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June
18th, 2003
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Eyeing the Future Revisited Looking back at eight global trends that continue to impact your company. © Dr. Terry J. van der Werff, CMC "Prognosticating is hard, especially as it deals with the future!" So began my first Washington CEO column in June, 1993, surveying global trends to use in guiding your company. Let's revisit them to see what really happened. Italicized quotes are from that original column. World Affairs. “Anyone who has been awake at all in the last few years must be impressed with the truly extraordinary changes that have occurred around the world.” The Soviet Union collapsed. The European Union (EU) expanded. The Asian economies rocketed. The United States became the world’s superpower and policeman. In the decade ahead, the EU will flex its muscles beyond its borders. China and India will exert global influence. Demographics. “The world's population is 5.5 billion and will stabilize at 8-14 billion by the late 21st Century.” The population rose to 6.3 billion, but yearly growth shrank. Six countries - India, China, Pakistan, Bangladesh, Nigeria, and the United States - will contribute half of this year's 76 million increment. Population will rise to 9 billion by 2100. Asia will grow the most, and Africa the fastest, despite AIDS. Food. “For four decades the world's per capita food supply grew by 1 percent each year.” It rose by .5 percent annually. More land was cultivated more productively. Fertilizer and pesticide use fell. Irrigation increased. Hunger lessened, but one person in six remains undernourished. Genetically modified crops, tuned for disease and drought resistance, will reduce pre- and post-harvest losses of cereals – especially corn, rice, and wheat - which provide 60 percent of the calories and 50 percent of the protein people consume. Economics. ”Since World War II the world's economic output has grown 3 percent per year to the present $25 trillion.” In spite of the late 1990s' Asian monetary crisis, the world economy grew 4 percent annually, led by China's 9 percent, to $33 trillion. Expect 3 to 4 percent worldwide growth rates ahead, with North America’s 2 to 3 percent, South America’s 4 to 5 percent, Europe’s 1 to 2 percent, Asia’s 5 to 7 percent, and Africa’s 6 to 8 percent. Trade. “In the past half century trade has grown 6 percent per year.” Global trade was $5 trillion in 1993. This year it will be $9 trillion (25 percent of economic output). Tariffs and trade barriers have fallen. Tariffs and trade barriers fell. GATT transformed into WTO. NAFTA led to double digit trade increases between the United States and its two neighbors. Expect annual trade growth of 6 to 8 percent, with the EU, China, and India all challenging the U.S. for trade leadership. Education. “The vast majority of the world's children receive some schooling.” The Global Education Forum saw literacy rise in nine populous countries - Bangladesh, Brazil, China, India, Indonesia, Egypt, Mexico, Nigeria and Pakistan - "defying all predictions." Illiteracy among young adults fell to 13 percent, but 900 million adults globally are illiterate, and 100 million children do not attend school. Economic prosperity will make education the growth industry of the next decade. Resources, Energy, and Environment. “As the world's population and industrial output increase, severe pressures will be put on the Earth's natural resources, energy supplies, and environment.” Global energy grew 1.2 percent annually. Asia dethroned North America as the biggest producer and consumer. Eighty-five percent of global energy still comes from fossil fuels (oil, coal, and natural gas). Alternative energy sources are decades away. Growth rates for the next two decades will be 2 percent, fueled by Asia's economic growth. Water will be the 21st century's vital resource, displacing oil’s role in the 20th century. Computers and Information. “With 140 million PCs in the world, users increasingly communicate with one another and tap into central data banks.” More PCs than that will be produced in 2003 alone; twice as many have access to the Internet. E-mail is the largest application, and finding information (think "Google") takes only seconds. Computing power will continue doubling every two years (Moore’s law) until at least 2025. What lies ahead? Technological breakthroughs, new industries and products, rising incomes and living standards, better health and longer lives, more goods at lower prices, more globalization and tougher competition, less conflict and more peace. Change will be your constant companion
as you journey into the future. Are you ready for the ride?
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