Mega Trends and the

Nondestructive Testing Industry

Macro to Micro Opportunities on
Future Business, Cultures and
Personal Lives
By
Nikhil Jain

1
 Agenda
• Introduction and Definition of Mega Trends
• Presentation of Top Mega Trends
• Conclusion and Macro to Micro : How To
Apply Mega Trends Within Your Organization
to Develop Growth Strategies

2
 Top Mega Trends

Urbanization
Bricks and Innovating to
What is a Mega Trend? – City as a
Customer
Clicks Zero

Mega trends are

Future Health,
transformative, global Smart is the Infrastructure Wellness and
New Green
forces that define the Development Well Being

future world with their far

reaching impact on New Business Future of
business, societies, Social Trends Models: Value Mobility
for Many
economies, cultures and
personal lives.
Connectivity Beyond BRIC:
and The Next
Convergence Game
Changers

3
 Mega Trend 1:

Urbanisation - “City
as a Customer”
 Mega
Mega Cities Regions

Mega
Corridor Mega Slums
5
Mega Cities in 2025
By 2025, 35 Mega Cities will exist globally, and about 77% of these will be from the developing world. Tokyo will
be the largest Mega City in 2025, with a population of 38.7 million.

Moscow

London Harbin
Chicago Paris Nanjing
Istanbul
New York City Beijing Shanghai
Madrid Tokyo
Seoul
Tianjin
Los Angeles Tehran Wuhan
Chengdu Osaka-Kobe Hangzhou
Delhi Chongqing
Cairo Chongqin
g
Mexico City Mumbai Kolkata Guangzhou
Foshan
Shenzhen
Bogotá Shenzhen

Jakarta Hong Kong

Rio de Janeiro
Population in 2025
São Paulo
More than 27 million
Buenos Aires
18–27 million Note: A Mega City has a population greater than 8.0
million and a GDP of $250.00 billion or more.
8–18 million
Source: United Nations, Department of Economic and Social Affairs, Population Division (2012);
World Urbanization Prospects: The 2011 Revision; and Frost & Sullivan analysis.

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Top Mega Regions of the World in 2025
By 2025, 21 Mega Regions will exist globally. Shanghai and Guangdong Mega Regions will contain 9% of the
total population of China.

New Delhi, Greater

Tri-state Area Noida, Ghaziabad,
Beijing-Tianjin
36.9 million Marmara Mega Region Gurgaon,
Greater Los 51.0 million
Istanbul, Kocaeli Faridabad Chongqing-
Angeles 28.5 million Chengdu
20.6 million
20.9 million 28.9 million
Mumbai, Shanghai
Washington, D.C.- Cairo-Giza
Bhiwandi, 67.9 million
Baltimore Area 17.6 million
15.6 million Kalyan, Thane, Guangdong Region
Central Ulhasnagar Kolkata, 58.7 million
Lagos and Eko
Mexico 34.4 million Howrah
Atlantic City
31.4 million Chennai, Kanchipuram, 21.6 million National Capital Region
25.0 million
Pondicherry in the Philippines
Population Greater Bangkok
15.0 million 27.7 million
greater than 40 19.2 million
million
Greater Rio Greater Jakarta
de Janeiro 29.8 million
Population from 20 17.2 million
million to 40 million
Greater Sao Johannesburg and
Paulo Pretoria
Population from 15 28.8 million 7.6 million
million to 20 million
Greater
Emerging Mega Buenos Aires
36.5 million Source: United Nations, Department of Economic and Social Affairs, Population Division (2012);
Region
World Urbanization Prospects: The 2011 Revision; and Frost & Sullivan analysis.
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 Mega Corridors in 2025
By 2025, there will be 21 Mega Corridors globally.

