Majority of Business Executives Are Encountering Global Resource Challenges

Sponsored by the Sealed Air Corporation, the Economist Intelligence Unit (EIU) conducted a survey of 800 business executives in the food & beverage, hospitality services, healthcare services and consumer goods industries. Respondents are drawn equally from North America, Latin America, Europe, Middle East and Africa, high-income Asia-Pacific countries and emerging-market Asia countries; 29 percent hold C-suite positions, with the rest being senior vice presidents, directors or senior leaders. Thirty percent of the respondents are from organizations with more than US$500 million in revenues.

To complement the survey findings, which may be found in a report titled Global resource challenges: Risks and opportunities for strategic management, "the EIU developed the Global Resource Management (GRM) Index, a set of four unique, interrelated industry-focused indices that examine how companies and governments monitor resource use, plan for future challenges and commit to sustainable, intelligent resource management across 25 countries. The industries and countries in the GRM Index are the same as those included in the EIU survey, with the exception of Denmark and Luxembourg."

Key findings of the report are listed below:

Labor is a constant challenge

• "Access to labor was identified as the biggest challenge by respondents across industries. Fully 70% of respondents say they face labor challenges, alone or in combination with other resource issues, and half say access to skilled labor is a top challenge. Food & beverage and hospitality services are the industries hardest hit by labor challenges.
• Improving overall working conditions is most often cited by survey respondents as an effective solution for both skilled and unskilled labor challenges, chosen by 27% of respondents. The other solutions in the top three are local training and education and relocating trained workers to locations with need for their skills.

Natural resource scarcity is particularly complicated to manage

• 40% of survey respondents who say their company is facing natural resource challenges say these add time, cost or complexity to their operations.
• Consumer goods and food & beverage companies are leaders in natural resource management. The index shows companies in these industries are more focused on sustainable management of environmental resources, such as committing to global standards, while the healthcare services and hospitality services industries have been slower to adopt such practices, in some cases because they are not as relevant to operations.
• To address natural resource challenges, food & beverage companies focus on training employees and vendors to manage resources more effectively; consumer goods companies say working with suppliers to reduce resource use is the most effective strategy.

Physical infrastructure challenges affect the entire supply chain

• Physical resource capacity, which includes the quality and reliability of the power network, is particularly low in emerging-market Asia, according to the index. In these countries, poor physical infrastructure exacerbates energy use and intensity due to waste and inefficiency. Europe, on the other hand, scores particularly well in this category.
• The most effective ways to address physical resource challenges, survey respondents say, are mainly operational—such as adding flexibility to more easily operate in many locations (26%), training workers (25%) and reducing overall reliance on physical resources (24%).

Companies can be short-sighted regarding long-term risks

• The index shows that water is a critical natural resource challenge for companies operating in many countries, but it is not cited as a top concern among survey respondents. This suggests that respondents are not necessarily aware of or focused on the long-term risk that water scarcity and climate change can have on their operations—even though 66% of respondents say climate change has had some effect, positive or negative, on the resource challenges they face. The lowest share saying so was respondents in North America (54%), while the highest was respondents in emerging-market and high-income Asia (81% and 71%).
• One in five hospitality, consumer goods and food & beverage executives say climate change has made resource challenges more difficult to manage in the past two years; a separate 11% say climate change has increased the priority of managing these challenges, suggesting that organisations focused on resource challenges today may have an opportunity to get ahead of their peers as those challenges become more acute.
• Collaboration with suppliers to reduce the use of natural resources is cited as an important way to mitigate natural resource challenges across industries (chosen by 24% of survey respondents as effective), while working with industry or consumer groups is cited as effective by only 11%. This suggests that most executives are not taking advantage of external collaboration partners to address critical resource challenges. This, too, seems short-sighted since best-practice companies very often gain significant benefits by doing so."

The report's conclusion begins by noting "most companies today face labor, physical or natural resource challenges, often in combination. The good news is that when they address these issues—individually and, more powerfully, together—most companies see hard and soft business benefits. The difficulty often comes in determining how to address all three challenges in a way that derives the most business benefit while mitigating a broad range of short- and long-term risks."

Moreover, "while many companies are focused on near-term talent issues ... they may be setting themselves up for long-term problems if they don't seek solutions that address labor in the context of the other issues facing them."

