If you want the right person to present on ‘Business in the Asian Century’, one can’t get much better than the Global MD of McKinsey, perhaps the consultant’s consultancy. This was the most recent event for the Asia-Scotland Institute, which promotes awareness and collaboration between one small vibrant nation of rugged mountains with a distant continent that’s 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 McKinsey’s activities in Korea and Shanghai. With a list of titles that rivals anyone outside the royal family, the Edinburgh audience of a Monday night could only expect a compelling and sincere delivery. From the outset there was complete silence as Mr Barton explained the enormous changes over the next two decades in Asia. There will be further urbanisation into cities, growing life expectancy and a doubling of the middle class. This would be coupled with a shift eastwards of the talent, capital, headquarters and brand strength of new corporate players, many of which operate in unique, local conditions, and are unknown to western markets.
This shall happen, regardless of the Euro or US-cultural hegemony of the current period. Disruptive technologies would enable the transformation. McKinsey names the top five as mobile online, automated knowledge, the internet of things, cloud computing and robotics, each obeying the merciless momentum of Moore’s Law. Eastern industry leaders have no compunction in cross-sector competition: for example, Alibaba, the Chinese online store – Global trade starts here ™ – has successfully entered the loans market because it understands far more about its 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 respect gentlemen’s agreements.
And as a backdrop to all this change, the Global MD highlighted an enormous resource scarcity. How do you feed, teach, clothe, transport, shelter and amuse so many more people, each consuming so much more. There will be a 40% gap in water scarcity by 2030, leading to issues between border nations: 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 – all these will be challenges.
The mood in the room, when I looked around and listened for the falling pin, seemed to be positive. Yes, it was all about challenge, but not how to stop it, nor a fear of it, nor how our lives would be affected adversely because of wealth moving east, but about the potential.
The questions, moderated by Bill Jamieson from the Scotsman, proceeded for half an hour, but all the time I was thinking, and I couldn’t stop these thoughts for the rest of that evening. To me, it was all about how, in a society where we’re unable to 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 overnight. Their employees make their homes in cities with streets without trace of 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, we have a different legacy, the prize for getting there earlier, the shackles of democracy laid over tradition. Perhaps, after all, it is now the West that has further to go.
The million-dollar question asked of Mr Barton (an answer to which he hadn’t quite figured out) was by how much Asian countries would disrupt the profit pools of individual Western businesses? Answers on a modern postcard via www.nickwilliams.org I’ll forward it on – trust me.
The Asia-Scotland Institute was founded in Edinburgh in 2012 and is chaired by Roddy Gow.
Nick Williams may be known best for his Pocket Mountains guides to the Highlands and Islands, but he has also trained as a mountaineering instructor and has thirty years of experience climbing all over the world. He organised the first international expedition to post-Soviet Kazakhstan and written a memoir, Jagged Red Line, which describes adventure and trauma in the Caucasus. Nick works as a coach and consultant, specialising in resilience for individuals and organisations. He speaks French, Mandarin and Russian.