Megatrends shaping the world
BREAKTHROUGH - Elfren S. Cruz (The Philippine Star) - May 24, 2018 - 12:00am

The world is changing very fast. The future is going to witness more changes. Condoleezza Rice, former US. Secretary of State recently wrote that there are three megatrends “...that have profoundly shaped this landscape over the past 30 years: globalization and supply chain innovations, rise of connective technologies; and dramatic changes in politics since the end of the Cold War.”

Globalization and supply chain innovation

During the past 30 years, the world has witnessed a revolution in supply chain management. Today’s supply is more global than at any time in history affecting every country and almost every business from the largest to small businesses. To illustrate this megatrend, Condoleezza Rice chose the Philippines as an example:

“In February 2014, Manila Mayor Joseph Estrada signed a new law to provide relief to local commuters;  Manila, the sprawling Filipino metropolis of several million residents, was growing so fast that it was being overrun by traffic. Gridlock was everywhere. Commute time of five hours or more were common. To ease congestion, the city government passed an ordinance that banned cargo trucks on main roads from 5 a.m to 9 p.m. ‘ The days when buses and trucks were king of the road are over.’ Estrada proudly declared.

But the truck ban quickly led to trouble. Manila was also home to the country’s most important port, responsible for handling half of all overseas cargo transiting to the Philippines. Before Estrada’s ban, up to six thousand containers could be moved in and out of the port by trucks all day. Now the number was closer to thirty-five hundred. Shipping containers were quickly piling up. Loading containers were getting stressed. Streets inside the port complex were clogged with  containers, further impeding the flow of equipment and the efficiency of operations. At one terminal, cargo processing time ballooned from six days to ten. 

Among those affected was Toyota, the world’s largest automaker, which had made the Philippines a hub for Toyota suppliers who shipped to Thailand for final production. In 2014 thanks to the truck ban and a political crisis in Thailand , Toyota experienced a 10% decline in shipments from the Philippines and its exports fell noticeably short of the company’s $897 million forecast.

It was a very different world than in 1933, when Sakichi Toyoda started the Toyota Motor Corporation. In 1950, Toyota sold just 492 cars outside Japan. The year’s top selling car in the American market was the American made Chevrolet Bel-Air. In Moscow, it was the Russian made GAZ Pobeda, and in Paris it was the French Renault 4CV. By 2009 in contrast, Toyota was selling 80% of its vehicles outside Japan. By 2015, the automotive industry was so globalized that the  top selling car in the United States was a Japanese ( the Toyota Camry) and for the first time since the 1970s , the top selling car for a given  month was not the Russian Lada but the South Korean Kia Rio. The globalization for products and markets meant that a Japanese automaker selling cars in other Asian countries had to worry about the political action of a mayor in the Philippines.” 

As venture capitalist Marc Andreessen said: ”There is no substitute for having some sense of global perspective.”

Rise of connective technologies

The second megatrend shaping the risk landscape is technological. According to Rice, the spread of social media, cell phones and the Internet has empowered small groups in big ways. Already 48% of the world is online. There are more cell phones than humans. By 2020, more people in the world are expected to have mobile phones than running water or electricity. Connectivity is here to stay and it is generating profound transformation in politics, business and society. 

Whether it is the Arab Spring or a Bangladesh factory collapse or Lego’s remote association with Arctic drilling, connective technologies are making it possible for seemingly distant events or actions by a small group to have substantial effects. These changes in connective technologies offer new hopes for citizens seeking freedom in repressive societies and new challenges and opportunities for businesses everywhere.

Key trends in politics since the end of Cold War

During the Cold War, superpower rivalry between the United States and the Soviet Union set relatively clear dividing lines between adversaries and allies. Trade policies and security politics were more sharply delineated, too, with the world largely split between Western capitalist markets and the command economies of the Soviet bloc.

China’s rise, Russia’s aggression, strains within the Eurozone, nuclear proliferation, the disintegration of the state in parts of the Middle East and North Africa and the rise of non-state terrorist groups and cyber criminal networks make the current global context far more complicated.

According to Rice,  security  is not just about security anymore. International economic challenges have become tightly connected to security politics. Nations, led by China are playing more direct role in the world economy, investing in the infrastructure of other countries, making strategic investments using sovereign wealth funds and state owned enterprises and purchasing other governments’ debts. Sanctions have become a more frequent tool of statecraft across the globe...Changes in politics have borders more porous and economic issues more centrally intertwined with international security.

Breakfast at rustic mornings

This is not a megatrend but a culinary mega-experience. Catch it at Holiday Inn on its last Sunday brunch on the 27th of May.  It is based in Marikina so this is a rare opportunity for those living in the South. Portia Baluyut prepares popular comfort food which has been judged by food lovers as the best breakfast fare in Metro Manila.

Creative writing classes for kids/teens and adults

Young Writers’ Hangout on May 26, June 2, July 7 & 21 (1:30pm-3pm; stand-alone sessions). Online Writing for Adults with Tarie Sabido on June 30 (1:30pm-4:30pm).  All classes at Fully Booked BGC.  For details and registration contact 0945-2273216 or writethingsph@gmail.com.

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 Email: elfrencruz@gmail.com.

CONDOLEEZZA RICE GLOBALIZATION
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