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7.1: The Global Market and Advantages of International Trade

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Learning Objectives

By the end of this section, you will be able to:

Define global market opportunities.
Explain why international trade is advantageous to business.
Discuss the challenges of international trade.

Global Market Opportunities Defined

For some, the thought of expanding business operations into the global market is new, exciting, and fun. For others, it may seem daunting or impossible. At some point, most if not all companies will decide if and how they will expand into global markets based on global market opportunities. Global market opportunities simply refer to conditions that are favorable for a company to expand outside its home country market. These conditions include internal factors, such as the company’s ability and knowledge, as well as external factors, such as market growth, customer demand, and regulations or trade barriers within the industry.

Many companies have a presence in the global marketplace at some level. Consider a small Etsy shop that sells custom-printed T-shirts. While the T-shirts may be printed in the United States (maybe even in someone’s garage), the T-shirts may be purchased in foreign markets, such as China. While Etsy is a small-scale example, larger companies may have a greater presence in the global marketplace. Consider that Nike , founded in 1964, now sells its products in 170 countries that serve more than 30 major sports and consumer lifestyles. 7 While there are considerable risks to entering global markets, there are numerous advantages as well.

Advantages to International Trade

There are several advantages to international trade, including increased revenues, decreased competition, faster growth, diversification of risk, and the ability to more easily find buyers of excess inventory. Let’s look at each of these in more detail.

Increased Revenues

One of the most obvious advantages to international trade is an increase in revenue. Recall that revenue is the money earned from business operations, so the more countries in which a product or service is available, the more revenue will be generated.

Decreased Competition

A US-based company may have a great deal of competition. Consider the automobile industry. In the United States, most households own at least one vehicle. Competition in this industry is rather fierce, and it would be difficult for a new company to enter the market. However, in developing countries where automobiles are not as prevalent or infrastructure is still in development, competition for automobile buyers could be much lower.

Alternatively, fiercer automobile competition in some countries may force competitors to leave the market or choose not to enter at all. China is the world’s largest vehicle market in terms of both sales and manufacturing output. 8 As such, carmakers around the world continue to vie for the Chinese automobile market share. However, the market is mainly dominated by its domestic automakers, making international competition difficult. 9

For example, the Hongguang Mini EV, a battery electric microcar manufactured by China-based SAIC-GM-Wuling , has been a top EV seller since 2020. 10 In an effort to take market share, Ford has set the “groundwork to accelerate a refresh of the company’s product portfolio in China by launching three new vehicles offered only in China.” 11

Faster Growth

For companies with a growth strategy, international expansion may be a viable option to achieve these goals. This is particularly true when the home country’s market is saturated or experiencing slow or no growth. A market becomes saturated when there is enough capacity in the industry to meet all of consumer demand or when consumer demand begins to decrease. Either instance may make the international market an attractive opportunity for a business.

In addition to the growth of the company, as firms decide to expand into global markets, the international market will also experience growth. For example, when Amazon expanded its global operations to include a fulfillment center in Poland, the company had to hire employees to fulfill those orders. As of 2022, the Poland fulfillment center employed 25,000 people. 12 These individuals use their paychecks to purchase goods and services within their economy, causing the economy to grow. As new companies enter these markets, individuals are given the opportunity to consume a wider selection of goods and services and to move into higher standards of living.

Diversification of Risk

Risk refers to any situation or condition that leads a company to decreased profits or even failure. 13 Have you ever heard the saying “Don’t put all your eggs in one basket”? It refers to putting all of your effort in one area and risking great loss. It’s a reminder of how international expansion can help diversify business risk. Rather than focusing on one product or one market, companies are able to spread their risk across various markets. Additionally, while one country may be experiencing a recession and causing sales for a company to decline, another country may be experiencing a boom, which would likely result in an increase in sales for that same company. With operations in multiple countries, a company can potentially balance the up and down markets. A downturn in one or a few markets will not cause the company to fail completely because the demand in other markets may be growing.

Disposal of Surplus Goods

A final major advantage to international trade is the ability to dispose of surplus goods. For example, prior to each Super Bowl, the NFL makes clothing for both teams that states each is the winner so that supply is available immediately after the game. However, only the winning team’s clothing is sold after the game. Rather than the losing team’s clothing going to the landfills, it is donated to other countries, decreasing the waste of the unsold product. 14 Do not confuse the disposal of surplus goods with the concept of dumping , an illegal practice that will be discussed later in the chapter.

Challenges to International Trade

While there are numerous advantages to international trade, there are also challenges. Those challenges are discussed in more detail in the following sections.

Understanding the Business Environment

Regardless of where a business is located, its success depends largely on management’s understanding of the business landscape. The business landscape refers to all internal and external factors of the business, its industry, and its environment. Companies that intend to expand internationally often make the grave mistake of assuming the landscape of a new market is the same of that in the home country, a concept known as ethnocentrism . In most instances, this causes companies to stumble or even fail. Understanding the nuances, expectations, and regulations in international markets is one element that drives success.

Understanding the Target Country’s Business Politics

Politics, laws, and industry relationships shape the environment of businesses both locally and abroad. The way business is conducted varies greatly from country to country, and businesspeople must not only be aware of these differences but must also have the ability to adapt to the local business politics.

Differences in Regulations and Marketing

Remember, there is no one-size-fits-all marketing campaign. You can imagine how this notion is amplified when thinking about marketing in various countries. Marketers must be in tune with their target markets to succeed. Additionally, marketing is perceived differently in various cultures, and it is important to understand how cultural differences influence consumer behavior.

For example, in the United States, it is not uncommon to see a plethora of advertisements for prescription medications targeting the general public. Most other countries do not regularly advertise prescriptions to the public but rather to the doctors prescribing those medications. In fact, the United States and New Zealand are the only countries where this type of marketing is allowed. 15 Each international market requires marketers to adapt or create new marketing strategies, which can vary considerably with each of the marketing mix elements—product, price, place, and promotion.

Cultural Differences

Local culture has an impact on marketing campaigns. It’s common for marketers and other businesspeople to find it challenging to understand the differences between their own culture and the target market. Cultural sensitivity can help to alleviate these challenges when preparing marketing campaigns for other countries and cultures. Cultural sensitivity is the awareness and appreciation of and the ability to adapt to a cultural, ethnic, racial, or other group other than one’s own. 16 By increasing cultural sensitivity, marketers can better create marketing campaigns that truly encompass the target market.

Two examples of companies not readily prepared come from Nivea and Gucci . In 2017, Nivea launched a social media campaigned stating “White Is Purity.” The phrase was perceived by the public as being racially insensitive. To make matters worse, the slogan was then used by white supremacists in their propaganda. 17 While the company apologized and removed the campaign, these marketers should never have let the campaign leave the idea room. In 2019, luxury fashion designer Gucci introduced a balaclava knit jumper that had material that went up and around the mouth. The advertisement for this clothing featured a White woman modeling the sweater with bright red lipstick. Many critics noted its similarity to blackface. The company immediately pulled the $890 sweater from stores. 18

Link to Learning: Gucci

Read more about the balaclava polo jumper from Italian designer Gucci , the public commentary, and Gucci’s official response. Also check out the details behind the Nivea “White Is Purity” ad and the uproar from consumers.

Cultural differences are an important factor in the marketing of a product, but these differences are also critical with business practices. Suppose you are meeting with a business partner in another country. Do you know if there is a gift-giving expectation? You may be aware that there are ethical concerns and sometimes prohibitions with gift giving in the United States, but in other countries it would be unprofessional to attend a meeting without a gift. For example, in Japan, it is customary to bring a small gift with an initial sales call. 19 In the United States, some companies won’t allow employees to accept gifts.

