Study suggests a key assumption of economic theory may be wrong. These are the 8 major forces shaping the future of the global economy. I can’t change the direction of the wind, but I can adjust my sails to always reach my destination. – Jimmy Dean The world is changing faster than ever before. With billions of people hyper-connected to each other in an unprecedented global network, it allows for an almost instantaneous and frictionless spread of new ideas and innovations. Combine this connectedness with rapidly changing demographics, shifting values and attitudes, growing political uncertainty, and exponential advances in technology, and it’s clear the next decade is setting up to be one of historic transformation. But where do all of these big picture trends intersect, and how can we make sense of a world engulfed in complexity and nuance?
Furthermore, how do we set our sails to take advantage of the opportunities presented by this sea of change? The Intersection of Data and Powerful Visuals Interpreting massive amounts of data on how the world is changing can be taxing for even the most brilliant thinkers. 1. 2. 3. 4. 5. Retail alert: This upscale grocery store chain is closing stores. 18 Emerging Economies Lifted A Billion People Out Of Extreme Poverty -- What They Did Right? . Photographer: Paul Yeung/Bloomberg Chinese and Malaysians are no longer poor. Indians, Ethiopians, and Vietnamese are still poor, but not as poor as they were 20 years ago.
Singaporeans are as rich as Americans, and South Koreans are catching up. The reason? Achieving sustained growth over a couple of decades or longer is among the top challenges for emerging economies. That’s according to a recent McKinsey Global Institute (MGI) study, which surveyed the growth patterns of 71 emerging market economies. Table 1 11 Countries With 5% Per Capita GDP Annually For 20 Years *MGI study ** World Bank Table 2 7 Countries With 3% Per Capita GDP Annually For 50 Years What separates and sets apart these 18 emerging market economies from the rest? One of them is a pro-growth agenda that boosts productivity, income, and demand. Then there’s the presence of large, competitive firms investing in assets, R&D and job training, which create spillover effects that benefit smaller firms.
Source: Finance.yahoo.com. Kitchen for rent? Ikea to trial leasing of furniture | Business. Ikea is to start renting out furniture as part of attempts to build a more environmentally friendly business. The world’s largest furniture retailer said it wanted to test out the idea of leasing office furniture such as desks and chairs to business customers, starting in Switzerland. However, kitchens could also potentially be rented rather than sold in future. The leasing strategy is part of Ikea’s wider effort to design and sell goods that can be repaired, reused, recycled or resold and promote services that prolong the life of a product. “You could say leasing is another way of financing a kitchen. He said the Swedish company was also considering launching its own spare parts business so that customers could replace components, such as hinges or screws, for furniture no longer stocked in Ikea’s stores. Ikea has said it wants to source 100% of its wood and paper from more sustainable sources by 2020 and plans to ditch fossil fuels by 2030.
Ikea i ny satsning: Gør klar til leasing af møbler. Ikea vil nu lease kontormøbler i en prøveperiode. Det er tale om en radikal ændring af Ikeas traditionelle saml selv-produkter, skriver Financial Times. Den svenske møbelgigant tror, at det vil kunne ændre måden, som kunderne køber ting på – inden for alt fra skrivebordsstole til køkkenskabe. Den første prøveleasing fra verdens største møbelvirksomhed skal allerede begynde i Schweiz i denne måned og vil ifølge Ikea omfatte »flere forskellige typer møbler«. Restaurering efter leasing »Sammen med vores partnere arbejder vi hen imod, at du kan lease dine møbler. Efter at møblerne har været leaset, vil Ikea restaurere dem, hvorefter de enten vil blive solgt eller genudlejet, hvilket alt i alt vil forlænge levetiden på Ikeas møbler.
Prøveperioden er første led i en lang række test, som Ikea håber vil blive til en »skalerbar abonnementsordning« for flere forskellige slags møbler. Forandringen er allerede på vej. Virksomheden har også forbedret sin tilstedeværelse på internettet markant. What's Next for the Sharing Economy? Everything as a Service The rise of the sharing economy is not happening in a vacuum. In the broader economy, nontraditional “rental” arrangements are also gaining traction. Consumers increasingly are renting music via streaming services such as Spotify and Apple Music. In 2016, record labels earned more US revenues from these services than from the sale of CDs and albums. In computing, the cloud allows companies and consumers to access software, storage, and other resources as a service.
Could the current sharing economy be just an intermediate phase between a past of traditional ownership and a future of everything as a service (XaaS)? Sharing is conceivably capable of replacing not just traditional rentals but ownership of a wide range of goods as well. The sharing economy is still relatively young and undeveloped. The Future Sharing Economy and a New Model of Consumerism. I’m a futurist, I think 24/7 about the impact of automation and technology on the on the global economy. In respect to basic income, it’s being introduced as some kind of fix-all “stand alone”solution to the next era of technological unemployment, but that is incorrect. There seems to be a lot of confusion about the role a human stipend (basic income) will play in the future of the next phase of consumerism.
