Political, Social concerns drive non-Western companies

Chemical companies, Consumer demand, Economic growth, Financial Events, Futures trading, Leverage, Oil markets

Triangle.pngLast week’s New Normal seminar in Houston continued the success of the Singapore and Frankfurt events. It sparked lively debate about the major opportunities for future growth in the New Normal. These include:

• The over-55 age group in the West – already 272m in number
• Those millions emerging from poverty in the East

One key discussion was around the different outlooks of Western companies, versus many of those in the Middle East and China. As the chart shows:

Western companies focus on economics, with some input from politicians eg taxes, employment law. American companies in particular believe the Profit & Loss (P&L) account is the key driver of success
• This is not so true in the Middle East. Companies there have a focus on the P&L, but usually have close linkages to government, and are very mindful of social needs such as providing employment
• Companies in China start from a different perspective. The majors such as Sinopec are largely state-owned, and their prime role is to act as utilities, providing raw materials to the factories to keep people employed

These distinctions are now taking on growing importance. In 1980, almost all the major companies were Western in orientation, and focused on the P&L. But today, half of the Top 10 companies are from the Middle East and China. So their views matter.

This is another example of the power of the Shared Value concept. As Harvard’s Prof Michael Porter has argued, it creates the potential for “the next wave of innovation and productivity growth”. It enables companies to focus on long-term opportunities and not just short-term financial metrics.

There is no going back to the post-1980 Supercycle world. Companies who now adopt the Shared Value approach will position themselves for success in the New Normal.

The next New Normal courses are later this month in Singapore, and in London in December. Please click here for more details of how to join.

PREVIOUS POST

Risks rise over future growth in China and India

01/11/2011

Many chemical companies now believe it is inevitable that China and India will r...

Learn more
NEXT POST

Bayer, Shell and Styrolution to speak in Amsterdam

03/11/2011

Our 10th European Aromatics and derivatives conference will take place on 22-23 ...

Learn more
More posts
EU patience starts to run out as UK threatens to break the N Ireland Protocol
17/10/2021

Unsurprisingly, it turns out that Brexit still isn’t “oven-ready”, despite the UK ...

Read
An end to the China bubble would risk a Minsky moment
05/10/2021

My letter in today’s Financial Times warning of the risk to Western financial markets from the bur...

Read
Xi aims to “bring order out of chaos” by bursting China’s property bubble
03/10/2021

China is at the start of its biggest economic shake-up since 1978, when Deng Xiaoping launched his p...

Read
The end of China’s real estate bubble will impact global supply chains, exports and growth
26/09/2021

“How did you go bankrupt?” Bill asked. “Two ways,” Mike said. “Gradually, then suddenly....

Read
An Evergrande default could reset the Chinese, and global, economy
19/09/2021

China’s economy has been ‘subprime on steroids’ since the financial crisis in 2008...

Read
PlasticsEurope calls for mandatory 30% recycling target for packaging by 2030
12/09/2021

The European plastics industry last week took the crucial first step in moving away from virgin plas...

Read
Housing markets face long-term downturn as central banks abandon stimulus
05/09/2021

Last month saw the beginning of the end for the central banks’ 20-year experiment with stimulu...

Read
Businesses set for transformation as supply chain chaos combines with Net Zero targets
15/08/2021

‘Business as usual’ seems a most unlikely outcome as we look forward over the next 6 months....

Read

Market Intelligence

ICIS provides market intelligence that help businesses in the energy, petrochemical and fertilizer industries.

Learn more

Analytics

Across the globe, ICIS consultants provide detailed analysis and forecasting for the petrochemical, energy and fertilizer markets.

Learn more

Specialist Services

Find out more about how our specialist consulting services, events, conferences and training courses can help your teams.

Learn more

ICIS Insight

From our news service to our thought-leadership content, ICIS experts bring you the latest news and insight, when you need it.

Learn more