Mega Trends and the Nondestructive Testing Industry
Macro to Micro Opportunities on Future Business, Cultures and
Personal Lives
1
By Nikhil Jain
Agenda
• Introduction and Definition of Mega Trends
• Presentation of Top Mega Trends
• Conclusion and Macro to Micro : How To Apply Mega Trends Within Your Organization to Develop Growth Strategies
2
Top Mega Trends
What is a Mega Trend?
Mega trends are transformative, global forces that define the
future world with their far reaching impact on business, societies,
economies, cultures and personal lives.
Urbanization – City as a Customer
Smart is the New Green
Social Trends
Connectivity and Convergence
Bricks and Clicks
Innovating to Zero
New Business Models: Value for Many
Beyond BRIC: The Next Game Changers
Future Infrastructure Development
Health, Wellness and Well Being
Future of Mobility
3
Mega Trend 1:
Urbanisation - “City as a Customer”
Mega Cities Mega
Regions
Mega Slums Mega
Corridor 5
6
Chongqin
g
Note: A Mega City has a population greater than 8.0
million and a GDP of $250.00 billion or more.
Source: United Nations, Department of Economic and Social Affairs, Population Division (2012);
World Urbanization Prospects: The 2011 Revision; and Frost & Sullivan analysis.
Population in 2025
More than 27 million
18–27 million
8–18 million
Beijing
Chongqing
Wuhan Tianjin
Chengdu
Harbin
Tokyo
Osaka-Kobe Delhi
Mumbai Mexico City
New York City
São Paulo
Kolkata
Los Angeles
Buenos Aires
Istanbul
Cairo
Rio de Janeiro
Jakarta
Moscow
Paris
London Chicago
Seoul
Tehran
Madrid
Shenzhen
Foshan Guangzhou
Hong Kong
Shanghai
Hangzhou
Shenzhen
Nanjing
Bogotá
Mega Cities in 2025 By 2025, 35 Mega Cities will exist globally, and about 77% of these will be from the developing world. Tokyo will be the largest Mega City in 2025, with a population of 38.7 million.
7
Greater Sao
Paulo
28.8 million
Greater
Buenos Aires
36.5 million
Central
Mexico
31.4 million Chennai, Kanchipuram,
Pondicherry
15.0 million
Greater Los
Angeles
20.9 million
Tri-state Area
36.9 million
Lagos and Eko
Atlantic City
25.0 million
Marmara Mega Region
Istanbul, Kocaeli
20.6 million
Mumbai,
Bhiwandi,
Kalyan, Thane,
Ulhasnagar
34.4 million
New Delhi, Greater
Noida, Ghaziabad,
Gurgaon,
Faridabad
28.5 million
Population
greater than 40
million
Population from 20
million to 40 million
Population from 15
million to 20 million
Beijing-Tianjin
51.0 million
Shanghai
67.9 million
Chongqing-
Chengdu
28.9 million Washington, D.C.-
Baltimore Area
15.6 million
Greater Rio
de Janeiro
17.2 million
Cairo-Giza
17.6 million
Source: United Nations, Department of Economic and Social Affairs, Population Division (2012);
World Urbanization Prospects: The 2011 Revision; and Frost & Sullivan analysis.
National Capital Region
in the Philippines
27.7 million
Guangdong Region
58.7 million
Greater Jakarta
29.8 million
Greater Bangkok
19.2 million
Kolkata,
Howrah
21.6 million
Johannesburg and
Pretoria
7.6 million
Emerging Mega
Region
Top Mega Regions of the World in 2025 By 2025, 21 Mega Regions will exist globally. Shanghai and Guangdong Mega Regions will contain 9% of the total population of China.
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Mega Corridors in 2025 By 2025, there will be 21 Mega Corridors globally.
