world's economy in 2030

8/7/2019 world's economy in 2030

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Where nextfor the global economy?

a view of the world in 2030

aCCoUntanCY fUtUreS
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22

ABOUT AccA

ACCA (the Association of Chateed Cetified Accountants) is the global bod fo pofessional accountants. We aim to offebusiness-elevant, fist-choice qualifications to people of application, abilit and ambition aound the wold who seek a ewadingcaee in accountanc, finance and management.

Founded in 1904, ACCA has consistentl held unique coe values: oppotunit, divesit, innovation, integit and accountabilit.We believe that accountants bing value to economies at all stages of thei development. We seek to develop capacit in the

pofession and encouage the adoption of global standads. Ou values ae aligned to the needs of emploes in all sectos andwe ensue that, though ou qualification, we pepae accountants fo business. We seek to open up the pofession to people ofall backgounds and emove atificial baies, innovating ou qualifications and thei delive to meet the divese needs of tainee

pofessionals and thei emploes.

We suppot ou 140,000 membes and 404,000 students in 170 counties, helping them to develop successful caees inaccounting and business, based on the skills equied b emploes. We wok though a netwok of 83 offices and centes andmoe than 8,000 Appoved Emploes woldwide, who povide high standads of emploee leaning and development. Thoughou public inteest emit, we pomote appopiate egulation of accounting and conduct elevant eseach to ensue accountanc

continues to gow in eputation and influence.

The present system o global cooperation is

not working sufciently. [We need to] look at

all issues on the global agenda in a systemic,

integrated and strategic way. We have to

rethink our values; we are living together in

a global society with many dierent cultures.

We have to redesign our processes; how dowe deal with the issues and challenges on the

global agenda?

KlAUs schwAB, PresidenT And FOUnder OF

The wOrld ecOnOmic FOrUm, JAnUAry 2010
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where nexT FOr The glOBAl ecOnOmy? 3

The global panel o experts

T v p t out a t poa v of t patpat a o ot

pt t v of t po o ttuto t po oup o o.

VerenA chArVeT

Managing lawe, Invesco;

fome legal counsel at

Baclas Wealth; fome

pincipal at Baclas

Global Investos

JOhn deFTeriOs

Coespondent, CNN Business

News and pesente/edito of

Marketplace Middle East

Andrew dilnOT

Pincipal of St Hughs College,

Ofod Univesit; economist;

boadcaste; fome diecto

of the Institute fo Fiscal

Studies

AnTOniO esTrAny y

gendre

Chaiman, Aial Analtics

(financial analsis

outsoucing compan); fome

membe of HSBCs eecutive

committees (Agentina and

Ameicas egion)

PrOFessOr sAUl esTrin

Pofesso of management

and head of the depatment

of management, London

School of Economics and

Political Science

chin KwAi FATT

Managing diecto,

PicewatehouseCoopes,

Malasia

mArK gOyder

Founde diecto,

Tomoows Compan

TOny hegArTy

Chief financial management

office, Wold Bank

lOUghlin hicKey

Global head of ta, KPMG

miKe hOBdAy

Patne, IBM, and fome CEO

of Atos Consulting

JAPheTh KATTO

CEO, Ugandan Capital

Makets Authoit

nenAd PAceK

Pesident,

Global Success Advisos

PrOFessOr mAUry

PeiPerl

Pofesso of leadeship

and stategic change, and

chaiman, business adviso

council, IMD BusinessSchool, Switzeland

ABBAs shOJAei

Founding patne,

Salehandishan & Co

(audit fim), Ian

mAlcOlm wArd

Leadeship team,

Gant Thonton UK

THE GLOBAL PANEL OF ExPErTSwhere nexT FOr The glOBAl ecOnOmy? 3


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4

Foreword

This epot pesents a vision of the wold in 2030.

The global economic cisis that stated in 2007 continuesto demand shot and medium-tem solutions fom

politicians, business leades and othe opinion fomes.

Howeve, in ceating new egulato bodies, commecial

stuctues and globall coodinated appoaches, leades

must conside the futue impact of shot-tem measues.

While debate continues on the outlook fo global

capitalism, we eploe the implications of ou changing

wold and offe a view of the global econom in 2030.

In ode to do this, ACCA discussed seveal hpotheses with a global panel of

epets, asking them how the believe the wold might evolve ove the net 20eas. The panel includes independent business leades, economists, academicsand commentatos fom aound the wold. Thei insights on the futue of the

global econom povide new paametes within which we eploe the business andgovenment dnamics that will shape the net two decades.

At ACCA, we wok closel with emploes fom multinationals to SMEs, govenmentsand egulatos to develop the global accountanc pofession. In doing this, weundestand that accountanc can advance onl with a deepe undestanding of

the diection in which global economic foces will take us. This eseach stud wasconceived to povide this citical contet essential to the long-tem development of thepofession and demonstate the value of accountants fo business.

Where next for the global economy? is designed to help ou navigate todaschallenges though an undestanding of how ou actions will shape the woldof tomoow. We shae ou panels ideas and pespectives to help eades make

decisions based on the collective undestanding of those at the foefont of debate. FoACCA, these pespectives fame the issues that we will investigate moe deepl in ouongoing eseach.

We would like to thank ou panel of global epets, who geneousl povided theitime, epeience and insight fo this epot. We would also like to emphasise that the

views the epess ae thei own pesonal opinions and do not necessail epesentthe polic of the oganisations in which the wok.

Helen BandChief eecutive, ACCA


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Contents

The glOBAl ecOnOmy 6

Multi-egional globalisationACCAs pespective

The disTriBUTiOn OF glOBAl POwer 9The wold becomes flatteWho will dominate the global powe-base in 2030?

resOUrces: scArciTy And cOmPeTiTiOn 12Bugeoning demand

Uncetain supplThe ecological cedit cunch a ta on economic gowthThe leapfog phenomenon

The FUTUre OF FinAnciAl mArKeTs 15What will global makets look like?Hamonisation of egulation

Impoved access to finance

The cOrPOrATe ecOsysTem 17

A wold of shopkeepes the entepeneus osteFluid, fleible fedeations of businessesA changing fom of collaboation

gOVernAnce And gOVernmenT 20Govenance and assuance

Towads a sstem of geate self-govenance and esponsibilitShifting sands between the public and pivate sectos the ole of the state in 2030

mUlTi-regiOnAl glOBAlisATiOn in 2030 24Five foundations fo egional gowth and success in 2030

A vision of egional chaacteistics in 2030

CONTENTS


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6

Tt a bot a o a a ot t o pot a to. i 1990, no

maa a a fo ja, maat Tat fo ovt, T B-l

pub a popoa fo t o b a mooft au wo 3. T

5.3 bo pop t o 1990, t a o 6.8 bo. B 2050, t ou bo ta 9 bo1.

The global econom is now at a tippingpoint; pevious intepetations of success,gowth and global statue have been

based on movement in the Fotune,FTSE, CAC, DAx and Hang Seng indices,tacking multinationals based in a few

dominant counties. This intepetation isnow adicall changing to ecognise the

egional stengths of divese and complemakets, famil business and a globalmittelstand of small and medium-sizedentepises. These stengths will define

the global econom of the futue.

Futuolog is an uncetain, even

impossible at, demonstated b theglobal financial shocks of the past theeeas. Although we cannot pedict the

futue, we can be bette pepaed fo it.B pesenting possible scenaios fo theglobal econom, we gain some clait

aound the stategies we need in ode tostee and pepae fo the couse ahead.

What might this couse look like?Boadl speaking, we see a futuewhee globalisation will continue and

will lead to a wold that is flatte. Ouundestanding of evolving globalisationwill be shaped b the stengths that wepeceive among diffeent egions. At the

copoate level, we epect to see theemegence of a wold of shopkeepesand new fedeations of businesses,

with geate collaboation between

people, businesses and makets. Thiscollaboation will be suppoted b

inceasing egulato hamonisation andconvegence. So the futue fo globalbusiness looks moe comple, moe

fluid and less clea cut. Despite this,ou panellists viewed the joune weface with a huge degee of optimism,

based on the individual and collectiveadaptabilit of the human ace.

1 United Nations Depatment of Economic Affais (Population Division)

Ou epet panel was given hpotheseswhich eploe the etent of potentialchange as spingboads fo discussion.

Panel membes shaed thei pesonalviews, which we have intepeted andshaped into five specific aeas.

1 dtbuto of oba po

A much bigge goup of counties nowdominates global debate. Oiginallsteeed b the G5 Fance, Geman,Japan, the UK and the US the

global econom was inceasinglinfluenced b Belgium, Canada,Ital, the Nethelands, Sweden and

Switzeland, leading to the G11.recognising the impact of developingeconomies has led wold leades

to accept the G20 nations as thenew global base and embace aneve wide goup in global economic

debate, as economic powe andinfluence speads.

2 rou: at a opttoThe competition fo natual esouceswill become moe intense. This

will esult in the need fo a moecoodinated, intenational appoachto accessing and secuing sufficientesouces such as oil the most

impotant commodit in the pastcentu but also food, basic andpecious mineals, and wate.

3 T futu of faa aktGlobal makets ae epected to

gow but in makedl diffeent wasdepending on egions, esouces andpatneships. Financial egulation

will convege acoss makets asintenational egulato coopeationcontinues. This will facilitate

an incease in the souces anddestination of funds and the volumeand value of global capital flows.

