the future of the economic, social and business environments · the future of the economic, social...

WHERE KNOWLEDGE IS POWER

Phil Ruthven AM, Chairman

The Future of the Economic, Social and Business environments

The Future of the Economic, Social and Business environments

2015 General Assembly

Shangri La, Sydney

Tuesday 19 May, 2015

Topics

1. Global Economic Direction

2. Population & Lifestyle Direction

3. Industries Direction

4. Endnote: GS1 into the future?

1.Global Economic

Direction

World GDP GrowthReal growth (PPP), 1950-2016 (F)

-12

-10

-8

-6

-4

-2

0

2

4

6

8

10

12

1940

1945

1950

1955

1960

1965

1970

1975

1980

1985

1990

1995

2000

2005

2010

2015

2020

2025

2030

Pe

r c

en

t

1950-1969 growthin US$ market terms

Purchasing Power Parity (PPP) terms

IMF/OECD/Economist//IBISWorld: 09/05/15

* The world decline in 2009 was -2.0% when

measured in $US market price terms

2012 3.0%

2013 3.1%

2014 3.1%

2015 3.0% (F)

2016 2.9% (F)

The World’s Economic Regions In 2015Share of World GDP (ppp basis)

2015 World GDP, $US 96.7 trillion

C&SAmerica

6.1%

North America

23.0%

W&C Europe19.0%

EasternEurope

3.6%

Asia Pacific

31.0%Africa

4.0%

ME6.0%

IndianS-C7.2%

IBISWorld 03/03/15

World Regions ImportanceChanging importance, % of World GDP (ppp terms)

Source: OECD 31/03/15

26.1%17.0% 16.3%

32.1% 36.0%4.2%

5.0%

10.5%

2.7%

3.6%

3.1%

4.5%

3.5%

5.0%

7.6%

8.6%9.6%

2.0%

4.5%

33.6%

35.5%

27.3%

23.5%

14.5%

2.0%

3.5%

6.7%

6.8%

7.0%

12.7%22.8%

30.5%24.0%

18.0%

1870 1913 1950 1998 20251.1 2.7 5.3 33.7 190.0 GDP (trillion)

1870 1913 1950 1998 2025 Year

Nth America

C & S America

Western Europe

Eastern Europe

Middle EastAfrica

Indian S-C

Asia Pacific

12.2%

7.6%

3.6%

World’s 30 Largest Economies2015 (E)

World’s 230 nations

US$ 97 trillion

Italy 2.1%S. Korea 1.9%Canada 1.7%Spain 1.6%Indonesia 1.5%Turkey 1.4%Australia 1.1% 17thIran 1.1%Saudi Arabia 1.1%Taiwan 1.1%

11th – 20th Nations 14.4%

19.0% USA

Purchasing Power Parity (PPP) terms

Rest of World(200 nations)

15.0%

Japan

5.2%

2.1

%

IMF/IBISWorld 05/01/15

Poland 0.9%Argentina 0.9%Thailand 0.8%Thailands 0.8%Netherlands 0.8%S. Africa 0.7%Pakisthan 0.6%Egypt 0.6%Malaysia 0.6%Colombia 0.6%

-4.0

0.6

0.81.1

2.02.02.0

2.42.52.62.62.8

[VALUE]

3.13.23.3

3.95.1

6.97.6

-5 -4 -3 -2 -1 0 1 2 3 4 5 6 7 8 9 10

RussiaBrazil

ItalyJapan

FranceGermany

CanadaIran

AustraliaUK

SpainUSA

MexicoWorld

S. KoreaTurkeyPolandTaiwan

IndonesiaChinaIndia

Economic Growth: 2015(F)20 Largest Economies (ppp ranking)

Economist/IBISWorld 09/05/15

World Growth

2015 (F), 3.0%

-0.9

0.4

1.2

1.21.51.6

2.12.22.2

2.42.5

2.82.92.9[VALUE]

3.33.4

3.63.7

5.66.7

8.1

-2 -1 0 1 2 3 4 5 6 7 8 9 10

RussiaItaly

BrazilJapan

FranceGermany

CanadaIran

SpainUK

USATaiwan

AustraliaWorld

S. KoreaMexicoPolandTurkey

IndonesiaChinaIndia

Economic Growth: 2016(F)20 Largest Economies (ppp ranking)