Using another US example, it is not unusual to “get right down to business” when meeting with others. Conversely, it may take several meetings of developing rapport with Japanese businesspeople before business is ever discussed. In addition, it’s commonplace in Japan for people to not shake hands (see Figure 7.2) but rather bow to one another. 20

Four business people sit around a conference table with laptop computers in front of them. Two people are reaching across the table, shaking hands.

Link to Learning: Cultural Sensitivity

There are many ways you can begin to be more culturally sensitive. The first step is awareness. Read this short article on five ways to improve your cultural awareness. Also check out this video to learn how to develop cultural competency as a skill.

Knowledge Check

It’s time to check your knowledge on the concepts presented in this section. Refer to the Answer Key at the end of the book for feedback.

When conditions are favorable for a company to expand globally, the company is experiencing ________.

global market opportunities
international trade
increased sales

Which of the following is NOT an advantage of international trade?

Increased sales
Cultural barriers
Diversification of risk

Being aware of and appreciating variations in culture is known as ________.

cultural sensitivity
cultural barriers
cultural differences
marketing regulations

Ashia is planning a business dinner with her new clients in Chile. She has never visited Chile before and is not familiar with their customs. Which of the following would you NOT advise Ashia to do?

Tell Ashia she should consider talking with a colleague who has traveled to Chile before.
Tell Ashia to study some of the most important Chilean customs so as not to embarrass herself or offend her dinner guest.
Tell Ashia that if she is in doubt, she should follow her dinner guests’ lead on what is appropriate.
Tell Ashia not to worry about it because the Chilean businesspeople should adapt to her customs because her customs are the best ones to follow.

Which of the following is true regarding business politics?

They do not vary from culture to culture.
Business politics can vary greatly across cultures, and businesspeople should decide what is within their own ethical compass before deciding to conduct international business.
Business ethics are the same across every culture.
When conducting business in a foreign market, you should always do what is asked of you, even if it’s unethical or illegal in your home country.

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What Is Globalization?

How It Works
Pros & Cons

The Bottom Line

Macroeconomics

Globalization in Business With History and Pros and Cons

Globalization refers to the growing interconnection of nations' economies. It represents the flow of financial products, goods, technology, information, and jobs across national borders and cultures. In economic terms, it describes an interdependence of countries around the globe fostered through free trade .

Key Takeaways

Globalization is the spread of products, technology, information, and jobs across nations.
Corporations in developed nations can gain a competitive edge through globalization.
Developing countries also benefit from globalization as they tend to be more cost-effective locations and therefore attract jobs.
The benefits of globalization have been questioned as the positive effects are not necessarily distributed equally.
One clear result of globalization is that an economic downturn in one country can have a domino effect on its trade partners.

Alex Dos Diaz / Investopedia

Understanding Globalization

Corporations gain a competitive advantage on multiple fronts from globalization. They can reduce operating costs by manufacturing abroad, buy raw materials more cheaply because of the reduction or removal of tariffs , and most of all, gain access to millions of new consumers.

What Globalization Means

Globalization is a social, cultural, political, and legal phenomenon.

Socially, it leads to greater interaction among various populations.
Culturally, globalization represents the exchange of ideas, values, and artistic expression among cultures.
Globalization also represents a trend toward the development of a single world culture.
Politically, globalization has shifted attention to intergovernmental organizations like the United Nations (UN) and the World Trade Organization (WTO) .
Legally, globalization has altered how international law is created and enforced.

On the one hand, globalization has created new jobs and economic growth through the cross-border flow of goods, capital, and labor. On the other hand, this growth and job creation are not distributed evenly across industries or countries.

Specific industries in certain countries, such as textile manufacturing in the United States or corn farming in Mexico, have suffered severe disruption or outright collapse as a result of increased international competition.

Globalization's motives are idealistic, as well as opportunistic, but the development of a global free market has benefited large corporations based in the Western world. Its impact remains mixed for workers, cultures, and small businesses around the globe, in both developed and emerging nations .

Globalization has grown at an unprecedented pace, with public policy changes and communications technology innovations cited as the two main driving factors.

The History of Globalization

Globalization is not a new concept. Traders traveled vast distances in ancient times to buy commodities that were rare and expensive for sale in their homelands. The Industrial Revolution brought advances in transportation and communication in the 19th century that eased trade across borders.

The think tank Peterson Institute for International Economics (PIIE) states globalization stalled after World War I. Nations moved toward protectionism as they launched import taxes to guard their industries in the aftermath of the conflict. This trend continued through the Great Depression and World War II until the U.S. took on an instrumental role in reviving international trade .

One of the critical steps in the path to globalization came with the North American Free Trade Agreement (NAFTA) , signed in 1993. One of NAFTA's many effects was to give American auto manufacturers the incentive to relocate a portion of their manufacturing to Mexico where they could save on the costs of labor. NAFTA was replaced in 2020 by the United States-Mexico-Canada Agreement (USMC) .

Governments worldwide have integrated a free market economic system through fiscal policies and trade agreements in the 20th century. The core of most trade agreements is the removal or reduction of tariffs.

This evolution of economic systems has increased industrialization and financial opportunities in many nations. Governments now focus on removing barriers to trade and promoting international commerce.

Pros and Cons of Globalization

Proponents of globalization believe it allows developing countries to catch up to industrialized nations through increased manufacturing, diversification, economic expansion, and improvements in standards of living .
Outsourcing by companies brings jobs and technology to developing countries, which helps them to grow their economies. Trade initiatives increase cross-border trading by removing supply-side and trade-related constraints.
Globalization has advanced social justice on an international scale as well, and advocates report that it has focused attention on human rights worldwide that might have otherwise been ignored on a large scale.
One clear result of globalization is that an economic downturn in one country can have a domino effect on its trade partners. For example, the 2008 financial crisis had a severe impact on Portugal, Ireland, Italy, Greece, and Spain. All of these countries were members of the European Union , which had to bail out debt-laden nations, which were thereafter known by the acronym PIIGS .
Globalization detractors argue that it has created a concentration of wealth and power in the hands of a small corporate elite that can gobble up smaller competitors around the globe.
Globalization has become a polarizing issue in the U.S. with the disappearance of entire industries to new locations abroad. It's seen as a major factor in the economic squeeze on the middle class .
For better or worse, globalization can reduce the cultural and social aspects unique to people and geographic areas around the world and increase product homogeneity. Starbucks, Nike, and Gap dominate commercial space in many nations. The sheer size and reach of the U.S. have made the cultural exchange among nations largely a one-sided affair.

A larger market for goods and services

Cheaper consumer prices

Outsourcing can benefit domestic firms and foreign labor

Increased standard of living

Concentrates wealth in richer countries

Some poorer countries can be left behind

Labor and the physical and intellectual resources of poorer countries can be exploited

Regions and cultures lose their uniqueness and products available around the world can become homogeneous

Why Is Globalization Important?

Globalization is important as it increases the size of the global market, and allows more and different goods to be produced and sold for cheaper prices. It is also important because it is one of the most powerful forces affecting the modern world, so much so that it can be difficult to make sense of the world without understanding globalization.

For example, many of the largest and most successful corporations in the world are in effect truly multinational organizations, with offices and supply chains stretched right across the world. These companies would not be able to exist if not for the complex network of trade routes, international legal agreements, and telecommunications infrastructure that were made possible through globalization. Important political developments, such as the ongoing trade conflict between the U.S. and China, are also directly related to globalization.

Is Globalization Good or Bad?