Do you agree with the findings of the report? Is your company facing labor, physical or natural resource challenges? And if so, what tactics are being utilized to mitigate these issues?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

EIU Report Highlights ASEAN as an Important Economic Bloc

Despite economic headwinds certain global markets are facing, I remain encouraged by the economic growth projections of the ten nations that comprise the Association of Southeast Asian Nations (ASEAN). This is a topic that I have been tracking for the past few years, Therefore, I found particular interest in a whitepaper, ASEAN Cities – Stirring the melting pot, produced by the Economist Intelligence Unit (EIU) that says: "In a world struggling with low growth, the ten member states of the Association of South-East Asian Nations (ASEAN) represent a genuinely exciting prospect among emerging markets." Moreover, the EIU "expects growth in the region, already the world's sixth largest economic bloc, to average 4.6% annually in the next five years. Much of this growth will come from ASEAN's urban hubs: the region currently has around 50 cities with populations of over 500,000, which will continue to drive an overwhelming share of its economic development in the next decades."

The whitepaper correctly asserts that ASEAN, with a population of 626 million according to the US-ASEAN Business Council, represents "a powerful economic bloc." Supporting this claim, the report says ASEAN is the sixth-largest economy in the world with a combined GDP of US$2.4trn. The report, however, importantly recognizes that ASEAN "includes economies with vastly different profiles: GDP per capita in its wealthiest member, Singapore, is over 50 times higher than that of its poorest member, Myanmar. At the same time, Singapore's population of 5.5m is only a small fraction of that of Indonesia, which, with a population of 250m, is the region's most populous nation and its single largest economy (see Figure 1)."

Encouragingly, "despite these differences, the EIU forecasts that the region's growing economic integration, aided by ASEAN-led initiatives, will pay off to see it expand by 5% a year on average over the next five years."

The EIU's analysis further explains that "the main 50 cities with populations of over 500,000 people in ASEAN are the ones that are driving an overwhelming share of the bloc's economic development. Urbanization is well known to result in productivity benefits, led by its ability to agglomerate knowledge, resources, ideas, innovation and different cultures. Cities profit from this cluster effect to form highly concentrated and efficient economic powerhouses. About two-thirds of a city's economic growth and competitiveness are determined by its population flow."

Having traveled to ASEAN's key economic hubs such as Bangkok, Ho Chi Minh City, Jakarta, Kuala Lumpur, Manila and Singapore, I can attest that "ASEAN cities are still young and evolving rapidly, and the importance of migration—internal, rural-to-urban and external—cannot be ignored."

The purchasing power of individuals residing in ASEAN's urban areas will continue to rise. "Over the coming years the EIU expects incomes to grow at marginally faster rates in rural areas than in cities, where labor markets are comparatively tighter, although this faster growth will be from a lower starting base."

I am bullish about the business opportunities that exist for companies looking to expand into ASEAN. In particular, I see significant opportunities for those companies creating products or services that target the interests of a growing middle-class. These products or services include education technology, mobile health, self-driving technology, smart energy, eCommerce and enterprise solutions, and home entertainment.

Do you agree with the findings of the EIU report? Are you currently or planning to do business in ASEAN?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

25 Things to Consider for Your Business as You Begin a New Year

Photo: http://ow.ly/9sEn307As1T

Happy 2017!! Many business owners use the start of a new year as a time to financially prepare for the next 12 months. In an article written for Entrepreneur magazine, John Rampton provides "25 ways in order to keep your business up-and-running for the long haul." While you can read Mr. Rampton's "25 Things to Begin Now so Your Business Thrives in 2017" below, this post focuses on a few items that I find particularly value as I prepare my business for the coming year.

Mr. Rampton correctly begins his list with revisit your business plan. I am a strong proponent that every entrepreneur should create a business plan, a topic that I have addressed in previous posts, and business owners should use the beginning of the year as a time to "make sure that your original plan still fits your current business situation."

A business should focus on profitability. As Mr. Rampton explains: "Either revisit or create a financial model by paying close attention to your expenses, assessing your marketing plan, building your projections from the bottom-up, checking results from the top down, and finding your breaking point. It may not be perfect, but those steps can guide you in boosting profits."

No matter how great your attorney or accountant is, a business owner should keep up on new tax rules and regulations. "There may not be major changes every year, but it's important to pay attention to any new federal, state, and local tax rules and regulations," writes Mr. Rampton.

"If you do not know your numbers, you do not know your business" is a theme that I often say to my colleagues. Therefore, I appreciate start monitoring your monthly expenses and create a budget and stick [to] it. Tracking "every single purchase," according to Mr. Rampton, "lets you know how much you’re spending on your expenses and where to start trimming the fat if you're overspending.

Importantly, tracking your expenses "lets you know if any of your accounts have been jeopardized to cyber-attacks if you spot any unauthorized purchases. This not only gives your total control of your money, it's one of the most important steps when creating a budget."

