Tuesday, August 7, 2012

What Will the Global 500 Look Like in 2021?

This was a very interesting question that was raised in the July 23, 2012 issue of Fortune (The Global 500).  The article highlights four forces that  will dominate the look of the Global 500.  The four forces will also dominate the opportunities and constraints engineering will face in the next decade.  These are:
  1. Your Next Customer - - About four billion customers live at the base of the economic pyramid, earning less than $3,000 a year in local purchasing power.  As a group, they are often rural, poorly educated, and economically under served.  Yet their aggregate purchasing power is enormous, creating major opportunities for businesses that can deliver products they need at prices they can afford.
  2. Devices Talking 24/7 - - Thanks to advances in sensor technology and data analytics, the world's basic systems are becoming intelligent.  At any given time, seven billion devices are communicating with one another worldwide.  Sensors are embedded in roadways, power grids, irrigation systems, household appliances, and even clothes feeding a flood of data that can help smooth traffic flow, conserve resources, and improve health care delivery, among others.
  3. The Rise of Urbanization - - The growth of mega-cities will drive massive infrastructure spending.  The UN predicts that 69% of the global population will live in urban areas by 2050, up from 50% in 2010.  In 2007 half of global GDP came from 380 cities in the developed world.  By 2025, 136 new cities should enter the top GDP ranks.  All those cities will be in the developing world, and a full 100 of them will be in China.
  4. Scarcity: New Normal - - Three billion new people will join the global middle class in the net two decades in the next two decades.  The resulting consumption boom will drive natural-resource prices higher, opening space for companies that learn to use resources that learn to use resources more efficiently.  By 2030 resource productivity opportunities worldwide will total $2.9 trillion.  Opportunities include reducing food waste, deploying efficient irrigation systems, and improving energy efficiency of buildings.

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