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Legal Dimension

// RESULTS OF THE ANALYSIS OF the LEGAL Dimension

MEGATREND: CONSUMER PROTECTION

TRENDS FOR CONSUMER PROTECTION*

01

The alteration in consumer preferences, coupled with the facilitation of access to banking services and electronic payment systems, has substantially enhanced the importance of cross-border payments. Within the EU, the trade of goods in February 2023 alone amounted to €345.5 billion, representing a year-over-year increment of 7.9% [1]. Similarly, outside the EU, trade volumes with China and the United States reached approximately €500-600 billion, respectively [2]. This trend culminates in a marked escalation in the volume of cross-border payments.

01

Cross-border payments

Cross-border payments
02

Dangerous products pose a significant risk not only to consumers but also to businesses, incurring an annual cost of €11.5 billion within the EU [6]. Consequently, companies are compelled to implement organizational changes to maintain market access. The aim of product safety regulations is to safeguard consumers by reducing risks, with approximately 80% of these risks originating from products outside the EU. This underscores the criticality of international safety standards [7].

02

Product safety
regulations

Product safety <BR>regulations
03

Long-term customer loyalty is essential for business success, as even a modest 5% increase in consumer loyalty can lead to a substantial profit boost, ranging from 25% to an impressive 90% [3], [4]. This emphasis on retention is cost-effective, as it is 5 to 25 times less expensive to maintain an existing customer than to acquire a new one [3], [4]. Established customers are more likely to make repeated purchases, recommend the company to others, and are willing to pay higher prices, leading to lower operating costs [5].

03

Long-term consumer retention

Long-term consumer retention

*Each trend is represented by some of the statistics that have been collected during the first part of the project.

RISKS FOR SUPPLY CHAINS FROM CONSUMER PROTECTION

The probability (P) and impact (I) of the different risks identified are categorized according to 5 degrees (very low🔵, low🟢 , medium🟡, high🟠 and very high🔴). The risks have been assessed during the project based on literature analysis and validated with support of experts.

// RESULTS OF THE ANALYSIS OF THE LEGAL DIMENSION

MEGATREND: INFORMATION REGULATION

TRENDS RELATED TO INFORMATION REGULATION*

04

The amount of data in the world increases significantly. It is expected that the data volume in 2025 will be three times higher than in 2020 [8]. Companies are also confronted to protect this data, also establishing data protecting laws for each country individually. At the same time companies, over 50% if the companies are expanding their cybersecurity teams to be prepared against future attacks [9].

04

Data privacy

Data privacy
05

The management of an increasing volume of data necessitates capabilities encapsulated in the term 'data sovereignty,' crucial for handling the anticipated 181 zettabytes of data by 2025 [8]. This concept is particularly relevant to technologies like artificial intelligence (AI), which rely extensively on large data sets and are closely linked to data sovereignty and ownership [12]. Reflecting this interconnection, the global market for AI, which amounted to $383.3 billion in 2021, is projected to expand to $450 billion in 2022, and further to $554.3 billion by 2024 [10].

05

Data ownership and sovereignty

Data ownership and sovereignty
06

Companies are increasingly safeguarding their intellectual property by patenting innovations, a practice that has seen a significant uptick, especially in the field of artificial intelligence (AI). This surge in patenting is evident from the increase in AI-related patent applications, which soared from 2,560 in 2010 to an astounding 141,241 by 2021 [10]. Moreover, the last-mile delivery patent market is anticipated to grow to a value of $200 billion, further encouraging investments and the proliferation of new patents [11].

06

Patents

Patents

*Each trend is represented by some of the statistics that have been collected during the first part of the project.

RISKS FOR SUPPLY CHAINS FROM INFORMATION REGULATION

The probability (P) and impact (I) of the different risks identified are categorized according to 5 degrees (very low🔵, low🟢 , medium🟡, high🟠 and very high🔴). The risks have been assessed during the project based on literature analysis and validated with support of experts.

// RESULTS OF THE ANALYSIS OF THE LEGAL DIMENSION

MEGATREND: SOCIAL AND ENVIRONMENTAL REGULATIONS

TRENDS RELATED TO SOCIAL AND ENVIRONMENTAL REGULATIONS*

07

Corporate social responsibility (CSR) is gaining increasing importance in Europe, driven by social legislation and growing consumer expectations. Around 70% of European consumers now expect companies to fulfill their social responsibilities, reflecting a steady increase since 2016 in the importance placed on socially and ecologically responsible corporate actions [13]. CSR is closely aligned with the Sustainable Development Goals (SDGs) of the United Nations, aiming to address global challenges like poverty and climate change [14]. Europe has made significant progress, with Finland leading at an 81.68% compliance rate in achieving SDG targets, yet improvement is needed across all countries [13], [15].

07

Corporate social responsibility

Corporate social responsibility
08

In Europe, inclusiveness regulations aim for gender balance in leadership, with only one in three managerial roles held by women [16] and a push to elevate people of color, who comprise 30% of the full-time supply chain workforce but only 9% of vice presidential roles [17]. The global gender gap, with only 68.1% closed in 2022, indicates a slow pace towards gender parity in corporate boards, projected between 2039 and 2069 [18]. In the EU, women represent 46.1% of the workforce but hold a lower proportion of managerial positions, showing significant intra-European variations [16].

