Global growth shifts and new opportunities

28 April 2017

Global growth shifts and new opportunities

The global economy is currently undergoing major growth shifts. Some of the important changes include the rapid rise of ICASA (India, China, Africa and Southeast Asia) economies, growing opportunities in resource-related business, accelerated industry disruption due to digitisation, rising consumer power and the need for new societal deal. The first report we have chosen focuses on these global forces which are important for businesses around the world to understand and adapt to. The second article focuses on the growing demand for protein products in Southeast Asia and how this creates major opportunities for New Zealand protein-based businesses.

The global forces inspiring a new narrative of progress

Keeping up with major short-term and long-term global trends is crucial for business success. Understanding trends is important for businesses in order to gain competitive advantages and improve collaboration. Changing trends and technologies offer great opportunities if businesses plan for them and implement them. This article reports on nine major global forces that are currently changing the global economy. The first three forces include ongoing globalisation but also rising anti-globalisation (involving calls for localisation and adherence to local taste). These forces also include the rise of ICASA (India, China, Africa and Southeast Asia). While 15 years ago, BRIC (Brazil, Russia, India and China) was the most rapidly rising group of economies, over the past few years Russia and Brazil have declined and have been overtaken by Africa and Southeast Asia. ICASA have the potential to expand significantly but also face internal challenges ranging from the need for sustainable urbanisation and improved infrastructure to diversifying state economies. Despite the challenges, more than half of global growth is expected to come from these markets over the next ten years.

The next three forces are all about the accelerating industry disruption. This is happening through digitisation, which enables greater competition, but also improvements in supply-chain, product and service improvements. Digitasation also gives customers more power to choose from an infinite variety of goods and services and also influence the products companies develop. The final three forces focus on the need for a new societal deal. Collaboration is becoming critical for the middle-class to progress. Trust has declined in business, government and media among the middle-class and this group of consumers want businesses to take action to rebuild this trust by improving local economic and social conditions. The new societal deal also needs to encourage experimentation (such as bringing in reforms to improve economies and taking new approaches to tackle internal and global issues). Businesses and governments also need to collaborate to improve cybersecurity and reduce threats of terrorism. While these forces may create disruption and take time to adjust to, they offer many business and collaboration opportunities.

Read the full article on the McKinsey & Company website.

The growing appetite for protein in SE Asia

With the rise of ICASA, there are now new opportunities for New Zealand dairy and protein businesses in Southeast Asia. This also means that New Zealand protein based businesses have opportunities to collaborate with local companies to develop new protein products for these markets. As Southeast Asian consumers become more health and nutrition conscious, the demand for protein fortified foods and beverages is growing exponentially. In the past, protein was thought of as a fitness ingredient but now it is becoming a health and wellness ingredient as people become more aware of its dietary benefits. More Southeast Asian consumers are now looking for foods with high quality protein and amino acids for good health. As a result, protein ingredient sales have more than doubled in Southeast Asia in the last two years and will continue to offer opportunities for New Zealand protein businesses. As time for food consumption becomes more constrained, consumers will be looking for convenience options such as on-the-go drinks and snacks as well as powder form protein. Indonesia, Singapore, Thailand and Vietnam offer the most prospects in protein based business growth. Opportunities are especially on the rise in Singapore, with greater focus on health and fitness, the growing ageing population and increased instances of chronic medical conditions all driving the demand for protein-fortified diets.

Read the full article on the Exporter Magazine website.

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