PROSPECTS FOR A GLOBAL RECOVERY AND IMPLICATIONS FOR BUSINESS LEADERS SEPTEMBER 10, 2009 PROSPECTS FOR A GLOBAL RECOVERY AND IMPLICATIONS FOR BUSINESS LEADERS BY Jeffrey E. Garten Professor, Yale School of Management

KEY ISSUES IN GLOBAL RECOVERY HOW STRONG IS THE RECOVERY? HOW LONG SHOULD EXPANSIONARY POLICIES CONTINUE? WHO WILL LEAD ECONOMIC GROWTH? WHAT PROSPECTS FOR GLOBALIZATION AND TRADE? WHAT ARE LONGER TERM DRIVERS OF GROWTH? IMPLICATIONS FOR BUSINESS LEADERS

HOW STRONG IS THE RECOVERY? V U W L J

HOW LONG SHOULD EXPANSIONARY POLICIES CONTINUE? GROWTH-DEBT-INFLATION TRADE OFF CHALLENGE OF SYNCHRONIZED WITHDRAWAL OF STIMULUS GLOBAL IMPACT ON TRADE

WHO WILL LEAD ECONOMIC GROWTH? THE CHALLENGE OF CONSUMPTION U.S.? CHINA? ASIA?

WHAT PROSPECTS FOR GLOBALIZATION AND TRADE? UNSTOPPABLE GLOBALIZATION DESPITE CRISES NEVERTHELESS, STOP-GO PATTERN SHORT-TERM CHALLENGES GREEN PROTECTIONISM HEIGHTENED RISKS AND VULNERABILITIES OF FINANCE AND SUPPLY CHAINS ECONOMIC NATIONALISM

WHAT ARE LONGER TERM DRIVERS OF GROWTH? EMERGING MARKETS RESTRUCTURED INDUSTRIES NEW INDUSTRIES INFRASTRUCTURE

WHAT ARE LONGER TERM DRIVERS OF GROWTH WHAT ARE LONGER TERM DRIVERS OF GROWTH? EMERGING MARKETS HOW SIGNIFICANT IN GLOBAL ECONOMY? Population in 2000 = 6 billion Population in 2050 = 9 billion Incremental 3 billion will be almost entirely outside of rich countries Source: World Bank / UN

WHAT ARE LONGER TERM DRIVERS OF GROWTH WHAT ARE LONGER TERM DRIVERS OF GROWTH? EMERGING MARKETS HOW SIGNIFICANT IN GLOBAL ECONOMY? In 2000 rich countries = 75% global GDP, rest = 25% Today 50% of all incremental growth from developing world In 2050 rich countries = 32% global GDP, rest = 68% Source: World Bank

LONGER TERM DRIVERS OF GROWTH THE $41 TRILLION INFRASTRUCTURE PICTURE

GLOBAL INFRASTRUCTURE OECD Report 2006 = $70 trillion CIBC = $35 Trillion Sustainability, inter-connectedness, vulnerability Hyper urbanization Financing

KEY ISSUES IN GLOBAL RECOVERY WHAT SHOULD WE BE MOST ENCOURAGED ABOUT? WHAT SHOULD WE WORRY ABOUT?

KEY ISSUES FOR BUSINESS LEADERS THE COMPETITIVE LANDSCAPE IMPLICATIONS FOR LEADERS

THE COMPETITIVE LANDSCAPE HYPERCOMPETITION AMONG RESTRUCTURED FIRMS MAJOR ACQUISITIONS OF COMPANIES IN THE U.S. AND EUROPE FIERCE GLOBAL COMPETITION FROM AND IN EMERGING MARKETS INDUSTRIAL POLICIES, ESPECIALLY GREEN REVOLUTION

IMPLICATIONS FOR LEADERS CONTINUOUS STRATEGIC PLANNING EMPHASIS ON RAPID ADAPTABILITY MORE RAPID DECISION MAKING REDUCTION OF COMPLEXITY COURAGE TO MAKE BIG BETS, WITH ESCAPE HATCHES

PROSPECTS FOR A GLOBAL RECOVERY AND IMPLICATIONS FOR BUSINESS LEADERS SEPTEMBER 10, 2009 PROSPECTS FOR A GLOBAL RECOVERY AND IMPLICATIONS FOR BUSINESS LEADERS BY Jeffrey E. Garten Professor, Yale School of Management