“Growth is shifting, disruption is accelerating, and societal tensions are rising. Confronting these dynamics will help you craft a better strategy, and forge a brighter future. Confronting these dynamics will help you craft a better strategy, and forge a brighter future,” according to McKinsey Global Institute (MGI.
Anticipating these global shifts is critical for business leaders and thinkers. “A company benefiting from such tailwinds is four to eight times more likely to rise to the top of the economic-profit performance charts than one that is facing headwinds,” claims MGI.
Trend 1: Global Growth Shifts
The digitalization of the economy is shifting power to all regions of the world. The BRIC nations are thriving, rich with natural resources and, now, the technology to extract it is fueling Brazil, Russia, India and China. In contrast, traditional trade and financial markets have stalled, moving us past the traditional terms of globalization. The sharing economy has arrived in the corners of the world with regions like Africa and Southeast Asia emerging.
Trend 2: Disruptions Accelerate
“Digitization, machine learning, and the life sciences are advancing and combining with one another to redefine what companies do and where industry boundaries lie,” cites the McKinsey report. “We’re not just being invaded by a few technologies, … but rather are experiencing a combinatorial technology explosion.”
These disruptions are changing the nature of competition and the interconnection of the supply chain, an evolution of the ecosystem. Customers can become partners, and suppliers a customer.
Trend 3: New Societal Deal
With disruption comes challenges of cybersecurity, economic terrorists which can only be countered by a collective global societal approach. Further, government and business need to partner to pre-empt an obsolete workforce and high human costs of automation.
These costs are high. For example, the McKinsey Global Institute (MGI) reports that the world will need to spend $3.3 trillion annually between 2016 and 2030 to keep up with projected growth—nearly $1 trillion more than we have been spending annually. MGI also suggests that infrastructure spending can be cut by as much as 40 percent through better project design and execution—areas ripe for public–private experimentation.”
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