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DIGITAL CONNECTIVITY RESHAPES THE WORLD
tHE digital age began in earnest around 1995 . Some 15 years later , it is an everyday fact of life for most of mankind . The combination of this digital revolution and globalization has shaped the world more profoundly and more rapidly than any other technological development . It has created new markets and transformed old ones , enabling companies to cut costs and become more efficient . However , it has also made corporate reputations more fragile than ever . News of corporate failings can reach an audience of millions within minutes and the damage done can last for years : witness the Gulf of Mexico oil spill . Rising income levels and a growing middle class with more disposable income will create increased demand for products to support both individual and corporate customers . In the rapid-growth markets , there are selective opportunities a globally nimble firm may consider :
INVESTMENT CAPITAL
International companies will be focusing more attention and investment capital on these markets and more local and regional companies will begin to emerge as global players . Global financial firms with developed franchises will continue to benefit , particularly incorporate and investment banking and wealth management . The repatriation of assets by struggling European banks , historically a significant source of credit and trade finance , may affect short-term growth prospects in some rapid-growth markets . However , this will also create significant opportunities for other banks to develop and strengthen relationships with corporate clients
RAPID GROWTH MARKETS
Rapid-growth markets do not represent the “ pot of gold ” for which some corporations might be hoping , and it will be particularly difficult for new entrants in some markets . For firms without an existing credible presence , it may not be feasible to plant a flag in economies grabbing the headlines today . Identifying the “ next generation ” of rapid-growth markets and focusing resources on gaining a market-leading position there often offer better prospects
LOCAL MARKETS
Local firms will pose an increasing threat to international institutions as they continue to leverage their natural home advantage and develop the expertise to expand beyond their home jurisdictions . Increasing trade and capital flows between rapid-growth markets may favor banks from those markets that are able to expand to support their domestic clients overseas