies can connect these globally scattered pieces of knowledge and use to create innovations, products, services and processesOptimizing efficiency of global sales, distribution, marketing, and supply chain to leverage across global markets rapidly and cost efficiently

Serious About Winning in Today’s Global, High Mobility Knowledge Economy

1. Expand the net you cast for new knowledge

2. Prospect for interesting, new technologies and consumer trends beyond those locations dominated today

3. Anticipate hotbeds of new technologies and bell weather customers

4. Unlock the potential knowledge that lies under-utilized in local subsidiaries

Key Leadership Question for The Aspiring Metanational or Local Government

What share of all new knowledge relevant to my company’s future am I capturing today?If you did not like the answer, then it is time to engage the world in a different wayGovernment and local officials can forge a leadership role for their region in the global knowledge economy by addressing where their region/city fits in a global economy – how their region can thrive by developing a fertile environment for metanational companies

Three Key Globalization Trends

Globalized area will represent 51% of the population and 74% of GNIAreas dominated by Islamism and Africa: 34% of the population and 3.5% of world GNIDeclining areas: European Union and South America: 14% of world population and 22% of GNI

Global Population by 2030World population expected to reach 8.2 Bil from 6.5 in 200510 most populated countries: India, China, EU/Balkans/Turkey, USA, Indonesia, Pakistan, Brazil, Nigeria, Bangladesh, EthiopiaMost populated cities: Tokyo, Japan; Delhi, India; Lagos, Nigeria; Mumbai, India; Dhaka, BangladeshGlobal population decline by 2100

One of the Fastest Growing Population Segments

Aging Global Population

World elderly population expected to more than double in next 30 yearsUS: 65+ will grow from 35 mil to 71 million by 2030Persons 65+ in developing countries projected to triple from 249 mil to 690 million

Economy by 2030: Regional Partitions

US/Canada will maintain same share of GNI: 30%China/Korea/Japan will see a significant increase from 19% to 30%Islamic world and Africa will represent 3.5% of GNI and 34% of the world population EU declines from 31% to 19%

Major Economic Powers by 20302004 2030

USA USA

Japan China

Germany Japan

China India

UK UK

France Germany

Italy Korea

Canada France

Spain Russia

Mexico Canada

India Italy

Korea Spain

Brazil Mexico

Australia Australia

Netherlands Brazil

82% GNI 84% GNI

55% Population

52% Population

Largest Economic GainsChina will have the largest economy

50% larger than US 2X IndiaGermany, Brazil, Russia, UK and France not even 1/10th of China

Economic gains in the next 20 yearsIndia 270%China 240%Indonesia 200%

Global trade will rise from $13.6 Bil today to $50.5 Bil in 2030

Global Per Capita Income Trends by 2030Low: $825Low Middle: $826 - $3,255Upper Middle: $3,256 - $10,065High: $10,066 & moreHyper Rich: $30,000+ (USA)

High and upper middle income groups will represent 61% of world population compared to 25% in 2004Greater middle class will present a “consumption explosion” and will boost the world economy (China, India & Indonesia)

Growing Middle Class…

Emergence of well educated workforce and low cost compared to wages in the USBlue and white collar workers in rich countries will endure severe competition in their wages and could be downgraded

US Business Talent Made Need to Look Cross Borders

JobMarket2009.wmv

Lower Middle and Low Income Good News/Bad News

Percentage of poor (lower middle and low income) will decrease from 75% to 39% (Southeast Asia and Africa)Sub-Saharan African poverty will be CATOSROSPHIC

GNI per capita was $355 in 2004 and is expected to decline to $290 or 18% worse

NGOs Aligned and Aware?

Global Income Inequalities on the Rise…

Hyper rich ($30,000+) were 60X higher than the average low income of $500 in 2004By 2030, the hyper rich will be 140X higher than the average low income As they say in London, “mind the gap”

Expansion of Global Consumption Function

Between now and 2015, more than 1 billion new consumers will enter the global marketSpending in emerging markets alone will increase almost $6 TrillionGrowth in global consumer spending represents nearly all of the spending in Western Europe

Expected Advances in Knowledge

Computers continue to follow a curve of exponential growth

Components embedded in the environment and materials such as clothing and eye glassesImages written directly on human retinas

Nanotechnology and Biotechnologydirect computing to the brain and organ replacement

Geneticsprevention of diseases and improvements in prosthesis

Expected Advances in Knowledge Cont…

New Energy sourcesClean energy investment to top $7 Trillion by 2030 (wind turbines, solar panels, and biomass generators)

Senior Services/CareSpace ExplorationWeaponry: non-lethal microwaves

Oil, Oil, Oil…….

1960’s, The Club of Rome Stated, “most of the natural resources were rapidly exhausted”Current CIA Survey: “…recent estimates indicate that 80% of the world’s available oil still remains in the ground as does 95% of the world’s natural gas”Expect a DECREASE in oil prices by 2015Natural gas usage will increase more rapidly than any other energy sourcePresent high oil prices could be followed by a price collapseFusion reactors after 2030

Global Growth Opportunities: 2008 – 2030; Major Shifts Coming

Fewer barriers to entry for global-minded businessesGrowing elderly populationChina, India and IndonesiaMiddle class consumption explosionSub-Saharan economic catastropheHyper rich – poor gap widensKnowledge economy continues to drive globalization

References and LinksCIA “The World Fact Book”CIA Global Trends 202036th Dilenschneider Group Trend/Forecasting ReportThe Millennium ProjectThe George Washington University Center for Study of Globalizationwww.cia.govwww.rand.orgwww.wto.orgwww.chinadaily.netwww.scmp.comwww.globalchange.comwww.kurzweilai.netwww.webcrawler.comwww.growthengines.comwww.businessmonitor.com/chinawww.tradethenews.com