In my 20+ years of business experience, I have become to appreciate the value of having a realistic budget. As Osmond Vitez notes in an article entitled, "Why Is it Important for a Business to Budget?" "Budgets usually represent a detailed analysis of how a company expects to spend money in future time periods. . . . Using an annual budget process also limits the amount of time companies spend creating and managing capital resources."

Lastly, I strongly support that a business owner should stay organized. You must have "a system in place so that all of your records are organized," says Mr. Rampton. "Take your invoices, for example. When they're organized you can see which invoices have been paid and which are pending. You can also have them handy in case you get audited. Thanks to the cloud, most of this information is started in one convenient dashboard automatically."

"25 Things to Begin Now so Your Business Thrives in 2017"

1. Revisit your business plan.
2. Gather necessary information for a business loan.
3. Focus on profitability.
4. Set a savings goal.
5. Evaluate your business processes.
6. Review your all of you insurance policies.
7. Keep up on new tax rules and regulations.
8. Be aware of salaries in your industry.
9. Take advantage of cash accounting.
10. Declutter and get tax deductions.
11. Research financial institutions.
12. Draw on your bank credit line.
13. Evaluate your product lines.
14. Look for ways to generate recurring revenue.
15. Make saving automatic.
16. Challenge the status quo.
17. Have collateral ready.
18. Ask your customers to purchase higher priced items or services.
19. Start monitoring your monthly expenses.
20. Create a budget and stick [to] it.
21. Cut costs, even if revenue is solid.
22. Shop around.
23. Evaluate the ROI of your sales and marketing efforts.
24. Stay organized.
25. Meet with an accountant or tax advisor.

How are you preparing your business for the new year? What would you add to this list?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

'Despite an Improved Global Economic Backdrop, Mounting Uncertainties Will Weigh on Companies in 2017'

Image: EIU

"In 2017, companies can look forward to an improved global economic backdrop but must prepare for uncertainty following Donald Trump's victory in the US presidential elections and the UK's decision to leave the EU," explains the Economist Intelligence Unit in announcing the publication of its whitepaper, Industries in 2017. "This exclusive whitepaper provides a global overview for the year ahead for six industries - Automotive, Consumer goods, Energy, Financial services, Healthcare, and Telecommunications. It brings together analysis and forecasts for each industry, identifying the key strategic business issues that we expect to arise."

Regarding the general overlook for the global economy in 2017, "Threats to global economic growth are mounting. Populist, anti-globalization sentiment has triggered Donald Trump's election in the US and Britain's planned exit from the EU. Yet, despite the raised risks, the world economy is in fact set for a slightly better year in 2017."

Many emerging markets will benefit from "a firmer outlook for commodities." The EIU predicts "that average prices of Brent crude oil will climb by a quarter on 2016, to US$56.5/barrel; non-oil commodity prices will tick up for the first time in years. Beneficiaries will include Russia and Brazil, both recovering from recessions. This will speed economic expansion in the non-OECD world to 4.3% at market exchange rates. The OECD will see a smaller acceleration to 1.8%, while global growth will rise to 2.5%."

As for the U.S. economy, the EIU's forecast "is a sunny one, with GDP rising by 2.3%. Although we expect faster monetary tightening by the Federal Reserve, the central bank, this may be offset by Mr Trump’s promised tax-cuts and infrastructure spending. However, if Mr Trump pushes ahead with protectionist trade policies, he could undermine US and world growth."

While the Federal Reserve will tighten monetary policy, other countries in the advanced world will see their monetary policy "remain overwhelmingly loose." The EIU notes that "governments will also turn to fiscal policy to stimulate demand. In Japan, for example, the prime minister, Shinzo Abe, is throwing yet more stimulus at the economy and the fiscal deficit is set to widen. Meanwhile, debt-laden China will avoid a sharp slowdown in 2017 (not so in 2018), as Asia grows by a healthy 3.9%."

It its overview of the global economy in 2017, the whitepaper correctly explains: "Europe will once again let the side down, thanks partly to Brexit. The consequences of the UK's decision to leave the EU will be long-lasting, profound and clouded in uncertainty. As consumer and business sentiment in the world's fifth-biggest economy sag, recession will ensue in 2017. Europe will manage only 1.4% growth. With important elections in France and Germany to come in 2017, the fear is that the forces ranging against globalization will gain further ground."

