The last observation is that goods-producing value chains are becoming more regionally concentrated. Robotization and automation made cheap labor less relevant when companies decide where to place production. This pattern is obvious in certain sectors with closely integrated supply chain for just-in-time production such as automotive, electronics, and electrical appliances. Locating production line close to the end-market also helps businesses better customize the products based on each market’s preference. Trade protectionism is undeniably one other key factor that help accelerate value chain regionalization. All these changes in value chains could be a threat to today’s businesses. Consumers are ready to switch to a competitor’s product if they find it suits their changing preferences better and quicker. A standalone service business might be disrupted by new service value chains that offers a more complete solution to the customer’s need. Rising wages in Thailand will draw production to emerging market countries with lower wages, while automation will help advanced economies draw production closer to home. But then again, for those who are prepared, this could be an opportunity. Businesses will have to think about how they could incorporate service components into their 6  products. An example of this transition is Daimler and BMW, who joined hands earlier this year to explore service-focused business models such as taxi-hailing, car sharing, parking, and EV charging. This, of course, also means that we will need to continuously reskill and upskill our workforce. 4. Digital transformation The fourth trend is digital transformation.

The more severe and tangible impact of climate change has raised awareness of people around the world, resulting in calls for new standards and regulations aimed at containing environmental externalities from businesses. Two good examples are the ban of fuel with high sulfur content for the shipping industry, and social calls for businesses to reduce the usage of single-use plastics. Naturally, adopting these higher standards comes with higher costs and it would serve businesses well to take this into account when designing new business models. For businesses taking these regulations passively, this will only mean higher costs and lower profits. However, the sustainable movement presents an incredible opportunity for businesses that can meet this demand. Consumers are now demanding more environmentally friendly products and services. According to a survey done by Nielsen, 66 percent of global consumers are willing to pay premium for environmentally friendly products. The number is even higher for younger generations. The concept of first-mover advantage also applies here, since those who could first systematically identify new environmentally friendly practice will set standard for the entire industry. 3. Changes in value chain The third trend I will highlight is the change in the global value chain. In discussing value chains, it is almost impossible to avoid thinking about the ongoing trade tensions that are suppressing the global economic sentiment. While the trade tensions might prove to be short-lived, they have distorted value chains and engraved a long-lasting impact on global production through trade diversion and production relocation.