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THE FUTURE AND HOW TO SURVIVE IT CORPORATE PROFITS ARE BEGINNING A LONG…
THE FUTURE AND HOW TO SURVIVE IT CORPORATE PROFITS ARE BEGINNING A LONG SLIDE PREPARE FOR LEANER TIMES.
by Richard Dobbs, Tim Koller, and Sree Ramaswamy
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Why profits rose
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A global presence
Succesful Western companies have used their size to expand aggressively abroad, thus capturing the increase in global revenue driven by economic development in China other parts of Asia, and Latin America.
Falling cost
Developed-world multinationals have exploited unprecedented opportunities for reducing costs. The biggest sources of savings have been falling labor costs and the higher productivity of both capital and labor.
THE PROFIT BOOM
Since 1980 corporate profits have grown at an unprecedented rate, increasing their share of global GDP by 30%.
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COMPANIES IN THE EMERGING WORLD ARE CATCHING UP with Western multinationals on
pay and career opportunities.
Companies from China, India, Brazil, and elsewhere in the emerging world become global firms themselves, they are closing the gap in terms of remuneration and opportunities for career growth
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THE OUTLOOK
But whereas the outlook for revenue growth is good, the profits picture looks less promising.
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Consumers could be the big winners, as could some workers—especially those in emerging markets and those with digital and engineering skills, which are in short supply.