Economist/IBISWorld 09/05/15

World Growth

2016 (F), 2.9%

Debt & Budget Situations

184152

112949393

8573

625958

4645

433939

352930

2316

1110

0 20 40 60 80 100 120 140 160 180 200 220 240

GreeceJapan

ItalyFrance

USAUK

SpainIndia

WorldPoland

GermanyTaiwan

MedxicoBrazil

CanadaNetherlands

TurkeyS Korea

ChinaIndonesiaAustralia

RussiaIran

Government Net Debt 2015(F)

Largest nations (+ Greece) % of GDP

IBISWorld 05/04/15

Trouble

Trouble

Trouble

Trouble

Serious trouble

Diabolical troubleDiabolical trouble

-4.4

-4.5

-4.4

-4.2

-4.1

-4.1

-3.5

-3.4

-2.9

-2.8

-2.7

-2.6

-2.5

-2.3

-1.9

-1.9

-1.8

-1.7-1.5

[VALUE]

0.5

0.7

-10 -9 -8 -7 -6 -5 -4 -3 -2 -1 0 1 2 3 4

BrazilSpain

UKFrance

IranIndia

GreeceMexico

ItalyChina

AverageRussia

USAAustralia

NetherlandsIndonesia

CanadaTurkeyPolandTaiwan

S. KoreaGermany

Government Budget Balances: 2015(E)Largest Economies (+ Greece) (% of GDP basis)

The Economist/IBISWorld 09/05/15

Taxes & Interest Rates

Taxation In The Major Economies % of GDP basis 2014

61212

1718

262727

2828

293030

323233

343535

3739

4041

434344

4546

4749

0 5 10 15 20 25 30 35 40 45 50 55 60 65

IranIndonsia

TaiwanChinaIndia

AustraliaKorea S

USAAustralia

JapanSwitzerland

RussiaMexicoCanada

AVERAGETurkeyPoland

NZOECD Average

SpainUK

NetherlandsGermany

ItalyAustriaFinlandFrance

SwedenBelgium

Denmark

Source: IBISWorld 04/05/15

Total taxation & other revenue as a share of GDP

“Nanny state” risk?

Developing economies

Average

OECD average

Developed economies

Source: Wikipedia 30/04/14

1719

2020

2122

25252525252525

29.83030303030

3131.4

33.334

3845

0 5 10 15 20 25 30 35 40 45 50

TaiwanPolandTurkeyRussia

UKS Korea

NetherlandsIndonesia

ChinaSwitzerland

ChinaIreland

IranGermanyAustraliaAverage

NZSpain

MexicoCanada

ItalyFrance

BrazilJapan

USA

Tax Rate (%)

Corporate Income Taxes2014

Maximums Federal 35% State 10%

13.0

10.3

9.5

7.9

7.9

6.1

3.9

3.3

2.9

2.9

2.5

2.2

1.9

2.0

1.8

1.8

0.80.6

0.6

0.1

-1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14

Brazil

Russia

Turkey

India

Indonesia

Mexico

AVERAGE

China

Australia

Poland

S Korea

USA

UK

Italy

Canada

Spain

France

Netherlands

German7

Japan

Interest Rates10-year Bond Rate May 2015

The Economist 09/05/15

The Employment Situation

25.4

23.0

13.0

11.7

11.4

11.3

10.6

8.9

8.6

6.8

6.7

6.4

6.2

6.2

5.9

5.8

5.5

4.2

4.1

4.0

3.8

3.4

0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30

GreeceSpain

ItalyPoland

IranTurkeyFrance

NetherlandsIndia

CanadaAVERAGE

GermanyAustralia

BrazilRussia

IndonesiaUSA

MexicoChina

S KoreaTaiwanJapan

Unemployment 2015Significant Economies Mainly March-April


Full employment <5% of labour force

58.4

57.3

39.7

29.7

27.2

23.7

21.6

20.4

20.1

15.8

14.5

13.8

13.6

12.3

12.2

11.0

10.5

10.1

9.9

9.4

7.8

6.8

0 5 10 15 20 25 30 35 40 45 50 55 60

GreeceSpain

ItalyIran

PolandFrance

IndonesiaTurkey

AverageUSA

RussiaCanada

BrazilTaiwan

AustraliaNetherlands

IndiaChina

S. KoreaMexico

GermanyJapan

Youth Unemployment 2013Significant Economies


2.Population &

Lifestyle Direction

Importance of World Regions GDP (ppp terms) 2015

$US ppp 96.7 trillion

IBISWorld: 08/05/15

Asia Pacific

31.0%

North America

23.0%

AfricaMiddle East %

WesternEurope

19.1%

Economy Population

7.2 billion

E.

