Davos World

Davos World

1. What is the gist of the scenario?

- Base on a letter presented from the head of the world economic forum to a former US Federal Reserve chairman about the current situation of globalization in the year 2020.

- The letter basically talks about how China, India and other Asian nations are at the core or forefront of economic leadership.

- China, India and other countries in Asia, if they keep developing at this rate, eventually they will become a more powerful economy than those counties in the western hemisphere.

2. Which countries and/or groups have gained power or influence?

- Asian countries, especially China which has the largest economy and market in the world; leader of globalization and currency.

- India is another large economy, and economic heavy weight. India is also at the forefront of technology.

- Women have gained rights and freedom in these Asian countries (education, Politics, and essential part of the workforce.

- The middle class is the group that had the greatest growth in Asian countries, as result of development most Asian nation’s middle class has shown considerable growth.

3. Which countries and/or groups have lost power or influence?

- Countries and groups that have lost power and influence are the U.S. and economic leaders in the Western hemisphere.

- The U.S. instead of been a leader in the year 2020, it will be seen as a competitor of China and India.

- Asian economies, mainly China and India are distancing themselves from the American influence that once was a super power compared to the rest of the world economically

4. How does your company- an American exporter of consumer products such as Dell computer or Microsoft- respond to the new global risk environment?

- The global risk environment is very broad because includes all types of risk, political, economical, operational, terrorism, geopolitical and environmental risk.

- Presence in Emerging markets & unstable markets: these are traditional political risk sites, encompassing the threat of war, terrorism, organized crime and expropriation. Better research of the countries when doing business with, form alliance instead of enemies by giving incentives such as no tariffs or free trade.

- Distribution of employees, corporate expansion and activity in emerging markets will required staff travel and having offices in unstable locations. Better training for employees and aware of the global issues and cultures where they are going to be send and established.

- Supply chain and partnership. Instead of having a centralized head quearter when doing business abroad, companies should have local partners or affiliation with established local companies that know the local market.

- Avoid capital hazards which are political shocks which can cause a sudden loss of investment flow into an industry.

- Better information and technological advances in order to stay competitive in the new global risk environment; information vulnerability, intellectual capital can be compromised by risk associated with false information, miscommunication, poor cyber security, and blockage of information flows