It depends. Proponents of globalization will point to the dramatic decline in poverty throughout the world for more than two decades after around year 2000, which many economists attribute in part to increased trade and investment between nations. Similarly, they will argue that globalization has allowed products and services such as cellphones, airplanes, and information technology to be spread far more widely throughout the world.

On the other hand, critics of globalization will point to the negative impact it has had on specific nations’ industries, which might face increased competition from international firms. Globalization can also have negative environmental impacts due to economic development, industrialization, and international travel.

How Does Globalization Impact Society?

Globalization has had a large impact on societies around the world, leading to massive migrations from rural to industrial or urban areas and to the rapid growth of cities and trade hubs. While this has meant an overall increase in incomes and a higher standard of living in general, it has also led to problems such as crime, domestic violence, homelessness, and poverty. Concepts of national identity, national or regional culture, and consumption patterns also change as goods from around the world become increasingly available and at low prices. The competitiveness of global capitalism may also lead to more individualistic ideals that contradict the cultural orientations of certain, more collectivist societies.

What Is an Example of Globalization?

A simple example of globalization would be a car manufactured in the U.S. that sources parts from China, Japan, South Korea, Sri Lanka, and South Africa. The car is then exported to Europe, where it is sold to a driver who fills the car's gas tank with gasoline refined from Saudi oil.

Globalization refers to the ongoing trend of increased interconnectivity of nations across the globe, as enabled by advancements in transportation and information technology, among others.

Globalization is facilitated economically by free trade agreements, which permit barrier-free imports and exports across borders. While globalization brings many advantages—including lower prices and higher standards of living to some—it also has drawbacks, including wealth concentration and cultural homogeneity.

Peterson Institute for International Economics. " What Is Globalization? "

Congressional Research Service. " The North American Free Trade Agreement ," Page 1.

Congressional Research Service. " The North American Free Trade Agreement ." Pages 16-17.

Office of the United States Trade Representative. " United States-Mexico-Canada Agreement ."

FasterCapital. “ Financial Bailout: PIIGS and Financial Bailouts: Lessons From the Crisis .”

Macrotrends. “ World Poverty Rate 1981-2024 .”

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“The Globalization of Markets” by Theodore Levitt Essay

To find inspiration for your paper and overcome writer’s block
As a source of information (ensure proper referencing)
As a template for you assignment

Central Theme

Critical analysis, main takeaways.

Levitt had authored several texts that became very influential in the business world, and his 1983 article on globalization is one of those texts. The author examines globalization’s phenomenon to stress that large companies that operate internationally have made a qualitative transition from treating the world as a collection of diverse markets to regarding it as one same market. This shift is the driving force of the globalization of markets. To illustrate it, Levitt compares multinational corporations to what he calls global corporations. Operating in several countries, multinational corporations adjust their policies and practices and products and services, to the specific characteristics of each country. It is posited for multinational corporations that people need and want different things in different parts of the world, which is why a significant effort is required to explore local demand and address them.

In contrast, global corporations treat the world as a single market. Unlike multinational corporations, they do not posit that people buy differently in different parts of the world. Instead, they assume that there is universal demand, and they address it. Levitt pays special attention to this universal demand that has become an integral part of globalization. Rather than discovered, this demand is constructed by global businesses to a large extent. The shifting understanding of trade in the 1980s affected the way companies approached the market: previously, the concept had been that companies should supply to customers what customers think they want and need; at the time Levitt’s article was written, the concepts were that businesses should supply to customers what customers will want and need. Somehow, corporations like Coca-Cola managed to have their product drunk in numerous countries across cultures, although it is the same everywhere.

The author compares multinational and global corporations to the fox and the hedgehog, as Isaiah Berlin described. The fox knows a lot about a great many things, and the hedgehog knows everything about one great thing; similarly, a multinational corporation knows a lot about many national markets, and a global corporation knows that the single factor of standardizing what it sells and how it operated will allow it to address the world as a single market.

Levitt’s article is written to be understood by both professionals and non-professionals, which makes it appealing. The author provides many examples to support his points, which makes the article valid and reliable. In several textboxes, additional readings are provided, which allows the reader to obtain a more comprehensive understanding of the addressed issue. Levitt’s great mastery of dealing with business concepts is evident in how he explains quite intelligibly the complicated process of globalization of markets. All these are the strengths of the article.

What can be considered a weakness is that the article does not feature illustrations or graphs, which is why it looks like a solid piece of text and should be read accordingly. Also, Levitt does not seem to evaluate globalization processes to address the issue of whether they are beneficial or harmful, i.e., whether they contribute to the well-being of society or represent a trend of social deterioration. From today’s perspective, another weakness is that the article was written almost 35 years ago. The concept of technology and globalization as opposing vectors seems somewhat outdated, as both technology and globalization have changed significantly since then. However, from my perspective, I still think that reading Levitt’s article can be useful for business practitioners, as it provides a valuable understanding of how globalization developed initially.

According to Levitt, being successful under global market conditions means adopting a certain vision and practices that allow addressing the global market as a single entity driven by universal demand. The vision is that marketing is no longer to study what customers think they want; it is rather producing something they will want and convincing them that they want it. And the practices are generally those associated with standardization. Levitt stresses the importance of standardization for the globalization of markets, as he declares that what is required from companies is to have a global focus, which means paying attention to the economics of simplicity, and standardizing products is what plays a special role in it.

Global corporations should not overestimate the significance of such factors as cultural differences. Instead, they should acknowledge that the commonality of preferences drives globalization. With the growing amount of common cultural context spread by mass media, people from different countries now have many things they can talk about, and somewhere within this common context, there is a universal demand hidden: something these people would buy despite their differences. According to Levitt, the commonality of preferences signifies the world’s homogenization, which is exactly what global corporations should use to grow and develop.

By standardizing their products and operation, global corporations also manage to drive their prices down, which is also an important aspect of global market success. With low prices and standardized products, companies reach vastly expanding markets and obtain much larger profits. Moreover, they enhance the process of globalization, which Levitt thinks will become more and more important because soon, all the businesses in the world will find themselves operating within a single market.

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Globalization and Sweatshops: Social Responsibility
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Why did Google and China choose to negotiate a partnership, bearing in mind what was at stake and the difference in their individual objectives? Google would risk going against one of its principles (do not be evil), whereas China would need to rethink its censorship policy.

Recommended Course of Action:

Business institutions and states should look at the best option (negotiation) to ensure that they fulfill their needs as much as possible. Therefore, both parties should be ready to make compromises, but ensure that they do not end up on the losing end.

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Compare and Contrast the Operational Strategies of Apple and Samsung: Growth and Integration Strategies

Introduction Apple and Samsung are the leading companies in mobile technology across the globe. Apple is an American multinational while Samsung is a South-Korean multinational. However, the two companies have a global presence with market command across various countries. According to Dringoli, the massive presence of these companies across different global markets results from their operational strategies, which make them market giants, despite the stiff competition present in the telecommunications market (32). The following paper compares and contrasts the growth and integration strategies that Apple and Samsung employ in an effort to remain market leaders across the globe.

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Global capital market essay.

Throughout the early modern period, as communications increased in speed and effectiveness, there were attempts to make larger capital markets, with the end goal being the creation of a global capital market where money can be raised internationally, allowing for greater access by all companies to the same pool of capital regardless of where the company is located, and also free of legislative and other restrictions that apply in some parts of the world.

Historically, the raising of capital involved transactions conducted between governments and private individuals. These processes were fraught with problems for both sides, and by the late 17th century, in western Europe, there was an attempt to formalize the process. This saw the creation of the Bank of England in 1691 (incorporated in 1694), and in the early 18th century the origins of other schemes in other countries, some for city corporations, others for governments.

