New math: 6 trends, 3 drivers
By Ken Cook
While doing business around the world, global companies notice the complexity of the interlocking systems that shape today’s ― and tomorrow’s ― economic and social environments. Faced with such complexity, they may be tempted to watch passively as the trends unfold and just wait for a clear picture to emerge.
By the time the picture snaps into focus, however, it may be ``too late’’ for them to capture the most valuable opportunities. And that’s why the global players must keep their eyes wide open and monitor major business trends from a broad, long-term perspective.
Ernst & Young publishes global trends report every year and last year’s, titled ``Business redefined,’’ reflected the impact of the latest financial crisis. Now a couple of years on, the global financial system remained fragile, but economies around the world began moving toward recovery.
In the 2011 paper ``Tracking global trends,’’ Ernst & Young gives attention to six major developments that are changing our business world, while at the same time identifying three key underlying drivers that have helped establish and perpetuate each of the six trends.
Well put into words in the 32-page paper, the three key drivers are demographic shifts, reshaped global power structure and disruptive innovation, and the six trends include, among others, emerging markets with increased power, cleantech as a competitive advantage and the smart-mobile world created by rapid technology innovation.
So, how should companies adapt this new math of six trends and three drivers to their own businesses? Often, complexity can be tamed with simple questions: ``What are the main opportunities that exist for our organization?’’ ``What are the threats?’’ ``What can we do that is new ― or, conversely, what have we always done that we should stop doing?’’ And, above all, ``when is the best time for action?’’
Casting such questions themselves can help enterprises clarify the way forward. Ernst & Young’s latest report include ``Key questions for global companies’’ for each of the six business trends, which are meant to be used as a guide ― one that would sharpen the focus on important issues and challenges and ways to cope with them.
Companies should now operate in a polycentric world in which there are various spheres of influence in both developed and emerging markets. In order to snatch opportunities and become a winner, they should read the global trends one step ahead of competitors and respond to them with more agility.
Ken Cook is Executive Partner and Markets Leader of Ernst & Young Korea.