The global economy

4 T opoat otSpecialisation continues asbusinesses look fo cost and scaleadvantages b placing elements of

thei value chains in the optimallocations. An inceasingl vitualnetwok of entepeneuial businesses

will seed, connect and collaboate on

a global scale. We call this a woldof shopkeepes. This will fom a

sstem of specialist SMEs that willesemble moe composite, successfuland cultuall adaptable fedeations

of businesses: the multinationals ofthe futue.

5 gova a ovt The futue ole of govenments is

defined b an emphasis on eithe

the facilitation of pivate entepiseo policing the sstem. Is thee acoheent middle wa suitable fo allnations, egional goups and the wold

econom? rigoous govenance andassuance is citical as the globalisationof business continues: new sstems

will emege to keep the wold ofshopkeepes on the ada, andmoe pinciples-based egulation

will incease self-govenance andesponsibilit within fedeationsof businesses.


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1 dtbuto of oba po

2 rou: at a optto

3 Futu of faa akt

4 copoat ot

5 gova a ovt

scAle OF POTenTiAl TrAnsFOrmATiOn

F 1: F TT TFT T F C

TThe global economy

THE GLOBAL ECONOMy

mUlTi-regiOnAl glOBAlisATiOn

Each aea above shaes a commontheme: the Westen view no longedominates the evolution of global

makets. Global capitalism is changingand we need to view the futue though adiffeent lens. But how do we do this?

Ou hpotheses enable us to eploenew visions and test ideas someeceived, some new and to ente into

wide debate with a ange of epetsfom aound the wold to eploe futue

diections and conside thei likelihoodand impact.

At the tipping point of globalisation we

look at five foundations fo gowth thatwill facilitate egional success in 2030.

We pesent a selection of ou panelliststhoughts about diffeent egions. It is

clea that egions possess ke definingchaacteistics that the can haness toshape and secue thei futue couse on

the global stage.

statu quo Tafoato
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8

The global economyT

AccAs PersPecTiVe

As the global bod fo pofessionalaccountants, ACCA is seeingsignificant shifts in economic powe

aound the wold.

Twent-two eas ago, ACCA became

the fist intenational pofessionalaccountanc bod to ente mainlandChina. Hee, ACCA witnessed an

immense appetite fo pofessional skillsin ode to suppot and fuel enomouseconomic epansion. Since then, theise of the BrIC nations and, moe

ecentl, the N-11 counties has healdeda new wold ode, with establishedWesten companies competing and

collaboating with an eve-wide

and moe divese ange of economicentities. Alongside this, the demand fo

pofessional accountants tained to ahigh intenational standad to suppotbugeoning economies aound the wold

has continued to gow apace.

Though ove a centu of wok in

ceating finance pofessionals, ACCAknows that talent and ambition esideevewhee and anwhee. And that,

given the ight conditions, business canflouish in an cone of the wold.

ACCAs long-tem mission has been tosuppot the development of all tpesof economies though the suppl of

high-calibe pofessional accountants.As a esult, it has established opeationsin 26 emeging makets aound the

wold, contibuting diectl to buildingfinancial skills capacit. Though thiswok, ACCA is alead witnessing the

immense contibution emeging maketsae making to the global econom andseeing the potential fo an even geate

ole fo these makets in the futue.

Fo this eason, ACCA foesees a futue

wold econom with moe pait anda much wide ange of ke plaes,shaing powe and influence aoundthe wold and binging with it geate

global pospeit. To undepin this, ACCAbelieves it is inceasingl necessato have a single set of high-qualit

accounting and auditing standads,facilitating the maimum mobilit oftalent and investment.

As the panel assets, it is inevitablethat we will see intense pessue on

natual esouces in the net 20 eas.

This epot contains some staggeing

figues on population gowth and futueconsumption, fuelled b the ambitionsand aspiations of a new global middle

class. The twin spectes of dwindlingnatual esouces and the impact ofclimate change loom lage. The etent

to which these affect societ willdepend on the decisions oganisationsand individuals make now. The dange

is, that b failing to invest in theceation of sustainable business, thewold isks haming the envionment

iepaabl endeing pats of theplanet uninhabitable, ceating swathesof economic migants and placing the

global econom in pepetual peil.

ACCA believes that the ceation of agenuine global geen-colla economwill theefoe not onl be vital but alsobings with it eciting possibilities fo

smate technologies and businesses.Accountants will have a ke ole to plain binging about a low-cabon woldthough leading on the disclosue of

companies cabon emissions and theauditing of these disclosues to quantifand pomote the financial consequences

of climate change.

As a dive fo this, ACCA believes itwill be impeative to have a common,intenationall accepted cabonaccounting standad.

If we accept the pemise that thee willbe a geate numbe of plaes in the

intenational econom, thee will be aneed fo global appoaches to egulationacoss the boad. But ACCA suppots

the panels view that this will be bestachieved though close collaboationbetween nations, athe than though the

ceation of monolithic supe-egulatos,

opeating at a distance fom the maketsthe seve. ACCA believes that egulatos

need to be local and close to those beingegulated and theefoe pioit needs tobe given to the ceation of mechanisms

which will allow fo the shaing ofknowledge and best pactice betweennational egulatos.

With the plethoa of business modelsand stuctues we ae likel to see

emeging in the net 20 eas, ACCAstongl suppots the panels view of

the need fo small, light-touch andstaightfowad egulation, especiall fosmall businesses. ACCA believes these

entepises will inceasingl speahead

innovation and ceativit and the needeve encouagement to thive. Thislinks ve cleal with the ke enables

fo gowth the panel identified, withentepeneuial spiit being seen as amajo contibuto to the futue success

of national and egional economies.ACCA has taken a lead in lobbing fothe inteests of SMEs with govenments,

egulatos and standad settes acossthe wold, helping to position itself as theaccountanc bod most closel affiliated

to the small business secto. To maintainthe health of the secto and enable newbusinesses to pospe in the futue,

e-establishing good access to finance fosmall businesses will be citical. Fo the

lage, moe comple global oganisation,it is inevitable that egulation will need tobe both moe hands-on and collaboativeacoss bodes.

ACCA is alead championing anumbe of themes highlighted b

this epot, though its AccountancyFutures pogamme of theme-ledeseach and insights, helping pepae

the accountanc pofession fo theimmediate and longe-tem challengesthe futue global econom will bing.

.aaoba.o/af
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The distribution o global power

THE DISTrIBUTION OF GLOBAL POWEr

ts terribly easy to describethe world economy as thoughits a war or a race. it is arace, its a peculiar type o racewhere whoever wins crossesthe line, turns around andexplains to everyone else howto win.

Andrew dilnOT, PrinciPAl OF sT

hUghs cOllege, OxFOrd UniVersiTy,

ecOnOmisT, BrOAdcAsTer And

FOrmer direcTOr OF The insTiTUTeFOr FiscAl sTUdies

hpot i 2030 t o b fatt, t a pa ba of faa po. goba

po ft to akt.

The wOrld BecOmes FlATTer

The wold stage is fundamentallchanging as a esult of globalisation

and the gowth of emeging makets. In2030, ou panel epects these tends tohave led to a flattening of the economic

landscape; man of them pedict thatin 20-eas time thee will be a moegenuinel global maketplace, whee

egional baies to the flow of goods,sevices, capital and knowledge will havebeen loweed o even dismantled.

Fewe constaints to globalisation willlead to moe competition. yet this isnot seen in tems of a battle, o a ace.

The panel was united b a feeling ofoptimism; the see the counties ofthe wold as pedominantl shaing in

its wealth, helping each othe along.Thus, it will be less a game of winnesand loses and moe a case of having

all the plaes on the same team, withadvanced and emeging economies

leaning fom each othe; ideas,

capital and was of doing business willinceasingl flow between the two.

Chin Kwai Fatt, diecto ofPicewatehouseCoopes, Malasia,sas thee will be a ebalancing of the

wold econom as it adjusts to thefinancial cisis b becoming less heavildependent on the US: If the esultinglandscape is such that these emeging

economies will have a geate ole,

thee will be a highe degee of mutualdependence to the etent that we will

not just be eling on the US domesticmaket. Hopefull emeging economieswill ceate new maket clustes, which

in tun will pomote two-wa economicpotential between the US and othetading nations. It will theefoe become

a two-wa flow, athe than a paallelunivese whee goods ae shipped to theUS while capital is shifted to the East.

F 2: W WT CT C2 WT

C C3

8

10

6

4

2

0

-2

1970 1980 1990 2000 2010

Tend

197020082

wo a gdP ot

1970 1980 1990 2000 2010

ra gdP ot

8

6

4

2

0

-2

-4

Emeging and

developing economies

10

Advanced

economies

2 IMF World Economic Outlook 2009

3 IMF World Economic Outlook 2009


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10

The distribution o global powerT

n 2030 the largest economyin the world will be the , thesecond largest will probablybe China, ollowed by Japanand ermany. There could

be a shit but it wont be atransormation.

sAUl esTrin, PrOFessOr OF

mAnAgemenT And heAd OF

dePArTmenT OF mAnAgemenT AT

lOndOn schOOl OF ecOnOmics And

POliTicAl science.

The diving foce of globalisation is

theefoe no longe epected to be themultinational companies of advancedeconomies. Instead, wold gowth will

be poweed b intenational companiesbased in emeging makets.

The signs of gowing matuit aeinceasingl appaent. The numbe ofmultinational companies fom emeging

makets in the Fotune Global 500 hasmoe than tipled ove the past decade;thee wee 70 in 20084, and emeging

makets shae of wold tade is gowing,along with thei impotance in globalequit makets. Thei 6.5% aveage

GDP gowth fom 2000 to 20075 hasspaked a lage ise in the numbe of

emeging maket equit funds that aepomising attactive etuns. Afte theecove fom the Asian financial cisisin the late 1990s, pivate capital flows

to low- and middle-income economiesmoe than quadupled fom $200bn in2000 to moe than $900bn in 20076.

