Macro Issues

Philip C. Zerrillo Ph.D.

NU- Day 2

What Will Drive the Performance of a Firm?

Human resources. Attracting, developing, retaining, and dismissing.

New products. Those that the market wants, those that allow us to enter market.

Cost control. Activity based costing, time-based costing.

Capital management. Steady capital flow, low cost sources, cash flow management.

Good vision. A succinct and directed strategy, well articulated and communicated.

The Drivers of Firm Performance

Managerial Performance

Industry Structure

Macro Environmental

Factors

Firm Performance cont.

Environmental factors• Economy• Demography• Political/Legal• Social• Physical• Technological

Demand Investment Employment Income

Savings Interest Investment Employment Income

Supply v. Demand

Supply Slow growth Stable Low interest rates Export growth Domestic dampening

Demand Fast growth Higher interest rates Inflation Domestic stimulus Export less important

Populations-Selected Countries

Country 1950 2000 % change USA 171 314 83 MEXICO 28 99 254 BRAZIL 54 170 215 COLOM 12 42 250 PERU 8 26 175 ARG. 17 37 118 CHILE 6 15 150

% of Population byAgeAmericas- 2000

Country Under 15 60 and over USA 21.5 16.2 MEXICO 33.1 6.9 BRAZIL 28.8 7.8 COLOM 32.8 6.9 PERU 33.4 7.2 ARG 27.7 13.3 CHILE 28.5 10.2

Birth Rate/Death Rate/Density

Continent BR DR Den (per km)

World 21.2 8.9 45

Africa 37.4 13.9 26

W/Europe 9.4 11.8 32

Aus/NZ 12.7 7.4 3

Asia 20.5 7.6 116

North Am 12.9 8.3 15

South Am 21.5 6.5 25

Life Expectancy / BirthrateN.A. & S.A

Cnt Life X M (80)

Life X F(80)

Fertile Rt (80)

Life X M (01)

Life X F(01)

Fertile Rt (01)

USA 71 78 1.8 74.6 80.4 2.1

MEX 65 71 4.3 70.4 76.4 3.2

BRAZ 61 66 3.7 64.7 72.6 2.9

PERU 58 62 4.7 67.3 72.4 3.4

ARG 67 74 3.2 70.6 77.7 2.8

CHILE 67 74 2.7 73 79 2.5

Life Expectancy / BirthrateEUROPE

Cnt Life X M (80)

Life X F(80)

Fertile Rt (80)

Life X M (01)

Life X F(01)

Fertile Rt (01)

Austr 70 77 1.6 75.4 81.5 1.24

Franc 71 79 1.9 75.2 82.8 1.8

Grec 73 78 2.0 75.9 81.2 1.24

Italy 71 78 1.6 75.5 81.9 1.20

Swe 73 79 1.6 77.6 82.6 1.29

Spain 73 79 1.9 75.4 82.3 1.13

Eng na na na 75.7 80.7 1.61 En

Life Expectancy / BirthrateAsia

Cnt Life X M (80)

Life X F(80)

Fertile Rt (80)

Life X M (01)

Life X F(01)

Fertile Rt (01)

H-K 73 78 1.8 77.3 82.8 1.17

Japa 74 80 1.8 77.8 85 1.33

Sing 69 74 1.4 75.9 80.3 1.45

Thai 62 67 3.0 67.9 73.8 2.0

Kor 64 71 2.4 71.8 79.1 1.51

Phil 60 64 4.7 68 72 3.24

Mal 66 70 na 70.6 75.5 2.9

Population AgesAsia

5-25 60+ 5-25 60+(80) (80) (00) (00)

Australia 33.8 14.2 28 16.3Bangladesh 48.5 4.8 45.5 4.9India 43.9 6.2 40.8 7.6Indonesia 44.7 5.2 40.4 7.6Malaysia 52.0 4.2 41.2 6.6New Zealand 35.7 14.3 29.2 15.6Philippines 46.0 4.8 44.8 5.5Singapore 36.0 7.7 27.4 10.6Sri Lanka 43.7 6.6 37.3 9.3Thailand 46.2 5.4 36.2 8.1Viet Nam NA NA 43.8 7.5