Listed below is the central thesis for each of the six industries addressed in whitepaper:

• Automotive. With the auto industry facing widespread challenges, the focus on research and development has intensified. But will traditional vehicle-makers lose out as mobility becomes more high-tech?
• Consumer goods/retail. Political events may dampen consumer confidence in 2017 but new technologies will continue to drive global retail sales upwards;
• Energy. Climate policies will keep chipping away at fossil fuels' role as the mainstay of global energy use, despite Donald Trump's appointment as US president in 2017;
• Financial services. Finance will enjoy boosts in 2017 from fintech, mobile money, an emerging market rebound and expanding customer ranks. However, the three villains of the post-crisis era—weak growth, low rates and tough regulations—will keep a damper on the sector;
• Healthcare. Plenty of countries will be trying to expand access to healthcare, but the US may step back from Obamacare; and
• Telecoms. Telecoms companies will seek new sources of revenue as traditional streams dwindle and pressure from growing mobile broadband usage mounts.

Do you agree with the EIU's forecasts for 2017? What key issues and trends are valuable to your business?

Wishing you a happy, healthy, and prosperous 2017. Thank you for reading.

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of GT Perspectives, an online forum focused on turning perspective into opportunity.

How and When to Invest in Product Marketing

The following is a guest post by Yan Tang

Photo:
http://ow.ly/SJJz307uE2D

When fitness startup ClassPass is doing everything to devise new product offering that would satisfy and affect users, its marketing team gets a better understanding of what users wanted and figures out the one process: getting in the mind of your customers. What the biggest public marketing comes from making better products, having a more focused team and making users happier. In an exclusive interview, Joanna Lord, Chief Marketing Officer at ClassPass, clarifies "what product marketing really is and why founders should consider investing in it sooner rather than later." She also shares her professional advice on establishing a top-notch product marketing team. And Ms. Lord correctly emphasizes the importance of putting the customers first in all things.

What is Product Marketing Is – and Isn't

"Product marketing, at its heart, is about understanding what you're building, why you invested in it, and how it will benefit the user—and then messaging that understanding to your customer," according to Ms. Lord. There are four key tasks that can help a company determine the product marketing:

1. What to build (which typically overlaps with product);
2. Who to build for (which typically overlaps with UX, or business development/sales);
3. How to price it (which typically overlap with pricing, marketing, product, or sales);
4. And how to sell it (which overlaps with marketing and sales).

Primarily, product marketing is "an exercise in communicating with your customers, and helping them understand the full value of everything you build for them." It is more about assisting existing customers to understand the products and features and engage with them.

Photo:
http://ow.ly/O7lx307uE85

When to Kick-start Product Marketing

If you are wondering when and how to integrate product marketing, consider these two key questions: How big is your company? And how complex is your product portfolio?

It is easier for smaller companies to navigate resources in marketing and sales." If you have one product, and it's super early for the company, you could even have someone on your product team, or your marketing team, playing this role 50% of the time," Ms. Lord explains. Even CEOs from really small early-stage start-ups can play a role of product marketers.

If your products are complicated, however, you might want to invest in product marketing early, no matter what the size of the company.

How to Hire for the Right Skill Set

It is very important to build an effective team of people who can create great products and message them into the public. When it is time to invest it companies should have a marketing team with a particular combination of hard and soft skills, such as ideation, agile development, launching releases, go-to-market and demand generation.

Except subject-matter expertise, some key traits should be considered when a company looks for a stellar product marketer.

• Drawn to details
• Researches by default
• Fetches feedback
• Identifies as cross functional

There is always a lot to look for, and companies can design some interview questions or create a process for digging deeper into a candidate's qualifications.

The Fine Art of Launching Product Marketing

Once you have recruit a right person for the job, proceed thoughtfully to integrate the new individual with the rest of your team- there is actually more of an art to it than you might think.

The addition of even one new member requires that the entire team regroup and rebond, finding new ways of working and ultimately recreating their dynamics and working style. Also, new product markers themselves need to take the responsibility of proving their worth and establishing a team that the rest of team members respects and values. Ms. Lords says: "that boils down to open, humble communication. The product marketer has to be an expert at asking questions and understanding both the customer and their internal stakeholder." Being objective and a team player are the keys to great product marketing.

How to Measure Success for Product Marketing

How do you know, however, if you are actually reaching the target customer? The four key elements mentioned above have their own set of metrics:

1. What to build (engagement metrics: log-ins, usage stats, sales figures);
2. Who to build for (customer feedback loop, cancellation surveys, funnel conversion rates);
3. How to price it (surveying and customer research);
4. And how to sell it (traditional acquisition metrics:click through and conversion rates etc.).

"Every dimension of product marketing is measured a different way, but it's absolutely a measurable science." That being said, at every stage of your growth, all of those metrics should be given different attention. The importance of certain part of product marketing varies at any given time.

So when you are thinking about investing in product marketing, what else you will take into consideration?