However with the Industrial Revolution many capitalists wanted to be able to raise capital to embark on their projects and there was no regular system of raising capital and sharing the risk. As a result with the building of the Bridgewater (or Worsley) Canal, Francis Egerton, the 2nd Duke of Bridgewater, had to take the entire risk for the venture himself, and although he did end up very wealthy, it was a move that nearly sent him bankrupt. Similarly some major capitalist ventures could come to create major crises in the countries where the vast majority of the investors lived. Two of the most extreme examples of these came from France—the attempt by the Mexican government of Benito Juarez to abrogate the debts incurred by previous Mexican governments leading to the French military intervention in the country to install Emperor Maximilian in the 1860s; and another being the Panama Canal Crisis in the 1880s when French investors lost fortunes in speculation in the shares of a company which hoped to build the Panama Canal.

20th Century

By the 20th century, there were numerous banks that were able to lend capital for industrial and other projects. This certainly helped with the needs of the vast majority of borrowers. However there were companies which invested in one country, financed by investment from another. Some of this was to do with the colonial empires, with the capital for the Malayan rubber industry in the 1900s raised in London; but there was also other examples, including the financing of the building of the Argentine railroad system, also financed in London. By the 1900s London had certainly emerged as the main capital market in the world but it was about to be challenged by New York, which started from 1919 to become the dominant center for global capital. With better communications through a regular telephone and telex service, and now with computer systems, it has been possible to link the capital markets around the world and provide, for the customer, wider options and more access to this capital, and for the lenders, a greater ability to spread the risk among capital investors, and also speculators, around the world.

As well as the global capital market which arose in the major financial centers in the world: New York, London and Paris, and later Frankfurt and Tokyo; the oil price rises of the 1970s created a new area of wealth with the availability of what came to be known as “petrodollars.” This led to a number of schemes by which people claimed to have access to a more secretive “global market” with “agents” approaching governments. The most infamous was Tirath Khemlani and his dealings with the Australian government in the early 1970s. The Bank of England warned against these schemes, which profited largely through large cancellation fees which would have to be paid if the government in question wished withdraw from these—there has been no evidence of this hidden “global capital market.”

The need for the global capital market became essential with increasingly larger numbers of companies having cross-listings by which their stock was quoted on a number of stock markets around the world. With the global capital market, it was possible to raise far larger sums of money than had been possible earlier, and this allowed investors and speculators to spread their risks over a wide range of capital investments all over the world.

The End Of The Bretton Woods System

One of the developments that arose from this global capital market was a convergence of real interest rates around the world. This coincided with the end of the Bretton Woods system and the floating of many currencies in the 1970s, coupled with the U.S. government’s suspension of the convertibility of the dollar into gold. This allowed the rates of exchange between most major currencies in the world to be set by the market, albeit with the government able to influence this through altering the exchange rates to increase or decrease demand for a currency.

As a result, if the government of a specific country sought to use macroeconomic instruments such as interest rates, and they were raised, the demand for the currency would create a rise in the value of the currency, after which the real interest rates would be comparable to those in other countries. With open markets, full and audited accounting by governments, and with the free flow of capital into and out of countries, market forces would balance the currency market forming an equilibrium. Economists defined this as the purchasing power parity theory, although similar theories had been around since the Swedish economist Gustav Cassell (1866–1945) suggested that this could become the case as early as 1916.

Speculation

If the global capital market could cope with balancing out the value of the various currencies, it was soon suggested that widespread speculation could affect the prices of the currencies allowing speculators to make (or lose) vast sums of money. This had led to the Bretton Woods system, which was a deliberate attempt by the United Kingdom, United States, and many other governments to constrain the global capital market in terms of the values of currencies, although it did not stop the two devaluations of the pound sterling to the U.S. dollar in September 1949 and November 1967.

The floating era from 1971 saw a large rise in world interest rates, largely through the rise in the price of petroleum. With the doubling of oil prices in 1978–79 after the Iranian Revolution, the effect was that the economies of North America, Western Europe, and other parts of the world went into recession. George Soros and other operators of hedge funds used the global capital market to raise large sums of money and this in turn resulted in the “Battle for Sterling” in 1992 when Soros fought the Bank of England, and later in 1997 with the Asian Economic Crisis. Since the late 1990s there has also been the increasing role of China in global capital markets, helping create a boom that led to estimates made in 2006 that the global capital market would exceed $228 trillion by 2010, although with the current crisis, this figure now seems improbable.

2008 Crisis

Thus the result of the global capital market and the spreading of risks can lead to many countries seemingly unconnected to the area at economic risk becoming affected. In 2007 with the start of serious problems in the U.S. subprime home mortgage market, the effects were felt not just by the individual lenders, and especially by Fannie Mae and Freddie Mac, but by banks and financial institutions around the world that had invested their money in Fannie Mae and Freddie Mac and suddenly found themselves exposed to the collapse of the subprime market. The crisis was triggered to a certain extent by undue offering and securitization of low-quality subprime mortgages and other lows in the United States, which were abetted by a certain extent by deregulation in the 1990s and a laxity in enforcement of regulations that continued. Stunned American legislators initiated a bailout coupled with a stream of new regulations.

Another dramatic effect in 2008 was following a crisis in the Icelandic banking system, it was revealed that vast numbers of individuals, companies, town corporations, and public organizations had invested their money in Icelandic banks because of the better returns offered, without realizing that this increased their level of risk. While there was confidence in the global capital market, there were no problems, but as soon as “panic” breaks out, there is a quick flight of capital, leaving those less able to quickly react to take potential or actual losses, and in extreme cases to lose their investments as well.

Bibliography:

Joshua Aizenman and Reuven Glick, Sterilization, Monetary Policy, and Global Financial Integration (National Bureau of Economic Research, 2008);
Marc Alvarez, Market Data Explained: A Practical Guide to Global Capital Markets Information (Butterworth-Heinemann, 2007);
Brendan Brown, What Drives Global Capital Flows?: Myth, Speculation and Currency Diplomacy (Palgrave Macmillan, 2006);
Barry Eichengreen, Globalizing Capital: A History of the International Monetary System (Princeton University Press 1996);
Charles W. L. Hill, Global Business Today (McGraw-Hill Irwin, 2008);
Michael H. Hyman, The Power of Global Capital: New International Rules—New Global Risks (Thomson South-Western, 2004);
Michael T. Kaufman, Soros: The Life and Times of a Messianic Billionaire (Alfred A. Knopf, 2002);
Harinder S. Kohli, Growth and Development in Emerging Market Economies: International Private Capital Flows, Financial Markets and Globalization (Sage, 2008);
Maurice Obstfeld and Alan Taylor, Global Capital Markets: Integration, Crisis and Growth (Cambridge University Press, 2004);
Robbie Robertson, The Three Waves of Globalization: A History of a Developing Global Consciousness (Zed Books, 2003);
Robert Slater, Soros: The Unauthorized Biography (McGraw-Hill, 1997);
Joseph Stiglitz, Globalization and Its Discontents (W. W. Norton, 2002);
Joseph Stiglitz, Making Globalization Work (W. W. Norton, 2006).

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The State of Globalization in 2021

Steven A. Altman
Caroline R. Bastian

Trade, capital, and information flows have stabilized, recovered, and even grown in the past year.

As the coronavirus swept the world, closing borders and halting international trade and capital flows, there were questions about the pandemic’s lasting impact on globalization. But a close look at the recent data paints a much more optimistic picture. While international travel remains significantly down and is not expected to rebound until 2023, cross-border trade, capital, and information flows have largely stabilized, recovered, or even grown over the last year. The bottom line for business is that Covid-19 has not knocked globalization down to anywhere close to what would be required for strategists to narrow their focus to their home countries or regions.

