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Dr Patrick Dixon Chairman Global Change Ltd !
The Future of Trade
Since 1980, global trade has grown at twice the rate of production, but what about the next 30 years ?!
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Wild Cards
Complexity and scale create risks
Title Text
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Trade strategies often overtaken by (reactions to) events
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World can change faster than you can hold a board meeting
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Trade economics
WGP 1980-‐2013 (%,constant prices)
US GDP 1980-‐2013 (%,constant prices)
EU GDP 1980-‐2013 (%,constant prices)
Vietnam GDP 1985-‐2011
$3.4 trillion !
$2.4 trillion !
Reserves
>40% World GDP in Asia by 2015�IMF -‐ adjusted for Purchasing Power Parity �50% populaUon in India under 25 years old
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!World !GDP % !
over 500! years
“South to South” Trade will grow !
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Expect huge growth in component trade
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Share of total trade in 2011
Watch Africa and Latin America
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Real GDP and Trade Projections to 2030 - growth
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Trade demographics
300 million move to cities in China 475 million to cities in Africa !
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2030
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Land-locked nations 40% less trade ! Sea trade will impact future cities!Landlocked nations lose 40% growth!
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Trade logistics
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Future of GlobalisaUon and Scale
11% wage inflaUon a year in China plus currency risks
Nearshoring Boom
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Manufacturing in Mexico
will grow rapidly for US market
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Retail Trade
In many EU naUons, up to 70% of retail spending is in <8 companies
e-‐commerce $1.5 trillion 2014 12% all UK retail
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Most online sales using
mobile in UK !
Over 4000 road hauliers in EU
1.3bn home delivered e-‐com items in UK a year (+12% pa)
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Radical Trade
$40 Trillion Green Tech Boom driven by oil price, cost cuts, green activism
Shale gas 33% US supplies 3.3m US jobs
More oil produced than Saudi by 2020 !
200 years global supply Up from 60 years in 5 years
Germany Power Surplus
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•In June 2013 electricity prices became negaUve -‐EU150 / MWhr
30% EU trucks run empty
150kms by road can cost more than 10,000kms by sea
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1 week extra shipping time reduces trade by 7-26% !
20% additional costs in low income !v middle income countries
$226bn on Mexico rail, road, ports since 2006 SUPER HUBS
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Customs / border delays - can we eliminate 10% costs ?!
Internet of Things
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Dr Patrick Dixon
FUTURE OF TRADE globalchange.com
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