LIFE AFTER A BIG BLACK HOLE

Transcription

1 LIFE AFTER A BIG BLACK HOLE A COMPETITIVE OUTLOOK FOR 2009, AND BEYOND FACING GLOBAL CHALLENGES COPENHAGEN 8 SEPTEMBER 2009 PROFESSOR AT IMD AND AT THE UNIVERSITY OF LAUSANNE, SWITZERLAND, DIRECTOR WORLD COMPETITIVENESS CENTER

2 «THE TROUBLE WITH OUR TIMES IS THAT THE FUTURE IS NOT WHAT IT USED TO BE..» PAUL VALERY,

3 COMPETITIVENESS IS ABOUT WINNING GDP QUALITY OF LIFE ECONOMIC GROWTH MANAGING PROSPERITY PROFIT SUSTAINABILITY

4 A CRISIS IN THREE ACTS ACT I ACT II ACT III FINANCIAL CRISIS ECONOMIC CRISIS SOCIAL CRISIS VALUE DESTROYED GDP DESTROYED JOBS DESTROYED SHARES WORLD WORLD GDP WORLD WORLD GDP V- $50 000bn LOANS FOR SALE HOUSES V - 5% V- 50 MILLION SAVINGS ECONOMY EMPLOYMENT

5 ACT I THE FINANCIAL CRISIS

6 SOLVING THE FINANCIAL CRISIS THE STANDARD MODEL 1. FLOOD THE STREET WITH MONEY 2. PACK THE BAD DEBT AWAY BAD BANK 3. RECAPITALIZE AND TAKE PART OWNERSHIP 4. LATER, RESELL THE BAD DEBT OR THE SHARES

7 BAILING OUT THE WORLD $789bn $450bn $151bn $209bn $586bn $111bn $41bn $68bn TOTAL COST STIMULUS: $3 200bn LOAN GUARANTEES: $2 700bn

8 US BUDGET DEFICITS: THE LEGACY 1999: +$236bn $1750bn - 13% OF GDP

9 1750 BILLION DOLLARS!!! 2 MILLION DOLLARS PER DAY 0 8 SEPT. 2009

10 THE EXIT STRATEGY? IT IS EASIER TO STAY OUT MARK TWAIN THAN TO GET OUT!

11 IN ADDITION: AN OCEAN OF DEBT $11.2 tn $7.0 tn US NATIONAL DEBT + $ 3.7bn per DAY! $6.0 tn $5.0 tn $4.0 tn $3.0 tn

12 DEBT IN THE G20 as a % of GDP 114% 106% 78% $9,000bn

13 THE EMPIRE STRIKES BACK MORE GOVERNMENT POWER HELP! GOVERNMENT BUSINESS

14 A GOVERNMENT BIG ENOUGH TO GIVE YOU EVERYTHING YOU WANT THOMAS JEFFERSON IS STRONG ENOUGH TO TAKE EVERYTHING YOU HAVE

15 ACT II THE ECONOMIC CRISIS

16 ITALY EURO AREA -4.6 UK GERMANY SWEDEN SPAIN NL DENMARK MEXICO AUSTRIA FRANCE BELGIUM -4.1 VENEZUELA COLOMBIA CHILE THE WORLD ECONOMY ANNUAL % CHANGE (12 month period) NOSE DIVING CH -2.4 OR LEVELLING-OFF? (compared to previous quarter) % -3.2% 1.4% JAPAN RUSSIA POLAND HUNGARY CZECH. REP TURKEY -6.4 AUSTRALIA THAILAND TAIWAN KOREA SINGAPORE SOUTH AFRICA MALAYSIA -1.0% INDONESIA -0.4% +1.3% % INDIA BRAZIL -1.8 HONG KONG ARGENTINA CHINA Q1 Q2 Q2-3.9% 4 5.8

17 FOLLOWING EXCEPTIONAL YEARS! EXPORTS OF GOODS (bn$)

18 RECESSION IN FOUR SIZES

19 WHICH RECESSION? OR

20 THE ECG «U» RECESSION BEFORE AFTER

21 WILL STIMULUS PLAN WORK? REVENUES SPEND? SAVE? WEALTH CONSUMERS

22 QUIZZ (NO ANSWER ) 1. HOW MANY PRODUCTS IN A TYPICAL HOME? 2. HOW MANY MORE CAN YOU BRING IN?

23 DRIVERS OF ECONOMIC GROWTH REPLACEMENT ECONOMY FIRST BUY ECONOMY A PURCHASE REPLACES A N EXISTING PRODUCT A PURCHASE INTRODUCES A NEW PRODUCT «DRAMATIC» INNOVATION PURCHASING POWER