Cross-border flows plummeted in 2020 as the Covid-19 pandemic swept the world, reinforcing doubts about the future of globalization. As we move into 2021, the latest data paint a clearer — and more hopeful — picture. Global business is not going away, but the landscape is shifting, with important implications for strategy and management.

Steven A. Altman is a senior research scholar, adjunct assistant professor, and director of the DHL Initiative on Globalization at the NYU Stern Center for the Future of Management .
CB Caroline R. Bastian is a research scholar at the DHL Initiative on Globalization.

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Global Market Entry Strategies, Essay Example

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Market entry plays a major role in business growth and development. A good market entry strategy is one that will give the business a good take off, and maintain it in good motion until it catches up with the business operation environment. The market entry should embrace the current technology as well enable the business to compete favorably in the market. It is therefore imperative that a business finds a good entry and penetration strategies to compete favorably in the competitive global markets.

As discussed by each of the below arguments, some of the best market entry strategies for a novice is to begin exporting. This is very important in ensuring that the company products get sufficient exposure to the outside market (Hillstrom, 2013). As a general rule of the thumb, company growth is basically viewed in terms of the level of awareness that it has in the business environment in which it operates; in this case the global market. Prior to this, it is also important to engage the use of social media to find market for the products.

Social media has become one of the most vital tools for any marketer, especially those intending to operate globally. It offers a platform for interaction to ensure that people of various needs meet and exchange ideas. Creating a page for your business products in the social media can help you advertise them within the shortest time possible. One of the most fantastic features of the social media is that it is viral in nature. A single piece of lucrative idea can circulate it within the shortest time possible, and the entire globe will be aware of its existence. Thus, when planning to go global and importing products, it is important to prepare a good landing ground where it will find readily available market.

Also mentioned in the discussions is licensing; in my opinion, licensing is mandatory for every business that intends to operate thus does not have so much effect on customers. It only applies in the legal aspect of the business. Others like joint venture are very important and can have very great impacts in the business market entry (Kerin et al, 2011). Teaming up with already successful companies and bringing quality products is a sure way of entering and capturing the market. Joint ventures helps companies take advantage of already established markets to sell their goods. In most cases, big companies enjoy customer loyalties hence amalgamating with them will give you the same advantage. This is one of the excellent ways that a novice can enter the global market. Similarly, when you join with other top companies, you will learn their techniques for staying top in the market and competing favorable in the face of ever changing market competition.

Creating a market brand for the products is also of great significance. A brand is the logo through which customers will identify your products. Market brands are known to be good at creating customer loyalty since they will always be looking for the brand mark on your products. This will prevent counterfeit products that are likely to emerge and cause your products to loose market (Licensing Expo, 2014). The trademarks should be conspicuous and easy to notice. Relatively, both the discussions touched on foreign investments. This is important in laying foundation and framework for the business operations in a foreign land. It gives them time to analyze the prospective market and design the best entry strategy for it.

Hillstrom Collier. Laurie, Revised by Marilyn M. Helms, Licensing And Licensing Agreements , 2013. (PDF).

Kerin, R., Hartley, S., & Rudelius, W. (2011). Marketing the Core . (4th ed.). New York, NY: McGraw-Hill Companies Inc.

What is Licensing?, Licensing Expo 2014. http://www.licensingexpo.com/licensing-expo/education/what-licensing

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Home — Essay Samples — Science — Innovation — Tesla Motors: Revolutionizing the Automotive Industry

Tesla Motors: Revolutionizing The Automotive Industry

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Introduction, body paragraphs, 1. the genesis of tesla motors, 2. innovation and technological advancements, 3. market impact and global expansion, 4. challenges and opportunities.

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Internet of Things (IoT) Market

"Smart Strategies, Giving Speed to your Growth Trajectory"

Internet of Things (IoT) Market Size, Share & Industry Analysis, By Component (Platform and Solution & Services), By End-use Industry (BFSI, Retail, Government, Healthcare, Manufacturing, Agriculture, Sustainable Energy, Transportation, IT & Telecom, and Others), and Regional Forecast, 2024-2032

Last Updated: May 20, 2024 | Format: PDF | Report ID: FBI100307

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KEY MARKET INSIGHTS

The global Internet of Things (IoT) market size was valued at USD 595.73 billion in 2023 and is projected to grow from USD 714.48 billion in 2024 to USD 4,062.34 billion by 2032, exhibiting a CAGR of 24.3% during the forecast period (2024-2032). North America accounted for a market value of USD 195.48 billion in 2023. The Internet of Things refers to the network of physical objects that are inserted with software, sensors, and other mechanisms for exchanging and connecting data with other systems and devices over the Internet.

The Internet of Things technology operates as a global infrastructure for the information society, empowering modernized services to connect and communicate things based on prevailing and evolving communication mechanisms. Also, it delivers interoperable data and the capability to communicate self-sufficiently without human intervention.

As a result, the technology is anticipated to generate new revenue streams, enhance business efficiencies, aid new business models, and progress the way current services are delivered across various sectors. For instance,

In November 2023, IDEMIA and TEAL announced a strategic partnership to enable unified connectivity for upcoming IoT applications. This alliance focuses on the recent GSMA SGP.32 model, which places the groundwork for a more streamlined and efficient deployment model desired in this market.

The IoT market created a significant opportunity to enhance the quality of life, with the probability of having a wide-reaching impact on society, predominantly during COVID-19's new normal. The pandemic encouraged enterprises and governments to reconsider their business actions and objectives. Moreover, these adjustments proved to be a driving factor for innovation and technology.

IMPACT OF GENERATIVE AI

Different Applications of Generative AI within IoT Devices to Fuel Market Growth

With the rising importance of IoT applications, the necessity to analyze and process huge amounts of data also increases. Generative AI involves the usage of machine learning mechanisms to generate new data and, thus, has emerged as an encouraging technology that can help resolve various challenges.

Generative AI can be implemented in Internet of Things solutions to enhance projecting maintenance. IoT sensors can collect massive amounts of data regarding machine health and performance that can be used to train generative AI models to generate synthetic data for upkeep predictive analysis. Other prominent applications of generative AI include anomaly detection, synthetic data modeling, fraud detection, personalized recommendations and customizations, energy optimization, and many more. Such applications of generative AI, along with IoT, can be used across different industries, such as manufacturing, automotive, healthcare, and others. For instance,

In December 2023, Microsoft and TomTom unveiled generative AI for linked vehicles. The partnership has resulted in the improvement of a wholly incorporated AI-driven conversational assistant that improves voice communication with infotainment, vehicle command systems, and location search.

Thus, generative AI has the potential to transform the process and collection of data from different Internet of Things devices. Producing new data that is comparable to the input data (synthetic data) can aid in overcoming the limits of traditional data-gathering procedures and increase the precision of ML models.

Internet of Things (IoT) Market Trends

Adoption of Blockchain Technologies to Upsurge the Progress of the IoT Market

Internet-linked devices collect an enormous amount of information and data for processing. However, the internet of things standard security access increases numerous privacy and security complications. The blockchain-based architecture provides linked devices with minimal and decentralized security solutions.

Moving freight is a complex process comprising several parties with variable priorities in freight transportation applications. An IoT-driven blockchain can record the arrival times, the status of shipping containers, temperatures, and position when in a movable state.

