Rise of state-directed capitalism

The pendulum swing away from the free market towards state-directed capitalism in the wake of the financial crisis is manifesting itself in increasing direction of financial services and the wider economy.

Governments are also becoming more competitive in the way they vie with other states for talent, investment and the primacy of key financial, industrial and other productive centres in the countries they govern.

Costs to governments of supporting the financial sector

View graph

Facts

As economies mature, public spending as a percentage of GDP typically increases, making governments important potential investment partners in emerging markets.

Public private partnership (PPP) investment around the world rose from US$50 billion in 2002 to US$170 billion in 2010.
 

So what does this mean for your business?

Profitability and growth are likely to be more dependent on the fortunes of the real economy than before the financial crisis, which will in turn be more closely tied to government policies.

As such, it will be important to work with industry and consumer groups to help influence and shape government policies. It will also be important to develop a strong relationship with government to make sure your strategy anticipates and is aligned to government priorities and investment plans.

 

Continue the conversation

Nigel Vooght If you have any questions, please contact:

Nigel Vooght

Global Leader Financial Services

Tel: +44 (0) 20 7213 3960

 

Andrew R Jurczynski

Global Leader Project Blue

Tel: +31 (0)88 792 6690