No longer just a trend, globalization is now the dominant business environment and we are seeing new patterns of trade clearly emerge.
Today, there is a net redistribution of wealth away from the rapid-growth economies — a process accelerated by the financial downturn and the economic recession that it has caused. Companies from those rapid-growth markets are now challenging the giants of the Fortune and Forbes lists.
We are witnessing a surge of investment from west to east, some of it speculative but much of it the result of by individual businesses decisions.
World trade has recovered strongly following the global financial crisis. But rather than a return to business as usual, we are now seeing new patterns of international trade emerge.
Businesses will need to adjust their strategies to reflect the changing patterns of world trade that are developing and are poised to intensify over the next decade.
Specifically, we think that by 2020:
World trade in goods will total around US$35t, two and a half times its value in 2010. At the same time, world trade in services will double to around US$6t.
China’s exports to Europe, at over US$1t, will be almost twice as large as US exports to Europe.
Intra-regional European trade will be worth over US$7t, still significantly higher than intra-regional Asian trade of US$5t, despite rapid-growth in Asia.
Europe’s exports to Africa and the Middle East will be around 50% larger than its exports to the US.
Europe will be the most important market for Sub-Saharan Africa’s exports, accounting for a quarter of all its trade, although still at a relatively small value of US$108b. By 2020, the total flow of services trade from Europe to Asia Pacific (excluding Japan) will be larger than to North America.