The financial cisis that stated in 2007has highlighted this pocess, thowinginto shap elief the weaknesses of the

financial stuctue in some advancedeconomies and the elative stengths ofcetain emeging makets, paticulal in

tems of debt-capital atios.

We theefoe see a new global

powe-base foming. The inceasedpominence of the G20 will haveecalibated the statue of emeging

makets in 20-eas time. The wold in2030 is epected to be chaacteised bmultiple centes of economic powe and

numeous financial poles.

whO will dOminATe The glOBAl

POwer-BAse in 2030?

In a flatte wold the etent to which

global powe will shift can be seenin diffeent was and we offe theepossible scenaios fo the edistibutionof global powe.

1 A t of avt

akt, pa t eat

The fist scenaio envisaged b somepanellists is a wold whee political and

economic powe will be inveted and thenew cente of gavit will lie in the East,paticulal in emeging makets, with aelative decline of the West.

The high-gowth scenaio of the WoldBank pedicts GDP gowth in emegingmakets will continue to outpefom

that of the developed economies.Nenad Pacek, pesident, Global SuccessAdvisos, notes that the economic

fundamentals in emeging Asia, theMiddle East and ke makets in LatinAmeica and Cental and Easten Euope

ae notabl stonge than those of theWesten Euopean makets, the US oJapan. He points to the fomes ecod

accumulated foeign echange esevesand lowe national debt.

In this scenaio, the doos would open ona new EastEast ais of powe. Capitalflows between emeging makets would

continue to incease as these countiesmove awa fom dependence on thecuent developed wold and access to

finance impoves. This ais of powe

would see a einvigoation of tadingoutes stetching fom emeging Asia to

the Mediteanean via Noth Afica.

John Defteios, coespondent, CNN

Business News and pesente/editoof Marketplace, Middle East, sas:The building of the new silk oute and

the new spice oute is a ke theme fothe futue. It uns fom Noth Aficato the Middle East, to Cental Asia, to

China and then moves down into SouthEast Asia. Five eas ago thee was aeluctance to foste tade between, fo

eample, China and the Middle East,but that has changed damaticall. Thatis because the etun on capital fo aMiddle Easten soveeign wealth fund

in sa Indonesia, Malasia o China, ismuch geate than it would have been inGeman, Fance, the UK o the US.

4 The rise of the emerging market multinational, Accentue 2008

5 World Economic Outlook 2009, Wold Bank

6 Wold Bank

The business world will beastonished by the rise o newcompanies rom emerging

markets at how powerul theywill become. They should notbe underestimated in any way.

nenAd PAceK, PresidenT, glOBAl

sUccess AdVisOrs


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TThe distribution o global power

7 World Population Prospects 2008, UN Population Division

The most impotant counties in an

Easten ais of powe would be thetwo Asian nations of China and India.As Andew Dilnot, pincipal of St

Hughs College, Ofod Univesit, sas:In 25-eas time, eal GDP in thedeveloped wold will have doubled. If

China and India gow at 8% a ea, in2035 the will be five times as lage asthe ae now. The elative size of those

two massive developing economies willbe the most significant change in a20-ea timescale. Japheth Katto, CEO,Ugandan Capital Makets Authoit,

elates that in Afica the inceasinginfluence of India and China in paticulacan be felt: I can see a ve stong shift,

paticulal in Afica, in whee foeign

diect investment, assistance, tade andso on is coming fom. Fo instance we

have seen Indian companies getting intotelecommunications and China gettinginto banking.

The IMF estimates that b 2030 emegingmaket economies will be home to ove

80% of the wolds population7 and thatthei shee size will ceate the wolds

lagest middle classes with spendingpowe. Thei ise will be accompaniedand suppoted b nascent economies

that will build on thei own competitiveadvantages, and that will include andleveage this gowing middle class. As

Pacek sas, the G20 will epandto accommodate such ising powes:Thee ae man good, eciting emeging

makets out thee sizeable ones andthe will gow even futhe in the netfive to 10 eas. The will want a sa.

These poweful counties willpedominantl lie in emeging Asia, with

some in Cental and Easten Euope.Gowth in othe emeging makets will be

led b commodit epots; thei businesseswill continue to flouish because the aenot et esticted b tight egulation andlaws. It will be the emeging makets

that will poduce most of what ou panelcall the new globalists the leades oftomoow who will inceasingl

demand a stake in global foums, ceatinga shift in global political leadeship.

In this scenaio, matue economieswould ecod elativel slowe gowth andbe dependent upon emeging makets

fo capital, consumes and labou. InDefteios wods: The G8 will not beable to live within its own envionment

an moe. Thee will be a gavitational

pull to the East. This elative shift inpowe would have a majo impact on the

constuct of business as we see it toda.Fo instance, as emeging tading blocsstengthen thei economic and political

unit, the wold will not necessailcontinue to be diven b the US dolla.In addition, dominant multinationals

headquateed in advanced economieswould pla a diminished ole in globalbusiness losing the edge to intenational

companies fom emeging makets.

2 A ft but o tafoato t

of t wt

In a scenaio whee economic poweshifts but stengthens in the West, todas

advanced economies would continue toshow thei powess fo innovation. Theipolitical and economic stabilit would

estoe gowth and keep them at the topof the value chain. The would continueto be the incubatos of ideas, with

emeging makets continuing to emulatethe model of Westen consumeism.

As this model dominates the wold,

smalle Westen economies wouldincease thei paticipation in the globaleconom, etending the G gouping.

These smalle economies would embaceentepeneuialism with a politicalmomentum that helps them step out

of the shadow of the moe dominantWesten economies. But will innovationeall be about lage o smalle, Westen

o non-Westen counties?

Antonio Estan Gende, chaiman,

Aial Analtics, fome membe ofHSBCs eecutive committees (Agentina

and Ameicas egion), sees countbodes as athe insignificant, aguingthat the net Micosoft could just aseasil come fom China o New Zealand

as the US. But he notes: Its moe likelthat innovative developments will happenin makets that ae stable and have an

entepeneuial tadition and mindset.

With economic powe concentated in

the West, the developing economies oftoda would continue to show stongGDP gowth, biting at the heels of the

THE DISTrIBUTION OF GLOBAL POWEr

West in 2030. China and India will

come closest to closing the gap, and thewould continue to have moe weight inglobal discussions, plaing a pat not fa

fom thei cuent ole.

3 goba ua a a a of

ato fft poto o t

vau-a a

In this scenaio panel membes see no

defined global ode in the value-addedchain. Veena Chavet, managinglawe, Invesco, fomel a legal counselat Baclas Wealth and peviousl a

pincipal at Baclas Global Investos,sas: I dont think that [the futuedistibution of global powe] is clea cut.

As people want to move up the chain,

whee does, fo eample, China go? IfChina moves to Koeas position, whee

does Koea go? Fom within each countou ae constantl looking fo the leastepensive place to get things done, so it

is fluid. Fo eample, call centes weeinitiall based in Scotland, then thewent to Hdeabad. Hdeabad became

too epensive, so the went to Pune.Thee is alwas someone looking fo acheape envionment.

Saul Estin, pofesso of management at

the LSE, points to a tpical developmentccle, with counties joining each otheon pa athe than displacing eachothe. The point is, as all these counties

develop the all do the same things.Fance and Geman basicall makeeactl the same poducts and tade

with each othe. In 100 eas fom now,China will make the same poducts asthe US and tade those poducts with

the US. Thees a value-added chain andeveone just moves up it.

So the thid scenaio would pla out like

a dance of diffeent egions: the poweof nations would shift continuousl

depending on whee the ae on thevalue-added chain of poduction atan one time. The will define theiown competitive stengths and no

single egion will be moe impotantthan anothe. This would be a woldof tue inteconnectivit and mutual

dependence, with moe balancedeconomic powe.


12/28

12

esources: scarcity and competition

hpot sta o atua ou a. T at oqu

b a a upp. T at p, oft a o

oo to.

In 2030 sustainabilit issues will

continue to be impotant and thecopoate and social esponsibilit(CSr) agenda will become much moe

cental to business. Panellists aguethat sustainabilit will no longe sit inbusiness and govenment silos; instead,

it will unite eve stakeholde in theglobal econom.

BUrgeOning demAnd

The bulk of the population gowthpedicted b the UN Depatment ofEconomic Affais (leading to a possible

woldwide population of nine billionb 2050) will be dominated b thedeveloping wold. Population in the

cuent developing wold is pojectedto ise fom 5.6 billion in 2009 to7.9 billion in 20508. This will beconcentated in todas emegingmakets in Asia, the Middle East and

some pats of Afica. yet the shee sizeof this demogaphic will be eclipsed

b the incease of thei elative wealth.Income gowth in counties such as Indiaand China is leading what has beendescibed as the thid wave of middle

class emegence9.

