Consultant ’ s Corner : Taking Control in a Disruptive World
Becky Roof , Managing Director , AlixPartners LLP Treasurer , American College of Bankruptcy Foundation
Do a google search on the word “ disruption ” and a number of synonyms appear : disturbance , c o n f u s i o n , disorderliness , even turmoil and interruption . It is safe to say that the last two years or so certainly meets these definitions and more . COVID not only exacted a tragic human toll , but mandated shutdowns of industries , disrupted supply chains , caused massive outlays of public spending , and ongoing uncertainty of what ’ s next . This was very unfortunate after a period of relatively steady economic and social gains , increased standards of living , growing free trade and global collaboration , improved modes of transportation and communication , and public health since World War II . But what business leaders currently fear the most is not the continuation of ( hopefully ) shortterm COVID-driven disruptions , but the massive tidal wave of change coming from other forces . 1 A combination of technological innovation , demographic change , climatedriven disruptions , and growing trade barriers are upon us and it is no longer traditional economic forces shaping the economy , but the ever-accelerating pace of change . Technological Acceleration
While technological innovation will drive economic growth and will improve lives , it
is the primary source of disruption in our world . The 2020s are seeing the merging of human capital with Artificial Intelligence ( AI ), big data , robotics , and an array of digital technologies to drive next-order business outcomes . In order to thrive , companies need to create collaborative interaction between their technologies , their employees , and their customers . Demographic Decline
Economic growth depends on one of two things : a growing workforce or improving productivity ( defined as technology deployment x capital investment ). The 2020s will be the first decade in which leading economies across the globe ( Europe , U . S ., Japan , and China ) will see labor force growth markedly slow and even shrink . ( Only India , Africa and parts of the Middle East will see meaningful labor force growth ). This will present a major economic headwind , as a third of GDP gains over the last six decades have come from labor force growth . To sustain economic growth levels , productivity growth through technological innovation will have to accelerate even faster . Climate Transition
The convergence of regulation , dollar flows , and employee and consumer sentiment – not to mention the falling costs of green technologies – will facilitate a move away from fossil fuels . Yet the transition will not be simple , cheap , nor quick . According to Goldman Sachs , $ 56 million in global infrastructure investment is needed to
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