A. T. Kearney specialist unit identifies five key trends that will shape the next five years
Source: A.T. Kearney , Author: Posted by BI-ME staff
Posted: Thu November 24, 2016 11:34 am

UAE.  The Global Business Policy Council (GBPC), a specialist unit at A.T. Kearney dedicated to helping leaders anticipate and prepare for the future, identified five macro trends that will play a role in the current and future operating environment for businesses, governments, and citizens around the globe from 2016 through to 2021.

Commenting on the report, Erik Peterson, Partner and Managing Director of the Global Business Policy Council said, “We continually scan the horizon for developments across the global external strategic operating environment to help business leaders and strategic planners test their assumptions and become more agile in adapting to the future. While our report focuses on trends that are global in nature, there are several implications that are highly relevant for decision–makers in the MENA region to inform their long-term business strategies and direction.”

The report, titled, ‘Global trends 2016 – 2021’ identified identifies these trends as:

Rising storm of populism: The Brexit vote and the election of Donald Trump in the United States are only the most visible aspects of the new global wave of populism.

The rising storm of populism is likely to continue in regions around the world, creating an unstable and potentially hostile environment for businesses and economic growth over the next five years.

Latin America of the future? Recent electoral wins on the continent have resulted in a shift in trajectory of Latin America’s business environment, raising the potential for new economic vitality. Many Latin American markets are already open to international trade and investment, with the region accounting for 6 per cent of annual global trade and 12 per cent of foreign direct investment inflows.

This trend will have a big impact on future trade flows between the Middle East region and Latin America.

Global labour market tipping point – The global labour force has ceased to grow due to population ageing and declining workforce participation rates. There are indications that the labour market is becoming less globalised, potentially reducing the opportunity for businesses to tap into workforces around the world. The MENA region still features attractive demographics as its workforce continues to grow. Nevertheless, some countries will struggle to provide enough jobs for surplus labour. For instance, less than 60 per cent of the working-age population is active in labour force in Iran, South Africa, India and Saudi Arabia.

‘Peak Stuff’ consumerism – There is a notable shift in consumer behaviour away from traditional retail and toward experiential activities, services and digital goods. This trend will continue to affect consumer spending patterns worldwide especially in developed nations.

Imminent CRISPR Revolution – Just four years after its invention, the ‘copy-and-paste’ biotechnology is bending the cost and timeline curves for major scientific breakthroughs. Its application will have far-reaching impacts on a multitude of industries, altering business models, regulatory environments, and consumer demands and preferences worldwide.

According to the report, rising populism has significant business implications, globally, and on the Middle East region in particular. Businesses with significant international supply chains and sales portfolios should assess the risk of new forms of protectionism in the markets to which they are exposed and determine whether it is prudent to maintain their current international footprint or diversify toward markets less likely to embrace protectionism.

“The countries in the Middle East in general and the six GCC countries in particular, which are characteristically dependent on international trade for their overall economic growth and development, are likely to affected should protectionism continue to rise,” said Rudolph Lohmeyer, Director, Global Business Policy Council based in the Middle East

The report also states that there is a rising risk of greater volatility and uncertainty in government policy making, including the implementation of more populist policies. Executives in all industries and markets should monitor new populist proposals that would affect business including, higher tax rates, restrictions on immigration, and financial sector regulations.

“As with any change in the global macro-economic environment, one can expect a degree of uncertainty that will undoubtedly affect world economies and developments in this region.” Peterson concluded.

Photo Caption: Rudolph Lohmeyer, Director, Global Business Policy Council based in the Middle East

About A.T. Kearney
A.T. Kearney is a global team of forward-thinking partners that delivers immediate impact and growing advantage for its clients. We are passionate problem solvers who excel in collaborating across borders to co-create and realize elegantly simple, practical, and sustainable results.

Since 1926, we have been trusted advisors on the most mission-critical issues to the world’s leading organizations across all major industries and service sectors. A.T. Kearney has more than 60 offices located in major business centres across the world.

From our Middle East offices in Abu Dhabi, Dubai, Manama, Doha and Riyadh, A.T. Kearney supports both private and public sector clients as well as nations to excel and prosper by combining our regional expertise and global business insights to achieve results.

For more information, visit www.middle-east.atkearney.com.



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