Similarly, in the component tracking and compliance application, the Internet of Things data kept in shared blockchain ledgers permits all parties to track component provenance throughout the product life cycle. Hence, the technology is being used across different sectors. For instance,

In December 2023, Vodafone and Deloitte collaborated to introduce blockchain IoT services to simplify operations in supply chains. The alliance with Nexxiot, a Zurich-based DAB platform and Deloitte makes use of blockchain to validate transactions over IoT devices automatically. It is being pitched to the energy, automotive, supply chain, and manufacturing sectors.

Thus, blockchain could help improve connected technology's scalability and security concerns.

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Internet of Things (IoT) Market Growth Factors

Growing Adoption of Smart Cities to Strengthen the Progress of the Market

With rising population and urbanization, several countries globally are introducing smart city projects and implementing smart city solutions to accomplish resources. Connected devices, such as sensors, smart meters, and smart lights, help advance the functions and proficiency of set-up and related services.

The rising number of smart homes and buildings, Industry 4.0, smart manufacturing, and smart infrastructure developments are projected to generate a vast transformation in business areas, thereby driving the internet of things market growth. For instance,

According to the World Economic Forum, 1.3 million individuals move to metropolises each week, and by 2040, an overwhelming 65% of the global population will live in cities. Thus, more of the population is moving toward urbanization and the usage of smart devices.
As per the World Economic Forum 2022 report, 131.4 million households were using smart speakers in 2022, and 335.3 million are predicted to use smart speakers by 2027. Similarly, 73.1 million households were using smart big appliances in 2022, and 177.6 million households are predicted to use these smart devices by 2027.

Moreover, smart city solutions, such as smart utility meters, smart transportation , smart waste management, smart grids, and smart air quality controllers, are being implemented by consumers, thereby elevating the market potential of connected devices worldwide.

RESTRAINING FACTORS

Limitations Associated with Security, Integrity, and Privacy of Data in Connected Devices to Inhibit Growth

Internet of Things technology has various applications, ranging from gathering biometric data through wearable devices to monitoring connected equipment via cloud platforms and communication networks. These devices have exclusive IP addresses that enable them to exchange information and communicate with other devices.

However, as the number of devices connected, mobile devices, smart devices, and platforms grows, so does the necessity for data protection and privacy. These devices and networks could comprise personal and sensitive data that attackers could use. Data misuse may emerge as a result of the rising dependence on connected devices, replicating design flows and the susceptibilities of connected devices.

Such limitations over the security and privacy of customer’s personal data can hamper market development.

Internet of Things (IoT) Market Segmentation Analysis

By component analysis.

Integration of Emerging Technologies Drives Growth in IoT Platforms

On the basis of component, the market is bifurcated into platforms and solutions & services.

The platform is sub-segmented into network management, cloud platform, and device management . The solution is categorized into real-time streaming analytics, security, data management, remote monitoring, and network band management.

The platform is expected to grow at the highest CAGR owing to the rising demand for effective platforms for downstream data servers and enterprise application connectivity. Also, various market players are enhancing IoT platforms by integrating them with new emerging technologies. For instance,

In June 2023, Ayla collaborated with Etisalat to offer an IoT Platform for a new smart home solution from Etisalat by e&, the brand, demonstrating the telecoms of UAE. The partnership with Ayla added further value to smart home services and solutions with its streamlined cloud infrastructure and capability to aid a variety of devices.

However, solutions & services are expected to dominate the market with the highest market share. Several industries are implementing intelligent solutions to improve their present systems. For instance, healthcare facilities deploy connected devices to improve medical outcomes.

Further, network management is expected to hold a significant market share during the forecast period due to businesses' growing demand for remote monitoring systems and internet-ready devices. The network management solution is device-independent and provides an easy approach to integrating cross-vendor hardware models and data structures into the workflow.

By End-use Industry Analysis

Agriculture Industry to Grow With Fastest Growth Rate Due to Growing Demand for Field-Based Equipment and Sensors

Based on the end-use industry, the market has been segmented into agriculture, BFSI, healthcare, government, retail, manufacturing, sustainable energy, transportation, IT & telecom , and others.

The agriculture industry is anticipated to grow at the leading CAGR owing to the growing demand for field-based equipment and sensors. Some key applications of the high-tech in the agricultural sector are smart greenhouse s, smart farming, precision farming, smart agriculture, smart drones, and many other applications. The implementation of IoT in agriculture includes various benefits, such as reducing expenses while multiplying yields and improving the decision-making of farmers with accurate data. Such factors create numerous opportunities for the market’s progress. For instance,

In January 2024, Morse Micro and Zetifi collaborated to announce modernized distant-area connectivity for smart IoT Farming at CES 2024. The inventive technology allows farmers and rural populations to access, expand, and improve coverage from existing cellular, radio, and satellite networks.

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REGIONAL INSIGHTS

The market has been analyzed across five major regions: North America, Asia Pacific, Europe, the Middle East & Africa, and South America.

North America Internet of Things (IoT) Market Size, 2023 (USD Billion)

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North America dominated the global market with a share of 32.81% in 2023. The region has witnessed noteworthy growth in the healthcare, industrial, and automotive sectors owing to a growing customer base for cloud-based platforms. Also, the rising adoption of 5G technology contributes majorly to the region’s market progress. Additionally, cloud platforms are experiencing extensive adoption in the region due to the expansion of IoT-enabled devices, rising R&D investments in advanced technology, and the prominence of key market players, such as Amazon Web Services (AWS), Google, Cisco, Microsoft, and IBM.

According to the GSMA Intelligence Report 2023 in North America, cellular IoT connections are estimated to reach 535 million by 2030. The U.S. accounts for the highest number of IoT connections in the region, accounting for over 90% of overall connections.

Europe is expected to dominate the market in the coming future by crossing North America with the largest Internet of Things market share. As healthcare is forecasted to hold a considerable market share in Europe, the industry is becoming progressively linked to big databases. Connected devices combined with big data are expected to gain traction in Europe.

Moreover, the demand for this technology is rising among enterprises and organizations in Germany, France, the U.K., Spain, Italy, and the Netherlands, thus driving the region's market growth. Similarly, Nordic and Eastern European countries show a substantial adoption rate of such advanced technologies.

According to industry experts, European organizations are estimated to spend USD 345 billion by 2027 on IoT-related technology. Thereby contributing to the region’s market progress.

Asia Pacific is anticipated to showcase the highest CAGR during the forecasted period owing to rising smart city plans and initiatives, such as the Intelligent Disease Prediction Project (China), Smart Wellington (New Zealand), and cloud spending in the region.

Also, the region's communication service providers and producers, such as Taiwan Mobile and Samsung Electronics Co., Ltd., are intensifying their portfolios to exploit smart device opportunities by adopting advanced analytics capabilities into existing systems. Also, various market players are investing in the region to fortify their business position there. For instance,

In October 2023, SoftBank Corp. expanded its IoT business in the Asia Pacific region. The company expanded its sales within 19 countries and regions, including Japan. SoftBank would emphasize the marketing of IoT services.

The Middle East & Africa and South America are expected to witness significant growth during the forecast period due to growing internet access services and regional users. Middle Eastern countries, such as Saudi Arabia and UAE, have been actively engaged in building smart cities , preferring to build and create them from scratch rather than integrating technology into existing ecosystems.

List of Key Companies in Internet of Things (IoT) Market

Established Players Invest in Core Technologies and Startups to Stay Competitive in the Market

Major key players such as Intel Corporation, Microsoft Corporation, Cisco Systems, Inc., Amazon Web Services, Inc., Siemens AG, PTC Inc., and others, are making substantial investments in advanced technologies such as AI, cloud computing, and others. Established market players are making substantial investments in startups and midscale companies to offer efficient solutions to the end-use verticals such as healthcare, manufacturing, retail, and others.

