Disruption, Megatrends, and Transformation: Reimagining International Business in a Changed World
The 2020s highlight exciting new technologies, shifting economic power, and major demographic and geographic change. Rapidly emerging technologies will revolutionize connectivity, data access, and information processing. The locus of global economic activity is shifting to China, India, and other emerging markets. The rising elderly population, urbanization, and other demographic trends pose enormous opportunities. Industrialization, urbanization, and soaring global consumption pose new challenges for resources and sustainability. The Covid-19 pandemic has brought immense change.
Top megatrends herald important opportunities and challenges. Firms must leverage the latest technologies, and devise and revise business models, to target new markets and the new global demography. But industrialization and rising affluence will coincide with more pollution of the air, land, and water. Strategy must make sustainability and social responsibility essential components of business practice. Nations will need to expand access to food, water, energy, and other key resources. Top megatrends hold enormous implications for scholarship and practice in international business. Megatrends include, but are not limited to, the following:
- The Great Economic Rebalancing. The rise of China and other emerging economies is shifting the locus of economic activity. One-quarter of the firms on the Fortune Global 500 list are from emerging markets; most are based in China.
- Accelerated Technological Change. Disruptive technologies are advancing faster than firms’ ability to manage and harness them. Rapid innovation in analytics, connectivity, digital platforms, and automation are affecting workstyles and lifestyles, and necessitate new business models.
- Volatility and Uncertainty. Geopolitical volatility and market instability point to economic hardship, nationalism, and extremism, increasing risk and uncertainty. Disruptions spread rapidly in an interconnected world.
- Demographic Shifts. Just as developed economies are home to aging populations, developing economies host younger ones, especially in Asia and Africa.
- Rise of the Global Middle Class. More than half the world – 3.8 billion people – is now middle class with significant discretionary income. They demand better housing, healthcare, education, retirement services, vacation and leisurely pursuits.
- Urbanization. Rather than whole nations, MNEs increasingly target the 600 cities worldwide that generate 60 percent of global GDP.
- Resource Scarcity and Environmental Harm. Just as industrialization is lifting billions from poverty, rising demand is straining supplies of energy, food, water, and other resources. Unrestricted commerce threatens the land, air, and water, and promotes global warming. In recognition of such trends, the 2021 conference features a new shared interest group and track – Sustainability in International Business.
- Covid–19. The global pandemic is a ‘mega-disruption’, with profound consequences for international business. The virus affects internationalization, value chains, strategy, management, the pattern of international trade and investment, as well as teaching and education.
These and other trends and disruptions hold important implications for international business. Such trends are transforming IB and its environments in various ways. What new resources, capabilities, and strategies are needed to manage such developments? What are the consequences for talent, partnerships, and global value chains?
How can firms manage and leverage emergent technologies to skillfully exploit such trends? How can firms best assess and mitigate risk? What is the role of agility and dynamic capabilities in a rapidly evolving world? How can firms strike the best balance in terms of economic, social, and environmental impacts? What are the implications of aging populations and the mismatch between old and young for work, consumption, economic progress, and public policy? What opportunities and hazards does the rise of the global middle class hold for strategy, management, trade and investment? What new business models will be needed for emerging markets? What are the implications of top trends for sustainability and corporate social responsibility?
The AIB 2021 conference theme highlights recent, remarkable phenomena. The conference site, Miami, and the local track, Building Bridges to Emerging Markets and the New Global Middle Class, acknowledge the importance of top international trends.