We're here today to talk about BCG's
recent publication,
Navigating Future
Uncertainty in Australia
with Megatrends.
I'm joined by two of my co-authors,
Fergie Romero and Katrina Bigelow
who are like me,
core members of our corporate
finance and strategy practice
here at BCG.
It's great to be here today to discuss
some of the key themes of this work.
Thank you for speaking with us.
Thanks for having us.
It's great to be here. Likewise.
Perhaps if we start
at the first fundamental question,
what is a Megatrend?
So a Megatrend is very large,
quantifiable shifts
that profoundly impacts
the way we live and the way
that our organisations do business.
What are the five themes that we landed
on being most relevant
for executives in Australia?
The five key themes
that we identified
throughout our research
were the sustainability imperative,
the emerging economic
and geopolitical risks,
demographic and consumer shifts,
the evolving labour market,
and digital innovation.
I'd love to deep dive
into a bit of each
one of those individually.
So why don't we start with the first one,
the sustainability imperative.
What's really important for businesses
within this theme of Megatrends?
I think there's two sides
to the sustainability imperative.
One is
what is happening around the world
and we are seeing it globally
extreme weather events,
increased frequency
and the impact on society
and communities
increasing in terms of cost and severity.
The other side of
that is what organisations,
both private and public sector,
are doing to address it.
We know now
that they're continuing to be reactive
and responding
after the fact to
these climatic events.
The imperative for organisations
is to move
from being reactive to being proactive.
What can they do to ensure
that these events,
decrease in frequency going forward,
that we're better prepared
to prevent systemic impact
in our communities.
And that requires
a lot of effort
and collaboration between private sector
organisations and governments
to be able to do that.
Speak to me
a bit more about
some of those opportunities
that you think that we have through this.
So I think when we think about climate,
we often think about risk
risk to our communities
individuals, our businesses.
What we're seeing is that there's
significant opportunities,
particularly in the private sector,
when it comes to attracting talent.
We find that organisations
who invest in strong sustainability
strategies attract really high
top talent.
Retention is higher.
Consumer engagement with their products,
their propositions,
the way that they're perceived in
market is also significantly stronger.
Really looking at demographic
and consumer shifts
and how that's going to impact
the entire Australian economy.
That's right.
So as we see
shifting generations with more Gen-Z
is coming into the workforce
and starting to grow up
as the baby boomers are retiring more,
what we're seeing is
they are really reshaping
how companies operate
and what they are willing to pay
a premium for.
So things like prioritising
social and environmental impacts
is really driving
the way that businesses
are having to rethink.
spending more money on actually
marketing and showing the market
that they are working towards delivering
positive economic change
or environmental change
rather than actually focusing
on delivering the change.
We also looked at the labour market,
which post-COVID
has been incredibly tight
for every business in Australia.
And the big question is,
is it going to remain that way
or has there been a fundamental shift?
COVID really shifted
the market on its head
in terms of who has more of the power
when it comes to the war for talent?
So historically,
you know,
companies had a lot more say
in what was expected
and what was required.
But post-COVID,
we have seen
that really flip on its head.
So employees have a lot
more say
in things like flexibility,
ways of working,
and being out of work from home
versus coming into the office
and having that mandated as well.
From a business perspective,
if I want to be able to address that gap
in my workforce
what does that mean
that I need to do to actually win
in this challenging environment?
Yes, I think there's a couple of things
that businesses should be considering.
Firstly, being much more open
to flexible ways of working.
So having more fully remote
or partially remote roles
and thinking about the way
that we mandate
sort of a few days in the office
each week.
It's not the only impact
we've seen post COVID in terms
of this tighter labour market.
We're also seeing challenges
within supply chains.
And that actually came up
as another topic
within one of the themes
that we looked at,
looking at emerging geopolitical risk.
I wonder if you can help explain
a bit more about that.
Yes, so in addition to changing demographics,
we also explored
the impact that things like COVID
and the war in the Ukraine
has had on supply chain.
What we're seeing is
an increasing demand
from consumers on organisations
to have more resilient
supply chain plans,
investing in data and analytics to ensure
that they can better predict
and better manage
these instances when they occur.
The onus is really on the private sector
and our organisations
to build greater resilience
when it comes to protecting themselves
against global events of this magnitude.
The final theme that we explored was
technology and digital disruption,
and that's a space
that's been in the news
a lot recently with Generative AI
being the magnificent tool that it is.
There is so much more to
artificial intelligence than I think
we often see in the media.
Artificial intelligence
has existed
and has been permeating industries
for years.
We see it in self-driving
vehicles and mining,
we see it in compliance
management and finance,
and we even see it
as part of medical decisioning
in healthcare.
It's a market
that's going to be worth
trillions of dollars in the next decade.
One statistic that sticks with me in
terms of the speed of change
that we're seeing in the magnitude
of impact
that this area
can have on our organisations
and society is what ChatGPT
achieved in five days,
took Netflix three and a half years
and it took Twitter
two years to get the same number of users
activated on it.
Our organisations
need to prepare for this
and we need to make sure
that those same way we've leveraged it
today, we capitalise
on the speed of change
and are able to do more with it.
It's fascinating to hear that
out of all of these Megatrends
we've reviewed,
this subset
are the ones
that really matter to Australia.
But why should executives care?
Executives should care
because the risk is to do nothing.
Megatrends aren't going away
and they will last for decades.
So there is tremendous opportunity
facing executives to act.
Thank you both for taking the time
to speak about
some of the findings of the research,
and I'm sure many executives
who read
the report
will find
the additional detail
even more exciting
to read and understand.
Because to your point, Fergie, it's
not just about the risk,
it's about the opportunities ahead.
Thank you for tuning into this video.
If you'd like to read more
about some of BCG's
findings on Megatrends in Australia,
please feel free to click the link below.