2010 Global trends and investment opportunities

Tuesday, 29 December 2009

What are the BIG stories and opportunities in 2010?

By Rob Denman, Editor In Chief, Pathfinder Business.

As the noughties end and we enter the teenies we look forward to where the stories and opportunities may lie in 2010...

Markets

Asia

The world will continue to look East. 

China. Expo 2010 starting in Shanghai on May 1st and running until the end of October will be the largest single event ever held. Over 200 million visitors are expected with just 10% of those expected from outside main land China. According to the organisers over 195 countries will be participating with many developing lavish pavillions to showcase their country. In 2010 the world outside China will slowly realise that China is not just a country but a world in itself.

Singapore and Hong Kong will continue to fight each other - and Shanghai - for regional investment top spot.

Hong Kong will also start construction on the Hong Kong- Macau bridge. Once completed in 2015, it will open up direct access to Macau and the factories of the western side of the Pearl River Delta.

In wider Asia, Indonesia will work to solve the issues relating to property and staff that is restricting the potential for investors to commit more to this market. The bridge between Malaysia and Indonesia will continue to be debated.

For more on 2010 Opportunities and trends in China...

Africa

The World Cup from South Africa will be Africa's World Cup – and, although it will be tight, the infrastructure will come together in time.

The potential of North Africa to supply Europe with energy will be developed with Desertec and other Concentrated Solar Power (CSP) developments.

ICT will continue to drive new growth opportunities for the African continent. With a similar time zone to mainland Europe, Africa will increasingly become a centre for back-office call centres. Kenya's new undersea cable, connected late in 2009, will grow opportunitity with other markets such as Ethiopia also attracting further investment.

Rwanda will continue to be discussed as a new opportunity with Zimbabwe also starting to be brought back into mainstream investment conversations.

The challenges of HIV and AIDS in the south and Malaria in the central areas of Africa will remain a strain on the countries and a challenge to business, governments and investors.

Middle East and Gulf

Iran will never be far from the news in 2010 and this will impact on the intentions of business and investors to commit to the region. Iranian influence throughout the Gulf is strong.

The Gulf will be led by the opportunities in Saudi Arabia with its relatively large internal market with Abu Dhabi and Qatar's petro-dollar economies also continuing to grow and invest. Dubai will recover its position and present itself as the gateway to the region. There re-naming of the world's tallest tower to Burj Khalifa from Burj Dubai (in honour of the president of the UAE and ruler of Abu Dhabi) is an example of the new era of collaboration and will be seen across the Emirates.

With the second attempt at awarding the Iraq oil field contracts completed in December 2009, the new year will see a new investment wave into the country. As long as security improves internally and regionally (Iran) the economy will slowly recover and diversify.

Europe

The German economy will recover from the economic crisis and continue to lead Europe. The UK will struggle to define its future until after the general election in early 2010 - or maybe later depending on the nature of the result. Smaller member states in the EMU (European Monetary Union) will battle with the challenges of balancing membership and the short-term obligations to their own people.

Russia will recover from the economic crisis and the low oil price and will increasingly engage with China to work with it on infrastructure projects for the Sochi Winter Olympics in 2014 and also the developments around Vladivostok for the Asian Pacific Economic Cooperation (APEC) Summit of 2012.

Americas

Rising working and middle-class salaries in Brazil will feed strong and growing interest in the potential of its population. An indicator has been Wal-Mart's recent announcement it is investing over USD 1 billion in the market in 2010, the largest investment in any of its operations outside the US. Investments in Brazilian energy and resources will also continue – led by China. Infrastructure opportunities will also be developed as Brazil and Rio de Janeiro start planning for the FIFA 2014 World Cup and the 2016 Olympics.

Sectors

Infrastructure will be needed to tackle challenges associated with climate change, water and energy. Engineering will still be seen as a worthwhile career in the developing world yet in the West the finance sector will continue to attract the top talent- unless the engineering industry acts as one to change perceptions.

Entrepreneurship will continue to grow in importance as young people look away from traditional career routes and use their understanding of technology to create their own networks and incomes.