List of Key Companies Profiled:

Amazon Web Services, Inc. (U.S.)
Intel Corporation (U.S.)
Microsoft Corporation (U.S.)
PTC Inc. (U.S.)
Cisco Systems, Inc. (U.S.)
IBM Corporation (U.S.)
Oracle Corporation (U.S.)
SAP SE (Germany)
Siemens AG (Germany)

KEY INDUSTRY DEVELOPMENTS:

November 2023: AWS and Siemens expanded their alliance to connect physical devices with the cloud more effortlessly. With the extended collaboration, AWS's IoT SiteWise Edge software can be installed directly from Siemens' Industrial Edge Marketplace.
June 2023: Rockwell and PTC extended their partnership to emphasize sales of IoT and AR (augmented reality) Software of PTC. Rockwell Automation continues to resell PTC's ThingWorx IoT software, comprising the DPM (Digital Performance Management) manufacturing solution, to new and present customers across process and discrete manufacturing sectors.
March 2023: Siemens announced the launch of Connect Box, a smart IoT solution to handle small-sized buildings. The Connect Box enables users to achieve crucial daily building management jobs from one place through a cloud-driven interface with no extra software.
January 2023: Intel launched the Intel Core 13 th Gen. mobile processor. The hybrid architecture of Intel powers the advancement and has thirty-two mobile processors. Intel's Core P-, H-, and U- -range mobile processors are driven by thin and light laptops and Internet of Things devices.
December 2022: Deloitte launched Olympus with AWS (Amazon Web Services). Olympus is an investment fund for building industry cloud solutions globally, along with progressive technologies such as IoT, AI, machine learning , 5G, quantum computing, AR/VR, and everything on the cloud. The initiative's purpose is to resolve the issues associated with food waste, financial product access, clean energy, and many other problems.

REPORT COVERAGE

An Infographic Representation of Internet of Things (IoT) Market

To get information on various segments, share your queries with us

The market research study highlights leading regions around the world to provide the consumer with a better insight. Additionally, the research focuses on the most recent market growth patterns and examines technologies that are being deployed at a quick speed on a global scale. It also provides some drivers and restraints, allowing the reader to obtain a thorough understanding of the market.

REPORT SCOPE & SEGMENTATION


	2019-2032
	2023
	2024
	2024-2032
	2019-2022
	CAGR of 24.3% from 2024 to 2032
	Value (USD Billion)

Frequently Asked Questions

According to Fortune Business Insights, the global market size is expected to reach USD 4,062.34 billion by 2032.

In 2023, the market value stood at USD 595.73 billion.

The market is projected to grow at a CAGR of 24.3% during the forecast period.

The solution and services segment is expected to dominate the market.

The growing adoption of smart cities is expected to drive market growth.

North America held the highest market share.

Asia Pacific is expected to grow at the highest CAGR.

By end-use industry, agriculture is expected to grow with a leading CAGR during the studied period.

Seeking Comprehensive Intelligence on Different Markets? Get in Touch with Our Experts

Below is the list of companies that are studied in order to estimate the market size and/or understanding the market ecosystem

This list does not necessarily mean that all the below companies are profiled in the report. The report includes profiles of only the top 10 players based on revenue/market share.

Internet of Things (IoT) Market:

Intel Corporation (Profiled in the report)
Samsara Inc.
Microsoft (Profiled in the report)
Amazon Web Services, Inc. (Profiled in the report)
PTC (Profiled in the report)
Bosch.IO GmbH (Profiled in the report)
Digi International Inc.
MobiDev Corporation
Siemens (Profiled in the report)
Oracle (Profiled in the report)
SAP SE (Profiled in the report)
Arm Limited
Cisco Systems, Inc. (Profiled in the report)
IBM (Profiled in the report)
Cellhire PLC
Konstant Infosolutions
Binariks Inc.
STUDY PERIOD: 2019-2032
BASE YEAR: 2023
HISTORICAL DATA: 2019-2022
NO OF PAGES: 130

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The global Internet of Things (IoT) market size is projected to grow from $714.48 billion in 2024 to $4,062.34 billion by 2032, at a CAGR of 24.3%

Nvidia surpasses Apple to become the 2nd-most-valuable company in the world

Nvidia is now the second-most-valuable company in the world.
The ongoing AI boom has helped catapult Nvidia's market valuation to $3.014 trillion.
Now bigger than Apple, the AI-chip maker is just behind Microsoft as the world's biggest company.

Nvidia surged 5% on Wednesday to become the second-most-valuable company in the world, surpassing Apple .

The stock closed at $1,224.40 per share, giving it a market valuation of $3.014 trillion.

The ongoing artificial-intelligence boom has catapulted Nvidia's market valuation to the $3 trillion club as mega-cap tech companies such as Meta, Alphabet, Amazon, and Microsoft rush to buy the company's supply-constrained AI-enabling GPU chips.

Nvidia's valuation was just above $950 billion a year ago and was about $400 billion in November 2022 when OpenAI first released ChatGPT to the public.

Apple stock, while trading near record highs, has stagnated over the past year as investors wait to see what the iPhone maker's AI strategy is.

Apple stock is up 2% year to date, compared with Nvidia's year-to-date gain of 146%.

Apple held a market valuation of $3.00 trillion Wednesday afternoon, or about $15 billion below Nvidia's current valuation.

With Apple surpassed, Nvidia is behind only Microsoft , which is the world's most valuable company with a market capitalization of $3.15 trillion.

With the AI boom powering much of the stock market higher , it's no surprise that the company most responsible for powering the boom has turned into one of the world's most valuable companies.

And Beth Kindig, an I/O Fund tech analyst, said she believed the gains could continue for Nvidia, arguing in an interview with CNBC last month that the company could be worth $10 trillion by 2030 .

Kindig compared Nvidia's CUDA platform to Apple's iOS, saying: "Similar to iOS is really what locked people into the iPhone because developers were developing applications for the iPhone. The same thing is happening with Nvidia, which is that the CUDA platform is what software engineers, AI engineers are learning in order to program GPUs, so that helps lock them in, and that combination, right now, I'm calling it an impenetrable moat."

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Electric Cars Are Suddenly Becoming Affordable

More efficient manufacturing, falling battery costs and intense competition are lowering sticker prices for battery-powered models to within striking distance of gasoline cars.

Three electric vehicles parked at a dealership. There are several yellow school buses in the background.

By Jack Ewing

Alex Lawrence, a dealer in Salt Lake City who specializes in used electric cars, has seen a change over the last year in the kinds of customers who are coming into his showroom. They used to be well-heeled professionals who could drop $70,000 on a Rivian luxury pickup truck.

Recently, Mr. Lawrence said, customers have been snapping up used Teslas for a little over $20,000, after applying a $4,000 federal tax credit.

“We’re seeing younger people,” Mr. Lawrence said. “We are seeing more blue-collar and entry-level white-collar people. The purchase price of the car has suddenly become in reach.”

Regarded by conservative politicians and other critics as playthings of the liberal elite, electric vehicles are fast becoming more accessible. Prices are falling because of increased competition, lower raw-material costs and more efficient manufacturing. Federal tax credits of up to $7,500 for new electric cars, often augmented by thousands of dollars in state incentives, push prices even lower.

At the same time, technology is improving quickly and making electric vehicles more practical. Cars that can travel more than 300 miles on a fully charged battery are becoming common, and charging times are dropping below 30 minutes. The number of fast chargers, which can top up a battery in less than half an hour, grew 36 percent from April 2023 to April 2024.

