Global Economic Trends

Payments have evolved from paper and plastic to APIs and orchestration - giving rise to a new breed of players that simplify the complexity and connect the dots behind the scenes. Here's how we got here. 𝟭. 𝗜𝗻 𝘁𝗵𝗲 𝗽𝗿𝗲-𝟭𝟵𝟵𝟬𝘀 𝗲𝗿𝗮, banks owned the entire payments value chain -acquiring, processing, settlement. Merchant onboarding was complex, and domestic clearing systems ruled. 𝟮. 𝗧𝗵𝗲 𝗿𝗶𝘀𝗲 𝗼𝗳 𝗲-𝗰𝗼𝗺𝗺𝗲𝗿𝗰𝗲 in the late 1990s changed everything. Players like PayPal and Authorize made online payments possible, while banks began exiting the acquiring space or partnering with processors to keep up with demand. 𝟯. 𝗕𝗲𝘁𝘄𝗲𝗲𝗻 𝟮𝟬𝟬𝟬 𝗮𝗻𝗱 𝟮𝟬𝟭𝟬, specialized gateways and regional wallets began to scale, offering merchants greater flexibility and control. The launch of SEPA in Europe marked a push toward payment harmonization, while non-bank players started building infrastructure that bypassed traditional acquiring models altogether. 𝟰. 𝗧𝗵𝗲 𝘀𝗵𝗶𝗳𝘁 𝘁𝗼 𝗔𝗣𝗜-𝗱𝗿𝗶𝘃𝗲𝗻 𝗶𝗻𝗳𝗿𝗮𝘀𝘁𝗿𝘂𝗰𝘁𝘂𝗿𝗲 transformed payments from siloed systems into modular, developer-friendly tools. Merchant onboarding became faster, integrations simpler, and innovation more scalable. Open Banking regulations enabled direct access to bank data, while new credit models redefined consumer behavior. Payments evolved into a flexible, programmable layer of the digital economy. 𝟱. 𝗧𝗼𝗱𝗮𝘆, we’re in the age of seamless integration. Payments are embedded in everything - from ride-hailing apps to SuperApps. Real-time rails like SEPA Instant, UPI and PIX are live. CBDCs are in pilot. However, as payment ecosystems grow more fragmented - with new methods, regional schemes, compliance layers, and fraud risks -complexity has become a major bottleneck for merchants, fintechs, and even banks. Integrating multiple providers, maintaining uptime across systems, and ensuring regulatory compliance isn't just costly - it's unsustainable without the right foundation. This is where a new breed of infrastructure players like 𝗔𝗸𝘂𝗿𝗮𝘁𝗲𝗰𝗼 fit in - offering the tools to simplify complexity and still retain control. • 𝗪𝗵𝗶𝘁𝗲-𝗹𝗮𝗯𝗲𝗹 𝗽𝗮𝘆𝗺𝗲𝗻𝘁 𝗴𝗮𝘁𝗲𝘄𝗮𝘆𝘀 let banks, PSPs, and fintechs launch their own branded platforms fast - without building from scratch. • 𝗣𝗮𝘆𝗺𝗲𝗻𝘁 𝗼𝗿𝗰𝗵𝗲𝘀𝘁𝗿𝗮𝘁𝗶𝗼𝗻 enables merchants to route transactions dynamically across multiple acquirers, reducing costs and failed payments while improving UX. • 𝗕𝗮𝗻𝗸𝘀 can embed API-driven acquiring services into their offerings without the burden of a full-scale tech overhaul. In a world where growth brings fragmentation, the real challenge isn’t enabling payments - it’s managing them. The advantage will lie with infrastructure that can unify complexity, adapt in real time, and scale across borders without adding friction. Opinions: my own, Graphic source: Akurateco Payment Hub Subscribe to my newsletter: https://lnkd.in/dkqhnxdg