Yan Tang is enrolled in the Professional Master of Business Administration (Marketing) program at Seattle University. She also serves as a Business Relationship Management and Small Business Coach at Seattle University's Innovation and Entrepreneurship Center. Previously, Ms. Tang worked for Manpower in the company's Shanghai, China office where she served in several roles including Service Consultant, On-Site Project Manager for IBM Shanghai, and Recruitment Consultant. Ms. Tang may be contacted at yantang1126@gmail.com.

Report Surveys Corporate Executives on Mergers and Acquisitions and the Use of Analytics and Big Data During the Process

Sponsored by EY, The Economist Intelligence Unit (EIU) published the 15th edition of its Global Capital Confidence Barometer claiming that 57 percent of executives plan to make acquisitions in the next 12 months. "The need to respond to challenges while navigating a complex and fast-changing environment makes dealmaking an imperative, not an option. Executives are looking at more targets, and deals will tend to be smaller. However, as boards look to make innovative acquisitions, they are using analytics to make better decisions."

The Global Capital Confidence Barometer gauges corporate confidence in the economic outlook and identifies boardroom trends and practices in the way companies manage their Capital Agendas — EY's framework for strategically managing capital. It is a regular survey, conducted by the EIU, of over 1,700 senior executives from large companies around the world.

In addition to over half of executives expect to actively pursue acquisitions in the next 12 months, 49 percent of companies have more than five deals in their pipeline and 91 percent are using big data and analytics as part of their deal process.

With respect to the macroeconomic environment, "Most executives see the global economy as stable and say corporate earnings are back on track. But there are uncertainties ahead, both in the near and long term, including political stability in their home markets and tightening credit markets. As low growth and disruption continue, boards are focusing on mergers, acquisitions and alliances to create value."

The report addresses the topic of corporate strategy by saying: "Innovation, new technology and changing customer demands are challenging businesses to reinvent their products and operations. At the same time, greater regulation is adding complexity to corporate strategy. Most companies, with an imperative to reorganize their portfolios, are responding with a mix of buying and partnering to underpin future success."

From where do you see growth
within your company coming
over the next 12 months?

In fact, 45 percent of growth is expected to be inorganic, the report explains. Moreover, 57 percent of companies are actively reorganizing their portfolios and 71 percent are shifting skills and talent to take advantage of new working models.

The percentages below reflect those who intend to actively pursue acquisitions in the next 12 months:

• Consumer products and retail — 71%
• Diversified industrial products — 60%
• Life sciences — 56%
• Technology — 54%
• Automotive — 54%
• Oil and gas — 52%

How do you use analytics and
big data for executing your
M&A process and strategy?

In answering the question, "How do you use analytics and big data for executing your M&A process and strategy?" 55 percent of corporate executives use data analytics to better identify synergies and determine valuation of the targeted asset, 54 percent use big data to identify growth options and potential targets, just 4 percent say they are not using data analytics but are considering it.

Lastly, as someone who takes a strategic approach in global business, I appreciate the top five questions every executive needs to ask as they invest for growth:

1. Are you capitalizing on the breadth of deal structures to realize your strategic objectives?
2. Will geopolitical challenges derail your growth strategies?
3. Are you using analytics and big data to bring greater clarity to complex deals?
4. Is an off-the-shelf approach to integration the best recipe for success?
5. Are you enhancing or destroying the value of acquired innovation?

Do you find this report useful for your business? Is your company considering making an acquisition in 2017 and if so, how are you using data analytics during the M&A process?

Aaron Rose is a board member, corporate advisor, and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

India to Have More Than 670 Million Mobile Broadband Connections by 2020

According to a new report published by the GSMA, India is the second largest mobile market in the world with 616 million unique users, almost half of the country's population, subscribed to mobile services at the end of June 2016. The report, The Mobile Economy India 2016, further says: "Improving affordability, falling device prices and better network coverage aided by operator investment will help deliver over 330 million new unique subscribers by 2020, taking the penetration rate to 68%."

The report is segmented into four chapters: India mobile market overview; Economic contribution of the mobile industry; Digital India: delivered through mobile broadband; and Reforming to accelerate mobile broadband adoption.

Infographic: GSMA

In addition to the information above regarding India's mobile market, the report explains that India is "seeing an ongoing technology shift to mobile broadband services." Moreover, "With a gradual reduction in data tariffs and growing availability of affordable smartphones for consumers, the mobile broadband connection base is forecast to reach more than 670 million by 2020. By this date, almost half of the total connections will run over mobile broadband networks. There is also an accelerating move to 4G, with the 4G connection base forecast to grow rapidly, from just 3 million at the end of 2015 to 280 million by 2020."

