Aug. 29, 2025
Currently, the world economy is becoming “mosaicked” due to diversification of consumer and industrial needs, uneven pace of international coordination, and geopolitical changes represented by protectionist industrial policies such as the “New Washington Consensus.” Hitachi Research Institute is attempting to analyze countries and regions in the mosaicked world to find out the perspectives and guidelines useful to build global/regional strategies for the businesses.
The global economy is now being fragmented due to several driving factors. In technology and industry, there are signs of market decentralization through technological innovations such as Generative AI, as well as immediate responses to the fragmented industrial needs of each country and region. In environment, differences among countries and regions are becoming apparent in terms of policy response countermeasures to global warming. In well-being, we can see disparity in social demand at different stages of economic development, and finally in geopolitics, in addition to de-risking from the U.S.-China hegemony race, the global rise of the New Washington Consensus has led to the development of a mosaic of fragmented markets. Consequently, the global market has become a mosaic (Figure 1).
Source：Created by Hitachi Research Institute from various materials
Figure 1：A World being Mosaicked
When a company considers its global business strategy, there is a greater need than ever to throw away the assumption of a single global market but consider each country and region as a totally different market.
To address this, Hitachi Research Institute has developed a 3x3 matrix framework from the two axes of “Phases of Growth” and “Governance of Growth.” In the axis of “Phase of Growth,” countries and regions are categorized from the viewpoint of the level of GDP per capita and manufacturing & service industries contribution to GDP as either Emerging, Growing or Transforming. In the axis of “Governance of Growth”, they are categorized as either Private Sector Autonomy, Government Regulation & Incentive or Government Control. To explain, Private Sector Autonomy means transactions of private sectors are basically free (self-governed) from government intervention. In Government Regulation & Incentive, the government provides only comprehensive norms in laws and/or subsidies so that private sectors can seek growth with autonomy. And in Government Control, the government regulations strictly control the activities of private sectors. Based on this 3x3 matrix with two axes of “Phases of Growth” and “Governance of Growth,” we plotted countries and regions (Figure 2).
From this analysis, we find that many of Private Sector Autonomy countries such as the U.S., U.K., Canada, Switzerland, Singapore, and Australia at “Transforming” phase of growth. While those with government control are mainly at the phases of growth: “Growing” (China) or “Emerging” (Egypt, Vietnam, Chile). As for the category of Government Regulation & Incentive where we see increasing government incentives/subsidies for new infrastructure and industrial development and the increasing private sector participation, we can see some countries in “Growing” (India, Indonesia, Saudi Arabia).
Source：Created by Hitachi Research Institute from various materials
Figure 2：3x3 matrix with two axes of Phases of Growth and Governance of Growth
Based on the characteristics of growth phases and governance in each country and region analyzed in Chapter 1, we examine the trends of core industries that drive growth in each type. An analysis of the amount of added value by industry and the scale of CAPEX and OPEX*1 in each country and region revealed that there was a diversity in the industries with the largest amounts, in other words, growth market segments.
In the Americas region, we find that IT services are the growth market in the U.S., that have expanded through private sector led activities for creating cutting-edge infrastructure and industries. Whereas in Chile, mining is the growth market which is supported by the government-led economic activities aimed at developing basic infrastructure. In APAC region, in case of India, IT services (e.g. digital payments) and manufacturing have emerged as growth segments, driven by government policy initiatives and subsidies to promote new infrastructure and high-tech industries, encouraging greater private participation. Whereas in Singapore, private sector led activities for cutting-edge infrastructure and industries lead to growth of financial services and manufacturing.
Thus, we see same diversity across the regions that shows diversified “growth market segment” due to diversified combination of Phases & Governance of Growth as outlined in 3x3 matrix (Figure 3).
Source：Created by Hitachi Research Institute from various materials
Figure 3：Diversified Combinations of Phases & Governance of Growth and Growth Market
The scenarios for economic growth in each country and region that companies should assume when considering their global/regional strategies are expected to be characterized by the growth phase and governance that we have described so far.
In this chapter, we examine the characteristics of growth scenarios, focusing on the U.S., a transforming country led by the private sector and Chile as an emerging country, which is led by government management.
In the U.S., data centers and other IT service industries are making large-scale investments for AI-based innovation, and private sector led innovation is the source of growth. However, to improve the fragility of the economic structure that has become apparent due to COVID-19 pandemic, the U.S. has begun to adopt the following two limited policy interventions from the perspective of economic security.
