Last August, McKinsey Quarterly published a great article entitled Winning the $30 trillion decathlon: Going for gold in emerging markets in which they predicted that “by 2025, annual consumption in emerging markets will reach $30 TRILLION USD – the biggest growth opportunity in the history of capitalism.” Just like I did on my post The Technological Revolution: How the Internet is creating a new kind of poverty, they turn to the Industrial Revolution as the benchmark of their argument – why? because that’s the only period in time worthy of comparison. This topic is extremely fascinating to me – after all I decided to focus my MBA on Global Business which I believe is one of the most important degrees today – no, that’s not just me trying to justify the cost.
However, a concern I’ve had is that the current level of investments global companies are making towards emerging markets does not seem to match the opportunity. McKinsey seems to agree. According to their report, leading companies in the developed world earn just 17% of total revenues from emerging markets, even though these markets represent 36% of global GDP. By 2025, only 13 years from now, consumption in emerging markets will account to nearly half of the global total.
I firmly believe that successfully tapping into these emerging markets will require a change in the Western management organizational hierarchy. Every company in the Fortune 1000 and Global 3000 rank should immediately create a new position of Chief Globalization Officer (CGO) along with a Globalization Business Unit because doing this right will require a fully committed team to analyze, evaluate, test, and optimize these companies corporate objectives in their respective markets.
In a highly competitive market, 13 years is a lot of time to fall behind, never catch up, and die.
May the race begin.