Fundamental shifts in global markets
There is almost no company in the world today that is not affected by the world markets. Even if the company itself does not sell internationally, they certainly see more and more international competitors in their local market. Global value chains connect companies to each other in an interdependent web of companies around the world. This is the key to why most companies are hit by changes in the world market. We see multiple changes taking place simultaneously, some are interdependent and some just happen at the same time. The common trait is that they are changing the world market as we know it and will affect companies and societies, both in Sweden and globally.
The industrial revolution 4.0
The technology revolution is ongoing, where artificial intelligence, digitalization, automation, robotics and internet of things play key roles. The amazing prototypes we saw at technology fairs and future technology articles we read about in Scientific Magazines a decade ago is now happening for real in production units around the globe. This will fundamentally change the preconditions for production and bring big power shifts globally.
New regions and countries will emerge as more competitive than others, while others will fail to keep up with speed and development. Long term experience and heritage, combined with smart investments, will compete with regions without the burden of installed base and filled with hunger, numbers of people and a strong demand to succeed. Access to world class education, R&D, competitive institutions will be crucial all over the world.
Sweden has been a world leader in robotics, IT and telecom and has key competences at our universities, companies and in our governmental agencies. We need to secure competence and investments to keep our competitive position and closely monitor and take part in the high-speed development taking place in other regions of the world.
New business logics and paradigm shifts
Amid these big technology shifts, new products and services are unfolding. Some are truly revolutionizing, offering solutions to long term sustainability and health challenges for example, while others yet create new business models. Large global companies shift positions in the global value chain, for example going from selling products to providing services and small innovative start-up companies break-up value chains and quickly out-compete global players. New business logics in global value chains stir-up the competitive landscape on global markets.
The divide between traditional and new companies is increasing, not just when it comes to market value. Companies that have been around for generations struggle to keep up with the tidal wave. The rapid transformation causes uncertainty, and many sense that business risks are increasing.
Companies need to embrace global business intelligence and follow the competitive landscape. What is happening in my industry and what options do we have to adapt or innovate to take leadership? Include new trends in your strategies and form scenarios on how to act and how to mitigate and manage risks.
A tilt to Asia
Half of the world’s population live in the Asia Pacific region. The current growth rate of the middle class in this region is outnumbering the rest of the world, both in number and in speed. That is fuelling a demand for everything from infrastructure, schools, health care to consumer products, to name a few. With growing businesses in Asia, Asian companies will also grow globally to western local markets.
Companies will have to thoroughly understand the Asian companies in your industry. As the Asian companies have a very high development and growth ratio it is important to understand what the companies are today, and what and where they probably will be tomorrow. I see too few Swedish companies present in Asia today. We need to double our presence in Asia to be able to stay ahead in the global competitive scene of tomorrow.
Changed world order and increased geopolitical instability
Institutions and organization like the UN, WTO, NATO, EU and many more have been questioned and challenged during the last few years. These organizations too are struggling with the high pace of change in our world. For decades they have filled an important role and as they crumble, so does world stability.
As the US is withdrawing its leadership and support, the vacuum is rapidly filled by other players. Changes cause instability which opens for misunderstandings and increased risk. When the world needs leadership to battle this instability as well as the climate changes, the leadership is swaying.
Managing risks is crucial for stability in companies’ trade and investments. Instabilities require back-up plans. Make sure to plan for different scenarios in key markets of your global value chain, including aspects of global production, export, import and future investments. Have preventive actions ready and when the wind changes — act and react fast.
At the same time our rapidly changing climate and the questioning of democracy adds to the very complex and increasing instability in the world.
Trade and foreign investments are key to Sweden
In this changing environment with technology shifts, power shifts and new regions expanding, trade and continued international investments are more important than ever for small countries like Sweden.
We need to secure that Swedish companies are well prepared to act for continued competitive edge in world markets, and that the Swedish market continues to be an attractive investment destination for foreign companies. If not, we risk future jobs and welfare in Sweden!
Get in touch with us and let’s talk about how we can provide strategic advice, sales execution and operational support.