43
1 Russia Mega Trends: Macro to Micro Implications for 2020 May 2012

Mega trends in russia 2012 2020

Embed Size (px)

DESCRIPTION

http://community.sk.ru/opus/megatrends/b/weblog/archive/2012/06/27/russia-mega-trends-macro-to-micro-implications-for-2020.aspx

Citation preview

1

Russia Mega Trends: Macro to Micro Implications for 2020

May 2012

2

Introduction to Mega Trends

3

Impact of Mega Trends on Key

Organizational Functions

Mega Trends are global, sustained and macro economic forces of

development that impact business, economy, society, cultures and

personal lives thereby defining our future world and its increasing pace of

change

What is a Mega Trend?

Definition of a Mega Trend

4

Mega Trends in Russia

5

Economy: Russia Beyond Moscow – The Next Game Changers

6

Moscow – Emerging Mega City

Fast Forward Moscow City Facts: Did You Know?..

� 25-30% of Russia’s GDP will be produced in Moscow (2025)

� 20% of Russian population will live in Moscow agglomeration

� The city will grow 2.5 times (Big Moscow)

� 150km of new tracks and 70 stations will be opened in Moscow Metro

What Are The Implications?

� Global economic force on its own

� Hub and spoke business model

� Diverse and dynamic socio-economic mix

� Tech-savvy citizens connected 24/7

� Mega-corridors: Moscow – St. Petersburg, Moscow – Nizhniy Novgorod

7

Russia Beyond Moscow – The Next Game Changers

Moscow

Yekaterinburg

Novosibirsk Krasnoyarsk Khabarovsk

Vladivostok

Krasnodar

Saint Petersburg

South: Sochi, Krasnodar, RostovDevelopment of tourism and agricultural business

Far East: Vladivostok, Nakhodka, KhabarovskModern infrastructure and logistics facilities

Siberia: Krasnoyarsk, Novosibirsk, TomskOil and gas, healthcare, energy, innovation

Ural: Yekaterinburg, PermLogistics, finance, machine building

1/3 of the population will live in the Eastern part of Russia in 2025

5 to 7 cities will emerge as alternative growth centres by 2020,bridging the welfare gap between Moscow and the regions

8

The New Locomotives of Growth

Vladivostok – “San-Francisco” in the Far East

� “Open sky” status – transit between China and US

� Modernization of Vladivostok Marine Trade Port

� Educational, scientific, travel and business centre linking Europe, Asia and America

“Tomsk 3.0 – Cognitive City of the Future

� Post-industrial, innovative economic development

� Strong scientific and educational complex

� Comfortable living environment and social infrastructure

Yekaterinburg – “The City” of Ural

� Economic and financial centre

� Important transportation hub – multi-modal logistics, the fastest growing airport

� Solid industrial base attracting investments

9

Social Trends: Prosperity, Education and Social Mobility

10

Wellness and wellbeing

•Healthy nutrition

•Healthier lifestyle – sport and fitness

Education

•RUB 140.5 billion investment

•From quantity to quality

•Corporate and federal universities, national research centres

Middle Class

•Boom in consumer expenditure, stimulating the overall economy growth

•The largest consumer markets in Europe

•Higher demand for intangible products –services, leisure and entertainment, etc.

2020201520102005

Annual Disposable Income* (Russia), USD per capita

Source: Frost and Sullivan, Euromonitor International, Rosstat

Social mobility

•She-economy

•Small and medium businesses

•Reverse brain-drain

* Current prices, year-on-year exchange rates

The Middle Bulge

11

Small and Medium Business – Engine for Innovative Growth

Restraints

� Only 5% have international contacts

� Only 2% - innovative SME

� US – 40% of GDP, Europe – 60% of GDP

� Barriers – tax system, lack of available financing, corruption, red tape

Positive trends� 1.7 m SMEs, 4 m individual entrepreneurs

� 17 m employed, 22% of working-age population

� 21% of GDP

� 2000-2005 growth – 7%, 2005-2009 – 40%

What kind of support measures for SMES would be most effective?% of responses

Source: Chamber of Commerce of Russia and the Ministry of Economy – “Monitoring of SME

sector”(June 2011), Opora.

