As the distinction between the ‘developed’ and ‘underdeveloped’ world becomes more blurred, businesses and organisations aiming to meet the requirements of the next wave of globalisation need to adapt as “powerful” new players “disrupt the global landscape”.
The latest Deloitte Business Trends 2014 report, titled ‘The next wave of globalisation”, revealed that organisations and businesses in emerging economies were “navigating” the new global business environment with greater confidence than leading organisations in developed markets.
“New global giants, grown from the soil of emerging markets, are gaining the leading capabilities and reach formerly enjoyed almost exclusively by Western multinationals,” Deloitte chief innovation officer Thomas Jankovich said.
The next wave of globalisation, which would bring fresh challenges on many levels for businesses and the people who manage them, would also see the emergence and rapid growth of a new breed of consumer – with a geographical and socioeconomical shift from the current traditional, comfortable markets.
“The consumers they serve will have different needs and higher expectations of the businesses they choose to patronise,” Jankovich explained.
This was evident through the steady decline of extreme poverty, the rapid expansion of the global consumer class and the materialisation of “another billion” [consumers].
But anticipated growth would shift from traditional developed regions to the emerging markets of Asia, Africa and Latin America, where the growth rates over the past two decades have raised income and consumption to unprecedented levels.
It is estimated that by 2020, the number of people in the global middle class would number 3.2-billion – nearly double the 1.8-billion recorded in 2009.
“These new consumer citizens are also increasingly urban; by 2030 urban populations will reach almost five-billion, with growth concentrated in the cities of Asia and Africa. Organisations will have to find different ways to reach the citizens of this city planet [in an increasingly urbanised world],” Deloitte noted.
“We are living through the largest wave of urbanisation in history, and have already reached the point where the majority of the world’s population lives in urban areas,” said Jankovich.
This trend created the need for forward-thinking companies to pay far more attention to their city strategies—because urban areas are so rich in opportunity but so complex, diverse and challenging to serve.
Meanwhile, the fast-paced change of the business world placed increasing pressure on companies’ collaboration capabilities, particularly with the emerging trend that “innovation [now] happens everywhere”, and was not just the product of developed Western-centric multinationals.
“Thanks to spreading economic growth, shifting national priorities and new open technologies, innovation comes from everywhere … wealth and privilege are no longer a prerequisite to success,” Jankovich added.
He pointed out that global supply chains were critical areas where collaboration and information combined, and had been central drivers of successful globalisation throughout history.