The past was yours, but the future’s mine

 

I attended an incredibly engaging talk by Mark Shayler towards the end of 2016 that concerned the current age of disruption that is occurring globally. Below are five of the key power shifts he outlined:

1. Old to Young

This shift has less to do with actual positions of power and more to do with how the voice of the younger generation is now amplified. Social media has changed the way we communicate and has become a platform for millennials to radically alter the global economy.

We don’t stay in hotels, we Airbnb. We don’t take taxis, we Uber. We don’t call, we Snapchat. We don’t text, we WhatsApp. We don’t buy music, we Spotify. We don’t print photos, we Instagram.

If you want to know what the next big app/peer-to-peer marketplace/social media platform to invest in is, listen to what young people are using.

2. West to East

China’s consumer market is dominated by a narrow middle class, roughly 11% of the population. This is set to increase exponentially: 326 million new middle class are set to emerge by 2030. What the world has seen so far is only a preview of the domestic and international buying power to come.

However, the West is slow to catch on. The 2016 Parker review into the ethnic diversity of UK boards revealed that out of nearly 1,100 director positions on the FTSE-100, only 1.5% are both non-white and UK citizens.

There is not one person of Chinese heritage on a FTSE-100 board. This strikes me as completely ludicrous.

3. Male to Female

The male/female ratio in senior management is still abysmal. A recent New Financial survey found that women account for 23% of board members and just 14% of executive committee members across UK financial services companies.

This is despite the overwhelming evidence that increased female representation in positions of power increases a company’s bottom line. EY released statistics that organisations with at least 30% female board members can see net margins increase by 6%.

It is time UK financial services firms rebalanced the senior management gender scale.

4. Physical to Digital

The digital economy is growing. Brick-and-mortar retailers are being left in the dust by the likes of Amazon. Adobe released figures that Black Friday e-commerce sales increased 21.6% on last year to $3.3bn; mobile commerce accounted for $1.2bn of these total sales. And this is just in the US!

Moreover, disruption is in the hands of digital. Blockchain, in its purest sense a transaction database, has unlimited possibilities in every sector. The internet of things (IOT) is just starting to be properly explored, and the rise of artificial intelligence (AI) has the potential to make a whole swathe of jobs redundant.

The future of the global economy is digital.

5. Product to Service

Companies have traditionally sold products: cars, computers, clothes, gym memberships, insurance – whatever you can think of.

But the narrative is changing: services are the new sexy.

IBM was way ahead of the curve when in the 1990s it realised there is greater value in software and services than hardware. New generations don’t want to buy a car, they want a convenient way to get from A to B – enter ZIP Car, Uber and Lyft. They don’t want to go out and buy food, they want it delivered to them; Deliveroo facilitates this, UberEATS is trying to. They don’t want to read a map, they want Google to plot their route.

The power players in our advanced economy offer a service, not a product.

Although I may have borrowed from the Stone Roses for the title of this piece, the lyrics are as apt now as they were in 1989. What was once inherent practice is now outdated. Businesses need to get on board with the new status quo if they want to succeed.

 

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