Difference between revisions of "Scenario 4 - Empire with Walls"
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==Overview== | ==Overview== | ||
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<b>5 words define this world:</b><br> | <b>5 words define this world:</b><br> | ||
* | * Era of Protectionism<br> | ||
* | * Intellectual security<br> | ||
* | * Effective Globalization<br> | ||
* | * High Risk<br> | ||
* | * Environmental compliance<br> | ||
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'''2030''' - The global economy has experienced major transformations over the last 20 years. The BRIC (Brazil, Russia, India and China) have become mainstay economies rivalling western traditionalists and have produced some of the largest multinationals in the world. Initially deemed as threats to the likes of Apple and Google, they now operate on the same competitive platform as these companies and both sides of the divide share mutual interest in the protection of intellectual property, as a means to their eternal survival. <br> | '''2030''' - The global economy has experienced major transformations over the last 20 years. The BRIC (Brazil, Russia, India and China) have become mainstay economies rivalling western traditionalists and have produced some of the largest multinationals in the world. Initially deemed as threats to the likes of Apple and Google, they now operate on the same competitive platform as these companies and both sides of the divide share mutual interest in the protection of intellectual property, as a means to their eternal survival. <br> | ||
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==2010 - 2015== | ==2010 - 2015== | ||
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The world is still battling to recover from the global recession. Most western economies are battling several financial challenges that are occurring simultaneously; deficits, trade imbalances, rising unemployment, company fold-ups and bail outs. At the same time emerging economies like Brazil, China and India are expanding with previous year growth for China at almost 10%. With the suspected likelihood of a second global recession, developed countries establish new regulations and governments intervene in society to provide bailouts for companies, implement tighter financial regulations to prevent another recession and take greater roles in some private sector areas i.e. health care<br> | |||
As the Eastern powers emerge, western companies begin to consolidate their businesses and streamline operational activities. in emerging markets with using smart innovation. Competition is still fierce and many of the companies are resistant to acquisition, breeding more collaborative and joint ventures prospects than straight-out acquisitions. <br> | |||
The stifling economic climate and saturation experienced in the West fuels the the searchlight on the African continent as the new hub of economic activity. Several discoveries of natural resources have been made on the continent, but there is a lack of the technical expertise and knowledge to refine these resources. This attracts Multinationals and global investment. the U.S. with a massive rise in trade volumes from $18billion in 2003 to $73billion in 2007. Thus begins a new wave of . <br> | |||
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The Major companies begin to explore opportunities in these , but on businesses where creativity and learning environments are engineered by a strong mix of global culture and backgrounds and thus begins the focus on global staff recruitment, used to draw the best of what the world has to offer. of social platforms and networks promoting open innovation, who have been unable to find outlets to export their ideas and talent because of the struggling economies, where companies are not willing to take risks on untested technology. This is seen as a key platform to drive market-tailored innovation in these markets. Researchers have begun working with organizations to test the feasibility of using Functional brain imaging as a best-fit recruitment tool on a commercial level. <br> | |||
There is a contrasting view to the approach to innovation; the lack of financial assets by western companies means innovation is temporarily taken from a cost effective approach i.e. several research and development centres are moved to emerging economies where wages and set-up costs are cheaper (Oracle and GE in India, Microsoft and Xerox in China). The emerging companies who have the financial wherewithal begin to invest in innovation projects that concentrate not only on price cutting but on strip-down re-modelling processes that produce goods and services that meet the needs of these markets. The western companies rely on government to raise funds to finance innovation projects as banks are still not loan friendly, and consumers have become spendthrift, with the gradual evolution of society to a saving culture. <br> | |||
==2015 - 2020== | ==2015 - 2020== | ||
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The | The application is not effective in developing countries where regulation and rule of law is lax and business continues as normal, encouraged by growing middle class. In the past, big corporations have found it difficult to produce tailored-made products for emerging markets, preferring to transfer their current products and business processes, which offer lower margins than their primary markets. To counter this, the new companies expand on joint ventures set-up, establishing subsidiaries and partnership with local entities, allowing them to manage operations faster and with less bureaucratic challenges. Unconstrained by legacy investments in capital equipment, processes, and technology, the working environment in these markets stimulates innovations that begin to breed profit in the companies. <br> | ||
The | They revamp their distribution channels to increase accessibility to middle class consumers and re-design every aspect of production, manufacturing, sourcing and delivery to reduce costs. They draw on their multicultural staff pool, the customers and R & D activities are located in close proximity to their client base and suppliers. <br> | ||
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The activities of emerging companies like Bharti Airtel, Tata and Godrej group benefit these economies through employment, increased productivity and a burgeoning middle class. The governments implement strict financial laws to ensure economic sustainability for their country but environmental regulation is still lax. <br> | |||
The new players are expanding into territories where entry rules are less stringent and lax environmental regulations and copyright laws allow for IP violations. Some of these territories bring them into direct competition with the traditional Western corporations becoming a direct threat and competition is becoming stiffer. The Big western companies switch to a companies and vertically integrate operations to drive cost-efficiency and stream line operations, focussing on their core speciality. The survivalist thinking also sees IP as sacred and as a competitive advantage through protectionism. Pressure begins to mount for stronger regulations to be implemented for IP protection for companies round the world and the need for an effective global legal framework. <br> | |||
