The relative rate of change in economic growth across the world during the current recovery period could have profound consequences, especially for the HR function.
According to the United Nations, growth between 2007 and 2015 in the developed economies will average just 0.3% per annum, but in East and South Asia it will have averaged 7.6% and in China 10.8%. There is, in fact, only one country in the world that is forecast to grow by over 7% in 2014 and 2015 – and that is China. Moreover, the Chinese economy will almost certainly overtake the USA as the world’s largest national economy by the year 2020. China is no longer deriving its growth from being a low cost production centre for US and European enterprises. However, due to its huge domestic market many Chinese corporations have not sought to set up large international operations and instead concentrated on small sales offices in principal cities around the world to deal with the rather limited export of goods so far available for export under Chinese brand names. But soon this will change.
By 2020 the movers and shakers on the global corporate scene will be predominantly Chinese companies. Established western brands in many markets will find that their positions are being rapidly undermined by new Chinese brands that are cheaper, higher quality and full of new features that western companies had failed to provide. Chinese employers will also introduce changes in the western workplace. A different work ethic and longer weekly working pattern will challenge legislative restrictions – particularly in the European Union – with the UK and Ireland being once again the favoured locations for inward investment. This is, of course, provided the UK remains in the European Union after the promised referendum. If the UK leaves the EU then ironically all the growth could go to countries outside the EU which have favoured access to the EU economy – such as Turkey and the Ukraine.
So HR practitioners keen to progress their careers over the next ten years will need to put Mandarin at the top of their learning agenda. Young graduates coming into HR for the first time might also wish to look at China as the best place to seek an internship or at least visit during their year out.