and additive manufacturing might reduce the in global superstar or “winner-take-all” 昀椀rms. importance of economies of scale and labor Global superstar 昀椀rms are the world’s larg- as an input and encourage 昀椀rms to move est and most pro昀椀table across all industries, more production closer to markets. These new including pharmaceuticals, consumer goods, production technologies could diminish the and information technology. These 昀椀rms cap- attractiveness of locating production in China tured approximately 80 percent of economic and accelerate the rate at which companies pro昀椀t among companies with annual revenues reorient their supply chains. greater than $1 billion in 2017 and earned E-Commerce Platform Economy Firms approximately 1.6 times more economic pro昀椀t Enabling Global Trade. Cloud computing, than they did in 1997. Superstar 昀椀rms, while automation, big data analytics, AI, and other domiciled in a single country, have sales that information technologies are enabling new are global, and growth in the size and reach distribution modes that expand access to in- of these 昀椀rms is likely to translate into an ternational markets for all sellers but especial- increase in economic globalization. The eco- ly for small and medium-sized enterprises that nomic factors that support the rise of global have historically faced high foreign market superstar 昀椀rms, including high 昀椀xed costs, low marginal costs, network and platform e昀昀ects, entry costs. E-commerce platform 昀椀rms, which and machine learning, are likely to persist in 2020 included the Chinese 昀椀rm Alibaba and through the next two decades. America’s Amazon, are creating a marketplace that matches buyers and sellers independent Further, as technology, including big data and of geographic location, providing a compar- machine learning, and intangibles, such as atively low-cost and low-risk way for 昀椀rms to brand, become increasingly important drivers enter foreign markets, and increasing interna- of value creation during the next two decades, tional trade 昀氀ows. the market dominance of superstar 昀椀rms is E-commerce sales in 2018 were equivalent to likely to increase. Growth in superstar 昀椀rms 30 percent of global GDP that year, according is also likely to a昀昀ect the division of economic to data released in 2020. International e-com- gains between and within countries, poten- merce spanned business-to-business and tially leading to friction and uneven regulation as host economies try to capture some of business-to-consumer sales; approximately 25 percent of all online shoppers made cross-bor- the value created by these 昀椀rms. The power der purchases in 2018. Looking forward, of these 昀椀rms beyond business—including increased access to the Internet, falling data control of data and information 昀氀ows—will en- costs, growth in smartphone ownership, and courage government e昀昀orts to regulate them, a shift to online purchases post-pandemic essentially as public utilities, or possibly break are likely to result in more e-commerce sales, them up. with many of these sales taking place on large State Owned Multinationals Continue to global e-commerce platforms. Expand. State-owned multinationals (SOM- Multinational “Superstar” Firms Perpetuate NCs), most of which originated in China, India, Economic Globalization. Technology and dig- Russia, Saudi Arabia, United Arab Emirates itization are also transforming the structure of (UAE), and some EU member countries, almost some industries, increasing the prevalence of certainly will continue to be active participants oligopolies and near monopolies and resulting in international commerce. Some SOMNCs 50 GLOBAL TRENDS 2040