Malcolm Wad, leadeship team, Gant

Thonton UK, descibes his epeiencesin leading the fims dive into India,and how in his view, the count

demonstates how demand fo goods andsevices will acceleate. On the one handou see people living on 50 upees a da,

salvaging and eccling evething. But

on the othe ou will see unbelievablewealth and enomous consumption. In

the middle of 45-degee heat ou willhave enomous ai conditioned officesand people consuming fesh fish which

has been flown in fom a good fewhunded miles awa fo sushi. We alltalk about India, China, South Ameica...

but thee is the whole continent of Aficawhich hasnt eall become economicall

Truth so oten ollows fction.n Quantum of Solace, orthe frst time James ondsnemesis is not seeking worlddomination through gold ornuclear weapons, but throughcontrol o that most essentialresource or lie water.

miKe hOBdAy, PArTner, iBm And

FOrmer ceO OF ATOs cOnsUlTing

active et. And the histoic model is

that economic activit equals hugeconsumption, so I think if ou look at iton a big scale we will have some difficult

home tuths to face.

The nascent middle class is ceating a

boom in discetiona consumption anddemand fo esouces. Indias consumemaket, fo eample, is epected to

quaduple ove the net two decades10.

And thee is no doubt this bugeoningmiddle class will be a huge foce in the

wold econom. Analsts at Macquaieuse the tem Geneation A A foaspiation to descibe this goup,

saing: The massive size of Geneation Ain the net 15 eas ensues it will be themost influential and poweful geneation

in the wolds histo.

The Economist featued a special epot

on this goup in 2009 called BurgeoningBourgeoisie. Abbas Shojaei, founding

patne, Salehandishan & Co, Ian, sas:The most likel new consume maketwill be in aeas such as the Middle East,which has a concentation of wealth

fom oil, gas and othe ich mineals.The aspiation geneation will also bein counties like Ian whee thee aelots of oung, talented people who have

not had the chance to pove themselvesso fa, but if the envionment becomesmoe favouable, the eneg and

ambition will attact foeign investmentin such counties.

With an eplosion in demand onthe hoizon, pices of had and softcommodities, eneg and tanspot

could soa. As Geneation A movesawa fom subsistence faming, its dietand consumption pattens will adicall

change. The povision of food has beennamed as one of the fou emeging globalisks of the 21st centu b the Wold

Economic Foum11.

8 World Population Prospects 20089 Sujit Bhallas fothcoming wok (The Middle Class Kingdoms of India and China). The fist wave was in 19th centu Westen Euope, the second was in the bab

boome (195080) geneation in developed counties.

10 McKinse Global Institute

11 Global Risks report 2008, Wold Economic Foum


13/28


To get a sense of how globalconsumption pattens will change, we

must look to emeging makets. China,fo eample, is the biggest maket fomobile phones, with moe than 395

million subscibes. In 2007 it ovetookJapan as the wolds second-lagestca maket. The wolds second-lagest

soft dinks maket is Meico. Out of thewolds si lagest eneg consumes,thee ae middle-income economies:

russia, China and India12.

As consume makets gow andcompanies stive to take advantage of the

oppotunities the pesent, thee will bea significant impact on the demand fo,and management of, esouces. Changingdiets, inceased demand fo food, isingdemand fo eneg that equies wate

and the inceasing use of biofuels havealead put pessue on wate esoucesin the US and Bazil. In fact, b 2030,

40% of global GDP and 85% of thewolds population will be in egionswhee wate demand eceeds suppl13.

In tems of eneg, global demand is

epected to soa 44% ove the net two

decades. Almost 75% of the ise in globaleneg demand up to 2030 will occu

in developing counties, paticulalChina, India, russia and Bazil14.

UncerTAin sUPPly

If ou have a global econom in whichthee is eponential gowth in the

population and the wolds esouces

rESOUrCES: SCArCITy AND COMPETITION

Tesources: scarcity and competition

emain constant, then ou have apoblem. So I think the long-tem futue

supplies of gas, electicit, new fomsof eneg, food and wate thingswe take fo ganted as being eadil

available toda ae going to be apoblem. We ae all going to have to bea lot smate about managing demand

and consumption, sas Mike Hobda,patne, IBM.

The ongoing depletion of woldesouces is well documented. Somepanellists aise questions as to whethe

these concens have been ovestated.

Pacek agues that it is difficult toaddess and assess the esouce issue

because the negative angles have beenoveplaed. He suggests that it is likelthee ae moe eseves than have been

documented and that changes in picesdo not eflect eithe the fundamentaleseves o undeling maket demand.

He sas: The one thing that is cetainabout commodit pices is ou will seecontinued speculation as we have seen

ove the past 10 eas. The oil picemoved fom $9.60 in 1998 to almost$150 within a decade. And at the same

time, eal oil consumption aound thewold wasnt even gowing moe than2% a ea. The pice movement ove the

past five eas has nothing to do with thefundamentals and the actual usage.

Official Oganisation of PetoleumEpoting Counties (OPEC) statisticsae moe beaish. OPEC will continue

12 The challenges to government from the multi-polar world, Accentue 2009

13 Wate scacit and futue business isks, Llods, Apil 2009

The United Nations World Water Development Report 3, UNESCO 2009UN wate statistics database

14 Eneg Infomation Administation/Intenational Eneg Outlook 2009

15 The new financial powerbrokers 2008 and The new financial powerbrokers: a crisis update 2009, McKinse Global Institute

16 Eneg Infomation Administation/Intenational Eneg Outlook 2009

to povide 40% of the wolds oil

supplies duing the net 20 eas.McKinse calls oil epotes one of thenew powe bokes and one that

is emaining esilient15

. The EnegInfomation Administation epotconcludes that although the demand

fo oil is inceasing, the wolds oilpoduction peaked in 200516. And mostof ou panellists agee with this view of

diminishing esouce suppl.

The ecOlOgicAl crediT crUnch

A TAx On ecOnOmic grOwTh

Howeve, moe petinent than theabsolute levels of esouces is the

stuggle fo access. This is a featue thatwill also be impotant fo those aeas

whee natual esouces ae plentiful.Katto sas: The winne is going to be theone who has access to those esouces.If the have access to them and this

access is cheap o economical, the aegoing to win because the battle of thefutue is going to be a battle of esouces.

It is a battle fo oil, a battle fo mineals,fo food, and so on. To me, the woldsfutue esouces ae in Afica.

Uncetaint ove esouces stetcheswell beond oil and eneg. Demand

will ise fo food, wate, steel, cement,basic metals and mineals and otheland esouces. This will necessitatea wide view one that eaches into

a egion whee paticipation in theglobal econom is patch and whosepotential is, some ague, unecognised.

In accessing esouces in Afica, thechallenges ae consideable, including alack of infastuctue, high cost of access

and distibution, political compleit andunknown levels of appopiate epetise.

The issue is fiecel political and the

panellists see an element of nationalismaffecting the development of this paticula

sto, eflected in inceasingl commonefeences to national issues such aseneg secuit and food secuit.

Man panel membes asset thateconomic gowth at the ate we have

witnessed ove the past few decades

A PrOFile OF generATiOn A

Age: 3040 eas

Eanings: $3,000$5,000 pe ea (appo) Chaacteistics: have moved to a lage cit Consume possessions: fidge, low-cost mobile phone

Consideing buing: fist ca o fist holida Wheeabouts: scatteed acoss the globe, concentated in the emeging

makets

Numbes: 2008 400 million; 2030 1 billion

Souce: Macquaie Investment Bank


14/28

14

is ecologicall unsustainable. If theeis going to be a hot zone fo conflict, it

will be whee thee is stained access tonatual esouces, especiall oil, gas andwate, sas Defteios.

Some ague that the impact will befelt dispopotionatel b developing

counties. As Estin sas: you can

think of global waming like a massiveta an unstoppable, unsustainable

ta on economic gowth, whichwill fall dispopotionatel on thepooe counties.

In the shot-to-medium tem, commoditpices ae likel to continue to fluctuate,

ceating moe tension ove access to, andthe management of, these esouces.

17 Wold Bank Development Indicatos 2009

esources: scarcity and competitionT

The leAPFrOg PhenOmenOn

Some panellists point to a moe

optimistic esouce scenaio in whichcounties developing clean technologcould patne with emeging makets,

enabling them to leapfog the use ofesouce-wasting technologies andadopt clean, geene technologies to

fuel thei gowth. As Defteios sas,

shotages can be avoided b focusing onthe scientific and technological advances

necessa to espond to the gowth inwoldwide demand, diven pimailb emeging economies. This is whee

collaboation between East and Westshould pevail and whee G8 countiescan make a diffeence.

F 3: TC CT C17

400

300

200

100

0

Jan 00 Jan 01 Jan 02 Jan 03 Jan 04 Jan 05 Jan 06 Jan 07 Dec 07

Commodit pices (inde, 2000 = 100)

Metals and mineals

Eneg

Food


15/28


The uture o fnancial markets

hpot T v oba pa f a optto ao out fo

a to fa. mo voat oba akt bo t o. T b o

uato a out o a oba v to ft t abt of opa, apta a pop to

fo ao bo.

THE FUTUrE OF FINANCIAL MArKETS

When discussing the futue of financial

makets, one question dominated thedebate. Will we see a faste economicccle in this millennium wheeb we

have to cope with ecessions ecuing ineve shote timefames?

yes we will go on having ecessions,but I dont think the will be an moe

fequent than the have been in the past40 eas. It will be astonishing if we evehave a gap between ecessions as longas the gap we have just had again. And

sometimes it will be a financial cisis,sometimes it will be a wa, sometimes itwill be a commodit-led cisis. We cant

know what the will be, but the willhappen, sas Dilnot.

whAT will glOBAl mArKeTs

lOOK liKe?

Past pefomance is no guide to the

futue at least that is the usual caveat

fo investos. But its difficult to makepojections without looking back at

majo tends.

