Briefing on Flat World Environment Facing U.S.

1
Briefing on Flat World Environment Facing U.S.
5a
2
Terrorism

• U.S. Armed Forces in about 30 countries hunting
  down terrorist groups (little publicity)
• Military action in Iraq and Afghanistan
  (relentless media coverage)
• Lasting lesson of 9/11, small groups of
  terrorists can kill large numbers very quickly
• Other than China, U.S. only country continuing to
  put money into military (getting on-the-ground
  experience vs. terrible price)

3
Emergence of China

• Has already passed U.S. and Japan as exporter
• Last 20 years have moved 250 million people from
  rural areas to cities (next 20 years, 300 million
  more)
• Manufacturing (in U.S. meet market demand and
  make profit, in China create jobs)
• China addicted to manufacturing, U.S. addicted to
  low prices (codependency, enabling each others
  addiction)
• Chinas economic growth causes need for more raw
  materials, drives up prices worldwide (e.g. oil)
  and factor in world politics
• Situation with Taiwan is very volatile for U.S.

4
Shifting Demographics of Western Civilization

• Western Europe birth rate is 30 below
  replacement (in 30 years, 70-80 million fewer
  Europeans)
• Immigration (10 of France and Germany are
  Moslems, by 2020 more than half of all births in
  Netherlands will be of non-European decent)
• Japan will lose up to 60 million over next 30
  years (limit immigration). Much older
  population.
• Economic impact Europe and Japan are shutting
  down
• U.S. just below replacement but Hispanic
  immigration leads to population growth

5
Shifting Demographics of Western Civilization

• U.S. has aging population. Need kids to have
  strong economy (consumers and become tax payers).
  Older population is huge drain (social security
  and health care).
• China and India populations are not declining,
  but many more boys than girls.
• Most effective birth control turns out to be
  money. Having large families incompatible with
  life style.
• Will take at least two generations to turn things
  around in low birth-rate countries.

6
Restructuring of American Business

• To succeed, you have to be the best (highest
  quality, lowest price, best service)
• Fracturing of businesses (rely on others to
  perform functions used to do itself)
• Result is fewer employees and more independent
  contractors (new employment contract)
• There are Integrators (IBM) and Complementors
  (Intel, Microsoft) and the complementors become
  integrators, etc.
• In fractured firms, employees and revenues may be
  going down, but profits going up

7
Restructuring of American Business

• U.S. (and to degree U.K. and Australia) is moving
  toward 21st century model economy (fast and
  flexible through fracturing and re-fracturing and
  is highly productive through its IT systems,
  human resources, and organizational leadership).
• Although China (and maybe India) may challenge in
  future, the economic gap between U.S. and
  everyone else should continue to widen,
  especially with Europe and Japan.