Слайд 1
Economy & Business
Lecture 1
Global Challenges
Слайд 2What are some of the Challenges?
The Communications Divide
Natural Resources and
the Ecological Footprint
The World of Inequality
World Conflict and the Flow
of Refugees
HIV/AIDS: The Plague of Our Times
Terrorism
Слайд 3The Communications Divide
Internet Usage 2011
19.8% of the world’s population had
access to the Internet in 2011. In North America 74.5
% of the population had Internet access.
Asia = 13.8%
Africa = 4.6%
Australia = 58.9%
Слайд 4The Communications Divide
Globally 1 person in 5 has a mobile
phone.
The Chinese and the Vietnamese are not even putting in
landlines at this time, jump straight to mobile.
Kenya introduced mobile phones in rural areas in 2005
IT: Bridging the communications divide
What does the communication divide mean for business?
Слайд 5The Digital Age
Convergence between computing and communications technologies and the
spread of the Internet.
Ongoing increase in the power of the
computing and communications technologies coupled with the decline in the cost of these technologies
Слайд 6The Digital Age
Emergence of ubiquitous point and click interfaces that
are based on open standards, are cheap to establish and
run and are truly global.
The anticipated rollout of broadband communications technologies over the next five to ten years across major parts of the world.
Слайд 7The Digital Age
The global shareholder is going to be an
ever-tougher taskmaster. It’s mathematically impossible for every company to be
No. 1 or 2 in its market and for every fund manager to be in the upper quartile. As performance becomes more transparent and information more accessible, the pressure on companies will only increase. There will be no rest no matter how great the weariness”.
Daniel Yergin.
Слайд 8Natural Resources and the Ecological Footprint
The Ecological Footprint is the
global measure of environmental sustainability
The footprint is the land and
water area (in hectares) needed to supply the resources one person consumes and to absorb the waste
The area available for every person is 1.8 hectares
Слайд 9Natural Resources and the Ecological Footprint
In 2009, on average, each
person was using 2.2 hectares
The burning of fossil fuels, the
growth and production of food and increased air travel has the greatest impact on the ecological footprint
At present, the average Australian uses 7.7 hectares. Australia has the 4th largest footprint globally
Слайд 10Natural Resources and the Ecological Footprint
China, the world’s largest population,
has a footprint of 1.5 hectares. This is due to
a combination of:- diet (green vegetables, rice and low meat intake), lifestyle (low levels in car ownership, energy usage and aeroplane travel).
Our demand for natural resources is exceeding supply.
If all of the world’s people consumed resources and produced waste at this rate, we would require 4.3 Earths to maintain our current lifestyle.
Слайд 11
The World of Inequality
In 2009, over 3 billion people lived
on less than $2.70USD a day.
Denial of basic human rights
114
million children do not receive a basic education
584 million women cannot read or write
3 million people die each year from Malaria
In 2009, nearly 4000 people were executed in 74 countries that still have the death penalty. 97% of these were executions in China, Iran, Vietnam and the USA.
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The World of Inequality
HDI – Human Development Index – is
used to measure the quality of life. (life expectancy, adult
literacy and years spent at school and the GDP In 2010 Norway was first and Niger was last.
GNI – in 2009 Japan had a GNI of $37,180USD, compared with $330.00USD a year in Tanzania.
More than 60% of the world’s working hours are carried out by women – India 32% of the workforce are women and they earn less than men.
What effect do these issues have on global business?
Слайд 13World Conflict and the Flow of Refugees
In 2005 there were
12 major armed conflicts in 27 locations around the world.
Massive
destruction
Kill, injure and displaces thousands of people each year
Refugees globally
What does this mean for global business?
Слайд 14World Conflict and the Flow of Refugees
Global Military Expenditure in
2009
More than US$1035 billion is spent on arms
US accounts for
44% of the world’s expenditure on arms
Australia is the 15th largest purchaser of weapons and spends US$10 billion annually
Do we see the above as a global business?
Слайд 15
HIV/AIDS: The Plague of Our Times
HIV/AIDS leading cause of death
worldwide
UN predicts 70 million will die from AIDS over the
next 20 years.
In 2009 over 40 million people were living with HIV/AIDS
95% infected live in low or middle income countries.
Слайд 16Global HIV/AIDS Statistics 2009
Approximately 1% of the total world population
is infected with HIV/AIDS
Approximately 12,000 people are newly infected with
HIV every day.
Every day 8500 people die from AIDS
More than 2.3 million children worldwide are HIV positive
There are 12 million AIDS orphans in Africa
Australia has 14, 840 people living with AIDS
Why is this situation a global business challenge?