Eu

rop

e 3

.6%

Africa11.5%

IndianS/C23.1%

Asia Pacific

33.6%

6.0%4.0%

World’s 25 Largest Populations2015

World’s 230 nations

7.3 billion

Mexico 1.7%Philippines 1.4%Ethiopia 1.3%Vietnam 1.3%Germany 1.2%

Indonesia

3.5%

19.3% China

Rest of World(180 Nations)

13.1%

IBISWorld 22/08/13

2.4

%

2.2

%

Egypt 1.1%Iran 1.1%Turkey 1.0%Congo 0.9%Thailand 0.9%

16th - 205h Nations 5.0%

World’s Languages1

2014 (E)

Population

7.2 billion(230 nations/sovereign states)

English2

8.5%

20.0% Chinese(several dialects)

Other2

15.4%

Russian 3.1%

IBISWorld 25/09/14

Vietnamese 1.2%Turkish 1.2%

Wu (Tibet) 1.3%Korean 1.3%

German 2.1%

1 Spoken as 1st or 2nd language

2 English is the most widely spoken language (105 nations) or the official language (a further

83 nations); around a quarter of world population

World Religious Affiliation2013

23.8%

Islam

31.0% Christianity

7.2 billion

Source: Wikipedia

Catholic, Protestant, AICs

Eastern Orthodox, Pentecostal,

Latter-Day Saints,

Jehovah’s Witness, Nominal etc

Religious Extremism

Al Qaeda, Taliban

Messianic ZionismGush Emunim

Mediaeval Crusades,Spanish Inquisituion,

Klu Klux KlanMoral Majority

Hindu Nationalism

* Voodoo (Vodun) is the world’s oldest religion,

around 6000BC

Buddhism 7.3%

World Political Systems2013

72.5%

Democracy

7.2 billion

Source: CIA Factbook

Republic, parliamentary

democracy, federations

* Theocratic, monarchial,

military, dictatorship etcIran Iraq Syria

Afghanistan EgyptUzbekistan Cambodia

Others

Democracy In Practice?

�Democracy, in practice, is nowhere near 70% of the world population. A true and fair democracy is expensive. It requires a SOL of over $25,000/capita to ensure fair elections, an adequate and honest judiciary, and reasonably corrupt-free military and police forces via taxation. And within that level, it requires the tax capability to provide also a measure of egalitarianism via support to the unemployed, aged, sick and illiterate members of society: somewhere between $5-10,000 in taxes

�So, there is a long long way to go before democracy actually can work in developing economies.

Different psyches across

countries

NZ Index of Consumer Sentiment2 months progressive to March 2015

50556065707580859095

100105110115120125130135140145

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Year commencing June

Happy 68% of last 35 years

87% of last 20 years

Recession Level

Source: Roy Morgan Research IBIS estimates 23/04/15

China Index of Consumer Sentiment2 months progressive to October 2014

60

65

70

75

80

85

90

95

100

105

110

115

120

125

130

135

1973

1975

1977

1979

1981

1983

1985

1987

1989

1991

1993

1995

1997

1999

2001

2003

2005

2007

2009

2011

2013

2015

2017

2019

Source: Trading Economics/IBISWorld 12/12/14

USA Index of Consumer Sentiment2 months progressive to April 2015

0

10

20

30

40

50

60

70

80

90

100

110

120

130

140

150

160

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020


Recession Level

Source: Conference Board Consumer Confidence Index April 2015


Canadian Index of Consumer Sentiment2 months progressive to April 2015

30

40

50

60

70

80

90

100

110

120

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020


Recession Level

Source: Conference Board Consumer Confidence Index. April 2015


Germany Index of Consumer Sentiment2 months progressive to April 2015

60

65

70

75

80

85

90

95

100

105

110

115

120

125

130

135

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Happy % of last 40 years% of last 20 years