Carmakers including Tesla, Ford, General Motors and Stellantis, the owner of Jeep, have announced plans for electric vehicles that would sell new for as little as $25,000.

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Global Energy Perspective 2023: Natural gas outlook

The Global Energy Perspective 2023 models the outlook for demand and supply of energy commodities across a 1.5°C pathway, aligned with the Paris Agreement, and four bottom-up energy transition scenarios. These energy transition scenarios examine outcomes ranging from warming of 1.6°C to 2.9°C by 2100 (scenario descriptions outlined below in sidebar “About the Global Energy Perspective 2023”). These wide-ranging scenarios sketch a range of outcomes based on varying underlying assumptions—for example, about the pace of technological progress and the level of policy enforcement. The scenarios are shaped by more than 400 drivers across sectors, technologies, policies, costs, and fuels, and serve as a fact base to inform decision makers on the challenges to be overcome to enable the energy transition.

About the authors

This article is a collaborative effort by Pradhuman Aggarwal, Alessandro Agosta , Gillian Boccara, Dumitru Dediu , Berend Heringa , and Mateusz Luszczynski, representing views from McKinsey Energy Solutions.

Growing global momentum could accelerate the energy transition, as demonstrated by the UAE Consensus, released in December 2023, that calls on Parties to make a just and orderly transition away from fossil fuels. Analysis from multiple sources, including the IEA, IPCC, and McKinsey, suggests that conventional fossil fuels are likely to remain a part of the energy mix to 2050, even in a 1.5° scenario, and may act as a bridge for an orderly transition. Therefore, decarbonizing the fossil fuel system and substantially reducing emissions, including methane, is a key area of focus. Within that evolving context, this article examines the current state of the global natural gas market and the outlook for demand and supply, with a particular focus on liquefied natural gas (LNG). To view our oil outlook, please visit Global Energy Perspective 2023: Oil outlook .

Gas prices have fluctuated in recent years

In recent years, global gas prices have seen considerable fluctuations. The war in Ukraine and the subsequent energy crisis led to an increase in global gas prices, which reached record highs in 2022. The reduction in Russian piped gas flows to Europe resulted in an increase in European LNG demand, which in turn led to increased competition for LNG cargoes between Asia and Europe. Prices have since stabilized both in Asia and in Europe, dropping below 2021 levels since May 2023 due to a mild winter, and, for Europe, a reduction in gas demand across sectors combined with high storage levels. The link between European and Asian gas markets through LNG is currently structural, with events in one market affecting pricing globally, although this could change in the future.

Simultaneously, 2022 was marked by several final investment decisions (FIDs) for LNG projects in North America and Qatar and sustained LNG contracting activity for pre-FID projects.

Global gas demand is projected to grow past 2030 in all scenarios

Natural gas has a wide range of applications across sectors, including power generation, heating, and high-temperature industrial processes, as well as being a feedstock in, for example, the petrochemical and fertilizer industry. It is expected to play a pivotal role in the energy transition by balancing renewables-based power generation until energy-storage technologies are deployed at scale.

Global gas demand is projected to grow past 2030 in all scenarios, with a total projected growth of between 10 and 15 percent. Even in faster decarbonization scenarios, growth is expected until 2030–40. After 2035, demand is projected to diverge significantly, with 2050 gas demand projected to grow by between 15 and 30 percent in the slower scenarios 1 Current Trajectory and Fading Momentum. but to decline by up to 20 percent in the faster scenarios. 2 Further Acceleration and Achieved Commitments.

Regionally, gas demand could vary significantly in different geographies due to differences in the uptake of technology, local policy, and geopolitical factors, among many others.

Demand growth is projected to be largely driven by the power sector

Across scenarios, the power sector is projected to continue driving the bulk of gas demand, accounting for around 40 to 50 percent of demand by 2050. This is largely due to the projected increase in power demand due to electrification in buildings and industry.

Chemicals and blue hydrogen production are the only sectors projected to show continuous growth in gas demand until 2050. In the buildings sector, electrification and biogas are expected to displace gas as more energy-efficient designs are applied. Finally, in industry (excluding chemicals), the electrification of heat and machinery is projected to ultimately result in a gradual decline in gas demand, mirroring the buildings sector.

There is a growing disconnect between gas supply and demand by geography

Overall, Asia is expected to account for the largest growth in gas demand, with North America accounting for some growth in the medium term, driven by coal-to-gas switching in Asia and increasing demand in the ASEAN, Chinese, and US power sectors. In Europe, gas demand is expected to steadily decline to 2050 in line with net-zero commitments.

In contrast, the Middle East, North America, and Russia are projected to remain the main sources of gas supply, accounting for around 70 to 80 percent of global supply across scenarios. As a result, traded gas in the form of LNG is expected to play a key role in bridging the gap between geographically disconnected supply and demand.

The share of LNG in the global gas supply is projected to increase

Across scenarios, LNG demand is projected to grow by between 1.5 and 3.0 percent CAGR from 2023 to 2035, mainly driven by demand growth in the ASEAN and South Asia regions. In contrast, Europe is projected to see a gradual decline in LNG imports in line with overall gas demand.

LNG supply growth is projected to come mostly from already-committed LNG projects in the Middle East and North America, which together could contribute more than 200 million tons 1 Metric tons: 1 metric ton=2,205 pounds. per annum (Mtpa)—between 45 and 70 percent of global LNG supply to 2050 across scenarios.

A demand-supply gap is projected to open in the global LNG market in the early 2030s

Across most scenarios, the global LNG market is projected to see a demand-supply gap open in the early 2030s, which is projected to last for at least the next decade. In the near term, the late 2020s may see a period of oversupply, although its scale and duration could be affected by LNG project delivery. In the longer-term, the sustained supply-demand gap will require additional LNG projects to be developed, and represents an opportunity for additional liquefaction capacity buildup.

Globally, more than 50 LNG projects are in contention to fill the supply-demand gap, which is projected to reach around 30 to 60 Mtpa from 2040 onwards. The gap will likely be filled by LNG projects with cost economics below $8–9/MMBTU, 1 Million British thermal units. largely from North America. Given how LNG demand trajectories are expected to develop to 2050, the 2030–40 window could be the last opportunity for new LNG projects to be developed.

Several uncertainties could impact the market

About the global energy perspective 2023.

Given its versatility, natural gas is projected to continue to play a key role in the energy mix irrespective of the pace of the energy transition, with demand projected to grow substantially in the short term. LNG as a delivery mechanism will assume an increasingly important role in linking geographically disconnected demand and supply centers.

However, our analysis of the scenarios shows that several key uncertainties remain around how the market could develop. These can be grouped broadly into four factors:

Technology: The role of gas in the power sector may be challenged by the accelerated development of batteries in terms of costs and load capacity.
Geopolitics: The potential for gas flows to Europe to increase could severely impact global LNG demand and push the market into oversupply.
Regulatory: Increasing recognition of the life-cycle emissions associated with natural gas and LNG and decarbonization of emissions could affect gas supply and demand.
Project delivery risk: Recent inflationary pressure has resulted in cost escalation for under-construction LNG projects, which could lead to delays in delivery.

It will be important to closely monitor these potential sources of uncertainty to keep abreast of key market developments.

To request access to the data and analytics related to our Natural gas outlook, or to speak to our team, please contact us .

Pradhuman Aggarwal is a consultant in McKinsey’s Houston office; Alessandro Agosta is a senior partner in the Milan office; Gillian Boccara is an associate partner in the London office, where Berend Heringa is a partner; Dumitru Dediu is a partner in the New York office; and Mateusz Luszczynski is a consultant in the Warsaw office.

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