WEBVTT

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We're here today to talk about BCG's

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recent publication,

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Navigating Future

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Uncertainty in Australia

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with Megatrends.

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I'm joined by two of my co-authors,

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Fergie Romero and Katrina Bigelow

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who are like me,

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core members of our corporate

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finance and strategy practice

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here at BCG.

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It's great to be here today to discuss

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some of the key themes of this work.

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Thank you for speaking with us.

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Thanks for having us.

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It's great to be here. Likewise.

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Perhaps if we start

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at the first fundamental question,

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what is a Megatrend?

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So a Megatrend is very large,

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quantifiable shifts

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that profoundly impacts

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the way we live and the way

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that our organisations do business.

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What are the five themes that we landed

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on being most relevant

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for executives in Australia?

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The five key themes

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that we identified

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throughout our research

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were the sustainability imperative,

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the emerging economic

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and geopolitical risks,

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demographic and consumer shifts,

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the evolving labour market,

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and digital innovation.

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I'd love to deep dive

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into a bit of each

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one of those individually.

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So why don't we start with the first one,

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the sustainability imperative.

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What's really important for businesses

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within this theme of Megatrends?

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I think there's two sides

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to the sustainability imperative.

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One is

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what is happening around the world

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and we are seeing it globally

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extreme weather events,

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increased frequency

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and the impact on society

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and communities

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increasing in terms of cost and severity.

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The other side of

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that is what organisations,

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both private and public sector,

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are doing to address it.

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We know now

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that they're continuing to be reactive

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and responding

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after the fact to

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these climatic events.

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The imperative for organisations

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is to move

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from being reactive to being proactive.

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What can they do to ensure

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that these events,

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decrease in frequency going forward,

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that we're better prepared

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to prevent systemic impact

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in our communities.

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And that requires

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a lot of effort

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and collaboration between private sector

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organisations and governments

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to be able to do that.

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Speak to me

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a bit more about

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some of those opportunities

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that you think that we have through this.

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So I think when we think about climate,

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we often think about risk

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risk to our communities

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individuals, our businesses.

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What we're seeing is that there's

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significant opportunities,

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particularly in the private sector,

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when it comes to attracting talent.

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We find that organisations

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who invest in strong sustainability

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strategies attract really high

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top talent.

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Retention is higher.

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Consumer engagement with their products,

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their propositions,

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the way that they're perceived in

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market is also significantly stronger.

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Really looking at demographic

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and consumer shifts

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and how that's going to impact

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the entire Australian economy.

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That's right.

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So as we see

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shifting generations with more Gen-Z

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is coming into the workforce

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and starting to grow up

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as the baby boomers are retiring more,

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what we're seeing is

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they are really reshaping

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how companies operate

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and what they are willing to pay

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a premium for.

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So things like prioritising

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social and environmental impacts

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is really driving

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the way that businesses

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are having to rethink.

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spending more money on actually

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marketing and showing the market

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that they are working towards delivering

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positive economic change

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or environmental change

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rather than actually focusing

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on delivering the change.

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We also looked at the labour market,

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which post-COVID

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has been incredibly tight

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for every business in Australia.

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And the big question is,

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is it going to remain that way

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or has there been a fundamental shift?

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COVID really shifted

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the market on its head

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in terms of who has more of the power

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when it comes to the war for talent?

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So historically,

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you know,

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companies had a lot more say

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in what was expected

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and what was required.

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But post-COVID,

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we have seen

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that really flip on its head.

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So employees have a lot

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more say

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in things like flexibility,

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ways of working,

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and being out of work from home

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versus coming into the office

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and having that mandated as well.

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From a business perspective,

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if I want to be able to address that gap

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in my workforce

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what does that mean

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that I need to do to actually win

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in this challenging environment?

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Yes, I think there's a couple of things

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that businesses should be considering.

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Firstly, being much more open

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to flexible ways of working.

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So having more fully remote

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or partially remote roles

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and thinking about the way

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that we mandate

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sort of a few days in the office

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each week.

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It's not the only impact

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we've seen post COVID in terms

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of this tighter labour market.

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We're also seeing challenges

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within supply chains.

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And that actually came up

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as another topic

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within one of the themes

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that we looked at,

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looking at emerging geopolitical risk.

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I wonder if you can help explain

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a bit more about that.

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Yes, so in addition to changing demographics,

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we also explored

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the impact that things like COVID

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and the war in the Ukraine

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has had on supply chain.

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What we're seeing is

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an increasing demand

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from consumers on organisations

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to have more resilient

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supply chain plans,

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investing in data and analytics to ensure

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that they can better predict

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and better manage

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these instances when they occur.

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The onus is really on the private sector

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and our organisations

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to build greater resilience

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when it comes to protecting themselves

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against global events of this magnitude.

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The final theme that we explored was

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technology and digital disruption,

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and that's a space

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that's been in the news

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a lot recently with Generative AI

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being the magnificent tool that it is.

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There is so much more to

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artificial intelligence than I think

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we often see in the media.

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Artificial intelligence

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has existed

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and has been permeating industries

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for years.

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We see it in self-driving

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vehicles and mining,

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we see it in compliance

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management and finance,

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and we even see it

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as part of medical decisioning

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in healthcare.

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It's a market

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that's going to be worth

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trillions of dollars in the next decade.

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One statistic that sticks with me in

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terms of the speed of change

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that we're seeing in the magnitude

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of impact

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that this area

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can have on our organisations

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and society is what ChatGPT

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achieved in five days,

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took Netflix three and a half years

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and it took Twitter

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two years to get the same number of users

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activated on it.

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Our organisations

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need to prepare for this

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and we need to make sure

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that those same way we've leveraged it

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today, we capitalise

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on the speed of change

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and are able to do more with it.

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It's fascinating to hear that

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out of all of these Megatrends

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we've reviewed,

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this subset

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are the ones

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that really matter to Australia.

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But why should executives care?

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Executives should care

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because the risk is to do nothing.

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Megatrends aren't going away

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and they will last for decades.

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So there is tremendous opportunity

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facing executives to act.

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Thank you both for taking the time

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to speak about

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some of the findings of the research,

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and I'm sure many executives

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who read

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the report

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will find

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the additional detail

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even more exciting

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to read and understand.

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Because to your point, Fergie, it's

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not just about the risk,

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it's about the opportunities ahead.

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Thank you for tuning into this video.

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If you'd like to read more

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about some of BCG's

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findings on Megatrends in Australia,

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please feel free to click the link below.