Middle class spending is crucial for economic growth. So now, with Western middle classes in debt and distress, many economists look to the new emerging-market middle class as the foundation for a new era of global prosperity. However, companies need new approaches to penetrate the developing world’s increasingly prosperous consumer markets.
The last couple of years 70 million people in developing countries joined the middle class, with incomes between $6,000 and$30,000. It is estimated that within 20 years they will surpass their Western pears when it comes to global spending power. The focus is mainly on Asia and it is estimated that in about a decade they will pick up the slack left by overspent America. Emergency market spending is in fact already bolstering the balance sheets of many Western firms.
World focusing on China and India
Needless to say the world is focusing on China and India due to its huge populations as well as rapidly rising economies and middle classes. Correct if you look at the amount of people. But by looking at the issue that way we overlook a very potent and prosperous group of people. Saudi Arabia's retail sector is actually predicted to grow by $50bn by 2014 as more international brands look to move into the kingdom that has overtaken better known retail destinations like Hong Kong, Russia and Japan when it comes to attracting brands. Only London and Dubai are attracting more retailers and shoppers.
Don't forget Saudi Arabia and the Gulf states
When it comes to per capita spending I'm certain that the middle classes in Saudi Arabia and the other Gulf countries not only earn more but also spend far more than their Asian counterparts. It's not for nothing many middle class Indians chose to work in the Gulf, despite the fact that they are paid less than the locals. Salaries are higher and you pay no income tax in the Gulf.
Shopping for entertainment
Shopping is a top leisure activity and when the weekend starts the malls are filled with people who literally shop until they drop. A woman who works in a Chanel shop in the area told me an average customer spends an absolute fortune every time they come to the shop. And the same goes for more expensive items like cars, jewellery and electronics. Considering the importance the Chinese put on saving money, I would be very surprised if middle class people in China, with the exception of some mega rich, spend that much.
Richard Branson and Martha Stewart eyes Middle East expansion
The world, certainly multinationals, are already managing the economic spending shift to Asia very well. But quite a few Western companies are forgetting about Saudi Arabia and the Gulf, which in my opinion could prove costly especially for companies selling expensive consumer goods.
So it comes as no surprise thatVirgin Mobile boss Sir Richard Branson and Qatar Telecom (Qtel) are expanding their partnership and eyeing a number of new markets in the Middle East. And US lifestyle guru Martha Stewart is extending her magazine publishing empire into the Middle East with the launch of several of her namesake titles in countries across the region
A large amount of Asian and Middle Eastern households have incomes today that position them just below the global middle class threshold and so increasingly large numbers of them are expected to become middle class in the next ten years.
Emerging middle classes have different tastes
Emerging-market leaders know that the Western system created the worldwide boom of the last quarter century that ended when Lehman Brothers collapsed. Now the boom has moved to emerging markets, and their leaders will increasingly choose to alter Western models to suit their countries. Consequently the fact that all eyes are on Asia and the Gulf is forgotten could turn out to be a fatal mistake. The new emerging middle classes are supporters of globalization but highly nationalistic. And there is a vast difference between nationalism in China and, say, Kuwait.
Kingdom to invest $100b in transport and logistics
And not only is KSA and the Gulf a key market for consumer brands. All other products and services will find that what they have to offer is in high demand. Saudi Arabia is, for instance, targeting $100 billion of investment in port, airport, rail, road and logistics centre projects over the next decade in a push to make the kingdom one of the world’s leading transport and logistics hubs by 2020.
Back to emerging middle classes in general, we can conclude that the Chinese bought more cars than Americans last couple of years, and that India has as many Internet users as the U.S. Also it is estimated that by 2030, more than nine out of every 10 mobile phones will be owned by people in the developing world. Coca-Cola actually forecasts a doubling of worldwide revenues to $200 billion over the next decade, thanks to another 1 billion people expected to join the middle class by 2020. So Western companies who haven't yet focused on developing countries' middle classes should jump on the band waggon swiftly and not overlook the Gulf.
If so, you personify the findings of Edelman's 2012 Trust Barometer. Watch Chrystia Freeland talk to Richard Edelman about the current erosion of confidence in the workplace and governments:
Respondents in 25 countries indicate trust in government have declined with nine percent and that Brazil is the country where confidence in elected officials have fallen most.
Not surprisingly the debt ceiling debacle in the US, bailouts in the European Union, corruption in Brazil and India as well as the nuclear disaster in Japan are the main reasons behind the mistrust. And it's interesting to note that Westerners have lower faith in their governments than citizens of the developing world.
