Download Emerging Markets

Looking to Growth Markets:
Key to the Future and How to Create
Successful Expatriate Assignments
Heidrick & Struggles’ Overview
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Growth Markets: Powerhouses of the 21st Century
Brazil, Russia, India, China, LATAM, Africa & Middle East
*The term ‘Growth Markets’/Economies can be used interchangeably with ‘Emerging Markets/Economies’ for this Presentation
News of the Future!
Growth economies to overtake developed economies in terms of share of
global GDP by 2014
70% of world growth to come from these markets, with China and
India accounting for 40% of that growth
By 2020, China, the USA and India will be the three largest economies in
the world in PPP terms
Two-thirds of the population growth in the global middle class to come
from just China and India
GCC projected to be a US$2trn economy by 2020, providing nearly onequarter of the world’s oil supplies
Africa to become the next growth powerhouse; By 2030, continent’s top 18
cities will have a combined spending power of $1.3 trillion
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Growth Markets today: The largest economies of tomorrow
2010
GDP in $Tn
(PPP)
2050
GDP in $Tn
(PPP)
US
14.12
India
85.97
China
9.98
China
80.02
Japan
4.33
US
39.07
India
3.92
Indonesia
13.93
Germany
2.91
Brazil
11.58
Russia
2.2
Nigeria
9.51
Brazil
2.16
Russia
7.77
UK
2.16
Mexico
6.57
France
2.12
Japan
6.48
Italy
1.75
Egypt
6.02
SOURCE: THE WEALTH REPORT 2012 ; GLOBAL GROWTH GENERATORS,
CITI INVESTMENT RESEARCH AND ANALYSIS
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Growth Markets: Dominant share of world GDP by 2014
Since 1992 the average global emerging economy has grown by 116%, versus 37% for the average G7 developed
economy (source: EIU)
Growth Economies’ Share Of Global GDP
1980
36%
2008
45%
2014
51%
*EU-15 refers to states that joined the European Union before 2004.
**Other advanced economies include Canada, Switzerland, Norway, Israel, Iceland, Cyprus, Korea, Australia, Taiwan Province of China, Hong Kong, Singapore, New Zealand and
Malta.
***CIS is Commonwealth of Independent States which includes all former republics of the Soviet Union, excluding the Baltic states.
Source: The Conference Board Global Economic Outlook, January 2012.
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Growth Markets : They are big!
These markets now represent 86% of the world’s population and 75% of the world’s land mass and resources
TOP 10 COUNTRIES BY POPULATION IN 2050
“The population of the BRIC countries is nearly six times higher than the EU27.”
“In 2010 those aged less than 15 made up 31% of the population in India , 24% in Brazil , 19% in China and 15% in
Russia, compared to 16% in EU27”
“Africa is the only continent that will double in size, reaching 2 billion people by 2045 at current rates; with 60 per
cent of all Africans living in cities (urban growth rate of 3.4%)”
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Growth Markets: Huge business potential
% of Global Trade Volume
# of Global Fortune 500
Companies in 2011
The five BRICS countries (Brazil, Russia, India,
China and South Africa) account for almost 15
per cent of global trade volume. Trade among
them is about $230 billion a year
China: 61 / India: 8 / Brazil:
7 / Russia: 7
# of Billionaires
There are around 301 billionaires in BRIC among their
combined populations compared to 300 in Europe
$ of Spending by Middle Class
The 2 Bn strong emerging middle class of
developing economies spends about $6.9
trillion annually
% of MNC’s Global Business Revenues
Half of the 430 global companies recently surveyed by
Global Intelligence Alliance (GIA) say at least 30% of
their global revenues will come from growing
economies
# of Technology Users
There are about 513.1 million Internet users in China
as compared to a 245.2 million users in US and there
are 13.3 million Indians on Linked In compared to
8mn in UK, 4 mn in Canada and 3 mn in Australia
73% of world’s total mobile subscribers live in
growing economies
# of Engineering Graduates
75,000 students in China and 60,000 in India
graduate with advanced degrees in
engineering or computer science every year
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Growth Markets: Did You Know?
CHINA
• Accounts for about 60% of
foreign direct investment in
emerging markets
• 85 percent of artificial Christmas
trees are made in China. So are
80 percent of toys
• Chinese consume 50,000
cigarettes every second
• There are more cell phones in
China than people in the U.S.