Information, Communication, Technology and the Media

The world of commerce now relies on emails for communication and managing the volume of emails is hindering progress and productivity. Therefore the technologies to make communication and collaboration simpler will continue. Google will lead the way with wider promotion of Google Apps and its integration of Google Wave.

Cloud computing will continue to grow with wider understanding. Integration with social networking sites (facebook, twitter) with products such as Salesforce.com's Chatter will show how money can be made from social networking.

Increasingly business will look at whether its yearning to engage with social media is driving the results it requires. More people will be speaking but fewer may be listening.

Laptops, netbooks and mobile phones markets will converge as will the platforms and performances. Mobile communication will continue to be the great enabler for emerging market populations. Currently 97% of new business in South Africa only operates through a mobile phone and this will model will continue. Emerging market companies that have developed successful business models in their home market will focus on other emerging markets.

The, currently stalled, merger of South African telecom company MTN with India's Bharti is just one example of so-called emerging market players joining forces and experience.

The growth and adoption of money transfer and banking by mobile phone will also continue.  In 2005, the Philippines were the first market to introduce the ability to transfer money by text message with various markets - such as Uganda, Tanzania - adopting the technology since. Monetise is one of the leading companies and has just announced a deal to expand into Hong Kong, China and other areas in Asia.

Energy

Green energy and technology. Feed-in tariffs will be adopted by an increasing number of markets (this currently stands at just over 40) as they look to follow the Spanish and German markets and develop a cleantech industry and drive investment.

With increasing evidence of countries stretching themselves too far – with the latest being Greece - the pressure will remain on government budgets and there will also be a focus on how government investments will turn into long-term growth rather than liability.

Investment in solar technologies will continue – focusing on driving down production costs in solar photo-voltaic (PV) and solar thin-film. Large Concentrated Solar Power (CSP) developments in desert areas will also be promoted as part of the solution.

Wind investment will be troubled by the developing technology and also the challenge in overcoming issues such as reliability and turbulence. In the medium- to small-scale markets the search for reliable, game-changing products will continue. In the wider market, the Chinese manufacturers such as Goldwind and Sinovel will use their price advantage to win an increasing number of projects outside of China.

The challenge of transporting electricity as High Voltage Direct Current (HVDC) over long distances will continue to be faced and slowly overcome by Siemens and others. The search for cheaper reliable storage will also be a focus and if the answer is batteries then the world will need lithium and will continue to eye up Bolivia's deposits.

With many countries looking at energy gaps between 2015 and 2020, the pressure on the nuclear supply chain will grow as markets commission power stations and look to break through planning obligations and shorten delivery timelines.

Companies will also look to promote their 'green' credentials through their offices and property. Those developments that meet legitimate green building credentials will continue to charge premium rates.

Following on from the leading Masdar World Future Energy Summit in January 2010 - the second European Future Energy Forum to be held in London in October will be a focus for the European cleantech industry - bringing together many of the global players.

Resources

Waste. The challenge of waste will create opportunities. From small markets such as the Caribbean to resource heavy markets (per capita) such as the UAE and even Indonesia the opportunities for managing our waste will increase.

Water. As nations look to protect their water sources the challenge and opportunity related to water will also grow. The collapse of the talks on a water sharing agreement for the 10 Nile basin countries in the summer of 2009 was predictable yet disappointing.  Water sustains life for people and countries and the military response will never be far from the top of the list of solutions when this is threatened - and the decision process will be quick with little debate.

Oil prices will continue to rise. Small private developers will continue to search markets across Africa looking for their big find.

Countries will also look to gain the financial benefits of processing their resources in-country rather than exporting their resources cheaply. Agri-processing will be a core focus for many small markets in the Caribbean and other emerging markets.

Agree/Disagree? Contact us at:

prospects2010@pathfinderbusiness.com

Through initiatives including pathfinderbusiness.com, Pathfinder Business magazine, Opportunity Series, Opportunity Marketplace, Global Seminars and more. We will follow and develop these stories through 2010.

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