Global trends for the new yearThe keywords for global trends in 2012 will be “stagnation,” “changeover,” and “exploration.” The overall global economy will stagnate this year with the fiscal crisis in the euro zone and the U.S. economy still shackled by high consumer debt, unemployment and a depressed housing market.
Meanwhile, emerging economies can’t be depended upon to prop up the global economy another year. Inflationary pressure and their own fiscal concerns won’t allow much room for further stimulus, and their trade-dependent growth will not escape the fallout from the euro zone and the U.S.
The keyword for government and politics is change in 2012. In addition to Korea, several other nations will elect a president, including the U.S., France, Russia, Taiwan, Finland, and Mexico, while China’s Communist Party will begin installing the next generation of top leaders. Although elections may usher in policy changes for sustainable growth, political gridlock should be expected before ballots are cast, meaning limited action. Moreover, election concerns could stall prompt international coordination.
Trade disputes will be seen on multiple fronts. China’s economy is trade dependent and the U.S. economy must rely more on trade to regain traction due to anemia in private consumption, the main driver. That will intensify the trade disputes between the No. 1 and No. 2 economies in the world as they both try to expand exports. China’s burgeoning trade surplus and the U.S. trade deficit further exacerbates their trade conflict.
In Asia, China and the U.S. are racing to reach trade agreements to ensure a share of the long-term growth foreseen in the region. Also, trade disputes between emerging countries will likely be seen more frequently.
Social network services (SNS) will likely be a more powerful influence this year in political as well as business realms. Thanks to the spread of mobile devices and an expansion of telecommunication infrastructure, the explosive growth of SNS will continue. This will make SNS a bigger tool for voters to express their opinions. Meanwhile, companies will increasingly use SNS for their marketing campaigns., publicizing their products on the SNS and monitor SNS chatter about consumer preferences.
Corporate strategy also will undergo change. Girding for the economic slowdown, companies will go back to their recession-proof playbook. They will have to contain costs, possibly by relocating some operations in countries with cheaper labor, and be mindful of greater price scrutiny by consumers. To offset falling sales in advanced markets, global companies will be aggressively marketing in emerging countries with high growth prospects.
In the meantime, the battle for talent will likely intensify in 2012. Even though companies have dull outlooks for 2012, their demand for talent is even bigger as they need those who can devise and execute strategies in the tough environment and lay the groundwork for sustainable growth when conditions improve. According to Manpower Group, a worldwide workforce-solution provider, about 34 percent of companies around the world complain about the shortage of quality talent.
Leading IT companies will be increasingly participant in non-IT fields. The “smart” trend will spread to the home electronics field. Particularly, Google and Apple will widen their market footprint into telecommunication media and mobile payment businesses.
Battles for commodities will take a sharper turn. Greater emphasis will be placed on securing stable water and food supplies. Water shortages have reached critical infection points around the world due to population growth, urbanization, pollution and desertification.
Of course, energy exploration will get its fair share of attention. In particular, the development of oil sands and shale gas, which was postponed by weak economic feasibility, will get a new boost because of high oil prices.
*The writer is a research fellow at global studies department at the Samsung Economic Research Institute. For more SERI reports, please visit www.seriworld.org.
By Jung Ho-sung
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