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// RESULTS OF THE ANALYSIS OF the Economic Dimension

MEGATREND: GLOBAL TRADE SHIFT

TRENDS RELATED TO GLOBAL TRADE SHIFT*

01

Global FDI (Foreign Direct Investment) flows in the second quarter of 2022 were down 31% from the first quarter and 7% less than the quarterly average of 2021. The negative trend reflects a shift in investor sentiment due to the current economic environment [2].

01

Restructured Investment Flows

Restructured Investment Flows
02

The estimated cumulated shortfall for the level of goods exports amounted to 6.7% for the euro area and 2.3% globally in 2020. Shipping volumes have recovered since the trough in mid-2020 [8]. Global real GDP growth is expected to increase in the first quarter of 2023 but remains subdued [9].

02

Export Growth
(On recovery)

Export Growth <br><FONT SIZE=5>(On recovery)</font>
03

There is a temporary pause in globalization, a re-alignment of geopolitical alliances is taking shape [3]. 48% of companies use diversification as their primary supply chain reconfiguration strategy, only 12% primarily regionalising, while just 5% were reshoring [4].

03

Reorganized Globalisation

Reorganized Globalisation
04

Global economy would expected to experience a bounce, growing at an average of 3.5% a year, compared with consensus forecasts of 2.8%. That growth could directly add $11 trillion to global GDP by 2030, about $8 trillion of that would come directly from emerging economies [5].

04

Deceleration of the Economic Growth in Emerging Economies

<FONT SIZE=5>Deceleration of the Economic Growth in Emerging Economies</font>
05

HICP inflation is projected to average 5.3% in 2023. The baseline projection sees headline inflation declining from 10% in the 4th quarter of 2022 to 2.8% in the 4th quarter of 2023, then hovering around 3% in 2024, before falling to the EU Central Bank’s (ECB) inflation target of 2% only in the 3rd quarter of 2025 [6]. However, inflation in Europe keeps increasing and Euro area annual inflation reached 7% in April 2023, up from 6.9 % in March 2023[7].

05

Increasing Inflation

Increasing Inflation
06

Since the pandemic, tech companies grew 2.3 times more than their non-tech counterparts. The Global Startup Economy Value Creation in 2022 was $6.4 Trillion [1].

06

Emergence of Born-Global Firms - Internationalization

<FONT SIZE=5>Emergence of Born-Global Firms - Internationalization</font>
07

Raises in transportation costs of 25% or more have been reported and 71% of logistics firms reported an increase in shipping costs that “many businesses will not be able to absorb”. 35% of logistics companies reported a decrease in orders, 12% say orders had fallen by 25% [10].

07

Transportation Costs Increasing

<FONT SIZE=5>Transportation Costs Increasing</font>

*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 GLOBAL TRADE SHIFT

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 ECONOMIC DIMENSION

MEGATREND: DIGITAL ECONOMY

TRENDS RELATED TO DIGITAL ECONOMY*

01

The revenue of the digital experience platform industry would increase at a CAGR of 10.9% between 2019 and 2025, increasing from a market value of $8.49 billion to nearly double by 2025 [12].

01

Digital Platforms

Digital Platforms
02

Global cashless payment volumes are set to increase by more than 80% from 2020 to 2025, from about 1tn transactions to almost 1.9tn, and to almost triple by 2030 [11].

02

Digital Currencies / Cashless Payment

Digital Currencies / Cashless Payment
03

The total value of the global sharing economy predicted to increase to $600 billion by 2027, from $113 billion in 2021, with a CAGR of approximately 32% [13].

03

Sharing Economy - B2C - C2C

Sharing Economy - B2C - C2C
04

Global fintech lending industry generated $449.89 billion in 2020, and it is forecasted a generation of $4,957.16 billion by 2030, witnessing a CAGR of 27.4% from 2021 to 2030 [14].

04

The Financial Technologies (FINTECH) Revolution

The Financial Technologies (FINTECH) Revolution

*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 DIGITAL ECONOMY

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] Startup Genome and the Global Entrepreneurship Network (GEN), “Global Startup Ecosystem Report (GSER),” 2022.

[2] “Investment Trends Monitor, United Nations Conference on Trade and Development ,” UNCTAD, no. 43, 2022.

[3] B. Baschuk, “Globalization 2.0 Will Realign Trade and Make Things More Expensive,” Supply Lines Newsletter – Bloomberg, May 19, 2022.

[4] H. Gong, R. Hassink, C. Foster, M. Hess, and H. Garretsen, “Globalisation in reverse? Reconfiguring the geographies of value chains and production networks,” Cambridge Journal of Regions, Economy and Society, vol. 15, no. 2, pp. 165–181, Jun. 2022, doi: 10.1093/cjres/rsac012.

[5] The McKinsey Global Institute, “Outperformers: High-growth emerging economies and the companies that propel them,” Sep. 2018. Accessed: Apr. 18, 2023. [Online].

[6] “Macroeconomic projections March 2023,” European Central Bank (ECB) Eurosystem.

[7] “Inflation in the euro area. Data from April 2023. Extracted on 2 May 2023. Next planned article update: 17 May 2023.,” EUROSTAT.

[8] European Central Bank, “Economic, financial and monetary developments,” ECB Economic Bulletin, Issue 6, 2021.

[9] Economic Central Bank, “Economic, financial and monetary developments,” ECB Economic Bulletin, Issue 2, 2023.

[10] W. Philips, “Logistics firms ‘unable to absorb surging costs,’” Supply Management, May 13, 2022.

[11] “PWC Navigating the payments matrix Charting a course amid evolution and revolution. THE FUTURE OF FINANCIAL SERVICES – PAYMENTS 2025 & BEYOND.”

[12] “Digital experience platform revenue worldwide 2019-2025,” Statista, 2023.

[13] “Value of the global sharing economy 2021,” Statista, 2023.

[14] AMR (Allied Market Research), “FinTech Lending Market to Reach $4,957.16 Billion, Globally, By 2030 at 27.4% CAGR: Allied Market Research ,” PRNewswire news release, Nov. 15, 2021.