The summe of 2007 and the ensuing

financial cisis maked a wateshed:not onl the beginning of the deepestshock and ecession that the wold

has seen since the Geat Depession,but also the end of an etaodinaillong peiod of economic gowth in theadvanced economies. As Dilnot sas:

If ou plot quatel gowth fo the UK,

back to 1955 what ou see is, fo thepast 16 eas, astonishingl consistent

economic gowth. Thee was a ecessionin the eal 1990s, befoe that, eighteas of economic gowth and then,

befoe that, fa moe fequent ecessions,an astonishingl volatile economicpefomance in the 1960s and 1970s.

We shouldnt be supised thee wasa ecession in 20089. We shouldbe staggeed that thee hadnt been a

ecession fo 16 eas. We have nevein the industialised peiod seen a gapquite like it.

Pacek points to GDP gowth in the pastfew eas as indicative of this tend: If

ou look at the annual gowth ates and

business sales gowth ates that we hadin 2006 and 2007, the annual inceaseswee incedible.

A numbe of the panel membes painteda scenaio fo the futue in which global

economic gowth will continue but likelslow, in lage pat, because the financialcisis has sown caution in the minds of

bankes, copoates and govenments.Pacek wans that gowth ates akin tothe past decade will be unlikel until

well afte 2030. He sas: All maketshave one thing in common. Thei gowthwill be slowe than in the high-gowth

eas and we ae now enteing an age ofeconomic modeation. This caution willpevent anothe boom o bust simila tothe one we have just seen fo some time,

pehaps even fo a geneation.

Othe panellists paint an altenative

scenaio: a wold in which nomal ates

of economic volatilit will etun aftethe cisis, and incease in fequenc as

counties get iche. The esult? Shapeand deepe highs and lows. As Dilnoteplains: Looking fowad, of couse

thee will be ecessions. The ae anatual economic phenomena and thepobabilit of a ecession gows the

longe the econom has been gowing.Because the longe the econom hasbeen gowing consistentl, the less

fightened people become and the moethe believe thei own hetoic about

how billiant thei poposition is. Andit is also the case that the longe theeconom has been gowing, the feweeall good popositions ae likel to be

left out thee. If an econom has beenstuggling fo 10 eas, then thee will besome eall good pojects available. But

once an econom has been gowing fo15 eas, then all the lowe hanging fuitwill have been picked. So we will go on

having ecessions.

Dilnot also emphasises the diffeential

effects on diffeent tpes of econom

and at diffeent stages. Its also the casethat I think when we have ecession it

is likel to be shap. And the eason fothat is to do with how ich we ae. Sa

the econom gows at 2.75% a ea,GDP doubles in eal tems eve 25eas, quaduples eve 50 eas. So

we ae massivel iche than we used tobe. As we get iche the composition ofou consumption changes. Much moe

of it becomes discetiona and centedon duables, and that means the speedwith which domestic consumption

can contact inceases, as the aveagewealth of an econom ises. And that iswh we see such a shap contaction this

time aound.

hArmOnisATiOn OF regUlATiOn

Whateve comes net, we know fonow that the financial cisis has thustfinancial egulation fiml into the global

spotlight. How, we asked ou panellists,do the epect the wold egulatoenvionment to be diffeent in 2030?

The panellists focused on two pioit

aeas: intenational egulato coopeationand, in paticula, convegence in globalfinancial egulation, In both aeas, theepect to see ongoing pogess. In theo,

panellists agee that global financialegulation is sensible and that it shouldbe a pioit. It is inceasingl impotant

to put in place global coopeation to solveglobal issues, because capital, people,companies and pollution ae global. Thus,

the means b which we esolve suchissues must also be global.

Thee is a big shift towads convegencebetween intenational standads and theUS accounting standads fo eample, soI think thats pobabl indicative of the

convegence that we see. And likewisepaticulal with the benefit of the ecentfinancial cisis oull find that the global

egulatos will pobabl have a geatesense of ugenc to coopeate and aimfo consistenc acoss the boad, sas

Chin Kwai Fatt.

Thee ae gains to be had fom being

pat of a goup whee evebod does

things in the same wa. Also in pats ofthe wold that ae not othewise lage

enough in themselves, businesses willcoopeate even though no juisdiction


16/28

16

equies them to do so because the

altenative would be to lose competitiveadvantage. Ageement on hamonisedstandads is a positive development,

with national authoities epectedto ensue that the ae implementedlocall. This will pevent the dange of

egulato abitage.

Thee ae, howeve, seveal baies

and even danges. It is impotant thatgloball ageed standads and guidelinesdo not tanslate into a igid one-size-fits-all appoach whee local conditions

ae oveidden and egulation becomestoo emote fom those being supevised.Thee has to be an element of fleibilit,

with innovation not being cushed.

This of couse uns the isk that somecounties pescibe too much detail and

othes not enough but that is the pice ofnational authoities and laws continuingto be the basis of ou egulato sstem.

The altenative, which would be to tto establish a tue global supe-egulato,

would pesent etemel difficultchallenges:

a global sstem and famewok ofegulation implies that thee will

be one egulato. Cuent global

institutions do not have the will andthe authoit to undetake global

egulation. In paticula, thee isinceasing esistance to one aea ocount being the wolds policeman.

Thee is also ecognition thatbusinesses will need to be involved inthe ule-making and the famewok-

setting. Mak Gode, founde diectoof Tomoows Compan, sas: MiltonFiedman assumed we lived in a wold

whee companies wouldnt deal withthings that wee the esponsibilit of

societ because govenments would.But whee is the global equivalentof national govenment? Who isgoing to deal with all these issues?Effective solutions have bael begun

to emege. Thee is some debate ovewhethe bodies such as the WoldTade Oganisation (WTO) could step

in hee, but it will take time to shapepowes that ae effective, meaningfuland feasible to implement.

govenments ae not inclined to give

up thei soveeignt and contol.

Centalised global egulation iscomple, both legall given

juisdictional issues and logisticall.This has cost implications which

ae difficult to justif to national

electoates. The financial cisis couldmean moe closing of bodes anda tend towads moe selfishness

and potectionism a go-it-alonephilosoph not fo businesses butfo govenments. It is also moe

difficult to achieve globalcoopeation because thee is no longea Westen club.

While Intenational Financial repotingStandads (IFrS) ae inceasingl

accepted as the global standad fofinancial epoting, pogess towadsglobal convegence elsewhee is patch:

ta thee is some movement in

coopeation egading ta havens inthe Euopean Union, with evenueauthoities moving in a simila wa,but thee is also ta competition, an

eample being between Luembougand Ieland

tade a beakdown of the WTOcould lead to moe potectionism

finance egulation thee is some

pogess hee, but the teainis comple, with, fo eample,disageement ove hedge funds

pitching continental Euope against

the UK and the US

climate change this is a thon test-case fo global coopeation, with huge

diffeences in epectations betweenthe Euopean Union, the US, China,India and developing nations.

While global coopeation ove climatechange emains faught with difficult,

panellists see bette pospects fointenational egulato coopeation b2030, with the aim of making competition

fai. This entails no cental monitoing o

enfocing bod, but geate convegenceand moe consistent policies. regulatos

will have a geate sense of ugenc todo this given the ecent financial cisisand especiall if moe volatile makets

become the nom.This does not mean that all egulation

will be the same evewhee, but thategulation will use good base indicatos,and thee will be was in whichegulatos wok togethe to achieve faie

competition. Not onl that, but the need

to involve businesses is well ecognised,in ode to constuct appopiate

egulato famewoks.

Panellists note that thee is a long

histo of intenational coopeation andhamonisation in cetain aeas. Tanspotis the pime eample: fom the effective

implementation of shipping conventionsinto intenationall ecognised law(including immigation and impot and

epot customs and pactices) to theconventions that goven ai tanspot.These wok simpl because of the

phsical movement between two (omoe) identified counties.

Howeve, thee emains much moe to bedone in intangible aeas even when theesults should bing geneal benefits. Fo

eample, infomation echange betweenand within national egulatos and

acoss indust bodies emains limitedbecause of the lack of geneall acceptedstandads. The documentation of a cagoship is elativel simple and univesall

accepted, but the selection of infomationto be ead fo echange pesents a moefomidable challenge in moe comple

aeas such as ta.

Oveall, the path ahead fo egulation

is clea to the panellists. The epect tosee moe volunta as well as statutoegulation and pehaps even moe

self-egulation, as businesses aoundthe wold ecognise the need fo stictecontols in the aftemath of the financialcisis and pessue to demonstate to

stakeholdes that the ae pusuingsustainable and esponsible commecialpactices. The path will follow that set

fo accounting and epoting standads,which povide a famewok fo egulationand encouage global convegence.

The dange is that egulatos willnot up-skill at the same time as the

companies the ae supposed to egulate.

Thei appoach could be a patchwok inwhich the codification just gets ewitten

and becomes moe complicated, whilenot being substantivel impoved.Moeove, egulatos could be subject to

patisan political pessues.

A hamonised egulato envionment will

cetainl be a significant advantage tocompanies as the gapple with this, andthe othe ke challenge facing them in the

shot tem, which is access to finance.

The uture o fnancial marketsT


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TThe uture o fnancial markets

imPrOVed Access TO FinAnce

If pogess is made on the Doha tadeageements and potectionism is ashot-tem featue, global capital flows

will continue to incease in volume andvalue. Pogess on tade cannot be takenfo ganted, though. Mau Peipel,

pofesso of leadeship and stategicchange and chaiman, business advisocouncil at IMD, sas: The big issue iswhethe thee eve will be a level, global

plaing field. Since the putative deathof the Doha ound, and given the manlimitations of the WTO, whence will the

global plaing field come? you have anincease in potectionism now with theecession and so thee is competition

among counties.