⚙️ The U.S. Economy Runs on GPUs Now Harvard economist Jason Furman says 92% of U.S. GDP growth in early 2025 came from AI-related data centers. Without them? Growth would’ve been 0.1%. Practically zero. At first, it sounds like a win — proof that AI is driving real value. But the more I sat with it, the stranger it felt. Because for the first time in history, machines — not people — are powering prosperity. Growth isn’t coming from human creativity, innovation, or productivity anymore. It’s coming from racks of humming servers and rivers of electricity. We’re no longer building around talent. We’re building around compute. → What happens when the economy’s health depends on energy, not effort? → When growth rises with GPUs, not with human ingenuity? → When progress stops being about people altogether? In my opinion, this isn’t just economic evolution — it’s a quiet trade-off. We’re outsourcing growth itself. And while that might look efficient on paper, it feels hollow in spirit. If AI is now the backbone of the economy, we need to build a human spine alongside it. ✅ Invest in capability, not just capacity. The next wave of GDP shouldn’t only come from data centers — it should come from how humans use them. ✅ Reward creation, not consumption. Growth that only counts infrastructure misses the real metric: human progress. ✅ Power balance. If compute drives growth, renewable energy must sustain it. Otherwise, prosperity becomes a power bill. Because the real question isn’t how far AI can push GDP — It’s whether we can still call it growth when humans are no longer the ones growing. #AI #Economy #Innovation #DataCenters #FutureOfWork #Ethics

During my time serving in government, I saw firsthand how geopolitics can impact energy production and flows, with cascading impacts on market and macroeconomic trends.   We're already seeing this play out following the last few days in the Middle East. U.S. and Israeli strikes on Iran triggered retaliatory action across the region that has disrupted energy production and transit.   The market reaction is changing quickly. Since I recorded this video on Monday, oil and gas prices have jumped further, and equities have shifted toward a risk-off move as investors price in continued escalation. Bonds sold off further, reflecting inflation fears in developed markets. Due to the segmented nature of natural gas markets, the impact of higher prices will hit regions differently, with Europe more exposed than the U.S. to elevated LNG prices.   The central question: will this remain a short-term volatility spike or evolve into a broader supply shock? The duration of the disruption and the severity of transit impacts are the core variables I'm watching.   ⬇️ Watch the full video for my latest take on what this could mean for markets.

Global sales of EVs and hybrid vehicles hit 1.2 million units in February 2025. That's a massive 50% jump compared to last year. But get this: China accounted for nearly 75% of those sales! I've posted before about the pace in China, and it just keeps accelerating. EV sales there are up 76% year-on-year. Brands like BYD, Xiaomi, Xpeng, and Zeekr are launching new models at lightning speed, moving from plug-in hybrids to fully electric in record time. In Europe, the race is still on. Volkswagen boosted BEV sales by 180%, BMW overtook Tesla, and Chinese-owned brands reportedly outsold Tesla in Europe for the first time. Meanwhile, Tesla's EU market share hit a five-year low. But what I still can't get over is the insane pace in China! I recently drove a Xiaomi EV in Shanghai that felt like a one-to-one copy of the Porsche Taycan for $40,000. Incredible materials, smooth drive, and great steering. Even my engineer, who was with me, was impressed. And this is just four years after Xiaomi said, "Let's make cars." Now, they're producing 100,000 a year. Also extremely interesting is that 20% of the car's cost is subsidised. That kind of scale-up is of course possible based on massive government backing. On the autonomous side, I've experienced Waymo in San Francisco and Hyundai's lidar-based system in Shanghai: fully self-driving, even in chaotic traffic. The future is already here. And I've become a real fan, especially when I need to work between meetings or get to the airport. Same as Vay for teledriven car sharing. There’s so much going on! Has Europe lost the race? No! Not yet. But we're under pressure. And we need to move faster. The future is 100% electric: that's crystal clear to me. Hybrids may be an important bridge, but the long-term path is electrification, enabled by renewables. So the real question is: Can Europe match China's speed, scale, and tech leadership? Or are we looking at a permanent power shift in the EV industry?  I'd love to hear your thoughts in the comments. #EV #ElectricVehicles #Mobility #Innovation #ChinaEV #EuropeEV #Automotive