China (7)
• Beijing-Harbin and Dalian
• Beijing-Shanghai
Europe (2) • Shanghai-Chengdu Cross-country (1)
• Trans-European • Ningbo-Shenzhen Beijing-Tokyo-Pyongyang-
Network Transport • Beijing-Guangzhou Seoul Corridor
(TEN-T) • Shanghai-Kunming
United States (3) • Blue-Banana • Guangzhou-Shenzhen-Hong Japan (1)
• Southern Corridor Kong Tokyo-Osaka Corridor
California Jakarta (2)
• Great Lakes Turkey (1) • Sumatra-Java
Corridor Istanbul-Izmir • Jakarta-East Java
• Bos-Wash (D.C.) Mega Corridor
Corridor
Malaysia (5)
• Sarawak Corridor of
Renewable Energy
Latin America (2) Africa (3) India (8) (SCORE)
• Rio de Janeiro-Sao Paulo- • Abidjan- • Delhi Mumbai • Sabah Development
Campinas Corridor Ouagadougou Industrial Corridor Corridor (SDC)
• Toluca-Mexico City-Puebla Corridor • Mehsana-Valsa • East Coast Economic
Corridor • North-South • Mumbai-Ahmedabad Region (ECER) Corridor
Corridor • Mumbai-Nagpur • Northern Corridor
• Kampala-Nairobi- • Bangalore-Belgaum Economic Region (NCER)
Transportation Corridors (16) • Iskandar Development
Mombasa Urban • Hyderabad-Hindupur
Mega Corridors (21) Corridor • Srikakulum-Nellore Region (IDR) Corridor

Regions with Mega Corridors • Chennai-Hosur

Australia (2)
• Brisbane Urban Corridor
• Perth Urban Corridor
Note: Mega Corridors are corridors that connect two major cities or Mega Regions (60 km
or more apart, and with a combined population of 25 million or more). The corridors can be
planned transportation or economic corridors (with planned investment going into transport
infrastructure, industrial zones, energy, or real estate) or naturally evolving urban corridors. Source: UN-Habitat and Frost & Sullivan analysis.
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 Mega Slums
Globally, 22% of the total population will live in slums by 2025.

Slum Population, Global, 2025

Europe
Eastern Asia
41.8 Western South-
Asia Central
Asia
362.0
Forecast of Asian Slum
89.4 Population as a Percent
Northern Africa of Total Slum Population,
476.0
Latin America 25.1 Global, 2025
and the Rest
196.8 Caribbean of the
88.7 World
43.1%
1.1
Southeastern
475.7 Asia Oceania

Asia
Sub-Saharan 56.9%
Africa

Note: The numbers in the circle are in millions Source: UN-Habitat and Frost & Sullivan analysis.

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 Cities, and Not Countries,
Will Drive Wealth Creation In the Future

Cities like Seoul account for 50% of the

country’s GDP; Budapest (Hungary) and
Brussels (Belgium) each for roughly 45%.

What are the Micro Implications?

High Economic Power

Hub and Spoke Business Model
Transit oriented development
New Mobility Solutions
City as a Customer

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 Mega Trend 2:

Smart is the New

Green
Smart Factory Case Study: Toyota Practices “Kakushin” in its
New Takaoka Plant
Able to Build 8 High-Volume Models as Against 3 on the Original Assembly Line

Current Plant - Cost-cutting to generate more than $2.5 billion

Press Shop
Welding Parts Shops Body Shop - Lead time to add new model halved
Paint Shop # 1 - Sensors that monitor quality during each process
Assembly Shop # 1

Paint Shop # 2
Stamping presses that use servo-motors rather
Body Shop than hydraulics, combined with high-speed
Assembly Shop # 2/3 delivery robots.
Paint Shop # 3
• 2006 – 660,000 Capacity

Future Plant Welding Parts Shops Press Shop

A "set parts system" that
A welding system that delivers a basket of parts to
slashes the cost of jigs and each vehicle.
Body Shop
other tooling.
Paint Shop # 1

Ditch huge expensive

machinery
A paint process that Assembly Shop # 1/2
eliminates the need to let
the base coat dry. Paint Shop # 2

• 2010– Capacity 500,000

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Mega Trend 3:

Social Trends
 Surge in
Asian Work
Pool

Geo Gen Y
Socialization

Middle Generational
Bulge Political Shift

“She-
conomy”