Слайд 17Global Challenge
What do we mean when we say that we
live in an increasingly global world?
Ideological change and technology revolution
are making globalisation one of the most important issues facing companies today
Слайд 18Terrorism
Terrorism knowledge base
Sept. 11/2001
Indonesia
Bali twice
London
Spain
Etc
Security
What does Terrorism cost global business?
Слайд 19Global Challenge
“Every business must be considered a global industry and
every business a knowledge business”
“Globalisation is no longer an option
but a strategic imperative for all but the smallest corporations”
Слайд 20Akio Morita
Co-founder of Sony
Advised companies to “Think Globally, Act Locally.”
His
philosophy was christened ‘Glocal’ and this led to the new
word ‘Glocalization’.
Слайд 21Henry Wendt
former CEO Smith Kline Beecham
Cross border alliances will be
the potential savior of the American pharmaceuticals industry …He recognised
that internationally based strategic alliances would become important if not vital.
Advocate of the ‘Sprinkler Model for market penetration’.
Слайд 22Walter Wriston
Former CEO Citibank
“Globalisation is an imperative not because
of management or business theories, but because of technological breakthroughs.”
Competition
between banks can no longer be based on banking services, but on acquiring better technology.
Effectively, the company that is able to make decisions quicker, often in the fraction of a nanosecond will be the winners.
Слайд 23Citibank
John Reid (current CEO) a technologist, MIT graduate.
Rationale for the
appointment – “Hard to teach technology to an established banker,
but relatively easy to teach banking to a technologist.
Citibank currently the world’s largest bank.
Слайд 24Relevant Question about Globalisation
Is your company a leader or a
laggard in engineering and exploiting ongoing globalisation of your industry?
Discuss
Слайд 25Road Map for Smart Globalisation
“People must ensure that their company
leads the industry in identifying market opportunities worldwide and in
pursuing these opportunities by establishing the necessary presence in all key markets”
Слайд 26Road Map for Smart Globalisation
“People must work relentlessly to convert
global presence into global competitive advantage”.
Слайд 27Road Map for Smart Globalisation
“People must cultivate a global mindset”
Cultural
and geographic diversity must be viewed as opportunities
Слайд 28Road Map for Smart Globalisation
“People should constantly strive to reinvent
the rules of the global game”
Who are our target customers?
What
value do we want to deliver to these customers?
How will we create this value?
Слайд 29What is Globalisation?
Globalisation refers to growing economic interdependence among countries
as reflected in increasing cross-border flows of three types of
entities: goods, services, capital and knowledge”.
Is the world truly becoming more global?
Слайд 30Global Markets
2006 2056
USA China
China India
Japan USA
How do you see the global markets developing in
the future?
Слайд 32What is Driving Globalisation?
Globalisation is becoming more feasible
Globalisation is becoming
more desirable
Слайд 33What is Driving Globalisation?
An ever increasing number of countries are
embracing free market ideology
EU, NAFTA, ASEAN Mercosur
WTO
EURO and Dollarization
Слайд 34What is Driving Globalisation?
Technological advances continue their onward march
Economic center
of gravity is shifting from developed to the developing countries
Слайд 35What is Driving Globalisation?
The opening of borders to trade, invest,
and technology transfers is rarely a one way street. While
it opens up new and much larger market opportunities for companies, it also opens up their home markets to competition from abroad.
“Global oligopolies are as inevitable as the sunrise”
Louis Galambos
Слайд 36Why Globalisation is here to stay.
Global Village
Emerging digital era of
globalisation will continue to develop and grow
Слайд 37Implications for Companies
The economic map of the world will change
more radically in the next twenty years than it has
in the last twenty.
The regional composition of the world’s five hundred to one thousand large corporations will be different in twenty years from what it is today. As a consequence, industry competition will become significantly more intense.
Слайд 38Implications for Companies
The ongoing technology revolution will make real time
co-ordination of globally dispersed operations routine.
What must be (versus is)
the extent of your market presence in the world’s major markets, particularly the major emerging markets, for your products and services? How should you build the necessary global presence?
Слайд 39Implications for Companies
What must be (versus is) the extent to
which you capture the cost reducing and quality enhancing potential
of optimal locations around the globe for the execution of various activities for your company?
Слайд 40Implications for Companies
What must be (versus is) the effectiveness with
which you are able to exploit global presence and turn
it into true global competitive advantage, as opposed to global mediocrity or even global mess?
Слайд 41Last Word
“Follow, Lead or Get Out of the Way”
Ted Turner