of threats from the lack of GDP growth, a lack of confidence in the European bank and sovereign debt markets, and calls for additional capital and liquidity.
The pace of regulatory change affecting the financial services sector this last year has been relentless, driven primarily by the G20 Financial Stability Board, in the form of requirements for Globally Systemically Important Financial Institutions, the implementation of Dodd Frank in the US, multiple European Union regulations, and an emerging focus on consumer protection.
But amidst the despondency in European financial services, firms are expanding in many world regions. According to the KPMG report, Forging forward: Financial services in 2012, there are tremendous opportunities to grow in the high-growth markets of Asia, South America, India, and also on the African continent, where the convergence of banking and mobile telephony is creating unprecedented scope for expansion.
The same source shows how Brazil, with its relatively stable macroeconomic environment, and growing consumer and investor confidence has proved to be a new hotspot in investment management. A recent survey by Coller Capital and the Emerging Markets Private Equity Association shows that Brazil overtook China as the most attractive market for fund managers’ deal-making in 2012.
The requirement in Brazil for infrastructure investment, especially, is pressing, particularly in the transport sector. In addition, Brazil is to host the football World Cup in 2014 and the Olympic Games in 2016, both of which require major investment in the country’s infrastructure. It has been estimated that Rio de Janeiro alone needs $36 billion of investment to prepare for these two events. Brazil’s investment management industry is most definitely open for business.
Information and Communications Technology
The importance of Information and Communications Technology (ICT) in the global economy is clear. Data quoted by the INSEAD/World Economic Forum Global Information Technology Report shows that, for the European Union, the ICT industry currently contributes 25 percent of its growth in GDP and 40 percent of its productivity growth.
The Gartner Worldwide IT Spending Forecast predicts a rise in global spending on ICT, but reduced its forecast from growth of 3.0 percent in the second quarter to 1.7 percent in Q3 (in current US dollars). However, this reduction is said to be due mostly to the effect of a strengthening US dollar on the growth calculation and not because economic conditions have deteriorated. The authors of Gartner’s IT Spending Forecast Q3 2012 Update were of the opinion that overall growth in global IT spending would be around 5 percent in constant dollars. Some of the growth areas identified were sales of tablets, ultra-mobiles and high-end telephones.
Reed Exhibitions | EIBTM Trends Watch Report 2012 9
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