Ageing Reverse
Population Brain Drain

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 Surge in
Asian Work
Pool

Geo Gen Y
Socialization

Middle Generational
Bulge Political Shift

“She-
conomy”

Ageing Reverse
Population Brain Drain

16
 Global Population in 2025: Out of 2.4 Billion Gen Y Population ,
Around 52% from Asia Alone
World Population: Breakdown by Region (Global), 2025
2025
8.01
Billion
Around 37% of
Gen Y Population
2011 Will Live in India
6.99 and China Alone
Billion

0-14 years 15-34 years 35-64 years 65 years and above

Source: Department of Economic and Social Affairs of the United Nations 2011; Frost & Sullivan, 2012
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Mega Trend 4:

Connectivity &
Convergence
80 Billion Connected Devices
By 2020
10 Connected Devices for
Every Household by 2020

5 connected devices for every

user by 2020

5 billion internet users by

2020

500 devices with unique

digital IDs (Internet of things)
per square kilometre by 2020
Source: Frost & Sullivan, 2012
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Connectivity will Lead to Convergence of Products,
Technologies and Industries Technology Convergence
Industry Convergence
Product Convergence

UAV Unmanned Aerial Vehicle

V2V Vehicle to vehicle
V2H Vehicle to Home
V2I Vehicle to Infrastructure

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 Convergence in the NDT Industry

Industry Product Competition

Convergence Convergence Convergence

Tablet “Expert”
Metrology
Computers Alliance

Phased Array NDT Training

NDT Ultrasonic and Equipment
Instruments Vendors

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 Mega Trend 5:
Bricks and Clicks
 Macro To Micro Implications of Bricks and Clicks
Before Clicks After Clicks Macro to Micro Implications
Big-box Format Small-box Format
(Hypermarket)
(Virtual Stores)
Store Sizes to Decrease by
15%-20% by 2020 (from 2011
levels)

Single-Channel Omnichannel
In-store, online and mobile to
integrate creating a
‘Omnichannel’ shopping
experience
Money Wallets Mobile Wallets
M-Payment Users to
increase by 16% exceeding the
1 billion mark by 2025

TV Campaigns Social Media Campaigns

New Marketing Solutions
through new ‘social’
platforms
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 Mega Trend 7:

New Business Models:

Value for Many
 Personalization &
Customization
Nike
Personalization and
Customization
Co-Creation
Quirky .com

New Business Models

Service as a Business
Model
Location
Based
Services
One-off Experience
(red letter Days)
25
Source: Frost & Sullivan, 2012
 Free + Premium

“Value for Many”

= Freemium

Will Replace

“Value for Money”

Source: Frost & Sullivan, 2012 26

 Mega Trend 8:

Economic Trends
 The Next Game Changers in 2025

Russia

$6,189
Billion

Turkey
$1,167
Poland Billion $2,441 $38,526
Billion
Billion China

$2,827 $653
Billion Billion $6,235 Thailand
Billion $772
Egypt $323
Brazil Billion
Billion Vietnam
Mexico
India $483
$5,437 Billion
BRIC Nations $4,816
Billion
Billion
Philippines
Next Game Changers $811
Billion Indonesia
$1,098
Billion Argentina
Note : The figure denotes GDP at market South Africa
prices. Forecasts to 2025 have been
extrapolated based on Nominal GDP
growth rate projections .
Source: International Monetary Fund. Oxford Economics, Frost & Sullivan, 2012
 The Next Game Changers in 2025—Increasing Oil and Gas
Activity in Africa Driving Economic Growth
Ivory Coast
Recent oil discoveries are expected to
enhance oil production by 200,000 bpd
in 5 years from approximately 32,500
bpd being produced currently

Ghana Ethiopia and Somalia

The country planning $20 billion Exploration activity has found
investment in the oil and gas sector over reserves of oil and gas, however,
the next 5 years. Oil production production is still a few years apart.
expected to double by 2021.