Half the public distrust companies
Businesses need to be regulated according to half the participants in the survery. And they are of the opinion that governments are not doing enough to rein in immoral companies. A high number of people would also like their authorities to increase consumer protection and ensure ethical corporate behaviour. It comes as no surprise that banks and financial institutions are least trusted.
Trust in social media on the rise
Traditional media and online search engines are still the most trusted sources of news and information but social media including blogs, networking sites and content sharing sites showed the biggest increase in trust this year. Surprising, considering the amount of incorrect information circulating on such forums.
Do you agree with the findings of the 2012 Trust Barometer and what Richard Edelman had to say? Have we lost confidence in authority figures? How can they build trust again and manage their reputations?There is now an opportunity for governments and businesses to lead in ways that earn trust. How would you like to see that done? Can they convince the citizens of the world that they are not about self interest but taking their responsibilities in society? Do you agree with Richard Eberman that confidence in governments and businesses will start rising again this year?
The prospect of war with Iran is headline news. But how prepared are we for cyber threats? Or worse, the prospect of cyber space turning into a nuke? Devote four minutes to listen to what a high level delegation from Europol, Israel, NATO, the EU and US has to say on cyber security:
According to a new report on cybersecurity by Security & Defence Agenda, a think tank in Brussels, Sweden, Finland and Israel are best prepared for cyber attacks. Better even than the United States, Germany and Britain, which is alarming since the latter three are more likely to be targeted than Sweden and Finland. India, Brazil and Mexico on the other hand, rank near the bottom.
More than half the respondents believe a cyber arms race is already going on and 36% are of the opinion that cybersecurity is more important than missile defence. Nearly half said that it's as important as border securiry.
Global agreement to share information recommended
Governments and private sector companies need to cooperate better on sharing information about possible threats. The public also needs to be educated and more attention being given to secure smart phones and cloud computing.
China lagging behind
Considering how active China is reputed to be in cyber warfare, it's surprising that the report finds that they are no better equipped to defend themselves than countries like Poland and Austria. Makes you wonder if the talk about China's super elite Cyber army is exaggerated? If not, why don't they make sure they are better protected against attacks? Provided, of course that the report has the right information.
Apparently the West is so far scrambling to bolster its capabilities as I wrote about in Cyber Warfare – hackers to the rescue? six months ago. Hackers are both a concern and possible assett when it comes to defense in cyber space. A few days ago Anonymous released a recording between the FBI and UK police discussing efforts against hackers. Once again, can't avoid thinking that it would be much better if the members of Anonymous and other such groups could give governments a helping hand. Let's face it they exist and could use their skills in beneficial ways.
US warns against Iran, China and Russia
On January 31st James Clapper, US intelligence officer told the senate that Iran is accelerating its activity in cyber space and warned that China and Russia have aggressive capabilities. Iran, Russia and China on the other hand accuse the United States of being the main agressor in cyber space.
What's your opinion? Do you agree that an arms race is already going on in cyber space? Are Iran, China and Russia as active as we are led to believe by US intelligence and the news? Did you know that 1,000 attacks a minute take place world-wide? Is a full scale online war more likely than a nuclear conflict? Is enough being done to protect us against attacks in cyber space? What more could be done? Will it actually go as far as an online war? If so, will it paralyze the world and who will be the winner?
Can't help wondering what the future has in store for newspapers? It's telling that even the New York Times are slashing employee benefits and laying off staff. Watch a very interesting interview with investigative journalist Russ Baker putting what's happening at the paper into a broader context:
How can newspapers find 90% of their revenues online?
When you look at the newspaper industry you find that they still get 90% of their revenues from ads in the printed paper.
Online ad revenue is on the rise but still only a fraction of the money papers get from printed ads. One huge problem is that studies have shown that most people ignore online ads. And another is psychological in the sense that people prefer to pay for something they can hold in their hands.
Most online advertising not on news sites
In total more money is spent online but search, engines such as Google ,get much of it and news media has come to accept that they are unlikely to get the kind of revenues, or maybe rather profits, that they get from print advertising. They know they need to find new and smarter ways since ads and subsciptions alone will not work online. For some companies even the experimenting required is a bit of a challenge.
But one notable exception is US magazine publisher,Atlantic Media, who reported last year that its online advertising revenue was higher than for their printed magazines. One reason for that could be that it has lower advertising prices than similar publications. Maybe something that could be developed online as well. Provided it doesn't result in too many ads, since that will turn readers away.
Enter video
Advertisng on videos online increased with 39% in 2010 and that trend is likely to continue. No wonder most media companies online sport more and more videos. Mainly without advertising though. So that seems to be an area that could be more exploited. No wonder Helsingborgs Dagblad, a profitable Swedish local newspaper is moving heavily into video reporting.