Latin America (2)
• Rio de Janeiro-Sao Paulo-
Campinas Corridor
• Toluca-Mexico City-Puebla
Corridor
Africa (3)
• Abidjan-
Ouagadougou
Corridor
• North-South
Corridor
• Kampala-Nairobi-
Mombasa Urban
Corridor
India (8)
• Delhi Mumbai
Industrial Corridor
• Mehsana-Valsa
• Mumbai-Ahmedabad
• Mumbai-Nagpur
• Bangalore-Belgaum
• Hyderabad-Hindupur
• Srikakulum-Nellore
• Chennai-Hosur
Cross-country (1)
Beijing-Tokyo-Pyongyang-
Seoul Corridor
Japan (1)
Tokyo-Osaka Corridor
Australia (2)
• Brisbane Urban Corridor
• Perth Urban Corridor
Jakarta (2)
• Sumatra-Java
• Jakarta-East Java
Turkey (1)
Istanbul-Izmir
Mega Corridor
Note: Mega Corridors are corridors that connect two major cities or Mega Regions (60 km
or more apart, and with a combined population of 25 million or more). The corridors can be
planned transportation or economic corridors (with planned investment going into transport
infrastructure, industrial zones, energy, or real estate) or naturally evolving urban corridors.
Mega Corridors (21)
Transportation Corridors (16)
Source: UN-Habitat and Frost & Sullivan analysis.
Regions with Mega Corridors
Europe (2)
• Trans-European
Network Transport
(TEN-T)
• Blue-Banana
Corridor
China (7)
• Beijing-Harbin and Dalian
• Beijing-Shanghai
• Shanghai-Chengdu
• Ningbo-Shenzhen
• Beijing-Guangzhou
• Shanghai-Kunming
• Guangzhou-Shenzhen-Hong
Kong
Malaysia (5)
• Sarawak Corridor of
Renewable Energy
(SCORE)
• Sabah Development
Corridor (SDC)
• East Coast Economic
Region (ECER) Corridor
• Northern Corridor
Economic Region (NCER)
• Iskandar Development
Region (IDR) Corridor
United States (3)
• Southern
California
• Great Lakes
Corridor
• Bos-Wash (D.C.)
Corridor
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Asia 56.9%
Rest of the World43.1%
Slum Population, Global, 2025
1.1
Oceania
25.1
Northern Africa
41.8
88.7
Europe
Southeastern
Asia
89.4
Western
Asia
Latin America
and the
Caribbean
362.0
Eastern Asia
475.7
476.0
South-
Central
Asia
Sub-Saharan
Africa
Source: UN-Habitat and Frost & Sullivan analysis.
Forecast of Asian Slum
Population as a Percent
of Total Slum Population,
Global, 2025
Note: The numbers in the circle are in millions
196.8
Mega Slums Globally, 22% of the total population will live in slums by 2025.
Cities, and Not Countries, Will Drive Wealth Creation In the Future
Cities like Seoul account for 50% of the country’s GDP; Budapest (Hungary) and Brussels (Belgium) each for roughly 45%.
What are the Micro Implications? High Economic Power Hub and Spoke Business Model Transit oriented development New Mobility Solutions City as a Customer
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Mega Trend 2:
Smart is the New Green
Smart Factory Case Study: Toyota Practices “Kakushin” in its New Takaoka Plant
Able to Build 8 High-Volume Models as Against 3 on the Original Assembly Line
Welding Parts Shops Press Shop
Body Shop
Paint Shop # 1
Assembly Shop # 1/2
Paint Shop # 2
• 2010– Capacity 500,000
Ditch huge expensive machinery
A welding system that
slashes the cost of jigs and other tooling.
Welding Parts Shops
Press Shop
Body Shop
Paint Shop # 1
Assembly Shop # 1
Paint Shop # 2
Body Shop
Assembly Shop # 2/3
Paint Shop # 3
• 2006 – 660,000 Capacity
- Cost-cutting to generate more than $2.5 billion
- Lead time to add new model halved
- Sensors that monitor quality during each process
A paint process that eliminates the need to let
the base coat dry.
A "set parts system" that delivers a basket of parts to
each vehicle.
Stamping presses that use servo-motors rather than hydraulics, combined with high-speed
delivery robots.