Infographic: GSMA

Regarding the mobile industry's contribution to India's economy, "the mobile industry was responsible for 6.5% of India’s GDP" in 2015, "a contribution that amounts to more than INR9 lakh crore ($140 billion) of economic value added." In addition, "Mobile operators and the ecosystem provided direct employment to approximately 2.2 million people in India across both the organized and unorganized sectors, while approximately 1.8 million jobs were indirectly supported. The mobile ecosystem also makes a highly significant contribution to the funding of the Indian public sector, with approximately INR1.4 lakh crore ($21 billion) in 2015."

The chapter titled "Building Digital India through mobile broadband" begins by noting: "The Indian government’s Digital India initiative was launched in 2015 and aims to utilize the potential of digital technologies to address some of the significant socioeconomic challenges in the country." The report continues to explain that "the initiative looks to empower 1 billion subscribers by providing internet access to all."

Furthermore, "Digital India has three key focus areas and nine pillars. Digital India will be delivered over mobile broadband, given the lack of alternative (fixed line) infrastructure, high levels of mobile ownership in the country and ongoing significant investment by operators to further build out networks and bring affordable services to the country's population."

Regarding the report's final chapter on how policy and regulatory reform can help boost mobile broadband, "Review and reform in three key areas would accelerate mobile broadband access and adoption across the country:

• India will benefit by adapting regulation to the realities of the new digital ecosystem. Obligations tied to a specific technology, rather than the service provided, distort the market, preventing operators from competing equally with other digital market players.
• Mobile operators in India carry significant debt as a result of the high prices for spectrum, administrative fees and levies. Reductions of these costs would free resources and foster an atmosphere conducive to investment, which is needed to keep pace with network expansion and improvements to achieve the goals of Digital India.
• To cater for rising mobile broadband adoption, India should commit to the spectrum bands supported at WRC-15. More importantly, India needs to allocate the 470–698 MHz band for IMT in order to boost mobile broadband and the broader digital economy."

Similar to China over the past few years, Indians will quickly gain access to information and value-added services via smartphones and tablets as a result of an expanding mobile broadband infrastructure. With a growing mobile industry, coupled with policy and regulatory reform, India could become an important market for mobile network operators, cloud storage providers, manufacturers of mobile devices and related network components, and developers of localized software optimized for mobile devices. While my colleagues and I are not actively engaged in the Indian market as of the date of this post, it is a matter of when, not if, we begin doing business in the world's second largest mobile market.

What are your thoughts about the GSMA report? Do you have any recommendations about doing business in India?

Aaron Rose serves as President and CEO of ROI3, Inc., a Seattle, Wash.-based company that empowers people in emerging economies through innovative, technology-based solutions. He is also the editor of Solutions for a Sustainable World.

The Coming of Age of the Chinese Consumer

"The Chinese consumer has finally come of age. The traditional drivers of China's economy, investment and exports, are struggling, but the country's consumers keep spending." The preceding sentences are the beginning of a whitepaper, The Chinese Consumer in 2030, published by The Economist Intelligence Unit (The EIU) in English and 简体中文. The introductory paragraph continues to explain that "private consumption is now the main driver of economic growth in China, and The EIU expects it will grow in real terms by 5.5% a year on average in 2016-30 – boosting its share of the overall economy to nearly 50%. The incremental growth we expect in private consumption in China over the next 15 years is more than current level of consumer expenditure in the EU."

The report's Executive Summary presents the following key takeaways:

• Nearly 35% of the population, or around 480m consumers, will meet EIU's "definitions of upper middle-income and high-income by 2030. That represents a sharp increase on the 10% (132m) at present. The emergence of this large population, with a personal disposable income of at least US$10,000, will alter the consumer landscape in China;
• Income will become more dispersed, rather than concentrated in first-tier cities on the eastern coast. Major interior cities, such as Changsha, Chengdu, Chongqing and Wuhan are set to see sizable leaps, with each having at least 2m high-income consumers by 2030. Nevertheless, smaller cities and those undergoing industrial restructuring risk being left behind, suggesting that high levels of income inequality will persist; and
• Rising discretionary income will drive changes in consumer tastes and preferences. Around 30% of the spending by the average Chinese consumer is still allocated to food, compared with only 15% in South Korea. As income levels rise, consumers will look to upgrade consumption habits and switch to more expensive and premium brands. We pinpoint how this will play out in the automotive, tourism and financial services sectors."

The authors of the report are correct to note that "understanding these trends and the scope for regional divergence in China will be critical for consumer goods firms. Access to robust data and local knowledge will be essential. There are also challenges to navigate. China's economic trajectory has become more uncertain, and firms will need to monitor risks accordingly in order to stay ahead of the curve."

