They served us dinky little sweet cakes about the same time lunch speaker, the affable KPMG boss Ross Buckley, started morphing into a scary alien messenger from 2030.
It was the Waikato Institute of Directors’ annual meeting and I’m sure a few of us could’ve done with a sugar jolt after he’d finished painting his picture of business in the next 20 years.
But as we resurfaced into a world mercifully still free of robot greeters and computerised clothing, I swear those cake platters were untouched.
Maybe Waikato Inc folk just have iron willpower. I prefer to think we had a collective attack of tummy butterflies. As in, life is coming at us quite fast enough already thanks Mr Buckley, whaddya mean we’re only at a gentle trot compared with the pace of what’s ahead?
Don’t get me wrong, the executive chairman of KPMG was riveting. His compilation of projections – cunningly titled Future Trends and Impact on Governance so as not to startle the horses too early – was compulsive viewing for business leaders tasked with navigating a course while technology keeps changing the signposts. And of course some people might have been gleefully thinking “bring it on”. (Amazing as it seems to me, some people over the age of 30 don’t get flustered by technology. They think it’s helpful and fun and that computers are not malevolent agents of frustration and despair but useful machines that bend to our will and save us time and money).
But I digress. A privilege of age. As it happened, Mr Buckley had quite a bit to say about us baby boomers when transporting a room full into a sort of parallel universe in the name of being “thought provoking.”
Having introduced us to the “VUCA battlefield” – business-speak for Volatility (been there, done that, the new norm), Uncertainty (Brexit, Trump), Complexity (multiple forces, no cause-and-effect chain) and Ambiguity (haziness of reality, potential for misreads) – Mr Buckley turned to population trends and this period of “unprecedented change”.
“One of the biggest challenges is to stay up to date with the impact of new technologies,” he said.
In 2009 1.8 billion of the world’s people were deemed middle class. By 2030 it’s projected to be 4.9 billion. That’s got to be a good thing for New Zealand Inc because a lot of that growth will be in Asia.
These days about eight percent of the world population is older than 65. By 2030 it will be 12 percent. Currently there are three economies where 20 percent of the population is older than 65. By 2030 there will be 34, including New Zealand, Mr Buckley says.
“Think about the repercussions of that. Suddenly at least one fifth of your market will be in retirement mode. Not earning, not investing, drawing down on their savings.”
In 2011, 73,000 Kiwis were 85 and older. By 2031 this will double to 147,000.
On the flipside, in Hamilton only one in three people will be 65 and older, implying two-thirds of the population will be younger and contributing to the economy.
The number of Waikato households is projected to grow by 28 percent to meet accommodation demand, a useful planning pointer for businesses in the construction, services and infrastructure sectors.
Mr Buckley urged a strong focus on digital disruption and enabling technology. We’re already seeing a lot of it – think music, gaming, fashion, capital raising, retail.
He introduced us to the world Unicorn Club, startups with a value of $1 billion made at warp speed. Their numbers on his map were too numerous to count. We met the Unicorn, DollarShave.com. Founded in the US in 2012 to deliver $1 quality shaving blades to the home for a $1 membership fee, its sales last year were $160 million and it has just been sold to Unilever for $1 billion.
A classic case of digital disruption – “challenging big groups that are making a lot of money out of you and I,” said Mr Buckley.
Adult Kiwis make about 16 online retail transactions a year. Men are the biggest adopters of this way of shopping. They’re partial to luxury items and spend one third more than females. About 35 percent of our online purchases are from offshore retailers. Baby boomers are big users of e-commerce.
By 2020 it’s projected humanity will be monitored and sensed by 50 billion “smart objects”. Mr Buckley says they’ll be in our clothing, our furniture, in the office, the home, the car, connecting us all to the internet.
Changing job market
No surprise then that the Oxford Martin Institute has forecast that of 702 occupations in the US, 47 percent of jobs could be automated within 20 years. They include Mr Buckley’s profession, accountants and auditors.
“The good news is that executive roles and director roles applying judgement have a very slim chance of being automated.”
By 2020 the top 10 skills to succeed in business will be complex problem solving; critical thinking; creativity; people management; co-ordinating with others; emotional intelligence; judgement and decision-making; service orientation; negotiation; cognitive flexibility.’’
We must learn to love robots.
They’re already quite common in some workplaces overseas, Mr Buckley says.
“Trade lawyers can get through 40 (analysis) exercises a day, a computer in 24 hours can do 10,000. When I arrived at our Tokyo office I was greeted by a robot and the whole session was introduced by a robot.”
The global market for robots is expected to be $152 billion by 2020.
The London Business School reckons for certain tasks businesses get a 600 to 800 percent return on investment by using robots and cognitive intelligence.
New food sources
Basic food sources will have been reinvented. In the US they’re already eating crickets as protein replacement, and the Impossible Burger, non-meat protein that tastes exactly like meat, is old news.
We’ll have a sharing economy. We’ll hire a surfboard, boat or luxury Birkin handbag for a day instead of buying them.
Are we ready for change?
So, how are businesses prepared for the march of robots and innovation?
Poorly, according to results of a survey of UK chairmen and directors.
It showed 47 percent of businesses had not looked at the impact of automation on jobs; 58 percent said their boards were not good at understanding or managing technology, only 35 percent thought automation would significantly affect their business structure in the next five years, and 68 percent of boards were not managing artificial intelligence decisions or doing them piecemeal rather taking a holistic view of the business and its future.
I bet they have no trouble eating the boardroom cakes either.