THE FUTUrE OF FINANCIAL MArKETS

The panel boadl agee that potential

souces of investment will incease,and the souces of best etun willnot necessail be in the West. These

gowing souces of investment and capitalpools will ceate moe oppotunitiesfo businesses and govenments to

access finance. The panellists aguethat these elativel equal foces ofcapital investment souces (suppl) and

moe open and easie access to cedit(demand) will ceate a balance. Theimplication is that competition fo accessto finance will not necessail incease fo

all govenments and businesses. Dilnotsas: yea b ea, the numbe ofpotential destinations fo investment

gow. At the same time, ea b ea the

amount of available finance gows. While

thee will be moe competing pojects,thee will also be moe people geneating

funds that can be used fo investment.

Howeve this access to finance maemain moe difficult fo SMEs thatcannot leveage the esouces andnetwoks that lage copoations can.

Big companies can still access finance;if the cannot go to a bank and get a loanthe ae usuall able to aise copoate

bonds at least. And so the eal sots ofsuvivos of the cisis ae actuall thelage companies that ae able to get

woking capital. Thee ae moe pessueson the small ones going fowad. So thecompetition fo funds pobabl in the

futue will also be moe in the

SME-dominated states, sas Pacek.

What is the ke dive of this specialisation?The impetus fo businesses to make cost

and size savings to compete on a globalscale. This will demand a continuationof scutin of business pocesses causing

the beakdown of the value chain intodiscete pats. relocation of theseelements follows.

This could be analsed as a two-stepsstem:

1 remote woking in a tue wold

of shopkeepes, embacing bothentepeneus and SMEs

2 The copoations of the futue willbe almost an amalgam of specialist

businesses, connected though looseageements and emploing a moeintuitive fom of outsoucing.

A wOrld OF shOPKeePers The

enTrePreneUrs OysTer

Entepeneuialism will be the wave of

the futue: small businesses will act like ashoal of small fish and become a stongglobal foce in the copoate envionment.

Smalle companies can get a big footpintthough collaboation without the same

The corporate ecosystem

hpot n oaboatv a o fu o fo o bu vop, t

tutu a fut ovato.

ne o the big challenges thatwe all ace at the moment istrying to work out how businesswill unction in dierent legaljurisdictions. dont think wecan say or sure what sorts oorganisations there will bebut think we can be pretty surethere will be greater diversity at least or a while as we all fnd

out which business structuresare most successul.

Andrew dilnOT, sT hUghs cOllege,

OxFOrd UniVersiTy

Moe divese. Moe comple. Moe

connected. The spectum of the copoatenetwok in 2030 will shift towads theend of heightened compleit. yet, with an

undestanding of the dives of copoatechanges, ou panel ageed that thiscompleit can be managed.

The copoate ecosstem will becompised of inceasingl vitual ties

that will continue to connect eve moe

specialist and emote businesses.This specialisation of businesses

will complement and accompanspecialisation within egions and cities.This will happen in emeging makets

as the wok thei wa up the valuechain and seek to define thei uniqueselling points (USPs). As Defteios sas:

Counties ae defining thei USPs muchmoe aggessivel than the wouldhave done five eas ago. One can see

egions of the wold, fom a Jodan toan Egpt o Malasia, quickl defining

thei USPs whethe it is a call cente, aphamaceutical hub, a financial sevices

hub, telecoms hub and tade facilit tobe able to seve those who have wealth,like the Gulf counties.


18/28

18

need fo capital, and this will position

entepeneuialism as a cuenc ofgowth in the coming decades.

In the emeging and developingeconomies, entepeneuialism isbeginning to take off. This is epected

to continue, diven b inceasedconnectivit and lowe baies to doingbusiness globall again including

inceased hamonisation of egulationbetween egions. As Chin Kwai Fatt sas:Collaboation is the catchphase fonew businesses. B definition these new

small companies will be shopkeepesbut at the same time the can povideintellectual capital and opeate on a

vitual basis with thei customes o

supplies. So thee could be designessitting somewhee in Singapoe, in

Koea, but eall poviding a sevice tothe manufactuing plants in China.

The esult will be a tue wold ofshopkeepes not dissimila totodas wold that will matue into

small specialised businesses. Andthe connections will be loose andecipocall-stuctued. As Hobda

sas: Individuals and businesses aeinceasingl inteconnected in this digital

age, and the web, combined with newsophisticated devices, is ceating openaccess to a global netwok of patnes,customes, supplies and ideas.

Some panellists ague that the ise ofentepeneuialism will be acceleated

b the wok and life pefeences ofGeneation y, which could see the ise ofa geneation of seial entepeneus. As

Chin Kwai Fatt comments: M view isthat in paticula ou have to look at thedemogaphic tends [to undestand futue

business models]. Those in Geneation

y ae likel to desie moe fleibilit todo the things the want to do, so in that

egad the ma decide to keep theibusinesses small.

FlUid, FlexiBle FederATiOns OF

BUsinesses

Copoate stuctues ae constantlevolving. In the 1950s, the stuctue was

tpified b big hieachical companies,monocultual in pocess and outlook,and with a clea national identit and

headquates. Now, thee is a sense that

the conglomeate model is no longeequied in ode to access capital, with

the eception of famil businesses thatchoose to etain thei independence.

Thee ae a gowing numbe of copoate

stuctues that ae moe fluid andnouished b collaboative netwoks.The esult is a flatte, moe global and

multi-cented model.

B 2030 the success of todas

advanced econom multinationals willno longe est on thei band names andpesence, but on a tue multinational

undestanding of business pacticesin diffeent aeas. Whethe the aea fedeation of business o famil

businesses, to suvive in 2030 the willneed to be cultuall adaptable. Pacekdescibes this in tems of eecutive

talent, saing that lage businesses willneed to be like two-headed monstes,

with sepaate leades fo advanced andemeging makets.

The fluid, fleible fedeations ofbusinesses of the futue ae cultual

chameleons: the have adaptabilitin thei DNA. Diffeent egions havediffeent was of doing business and

cultual undestanding and alignmentwill be a success facto vital fo thesustainable gowth of fedeations

of businesses consisting of moeand close collaboations of small,

specialised businesses. Chaveteplains b compaing business modelsin Asia Pacific with those tpical ofmultinationals fom advanced economies:

In China and Japan thee ae diffeentbusiness stuctues which look moelike a patneship. So the entities wok

togethe based on an ageement thatspecifies what each business is goingto povide. Fom a UK legal pespective

it looks like a patneship, but withgoups of companies that all needto bing togethe component pats.

Howeve, thee is a much tighte bond

in these business stuctues than in amee outsoucing aangement. Thees

a simila ethos, a simila appoach inhow each business is going to do things.Fom a developed wold pespective,

we would see it as a business pullingtogethe a lot of outsouced activities andthen managing that fo us. So it is quite

an inteesting, diffeent appoach. It alsoseems to involve a high degee of cultualadhesion and similait, but also a highdegee of tust.

This is not a baie fo familbusinesses. Thei cultual similait

eplains the stength and etaodinalongevit of the famil business model

which ou panellists epect will continue

to be a dominant featue in the copoatelandscape of 2030. Wad descibeshis obsevations on famil-un Indian

companies: The have benefitted fomthis consistenc, the common values, theelement of es, OK we all make mone

because we ae all a pat of the samebusiness.

Gode agees: Famil business hasalwas been incedibl impotant and Idont think that will change.

Dilnot adds: Thee ae some eall bigbusinesses and the ae still effectivel

famil fims. Not little businesses, butmassive businesses, financial sevices

businesses, development companiesand m impession is that these peoplehave been, and will continue to be,etaodinail successful. In Hong Kong,fo eample, the Hsan Development

Compan is still a lage famil business,as is the Kowloon Moto Bus Compan.

A chAnging FOrm OF

cOllABOrATiOn

In all tpes of businesses, paties

will become tied to othes in closecollaboative ageements, with moe joint

ventue-tpe ageements undepinningtighte contactual elationships than insimple outsoucing, et aligned cultuallin the same diection. As Chavet

sas: We ma see a development ofmoe inteesting joint ventue-tpeaangements. So ou would have a

situation whee two lage companiessee a maket oppotunit, but neithe ofthem wants to take the complete isk.

O one of them bings cetain skills tothe poject and anothe bings othecapabilities. We ma see moe of that

tpe of activit happening, which could

be a ve inteesting development.

Chavet cites the Smat ca as aneample: Smat ca is made up ofcomponents bought togethe unde a

ve loose joint ventue aangement toceate a little ca and the componentsof that ca come fom all ove the wold.

...It is Mecedes that badges it, but if ouask them about it, the would descibe itas fomed in a joint ventue stuctue.

This is a good eample of how

de-conglomeation and specialisationis epected to continue in new

was fo todas advanced econommultinationals. But, cautions Peipel,

The corporate ecosystem T


19/28


TThe corporate ecosystem

THE COrPOrATE ECOSySTEM

specialisation will not mean eclusivit

thee will be multiple clustes in onespecialit and multiple specialities inone egion. The potabilit of people

and infomation, especiall infomationand mone, means that while ou willhave clusteing, thees elativel little

eclusivit. Thee ae elativel fewbaies to most of that clusteing andtpicall thee will be multiple clustes in

one specialit and thee will be multiplespecialities in one egion.

Deconglomeation entails ceating

businesses in which even the basicfunctions that used to be housed undeone oof ae sepaated. A business

ma fam out its accounting, its cash

management, its poduction, itsmaketing, o even sub-functions of

these, in ode to achieve efficiencies.Deconglomeation will evolve into a famoe intuitive fom of outsoucing.

