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By: Mike Fergus

The forces shaping international markets are always in flux and 2016 is no exception to change. Governments, businesses and citizens are facing both internal and external pressures. While some of these influences are trends that have developed over decades, there are also ones that have developed in recent years and quickly impacted markets on a similar, if not greater scale.

Below are topics from Euromonitor International research that highlight trends impacting almost every international marketer in 2016.

trade flow map

Less Ebb, More Flow

As seen in the graph above, many wealthy and developed nations are still net importers of goods. While there are other elements that make up a country’s balance of payments,  trade balance is useful for visualizing and understanding the flow of goods across the world. Unsurprisingly, China, along with the Asia Pacific region as a whole, has continued to export more than they import.

Get Out and Stay Out

There has been a wave of nativism across the world in the past couple years, with the U.K. voting to leave the European Union, uncertainty if other countries might follow and a U.S. presidential candidate calling for a wall along the border of Mexico and the U.S.. While part of these movements are targeting the flow of people, there are also significant political actions against the proliferation of free trade agreements. The impact of these agreements has created great uncertainty for international businesses and in the case of Brexit, the U.K. has seen a its GDP growth revied down to .06% compared to 2.1% pre-referendum.

Productivity and Profits Abroad

Over the last several decades, many industrialized countries have seen jobs move abroad thanks to low wage labor. However, since 2010 there has been an acceleration of wage hikes in many developing cities with the wage gap between developed and developing cities shrinking by 10%. Further, many of these cities are moving away from the traditional low-end products associated with developing economies and are turning their workforces to higher value-added industries such as medicine and aerospace. Companies are likely to continue seeking cost savings in developing markets as there is still a significant labor discount. This could also contribute to widening income inequality, as employers engage in a race to the bottom with wages.

Protests

Protests against international organizations and international trade are nothing new. However, the modern economy has seen discontent flow from isolated events like the 1999 WTO protest, to sustained events like Occupy Wall Street and now to mainstream demands on our politicians, with the rise of figures like Donald Trump and Bernie Sanders in the U. S.. All of these protests may share a partial source in that a growing number of people have a pessimistic outlook regarding their economic futures. As seen in chart below, many people have weak or weakening confidence in their economies.

While many of these topics have been key elements for decades, it is always helpful to have a refresh on how the topics stack up in the current world. As with the protest trend, some of those topics that were outlier issues 20 years ago have become mainstream criticisms today. By using market research, students can take an updated assessment of all of these trends and others to gain an understanding of whether these influences may accelerate decrease in importance over the coming years.

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