Cameroon
Oil production has been declining steadily since
1985 but large natural gas reserves remain
largely untapped. The country expected to
invest in developing the natural gas reserves
over the next 5-7 years.
Equatorial Guinea
Oil production rebounded in 2012 after declining year on year
since reaching a peak in 2005. Natural gas production rising
and expected to witness considerable investment.
Gabon
The country has been producing oil for decades but
production has been dwindling over the past 15 years
due to depletion of reserves. However, offshore oil
discovery is expected to usher in the next oil boom in the
country.
Namibia
Oil discovered recently in partnership with a
Brazilian firm after years of exploration.
Production expected to start in the next 5
years.
Kenya
Recent oil and natural gas discoveries
have increased investment. 46 oil
blocks auctioned off in the past year.
Tanzania
Large natural gas reserves discovered
recently. The country looking to develop the
reserves and start exporting power by 2015.
Mozambique
Large recent natural gas discoveries add to the
existing reserves. Production to ramp up with
potential export of natural gas to South Africa
being planned.
- Potential oil and gas Producers
- Emerging oil and gas Producers
- Current Major Oil and Gas Producers
Source: Frost & Sullivan Analysis
 South Africa—NDT Inspection Services Market
Key Takeaway: The market is expected to witness high revenue growth rates with significant
investment being made in developing new infrastructure.

250.0 21.0

20.5

200.0 20.0

Revenue Growth Rate (%)

Revenue ($ Million)

19.5

150.0 19.0

18.5

100.0 18.0

17.5

50.0 17.0

16.5

0.0 16.0
2012 2013 2014 2015 2016 2017
Year

Revenue Revenue Growth Rate

Source: Frost & Sullivan, 2012

 Mega Trend 9:

Future Infrastructure
Development
Investments in Infrastructure Development is expected to cross
$27 trillion by 2025

Worldwide Infrastructure Investment, US$ Trillion, 2010-2025 (Cumulative)

Europe

6.6
Middle East

Americas

1.5

8.3 Asia Pacific

Africa

10.5
Sector Total (US$
trillion) 1.0

Road 9.7

Railway 1.5

Air/Seaport 1.0

Power 9.7

Water 5.9 Source: Frost & Sullivan analysis.

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 CAPEX in Developing Canadian Upstream Infrastructure
Increasing Steadily

E&P Capital Expenditure in Oil and Gas, Canada, 2005-2013

50.0 120.00
44.7
45.0
100.00
40.0

Forecast

WTI Spot Crude Price ($/bbl)

35.0
80.00
12.2 24.8
30.0 20.7 21.6
E&P CAPEX ($B)

9.9 17.2
25.0 16.8 60.00

20.0
10.6 40.00
15.0
25.4
23.0 20.9
10.0 19.4 18.5 19.8 19.6
20.00
5.0 11.0

0.0 0.00
2005 2006 2007 2008 2009 2010 2011 2012 2013

Conventional Oil and Gas Oil Sands Oil Prices

Source: Statistics Canada, Public and Private Investment in Canada, BP Statistical Review of World Energy 2013, Frost & Sullivan Analysis

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 CAPEX in Developing Pipeline Infrastructure Increasing at a
High Pace
6

5
Pipelines CAPEX ($B)

Planned
3
5.7

2.6
1
1.3

0
2011 2012 2013

Source: Oil and Gas Journal, Frost & Sullivan Analysis

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 From Macro to Micro: Taking Mega Trends from Information to
Strategy Implementation

To
Macro Micro

Mega Trend Analysis of Opportunities and

Selected trends that impact your
business and markets
Unmet Needs

Sub Trend Impact on Future Product/

A sub-layer of trends that has a
Technology
wide ranging impact

Impact to Your Industry

Visualising the roadmap of these
critical forces through scenario-
building and macro economic
forecasts
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Thank You

Questions?

36
 Contact Information

Nikhil Jain Vijay Mathew

Senior Research Analyst, Measurement and Program Manager, Measurement and
Instrumentation Instrumentation

(+91) 44 6681 4013 (+91) 44 6681 4014

nikhilj@frost.com vijay.mathew@frost.com

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