Targeted banner ads one possibility
Targeting the interests of the individual with the "right" ads, like on Facebook is also on the rise. Media here, in theory, has the potential to know what their different readers want and display ads that should appeal to them.
Google CEO Eric Schmidt apparently told the New York Times in 2010 that while his company was built around search advertising their next big business is targeted display. Consequently on January 24th this year Google annonced their new online privacy policies that enable them to use information to target online ads at users more accurately. It's not possible to opt out and the new rules will be implemented on March 1st.
Let's see what happens to advertising on Google after that. Not least since revenue from their "pay per click" ads have declined.
Consumers not keen on online subscriptions
More and more of us are reading news online. But despite that, the majority of people are not prepared to pay more than $5 a month for subscribing to online news. So no matter how we look at it, subscriptions will, as always, be a small part of revenues.
The jury is still out on if paywalls, like for instance the New York Times and the Economist use, will work. But it's unlikely a paywall is a viable alternative for smaller, less famous publications.
Sponsorship actually works for some media companies so that may be another source of revenue. Some online media outlet operate as a tax-exempt, nonprofit corporation funded by donations and grants. So we will most likely see more of that as well.
Future journalists freelancing
Unfortunately what just happened to staff at the New York Times is likely to continue for the simple reason that lower advertising revenues means cutting expenses. So in the future most journalists will be independent and work on their own.
It seems to me that the likely way forward are newspapers written mainly by freelance journalists and more news coming to you in video format. And online news may not have to be expensive if you are prepared to accept that newspapers use the information they have on you to target you with the appropriate banner ads.
Very much doubt there will be an outcry from readers about targeted ads. Let's face it, Facebook has been getting away with doing so for a long time, and Google is now going down that route as well. How likely is it that people will suddenly stop using Google and all its services? Can't see why readers would prevent newspapers from doing what Facebook and Google are doing to their privacy?
What's your opinion? How do you see the future of online newspapers? Do you agree with me that video and tageted banner ads will be more prominent in the future? Or do you know better ways for newspapers to make money online? What alternative sources of revenue can you imagine? Print journalism will be around for quite some time since that's still where the money is. But how will newspapers survive – and preferably thrive – once the printing presses stop rolling?
You can't hide lack of energy and motivation since it's evident from how you carry yourself. Sit down somewhere and watch people walking and you will quickly notice whose got what it takes and who hasn't. How are you going to be able to move forward and create new beginnings if you don't have it? Who would hire or do business with someone without the drive and energy to succeed?
What kind of exercise you choose is entirely up to you. Personally I thrive on swimming, yoga, roller-blading and walking.
To be inspired will not be enough if you don't have both the physical and mental energy it takes to succeed. So now that many of you are between jobs you have no excuse for not exercising, sleeping enough and making sure you get the nutrition you need, both for your health and mental wellbeing.
At least half an hour a day
When you are tired and under stimulated you don't perform well and your results consequently leave a lot to be desired. So now is the time to change that. You have the time and it's not more expensive, or difficult, to lead your life in ways that give you energy. Are you getting the nutrition you need through what you are eating? Are you exercising enough? At least half an hour a day, now that you have the time? Are you sleeping enough? Have you got positive relations with the people around you? How about goals? Have you set them yet? And are you taking time out for yourself to be able to think and reflect on what is important to you and why? Not to mention learning from what is not working out the way you intended?
What kind of exercise do you do?
There is no set formula for this since we are all different. What kind of exercise you choose is entirely up to you. Personally I thrive on swimming, yoga, roller-blading and walking. But if you prefer football, jogging or whatever that's what you should do. Exercising makes your body produce endorphins, which is like a natural feel good drug. And yoga has the added benefit of completely removing stress if you breathe properly while doing it. Not to mention pranayama, the yogic breathing exercises, that have amazing benefits on your health an well-being. Sauna and steam baths are great too since you sweat out the negative energy.
You are what you eat!
Whenever I'm in a supermarket anywhere in the world I'm amazed at what people have in their trolleys. Not as bad as junk food, but almost. There is very little nutrition left in such food, so how about eating more fresh vegetables, fruit, whole-grain bread and other good sources of fibre? And to be on the safe side, take at least a multivitamin supplement to make sure you get everything you need.
Sleeping enough to recover and repair is essential. You may be one of the lucky ones that thrive on four hours a day or you may need eight? Personally I'm fine as long as I get six hours. Anything less and I'm tired. You know how much you need, so just make sure you get it.
