August 2009

CONSUMER/TECH:Virtual TourismIs Virtual Tourism the way of the future or is Homeset to be the new Abroad?

➔ Annually over 700 million people engage in internationaltravel. Tourism’s contribution to national economies goesway beyond foreign exchange earnings and revenue fromtaxes and employment.

➔ From being very beach-orientated, tourism has becomemore sophisticated and fragmented; particularly with theadvent of low cost airlines offering a gateway to previouslyinaccessible destinations.

➔ Technology presents both an opportunity and a threat totourism as increasingly savvy travelers cut out travel agentsand trawl the net for information on destinations, climate,ratings and the best deals.

➔ This is already changing the whole competitive frameworkbut imagine a time where tourists choose NOT to visit acountry with a bad ecological record or where the damagecaused by long haul flights completely transforms our traveloptions.When it is no longer possible to hop on a plane andbe on another continent 9 or 12 hours later because theenvironmental fall-out can no longer be countenanced.

➔ To save the planet we may even need to limit our tourismto the virtual world. This could provide opportunities forSecond Life, GoogleEarth or any number of new start upsable to offer experiential products and services.

➔ On the other hand, that would decimate travel operators,airlines and the hotel industry. And Home would have tobecome the new Abroad.

HR:Survival of the EldestAn ageing workforce will bring employers amultitude of issues to deal with, not least ensuringthat brain power matches staying power.

➔ The world's 65 and older population is expected to reach1.53 billion by the year 2050, three times more than the516 million alive today. By mid-century, 16 percent of theworld's population is expected to be 65 or older.

➔ The 85-and-older group will increase from 40million in2009 in the world to 219 million by mid-century.

➔ By 2050, 100 countries will have an older populationaccounting for 20 percent or more of their country,withEurope remaining the world's oldest region.

Flexibility/Human Rights

➔ As the workforce ages, employers will have to buildflexibility into working hours to allow workers to build inmore rest, as well as the possibility of absences for caregiving to their own even more elderly parents.

➔ The European Union's Emergence Project found that by2010, 27 million Europeans will work from home at least partof their work week,with employees in the United Kingdomleading the trend.The number of jobs filled by telecommuterscould grow nearly fourfold to 19 million by 2012.

Insurance/Legal Issues

➔ Companies will need increasingly sophisticated insurance,healthcare and legal liability policies to deal with an absent– home-based – and ageing workforce.

➔ For the most part, it will be about adapting existing policytypes to the many specific life situations that older adultsfind themselves in. After all, a 70-year old manmarried to40-year old woman needs just as much insurance as a40-year old man.

➔ Laws about age discrimination will becomemore robust.

Mental Agility/Memory Protection

➔ The elderly, being the most resistant to change,will have tocope with radically and rapidly evolving technologies andenvironments.

➔ There will be an increased need for cognitive training andtools that will ensure that the silver workforce maintains itsmental fitness as well as keeps up to date with technologiesthat will be evolving exponentially.

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HEALTHCARE:Age shall notwither themThe elderly population will also shape healthcarethe world over.

➔ 65% of health care costs are spent on over 65 yr olds.

➔ 75% of pharma shares are owned by the over 65s.

➔ The pharma industry is owned by older people for olderpeople and yet you would be forgiven for not realising this.

➔ Media headlines shriek of abuse, neglect or carelessness,inappropriate medication,malnutrition and a lack of dignity,privacy and confidentiality.

➔ In addition, the majority of older people will be living indeveloping countries that are often the least prepared toconfront the challenges of rapidly ageing societies.

➔ Increased longevity is a triumph for public health and theresult of social and economic development. Nevertheless,many individuals will face, as they age, the risk of having atleast one chronic disease, such as diabetes, hypertension orosteo-muscular conditions.

➔ On a positive note, looming on the horizon are somevery promising drug discoveries. The biotech industry isdeveloping new therapies that can cure such diseases asAlzheimer’s — treatments that are bound to lead to theworld’s first “lifestyle” drugs that deal with forgetfulness.

CSR:It’s good to giveAs consumers come to grips with the new worldorder post the global banking crisis and worldrecession, they are increasingly looking toorganisations that share their concerns andreflect that in their marketing.

➔ Cause Related Marketing is not philanthropy, nor is italtruism; it is consumer-led and market driven. Usedcorrectly and efficiently, Cause Related Marketing canalso impact directly on the bottom line.

➔ It has the potential to form a link between business ethics,business basics, consumer engagement and bottom linebenefits, while also benefiting the health and prosperityof the wider community.

➔ Consumers in the UK are now purchasing a productassociated with a good cause every second.

➔ Cause-related marketing can increase sales as much as74 percent in certain consumer-goods categories, andconsumers spend twice as long looking at cause-relatedads than generic corporate ones.

➔ In 2009 Tesco announced staff and customers had raisedover £6.1 million for their Charity of the Year, Marie CurieCancer Care. This total was the result of 14 months offundraising in stores, distribution centres and offices acrossthe UK.The amount raised breaks all previous fundraisingrecords for a Tesco Charity of the Year partnership and –significantly – comes despite the recent economic downturn.

The reality is that:• Treatment for minor strokes is often covertly rationed forpeople over 80 years of age.

• Angina sufferers are less likely to see a specialist or tohave tests if they are over 65.

• Priorities for health and social care restrict targetsfor reducing heart disease, strokes and cancer topeople under 75.

• Invitations to breast screening stop for women over 70.

• Older people tend to be excluded from drug trials.

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ENERGY/LOGISTICS:Oil terrorismThe possibility of energy terrorism - attacks on theworld’s energy infrastructure - may not generate thesame attention as potential chemical or biological ornuclear terrorism. But the economic implications ofsuch attacks are potentially enormous.

➔ Many believe that there is a ‘‘terror premium’’ factored intothe price of a barrel of oil and that oil terrorism is emergingas a major threat to the global economy.

➔ The vulnerability of Saudi Arabia to energy terrorismis a particular concern. Saudi Arabia is the world’s mostimportant oil-producing country, being the largest exporterand the only country with significant excess productioncapacity. Over the last few years there have been severaldeadly attacks onWestern oil workers. These have disruptedoil markets and had the effect of driving up insurancepremiums.

➔ Pipelines,which carry one-half the world’s oil and most ofits natural gas, are generally built above ground,makingthem common targets for terrorists and insurgents. Thereis concern that insurgents, having gained expertise fromattacking Iraqi pipelines,will transfer their skills elsewhere.

➔ Global shipping “chokepoints” [such as the Strait ofMalacca] are vulnerabilities in the world’s energy system.Various troubling scenarios are possible, including a terroristhijacking of an oil tanker, to be turned into a floating bombthat could be detonated in a busy seaport.

➔ These issues are just one part of the complex issue of energysecurity. Beyond the threat of terrorism, energy security isbecoming an issue of increasing importance to the UnitedStates and its European allies, as some energy producers areshowing a tendency to use oil and gas as political leverage.

➔ The world’s vulnerability to supply disruptions will increaseas international trade expands. Recent geopoliticaldevelopments and surging energy prices have brought thatmessage dramatically home.

➔ Flourishing trade will strengthen the mutual dependenceamong exporting and importing countries. But it will alsoexacerbate the risks that wells or pipelines could be closedor tankers blocked by piracy, terrorist attacks or accidents.

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CONTACT:Elaine CameronManagerStrategic Research & Innovation EMEAelaine.cameron@bm.com

Stéphanie BonnetManaging DirectorStrategic Research & Innovation EMEAstephanie.bonnet@bm.com

http://www.burson-marsteller.eu