12

Healthcare as a National Security Doctrine

13

Sourc

e: W

HO

, U

N, R

ossta

t, F

rost and S

ulli

van

Nation’s healthcare becomes THE most urgent problem in Russia

Facing Demographic Crisis

� Life expectancy among the lowest in the developed world

� Unhealthy lifestyle and inefficient healthcare system

� Number of population decreased by 7 million in 1991-2009.

� 2025 forecast: optimistic/pessimistic scenarios ~139/131 million

Fast Forward Facts:Demographics

14

Sourc

e: IM

S H

ealth

, F

rost and S

ulli

van

Pharma 2020

Manufacturing of pharmaceuticals in Russia

Foreign Russian

2010 2020

Today

� Low per capita consumption of drugs

� High dependency on imports

Tomorrow

� One of the fastest and most attractive pharmaceutical markets

� Locally-produced drugs, including innovative and biopharmaceuticals

Pharma

Pharmerging Economy

CAGR 2011-2016:

11-14%

15

Source: Frost and Sullivan

Equipping the Healthcare System

Today

� Installed base – 4 MRI and 9 CT scanners per 1 million population Estimate in order to meet the diagnostic needs – 14 and 25

� Lack of qualified personnel (e.g. radiologists)

� Dependency on imports

Tomorrow

� Steady market growth

� Localization of production and technology transfer

Medical Equipment

CT – computer tomography

MRI – magnetic resonance imaging

CAGR: 7-8%

16

Infrastructure Development

17

The most ambitious infrastructure development programme in the world

� New and improved business opportunities

� Population mobility

� Economic development of the Eastern part of Russia

18

Source: Rosstat, IATA, Frost and Sullivan

Today:

� 63% of the Russia’s territory has no alternative to air transport.

� 80% of airport infrastructure is outdated and requires modernization

� 70% of runways were built over 20 years ago.

Tomorrow:

� Tourism in the North Caucasus– 4 new and modernization of 6 existing airports

� Vladivostok – air hub in the Far East

Investment 2012-2019: RUB 107 ($ 3.55)

billion

Up in the Air

19

Source: Ministry of Transportation, Frost and Sullivan

Automotive IndustryOver 4 mln new car sales in Russia by 2020

Logistics IndustryTo reach over $100 bn by 2020

Fools and Roads

Today:

� 29% of federal roads are overloaded, in Moscow – 60%

� 46,000 settlements (2.7 m citizens) do not have access to hard-surfaced roads

� 23.5 deaths per 100,000 people caused by road accidents (Europe – 9.5)

Tomorrow:

� Construction/modernization of ~20,000 km of roads, including toll highways

� Trans-Siberian route development and emergence of multi-modal hubs

� The Silk Road of Modern Age: Europe to China highway via Kazakhstan

Investment 2012-2019RUB 1.71 trillion

($ 57 billion)

20

SiemensDesiro trains to be manufactured in Russia

TalgoSpanish manufacturer to supply variable gauge trains for Moscow-Berlin and Moscow-Kiev routes

AlstomSupplier of Allegro train on St.Petersburg-Helsinki direction, is eyeing further expansion in Russia

Back on Track

Today:

� Low railway network density

� Low cargo delivery reliability – 88-90%

Tomorrow:

� 20,000 km of new railway links by 2030, +24% in railway network density

� The dawn of high-speed railway era – 1,500 km with speeds up to 350 km/h (St-Petersburg – Moscow – Yekaterinburg)

� Modernization of rolling-stock (passenger and cargo)

Investment 2012-2019RUB 407 ($ 13.5)

billion

Railway modernization in Russia attracts

foreign players

Source: Ministry of Transportation, Frost and Sullivan

21

e-Russia

22

Modern Russia

Implications for Government, Business and Society:

� Accountable and transparent government

� Transparency for stakeholders in G2G and G2B transactions, bidding process

� Improved city planning process

� Cut red tape and save time: on-line G2C services (taxes, utility bills)

� Reduce operational costs for businesses

� Efficient delivery of a long range of public services 24/7 – education and healthcare

� New business models

23

E-Government

UN e-Government index 2012

� www.government.ru – solid and representative, rich technical features

� www.gosuslugi.ru portal – One Stop Shop for e-services, ~500,000 monthly visitors

� 27th spot in the world

� The leader in Eastern Europe, only behind Japan and US among the largest populated countries

� RUR 80 ($2.7) billion investment for government informatization

� 60% of the population to use e-government services in 2020, up from ~11% presently

+32 positions in global ranking in

2 years (!)