INDIA
• Half the world’s outsourced IT
services come from India,
amounting to a $47 billion dollar
industry (Walmart alone
outsources $1 billion in IT
contracts to India)
• A bigger movie market than
America and Canada combined,
India sold 3.2 billion tickets last
year
• China is the largest foreign
holder of U.S. Treasury securities
• The average Indian is nearly 20
years younger than the average
Japanese (26 vs. 45)
• By 2030, China will add more
new city-dwellers than the entire
U.S. population.
• India has 568 million more
registered voters than the US -and a better turnout rate too
• By 2025, China will build enough
skyscrapers to fill TEN New Yorksized cities
• India is the world's second
largest importer of arms and has
spent $50 billion on defense
purchases in the last decade
BRAZIL
• Brazil's GDP is the size of Mexico,
Venezuela and Argentina
combined.
• Brazil discovered more oil than
any other country in 2010
• Brazil is the 2nd largest world
producer of Ethanol fuel and the
biggest fleet of Flex-Fuel vehicles
in the world
• Brazil has the 10th highest
number of vehicle owners in the
world.
• Brazil harvested coffee beans
equal to approximately 285
billion cups of coffee in 2010
• World’s largest exporter of
commercial jets
• World’s fourth-largest steel
exporter
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Growth Markets: Did You Know?
AFRICA
• Africa is the continent with the
fastest rate of urbanization
• More than half of all diamonds in
the world come from Africa
• South Africa is the second largest
exporter of fruit in the world.
• Three of the world’s largest gold
producers have their primary
operations in Africa – Harmony
Gold, Gold Fields and Anglogold
Ashanti.
• South Africa is one of the
countries with cheapest
electricity in the world
• South Africa is the world's leader
in mining and minerals. It has
nearly 90% of the platinum
metals on earth, 80% of the
manganese, 73% of the chrome,
45% of the vanadium and 41%
of the gold.
RUSSIA
• World’s largest exporter of
natural gas; second-largest
exporter of oil
• In 2011, the Forbes magazine
ranked Moscow as the city with
the greatest number of
billionaires (79), displacing New
York City by three.
• The space launch industry is now
the world's second largest behind
Arian Space of Europe
• St. Petersburg alone has 2,000
libraries, 221 museums, 80
theaters, 45 art galleries, and
over 100 concerts, shows and
festivals each year
• Russia is now the world's third
biggest destination for
outsourcing software behind
India and China
MIDDLE EAST
• The Middle East currently has the
largest oil reserves . Saudi Arabia
alone possesses 25% of the
world's reserves.
• GCC is home to more than 16
million expatriates from around
the world
• Eighty percent of the residents of
Dubai are foreigners.
• Qatar is currently one of the
fastest growing Rapid Growth
Market (RGM) in the world (13%)
• Dubai Duty Free is the world’s
largest single airport retail
operation
• UAE had the highest per capita
spending on clothing in the world
in 2010
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Most common Expat destinations in Growth Markets
China
India
Brazil
Russia
United Arab Emirates
South Africa
Mexico (8%)
Malaysia and Saudi
Arabia
The Philippines and
Vietnam and Vietnam
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Moving to Growth Markets
Company
Role
Culture
Family
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Company
• Do I understand the business I’m in?
• What does it look like now?
(organizational structure,
governance, visibility)
• What does it want to be in the
future? Global player, acquisitive, is
presence a one off or part of regional
development?
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Role
• Is it an assignment worth taking on for
my career? (Tactical vs Strategic)
• Does my company value international
rotation? (building skill set vs out of
sight out of mind)
• Am I going to be successful at the role?
(language, team building, resource
issues, work with less structure and
infrastructure)
• How do I get back? (next step, another
international assignment or is there
succession planning in place)
• Compensation
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Culture
• Political
• Country:
• Religious
• Social integration
• Company:
What is overall company culture is it clearly
defined? (important if an acquisition)
• Office:
•
•
•
Office subsidiary
Environment
People in the office
(Corporate company culture is one thing but country office cultures can differ significantly)
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Recommendations
Before taking an assignment
•
Know your company’s strategy
•
Clear definition on the role and requirements and next step in career
•
Invest in understanding the fit. Make several trips, house hunting etc
•
Make sure your family are engaged in the process
Once you’re there
•
Accept that things will and should be done differently
•
Submerge yourself
•
Learn the culture but don’t think you’ll ever understand it
•
Develop successors
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Thank you!
Copyright © 2012 Heidrick & Struggles. All rights reserved. Reproduction without permission is prohibited
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