Goodbye China — the world’s #1 clothing producer loses its crown 👑. For the first time in years, China has dropped below 30% of global apparel exports. Once the undisputed “factory of fashion,” it now stands at 29.6%, overtaken by the European Union with 29.7%, according to the World Trade Organization’s 2024 Key Insights Report. 📉 In 2010, China controlled nearly 37% of global apparel exports. In 2023, it still held 31.6%. The shift may look small on paper, but it signals a deeper transformation in global sourcing. Brands aren’t just chasing lower costs anymore — they’re prioritising resilience, traceability, better quality, and transparent partnerships. And that’s reshaping where and how production happens. Over the past year, I’ve worked with factories and stakeholders in Pakistan and Cambodia, supporting: • Sustainable production practices. • Circularity through material prioritisation. • Pre-consumer waste mapping. • Supply chain transparency introducing Digital Product Passport tools. So I was glad, but not surprised to see these countries gaining ground: 📈 Cambodia: up 24% in exports this year, now at 1.8% of the global market 📈 Pakistan: +15%, now representing 1.7% 📈 Vietnam: +9%, up to 6.1% 📈 India: +6%, stable at 2.9% 📈 Bangladesh: +7%, at 6.9% — with ongoing improvements in sustainability and factory compliance gaining traction, though reputational challenges persist. Meanwhile: 📉 Turkey: -4%, down to 3.2% 📉 China: stagnant at $165B in exports 📈 EU: $166B in exports, rising with reshoring and strong internal demand Let’s be honest, some of these emerging sourcing countries still have work to do. But what’s exciting is the genuine momentum in places willing to innovate, even those outside traditional fashion capitals. 🧵 The future of fashion manufacturing won’t be about volume alone. It will be about how things are made, and who you choose to partner with. What are your thoughts on the above? Is China’s decline purely about tariffs, or is this a deeper shift in values? GIZ Pakistan GIZ Cambodia Fashion Revolution Fashion for Good #SustainableFashion #ResponsibleSourcing #FutureOfFashion #MadeInPakistan #CambodiaFashion #SupplyChainTransparency #FashionManufacturing #TextileInnovation

"Our savings go to the USA, and with it, they buy our companies." With this powerful message, Enrico Letta has recently summarized the conclusions of his report on the future of the Single Market. The EU is home to a staggering 33 trillion euros in private savings, but this wealth is not being fully leveraged to meet strategic needs, with around €300 billion being diverted to markets abroad, primarily to the US, due to the fragmentation of our financial markets. This might seem detached from citizens' and companies' daily lives - a high finance issue that affects a few. However, it means less growth, smaller companies, and fewer resources available to fund better public health, education, and, down the road, pensions. The Banking Union is more of the same, as well as the development of a large European capital market, which would translate into more sustainable growth in Europe and better options for all its citizens. This is why the best entrepreneurs end up - mostly - setting up their new companies in the US instead of Europe. Since 2008, the American economy has grown more than twice as much as Europe. And companies in our continent suffer from a considerable size deficit; for example, Europe has almost six times fewer startups valued at over $1 billion (249) than the US (1,444) and fewer than China also, which reached 330. An essential ingredient of growth is investment, and there is no investment without credit. Europe has sound and well-regulated financial systems and enough savings to provide the financing we need. The time to deepen our Single Market and create a true Banking and Capital Markets Union is now so we can get credit flowing, grow, and secure prosperity for everyone.

A month ago I was with IMD #EMBAs in Japan on program about resilience, where conversations about #population_decline seem to be everywhere. The country's fertility rate has plummeted to just 1.15 (2024) children per woman, one of the lowest in the world. It’s been declining since the 1970s. But here's what's fascinating: #fertility rates had decreased in Japan much more than Sweden for the same period. Why? New research (May 2025) by Nobel laureate economist Claudia Goldin reveals something counterintuitive: the #speed of #economic_development matters more than the level of #wealth. Japan experienced explosive economic growth from the 1960-80s. Per capita income quadrupled in just two decades. But here's the catch, #social_norms couldn't keep pace with economic reality. The result? A #generational and #gender_conflict: • Women gained education and career opportunities rapidly • Men largely maintained traditional expectations about household roles • Today, Japanese women do 3+ hours more unpaid household work daily than men • In contrast, Swedish women do less than 1 hour more than men This isn't just about childcare policies or economic incentives. It's also about what happens in #private, when societies transform faster than cultural norms can adapt. Countries that developed more gradually (like those in Northern Europe) gave men and women time to #renegotiate #household_responsibilities. The result? Higher fertility rates even with high female employment. The lesson is clear: #economic_transformation without #social_transformation creates demographic challenges that are incredibly hard to reverse. These findings are especially meaningful in the #current_context when gender equity becomes a political fault line, workplace norms continue to reward availability over care, and traditional gender roles make a come back. Walking through Tokyo's quiet neighborhoods, you can feel this tension a modern economy built on traditional family structures that no longer work for the #families (and #women) themselves. Goldin reframes the #fertility_crisis as a #macroeconomic and #cultural challenge. It’s not about persuading women to have more babies, it’s about redesigning the world so they can. Worth reading the full paper in comments #Demographics #Japan #GenderEquality #EconomicDevelopment #SocialChange

