Deglobalizing the economy?

L’économie mondiale a connu une période faste au cours des 40 dernières années. 5,5 % de croissance annuelle (3% hors inflation2), 8% de TSR annuel pour les grandes bourses mondiales, un taux d’inflation tombant de 12% à 1%3, des grands pays sortant de la pauvreté et atteignant des niveaux de vie moyens qui étaient ceux de l’Europe ou des Etats-Unis il y a 20 ans.

La mondialisation a été un facteur majeur de cette croissance.

Ce cycle est aujourd’hui remis en cause.

Entrons-nous dans un cycle de démondialisation de l’économie ?

Vertical growth

Quand une entreprise a déjà concentré son marché avec une part de 40 à 60% de celui-ci et que la croissance du marché ralentit, il faut envisager d’étendre le terrain de jeu à tout l’ensemble de la chaîne de valeur, avec les étapes en amont ou en aval du marché sur lequel l’entreprise est positionnée. Le potentiel de concentration horizontale devenant limité, l’intégration verticale peut être un relais de croissance significatif.

Hydrogen, distinguishing myth from reality

The joint challenges of energy and climate currently occupy economic, geopolitical and media debate. Like always, a work of analysis is indispensable to sort between good ideas and “false good ideas”. The challenges related to hydrogen, which is back in fashion, are no exception to this rule.

Here we preview some myths and realities on the subject.

Innovating to grow

Six major innovations account for 32% of global growth over the past decade. They account for 70% in Europe.

Innovation is obviously a critical driver of global growth (along with demographics), and even the only one in mature countries. The mere improvement in productivity through cost reductions enables an economy to grow in volume, but not in value.

The same phenomenon occurs with every business which grows in the long term. The number of products, services, business models which did not exist five years ago can represent 50% to 100% of revenue at any time.

There is no long-term growth without disruptive innovation.

How to innovate to grow?

Moving to sustainability

For businesses, pressures are mounting to act on sustainability. The social trend is strong and pushed by the workforce, clients and investors alike. The gathering sense of urgency is supported by the scientific consensus that the next ten years are key for climate change.

However, commendable exhortations to do more, more quickly often run straight into the realities of business and budgets. Claims that doing good for the planet will create financial value are hard to justify when the time comes for investment decisions. Data and evidence are missing or aggregated into broad ESG metrics which capture too much and are inconsistent with one another. There seems to be no basis for rational decision making.

What can senior executives do?

What’s next?

As every year, here are our core assumptions on macro scenarios which will underly corporate strategic options.

Let us have a dream. With efficient and swift vaccination campaigns, a recovery in 2021 is confirmed. This recovery is uneven. China beacons from afar with 8% growth in 2021 on top of 2% growth in 2020. Overall, fast-growing markets finish 2021 with a GDP 4% above 2019. The USA finishes 3% above 2019. Europe does not recover before 2022 at the earliest.

In this dream, the crisis already waves from a distance. Some countries and corporations move out stronger from the crisis. Others are strongly weakened. The world embarks on the next decade and beyond. What does it look like?

Large family holding companies: undefined objects?

After forty years of strong growth of the world economy and stock markets, the acquisitions and disposals resulting from industry restructurings have generated a significant number of large family holding companies, whose ambitions go beyond the mere risk diversification of their wealth.
Today in the United States, there are more than 900 family holding companies with more than 500 million dollars of assets, including 400 with more than 1 billion dollars of assets and 25 with more than 5 billion dollars (on average, the stake in the historical company represents less than 50% of the total). Globally, the number of these holding companies is growing by 18% per year.
Some of these holding companies, especially when they are newly created, have difficulty defining their positioning, their strategy, and therefore their organization.

Winners and losers: the gap is widening

Contrary to the hopes of some, the economic and competitive world of tomorrow will be just like the one of yesterday, but with more contrasts and speed in its evolution. The health and economic crisis has sharply accelerated the major dynamics in the development of certain businesses, technologies, customer access methods, geographies… at the expense of others, in particular certain mature businesses and countries. We now see in a few months disruptions and substitutions which would have taken place over five to ten years in other times.

Disruption or Acceleration?


Global GDP is likely to fall by 3% in 2020. This is the largest economic downturn since 1945, albeit not at the same magnitude than at the time or during the 1929 crisis. For companies, additional credit will not compensate for losses in capital and value. The only companies to come out of the crisis stronger – or simply to survive it – are those that focus all of their resources on their strengths, as long as those strengths also match the growth trends of tomorrow. The most rational thinking today is to bet on a forced and brutal return to reality. What is this reality?

The energy transition… towards what?

The exceptional global economic growth of the past 70 years is today threatened by three strong factors. The pressure induced on the middle classes, which results in temptations of national withdrawal and protectionism. The fight against climate change linked to the use of fossil fuels which results – beyond energy savings and changes in the energy mix – in temptations to reduce global growth and relocate production. The anticipation of a virtual disappearance of fossil fuels and their impossible replacement in the required proportions by the year 2070, which can fundamentally challenge economic growth.