Can any of us really afford not to be part of China's continued mega-growth?
This blog was first posted on our sister site, SSON Analytics. Reposted here by kind permission.
2017 marks another growth year (12% increase) for the Chinese Shared Services Landscape: Ignore this BRIC market giant at your own peril
As the Chinese year of the Rooster draws to a close, there are now nearly 1.4bn Chinese nationals on Earth. The population growth of this 21st century BRIC mega-nation continues to expand at an astounding rate (despite a very slight YOY rate reduction from 0.48 to 0.46% last year). In real terms that equates to almost early 8.8m people added to the total population in 2017... and there’s still another 7 weeks left in the year.
If you’re in any doubt about the true pace of China's growth (or if, like me, you’re a natural cynic and require good old fashioned statistical proof before you take things as read), check out this real-time population data feed for an eye-opening glance of the facts. As I write this, 9,966 children have been born in China today (correction 9,980 ... it’s literally updating faster than I can type). Counterbalance that with the 6,215 deaths so far today in the same country, and it’s not hard to do the math as to why China’s demographic growth is so relentless.
Sitting in a data analytics centre every day (as I now do) really does wake you up to the sheer velocity and scale of real-time data movement in the world today. Right now, SSON Analytics’ own global data centre has almost 300 live API data-feeds (from publically available sources) automatically pumping updated figures into our data tools and analytics reports (blending with SSON’s own proprietary data) to keep our insights fresh. A closer look at those numbers quickly reveals the speed of data change is frankly scary. Ironically it’s always been this way, but now it's more visible in my day to day, the impact feel ever more present and important. And I think perhaps it should for all of us.
It's not rocket science. We all get that understanding the direction of where the world is heading is critical to effective global business strategy – especially in the Business Services industry where everything, from global workforce planning and currency volatility to service delivery location assessment and digital adoption rates, play critical roles in the future of an organisation's ability to scale and support. But taking it a step further, we need to extrapolate those figures forward and compare them globally, to get a truer sense of their actual meaning and how we can utilise those numbers in the present.
Take China, with its population forecast of near 1.55bn by 2045 (that’s about 161m more people than it has today) and simply compare it with the world’s incumbent SuperPower. The good old US of A does, in fact, have a similar population growth rate to China (the US is currently net gaining 1 new person every 15 seconds), but, crucially, when you fast forward the same 27 years to 2045, America’s population forecast is just 363m (52m more than it has today) and feels dwarfed in comparison to China. The numbers don’t lie. China will have produced 3 x the equivalent US population growth by the time we Gen Xers (and Gen Y crowd) retire. For those who still think their global business may not need to create a footprint in China at some point, this is meaningful food for thought.
Unsurprisingly, many MNCs are already cottoning on, both to the opportunity in China and the increasing necessity to capitalise on it. The growth of the Shared Services landscape alone in China over the last 12 months is testament to that (up 12% from 2016), and it’s showing no rate of slowing. If you’ve not played with the data on China’s SSC activity recently take a quick squizz at the latest numbers (if that doesn't translate outside of UK and Oz please substitute with a good old-fashioned “look-see”). You can access the 2017 latest Chinese SSC landscape and benchmarking data here to see what’s happening on the ground across the 363 captive and hybrid SSCs SSON has now identified there.
Perhaps most interestingly in my view, it highlights that the greatest talent challenge Chinese SSCs cite they are currently facing ties into the rate of digital adoption being implemented there. A phenomenal 70% of respondents to our latest survey of Chinese SSCs (held at Shared Services & Outsourcing Week China in Shanghai last month) stated that reconfiguring the workforce after digital transformation, and upskilling and recruiting staff for higher value services was their main talent challenge for 2018. Couple that with the latest data on Intelligent Automation and RPA/RDA usage in Chinese SSCs, which shows that only 24% have not yet started their due diligence or are already on the IA journey, and the message gets even louder.
China will not stop growing – it will continue to have the biggest workforce on the planet and by all accounts a sizeable digital workforce is in the making there too. If you’re one of the organisations still not looking to harness this BRIC nation somehow, perhaps it’s time to ask yourself if you should?