Regarding the segmentation of the middle class, the report says: "Individuals moving into the lower middle-income bracket will have greater room for discretionary spending on goods and services. Those entering the upper middle-income segment will be looking to upgrade their spending towards branded and premium products."

Doing business in China over the past few years, I have witnessed the tremendous rise, both in population and purchasing power, of the Chinese middle class. And I can attest to The EIU's report that the middle class are purchasing more vehicles (low, booking more vacations abroad (i.e., destinations outside of mainland China), and financial services including insurance and wealth management.

While the topic of information and communication technology is not covered in The EIU report, I am confident that a growing middle class in China will continue the drive to purchase technology products and services. Despite the deceleration to China's economy during the past few years, spending on mobile technology hardware and services remain strong. Lower middle-income consumers are replacing their feature phones with basic smartphones and upgrading their service plans with mobile network operators to access high speed mobile broadband. Those individuals in upper middle-income bracket are upgrading to high-end smartphones. The growing adoption of smartphones in China presents an opportunity to develop value-added services and content optimized for mobile devices.

The report's final sentence says: "In the future ... meeting the needs of a booming and more demanding middle-class group of consumers will be fundamental to [China's] economic sustainability." Do you agree? What are your thoughts about The EIU report?

UPDATE: The EIU held a webinar on Nov. 30, 2016 discussing its whitepaper in greater detail. You can watch a recording of the webinar through this link and download the slides here.

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

Insights into GSMA's Inaugural 'Global Mobile Trends' Report

On Oct. 6, 2016, the GSMA launched its inaugural Global Mobile Trends report, which offers "a vast wealth of data and insight on the state of the mobile ecosystem today and mapping out its future development," according to the London, England-based organization's press release. "This flagship report, produced by GSMA Intelligence, the research arm of the GSMA, compiles data on mobile subscriber growth trends, mobile internet adoption, devices, and industry financials from both a global and regional perspective."

The 2016 edition of the Global Mobile Trends report is organized into five sections: Megatrends; Consumer Insights; Industry Performance and Mobile Ecosystem Dynamics; Future View and Regional View.

Asia becoming the growth engine of the mobile ecosystem is one key point found within the "Megatrends" section. In its press release, the organization explains that "more than one billion additional people worldwide will be connected to mobile networks by 2020. Approximately a third of these new users will come from India (337 million), underlining the country's increasing position as the world's most significant mobile growth market, overtaking China."

Furthermore, "China is forecast to add more than 200 million subscribers and there will also be major net subscriber contributions from Indonesia, Pakistan, Bangladesh and Myanmar. In total, these six Asian markets will account for approximately 60 percent of the 1.1 billion new subscribers added globally by the end of the decade." Whether a company is focused on developing hardware or software for the mobile ecosystem, it must consider how to penetrate the rapidly growing Asian market.

The report provides a clear illustration how "the internet is mobile, and mobile is the internet." Over the past 10-15 years, I have witnessed how the increasing adoption of mobile phones (and smartphones specifically) over the past few years has empowered people in developed and emerging markets alike to access the internet. During my travels to emerging markets in recent years, I have come to appreciate how the mobile phone serves as the only access point for millions of people to reach the internet. Therefore, I am not surprised by the report's claim that "mobile internet penetration reached 44% by the end of 2015" and "by 2020 we expect it to be 60%, with smartphones the only access point for many in emerging markets. For an entire generation, the internet is now inextricably linked with mobile and vice versa."

Encouragingly, "Income will become less of a barrier to smartphone ownership." The report further elaborates that "the main sources of future growth in smartphone adoption will be India and a number of other emerging markets (such as Nigeria and Indonesia). This will be driven by continued falls in device costs and rising incomes. Several low-income countries (e.g. GDP/capita below $10,000) will have smartphone adoption rates of 60–70% by 2020, similar to most advanced regions."

Lastly, as a shareholder and executive of ROI3, Inc., a company creating localized content, services, and applications for smartphone and tablet users in Africa, Asia, and Latin America, I am quite pleased to see an important question posed on page 42: "What is local content and why does it matter?" The report correctly says:

In trying to connect the unconnected to the internet, content has for many years been the forgotten ingredient, with efforts prioritized in expanding coverage and lowering the cost of ownership.

These are, of course, fundamental, but so too is the question: is the internet relevant for me? 

The surprising truth is that for many non-users, the answer so far has been no, even if they can access and afford it. 

As such, efforts have shifted among mobile operators and internet companies into designing content and services that appeal on a local level, both in language and in the value proposition.

If you work in the mobile technology industry, I highly recommend reading this comprehensive 121 page report. What information do you find valuable?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.

