Global Perspective
Catalysts have varying effects on different places, based on their specific and unique characteristics, just as they do on different industries. All three elements — catalyst, market context, and place – must be understood to make sound strategic decisions in changing markets.
Plainly stated, catalysts impact the developed world in a much different fashion than the developing world. Changes that result in positive outcomes in some countries or regions can be disastrous for others, with significant impact on companies that operate or sell into those areas.
As a globally oriented organization, Grayline recognizes the international connectivity of markets and their importance to modern corporations. It is helpful to categorically evaluate the different ways global catalysts impact major geographical regions and stages of economic development, as this provides a framework for more granular analysis. However, impacts must really be understood locally, at the city, state, or regional level.
Human Development Index
Source: United Nations Development Programme (2015). Human Development Report 2015: Work for Human Development.
Bottom-up Analysis
The most important impact study is generally done at the most basic level possible. Geographically, it is at the block, city, or business opportunity level where we can really understand how the environment is changing and what specific risks and opportunities are emerging. Accordingly, the best-informed decisions are made in context of the people and businesses that are most impacted.
While the local-level, bottom-up analysis is most impactful for evaluating specific opportunities, it is less useful for understanding broader trends. The challenge is to determine the right level of granularity that is useful at both the micro and macro level. In some cases this can be city, state, country, or regional analysis.
At the highest level, the split between developed and developing economies is useful for understanding broad trends and the positive/negative directionality of impact. We generally use the Human Development Index to separate developed from developing countries. This index accounts for the development state of economies and technological infrastructure, with the top two quartiles being “developed” and the bottom two quartiles “developing.” This is an admittedly artificial distinction, but is useful at a high level to evaluate global impacts, understanding that our more tactical work is generally done at the city or regional level.
Actionable Information
There are several categories of information, ranging from misleading to irrelevant on one side of the spectrum to actionable and essential on the other.
High-level trend analysis generally falls in the middle of the spectrum: irrelevant, interesting, or helpful. It is rarely directly actionable by a business or public entity, but can help inform the institutional thinking on important issues. Granular, market, or opportunity-specific information also frequently falls in the middle of the spectrum but may be actionable and is sometimes essential.
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