One of the things I have always enjoyed and done as part of all my roles throughout my career is to have a strong sense of what is going on in the world, and to be able to translate that into meaningful insight for my clients, stakeholders, members or partners.
I consume a wide variety of information. My work at the Haskayne School of Business brings me in connection with the big picture issues affecting business, trends and forces, and my particular area – efforts to break the short-termist and profit-maximizing paradigm of business by developing strategies for companies to focus on the long-term common good while navigating disruption in the here and now. There is plenty to keep me reading based on that alone.
My work on remarkability and with my clients has me diving into topics like brand, culture, leadership, strategy, governance and teams. My interests in history and current affairs has me keeping abreast of everything from geo-political affairs to the historical precedents to the conditions we face in modern day.
So, I consume a lot.
In doing so, a project that I have embarked upon is an attempt to knit some of this together to find meaning and implications for leaders and organizations. I am working on a report to be released later this year that will weave together what I am seeing, hearing, reading and thinking about and their implications for leaders and organizations. It won’t necessarily be an economic outlook per se, more a report on the big macro issues facing every leader. There won’t be forecasts and estimates, more like questions and considerations as people move into strategy and business planning for 2019.
But for you great and loyal readers of my blog, I thought I would give you a rough overview of what it might look like from a structure and content perspective.
First caveat: I can’t address everything. You will read this and think “hey, what about X topic, or Y issue.” Yes, it is likely out there. I just have decided not to address it in my report. Not because it isn’t important or meaningful, purely because I feel it may not fit into the weave of this report or may not have significance for my audience. Second caveat: have I hit every angle for each of these issues? No, I don’t because I try to frame each one from the perspective of my audience. Third caveat: None of this should be news. If you are keeping on top of these issues none of them should be new. But my goal is to weave a tapestry that will shed light on them in different or unique ways, or even through the bringing together of disparate parts.
A fractured world
Two Critical Imperatives
People and Planet
Most Important Issues for Leaders
- Imperative of addressing long-term common good while understanding, and adapting to, disruption
- Ensuring public policy keeps pace with business and innovation
- Creating more space and opportunities for business to deliver solutions to grand challenges of our time
- Technology takes over. Or does it?
- Workforce of the Future: Could vs. Should
- An Angry World: Us vs. Them
- New Power
- A Fragile Planet
Below is a short summary of what each section will cover – for the implications and deeper considerations – well, you will just have to wait for the report.
Technology Takes Over. Or does it?
- Everything is awesome with tech. Our lives will be easier, longer, healthier, more pleasurable, faster and more efficient with technology.
- The convergence of technologies in everything from mobility, energy, health and agriculture is creating immense opportunities for business and for improved quality of life and environment.
- But there realities and risks to the pace of technological change – most leaders don’t have a handle on change and disruption and not enough are creating strategies to adopt or leverage technology and innovation.
- Government doesn’t know how to handle technology and innovation and policy is not keeping pace. Government runs a risk of becoming irrelevant if it can’t do better.
- Technology brings with it new and emerging risks of cyber terrorism, crime and digital manipulation, as a few examples.
- The concentration of technology across a small handful of platforms – think Google, Amazon, Facebook, Twitter – is at the precipice of change as governments (recall recent testimonies by Facebook and Twitter to US legislators, and the noticeable, mind-boggling stupidity of Google’s no-show) begin to question whether they are too big and powerful – will we see trust-busting reflective of the early 1900’s? (My prediction: we will see change yes. Particularly with Facebook and Google. Consider that approximately 35% of Canadians, Brits and Americans think Facebook is bad for society.)
- Returns from innovation are going to too few – the massive accumulation of wealth from the technology sector is reminiscent of the industrial barons of yore. Bezos and Zuckerberg are the new Rockefeller and Vanderbilt as shares of income garnered by the top 1% reach levels not seen since the mid to late-1920’s. 99% of the S&P gains of 2018 year-to-date have been a result of 6 companies – all tech. Consider what this means for the new elite, income inequality, future education and business.
Workforce of the Future: Could vs. Should
- AI and automation are creating opportunities for incredible technological advancements in every aspect of life. Increased productivity to alleviate aging demographics and higher quality of life are two drivers of this.
- Robots have always been a threat to our jobs. It is important to separate jobs and tasks – robots can do tasks but not all jobs. Anything that is repetitive and follows a set process, procedure or rules is being viewed as fair game. Estimates of jobs at risk range from 40% of jobs in Canada to upwards of 70%+ in countries like India, China and Africa.
- The implications of AI and automation depend heavily on the nature of the jobs, and the social safety nets and retraining regimes of any particular locations. Places with higher skilled jobs and good safety nets like Canada and Sweden? Likely lower impact. Places with low skilled jobs and poor safety nets like Africa, southeast Asia and some parts of the US – potential for dramatic spikes in poverty and social unrest. Knowing this, just because we can, does it mean we should?
- Skills and training programs – developed and administered both by the public and private sectors – will need to be reimagined for the increased adoption of AI and automation.
- What does the future of work and the workforce look like? The rise of the gig economy and more nimble organizations creates opportunities for new work and greater freedom but increased security and benefits. Public policy and education will need to adapt and change.
