Anil K. Gupta

In the early 1990s, China was a relatively small economy which had just built its very first highway. Mobile phones were a luxury purchased mainly by rich Europeans. And, social media meant walking over to your neighbor to borrow his/her newspaper. How the world has changed over the last twenty years. Look ahead to 2025. Notwithstanding how much change we have witnessed in recent years, it’s a certainty that the quantum of change over the next ten years will be even greater than over the last twenty. In this talk, Professor Gupta discusses the six megatrends that will drive this transformation:

• Restructuring of the global economy;
• Growing volatility and risks;
• Divergent demographics;
• Digitization of everything;
• Global warming and environmental crunch; and
• Rise of the empowered individual.

The collective impact of these global game changers will be such that the structure and dynamics of the world’s economy, politics, and culture in 2025 will be fundamentally different from what they are today. Professor Gupta also discusses what these megatrends mean for countries, companies, investors and individuals in terms of who can expect to thrive in the new era.

Asia’s rise will be one of the defining game changers for the global economy in the 21st century. Asia today accounts for about a third of the world’s GDP as compared with about a quarter each for North America and Europe. Since Asia continues to grow faster than each of the other two continents, it is almost certain that, by 2025, Asia’s GDP will be larger than that of the US and Europe combined. Further, Asia’s impact on the global economy is multidimensional – as a mega-market, as the world’s factory, as a rising hub for global R&D, as a source of capital, and as the springboard for the rise of new global champions. Asia is also becoming more “Asian” in that intra-Asia trade is growing faster than Asia’s trade with the rest of the world. This talk will examine the forces propelling Asia’s rise and discuss a number of related questions including:

• What are the risks? What could derail Asia’s rise?
• What are the implications of China’s slowdown for corporations and investors?
• What lies ahead for India and Indonesia, the two largest Asian emerging economies after China?
• How should MNCs prepare themselves to benefit from Asia’s rise?
• Implications for investors? And, for young managers?

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For almost three decades, China and India have been the two most dynamic emerging markets in the world. Unlike Latin America or Africa, both countries are resource poor. Yet, since 1990, both have been the world’s two fastest growing large economies. The answer lies in the ability of the two countries to boost the productivity of their peoples at some of the most rapid rates in the world.

As of 2015, China is the world’s second largest economy and India the eighth largest – at market exchange rates. By 2025, while China would have reduced the size gap with the United States, India is likely to have overtaken Italy, France, UK, Germany and even Japan to become the third largest. By the middle of the 21st century, both China and India are likely to overtake the U.S. also to become the world’s two largest economies. In many ways, this will be a back-to-the-future story, since China and India were the world’s two largest economies for much of recorded history. They became poor only during the 19th and 20th centuries when the industrial revolution passed them by.

As China and India continue to rise, they are transforming the global economy in multiple ways:

• They are two of the world’s biggest and fastest growing markets for almost every product or service.
• They are two of the world’s most important platforms for cost reduction for both blue- and white-collar work.
• They are the world’s two most important rising powers for technology and innovation.
• They are also the world’s most prolific springboards for the emergence of new, powerful, and ambitious global competitors.

In this talk, Professor Gupta discusses the factors propelling China and India, the challenges that each country faces, and implications of these developments for multinational corporations.

The structure and dynamics of the global economy are changing rapidly. Despite the ups and downs in individual economies, emerging markets as a group continue to grow at three times the pace of developed markets; by 2025, they will account for over half of the world’s GDP. The diffusion of mobile broadband to every corner of the earth continues to make cross-border collaboration easier, cheaper, and more ubiquitous. And, the technology revolution continues unabated – electric and/or autonomous cars, wearable computing, genetic engineering, shale oil and gas, human-scale robots, etc. These developments will lead to the disruption of industries at an even faster pace than what we’ve seen over the last decade.

Given these developments, what must today’s corporations do to emerge or remain as the global leaders in their industries ten years from now? The answer lies in: (i) rethinking global strategy i.e., commitment to emerging markets, atomization of the value chain, and leveraging global platforms to create highly customized local solutions; (ii) rethinking global innovation i.e., 360-degree innovation, distributed innovation, open innovation, and frugal innovation; (iii) rethinking global organization i.e., connect-and-coordinate rather than command-and-control plus a strong one-company culture; and (iv)globalizing the corporate mindset i.e., cultivating leaders who combine in-depth knowledge of key markets and cultures with an ability to connect the dots globally.

In 2000, Chrysler’s then president traveled to India to study the market. At the end of his visit, remarked: “Call me when you’ve built some roads.” He simply didn’t anticipate that the Indian auto market would grow by over 500% over the next 10 years. India’s car sales shot up from 518,000 units in 2000 to 2.8 million in 2010, making it the world’s sixth largest. Not surprisingly, Chrysler is notable for its near-absence. In 2014, Chrysler-Fiat’s share in India was a mere 0.4%.

As this story illustrates, we are in the middle of a radical paradigm shift in the global economic landscape. Non-linear changes are particularly risky times for companies and people entrenched in old mindsets. No longer can you continue to rely on old lenses to make sense of the world around you. The winning global leaders, whether individuals or companies, will be the ones with a global mindset who truly grasp the unprecedented transformation of the global economy, and possess the capabilities to sense, filter, and integrate diverse opportunities on a global scale ahead of the pack.

Through real-world examples, Professor Gupta illustrates how a global mindset can enable a company to be an early mover in identifying new opportunities in global markets. It also offers concrete guidelines that individuals and companies can use to develop a global mindset, which requires not only local depth (i.e., an openness to and knowledge of diversity across cultures and markets), but also global connect (i.e., the ability to integrate across this diversity).