Life Expectancy

Life X Life X Life X Life X

M(80) F(80) M(00) F(00)Australia 71.9 78.7 76.4 82Bangladesh 50.1 49.3 60.6 60.8India 55.3 55.1 63.6 64.9Indonesia 54.5 58.0 65.3 69.3Malaysia 66.0 70.0 70.6 75.5New Zealand 70.7 76.9 75.3 80.7Philippines 60.2 63.7 68 72Singapore 69.2 74.6 75.9 80.3Sri Lanka 67.0 71.5 69.9 75.9Thailand 62.6 67.4 67.9 73.8Viet Nam 56.7 61.1 66.9 71.6

Birth RatesPer 1000

1980 2000Australia 21.0 13.9Bangladesh 48.1 43India 36.2 28.7Indonesia 38.1 24.6Malaysia 35.2 25.8New Zealand 22.3 15.3Philippines 38.4 31.2Singapore 21.2 12.7Sri Lanka 24.4 18.6Thailand 39.1 18.1Viet Nam 39.3 28.9

Where Population Resides

COUNTRY LARGEST 3 LARGEST % POP 3 LARGEST % OF POP USA 19.1 45.1 17.1 45.1 MEXICO 15.1 20.3 22 20.3 BRAZIL 18.4 49.5 31 COLOM 5.1 8.4 24 8.4 PERU 6.6 7.8 32 7.8 ARG 11.3 13.5 39 13.5 CHILE 5.4 6 43 6

LiteracyNA & SA

Mexico (M) 8.2 (F) 7.8 Argent 3.8 3.8 Chile 4.6 5.0 Brazil 16.7 16.8 Peru 5.5 17

LiteracyAsia

H-Kong (M) 4.0 (F) 11.8 Japan NA NA Thail (M) 4.0 (F) 8.4 Korea (M) .7 (F) 3.3 Philip (M) 5.0 (F) 5.7

LiteracyEurope

Greece (M) 4.8 (F) 3.2 Italy (M) 4.8 (F) 2.3 Spain (M) 2.5 (F) 5.8 Swe (M) 2.4 (F) 2.3

What Advice Would you Give to Mexico? Vietnam? China?

Why Did The US Economy Slide?

Greenspan? Exuberance? Taxes? Regulation?

What Will It Take to Make It Pick Up?

What Will Happen to the Structure of Industries?

Employment (% Agriculture)

M(80) F(80) M(00) F(00)

Australia 7.2 4.1 6.1 3.6Bangladesh 62.5 8.5 NA NAIndia 64.2 57.5 NA NAIndonesia 56.0 52.5 53.0 56.0Malaysia 31.9 38.1 21.5 16.8New Zealand 13.2 6.6 NA NAPhilippines 55.1 33.9 51.6 31.0Singapore 2.0 1.1 0.3 0.04Sri Lanka 37.2 35.7 35.4 41.5Thailand 69.8 75.6 59.8 60.8Viet Nam

Employment(% Professional)

M(80) F(80) M(00) F(00)

Australia 25.4 11.0 11.7 14.4Bangladesh 2.4 3.1 NA NAIndia 3.1 2.3 NA NAIndonesia 2.7 3.2 0.7 0.6Malaysia 5.7 7.0 4.3 5.0New Zealand 11.8 17.7 NA NAPhilippines 3.9 9.8 2.0 2.3Singapore 7.9 9.3 9.2 13.3Sri Lanka 3.5 9.1 1.5 2.1Thailand 5.1 3.2 NA NAViet Nam

Employment(% Manufacture)

M(80) F(80) M(00) F(00)Australia 44.4 10.1 17.8 8.7Bangladesh 14.6 30.4 NA NAIndia 16.2 6.8 NA NAIndonesia 20.7 13.1 8.7 12.0Malaysia 26.8 14.5 20.0 29.4New Zealand 46.6 17.4 NA NAPhilippines 15.8 11.0 8.4 12.7Singapore 39.8 33.7 26.0 26.1Sri Lanka 25.4 11.1 11.3 27.0Thailand 11.8 7.8 10.0 12.2Vietnam