Avoid negativity
Being surrounded by negative people have a really bad impact on you. How about trying to improve relations, when possible? Failing that I would suggest you just ignore negative people and the discouraging comments you get. Simply make an effort to be tolerant and accept that what he/she thinks is his/her opinion. We're all different and whose right and whose wrong?
Regarding goals, if you don't know what you are aiming for, where will you end up? Now is the time to decide what you really want to achieve in your life. But don't be too rigid since that may prevent you from even noticing other lucrative possibilities that come your way.
Make plans and evaluate
Getting time for yourself may be difficult, but it's essential in order to move on. If nothing else how about thinking through what happened during the day and how you could have done better just before you go to sleep? And then first thing in the morning thinking through and deciding what you would like to achieve during the day.
And whatever you do, don't feel sorry for yourself or, worse, start drinking or doing drugs, because then you really are doomed. Sitting at home watching television is not a good idea either. Read inspiring books about people who have achieved something, Dale Carnegie or other motivating authors.
Scientists have actually proven that flowers and plants make us more creative and able to come up with innovative solutions to problems. So get out in nature and get energy. Not only is it delightful but it also brings you closer to your goals. Even buying a plant will have a positive affect on you. So what are you waiting for, make an effort, get more energy and succeed! No health – no wealth, is another way of putting it.
In my opinion the mission of a successful leader is to make sure colleagues know more than he/she does about the tasks each of them are carrying out. Have interviewed a multitude of heads of states and without failure they had several advisers present who, if necessary, filled in regarding details and areas the president didn’t know about.
Nobody’s perfect
So why do so many heads of companies and organisations believe they have to know everything there is to know? In today's business climate it's impossible to master everything. On top of it it's futile to try to know everything. Nobody does. So don't make your business dependent on one or two people only.
It's the leaders job to make sure that the company rests on a huge platform of knowledge and competence. And to ensure the staff really know what they are doing, not that you beat them to it in every respect.
Are you competing with your staff?
Are you a leader that gets stressed by colleagues knowing more than you do? How about looking at it as the day your staff are more skilled in what they are doing than you are, you have succeeded?
Leaders that competes with their colleagues are detrimental to the organisation they are running. Compare that with Ronald Reagan, a good example of a leader who didn't know everything but surrounded himself with experts that did and listened to them. Another prime example is Richard Branson who delegates to qualified people. And it's no secret that they are both regarded as very successful leaders. So how about following in their footsteps and make sure you thoroughly master the art of leadership and allow your colleagues to be experts at what they are doing? If you do, you will not only succeed as a leader but make sure your business flourish as well. Provided of course you listen to the experts you surround yourself with.
You can have a fresh start any moment you choose, for this thing we call 'failure' is not the falling down, but the staying down, Mary Pickford once said and it's so true. And only you can do it. If you wait for others to lift you up, not only will you be disappointed – you will stay down.
Get back in the saddle again and look at your problem in ways that will allow a solution.
Now it's time to make an effort and make sure your life and/or business benefits. Many of you actually ask me to write more since you are feeling better after reading what I write. Makes me wonder if you feel good long enough to get back in the saddle again? Because you simply have to.
Are you brave?
These are difficult times and it's essential that you realise that the problem isn't you and get the courage to move on. And it has to come from within you. I appreciate that it's hard but it's in times like these that you separate "winners from loosers"
Opportunities disguised as problems
Being positive is crucial and to look at your problem in ways that will allow a solution. Maybe you have to look at possibilities you never considered before? But no matter what, it will be a question of persevering until you succeed, and not allow yourself to feel down. And don't forget that we are often faced with great opportunities disguised as insoluble problems
Are you "problem friendly"?
How creative are you? Ever thought about the fact that creative people are “problem friendly”? Don't get me wrong, nobody is delighted to deal with problems but now is the time for you to roll up your creative sleeves and find opportunities to improve your life. How? The solutions will be different for each of you. We all have problems that need to be solved every day. Even if it's just that we got dirty and have to wash. There's no running away from problems since everybody has them. If someone says they don't, they are simply not telling the truth. So the important thing is to try to find solutions that will enrich your life.
Don't discard your ideas
Don't discard the ideas you have, value them instead and take the challenge of developing them. If you are creative you will be persistent and optimistic until you succeed. If you, or others around you, dismiss your ideas too early you will never get anywhere. Many of the ideas that I have had would in the beginning have appeared crazy to others, but nobody called them crazy after I succeeded. What would have happened if I had talked about them to early? Maybe criticism would have killed off my ideas? Be flexible as well. The fact that you are developing one idea doesn't prevent you from working on other ones as well. In fact, I think you should work on several possibilities at the moment because so much is changing in our world. Covering your back is always a good idea. Have noticed that when I don't, things go wrong.
