THE NEW GLOBAL WORLD ORDER What The Emergence of China, India and Brazil Means for You

THE NEW GLOBAL WORLD ORDERWhat The Emergence of China, India and Brazil Means for You

John N. Doggett, JD, MBA, Senior LecturerGlobal Management, Entrepreneurship & Sustainable Energy

McCombs School of BusinessSenior Research Fellow, IC2 Institute

University of Texas at [email protected] www.jndoggett.com

November 12, 2010

We Are In The Eye of a S.I.P.

Strategic Inflection Points Are Scary

• “A strategic inflection point is a time in the life of a business [or a country] when its fundamentals are about to change. That change can mean an opportunity to rise to new heights. But it may just as likely signal the beginning of the end.”

• Andy Grove, Only the Paranoid Survive

Deep Water Horizon

27,000 Abandoned Wells . . .

. .

Who is the Enemy?

IT’S THE ECONOMY, STUPID!Four Words Say It All

Deficits Forever . . . ?

The World’s Debt Cycle

Greece is Just The Beginning

The World Is Upside Down

Japan Had A Lost Decade

The Worst Job Loss Since WW II

What Will We Make in the Future?

If One Fails To Learn From History

EMERGING FROM THE MISTRegaining Their Place in History

At the End of WW II

• Europe and Asia had suffered unimaginable destruction.

• Most of the factories of our competitors had been destroyed.

• For a brief period in history, American manufacturing firms were the only game in town.

• We assumed that Third World Countries would always be dirt poor colonies.

• We assumed that Third World Countries would never be able to produce innovative products that could compete with our products.

• We Were Wrong On Both Counts.

Assume is a Very Dangerous Word

Be Careful What You Wish For

• We told the world that our way of life was better than Communism or Socialism.

• CNN and Hollywood showed the world an irresistible vision of American Life.

• Then the Unthinkable happened.– On November 9, 1989, the Berlin Wall Fell– On Christmas Day, 1991, the USSR ceased to exist.

• We had won the Cold War.• And most of the world wanted to live like US.

Birth of the BRICs

• In 2001, as the Internet Bubble was collapsing and the stock market was imploding, Goldman Sachs predicted that four countries would dominate global economic activity in the 21st Century.

• Brazil• Russia• India• China

The Axis of the Future

Is Goldman Sachs Crazy?

• 6,100% Annual Inflation (1994)

• Collapse of the Ruble (1998)

• Two Weeks of Foreign Reserves (1991)

• The Cultural Revolution (1966-1976)

Largest Countries By Population1. China 1,330,141,295 (slightly smaller than the US)

2. India 1,173,108,018 (slightly more than 1/3 the size of the US)

3. United States 310,232,863 (6.25% of the earth’s land mass = 424,378,888)

4. Indonesia 242,968,342 (slightly less than 3X the size of Texas = 25 million)

5. Brazil 201,103,330 (slightly smaller than the US)

6. Pakistan 184,404,791 (slightly less than 2X size of California = 37 million)

7. Bangladesh 156,118,464 (slightly smaller than Iowa = 3 million)

8. Nigeria 152,217,341 (slightly more than twice the size of California)

9. Russia 139,390,205 (approximately 1.8 times the size of the US )

10. Japan 126,804,205 (slightly smaller than California)

11. Mexico 112,468,855 (slightly less than three times the size of Texas)

12. Philippines 99,900,177 (slightly larger than Arizona = 6.6 million)

13. Vietnam 89,571,130 (slightly larger than New Mexico = 2 million)

CIA World Factbook –November 11, 2010

National GDP in 2009 (purchasing power parity)

Country GDP 2009 Growth %1. United States $ 14,140,000,000,000 - 2.6%2. China $ 8,748,000,000,000 9.1%3. Japan $ 4,150,000,000,000 - 5.3%4. India $ 3,570,000,000,000 7.4%5. Germany $ 2,810,000,000,000 - 4.9%6. United Kingdom $ 2,128,000,000,000 - 4.9%7. Russia $ 2,110,000,000,000 - 7.9%8. France $ 2,097,000,000,000 - 2.5%9. Brazil $ 2,013,000,000,000 - 0.2%10. Italy $ 1,739,000,000,000 - 5.1%11. Mexico $ 1,465,000,000,000 - 6.5%12. South Korea $ 1,364,000,000,000 0.2%13. Spain $ 1,362,000,000,000 - 3.6%14. Canada $ 1,279,000,000,000 - 2.5%

CIA World Factbook – November 11, 2010

Elephants Emerging from the Mist• Total World Population = 6,768,181,146• BRIC Population = 2,843,742,848 (42%)

• Total World Land Area = 174,814,000 sq. km. (- oceans)

• BRIC Land Area = 38,471,715 (22%)

• Total World Gross Domestic Product = $58.15 Trillion (Official Exchange Rate)

• Total World Gross Domestic Product = $69.98 Trillion (Purchasing Power Parity) (p.p.p.)

• BRIC Gross Domestic Product (p.p.p.) = $ 16.44 Trillion (23.5%)

Source: CIA World Factbook – November 11, 2010