Much has been said about the softening growth of China’s GDP after the announcement that it will be cut to 7 per cent – its slowest rate in two decades. However, one thing that most agree is that a 7 per cent GDP growth rate remains the envy of most countries today.
Let’s take a closer look at the facts. With a population of 1.4 billion, China is projected to account for 20 per cent (or $27 billion) of global luxury sales this year. By 2030, not only will China contribute 28 per cent to global GDP, it will also take over as the world’s biggest economy. In the same ranking, India (a country with 350 million English speakers) will be the third-biggest economy after the US by 2030, contributing 11 per cent to global GDP. By 2060, China and India will jointly contribute close to half of global GDP – more than all developed markets. Professor Danny Quah of the London School of Economics released a provocative paper on how the centre of the world economy is shifting eastwards.
He calculated that the average location of economic activity that started in the 80s from the mid-Atlantic will reach a point literally between China and India by 2050.
It is imperative that we review if we are doing enough to prepare our companies for tomorrow
An EY report published in 2013 showed that, by 2030, two-thirds of the world’s middle class would be in Asia-Pacific (China, India, Singapore, Malaysia, Japan, South Korea, Vietnam, Indonesia and the Philippines), making it the centre of all consumer purchasing power.
Yet if there is one thing that is constant, it is that we live in times of unprecedented change.
Environmental changes, natural disasters, social unrest, disputes between countries and the threat of terrorism could all completely tip the scales in a different direction.
As leaders of our fields, I think it is imperative that we consider the possibilities of these scenarios, take a step back and review if we are doing and investing enough to prepare our companies and our teams for tomorrow. More crucially, are we structured in a way that allows for flexibility to navigate business risk or take advantage of opportunities? The fast-changing landscape of economics, communications and technology has changed the face of our business. There is no reason not to change the way we perceive challenges, seek solutions and chart new geographical territory of business.
2008 was a defining moment that many economists call the start of a recession. As Edie Weiner, the president of Weiner Edrich Brown, rightly pointed out in a TEDx speech, regardless of the ups and downs of the markets, this is not a recession but a fundamental transformation. To succeed, we need to stop focusing on what was and learn to realign ourselves with what is ahead of us and how to win differently.
Jarek Ziebinski is the chairman and chief executive at Leo Burnett Asia-Pacific