Uncertainty, Yes, but Opportunities Lie Ahead
Uncertainty and volatility will likely be the two words we will hear most during the first two days in Davos — uncertainty about economic growth rates, particularly in Europe, and volatility in commodity prices driven by continuing demand in emerging markets and possible political disruptions around the world.
But there are also more predictable forces making their presence felt. In particular, social and technology trends that will drive the pace of transformation through the rest of this decade. We therefore need to balance the dialogue around uncertainty and volatility with the language of power shifts, speed and opportunity.
This is a decade of transition in which power is shifting from North to South and West to East. The growth in world population by a billion over the next 16 years and the ongoing rise of cities as critical economic engines of the emerging world, will fuel significant increases in consumption this decade.
In an Accenture study that we published this week from Davos, we forecast that emerging markets will generate an additional $8.5 trillion of household income between 2010 and 2020. Turkey will see the greatest absolute increase in households earning at least $50,000 of any emerging market in the decade to 2020. And Kazakhstan will have more households at this income level by 2020 than Indonesia, Vietnam, Pakistan and Egypt put together.
Technology in the form of mobile applications, cloud computing, analytics and super-fast broadband are transforming the way that consumers interact and buy products and services as well as the way in which businesses interpret market data and drive business direction and decisions based on that insight.
Companies that want to be successful in this decade of transition, with the growth in emerging markets, will need to be much more sophisticated in their approach to customer segmentation and their use of data.
This week there will be a lot of discussion about the ongoing uncertainty in the euro zone and risks of inflation in many emerging markets. My hope is that by Saturday, delegates here will have been able to fully explore the realities of those uncertainties and how best to mitigate the short-term risks, but will see that this is also a decade of opportunity, both in terms of accessing new high-growth emerging markets as well as catalyzing growth and innovation in more established economies.
Mark Spelman is global head of strategy at Accenture.