This will be most evident fom changingoutsoucing locations. Businesses will

shift elements of the value chain to theegions of lowest-cost labou fo easonsof cost, scale and qualit. And as Wad

descibes, divesifing outsoucinglocations would have the added

advantage of inceasing the safet netfo businesses: At a eall basic level,ou have to look at the pacticalities.What happens when the Himalaan

glacies all melt and the wate suppl isseiousl pejudiced in India? Thee aesome big what-ifs that suggest if ou

ae going to engage in outsoucing, ouneed to do it in a multidimensional wa.Easten Euope, I think that is undeated

and that is quite inteesting. Also SouthAmeica and the Philippines. Afte 30eas of epeience in outsoucing, I

suspect India is the best place in the

wold to have as ou mainsta, but oudo need to get aound the globe. If ou

do that, ou can also go fo 24 hous,seven das a week. Hobda descibesthis as a fom of outsoucing abitage:People ae outsoucing to new places,

Easten Euope, fo eample. you couldcall it a kind of abitage. Howeve,clients ae now seeing benefits in

qualit and poductivit too, paticulalin India.

The abilit to manage these moe loosel

connected business aangements willagain equie stong cultual fluenc.

yet to amelioate this potential baieto foging business connections, we ae

also likel to see businesses outsouce

to egions that ae cultuall simila.Ou panellists cited this fo the easonbehind a heightened Westen inteest

in Cental and Easten Euope as anoutsoucing destination.

Changes in the speed and scale ofoutsoucing, as well as the location ofoutsoucing, ae also likel b 2030.

Some panellists ague that outsoucingwill continue, albeit at a slowe pacethan we have seen in the past few

eas. This is because, as Estindescibes, man businesses have aleadoutsouced the obvious functions: All the

obvious things ae alead done but asthe diffeence in costs continues to ise in

the US o the UK, as eal wages ise, ouknow a diffeent catego of job is bought

into theat so to speak, so this pocesscontinues in m view, but m guess is ata somewhat slowe ate.

yet in some sectos highe-value wokwill be outsouced moe heavil fo

eample, accountanc and othepofessional sevices and somepanellists ague that public secto jobs

ma also follow the same oute. AsHobda eplains: I think the paadigm of

outsoucing low-value, low-skill wok willbe inceasingl challenged. Fo eample,in application management sevices, Iam seeing high-value achitectue and

development sevices being offshoed toIndia, with the pospect of end-to-enddelive of IT sevices coming fom Pune

o Bangaloe.


20/28

20

gOVernAnce And AssUrAnce

Westen govenance models havealead changed consideabl in thepast 20 eas shaeholdes aeno longe small individuals but big

institutions and companies. Chavetnotes this change on the LondonStock Echange: Shae capital-based

companies, having taditionall hadindividual investos, toda ae un bve lage businesses. The investos

in companies listed on the FTSE, foeample, ae ve lage entities. That hasbeen the majo change that we saw in

the latte pat of the 20th centu.

Thee is geneal ageement that it is

becoming inceasingl difficult to govensmall businesses, famil businessesand multinationals, because the ae all

becoming moe global. Not onl will theshae simila govenance and assuancechallenges, the will face othe issues

specific to thei business stuctues.

Companies that ae on the cusp of

being pofessionalised ae gettingbigge and becoming tul intenational.Global businesses ae b no means

a new development, et thee mabe shotcomings in undestandingdiffeent cultual business aangements,

ageements and stuctues. Withoutfist confonting this challenge ofundestanding such aangements, how

can the be govened? In paticula,thee is a tendenc in the West tocollapse down dimensions of diffeence,

as Dilnot sas.

It could involve moe isk if new modelsae allowed to sping up without

pocedues in place to ensue popegovenance. In a wold dominated bcomple connections, whee small

businesses establish loose technologicalaffiliations, distibuted suppl chainsand a netwok of shopkeepes, how

is it possible to goven and egulategaduates who set up businesses fomthei student accommodation?

When people come togethe to stat doingbusiness in this wold of shopkeepes,

thee aises the question of how to keep

overnance and government

hpot n fo of ova a aua to aa o fu,

oaboatv bu o. Ba bt t pub to a opoat b to

ov a t oaboat fut to pov pout a v.

tack of who has an aangement with

whom. This is a ve difficult egulatoissue unless the paticipants canself-goven and epot. Loughlin Hicke,global head of ta at KPMG wans: When

ou have a distibuted suppl chain,which ou can do though technolog, oucan have emote woking and encouage

entepeneuship. This is a model that canbe difficult to goven. you then go to thenet stage when people come togethe to

stat a business. How do ou goven that?Well, that is a kind of self-govenance.you then get to the level whee ou stat

to have a poblem companies get so bigthe would benefit fom assistance, butthe do not seek outside help as the have

no tadition of fomal govenance.

The challenges do not disappea as

companies gow. Lage businesses havelots of assets to move aound betweenthei vaious businesses and this pocess

can be ve complicated and had to

map. Companies ma have channelsof communication, but the do not

necessail have the cultues of intenaland etenal scutin to use them.Cultual behavioual esponsibilit needs

to be instilled, togethe with pemissionto challenge all aspects of CSr and notjust fomal pocedues. Othewise, thee

is a dange of sleepwalking accountabilitand not poactive esponsibilit. AsGode comments: It seems to me that

big, old oganisations ae whee it goeswong. People deviating fom the ightpath, I would ague, ae moe easil

picked up when cossing oganisationalboundaies than those within a megacopoate oganisation. I think that theke mistake we make is when we think

that thee is onl one sot of dimensionto govenance we have elected thesepeople theefoe we can tust them.

The task now is to find effective was fospotting ogue behavious inside thesegiant oganisations what we call the

behavioual audit tail.

This can be especiall had in famil

businesses, whee the stakeholdesae not clea o alwas fomalised.The usuall do not ask fo etenal

help because thee is no one neithe

shaeholdes no banks, if the companies

ae cash geneatos and need onltansaction banking, not wokingcapital to make them self-goven. As

Hicke descibes it: The identit of thestakeholdes ou need to look aftein famil businesses is not alwas clea.

you can have big famil companies whoae not looking fo outside shaeholdesand ae not looking to banks. The

question then is how do ou get them to

fomalise self-govenance to pepaethemselves fo difficult decisions, in

paticula, aound the ole of the companin societ and geneational change.

The panel made clea the necessit fogovenance and assuance to evolvesmbioticall with changing business

models and moe comple and inticatewoking aangements.

In the case of small businesses:

thei size will be self-limiting if thedo not adhee to govenance and

assuance policies. Some will each apoint whee, to emain competitive,the will have to join the suppl

chains of lage businesses, eithelinking up o being pat of the chain.As long as an business is pat of a

netwok, that will impose a degee ofgovenance, as Chin Kwai Fatt sas

thei emploees will also equiethem to do the ight thing. Thisetends to govenance and assuance

pocedues. Companies can no longepa lip sevice to things like CSrbecause it will be an impotant facto

in attacting and etaining talent

thee will also come a point whee

these businesses have to makean acquisition, o seek etenalinvestment, and these steps can

pesent a massive hudle. The moveto engage with pofessional advisesin the due diligence pocedues pio

to listing can be taumatic becausethe compan will have to el upon

outsides. No will things becomeeasie in the public aena, whee

eling on outsides becomes thestatus quo.


21/28

where nexT FOr The glOBAl ecOnOmy? 21GOVErNANCE AND GOVErNMENT

Fo multinationals and lage famil

businesses:

thee is a dange of just falling, oeven just difting, into cisis mode,

as happened in 2008 and 2009

thee will now be moe accountabilit

to thei shaeholdes, the public andthe egulatos.

TOwArds A sysTem OF greATer

selF-gOVernAnce And

resPOnsiBiliTy

Ou panellists saw the solution as

inceasing self-govenance b ceatinga cultue whee the esponsibilit ofdoing the ight thing is embedded

within businesspeople and oganisations.

In this wa, govenance can evolve asbusinesses evolve.

This would addess the challenges ofgovening and assuing those businesses

unde the ada small enough to be ata level at which fomal pocedues havemassive cost and esouce implications.

The answe is small, light-touch andstaightfowad egulation. Ou panellists

see the need fo an inceased sense ofpesonal esponsibilit and govenance

though pinciples-based egulation.The ague that govenments shouldestablish standads clea behavioualbenchmaks fo the majoit and

intevene when thee is a need. The willalso have moe esouces to think aboutand use to addess sstemic isks at both

sectoal and national level.

If ou have a ules-based sstem, the

ule make takes esponsibilit fo havingthe coect ules. Theefoe a cultuegows whee anthing that is not in the

ules is fai game. I think thats a eall

dangeous place to go, Hicke wans.

The idea of ensuing that the thinkingis not devolved is impotant, and oneou panellists ageed is moe likelto take place within a pinciples-

based famewok. As Gode sas:In oganisations ou need not onlthe fomal accountabilit of who has

been elected, but ou also need a kindof behavioual challenge. you needoganisations and cultues to be assued

b the knowledge that anbod can sa

to anbod, I think that is a sill idea,o Wh on eath ae we doing this?

And oganisations need to be moetanspaent so that the public can sa

Wh on eath ae ou doing that? But

thee is also a need to be caeful thategulation does not just favou the lageand buden the small.