Current Plant
Future Plant
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Mega Trend 3:
Social Trends
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Gen Y Geo Socialization
“She-conomy”
Ageing Population
Reverse Brain Drain
Middle Bulge
Generational Political Shift
Surge in Asian Work
Pool
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Gen Y Geo Socialization
“She-conomy”
Ageing Population
Reverse Brain Drain
Middle Bulge
Generational Political Shift
Surge in Asian Work
Pool
Global Population in 2025: Out of 2.4 Billion Gen Y Population , Around 52% from Asia Alone
Around 37% of Gen Y Population Will Live in India and China Alone
World Population: Breakdown by Region (Global), 2025 2025
2011
6.99 Billion
8.01 Billion
0-14 years 15-34 years 35-64 years 65 years and above
Source: Department of Economic and Social Affairs of the United Nations 2011; Frost & Sullivan, 2012
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Mega Trend 4:
Connectivity & Convergence
10 Connected Devices for Every Household by 2020
5 billion internet users by 2020
5 connected devices for every user by 2020
500 devices with unique digital IDs (Internet of things) per square kilometre by 2020
80 Billion Connected Devices By 2020
Source: Frost & Sullivan, 2012
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Technology Convergence Industry Convergence Product Convergence
Connectivity will Lead to Convergence of Products, Technologies and Industries
UAV Unmanned Aerial Vehicle
V2V Vehicle to vehicle
Vehicle to Infrastructure
Vehicle to Home V2H
V2I
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Convergence in the NDT Industry
Industry Convergence
Metrology
NDT
Product Convergence
Tablet Computers
Phased Array Ultrasonic
Instruments
Competition Convergence
“Expert” Alliance
NDT Training and Equipment
Vendors
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Mega Trend 5: Bricks and Clicks
Macro To Micro Implications of Bricks and Clicks
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Store Sizes to Decrease by
15%-20% by 2020 (from 2011
levels)
In-store, online and mobile to integrate creating a
‘Omnichannel’ shopping experience
M-Payment Users to
increase by 16% exceeding the
1 billion mark by 2025
Before Clicks After Clicks Macro to Micro Implications
Small-box Format (Virtual Stores)
Single-Channel Omnichannel
Money Wallets Mobile Wallets
New Marketing Solutions
through new ‘social’ platforms
TV Campaigns Social Media Campaigns
Big-box Format (Hypermarket)
Mega Trend 7:
New Business Models: Value for Many
New Business Models
Personalization and Customization
Personalization & Customization
Nike
Quirky .com
Co-Creation
One-off Experience
Service as a Business Model
Location Based
Services
(red letter Days)
Source: Frost & Sullivan, 2012
25
Will Replace
“Value for Many”
“Value for Money”
Free Premium
Freemium
+
=
Source: Frost & Sullivan, 2012 26
Mega Trend 8:
Economic Trends
The Next Game Changers in 2025
$2,827 Billion
$5,437 Billion
$1,098 Billion
$811 Billion
$1,167 Billion $2,441
Billion
$653 Billion $6,235
Billion
$38,526 Billion
$6,189 Billion
$772 Billion $323
Billion
$483 Billion
Mexico Brazil
Argentina
Egypt
South Africa
Turkey
Poland
India
China
Russia
Indonesia
Thailand
Vietnam
Philippines
BRIC Nations
Next Game Changers
Note : The figure denotes GDP at market prices. Forecasts to 2025 have been extrapolated based on Nominal GDP growth rate projections .
Source: International Monetary Fund. Oxford Economics, Frost & Sullivan, 2012
$4,816 Billion
The Next Game Changers in 2025—Increasing Oil and Gas Activity in Africa Driving Economic Growth
Source: Frost & Sullivan Analysis
- Emerging oil and gas Producers
- Current Major Oil and Gas Producers
- Potential oil and gas Producers
Ethiopia and Somalia
Exploration activity has found
reserves of oil and gas, however,
production is still a few years apart.
Kenya
Recent oil and natural gas discoveries
have increased investment. 46 oil
blocks auctioned off in the past year.
Tanzania
Large natural gas reserves discovered
recently. The country looking to develop the
reserves and start exporting power by 2015.
