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Trends Rebalancing The World Order

Understanding trends is an important skill for today's leaders when the economies have become more precarious and interdependent

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Today trends do have their relevance with capacity to foment macro levels and global stability. If we analyze the crucibles that determine growth shifts it is clearly apparent that the demand of the digital products and services is surging. At the same time the traditional trade and financial flows have crippled drastically moving beyond globalization. The mental model of  the Brics (  Brazil , India ,China ,Africa) have already been giving ways to the regional emphasis with Brazilian economy proved to be hypothetical to projected story  .The world of the natural resource equation have also been changing in an inordinate  manner . As technology boosts the resources, productivity and new bottlenecks emerge the fresh questions arise about 'glut resources'.

The few other trends that highlight accelerating industry disruption are digitalization, machine learning and the life sciences. These are advancing in an impeccable manner combining to redefine what the companies do and where are the industry boundaries. These are not just being envisioned by new technologies and in other words are experiencing the overall combinational technology explosion. The customers are clearly shaping the market place and disrupting the idea of the value delivery .Take the example of the Ali Baba founded by Jack Ma started as B2C is becoming C2B.  This idiosyncrasy can be attributed to the fact that with such business model   customers enjoy the free access to goods and services combing the personalization and the variety. The competitive landscape has been changing drastically through the interconnected network of partners, customers, platforms, suppliers who are becoming more important part of business ecosystem.

The  few  forces that is  underscoring the need for mutual understanding to strike a new societal deal in many countries .We must cooperate and be more gregarious  to safeguard the humanity against the dark side of the manovalent actors like  cybercriminals and terrorists who fetter humanity .Any support or  collaboration between business and the manovalent actors including the cybercriminals and the terrorists should be harshly dealt with  .The liaison  between the business and the government   will be critical  to counter such threats. The Government through its good decision making is bound to exalt the economic activity by the growth initiation steps and sharp business policy.

The next area that is a part of growth story and not at all fortuitous is the advances in the analytics, automation and material sciences. This is as a result of human efforts which have already been showing a great prominence and potential. The governments try their best to drive billions of people out of the poverty through the right use of the material resources. Be it the cement grinding plants or other process manufacturing units where the consumption of the energy is raising as much as 30 percent year on year. The highly efficient lighting technology and new avenues of reducing electricity consumption through the right energy management system is doing wonders around the world. The technology isn't a panacea but the external consequences are triggering the scope for development across the world. Be it agriculture or anything thing else, the new technology methods are enhancing the levels of productivity. The push towards electrical vehicles is surely going to rebalance the dependence on fossil fuels and contribute to the growth rates in the emerging economy like India which is imports oil to serve domestic market.

The ecosystem revolution is doing the wonders and the digitalization is adding to the growth trajectory .What is your ecosystem and which business to deal with will broadly define the success stories. The pertinent strength of the ecosystem needs to be analyzed and it will be a powerful source of the value addition in the competitive areas. Regulators in the emerging economy are pushing towards digitalization to make the system more transparent and reduce corruption.

Some of the key differentiators in the modern world would be more efficient linear value chains which almost dominated the entire 20th century comprising of the series of the value adding steps with the goal of selling through right production strategy .People started to think automatic assembly with enhanced efficiency.
The horizontal platforms which gained the  high prominence through personal computing and the internet cutting technology  would be imperative for highly  optimized  the value chains  .The companies  operating under this specific models  own the  assets  ,have  sophisticated  architecture  , value adding software  and technology stacks .

Ecosystem with the potential to disrupt globally such as Uber and Airbnb has emerged recently. These companies operate at the centre of the platform but are distinctly the asset light .The horizontal platforms of the players such as the Amazon, the Google and the facebook have been creating value through the right set of the disruptive business models attracting maximum number of audience and also enhancing valuation.

The lines of the demarcation between the categories are beginning to blur the value chains. The   ecosystem and the platforms that help to get identified in   open and expand the linear value chains are prone to the external threats.  In sports a globally reputed brand announced the biggest plan to connect fitness platforms in the world.

Another  trend that  needs to be considered  is  that the growth   in certain countries have reached the limits .The central government  and the banks have  responded to the financial crises in recession prone countries in developed markets   very well by slashing the interest rates  and creating the innovative  facilities to keep their credit flows . In some of cases it is the result of the experimentation and markets have responded well by getting back to positive growth trajectory.

Key factors such as aging, scope for  infrastructure development, income inequality  have more  dynamic  implications for our world  than ever .The empirical  analysis of the  selected  target audience  clearly predicts that 30 percent of the corporate profits comes from the  shares of the companies that have the least regulatory issues and who clearly predicts the social trends . Hence government should work towards ease of doing business to attract FDI.

The incremental growth and GDP is bound to move towards east. If we put the globe flat the 13th and 14th Century belonged to India and China together constituting 75% of global GDP. In the 17th and 18th Century the growth story began to move west with the emergence of Europe and advent of  first industrial revolution in Britain .The 20th Century belonged to America with the second Industrial revolution resulting in the economies of scale making USA economic  world super power .The 21st Century would belong to Asia especially India and China and it is very evident through their growth rates .Hence certainly there is rebalancing happening  in the global economy  with India and China leading the change.

The growth due to urbanization is going to be an important emerging shifts .There has been mass migration from the rural areas to urban and this is going to pave a way for better developed cities with its citizens aspiring for higher standards of living .Such trend will make the cities more competitive with scope for huge infrastructural up gradation .It is projected that most of the global GDP would be dominated by top 500 cities across the world.

Hence we conclude that accelerating disruption , growth shifts from west to east , new societal structures are quite evident .The powerful forces of demand and supply has the seeds of extraordinary opportunity. Hence it is the duty of the leaders to reach out for these opportunities by preparing their organization for the new world order. These leaders need to imagine new possibilities and better question their set of assumptions. The world would embrace a survival for the fittest culture with ability to adapt to changing times. Those who compete more effectively would   better contribute to solving complex problems and in the process paving a way for progress and better world.

Disclaimer: The views expressed in the article above are those of the authors' and do not necessarily represent or reflect the views of this publishing house. Unless otherwise noted, the author is writing in his/her personal capacity. They are not intended and should not be thought to represent official ideas, attitudes, or policies of any agency or institution.

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Divakar Prakash

The author is a Strategy Consultant with experience of consulting CEO level executives and key stakeholders in Real Estate , Government, Not for Profit, FMCG and Chemical sectors. Educated at the School of Management ,University of St-Andrews consistently a top ranked institution in Europe at Master's level in business Strategy, Corporate Finance and General Management

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