08

Inclusiveness regulations

Inclusiveness regulations
09

The management of waste and resources is crucial in today's urbanizing society, with concerns for environmental sustainability growing. By 2050, about 50% of the world's population will reside in cities, which are responsible for roughly 70% of GHG emissions and 50% of solid waste [21]. Currently, the EU recycles only 38% of waste, while the average European produces 5 tonnes of waste per year, with over 60% of household waste in some EU countries still sent to landfills [21], [22].

09

Waste and resources management regulations

Waste and resources management regulations
10

Awareness of the harmful effects of greenhouse gas emissions on the environment and human health has led to significant regulatory measures in Europe. The EU Commission's 2022 mandate requires large companies with over €150 million in sales to align with the Paris Climate Agreement, impacting supply chain transparency and partnerships [19]. This regulation offers strategic opportunities for SMEs. Interestingly, in the third quarter of 2022, the EU saw a 3% GDP growth accompanied by a 2% increase in greenhouse gas emissions, indicating a slight decoupling of economic growth from emissions, with increases observed in 16 out of 27 EU Member States [20].

10

Emission control regulations

Emission control regulations

*Each trend is represented by some of the statistics that have been collected during the first part of the project.

RISKS FOR SUPPLY CHAINS FROM SOCIAL AND ENVIRONMENTAL REGULATIONS

The probability (P) and impact (I) of the different risks identified are categorized according to 5 degrees (very low🔵, low🟢 , medium🟡, high🟠 and very high🔴). The risks have been assessed during the project based on literature analysis and validated with support of experts.

Suggested References:

[1] “Euro area international trade in goods surplus €4,6 bn,” 2023. https://ec.europa.eu/eurostat/web/products-euro-indicators/w/6-20042023-AP

[2] “International trade in goods – Statistics Explained.” https://ec.europa.eu/eurostat/statistics-explained/index.php?title=International_trade_in_goods#United_States_largest_partner_for_exports.2C_China_for_imports  (accessed May 15, 2023).

[3] Havard Business Review, “The Value of Keeping the Right Customers”, 2014. https://hbr.org/2014/10/the-value-of-keeping-the-right-customers  (accessed May 15, 2023).

[4] IBM, “What is customer rentention? | IBM”, 2021. https://www.ibm.com/topics/customer-retention  (accessed May 15, 2023).

[5] F. Reichheld, “Prescription for cutting costs,” 2001

[6] European Commission, “Daily News 29 / 11 / 2022”, 2022. https://ec.europa.eu/commission/presscorner/detail/en/MEX_22_7275 (accessed May 23, 2023).

[7] “SAFER PRODUCTS FOR ALL 2022 RESULTS DG Justice and Consumers”, doi: 10.2838/174316.

[8] IDC, “Daten – Volumen der weltweit generierten Daten 2025 | Statista,” 2021. https://de.statista.com/statistik/daten/studie/267974/umfrage/prognose-zum-weltweit-generierten-datenvolumen/ (accessed May 16, 2023).

[9] Global Digital Trust Insights Survey 2021

[10] Statista, “Künstliche Intelligenz | Statista,” 2022. https://de.statista.com/statistik/studie/id/116984/dokument/kuenstliche-intelligenz/ (accessed May 16, 2023).

[11] “Global last mile delivery market size 2020-2027 | Statista.” https://www.statista.com/statistics/1286612/last-mile-delivery-market-size-worldwide/ (accessed May 15, 2023).

[12] D.-I. Günther Schuh Dr-Ing Volker Stich Max-Ferdinand Stroh et al., “BMWK_KI_2022,” 2022, Accessed: May 16, 2023. [Online]. Available: www.bmwk.de

[13] Statista Research Department, “Nachhaltigkeit in Unternehmen – Statistiken rund um CSR | Statista,” 2022. https://de.statista.com/themen/7808/nachhaltigkeit-in-unternehmen/#topicOverview  (accessed May 17, 2023).

[14] United Nations, “THE 17 GOALS / Sustainable Development .” https://sdgs.un.org/goals  (accessed May 17, 2023).

[15] “Europe Sustainable Development Report 2022.” https://eu-dashboards.sdgindex.org/map  (accessed May 09, 2023).

[16] D. Born and C. Krys, “Trend Compendium 2050 Six megatrends that willshape the world,” 2020. Accessed: May 17, 2023. [Online]. Available: https://www.rolandberger.com/de/Insights/Global-Topics/Trend-Compendium/

[17] S. Hippold, “Supply Chain Diversity: 3 Learnings From the Gartner/ASCM DEI Survey,” 2022. https://www.gartner.com/smarterwithgartner/3-learnings-for-more-supply-chain-diversity-equity-inclusion  (accessed May 15, 2023).

[18] “Global Gender Gap Report 2022 | World Economic Forum,” 2022. https://www.weforum.org/reports/global-gender-gap-report-2022/digest/  (accessed May 15, 2023).

[19] European Commission, “OECD Guidelines for Multinational Enterprises,” OECD Guidelines for Multinational Enterprises, 2011 Edition, Sep. 2022, doi: 10.1787/9789264115415-EN.

[20] “EU economy greenhouse gas emissions in Q3 2022 – Products Eurostat News – Eurostat.” https://ec.europa.eu/eurostat/web/products-eurostat-news/w/DDN-20230215-1  (accessed May 09, 2023)

[21] European Commission, “Waste and recycling.” https://environment.ec.europa.eu/topics/waste-and-recycling_en  (accessed May 17, 2023).

[22] OECD, “Towards a more resource-efficient and circular economy The role of the G20,” 2021.