Mozambique
Large recent natural gas discoveries add to the
existing reserves. Production to ramp up with
potential export of natural gas to South Africa
being planned.
Ivory Coast
Recent oil discoveries are expected to
enhance oil production by 200,000 bpd
in 5 years from approximately 32,500
bpd being produced currently
Ghana
The country planning $20 billion
investment in the oil and gas sector over
the next 5 years. Oil production
expected to double by 2021.
Gabon
The country has been producing oil for decades but
production has been dwindling over the past 15 years
due to depletion of reserves. However, offshore oil
discovery is expected to usher in the next oil boom in the
country.
Cameroon
Oil production has been declining steadily since
1985 but large natural gas reserves remain
largely untapped. The country expected to
invest in developing the natural gas reserves
over the next 5-7 years.
Equatorial Guinea
Oil production rebounded in 2012 after declining year on year
since reaching a peak in 2005. Natural gas production rising
and expected to witness considerable investment.
Namibia
Oil discovered recently in partnership with a
Brazilian firm after years of exploration.
Production expected to start in the next 5
years.
16.0
16.5
17.0
17.5
18.0
18.5
19.0
19.5
20.0
20.5
21.0
0.0
50.0
100.0
150.0
200.0
250.0
2012 2013 2014 2015 2016 2017
Reve
nu
e G
row
th R
ate
(%
)
Reve
nu
e (
$ M
illi
on
)
Year
Revenue Revenue Growth Rate
South Africa—NDT Inspection Services Market
Source: Frost & Sullivan, 2012
Key Takeaway: The market is expected to witness high revenue growth rates with significant
investment being made in developing new infrastructure.
Mega Trend 9:
Future Infrastructure Development
32
Worldwide Infrastructure Investment, US$ Trillion, 2010-2025 (Cumulative)
10.5
6.6
8.3
1.5
1.0
Americas
Europe
Middle East
Asia Pacific
Africa
Sector Total (US$
trillion)
Road 9.7
Railway 1.5
Air/Seaport 1.0
Power 9.7
Water 5.9
Investments in Infrastructure Development is expected to cross $27 trillion by 2025
Source: Frost & Sullivan analysis.
CAPEX in Developing Canadian Upstream Infrastructure Increasing Steadily
33
23.0 25.4
20.9 19.4
11.0
18.5 19.8 19.6
44.7
9.9
12.2
16.8
20.7
10.6
17.2
21.6 24.8
0.00
20.00
40.00
60.00
80.00
100.00
120.00
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
45.0
50.0
2005 2006 2007 2008 2009 2010 2011 2012 2013
Conventional Oil and Gas Oil Sands Oil Prices
Fore
cast
E&
P C
AP
EX
($
B)
WT
I S
po
t C
rud
e P
ric
e (
$/b
bl)
E&P Capital Expenditure in Oil and Gas, Canada, 2005-2013
Source: Statistics Canada, Public and Private Investment in Canada, BP Statistical Review of World Energy 2013, Frost & Sullivan Analysis
CAPEX in Developing Pipeline Infrastructure Increasing at a High Pace
34
Source: Oil and Gas Journal, Frost & Sullivan Analysis
1.3
2.6
5.7
0
1
2
3
4
5
6
2011 2012 2013
Pla
nn
ed
Pip
eli
ne
s C
AP
EX
($
B)
Macro Micro
From Macro to Micro: Taking Mega Trends from Information to Strategy Implementation
Mega Trend Selected trends that impact your
business and markets
Sub Trend A sub-layer of trends that has a
wide ranging impact
Impact to Your Industry Visualising the roadmap of these critical forces through scenario-
building and macro economic forecasts
Impact on Future Product/ Technology
Analysis of Opportunities and Unmet Needs
To
35
Thank You
Questions?
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Contact Information
37
Nikhil Jain Senior Research Analyst, Measurement and Instrumentation
Jeannette Garcia Corporate Communications, Measurement and Instrumentation
(+1) 210.477.8427
Vijay Mathew Program Manager, Measurement and Instrumentation