Emerging markets growth is imminent. “Global trade management will mature as a critical capability in managing growth in emerging markets,” according to research and recently released Predictions for 2014 by IDC Manufacturing Insight. Both manufacturers and their IT suppliers are looking at emerging global markets in Asia Pacific, South America, and the Middle East. This tendency has been a reoccurring theme in a variety of industry research papers that have been released recently.
Significant global change is about to happen in the global economy. Consequently, the global manufacturing sector will be searching for new opportunities, and supply chain management needs get ready for it.
Predicting expansion into emerging markets
In her article “Manufacturers See Emerging Markets as Ripe for E-Commerce Growth,” Heather Ashton, IDC Research Manager, clearly draws the attention to the increasing importance of manufacturers expanding into emerging markets and how their IT suppliers are supporting their initiatives. Once again, the importance of Third Platform technologies — big data, cloud, mobile, and social — is noted, which we have previously discussed here on EBN. (See: Building 3D Value Chains.)
Why emerging markets?
Earlier this year, the United Nations' Development Policy and Analysis Division published a report entitled “World Economic Situation and Prospects 2014.” The report examines the prospect growth in developing countries as well as economies in transition. According to the report's global press release (available for download here):
Growth in Brazil has been hampered by weak external demand, volatility in international capital flows, and tightening monetary policy, but growth is expected to rebound to 3% in 2014. A slowdown in China has been stabilized and growth is expected to maintain at a pace of about 7.5% in the next few years. India experienced its lowest growth in two decades, along with large current account and government budget deficits plus high inflation, but growth is forecast to improve to above 5% in 2014. In The Russian Federation, growth weakened further in 2013 as industrial output and investment faltered, and is expected to recover modestly to 2.9% in 2014. Among developing regions, growth prospects in Africa remain relatively robust.
With the most significant expected growth in Brazil, China, and India as we can see below, the total world gross product is forecast to increase at a pace of 3.0 in 2014 and 3.3 in 2015.
Looking on the bright side, but with caution
Despite the positive predictions, it is important to keep in mind some possible risks and uncertainties, including the unwinding of quantitative easing that may cause global financial turmoil and threaten the recovery; vulnerability of the emerging economies to external shocks; and a still fragile banking system. Further complicating the scene is the real economy in the EU, debt-ceiling negotiations in the US, and geopolitical tensions in Western Asia, as the United Nations warns in the video below:
A truly expanding international trade management
For years we have been talking about globalization. However, how globalized can the manufacturing industry be if most of the time the industries are only looking at the US and Europe? With emerging technology that will help the rise of global trade management growth in key emerging markets, we can finally start talking about a truly global economy.
How do you see this predicted trend for 2014 and the years to come?