Global Challenges

What 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

The Communications Divide

Internet Usage 2007 17.8% of the worlds population had access to the Internet in 2007. In North America 69.5 % of the population had Internet access. Asia = 11.8% Africa = 3.6% Australia = 54.9%
Internet Usage Statistics

The 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?

The 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

The 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.

The Digital Age

The global shareholder is going to be an evertougher taskmaster. Its 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.

Natural 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

Natural Resources and the Ecological Footprint

In 2004, 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

Natural Resources and the Ecological Footprint

China, the worlds 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 worlds people consumed resources and produced waste at this rate, we would require 4.3 Earths to maintain our current lifestyle.

Natural Resources and the Ecological Footprint

Will the Australian Federal Government sign the Kyoto agreement? Why is John Howard hesitant to sign the agreement? How is Australia perceived by other countries for not signing the Kyoto agreement?

The World of Inequality

In 2005, 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 2004, 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.

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 2006 Norway was first and Niger was last. GNI in 2004 Japan had a GNI of $37,180USD, compared with $330.00USD a year in Tanzania. More than 60% of the worlds 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?

World 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?

World Conflict and the Flow of Refugees

Global Military Expenditure in 2005
More than US$1035 billion is spent on arms US accounts for 44% of the worlds 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?

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 2005 over 40 million people were living with HIV/AIDS 95% infected live in low or middle income countries.

Global HIV/AIDS Statistics 2004

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?

Global 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

Terrorism
Terrorism knowledge base Sept. 11/2001 Indonesia Bali twice London Spain Etc Security What does Terrorism cost global business?

Global 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

Akio 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.

Henry 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.

Walter 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.

Citibank
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 worlds largest bank.

Relevant Question about Globalisation

Is your company a leader or a laggard in engineering and exploiting ongoing globalisation of your industry? Discuss

Road 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

Road Map for Smart Globalisation

People must work relentlessly to convert global presence into global competitive advantage.

Road Map for Smart Globalisation

People must cultivate a global mindset
Cultural and geographic diversity must be viewed as opportunities

Road 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?

What 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?

Global Markets
2006 USA China Japan 2056 China India USA

How do you see the global markets developing in the future?

What is a Global Company?

What is Driving Globalisation?

Globalisation is becoming more feasible Globalisation is becoming more desirable

What is Driving Globalisation?

An ever increasing number of countries are embracing free market ideology
EU, NAFTA, ASEAN Mercosur WTO EURO and Dollarization

What is Driving Globalisation?

Technological advances continue their onward march
Economic center of gravity is shifting from developed to the developing countries

What 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

Why Globalisation is here to stay.

Global Village

Emerging digital era of globalisation will continue to develop and grow

Implications 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 worlds 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.

Implications 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 worlds major markets, particularly the major emerging markets, for your products and services? How should you build the necessary global presence?

Implications 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? How should you reduce the existing suboptimalities?

Implications 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? How should you eliminate the existing shortcomings?

Last Word
Follow, Lead or Get Out of the Way Ted Turner