The global economy is correcting in a way which requires a fundamental shift in corporate behaviour. Partnerships are now more critical than ever before and the requirements for success apply to every nation dealing with the consequences of the correction. The challenge of delivering practical expertise that effortlessly spans countries, languages, cultures and government structures is a significant challenge for advisory organisations over the coming years. More importantly, those governments and companies who pay for support will need to be more discerning than ever before about how to ensure real value.
Countries with developing legal and governance infrastructure require advisory services offering specialist sector experience, integrated working practices and more pragmatic tools.
The economic landscape of the world is changing. China’s relationship with the world is changing. New types of partnerships and new a new corporate behaviour is needed to enable a sustainable future.
Three areas are emerging where political will, investor confidence and opportunities for new partnerships all converge:
- Inward investment in developing nations: The World Bank estimates that Africa needs an extra US$90 billion a year for infrastructure alone. Consumer demand is growing, and private equity firms are flocking to the continent. There is evidence that large funds are changing behaviour and instead of focussing on buying businesses worth more than US$100 million, investors are showing more imagination and faith in the long term growth of Africa. Almost 50% of all firms bought by private equity funds in 2015 were worth less than US$10 million.
- Investment in infrastructure and renewable energy: Renewable energy is a powerful driver for growth. Nations in which political impetus matches scope for development are generating huge opportunities for outside partnerships. Saudi Arabia continues to drive forward hugely ambitious renewable energy projects with more than US$100 billion of planned investment over the next two decades. Similarly, Australia plans to generate US$28 billion worth of investment before 2030. Thousands of projects across the world are going to require technology partners, advisory services and a vast array of new skills in the next decade and a significant number are scheduled to be commissioned before 2020. Meanwhile, traditional and now much cleaner energy sources continue to fuel much of the developed world.
- Partnerships with societal benefit: Global governance is improving, the political world is watching and the societal consequences of all investment activity is being measured and evaluated with closer scrutiny than ever before.