Note: * - with a population over 100 million peopleSource: United Nations

24

e-Society

e-Learning

� Legal status of e-learning approved by the new Law on Education (2012)

� 20-25% growth of e-learning services in the coming years

� ~ 40% annual growth

� Overcoming general distrust, expansion in the regions and all age-groups

� Solving logistics and payment issues

� New business models (private shopping clubs, group purchasing, penny auctions)

e-Commerce

e-Healthcare

� RUR 24 ($ 0.8) billion investment

� Electronic health records system roll-out in pilot regions

� Telemedicine and m-healthcare – remote patient diagnosis, monitoring and treatment

25

Made in Russia

26

Made in Russia 2.0

Innovative production in Russia, % of GDP

Innovative products in Russian exports, %

Before After

“REBRANDING”

27

Localization of foreign

manufacturers

Strong dependence

on hydrocarbon

exports

Export of innovative goods and services

R&D funding

Technology transfer

Before After

Localization of manufacturing in Russia will trigger its innovative growth

From Raw Materials Supplier to Innovative Exporter

28

Back to Russia

Healthcare

�CT scanners – Philips Healthcare and Elektron, GE Healthcare and Rostekhnologii

�Big Pharma

ICT

�Mobile base stations for LTE networks – NSN, Rosnano and Mikran

�IPTV set-top boxes –Cisco Systems (manufactured by Jabil)

Energy

�Energy efficient power generation turbines –General Electric and Rostekhnologii

�High performance gas turbines – Siemens AG and Silovye Mashiny

Automotive

�Localization of automotive plants

�Railway cars – Alstom and Siemens AG

�Automotive components – Valeo, Robert Bosch

29

Technology Leapfrogging

30

Automotive & Logistics:

•Navigation assistance

•Traffic management

•Usage-based insurance

•In-vehicle infotainment

•Asset tracking

•Real-time stock management

•Air-traffic control

•Automated guidance of machines

ERA GLONASS is to become fully operational by 2014-2016 and create multiple innovative applications

Space Jam

Other:

•Tracking (personnel, children, criminals)

•Remote patient monitoring

•Improvement in weather prediction

•Mobile satellite services

•Increase in broadband speed

31

RFID / NFC

•Potential economic benefits to outweigh implementation costs

•Multiple applications – retail, logistics, toll collection, fare payment

4G Mobile Technology

•High rates of data transmission

•Enabling integration into any wireless platform

•Russia at the forefront of LTE deployments globally

202020152010

Broadband Internet Access, % of Households

Security

•Transportation and critical infrastructure protection

•CCTV surveillance integrated into the wireless platform

•Market growth of IP-based solutions

Wireless World

Wireless intelligence – IT infrastructure to be around 80% wireless

32

Biopharmaceuticals and Beyond

Biotechnology-2020

RUB 1,163 ($38.6) billion

Today�0.1% of the global biotechnology market�80% import dependence�Focus on pharmaceutical biotechnology

Tomorrow�5% market share in the global biotech market�Two-fold reduction of imports�Red, White and Green biotech

� Fast-growing, attractive for investment

� Large-scale projects –Generium, Bioprocess, Chemrar, Biocad

� Opportunities – import substitution of generics, innovative drugs

Red Biotech - Pharma White Biotech – Industry

� Virtually non-existent

� “Third wave of biotech”

� Opportunities – biofuels (agricultural and forestry waste), chemical industry (biopolymers), food and feed (ingredients, supplements)

Green Biotech - Agriculture

� Legal uncertainty – barrier for growth

� Opportunities – increase yields of agricultural crops, reduce their vulnerability to diseases, improve nutritional quality of food (amino acids)

33

2018201520122009

Source: Frost and Sullivan, NT-MDT, Rosnano

Global Scanning Probe Microscopes Market,$ million

CAGR 15%

NANOMATERIALS

�Large scale production of silicate nanocomposites (Bryansk, February 2012) – Rosnano

�Large number of innovative SMEs, e.g. Novosibirsk Nanomaterials – metal nanopowders.

NANOMATERIALS

�Large scale production of silicate nanocomposites (Bryansk, February 2012) – Rosnano

�Large number of innovative SMEs, e.g. Novosibirsk Nanomaterials – metal nanopowders.