One is to strengthen innovation in digital, green, and bio. Large-scale subsidies that support corporate capital investment are encouraging private investment in semiconductor fabs and next generation energy infrastructure on the scale of hundreds of billions to trillions of Yen. Another policy intervention is to strengthen economic security. For example, in the field of biotechnology, The BIOSECURE Act is currently under consideration by the US Congress, which would exclude designated companies from countries of national security concerns from government procurement projects to prevent one of the most critical and emerging technologies outflows and build a value chain that is located in the U.S. and like-minded countries (Figure 4).
Source：Created by Hitachi Research Institute from various materials
Figure4：Growth Scenario Leveraged by Private-Sector Innovation and Economic Security in the U.S.
Based on this series of policies, the U.S. is expected to have a growth scenario centered on digital technologies, including data centers. The explosive increase in the use of AI will cause a surge in electricity demand, and digital and green initiatives will play an important role in this. For example, promoting the greening of data centers with energy-saving semiconductor chips and next generation energy infrastructure such as SMR (Small Modular Reactor) will lead to market expansion. In addition, these promotions can also support the expansion of AI and data services to support drug discovery development in material informatics, which plays an important role in battery development, and have a ripple effect.
In such transforming and private sector autonomy countries, it will be important to have business strategies that consider the core industries of growth, such as data centers in the U.S., and the ripple effect of digital, green, and biotechnology on peripheral industries, while keeping an eye on policy implications.
Chile has the world's largest reserves of lithium which are essential for the expansion of EVs, and rich renewable energy resources such as solar and wind power. The country is moving forward with initiatives aimed at the next stage of growth by placing natural resources under the government's own control and using the funds obtained from resource exports to enhance infrastructure and high-value-added manufacturing (Figure 5).
Source：Created by Hitachi Research Institute from various materials
Figure 5：Growth Scenario Leveraged by Strengthening Resource Management and Expanding Renewable Energy Infrastructure in Chile
The Chilean government is strengthening the governance for natural resources by state-owned companies to secure investment capital for new growth industries through the export of abundant resources. In addition, the government is promoting the introduction of renewable energy as a national policy and is planning projects to enhance solar and wind power generation, as well as expand High Voltage Direct Current (HVDC) and hydrogen plants in the future. These government activities will serve as a foundation to support the strengthening of mining and manufacturing industries. Previously, Chile only supplied raw materials such as lithium, but now it is actively promoting to attract foreign investment to strengthen exports of high-value-added products through resource processing, such as cathode materials for lithium-ion batteries.
In this way, in emerging and government control countries especially resource-rich countries, the government's industrial policy has a strong influence on introduction of renewable energy and strengthening of manufacturing industry. Thus, business strategies should be aligned with the policies.
This report examines strategies and growth scenarios for economic growth in each country and region using a 3×3 matrix that combines growth phases and growth governance. As geopolitical, environmental, social and technological factors become more complex in a nested structure, and as the U.S.-China confrontation is spreading around the world to prioritize one's own country first, there is a possibility that the strategies and growth scenarios of each country and region will change significantly.
Hitachi Research Institute will continue to analyze mosaic patterns that capture the dynamism of market environment and conduct research on the state of corporate management in times of difficult predictability.
Daisuke Yasuda
Senior Researcher, Global Business Strategy Group, 2nd Research Department
Mr. Yasuda has engaged in research on digital policies and industrial trends and assisting in the formulation of business strategies. After working at the National Institute of Advanced Industrial Science and Technology, the Ministry of Economy, Trade and Industry, and Fraunhofer IPA, he took his current position. Recent research themes include rule development and corporate trends in AI and IoT.
Ajay Kumar Airan
General Manager, Hitachi Research Institute Office, Hitachi India Pvt. Ltd.
Mr. Ajay joined Hitachi in October 2011. He has 22 years’ experience in industry research and macroeconomic analysis across regions/countries for strategy support activities. He holds a Master of Business Economics degree from the University of Delhi.
Author’s Introduction
Daisuke Yasuda
Senior Researcher,
Global Business Strategy Group,
2nd Research Department
Ajay Kumar Airan
General Manager,
Hitachi Research Institute Office,
Hitachi India Pvt. Ltd.
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