The expansion drive of the new players across regions involves recruitment of staff of different nationalities and cultural backgrounds, offering the companies a mix of creative talent and skills. They are able to tap into a new pool of cost-cheap knowledge and potential on which they leverage, using their own technical expertise and experience to shorten production cycles and deliver products and services quicker to the consumers. It is a recruitment strategy rapidly advancing in the developed world as part of smart acquisition and as strategic response to the emergence of the . It serves to evaluate brain activity during tough decision making process and is believed to help determine the right minds to employ for different roles and responsibilities undertaken, in any part of the world. Accenture with a quarter of their workforce from India is an example of employing a global workforce. <br> | |||
The advancement in living standards means an increase in life expectancy and a declining work force, reduced spending and decreasing tax revenues. People are becoming more like the Japanese and saving more because the last recession was one too many, causing an erosion of trust in governments. It also gave fuel to the cries from people for the development of sustainable ways of doing business and increased awareness on environmental protection. There is now more concern about where goods and products are manufactured. This breeds a change in the demographic perception of the customer beyond traditional metrics like age, sex, location etc. It has become more about lifestyle, influences and it seems to begin a change to consumer power. <br> | |||
==2020 - 2025== | ==2020 - 2025== | ||
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There are 2 new Sheriffs in town; China (the 2nd largest economy) and India (who are on the way to becoming the 3rd largest economy). They have taken the world by storm and have become major economic power brokers. Their corporations rival the Western traditionalists and half of the Fortune 500-listed emerging companies are from both countries alone. They have established themselves on strategic locations around the globe particularly in developing regions like Africa, Asia and South America. The penetration strategy is a bundle of low cost and customized innovation specific to the societal challenges in these operating environments. They do not present pre-conditions to doing business and do not interfere with domestic politics although their actions influence local policy decisions. They bring a lot of technical expertise, knowledge and skills which is acquired overtime by the local workforce through employment opportunities, training programmes and trade-free zone management established by these companies, thus establishing a transfer of knowledge process. The continent benefits from economic and infrastructural development and skill growth. However, the success has also becomes a threat; the invasion of the deputies. <br> | |||
The | The deputies are rising players from other emerging markets like Indonesia, Russia, Malaysia, South Korea, Brazil and Chile. They bring with them everything that China and India have to offer but with a difference; lower cost, more opportunities for local start-ups and employment. The original emerging players have become global empires and smart innovation, strategic thinking, knowledge provision and the creation of a multinational workforce of brilliant minds and creative personnel, some of them from the local population. They are now large hierarchical organizations with a huge workforce some of whom seek bigger career opportunities or the possibility of starting their own companies through joint-ventures or partnerships. The expertise they have acquired working with the Chinese companies. Operating in regions with lax laws on IP protection, they present a threat to the new players. It is difficult for the Chinese companies to seek individual assurances of IP protection from the different governments, because of the various local interests involved in bringing some of these companies into the region, to exploit the vast opportunity that abound. <br> | ||
The International pressures placed on the governments in developing countries to curb emissions levels and the threat of fines, disruptive tariffs and outright bans on exports leads to local demonstrations supporting the calls. The environmental degradation suffered in these countries has given rise to local demonstrations by environmentalists and consumer groups established through an International network, to raise public awareness on these issues. The old GATT agreement for IP compliance is being reviewed to amend loopholes previously explored by its members. The government is under pressure and begin to design strict local laws for companies to abide by in terms of environmental protection. Countries who are quick to respond are those still dependent on International aid whose with high debt balances with the develop countries. <br> | |||
==2025 - 2030== | ==2025 - 2030== | ||
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Governments from the East and West discuss forming regional organizations and new policies to enforce IP emissions compliance. The of doing business without exploiting natural resources. Local businesses in countries yet to with high tariff. The governments of these countries have been issued huge fines and had selected aid programs withdrawn, except for essentials like education and food. The Chinese and Indian companies are reluctant to fill the funding gaps because of their battle with IP violations, and they need the support of the International community to guarantee their protection. <br> | |||
The | Governments begin enacting policies to control carbon emission and IP protection with only the strongest of the new deputies surviving under the new policy regime. <br> | ||
The somewhat vanquished threat of new deputies and to continue with business, with a stronger sense of social responsibility and regard for environmental concerns. Their approaches to innovation borders on using sustainable technology to provide incremental improvements on existing products and established technology already live in the market, and they do this by staying close to their clients and being proactive in creating future needs based on current challenges. This allows them maintain a strong hold on their territories and create some sort of entry barrier for new players. They ensure the core of their creative talent pool is retained no matter the means, because of the need to maintain their competitive advantage and walled empires. The ideas and creations originating from these smart people is owned a hundred percent by these companies. <br> | |||
The period of consolidation leaves the Western hemisphere with few global empires/big brands that have vertically integrated their operations, empires resulting from acquisitions, mergers and the collapse of non-performing corporations. They have become financial stable, extremely wealthy with a vast range of assets and can begin to influence issues at the level they used to before the global meltdown. The smart acquisition strategy has left them with an international pool of brilliant minds and untapped ideas through which they can continue to power the innovation drive and expand market share. Towards the end of 2025, an embryonic level of collaboration between these companies on innovation and sustainability slowly begins to occur; there is now a sense of the need for high level partnerships and Government (s) support in areas of tax breaks for companies who re-focus on innovation aggressively and strict implementation of IP policies worldwide to ensure competitive advantage. <br> | |||
[[Future of Innovation Main Page]] | [[Future of Innovation Main Page]] | ||