At the intersection of technology, finance and the Pacific Rim.

Tuesday, September 22, 2009

Globalization and Industry Transformation

Michael Moe, a noted global technology analyst, writes of the effect of globalization on industries (note global vs. local in looking at business models). His point:

While many new leaders still originate in the United States, increasingly emerging stars such as Baidu, Alibaba, MercadoLibre, Ctrip, Research in Motion, and Vestas are conceived outside the U.S. Moreover, even new leaders such as Google and First
Solar are generating approximately 50% of their revenues outside of the United States
and 50% of the S&P 500 earnings come from abroad.

On specific industries that benefit from globalization:

Despite the airline business having been a notoriously horrible industry with the
cumulative loss by all US airlines being approximately $25 billion since Orville and
Wilbur Wright took wings, globalization and the demographic of aging populations
retiring and having more time to travel makes it impossible not to be bullish on the
travel industry.

As English is the global business language, another pure play on globalization is
English Language training. China, always looking ahead, has made English classes
mandatory starting in the 2nd grade. Berlitz is an idea with that theme. Pearson and
Thomson are two terrific global media companies that have sizable English Language
businesses. Rosetta Stone, which is a recent IPO but has stumbled lately, is another
terrific play for this theme. Livemocha, which is a private company in the social
language learning space, has tremendous potential in my view.

Identification technology such as biometrics is an obvious benefactor of a global world.While for now a driver’s license is generally sufficient identification in the United States,
and a passport is acceptable abroad, in a global world where people are traveling in
multiple countries frequently and commerce is conducted without geographic
boundaries, physical and virtual security will be enhanced by more infallible

Of course, driving so much of this globalization has been the internet of late.

Industry that Benefit from Globalization
Language Training
Identification Technology
Security Companies
Financial Services
Consumer Brands
Green Technology/Water
Social Learning/Social Media

A.T Kearney Global Services Location Index 2009
Rank Country
1 India
2 China
3 Malaysia
4 Thailand
5 Indonesia(6)
6 Egypt
7 Philippines
8 Chile
9 Jordan
10 Vietnam
11 Mexico
12 Brazil
13 Bulgaria
14 United States
15 Ghana
16 Sri Lanka
17 Tunisia
18 Estonia
19 Romania
20 Pakistan
Source: AT Kearney

For the full reading of the report:


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