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Key Disruptive Global Trends: The View from McKinsey
By Shlomo Maital
“The trend is your friend.” Thus begins a terse McKinsey Quarterly (April) article on disruptive global trends. The trend is your friend – provided you spot it accurately. It is your enemy if you miss or misread it. Here is McKinsey’s take on the nine key disruptive global trends.
The first three: “ ● The globalization of digital products and services is surging, but traditional trade and financial flows have stalled, moving us beyond globalization. ● We’re also seeing new growth dynamics, with the mental model of BRIC (Brazil, Russia, India, and China) countries giving way to a regional emphasis on ICASA (India, China, Africa, and Southeast Asia). ● Finally, the world’s natural-resource equation is changing as technology boosts resource productivity, new bottlenecks emerge, and fresh questions arise about “resources (un)limited?”
What do these trends mean to you, to your job or business or startup? Can you find opportunity in them?
The next three tensions highlight accelerating industry disruption. “● Digitization, ● machine learning, and ● the life sciences are advancing and combining with one another to redefine what companies do and where industry boundaries lie. In the words of Alibaba’s Jack Ma, B2C is becoming “C2B,” as customers enjoy “free” goods and services, personalization, and variety. And the terms of competition are changing: as interconnected networks of partners, platforms, customers, and suppliers become more important, we are experiencing a business ecosystem revolution.”
The final three forces: “● underscore the need for cooperation to strike a new societal deal in many countries. We must cooperate to safeguard ourselves against ● a “dark side” of malevolent actors, including cybercriminals and terrorists. ● Collaboration between business and government also will be critical to spur middle-class progress and to undertake the economic experiments needed to accelerate growth. This is not just a developed-market issue; many countries must strive for a “next deal” to sustain progress.
Scary? Risky? McKinsey strikes an optimistic note: “These tensions seem acute today because of fast-moving political events and social unease. But earlier times of transition provide encouraging precedents: the Industrial Revolution gave rise to social-insurance programs in Western Europe and the Progressive movement in the United States, for example.” In other words, times of change and disruption always bring opportunities, for those who see clearly and act decisively.
Are YOU among them?
What If Technology Does Destroy Jobs?
By Shlomo Maital
Larry Summers
Larry Summers was Treasury Secretary under President Bill Clinton, President of Harvard, and is one of the world’s top macroeconomists. In a recent New York Times article on how technology is disrupting the world, the author recalls how Summers spoke in November at a conference, about his undergraduate days at MIT in the 1970s. Nobel Laureate Robert Solow made the case then that new technology boosts productivity and overall creates jobs, employment and wealth. Sociologists at the time responded that new technology often destroys jobs and wealth.
“It sort of occurred to me,” Summers recalled, “suppose the ‘stupid’ people (sociologists) were right, and the ‘smart’ people (economists) were wrong. What would it look like? Well – pretty much how the world looks today.
Uber is eliminating taxi-driver jobs. Internet news is destroying print journalism jobs. Digital education will soon eliminate my job (as professor). Long ago, software made the entire mid-level managers’ jobs (focused on processing and interpreting data) redundant. Add to that globalization and world trade, which led America to outsource its manufacturing to Asia.
What if technology really does eliminate jobs? What if, like Finland and Switzerland, we will need to consider providing a basic minimum living wage for everyone, when unemployment becomes widespread? (The referendum in Switzerland on this idea was soundly defeated…but nonetheless, the mere fact it happened is important). What if in future, work itself will be a huge privilege and a luxury, granted only to a very few highly skilled, highly productive people who somehow are not made redundant by very smart machines?
The late MIT Dean and Professor Lester Thurow, who passed away recently, liked to say that sociology trumps economics. If sociology is about how people live and work together, and economics is about how money and capital procreate and proliferate, then surely he was right. Perhaps it is time that economic policy should be shaped by the sociologists.
Chaos Is the New World Order
By Shlomo Maital
Thomas Friedman’s latest New York Times column helps us understand what is going on in the world. In a word: Chaos. Chaos is the new world order. Here is what he means.
Quoting a high-tech executive, Tom Goodwin, Friedman notes: Uber is the world’s biggest taxi company but has no taxis. Facebook is the world’s most popular media owner but has no content. Alibaba is the world’s most valuable retailer but has no inventory. Airbnb is the world’s biggest accommodation provider but has no real estate.
So what is going on? More and more businesses are simply doing global matchmaking (someone needs something, someone else has it), without owning assets. More and more businesses are digitally creating markets where none existed before. (You have a seat in your car? Why not use it to make some spare cash?)
This trend is highly disruptive, because it disorganizes and reinvents whole industries, in no time. The existing players (taxi drivers, hotels) have little time to adapt.
It’s pretty clear, out of this chaos will emerge some order, and the chaos is actually creating value. But the implications are huge. A whole range of job skills will disappear. New patterns of markets and ownership will emerge.
For now, chaos is the new world order. How are YOU adjusting and adapting? Do you have a job skill that will be needed in a year or two, or do you need to reinvent yourself and your skills? If so, how will you do it?
These are interesting times indeed.
TIMnovate 