Key trends influencing the global business climate
Hard to define, but clear based on conversations in offices everywhere, the world has changed. In mid-2019, we are emerging into a different era than we found ourselves in at the same time last year. While there are the micro trends impacting the markets and regional politics as there always is, there is a looming anxiety that we are facing a much greater shift, both economically and societally. This anxiety is fuelled by widespread uncertainty.
Where are we going and what—who— will lead us there? While the road ahead always carries with it a sense of mystery, our current mood suggests that what lies ahead is something fundamentally different.
The unknown always brings both risk and opportunity. Global business leaders are cautious, but also optimistic about leveraging new opportunities. They are looking for signals and intelligence that can help guide them through the uncertainty and identify new competitive advantages. In order to navigate the path ahead— increasingly non-linear and ever-shifting—it is critical business leaders understand the big-picture forces shaping the current business environment and how those forces will fundamentally redefine how their organisations operate tomorrow and the talent they will need to compete and drive innovation. Responses to our survey from C-suite leaders reveal the following forces behind the current anxiety and guide our analysis of current organisational challenges, help us better anticipate what those challenges tomorrow will look like and the executive talent needed to steer tomorrow’s organisations to success.
Global uncertainty is the new normal
Shaped by the lightning-fast pace of change brought on by our digitally connected society, like technological change, geopolitical change now happens at a faster rate than ever before. Communications from an influencer on social media can shock entire industries or call trade agreements into question. Digital platforms can bring movements together quickly, shifting the political landscape seemingly overnight.
The same technology that facilitated the revolutions of the Arab Spring only a few years ago has equally shaped the currents of populism recently surfaced in the United States, Europe and Australia, leading to the Trump political brand, Brexit, changes to Australian immigrant visas, and similar developments bubbling up around the world. Increased global terrorism and the rise of movements like ISIL and Boko Haram have been aided by the same technology and ability to connect quickly and influence, creating real societal anxiety throughout cities around the globe.
Just as the world is more connected than ever, a side effect is there is also an emerging appetite for new kinds of borders: national; political; regulatory. While much of this may be in the realm of short- term shocks rather than long-term trends, the ability to connect rapidly and on a global scale ensures the constant ability for quick shifts and thus geopolitical uncertainty for the foreseeable future. Yet, there is also much optimism regarding the potential impact of technology, reflected in the mission recently unveiled by Facebook: “To give people the power to build community and bring the world closer together.”
Mass demographic shift is upon us
The Baby Boom generation (those born after World War II, roughly 1946-1964) is retiring in mass every day in developed markets around the world, and will continue throughout the next decade. In the United States, Millennials now outnumber both Baby Boomers and Generation X. Many EU countries, including Portugal, Finland, Bulgaria, Sweden, Malta and Latvia have large ageing populations, and Germany will experience a sharp population decline throughout at least the next three decades. Japan is home to the oldest citizens in the world and its population is expected to shrink by a third by 2065.
Meanwhile, Africa leads with some of the fastest growing and youngest populations on the planet, along with the Middle East and Latin America, all important emerging markets. China, India and Indonesia make up three of the top four world’s most populous nations. The Asian continent now represents 60% of the world’s current population and will continue to influence as a world economic giant over the coming decades.
Women now make up 40% of the workforce in more than 80 countries. In the United States, for every two men who now receive a college degree, three women do the same, suggesting significant changes to the American workforce over the next two decades. Meanwhile, in Japan, while more women age 25-34 now hold university degrees than do men of the same age, so far they still occupy significantly less of the Japanese workforce. However, that balance could start to shift as Japan ages and faces a talent shortage.
These demographic changes profoundly impact society on an international scale and place a premium on global intelligence and cultural acumen within the business realm.
Technology has fundamentally altered the pace of change and the pace will only continue to accelerate
Digital technologies and platforms have reshaped not only how business is conducted, but the entire nature of business itself. Artificial intelligence is already replacing workforce tasks that are routine, and the sophistication of AI and machine learning will only evolve over the next few years. Software can predict our behaviour and anticipate our needs. The way people live and work is changing and will continue to change, but even why they work and the purpose of work itself.
According to the World Economic Forum, 65% of children entering elementary schools today will likely work in roles that don’t yet exist. Not only will jobs dramatically shift, so will organisational structures. Already, what is an office today? It can be both a physical space but also a concept, with a remote workforce connected only by digital platforms under a common brand.
This rapid rate of change is new in human experience. In the past, intervals between shifts were longer and thus plans to align with change could be developed well in advance over a longer period of time. This luxury no longer exists and being relevant today and competitive in business relies on being able to adapt and change quickly.
For more information about the key trends influencing your specific market, contact us for a quick, confidential conversation.