If you want the right person to present on ‘Business in the Asian Century’, arguably you can’t get much better than the Global MD of McKinsey, perhaps the consultants’ consultancy. Say what one wants about morals, the firm undeniably helps create the future just by doing, advising, speaking. This was an event for the Asia-Scotland Institute, which promotes awareness and collaboration between one small vibrant nation of rugged mountains with a continent that is 568 times its size and 812 times more populous. We are not afraid!
Enter Dominic Barton, a Canadian at the top of his game and, until recently, head of the McKinsey’s activities in Korea and Shanghai. With list of titles that rivals anyone outside the royal family, the Monday-night Edinburgh audience could not expect other than a compelling and sincere delivery. From the outset there was silence as Mr Barton explained the enormous changes over the next two decades in Asia. Further urbanisation into cities is guaranteed, associated with increased life expectancy and a doubling of the middle class. Simultaneously, the talent, capital, headquarters and brand strength of new corporate players will shift, as if driven by the Coriolis effect. Many operate in unique, local markets, and are unknown to the West.
This is going to happen, regardless of the Euro or US-cultural hegemony of the current period. Disruptive technologies would enable the transformation. McKinsey names the top five named as mobile online, automated knowledge, the internet of things, cloud computing and robotics, each obeying the momentum of Moore’s Law. Eastern industry leaders have no compunction about cross-sector competition: for example, Alibaba, the Chinese online store with the motto Global trade starts here, has successfully entered the loans market due to a stronger understanding of customers’ habits and needs than your traditional bank. What implications, I ask, does this have to old economies, where things are done a certain way and investment houses are unassailable? Such a brave new world does not entertain gentlemen’s agreements.
And as a backdrop to change, the Global MD highlighted the resource constraints. How do you feed, teach, clothe, transport, shelter and entertain so many people, each consuming more. Water scarcity should reach 40% by 2030, leading to border nation strife: Ethiopia and Egypt on the Nile; China with Vietnam, which both tap the Mekong. And the sorting of waste, the harnessing of renewable energy, the reduction of pollution are major challenges.
The mood in the room, when I looked around and listened for the falling pin, seemed to be positive, not about how to stop, nor of fear, nor how our lives would be affected adversely because of wealth moving east, but about the challenge, and the potential.
The questions went on for half an hour, but all the time I was thinking, and couldn’t stop the whirring for the rest of that evening. To me, it was all about how, in a society where we can’t just rip up everything and start afresh, can we continue to hunt with the tigers? Our rivals are companies so young they can install smart cloud-based systems almost overnight. Their employees make their homes in cities with streets without trace of half-dilapidated Victorian infrastructure. They are served by political structures that enable things to happen efficiently without paying lip service to aristocracy, church, state, local bureaucracy and pressure lobbies. No, this is our legacy, the prize for getting there earlier, the shackles of democracy laid over tradition. Perhaps, after all, the West has further to go.
The million-dollar question asked of Mr Barton was one he hadn’t yet figured out: by how much would Asian countries disrupt the profit pools of individual Western businesses? Answers on a postcard.
Images
Singapore and Gardens by the Bay
Moped and bags, Vietnam
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