Companies that tap into the wave of current trends and
developments are more likely to succeed than those who struggle
against them. A “bad” industry will always trump
good management; therefore companies must gauge short-term
changes occurring within their industry against the more
forceful influence of long-term development in the global
market.
Consider how the internet took more than 30 years to be
considered an “overnight” phenomenon (think where
was IT 30 years ago, for example), and you can see why economic
analysts are now using 2015, 2020 and 2050 as benchmarks
to predict the direction of business trends currently developing
right now.
McKinsey & Company is a reputable global consulting
firm that studies these trends. According to the research
of McKinsey consultants, Ian Davis (Davis is Worldwide Managing
Director of the Company) and Elizabeth Stephenson, certain
themes will bring marked changes to global business over
the course of the next 25 to 50 years.
The pair outlined their findings by rating the top ten trends
business leaders need to start preparing for now:
Macroeconomic Trends:
1) There will be a massive realignment of economic
activity. This will occur as a result of economic liberalization,
technological advances and demographic shifts. Today, Asia
(with the exclusion of Japan) holds 13% of the world’s
GDP. In contrast, Western Europe accounts for 30%. Within
the next 20 years, the gap between these two markets will
converge. The trend is not simply a “march to Asia,” however,
as shifts within regions will be just as significant as
those occurring across regions.
2) Without any new productivity
gains from the Public Sector, taxes will increase to “stifling
proportions” as
the population of the developed world continues to age. The
public sector will be required to function with increased
levels of efficiency and creativity, and the adoption of
private-sector approaches are likely to occur more frequently.
3) Almost a billion new consumers will enter the
global marketplace in the next decade. From now until 2015,
the consumer spending
power in emerging economies will increase from $4 trillion
to more than $9 trillion.
Social & Environmental Trends:
1) Increased technological connectivity will transform
the way people live and interact, and will bring with
it shifts
in behaviour. As Davis and Stephenson write: “We
work not just globally but instantaneously. We are forming
relationships and communities in new ways….(and)
for perhaps the first time in history, geography is not
the primary constraint on the limits of social and economic
organization.”
2) Labor and talent shifts will become far more
profound then the outsourcing of jobs to low-wage countries. At 33
million, the number of university–educated professionals
in developing countries is more than double the number in
developed ones. The implication of this is that companies
and governments will need to focus their attention on global
labor and talent strategies rather than just global sourcing
and manufacturing strategies.
3) The scrutiny surrounding the practices and behaviour
of big business will increase. This will occur as businesses
become bigger and expand their global reach, and as the
economic
demands on the environment intensify.
4) The demand for natural resources will grow, as
will the strain on the environment. Oil demand is projected
to grow
by 50 percent in the next two decades. The demand for
copper, steel and aluminum is also surging. In China,
for example,
the demand for these three commodities has nearly tripled
in the past decade. Innovation in technology and regulation
of resources is crucial in a world where economic growth
needs to sustain environmental demands.
Business & Industry Trends:
1) Global industry structures are changing, with
non-traditional business models flourishing in this new business
environment. This is a result of changing market regulations and of
new technologies.
2) Improved technology and statistical-control tools
are shaping new management practices. Business leaders are increasingly
using algorithmic decision-making techniques and using sophisticated
software to manage their organizations. This style of “scientific
management” is a move away from the more traditional “gut
instinct” management style. As Davis and Stephenson
write: “Scientific management is moving from a skill
that creates competitive advantage to an ante that gives
companies the right to play the game.”
3) New models of knowledge production, access, distribution
and ownership are emerging. Worldwide patent applications,
for example, rose 20% in the period from 1990 to 2004.
But while knowledge is increasingly available, and
knowledge production a growing phenomenon, companies
will need to
figure
out how to make the acquisition of it work for them,
rather than drown in a flood of too much information.
Source: McKinsley Quarterly
.
Do you have a comment or feedback on
this article? Email
us and let us know what you think.
|