This is pat of a big debate cuentl, andthee will be a tendenc fo a while fo

it to be enfoced in the aftemath of thefailue in some pat of the egulatos topevent banks fom accumulating such

high levels of toic assets. So govenmentswill be foced to step in and mico-managebecause the do not want to be seen

to have failed. And thee is cetainl aneed fo moe innovation aound how tofomall goven and assue these moe

loose confedeations of small businessesconnected though emote woking.

Some panellists also comment that

enfocement should not be too sevee.But to emain in businesses in 2030,plaes will have to plan fo it. As Hicke

sas: The tipping point of getting itwong is just so fightening that peoplewould ove-egulate to eliminate the isks

o the would stop doing business as theisks outweigh the ewads.

This could be accomplished b efomof the ta sstem. Hicke suggests an

innovative and inteesting appoach:The ideal business model fo me wouldinvolve businesses egisteing with thegovenment as soon as the ae set up.

The govenment would do two things:one, enol the business into the tasstem, and two, offe to take on the

basic business papewok.

Effectivel, the business would un an

outsouce model with the govenmentb giving complete access to businessecods. The govenment would be

heavil involved in the pocess and take

the esponsibilit fo getting it ight.Whethe this model will take off, Im not

sue, but the moe infomation that getsepoted to govenment agencies, themoe logical it becomes. In some was, it

is the net logical step fom whee someta authoities ae moving which is thepe-population of ta etuns based on

infomation alead held. The advantageis that it enols tapaes into the tasstem fom an eal stage and keepsthem compliant and safe fom penalties

fo non-compliance. The geate the

elationship between govenment,businesses and citizens, the moe likel

ou ae to see tust being built up. Thiswill be an asset when a business gets

big enough to take on its own accounting

and epoting esponsibilities.

This would be a significant step change,

positioning the public secto almost asa povide of accountanc sevices fosmall tades, offeing assuance fo

cedit puposes and faud. The one-stop-shop facilit would be attactive fo smallbusinesses, enabling them to egiste moe

easil. A single egulato offeing incometa, sales ta, compan egistation andIP would be opeating, effectivel, as an

agent fo geneal business affais.

This fom of encouaging poductive

business and, paticulal, tade withconsumption-based ta models (most

usuall epessed in Value Added Ta) ceates an audit tail, albeit withbueaucatic inputting and outputting.

Hobda suggests anothe development,

that of an audito of suppl chains:Mabe thee is a ole that sas, I am theaccountant of this suppl chain, not the

accountant to the oganisation. It mightbe quite inteesting.

shiFTing sAnds BeTween The

PUBlic And PriVATe secTOrs

The rOle OF The sTATe in 2030Ou panellists unanimousl ageed thatthe pessues on govenments toda willcontinue to intensif, this will occu as:

concuent with the ise of absolutewealth in egions aound the wold,

the demand fo good-qualit socialsevices will incease. Thee will beadded pessue in aeas whee the

state has taditionall povided healthand social cae

population is likel to ise, paticulal

in the developing egions. Theewill be spectacula gowth in someegions, as infant motalit dops

in some places thee ae likel tobe sevee demogaphic imbalances,

with ageing populations in thedeveloped wold and a outh-bulge inothe aeas

continued ises in longevit willplace additional pessue onwelfae sstems

the eve pesent epectation will

fall on the public secto to continuepoviding good-qualit seviceswithout inceasing taes. This will alsoequie impoved delive of sevices.

Tovernance and government


22/28

22

At the cu of this hadship is that the

public secto in diffeent egions willhave to do moe with less. The state willeach a tipping point. This will equie a

ethink of how the public secto opeates,and how the public and pivate sectoswok togethe to ovecome the pessues

on demand.

Ou panellists have etemel divegent

views on the likel futue ole of the publicsecto and thee ae two clea schools ofthought emeging. This is based upon thebalance between the thee diffeent

social esponsibilities that ou panellistssee that govenments possess:

poviding the ight envionment fo

businesses

collaboating moe closel with thepivate secto as a delive patne

egulating and govening the pivatesecto.

Some panellists see the govenmentsole in 2030 as pimail being acombination of the fist two activities,

making the public secto a chieffacilitato of business. Othes see itas a combination of the second two,

positioning the public secto as acopoate policeman.

Some panellists ague that thee willbe a bluing of the lines betweenowneship, function and delive, leading

to a convegence of all thee oles ofgovenment. The closest eampleswe have of this can be seen in thephenomenal gowth of soveeign wealth

funds in some egions, and in othes,the inceasing numbe of publicpivatepatneships. Both of these encouage

overnance and governmentT

the pivate secto to self-goven and

the public secto to focus moe closelon measuing its delive to customes.The esult is to mege thei commecial

and social esponsibilities in a cohesiveappoach that suggests the futuedevelopment of moe fluid appoaches.

Howeve, this moe cohesive appoachinvolves poviding the ight envionment

including egulation and wokingtogethe ceativel to delive sevices.This ole is about woking togethe topovide the infastuctue facilitato to

ceate the appopiate atmosphee fobusiness to develop and to pomotebusiness-fiendl, po-gowth initiatives.

This ole ma also include poviding

investment in the appopiate aeas tostimulate copoate gowth, to use ta

incentives and to povide a suitableegulato envionment.

As Chin Kwai Fatt comments: I see thepublic secto as the chief facilitato ofbusiness in the futue. B that I mean

the could povide the infastuctue tobuild the pots and the oads, and thenthe pivate secto could use these to

gain an advantage in business. I thinkthat the public secto would, in 2030,

pla a moe active ole in patneingwith businesses to facilitate developmento gowth b poviding the ightenvionment and the ight infastuctue.

If ou look at most of the emegingmakets, the eason wh the developfast, the eason wh Bazil, russia, India

and China ae whee the ae toda,is because the govenment has beenactive in what I call business-fiendl,

po-gowth initiatives, though eitheinvestments, incentives, infastuctue othough investment in education.

1 and 2 =Govenmentas the chief

facilitato of

business

2 and 3 =

Govenment asthe copoatepoliceman

1 Pov t t vot fo

bu

2 coaboat o o t

t pvat to a a v

pat

3 ruat a ov t

pvat to

The emphasis should be on finding

was to incease ceative was ofwoking with the pivate secto theewill be long-tem coopeation including

much moe govenment involvementin business but not to the etent ofnationalisation, which is the cisis mode

in the West.

Hicke sas: Business needs to have

a esponsibilit fo good govenance,and govenments need esponsibilitfo allowing good business. If ou thinkabout counties like China, thee is an

ethos of govenment intevention toensue that activities in the copoatewold ae done at the ight pace fo

the ight pupose. Thee is an implied

contact in China between the peopleand the govenment in tems of feedom

to opeate within an ageed famewok.While that ma be paticula to China,in m view govenments should become

moe business-like and businessesshould take on cetain copoate socialesponsibilities. I think that this is whee

we will end up.

The need is to make govenments

moe awae and esponsive in theidealings with business, whethe though

collaboations such as public pivatepatneships (PPPs) o diect stateintevention in business egulation. Theshould essentiall be woking on simila

things because thei activities ae notwholl diffeent and govenments willhave insight into what is going on.

The medium-tem changes seen in the UKpublic secto ae indicative of this tend

of patneship in delive. B Janua2008 thee wee ove 500 opeationalPPP pojects with a total capital value of

F 4: C T F T


23/28


Tovernance and government

GOVErNANCE AND GOVErNMENT

Pub

to

Pvat

to

F 5: T T CF FCTT F

The inceasingl ovelapping oles ofthe public and pivate secto

Pub

to

Pvat

to

F 6: T T CT C

Inceasing divegence in the oles ofthe public and pivate sectos

aound 44bn and a futhe numbe

in the pipeline. Thei scope was alsowidened, with a highe popotion used tobuild new schools and hospitals.

A second scenaio is noted b othepanellists, who epect the govenment

to pla a moe active ole as a efeee,because ultimatel the govenment can beheld accountable. Estan Gende sas:you need the govenment as a egulato

and I think that votes have ealised this.And so we will see in decades to come,govenments plaing a moe active ole as

a efeee. Because at the end of the da,the govenment is held esponsible b thevotes if evething goes wong. So I think

that thee will be moe involvement, andI dont epect the baies between thesetwo sectos to disappea. On the conta.

It is agued that govenments andbusinesses ae essentiall diffeent and

often mutuall hostile species. Thepublic and pivate sectos will alwashave to wok quite sepaatel and it is

impotant fo this to emain the caseto eflect thei fundamentall diffeentaims and puposes. As Estin sas: The

pivate secto is diven fundamentallb pofit. The state secto... lets sa bsevice povision: the have paticula,

specificall set objectives. And Ithink it is modeatel had fo these

things to wok in tandem. I think thatpublicpivate patneships that peoplewee ve ecited about sot of failed fove pedictable easons.

Howeve, ou panellists ague that closepublic and pivate patneships ma bemoe likel in some places and that

this could stimulate gowth. As Peipelsas: Look at the Middle East, possiblChina, Nigeia, with egad to the

national oil companies, places whee the

state has made a clea statement, a cleainvestment, o in some cases, a kind of

nationalisation. The ae saing es, thisis fo the benefit of the count; its noteall about pivate entepise and then

in some cases the go and pla it likea pivate entepise. In these countiesthe do have an advantage, of couse,

because the have the law on thei side,unlike Westen counties o maketswhee the copoate plaes ae not

connected to a govenment.

In this view, govenment intevention is

moe of a shot-tem need, poviding asafe habou in a stom. But thee willbe moe conflict between them as theewill be moe po

world's economy in 2030

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