ey-megatrends-report-2015

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Global marketplace Economic power continues to shift east and south, driving new patterns of trade and investment 1. Global economic power will continue shifting to rapid-growth economies Global GDP of rapid-growth markets 38 % 63 % US$223t Home to world’s largest companies China 18 India 1 Brazil 3 US 179 UK 38 Germany 37 2000 2014 95 4 4 128 28 28 By 2030, rapid-growth markets will comprise 63% of global GDP, up from 38% today and amounting to US$223t. Sources: “The super-cycle lives: emerging markets growth is key,” Standard Chartered, November 2013, www. sc.com/en/news-and-media/news/global/2013-11-06-super-cycle-EM-growth-is-key.html; and EY Analysis of 2000 and 2014 Global Fortune 500 lists, November 2014. Growth in rapid-growth markets is expected to taper somewhat going forward, but should nevertheless remain very healthy. For 2014-2030, projected growth rates for major players such as China (+5.9%), and India (+6.7%), as well as fast-developing regions such as Sub-Saharan Africa (+5.8) and the Middle East and North Africa (MENA) (+4.9%) will continue tipping the world’s center of economic gravity toward the east and south. 1 With growing economies, and supported by socioeconomic trends such as urban migration, declining dependency ratios, favorable demographics and growing income levels, rapid-growth markets will become increasingly important venues for conducting global business. For all companies with global ambitions — both established multinationals and their rapidgrowth market challengers — this great shift in economic power will force major adjustments in strategy. 24 Megatrends 2015 Making sense of a world in motion
2. Trade-flow patterns will undergo continued transformation The share of intra-emerging market will increase to one-third of global trade by 2020. Up from 10% in 1995. US$1.6t US$8.7t 2012 2035 Services trade will see its value increase from nearly US$1.6t to nearly US$8.7t between 2012 and 2035 increase. Source: “Lamy says Europe needs a good compass to sail through crisis,” World Trade Organization website, www.wto.org/english/news_e/sppl_e/sppl275_e.htm, accessed 17 October 2014. Global merchandise trade is forecast to grow 8% annually to 2030, and should outpace GDP growth. 2 China, which is already the largest goods trader, will further consolidate its position in world trade. Other emerging markets, such as India and Vietnam, are also expected to post double-digit annual export growth over the next seven years. 3 The increasing role of the developing world in trade, coupled with rapid advances in communication and technology, will lead to further fragmentation of supply chains. By 2030, the World Trade Organization estimates that the import content of exports will rise to 60%, as compared to 20% in 1990s and 40% in 2012. 4 Overall, the global trade landscape will be marked by increasingly high levels Source: World Trade Report 2013, World Trade Organization, July 2013. of integration. Asia is likely to emerge as the fulcrum of future global trade architecture, and will remain at the center of the world’s fastest-growing trade routes (e.g., Asia-MENA, Asia-Latin America and Asia-Africa). 5 The Middle East and Africa will become new trade hubs, driven by economic integration with Asia, proximity to Europe, capacity for low-cost production and growing domestic markets. The major brake on increasing trade will be protectionist impulses. While dealing with the ever-present spectre of protectionism, the economies of the world will remain highly interdependent through trade and financial system linkages, driving the need for stronger global policy coordination among nations and resilient supply chains for companies operating in this environment. Megatrends 2015 Making sense of a world in motion 25
Page 1 and 2: Megatrends 2015 Making sense of a w
Page 3 and 4: Welcome At EY, we describe megatren
Page 5 and 6: Each megatrend is important in its
Page 7 and 8: major hub. In the global marketplac
Page 9 and 10: 1Digital future Fueled by the conve
Page 11 and 12: 2. Declining PC usage and increasin
Page 13 and 14: 4. Digital disruption is changing t
Page 15 and 16: 6. Workstyles and the means to enga
Page 17 and 18: 2Entrepreneurship rising The growth
Page 19 and 20: 2. High-impact entrepreneurs will c
Page 21 and 22: 4. The face of entrepreneurship is
Page 23 and 24: 6. Access to funding remains the bi
Page 25: 3Global marketplace will continue t
Page 29 and 30: 4. The growing global middle class
Page 31 and 32: 6. The war for talent grows increas
Page 33 and 34: 4Urban world The number and scale o
Page 35 and 36: 2. Demographic patterns will help s
Page 37 and 38: 5. An urban world requires major in
Page 39 and 40: 7. Truly sustainable cities must al
Page 41 and 42: 5Resourceful planet Absolute popula
Page 43 and 44: Over the next 20 years 2. Increasin
Page 45 and 46: The cost of adapting to climate cha
Page 47 and 48: 6Health reimagined Health care —
Page 49 and 50: 2. Incidence of chronic disease wil
Page 51 and 52: 5. Genetic and genomic information
Page 53 and 54: 3Global marketplace 1. “The super
Page 55 and 56: Megatrends 2015 Making sense of a w

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