1. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 2009_05_Localization World_05.pptx Document number 1 Dr. Tobias Raffel MEGA-TRENDS Academic Affairs Manager, Roland Berger Strategy Consultants Localization World Conference Berlin, June 9, 2009 Global

2. "A4rb_speech-narrow" – 20090407 – do not delete this text object! ContentsPage 22009_05_Localization World_05.pptx This document was created for our client. The client is entitled to use it for its own internal purposes. It must not be passed on to third parties except with the explicit prior consent of Roland Berger Strategy Consultants. This document is not complete unless supported by the underlying detailed analyses and oral presentation. © 2009 Roland Berger Strategy Consultants GmbH A.Beyond the current crisis WHY it is essential to discuss global mega-trends today 3 B.Global mega-trends through 2030 HOW they will shape our world 8 C.Consequences for decision-makers WHAT global mega-trends mean for you 22 2

3. 3 A.Beyond the current crisis WHY it is essential to discuss global mega-trends today

4. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 42009_05_Localization World_05.pptx When people talk about the future today, they often use characters like V, U, W or L 4 1 Global GDP growth [%] 3.5 4.0 3.9 2.0

5. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 52009_05_Localization World_05.pptx In the long run, however, a few years of developments don't make much difference 5 2 Global GDP growth [%] 1.6 TODAY'S CRISIS 19902030 3.0 3.6 4.2 1.5 4.0 2.1 3.4 2.0 2009

6. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 62009_05_Localization World_05.pptx The future will be shaped by global mega-trends 6 3 Globalization Value shiftsPower shifts to the East Tertiarization Use of new technologies Scarcity of resources Population growth & ageingUrbanizationGlobalizationClimate change Global impact (not just regional/sectoral) GLOBALMEGA-TRENDS Very large, profound, sustainable Long-term developments (several decades) etc.

7. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 72009_05_Localization World_05.pptx So WHY is it essential to discuss global mega-trends today ? 7 Because: >Global mega-trends are shaping our future >Only those who know about them can (re)act >(Most) global mega-trends – won't "wait" for the current crisis and – won't change direction because of it 4

8. 8 B.Global mega-trends through 2030 HOW they will shape our world

9. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 92009_05_Localization World_05.pptx Predicting the future is difficult and experts can be completely wrong 9 1 "Everything that can be invented has been invented." "Heavier-than-air flying machines are impossible." "If anything remains more or less unchanged, it will be the role of women." CREATIVITYTRANSPORTEQUALITY Charles Duell, US patent office, 1899 Lord Kelvin, President of the Royal Society, 1895 David Riesman, conservative American social scientist, 1967 "That virus is a pussycat." HEALTH Peter Duesberg, molecular biology professor at U.C. Berkeley, on HIV, 1988 "I think there is a world market for maybe five computers." IT Chairman of IBM, 1943

10. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 102009_05_Localization World_05.pptx What research institutes and future experts predict: The Roland Berger and World Economic Forum "Trend Compendium 2030" 10 2 INPUTOUTPUT >Compilation of all relevant existing trend studies > Hard data as well as qualitative assessments from experts >Used for discussions and scenario development at WEF conferences in Davos, Dalian, etc. >Sent out to over 4,000 decision-makers worldwide >Presented at conferences, used for consulting work

11. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 112009_05_Localization World_05.pptx Demographic mega-trends: The world population keeps on growing, ageing and moving into the cities 11 3.1 Population growth: World population grows from 6.6 billion to 8.3 billion, mainly in developing nations. India overtakes China as the most heavily-populated country in the world in 2025. It now has a population of 1.51 billion, twenty times more than Germany's. And the latter is now shrinking. Aging: The average age across the globe, now 28, is set to rise to 34 by 2030. In the industrialized nations, it will rise from around 39 to over 44. Japan has the oldest population, at 52.1 on average, sub- Saharan Africa the youngest, at 21.7. Average age in Germany rises by over four years to 48.2. Urbanization: More and more people will be living in urban agglomerations. Today, around 50% of the world's population lives in cities; by 2030, it will be over 60%. Rural areas become depopulated, especially in Asia. Smaller cities with less than a million inhabitants grow particularly quickly. By 2030, the largest mega-cities are Tokyo (population 38.7 m), Delhi (37.7 m) and Lagos (33.1 m). Source: Trend Compendium 2030 Known TRENDS 2009-2030Lesser-known CONSEQUENCES by 2030

12. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 122009_05_Localization World_05.pptx Population growth example 12 20092030 CHINA NORTH AMERICA Population growth [% p.a.] Urban population [%] Bubble size = Population 2009 JAPAN 0 1 2 3 2030405060708090 LATIN AMERICA EUROPE INDIA AFRICA Bubble size = Population 2030 CHINA Source: United Nations Population Division, City Mayors

13. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 132009_05_Localization World_05.pptx Economic mega-trends: Asia is at the heart of a growing global economy and the tertiary sector becomes more important 13 3.2 Asia rises: With their economies growing 3-4 times faster, emerging Asian nations such as China and India catch up with the West. In terms of purchasing power parity, the Chinese economy will be 50% larger than the US's by 2030, twice the size of India's and ten times larger than Germany's. Global economic growth continues: The world economy will grow by 3% p.a. on average until 2030, so GDP doubles in the next 22 years. India will lead the fast-growing economies, growing 272% by 2030, followed by China and Indonesia. Western Europe and Japan bring up the rear, behind the US. Tertiary sector becomes more important: While the industrial sector remains stable globally, the services sector grows considerably. Although the global population is growing and demand for biomass as an energy source is increasing, agriculture's share of GDP in the industrialized nations will fall to less than 1%. Agriculture will account for less than 3% of jobs. Source: Trend Compendium 2030 Known TRENDS 2009-2030Lesser-known CONSEQUENCES by 2030

14. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 142009_05_Localization World_05.pptx GDP growth example 14 20092030 Source: Economist Intelligence Unit, TNS Infratest 0 2 4 6 8 10 12 354555657585 US CHINA INDIA GDP growth [% p.a.] Services [% of GDP] GERMANY JAPAN LATIN AMERICA AFRICA Bubble size = Real GDP 2009Bubble size = Real GDP 2030

15. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 152009_05_Localization World_05.pptx Healthcare mega-trends: People will be living longer, but increasingly unhealthily, and healthcare costs will rise 15 3.3 Life expectancy: Life expectancy rises, not least thanks to progress in hygiene and medicine. Today, the world's population lives to 67.3 on average; by 2030, it will be 72.2, nearly five years more. The gap between men and women narrows. Women in the West may live nearly eight years longer than men today; by 2030, that will be down to just six years. Unhealthy living: We are eating increasingly unhealthily – fattier foods, too much sugar, etc. – and not getting enough exercise. So diseases like obesity, diabetes and cancer keep on growing. The two most prevalent diseases in 2030 have little to do with unhealthy lifestyles, however: HIV/AIDS and mental disease. Medical care: As medicine advances and the quality of healthcare gets ever better, healthcare costs keep on soaring – soon, the West will be spending one dollar or euro in every five on healthcare. Healthcare in the West will not be a problem in 2030; but the developing nations will be many millions of doctors and nurses short, so basic medical care cannot be guaranteed. Source: Trend Compendium 2030 Known TRENDS 2009-2030Lesser-known CONSEQUENCES by 2030

16. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 162009_05_Localization World_05.pptx Developed countries Life expectancy [years] Women outliving men [years] Emerging countries Developing countries Life expectancy example 16 20092030 Source: United Nations Bubble size = Population 2009Bubble size = Population 2030

17. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 172009_05_Localization World_05.pptx Environmental mega-trends: Average temperatures rise, energy consumption goes up and water gets scarcer 17 3.4 Temperatures rise: Average global temperature rises 0.5-1.5°C by 2030, resulting in dramatic changes in global ecosystems The costs of global warming will rise to an unimaginable 5-20% of global GDP p.a. (source: Stern Report). Energy consumption: We will be using more and more energy, 47% more by 2030, mainly because emerging Asian economies are hungry for energy. China will have overtaken the US as the largest energy consumer by 2030. India's consumption is also on the rise, using more energy than all of Africa put together. Water shortages: Clean, fresh water is becoming an increasingly scarce resource. This is mainly because rivers, lakes and seas are becoming increasingly dirty, and because of the effects of climate change, such as growing deserts. Regional differences in water supplies increase. One of the main challenges is a modern distribution infrastructure in cities – in many Third World megacities, 40-70% of all drinking water just leaks away. Source: Trend Compendium 2030 Known TRENDS 2009-2030Lesser-known CONSEQUENCES by 2030

18. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 182009_05_Localization World_05.pptx Energy consumption [quadrillion BTUs] Year 20302007 0 40 80 120 160 AFRICA INDIA RUSSIA US CHINA Energy consumption example 18 20092030 Source: International Energy Agency, Institute of Energy Economics Bubble size = Population 2009Bubble size = Population 2030

19. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 192009_05_Localization World_05.pptx Living standards mega-trends: Income grows inconsistently, infrastructure investment rises and fewer people go hungry 19 3.5 Income distribution: Differences in incomes between rich and poor countries shrink, but the income gap within countries widens. A global middle class arises, 1.2 billion strong, involved in the global market, demanding top quality and education worldwide. Infrastructure: Global population growth and the progress of civilization mean investment in infrastruc- ture will be huge in the coming decades. Of those funds, half will be needed by developing nations. Almost twice as much is invested in water infrastructure as in energy infrastructure – which, in turn, is four times more than in new roads and railways. Food: The number of undernourished people falls – from 710 million (13.5% of the world's population) today to 460 million (6.9%) by 2030. The specter of undernourishment will still not be completely banished in the foreseeable future, however. Western nations have too much; others, Africa in particular, have too little. And climate change makes the problem much worse. Source: Trend Compendium 2030 Known TRENDS 2009-2030Lesser-known CONSEQUENCES by 2030

20. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 202009_05_Localization World_05.pptx Daily food consumption [kcal/person] Under- nourished people [%] 2,200 2,400 2,600 2,800 3,000 3,200 3,400 3,600 05101520253035 SUB- SAHARAN AFRICA SOUTH ASIA LATIN AMERICA EAST ASIA MIDDLE EAST/ NORTH AFRICA DEVELOPED COUNTRIES Daily food consumption example 20 20092030 Source: United Nations Total number of undernourished people 2009Total number of undernourished people 2030

21. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 212009_05_Localization World_05.pptx Technological innovations will also change our lives in the decades ahead – But are also difficult to predict 21 4 Source: Nowandnext Innovation Timeline, BT Technology Timeline Intelligent cosmetics Mood-sensitive home decor Location devices implanted into pets Wearable computer Dream machines Road reser- vation system Computers that write most of their own software Full voice interaction with PC Robotic surgery Arti- ficial eyes Face recog- nition doors Fully auto- piloted cars Synthetic bacteria Child- care robots Holo- graphic TV Anti-noise technology in gardens 3D home printers Gene- based diets Accele- rated schooling Memory enhance- ment in humans Self- repairing roads Virtual vacations Space factories Sleep surrogates Single global currency Video wallpaper 20092030

22. 22 C.Consequences for decision-makers WHAT global mega-trends mean for you

23. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 232009_05_Localization World_05.pptx It is necessary to analyze the impact of global mega-trends on your specific industry 23 1 Global localization industry GlobalizationDemographic change Value shifts Power shifts to the East Climate changeUse of new technologies … YOU as decision-maker

24. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 242009_05_Localization World_05.pptx The localization industry will be affected in many ways (1/2) 24 2 GLOBAL MEGA-TRENDS Possible impact on localization industry Globalization Use of new technologies > Increasing demand for localization services (globalization of businesses, terrorism surveillance, EU, etc.) > More integrated solutions (simultaneous product launches worldwide, parallel content creation and translation, etc.) > Translation technologies (machine translation, translation memory), language recognition software etc. will advance and help – but not replace human translation and localization >Increased personalization of language services >Collaborative open-source services and free-of-charge business models

25. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 252009_05_Localization World_05.pptx The localization industry will be affected in many ways (2/2) 25 GLOBAL MEGA-TRENDS Possible impact on localization industry Demographic and power shifts >From European to Asian languages; Chinese, Arabic and Spanish more important; Chinese as a second lingua franca ? >Death of languages or revitalization and re-emergence of local dialects: more or fewer languages spoken? >"The old urban Asian customer " Healthcare, environmental and living standards shifts > New topics and customers emerge >Role of your industry beyond providing localization services (addressing global inequalities, shaping trends)?

26. "A4rb_speech-narrow" – 20090407 – do not delete this text object! 262009_05_Localization World_05.pptx So WHAT do global mega-trends mean for you ? 26 > Be aware of their impact: Analyze what global mega-trends mean for your industry's/your business's –value chain –service portfolio –customer base –etc. > Prepare for challenges and opportunities: You will have to meet different customers needs in the future, develop new products and services, etc. > Plan differently: Use scenario planning as a tool to integrate long-term developments 3