An Angry World: Us vs. Them
- People are pissed – they have lost out on economic growth, wage growth and are seeing nothing but elites, executives and political leaders advance themselves and their causes at the expense of the average person. Consider that in the US the bottom 50% of income earners saw their incomes remain flat from 1980 to 2014. The top 0.001%? A 636% increase.
- The financial crisis, increased financialization of the economy, a prevailing short-term profit maximization ideology in business, the skewed returns of innovation going to too few, and access to good education and opportunities are all fueling this inequality.
- Inequality is resulting in a growth of the us vs. them sentiment and dramatic political polarization. Hence populism, Donald Trump, Brexit, and close calls in Netherlands, France and Italy.
- Social media and the human predisposition to homophily – the tendency for people to have ties to people that are similar to themselves – has only fueled the fire of anger, polarization and populism.
- Populism is only creating chaotic conditions for business and organizational leaders, not knowing what radical policy move is next and a difficulty in finding sane, viable paths forward. Will populism slow and move to a saner centre? That depends on whether people feel legitimately like they are not as bad off as they currently feel they are, or whether “we/us” have gained over “them.” My take: not any time soon. And it seems to be rising in Canada as well; sunny ways don’t seem to be producing many results.
- Distrust of business is growing and the high-profile cases of Enron, the 2008 financial crisis, VW, and Harvey Weinstein only solidify the beliefs. Lack of trust is a key driver to major projects like Energy East, Trans Mountain and Keystone XL not happening in Canada.
- Business is at a watershed moment where it can keep on with business as usual and perpetuate the distrust and populism, or it can find a new way forward – focusing on the long-term common good. This will rebuild trust and provide meaningful benefit to people and the planet that will move us to a saner middle ground.
- What is the future of the firm in light of a longer-term common good focus? Think Nordic foundation-owned companies, B-Corps and Exponential Organizations.
- The geo-political climate is scary – with some strides in North Korea de-nuclearization, but the continued mess of Syria, Russia, and Iran that threatens progress on important global topics.
- Trade wars escalate and major trade and policy agreements hang in the wind. NAFTA is in tatters, Paris seems impotent, TPP is anyone’s guess. Will the world be able to realize better globalization or will we retreat into “Made in…” campaigns? Will the rising populist movements and trade wars result in further nationalist strategies, policies and the building of more actual and metaphorical walls?
- 12 countries in Africa, the Middle East and Asia represent 50% of the world’s population and expected economic growth. How they handle people and planet, and industrialization will heavily determine their success. They represent the growth engine while developed Western economies are sluggish and weighed down by small and aging populations and mountains of debt.
- While fears of a developing economy financial contagion crisis grow, China still represents significant potential as the soon-to-be largest economy in the world. Its One Belt One Road economic initiative is massive and is the focus of major investment and policy. The Western developed world is nowhere near it. Western developed economies face a challenge in being relevant and involved in future economic growth.
- The mega-cities of populations over 10 million represent the epicenters of the future economic growth – they will be hubs of growth, activity, investment, innovation and adaptation to intense pressures of size, scale, affordability and mobility. The bulk of these are in the east. North America has 3 – LA, New York and Mexico City. China alone has 15.
- New power is coming, and enabling change, from networks that mobilize to start movements and spread ideas and information – true or fake, for good or for bad. Donald Trump is likely president because of a better social media network. #metoo and #blacklivesmatter became part of the cultural fabric because of social media networks. ISIS has mastered the use of networks to recruit, spread, and execute ideologies meant to harm and maim. Boaty McBoatface also became the number one pick for a new British research vessel due to social media networks, but alas was not chosen for some strange reason….
A Fragile Planet
- We have seen tremendous strides in environmental improvement over the decades in terms of intensity of emissions from certain economic activities, greater awareness of environmental issues, life expectancy and health improvements and greater commitment to the environment.
- But we still face a fragile planet with significant problems. The UN estimates that 4 out of 9 planetary boundaries have been crossed and CO2 emissions continue to rise despite investments, policy and international accords.
- Growing middle classes around the world are adding to the resource demands and at full peak, we would need 9 planets to meet the resource demands of an enlarged global middle class.
- Extreme weather events continue to devastate, destroy and kill – putting strain on largely poorer nations and cities, impacting livelihoods, economies and the ability of governments, insurance, business and households to rebuild.
- There are a host of initiatives aimed at doing better for our planet – international accords like the Paris Agreement – and business led coalitions like the B-Team, CRIN, SASB, X Prizes and the Virgin Earth Challenge.
- Only by finding that currently unattained balance between progress on environmental protection and economic prosperity that is able to bridge incumbent employment, systems, infrastructure and energy sources with the new will we make progress. Otherwise it feels like there will be continual political pendula that will get us moving in one direction till people are fed up, then swing back to eliminate it in favour of negative reaction. Humans are terrible at acting in the face of uncertainty and long time horizons. What will get us on the right environmental track is unknown.
Lots of meaty stuff there – if this peaked your interest in terms of the major forces and trends facing leaders, business and organizations heading into 2018, stay tuned for the full report to be launched in late October.
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