As wealth inequality increases to rise, and global tech monopolies become even more powerful, and as automation continues and advances more rapidly, there will be a significant social and economic press on global citizens. The Disenfranchised Millennial (Generation) In the U.S. students saddled with student debt delay home ownership or are never able to go down that path. In fact, young people are already experiencing this press today. The New Economics of Social Mobility In 2025, millennials will make up 75% of the workplace — World Economic Forum A Regulated Gig Economy With Benefits. The Futurist: Economic Trendline Reversion Does Not Happen Evenly. If we could point to one aspect that makes the modern era different from centuries past, the premier candidate for that distinction is how the centuries-established exponential, accelerating trend of technological progress manifests in economics, and the fact that the trendline is now in a steep upward trajectory.
These are all worldwide metrics, and have to be. But if one examines the components, the variance contained therein is immense. One table that I use relatively often is the one that depicts relative GDP gain by country, and have in the past used it to describe how the 2008-09 crisis led to the rebound happening elsewhere. Google has just updated its economic data engine for 2017, enabling a full decade to be included from the start of the prior crisis. This enables us to see what happens when the global economy experiences a major dislocation. From the table, we see that the World Economy grew by 40% in Nominal GDP. China has effectively dominated the entire world's growth. Not enough people are paying attention to this economic trend.
By the second semester of my freshman year at Harvard, I had started going to classes I wasn’t signed up for, and had pretty much stopped going to any of the classes I was signed up for—except for an introduction to economics class called “Ec 10.” I was fascinated by the subject, and the professor was excellent. One of the first things he taught us was the supply and demand diagram. At the time I was in college (which was longer ago than I like to admit), this was basically how the global economy worked: There are two assumptions you can make based on this chart.
The second assumption this chart makes is that the total cost of production increases as supply increases. Software doesn’t work like this. The portion of the world's economy that doesn't fit the old model just keeps getting larger. If you want to understand why this matters, the brilliant new book Capitalism Without Capital by Jonathan Haskel and Stian Westlake is about as good an explanation as I’ve seen. It’s a sunk cost. Bill Gates Says We Need New Economic Models That Take Tech Into Account. You couldn’t get your grubby paws on a first edition Charizard card, never seemed to find the latest action release on the shelf at Blockbuster Video, or found that you couldn’t quite afford that new Playstation game with your allowance. The rarer something is, the more it’s worth. We learn this so-called law of supply and demand from an early age, and that largely stays true when we grow up, at least in capitalistic societies around the world. But in a blog post published last week, Bill Gates says supply and demand is over.
It’s grown irrelevant to today’s economy, Gates argues. And he feels that many politicians have failed to take these economic shifts into account as they consider legislation and steer the country into the future. The reason? But for companies that deal exclusively in software, traditional notions of supply and demand just aren’t relevant anymore. This argument doesn’t fully hold up, though. 5 Sectors Exploring New Ways of Doing Business with Advanced Blockchain | IEEE Innovation at Work. Removing fraud and trust from the equation, blockchain technology verifies, records and coordinates transactions autonomously without the need for third parties. It implies the role of intermediaries will diminish, which has a critical impact on legacy market players, whose business model is often based on some role in intermediation.
Thanks to the blockchain, new and as yet unimagined ways of doing business are in our very near future. Here are just five business sectors on the path to disruption. Energy Flexible, efficient and secure, the blockchain will fuel the transition to a new distributed energy model where consumers become prosumers – producing electricity via solar panels and battery storage. New types of collaboration will replace intermediaries and allow direct peer-to-peer trading transactions. The only issue when it comes to replacing intermediaries is the question of who owns the liability when a transaction fails. Supply Chain Internet of Things Finance Healthcare Related. How Social Media Influencers Are 'Influencing' New Ways Of Doing Business. The Biggest Problem For The Global Economy In 2019 Won't Be The US-China Trade War. The biggest problem for the global economy in 2019 won’t be the trade war between America and China. It will be massive business failures.
Perhaps bank failures, too. The US-China trade war was the big problem in 2018, raising fears of de-globalization and the descent of the global economy into a collection of highly protected national markets. But financial markets and global corporations will bring the two parties on the negotiation table in 2019, the way they did with NAFTA a few months ago. Instead, the biggest problem for the global economy in 2019 will be massive business failures that could also lead to bank failures in emerging markets relying on foreign capital to maintain elevated living standards. The reason? The explanation is simple and straightforward. China's Household DebtKoyfin Then, there’s the debt of China’s corporate sector that is a big unknown. On the supply side, it encouraged corporations and entrepreneurs to pursue low profit businesses opportunities.
The rise of new economies. Image copyright Getty Images The Parc de la Villette is where the Paris slaughterhouses used to be. It is now the third largest park in the whole city. Transformed unrecognisably, it has become the home of a huge science museum and many cultural activities. It is one of the mighty "grand projets", the huge public works schemes inspired by the late President, Francois Mitterrand. For some weeks this autumn, the Parc was also the temporary home of a provocative exhibition called Wave: How Collective Innovation is Changing the World. It was a collection of photographs and demos of start-ups and projects from many places around the world.
It has now closed in Paris, but look out for it popping up in other cities in the coming months. Wave is backed by the French bank BNP Paribas. It is a celebration of many ideas made possible by the new connectivity of the internet. Sharing economy Nobody can yet say what will result from the great internet disruption, which is still in its birth stages.