Still stuck in the rut? How about re-framing your situation by looking at it from different angles? It has the power to change your entire perception of the problem and finding new solutions.
And always, always remember that the only thing that's certain in life is that everything is uncertain. That's a fundamental fact of life and you have to get the strength from within to handle it, because whatever happens to you in life, it's up to you how you perceive it. Positive or negative? Your choice. Or as Lincoln once put it “You cannot help men permanently by doing for them what they could and should do for themselves”. Remember that failure happens on the road to success, which may be just a step away.
Should the US government have the power to shut down web sites world wide? Or do you agree with Wikipedia and Google that the proposed bills amount to Chinese style online censorship? Devote 2 minutes to watching an informative video about the bills:
If congress pass the bills, anyone posting a home video online with a song playing in the background could in theory be accused of piracy and their site shut down. The Obama administration has stated it's not in favour of the proposed legislation since it threatens an innovative and open internet. So if worse comes to worse, the president could presumably veto it? Some members of congress however, are keen on the bills in order to please Hollywood and the musical industy.
Would the bills be the end of internet as we know it?
This is what Wikipedia has to say about the bills: ""They put the burden on website owners to police user-contributed material and call for the unnecessary blocking of entire sites. Small sites won't have sufficient resources to defend themselves. Big media companies may seek to cut off funding sources for their foreign competitors, even if copyright isn't being infringed.
'Foreign sites will be blacklisted, which means they won't show up in major search engines. And, Sopa and Pipa build a framework for future restrictions and suppression. Proponents of Sopa have characterised the opposition as being people who want to enable piracy or defend piracy".
According to Jimmy Wales, "The bill is so over broad and so badly written that it's going to impact all kinds of things that, you know, don't have anything to do with stopping piracy."
Sopa and Pipa actually propose that anyone found guilty of streaming copyrighted content without permission 10 or more times within six months should go to jail.
Would Sopa and Pipa completely change social media networks like Linkedin and Facebook because they would need to police everything their members post? Will online freedom of speech be severely resticted by the bills? Or do you agree with Robert Murdoch who has complained about the White House not supporting the most extreme elements of the bills? Do you want to keep the internet as it is or should it be censored world-wide by the US government?
Tehran says it not only will, but is ready to, counter attacks from Israel and the United States. They are angry about the new sanctions and have threatened to close the Strait of Hormuz. Devote 6 minutes to watching an interesting video with Seyed Mohammad Marandi from the University of Tehran explaining how Iran looks at the current stand off:
After watching the video do you believe Iran is not only stronger, but also more of a threat, than the West wants to believe? Is Tehran capable of causing more trouble than the world needs at the moment? Do you agre with Seyed Mohammad Marandi that it's actually the United States that's being provocative? Who's actually at fault here, Iran, the US, both of them or a more complicated scenario?
With Iranian scientists being assassinated and the regime squeezed financially are they actually provoking an attack? Is it in their interest to unite Iranians against an outside enemy? Will Iran go ahead and close the Strait of Hormuz? If so, will the US attack? Is Iran capable of launching an attack on Israel? Will there be war in the Persian Gulf? What's your opinon? If an armed conflict starts will it involve the whole region? Or is the threat of closing the strait just sable rattling and the issue will be resolved peacefully? Or maybe it's all just a media hype?
Interested in making a fortune in investment banking? Preferably at Goldman? Here’s a tutorial created by 5 bankers advising you how to get hired:
Are you after the watching the video up to the challenge of convincing Goldman Sachs to hire you? Would they consider you part of the inner circle?
Is becoming a partner still equivalent to wealth beyond imagination?
It is said that Goldman Sach's partners are its highest executives and its biggest stars. The rumours are many but what’s really going on behind the scenes? An examination by The New York Times looks at the power and wealth of this secretive group:
Or maybe the world is changing and the allure of the financial markets is a thing of the past? On December 15th Fitch credit rating agency actually downgraded Goldman and several other large banks in Europe and the United States, stating that results from both economic developments and a myriad of regulatory changes will have a detrimental impact on them.
So is a career in Goldman Sachs till the lucrative ticket it was? Would a Golden Ticket make you happy? What have you got to offer them? Would they be interested in you? Or maybe you are not interested in joining Goldman? Maybe you think investment banking is a bad choice of career at the moment. After all, according to what we read in the press Goldman in getting rid of some staff. Do you believe that investment banks are hanging themselves due to their recent behavior? Is trust in brokerages declining? Will that result in a trend of more and more people opting for careers in other sectors?
Videos: BreakIntoBanking & The New York Times – You Tube