NANOINSTRUMENTATION

�Worldwide spending on nanotechnology will lead to sustained growth in demand

�NT-MDT (Zelenograd) –manufacturer of world-class scanning probe microscopes (SPM) since 1989

�Advanced Technologies Centre –manufacturing of SPMs (Moscow, December 2011) – Rosnano.

NANOINSTRUMENTATION

�Worldwide spending on nanotechnology will lead to sustained growth in demand

�NT-MDT (Zelenograd) –manufacturer of world-class scanning probe microscopes (SPM) since 1989

�Advanced Technologies Centre –manufacturing of SPMs (Moscow, December 2011) – Rosnano.

Nano-Russia

34

Smart is the New Green

35

“Smart” is the New Green

Smart Cities Smart Technology

Smart Infrastructure

Smart Energy

Smart Mobility

Smart Buildings

Smart Grids Smart Clouds

Smart Materials

Smart Bandages

Smart Phones Smart Meters

36

Sourc

e: F

rost &

Sulli

van

Russia is to leapfrog from incandescent light bulbs to intelligent LED lighting systems

The Lighting Revolution

LED-pioneers in Russia

LED Lighting – Market Revenue, World

CAGR 20%

Smart Lighting

Today� LED – 3-5% of the market due to high cost

Tomorrow� LED prices are to decrease 30% by 2015

� Russia is to phase-out inefficient light bulbs: 2011 – 100W, 2013 – 75W

� LED vs. Incandescent bulbs – potential energy saving of 80%

� Intelligent lighting systems – wireless networks to remotely monitor and control street lighting, motion controls, dimming sensors, on/off scheduling.

37

Sourc

e: F

edera

l Grid C

om

pany, F

rost

& S

ulli

van

Price Projection, $Installed Base, million units

Saving the Energy

Intelligent grid implementation could result in RUB 50 million annual savings

Smart Grid projects in Tomsk, Sochi, Perm, Belgorod

European Smart Meters Market

Today� 13-15%energy loss during electricity transmission

� 70% of installed equipment – import

Tomorrow� 40% energy efficiency increase by 2020 (Federal Law #261)

� Incentives for localization of production – to reduce share of imports to 40%

� Beyond electricity – pilot installations of water smart meters (Mosvodokanal)

Smart Meters and Grids

38

• E-government• E-healthcare

• Smart buildings• Smart grid

• Traffic management• Public transport

• Entertainment• Culture and sport

Smart governance

Smart environment

Smart living

Smart mobility

Smart City – interconnected urban environment where citizens lead a fully digitalized lifestyles

From Concept to Reality

Today� Citizens demanding a modern living environment

� Energy efficiency and environmental concerns

� Rapid growth and penetration of ICT

Tomorrow� Smart city projects in Belgorod and Skolkovo – a model for

modernisation of smaller Russian cities

SMART CITY

Belgorod

� Maiden smart city project in Russia

� Smart lighting system� 59,000 smart meters� Smart grid.

39

Mega Events

40

Mega Events

Sochi 2014 Winter Olympics

� $ 10 billion investment

� Development of tourism in the Caucasus

F1 Grand Prix

� $ 200 million investment

� Recurring annual revenue

FIFA World Cup 2018

� ~ $ 22 billion investment

� Infrastructure, tourism, global marketing campaign

APEC Summit 2012

� $ 9 billion investment

� Modernization of Vladivostok – hub in the Far East

A string of large-scale events that will open up Russia to the world

41

Macro to Micro Analysis

42

Key Strategic Conclusions

1. Mega Trends are connected and intertwined which suggests “synergetic” opportunities

between them

2. It is important to understand the eco-system of the Mega Trend and the elements of the

value chain which have most profitability

3. All these trends have global ramifications thereby offering scalable opportunities

4. These forces are changing rapidly and bringing new competencies into play at half the

life-cycle speed of the past decade

5. Organisations’ need “Mega Trend” champions and teams within their organisation

structure to best exploit the opportunities

6. It is important to build a healthy eco-system around your opportunity related to a mega

trend as it can be a source of competitive advantage and raise barriers to entry

43

From Macro to Micro: Taking Mega Trends from Information to Strategy Implementation

Sub TrendA sub-layer of trends that has a wide ranging impact

Mega TrendSelected trends that impact your business

and markets

Analysis of Opportunities

and Unmet Needs

Impact on Future Product/

Technology

Impact to Your Industry

Visualising the roadmap of these critical forces through scenario-building and macro

economic forecasts

Macro Micro