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In this special report, students from the Joseph H. Lauder Institute of Management & International Studies present new perspectives on some of the latest developments in the global economy.
Every day, more than 500,000 coffee growers throughout Colombia fulfill a family tradition, one that has been passed down from generation to generation. Growing premium-quality coffee beans across nearly 2.2 million acres of Colombian highlands is an important part of their heritage. Even today, coffee growing remains the largest source of rural employment in the country, which makes it vital that the country represent and defend the coffee growers' interests.
In recent years, the government of Colombia has faced several obstacles in its attempts to catalyze socioeconomic progress, not the least of which has been working to end a drug war and regain control of most of the territory that had been lost to guerrilla groups. However, as Colombia enters a phase of economic stability and growth, it faces yet another enormous challenge: offering high-quality education to its citizens.
The e-commerce story in Brazil is one of tremendous opportunity, but with significant barriers to entry. While the country's growing middle class and its ranking as the fifth most Internet-connected country would suggest a good fit for e-commerce, consumers still harbor skepticism about making purchases online. Bureaucracy and corruption further complicate the situation. But there are rewards for entrepreneurs willing to take on these challenges. Consider baby.com.br, one of Brazil's leading baby products e-commerce companies.
A decade ago, Colombia was struggling with political and social instability, a weak economy and widespread violence. With foreign direct investment (FDI) hovering around US$2 billion from 1999 until 2003, it was clear that the international financial community was not looking at the country as a favorable place in which to invest capital. However, with the election of President Álvaro Uribe in 2002, Colombia began to resolve the issues of violence and national security and lay the foundation for a 10-year economic boom .
The greater Colombian economy -- specifically its tourism industry -- is the best positioned of any in Latin America to expand steadily in the coming years. However, it has failed over the last decade to capitalize on this advantage through poor brand management, a misunderstanding of the importance of its international perception and a number of larger, strategic infrastructural challenges. Other Latin American countries, even some with violent histories, have better managed these challenges. Yet according to a number of analysts, Colombia can still transform itself into the premier tourism destination at the center of the Americas.
For any economist studying Brazil, a key question today is: How much can Brazil grow? Brazil has demography on its side, but how does this booming economy remain on its growth path and continue to bring more Brazilians into the nova classe media (emerging middle class)?
Colombia today is considered to be one of the world's great emerging economies. Its growing political stability, decrease in violence, young working population and overall positive economic trend make it a country with interesting prospects. One particularly noticeable result of this stability is significant expansion of its entrepreneurial environment. While this is good news, it also challenges the Colombian government to figure out ways that this entrepreneurial potential can be cultivated and maximized.
Over the past decade, Brazil has become a success story among emerging market economies. This, in turn, has translated into increased consumer spending in a variety of areas, including basic goods, furniture and automobile sales. In addition, the government continues to invest money in offshore oil exploration. Not surprisingly, over the past decade the Brazilian private equity sector has thrived as well, with Brazilian PE funds helping to professionalize family-owned businesses, improve corporate governance and provide needed growth capital. What challenges and opportunities will PE see in the next 10 years?
The leadership of the United Arab Emirates (UAE) considers economic diversification a necessity to protect the country's economy from oil-price fluctuations and to maintain prosperity. Along those lines, a government-owned investment vehicle is trying to encourage growth and innovation in knowledge-based industries in such areas as aerospace, health care, information and communications technology, and renewable energy. One of the goals -- promoting a local semiconductor industry -- is proving to be especially challenging.
If there is a product whose provenance consumers care about, it is wine. There are two methods of classifying wine -- cépage (varietals), which identifies the wine by the type of grape used in its production, and terroir (land-based), which highlights the geographical origin of the wine, its region-specific taste and the winemaker's skill. In defiance of marketing trends in the wine industry, many French winemakers continue to identify and market their wine based on terroir, even though this limits its accessibility to new consumers and hinders sales. What's ahead for the French wine industry?
Germany's beer industry is shrinking -- for a multitude of reasons. The country is undergoing significant demographic changes characterized by a rapidly aging population and low fertility rate. Moreover, the frequency of beer consumption is falling even as beer is viewed by some consumers as a low-end and high-calorie drink. Indeed, many Germans these days prefer wine to beer. But the German beer industry is not disappearing, and some experts suggest a number of steps that can be taken to shore it up.
Thanks to relative political stability and strong oil and gas prices, Russia's retail turnover more than quintupled from 2001 to 2011 and now exceeds US$600 billion annually. Data suggest that this sector is entering the steepest part of its growth curve. How will Russia's retailers face the challenges of this critical period of expansion? Will foreign retailers manage to get a slice of this growing pie?
In France, taxation and regulation have worked against entrepreneurship by raising obstacles to innovation and crowding out early-stage investment. Yet opportunity for new businesses still exists, provided the country takes steps to rediscover its entrepreneurial spirit through an examination of its rich cultural heritage. What factors have led to the failure of past efforts to spur entrepreneurship in France? And how can the country innovate by working with, instead of against, its strong central government?
At the very least, 2012 has been a challenging year for Spain, whose economy continues to suffer due to ongoing fallout from the financial crisis. While the country's construction industry has been at the heart of this crisis -- contributing to, and weighed down by, the bursting of the real estate bubble -- few people know that Spain's construction businesses are responsible for some of the world's most advanced water-treatment strategies and technologies.
Apple has been a success story in China to date, demonstrating in some ways the perfect combination of product and market fit. Indeed, the company's meteoric rise suggests that Chinese consumers are slowly evolving from merely making buying decisions based on status toward demanding products that also offer superior design and functionality.
According to traditional Chinese matchmaking culture, family elders drive the screening and selection of their children's future. But in the last decade, rapid urbanization, increasing gender imbalance and the coming of age of the One-child Policy generation has changed the way people find love in big cities. These factors have spurred the growth of online dating and match-making, a nascent industry in China that is expected to exceed two billion RMB (US$318 million) in annual revenue by 2014.
Japan is currently facing a myriad of intractable and unprecedented challenges -- from a demographic crisis to border conflicts to a strong yen. The population is aging quickly, and the energy sector is still reeling from the March 2011 Tohoku earthquake, tsunami and nuclear disaster. One other significant problem is Japan's inhospitable climate for start-ups. What can be done to encourage more entrepreneurship and venture capital in a country whose economy is clearly in need of recharging?
Since being introduced in 1985, credit cards issued in China have grown at an astonishing rate, reaching 285 million in 2011, five times the number in 2006. Growth is expected to continue at 31% per year over the next five years. Yet credit cards are still used mostly for large-ticket items, while cash remains the predominant payment method for smaller purchases. In addition, China's traditional beliefs about personal finance have slowed the adoption of electronic payment methods. Recent studies, however, have also shown that these traditional value systems are changing, and that Western consumption-driven lifestyles are finding their way into China, especially among the youth.
Over the last decade, while India has taken a number of steps to strengthen its primary education system, the learning outcomes of India's children still lag behind those of other countries. Indeed, one can see the link between India's anemic productivity growth and the lack of progress in countrywide, high-quality education. Why has there been such slow advancement in an area that is so vital to the country's growth and prosperity? The reasons are as diverse and nuanced as India itself.