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Two-Speed World, Manyness Key Themes in Post-Crisis World

By Kim Jae-kyoung Staff Reporter The global economy, both advanced and developing, is facing a totally new economic paradigm in the wake of the global financial crisis triggered by the U.S. subprime mortgage meltdown. The worst crisis in half a century has accelerated ongoing global trends ― the shifting economic center of gravity from the West to East, the rise of new global challengers from rapidly developing economies, and the growing volatility and complexity of the business environment. This transformation has redefined the nature of globalization, changing the rules of the game for companies with international ambitions and calling for new competitive models to win in the post-crisis world. For South Korea, this crisis could be a great opportunity to emerge as a leading player in the global community. Depending on how it copes, Korea's future could turn out very differently in the coming decades. This would be a great time for Korea to develop a winning platform for the future. Korea should think about what its competitiveness will be when the current crisis e

Global Economy in Stabilization Without Full Recovery

By Kim Jae-kyoung Staff Reporter There are growing signs that economies are bouncing back from the deepest drop since World War II. However, pessimism is still rampant that the global economy will undergo a sluggish recovery, with many hiccups along the way. According to the Boston Consulting Group, global recessions preceded by financial crises are longer, deeper and slower to recover, and although there have been some signs of "green shoots," it's hard to regard them as signs of a consistent upturn. In particular, it says that considering the market outlooks of the U.S., EU, Japan and China, which account for around 70 percent of global GDP, the global outlook is not so positive, forecasting that a drastic upturn is not likely within next year in the U.S., EU, or Japan. The freefall in the U.S. economy has slowed down, but a "U-shaped'' recovery seems most likely, the consulting firm said. "Consumption is the key, but consumers need de-leveraging. Inventories may be falling, but sales are falling even faster. Money aggregates are growing but lending is stagnating,"

Winners & Losers in Global Economy

The recession is over but consumption is not fully recovered. Business is not as usual in many industries, such as shipbuilding and steelmaking, where supply exceeds demand. But for survivors in automobile and financial sectors, the crisis opened new opportunities. Automobile, electronics and insurance sectors expect solid growth, while shipbuilding and securities face uncertain future. Sunny Days Ahead for LCD, Mobile Phone, Memory Chip Makers The global electronics industry struggled to recover from a bad start in 2009, but an encouraging indicator for 2010 is that the demand for consumer electronics and information-technology products appears to be picking up. The liquid-crystal display (LCD) television market looks ripe for a rebound, and the global mobile-phone market is also projected to expand 8 percent this year, with much of the growth generated from smartphones. It is also expected to be a better year for the global semiconductor industry, as chip prices are expected to ease into a steady level, helped by the increased demand in digital products such as mobile p

Chaebol Slow in Embracing Global Culture

This is the first in a 12-part series of ``The Korea Times ― the Boston Consulting Group (BCG) Joint Project'' designed to identify new realities in the post-crisis world and provide winning strategies for leading Korean firms in 11 key industries. In cooperation with BCG, The Korea Times will look into a wide variety of issues both in the global economy and major industries. By Kim Jae-kyoung Staff Reporter Korean conglomerates, such as Samsung, Hyundai and LG, should take a different approach in their globalization moves to become winners in the post-crisis world, according to the Boston Consulting Group (BCG). The world's top global consulting firm pointed out that the worst crisis in half a century has changed the rules of the game for multinational enterprises. The economic center of gravity is shifting from the West to the East; developing economies are rising rapidly and the business environment has become more complex than ever. In line with such changes, the global economy is undergoing a new economy order, dubbed a "two-speed world," which is characterized by

Crisis Changes Economic Paradigm

By Steven Chai Co-Head of BCG Seoul Office We are currently witnessing many attempts to look ahead and characterize the years to follow the recent crisis. Some talk about a "slow growth decade," a "period of two speed economies" and/or a "period of prolonged uncertainty." Others want to see it as a "new beginning" and/or a "period of emerging new champions." We may not know exactly which will best characterize the times to come, but there is a rapidly growing consensus that regardless of which scenario plays out there will be significant changes as to how global and local industries and businesses need to think about their operating environment. Research conducted by the Boston Consulting Group suggests that there will be hardships imposed on many of the existing business competition models, but at the same time there will be unique opportunities for those who understand the new environment and act accordingly. For many economies, industries and businesses, it will therefore be important to revisit the shift in the rules of the game and reset its strategies. The foll