24 IS INNOVATION VALUE? EVERY YEAR US PATENT OFFICE DELIVERS 40 NEW MOUSETRAP PATENTS 4,400 MOUSTRAP PATENTS SINCE 1838!

25 ACT III THE SOCIAL CRISIS

26 AND THE TERRIBLE TWO JOB LOSS WORLDWIDE MILLION

27 WHY INFLATION? IN FAVOR 1. TOO MUCH LIQUIDITY 2. STIMULATE ECONOMIC GROWTH 3. REDUCE DEBT AGAINST INVENTORIES...? OVERCAPACITIES...?

28 IN NEED OF A PURPOSE «A BUSINESS THAT MAKES NOTHING BUT MONEY HENRI FORD IS A POOR BUSINESS!»

29 A NEW SENSE OF ETHICS BEING GOOD AT WHAT YOU DO BEING GOOD AT WHAT YOU ARE

30 THE POWER GAME IS CHANGING

31 WHO IS HAVING THE MONEY? Foreign currency reserves $1953bn $1019bn $385bn $305bn $256bn $205bn $204bn $767bn TREASURY BONDS ( Total: $3265bn)

32 NEW PRIORITIES FOR MONEY FINANCIAL ASSETS INFRASTRUCTURE GOVERNMENT BONDS LOCAL AND REGIONAL INDUSTRIAL ASSETS LOCAL COMPANIES EVERYWHERE AT HOME

33 A WORLD OF NEW BRANDS

34 GOOD NEWS YES

35 THE ORIGIN OF GROWTH? EMERGING MARKETS MIDDLE CLASS LIFE EXPECTANCY EMERGING «LESS POORS» NEW BUS. MODEL CLEAN TECH SUSTAINABILITY INCREASES 5 HOURS PER DAY AGE AND WELLNESS ANOTHER LIFE?

36 IS IT SUSTAINABLE?

37 VOLATILITY 147$ 16$ 70$ 75$ 1999 July 2008 NOW FOOD INDEX - 27% RECOVERY?

38 AND FROM THERE? BUT 300 LITERS OF METHANE PER DAY! 60% AGRICULTURAL LANDS ARE FOR ANIMAL FEED LITERS OF WATER FOR 1 KG OF BEEF

39 ENVIRONMENT IS BIG MR FARADAY, WHAT IS THE USE OF ALL THESE INVENTIONS? WILLIAM. E. GLADSTONE I AM NOT QUITE SURE BUT I KNOW THAT ONE DAY YOU WILL TAX THEM... MICHAEL FARADAY

40 THRIVING THROUGH A BIG BLACK HOLE

41 WHERE WE COME FROM WORKING BETTER WORKING CHEAPER WORKING ELSEWHERE

42 THE NEXT FRONTIER: PROCESSES PRODUCTS e.g IPOD PURCHASING ORDER COST EFFICIENCY SATISFACTION

43 NEW: REDUCING COMPLEXITY «THERE IS NOTHING SO USELESS AS DOING EFFICIENTLY SOMETHING THAT SHOULD NOT BE DONE AT ALL» PETER DRUCKER,

44 A SMALL SECRET IN COMPETIVENESS THE IMD WORLD COMPETITIVENESS YEARBOOK 2009 DIVERSIFICATION OF THE ECONOMY NR 1. COMPETITIVENESS OF SMEs NR 2. EASE OF DOING BUSINESS NR 3.

45 CHANGING THE MINDSET COMPETENCIES AND SKILLS

46 THE BIGGEST DANGER «WE STARTED TO BELIEVE OURSELVES ALL THE GOOD THINGS THAT WE WERE TELLING TO OTHERS» ANONYMOUS CEO

47 THE SPIRIT OF COMPETITIVENESS POURQUOI PAS? JEAN-BAPTISTE CHARCOT WHY NOT? MENTALITY