COMMENTAR Y


from accident victims. (Not a very nice dinner conversation but that’s where the hearts come from).


So you get a lot less supply of hearts. The average doctor is not thinking about that. The average person in medical practice is not thinking about that, and that is an illustration of a second order of fact. So these disruptions from outside your sector are going to become more significant, and I’ll come back to this on leadership. So if you’re a leader, you cannot just think about your own industry. That’s too narrow. You have to start to have a broader radar to think about where changes are coming from. That’s just one illustration.


Design has become a much more important factor. Another bizarre fact – the average person checks their phone every 5/6 minutes, so how you interact with your screen is a big deal. That’s why design has become an important part of the world. If you’re a product manufacturer, if you’re a services industry, if you’re a digital, you have to think about design.


McKinsey love to tell people what to do and say – take this medicine, take that medicine – but we don’t like to take it very much ourselves. Well, we have just decided to buy a design firm, Lunar in California, because we need it for a lot of our product development work, for our digital work. It’s to complement the thinking that’s going on.


Even agriculture. I was with a group of about 2,000 veterinarians four weeks ago, and the big question they were asking themselves was will we have a job in the future? And the reason is because of all of the data analytics, the sensors and automation. With the dairy cow, what you can do with the sensors now is radically different to what we could do even two years ago. You needed one vet to handle about 1,000 dairy cows. With the technology you have now, you can go from one to 10,000 easily and with far better quality care. You can tell earlier than is typically diagnosed physically, whether a cow’s beginning to get sick or not.


I don’t want to go off down another tricky trail but what data analytics is doing is disrupting how one thinks about businesses. Who would have thought ag food would be one of the high tech future areas. I think of it as one of the implications from the 2.2 billion is that ag food is going to be one of the biggest industry opportunities in the world. Those people want to eat and live like we do.


You know that if you’re in banking, almost every aspect of a bank is being attacked or disrupted by technology players. We’re even seeing the education system being disrupted. I don’t know if people have heard of a firm called 42 in Paris? It was set up by


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a telecoms entrepreneur. They provide free three year computer programming courses. They don’t care what background you have. You have to do a qualification but they’re not looking at what your educational background is; you can get a test in terms of your character or capabilities. What they’re doing, if you think about the jobs that those people are getting in a very different way, it’s disrupting the education system.


On the technology side, we’re in the early stages of disruption that’s affecting all of us.


As we look at an ageing population of 400 million people over the age of 80, we’re going to double people over the age of 65. As I mentioned, a lot of our costs – healthcare in particular, but also social security and others – is directly driven by age. Assuming we have the same retirement ages and benefits, one of the implications for me is there’s no way we can continue to do that.


I doubt that anyone in this room here is going to stop working at the age of 65. I think people are going to work till they’re 80 and maybe that has implications for education. Maybe going to university in our 20s is just a bit narrow-minded. Maybe we have to go in our 40s and our 60s, our 70s, to go through it to re-tool ourselves as we move through. I don’t think it’ll be a steady state but it’s going to mean a lot of changes.


The other comment that I made before is labour productivity. The biggest driver of labour productivity is more people coming into the workforce. For example in the US, the largest increase in productivity from 1950 to 2000 was not because of technology. It was because women entered the workforce.


So immigration is going to matter. I’m a big fan of immigration. It may not be politically correct. I come from Canada. I’m part of a group that says we should have 100 million people in Canada. We should open the doors. Donald Trump probably wouldn’t like that!


Trade flows, as I said, are getting much wider. As we relate it to economic power, we’re seeing more of the size of the bubbles and the thickness of the lines happening in Asia. Back in 1994 when I was first in Asia I went to see one of my Japanese colleagues; he was a bit of a mentor and he said “I want to tell you something: Asia is a western invention. It doesn’t really exist. It’s on your map but we actually don’t do that much together. The trade routes are not very linked, because some of us actually don’t like each other very much”. My jaw dropped. But I think Asia is much more Asia now. If you just look at the trade routes, the supply chains, it’s deep. linkages and lines.


It’s got lots of


Africa right now looks to me like Asia did in 1993, ‘94, ‘95, and I think we’re going to see a much deeper linkage, we’re going to see more of that trade.


But probably the biggest shift or change is now going to be in data, and we’ve found that those countries and cities that are more connected with data are the ones that are going to be able to achieve more growth and productivity.


This is an area where regulation is still being formulated in terms of how we move data. Data’s an asset class. We have to look at how we manage it and how we protect it. That’s deepening, and it’s an area where governments are going to have to play a more critical role in terms of the infrastructure that they put in place.


People are also becoming much more of that flow. I think the migration issue in Europe is the tip of the iceberg, with the technology we have now today. If you are in a troubled part of Africa or the Middle East, you can very quickly see what the rest of the world looks like, and you can figure out how to get from A to B. We never used to have that. I think there is a very big pent-up demand there.


There’s also a lot of movement in Asia. We’re not talking about that right now, but from central south-east Asia to the rest of Asia, there are very big flows. It’s a very sad situation because a lot of it is trafficking, it’s illegal, it’s people in very tough situations, but I think that’s going to continue, and I personally don’t think Japan is going to be able to survive without having a much more open immigration policy.


And I look at the Philippines, which is an amazingly young, vibrant population. If I’m betting on a place over time because of the demographics, it’s the Philippines. I think it’s going to be a scarcity to have young people in a very ageing Asia, in north Asia, including China.


We’re also not very good at using our resources right now. I’m a big believer in climate change and resource efficiency and effectiveness. I think we as business people have to own that problem. It can’t just be done by government. There is a cost and it’s going to get worse unless we address it.


And then we have geopolitics. When I started in McKinsey, it was probably at the peak of the thinking that geopolitics didn’t matter. I joined McKinsey in 1986. The Berlin Wall fell, I think it was in ‘89, the Soviet Union collapsed shortly thereafter, and it was almost a notion that you had to obey the capital markets. That’s really what drove the system, and the peak of that was when


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