Exploring the Recent Progress and Challenges of Tackling Tuberculosis

In the previous post in this blog, I discussed a report published in 2014 by The Economist Intelligence Unit (EIU) that investigates the health challenge posed by tuberculosis (TB) and ways to improve the effectiveness of the global response to it. On Oct. 26, 2016, The EIU announced the publication of an updated report, which evaluates "the progress made in the global response to TB since The EIU’s 2014 study." The 2016 report, Tackling tuberculosis: Recent progress and challenges, first considers "the socioeconomic and political context of tackling TB and then look at policy and progress in the areas of prevention, diagnosis and treatment. Moreover, four country case studies shed light on recent progress and challenges in tackling TB in Ethiopia, Kenya, Nigeria and South Africa."

On the chapter titled "The Political and Socioeconomic Context," the report explains that "the prospects for improving TB prevention, diagnosis and treatment efforts are intrinsically linked to socioeconomic and political factors. For a start, a country's level of development has a strong influence on its response to the disease."

According to Michael Kimerling, director of the technical services division at the Netherlands-based KNCV Tuberculosis Foundation, which works to strengthen health systems in the fight against TB, "As you build up primary health infrastructures, the stronger these become, the better TB can be managed. It's such a classic disease of public health. Development is important for overcoming TB."

A stronger political will to tackle TB is necessary as "the disease continues to receive relatively less attention than other higher-profile diseases, the experts interviewed for this report say." Mario Raviglione, director of the Global TB Program at the WHO, is quoted as saying, "Fundamentally, what needs to be recognized is a lack of political commitment. As we mentioned in [the UK medical journal] The Lancet a few years ago, TB is not a main priority among any of the main UN agencies; it does not have a special UN program, is not in UNICEF's portfolio and is not a special presidential initiative in the US. It does not have strong support from the pharmaceutical industry."

On the topic of policy and progress on prevention, diagnosis and treatment, the report notes the World Health Organization's goal of reducing TB by 90 percent by 2030 "will require new tools that are currently lacking . . . including better prophylaxis, the development of vaccines and new treatment regimens, especially for MDR TB."

With respect to improving diagnostics and prevention, the report asserts that "reliably identifying vulnerable populations that are most likely to go on to develop TB would allow for a more rapid management of the disease and avoid exposing those at lower risk to treatment regimes that involve significant side effects, Dr Raviglione says. He adds that current tests only show whether a person has been exposed, but not whether they are likely to develop full-blown TB. Around one-third of the world's population has latent TB—where they have been infected with mycobacterium tuberculosis but have not developed the active disease —according to the WHO."

The report's conclusion notes: "Two years on from our original report there is evidence of some progress on the global response to TB, including, for example, efforts to shorten treatment regimens. At the same time, however, public-health experts observe that TB retains a relatively low disease profile in terms of R&D, both compared with diseases such as HIV/AIDS and in proportion to the impact of the disease. Major political and socioeconomic challenges remain, notably the lack of universal access to health coverage in many endemic countries, insufficient political will and deficient national TB control plans."

And I agree with the report's final paragraph: "Ultimately, progress will depend on the political will to underpin greater investment in research and the willingness of more countries to commit to both national policy frameworks and cross border partnerships."

Lastly, given the interest of colleagues and I have regarding the development of mobile software solutions to prevent infectious diseases such as TB, I would be reminiscent not to mention how the EIU's 2014 report or 2016 update addresses this topic. Below is an excerpt from the 2014 report:

The Kenyan Ministry of Health, along with Safaricom, one of the country's major mobile-phone companies, and a number of other partners have developed a data management system called TIBU, which means 'cure' in Swahili. Since November 2012, this has allowed the direct entry of details on new TB infections, using tablet computers at the point of diagnosis, into a national database that currently holds details on around 90,000 patients. The information can then be used in a wide variety of ways. At the national level, it enables the monitoring of trends, as well as indicating if any districts are performing poorly and need support. Local clinicians can use it to determine in real time if drug stocks are able to meet local need and to order new medication where required. It allows the treatment of individual patients to be followed even if they migrate to a different part of the country, and sends SMS messages to anyone who does not attend a clinic, reminding them to take prescribed their pills. Finally, TIBU is linked with Kenya’s mobile payments system, M-Pesa, to allow faster dispersal of support payments to those with MDR TB who continue to adhere to treatment.

Do you agree with the findings of the report? What is your recommendation on achieving WHO's goal of reducing the incidence of TB by 90 percent by 2030? What role should mobile technology play in achieving this goal?

Aaron Rose is an advisor to talented entrepreneurs and co-founder of great companies. He also serves as the editor of Solutions for a Sustainable World.