With Deloitte reporting its weakest revenue growth in 14 years, significant changes within the Big 4 seem more imminent than ever. The possibility of reorganising business units, or even separating consulting and audit arms, is increasingly being considered. Should the Big 4 streamline and become more agile, unburdened by limitations such as audit conflicts and geographical restrictions, their strong brand presence has the potential to dominate the market. The consulting and advisory arms, in particular, hold immense potential, which is currently constrained by the existing Big 4 operating model. In the short term, we may witness cuts in lower-margin areas to free up investment for high-margin consulting and advisory businesses. For example, profitable practices such as Cybersecurity could be repositioned within Technology Consulting arms, moving them away from the lower-margin Risk business, as seen at Deloitte. Additionally, duplicate practice areas across various functions are likely to be consolidated, inevitably leading to personnel changes, fewer management roles, and necessary headcount reductions. A more fundamental shift may require rethinking the traditional Partnership model. As these firms scale, consensus-driven decision-making becomes increasingly inefficient. Transitioning to a corporate governance structure could streamline decisions, improve conflict resolution, and enhance overall agility. This model would also allow for faster responses to market demands and elevate client service delivery. Meanwhile, younger professionals may find stock options and equity-based compensation, increasingly offered by smaller, more nimble firms, a compelling alternative to the traditional partnership track further driving the need for change. Finally, the Big 4 will increasingly adapt to the growing demand for technology driven solutions. Traditional services such as accounting, tax, and audit are facing shrinking margins due to leaner, tech-savvy competitors and rapid advancements in artificial intelligence and automation. To remain competitive, the Big 4 must pivot towards higher-margin, tech-enabled services that leverage their global scale and expertise. In doing so, they can remain at the forefront of the professional services industry, unburdened by models that restrict their consulting and advisory businesses, and better equipped for the future.

In our report "The Missing Half: Women and India's growth challenge" we show that raising women's labour force participation rate is not just a social necessity but an economic imperative. The growth acceleration necessary for 'Viksit Bharat' may not be possible without a substantial rise in female labour force participation rates (FLFPR). To understand both the opportunity and the limits of policy, we place India within a longer global arc. India is currently near the bottom of the ‘U’ seen when countries are mapped on FLFPR vs. average incomes. India is climbing out of the bottom but not fast enough. We studied trends in advanced economies, where, over the past century, women have moved from the economic periphery to the core. Given the paucity of primary research on FLFPR in India, we also conducted a proprietary survey of around 11,000 college educated women across 42 Indian cities. In developed countries, demand for women's labour was addressed by shifts in demand (more services, removal of legal barriers and reduction in cultural bias) as well as its supply (household automation, education, out-of-home safety and reproductive control) . These would not have occurred without shifts in cultural norms, which were accelerated by war-time mobilization in WW2. Even high-income economies though continue to see gender gaps in pay later in careers, mostly attributable to the ‘motherhood penalty’. This structural lens helps understand India’s challenges. There has been substantial progress on the supply-side, like inputs that reduce time spent on household work: pucca houses, dense energy access (electrification, cooking gas) and piped water. Higher-education enrolment ratios for women, necessary to reduce the ‘marriage penalty’, are rising and are now mostly at par with men in most states. However, there are demand side constraints like too few accessible non-farm jobs (for men and women), fewer jobs in sectors that are globally women-dominated, and several remaining supply-side constraints like unpaid care, safety concerns, and social norms that suppress participation. For the cohort we surveyed (white-collar, English-speaking: at the top of the social pyramid), the survey reveals a clear transition to “Career AND Family”, and a shift in aspirations to viewing paid work as a career and as central to their identity, not merely a source of income. In this #opendialogue episode, Sameer Shetty and I discuss the key findings. https://lnkd.in/dV7_mJHf (link to the report: https://lnkd.in/d559eqbq)

Economic policymakers are grappling with elevated uncertainty, trade tensions, and effective tariff rates reaching levels not seen in a century. Our April 2025 World Economic Outlook shows a range of global growth projections. Our reference forecast, reflecting policies as of April 4, shows global growth declining to 2.8% in 2025 and 3% in 2026, down from 3.3% in the January Update. Despite the slowdown, global growth remains above recession levels.    The path forward demands clarity and urgent action. Countries should work constructively to promote a stable trade environment, manage difficult policy tradeoffs, rebuild fiscal space, and accelerate structural reforms to boost resilience and growth.