Source: OECD / IBISWorld 14/05/15

UK Index of Consumer Sentiment2 months progressive to March 2015

4550556065707580859095

100105110115120125130135140145

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Happy 12.4% of last 41 years13.3% of last 20 years

Recession Level

OECD EC Indicator 23/4/15

France Index of Consumer Sentiment2 months progressive to April 2015

60

65

70

75

80

85

90

95

100

105

110

115

120

125

130

135

1972

1974

1976

1978

1980

1982

1984

1986

1988

1990

1992

1994

1996

1998

2000

2002

2004

2006

2008

2010

2012

2014

2016

2018

2020

Source: OECD / IBISWorld 14/05/15

Our Changing Society in the New AgeThe developed nations

� Living longer

� More generations co-existing

� Living with more leisure

� Smaller/different households

� Moving to coast and equator

� Changing ethnic mix

� New tribalism (less local)

� A stabilising divorce rate

� Rising incomes & wealth

� Apartment living rising

� Home leasing on the rise

� More spending on services

� Outsourcing tasks and chores

� Rise of virtual shopping

� Living with ICT

� The Internet/Information age

� Increasing knowledge

� Increasing financial literacy

� New entertainment & sports

� Electronic “guardian angels”

� Working differently

� New industries/ occupations

� Changing spirituality

� Outlawing discrimination

� Changing politics (ideologies)

� Ecological sensitivity

Living Longer And Working LongerAustralian Life Expectancy And The Retirement Age of Male Australians

0

10

20

30

40

50

60

70

80

90

100

110

120

18

00

18

10

18

20

18

30

18

40

18

50

18

60

18

70

18

80

18

90

19

00

19

10

19

20

19

30

19

40

19

50

19

60

19

70

19

80

19

90

20

00

20

10

20

20

20

30

20

40

20

50

20

60

20

70

20

80

20

90

21

00

Source: ABS, Australian Historical Statistics, IBISWorld

Who would want to be retired for 30+ yearsin 2100; and could the nation afford it?

Female life expectancy

Our many Generations In 2015

Australia24 million persons (F2015)

Older Civics(91+ years)

0.8%

Gen Zers(<14 years)

Net Generation (Y)

14-33 years

Silents73-90 years

Baby Boomers50-72 years

17.8%

IBISWorld 08/05/15

Generational Types

Civics

Adaptives

Idealists

Reactives

Changing Household Expenditure% of total basis

6.913.2

7.4 7.9 10.06.6

1.26.8

9.3

10.3

14.7 13.9 10.9 15.4

11.9

12.3

1.0

2.0 3.9 5.1 5.96.5

6.8

8.18.0

7.0 6.07.9 10.1

11.2

12.6

13.7

3.0

3.8 2.82.6

2.5

2.4

3.4

3.6

1.5

3.3 7.16.5

6.3

6.6

8.5

6.3

2.5

3.0

6.75.9

5.14.4

5.3

4.2

3.5

3.0

3.03.4

3.6

3.54.5

6.9

2.0

6.8

7.310.7

13.815.0 16.3

13.9

7.8

10.6

9.7

8.5

7.2

6.5 6.3

4.7

54.0

36.230.3

26.4 23.320.0 20.7

16.9

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

0.3 4.8 14 30 118 360 543 1352 $ billions

1900 1950 1960 1970 1980 1990 2000 2014

Non-durables

Durables1

Taxes (direct)

Health & Education

Hospitality

Entertainment/Recn

Communications/fares

Other services

Rent

Finance & Ins Serv

Capital Related

Savings

Note: 1 Durables includes cars, furniture, electricals, electronics etc

3.Industries Direction

And Their Changing Importance

Industry Mix in 2014Australian shares of GDP, in F2013 price terms

ABS 5206-26 IBISWorld 08/03/15

Agriculture

2.3% Utilities2.7%

GDP $1.6 trillion

Finance & Insurance

Mining

8.5%

Govt. Adm. 5.3%7.9% Construction

8.5%

Info Media & Communications

Cult & Rec. Serv.0.8%

Pers. & Other Serv.

Hospitality

SectorsPrimary

Secondary

Tertiary

Quaternary

Quinary

Admin. & Support Services

Note 1: includes stat. discrepancy (0.2%)

Rental, Hiring &

Real Estate

2.8%

1 Less subsidies, + stat discrep

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

1 2 3 4 5 6 7 8 9 10 11 12 13 14 15

Note: At market prices to 1940, at factor cost thereafter Source: N.G Butlin, ABS & IBISWorld 8.01.15

1800 1820 1840 1860 1880 1900 1920 1940 1960 1980 2000 2020 2050

Changing Importance of Industries Australia Shares of GDP by Industry Division, 1800-2050

1800

1820

1840

1860

1880

1900

1920

1940

1960

1980

2000

2020

2050

AgricultureMining

Manufacturing

UtilitiesConstruction

W’Sale Trade

Retail Trade Transport, Postal

Media & Telecom

Finance & Insurance

Rental, Hiring. R Estate

Dwelling O’Ship

Prof & Tech Services

Admin Services

Public Admin/Safety

Ind taxes less subsidies

Education

Hospitality

Health & Social Assist

Arts & Recreation Personal & Other Serv

PrimarySector

SecondarySector

TertiarySector

QuaternarySector

QuinarySector

Fastest Growing Industries in the New AgeNew Age 1965-2040s

� ICT & Fast Broadband - the New Age all-pervasive utility.

� Knowledge Industries - databases & multi-media services.

� Business Services - outsourcing non-core functions.

� Financial Services - outsourcing of transactions/investment.

� Property Services - outsourcing ownership, facilities mgt.

� Health - outsourcing home doctoring.

� Education - outsourcing pre-school, plus universities.

� Personal & Household Services - outsourcing chores.

� Hospitality & Tourism - outsourcing the kitchen and travel

� Recreation & Cultural Services - outsourcing leisure.

� Mining - energy minerals (oil, gas, coal, uranium)

� Construction - cyclical, but growing importance of civil work

� Transport – cyclical, but growth in road, air and pipeline and F/F

� Biotechnology & Nanotechnology - New Age technologies

� Environmental Services - testing, assessment, amelioration

The Industry Input-output Chain For Goods

Agriculture

MiningConsumers

Imports

WholesalingRetailing

&

Other FinalResellers

Exports

Manufacturing

Utilities

Construction

CapitalExpenditure

Most PowerLeast Power

Households

Government

The New Post-industrial Age, after the mid-1960s

Barcoding is playing a vital role in the logistics and efficiency of domestic and international input-put chains

Power Points In The Input-Output Chain

AgricultureMining Consumer

Imports

WholesalingRetailing

&Other FinalResellers

Exports

Manufactg.Crude

ModerateElaborate

CapitalExpenditure

Industrial Age (1865-1964)

Most Power

Least PowerMost Power

Least Power New Infotronics Age (1965-2040s)

Vertical Integration/alliances Vertical Integration/alliances

In the Industrial Age, each link in the chain usually operated independently

Most Power

The Retail Revolutions

1820s Specialty stores emerge to challenge General Stores.

1890s Chain stores emerge to challenge sole operators.

1960s Self-service stores emerge to replace service stores. Supermarkets led the way. Prices fell.

2010s Online shopping emerged as part of the digital age. eBay, Amazon become the new department stores as well as there being specialty online retailers. Prices plummeting in many cases. Employment falls

4.End note:

GS1 into the future

The Future

� The past has seen GS1 revolutionise the world of commerce with the introduction of globally unique identification, scanning, barcodes RFID.

� While GS1 may not revolutionise the future at large it has a critical role to play as the keeper and provider of product data. The future is filled with endless opportunities!

� Among the continuing challenges are: assisting stock minimization; the reduction of waste; faster response to changing consumer preferences; forward planning; and cashflows.

� With more and more retail going on line, data is vital. Indeed accurate data is becoming more and more critical.

� Information about goods and services purchased on line must be made available to consumers who are looking for more information about what they purchase and where it comes from.

� Consumers are wanting to make choices based on a whole range of things:

� sustainability of the product, � where it was produced, � who produced it, � where did the raw material come from, � how was the transportation handled.

� Consumers want the products they purchase to be safe, whether it’s food or otherwise, they want total visibility, transparency and information that they can trust and rely on

ruthven

g s 1

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