Forum Host Bill Raisch: Ted, you are a veteran journalist, essayist and former member and trader of the Chicago Mercantile Exchange. Further, you’ve authored two books as of late. All of which give you a distinct perspective on current and emerging disruptors.
In Shock of Gray, The Aging of the World’s Population and How it Pits Young Against Old, Child Against Parent, Worker Against Boss, Company Against Rival, and Nation Against Nation, you look at how the aging of the world is propelling globalization, redefining nearly every important relationship we have and changing life for everyone young and old.
In China, Inc.: How the Rise of the Next Superpower Challenges America and the World, you described the effects of China’s recent emergence as a world power on the lives and businesses of people across the globe.
With that broad perspective, what do you see as the most important disruptors and their likely impacts facing global corporations, markets and/or wider society?
Ted Fishman: A few things come to mind.
A) The reassertion of the state as a powerful economic player in realms that were ceded to the private sector. As emerging markets rise toward middle incomes for their populations, states such as China, Venezuela, Russia and Brazil show how tempting it is to re-engage in the marketplace and take, for connected state players, larger stakes in national economies. The moves also push competition and innovation out, raise new possibilities for corruption and populist economic policies that use resource riches to, in effect, buy off votes. Regulation becomes almost impossible because of the lack of separation between the regulators and the regulated.
B) Shifting labor forces driven by a difficult combination of demographic transition and economic straits. In countries where historically low fertility rates are shrinking the local force, the workplace is changing forever. Manufacturing is increasingly handled in highly automated plants or outsourced to places with abundant, and low-cost labor. At the same time, service sectors grow, and immigrants are frequently called into to fill low-wage service sector jobs. This creates a whole new population that is employed outside their home countries but who travel through their own work lives without social safety nets.
C) On the positive side, changing demographics are also one of the chief drivers of global prosperity creating new middle class consumers. As families shrink, children benefit as they get larger portions of their families’ means, usually spent to keep them healthy and to get them schooling. This is raising their prospects, their skills, their wages and the lifespans.
Bill Raisch: What strategies would you suggest to address these disruptors – to either mitigate negative impacts and/or to capitalize on potential opportunities?
A) For dealing with the reemergence of state sectors, it becomes much more important to have international norms of regulation. With international norms, enforced across borders, countries do not have to depend on their own, often mobbed-up, regulatory systems to protect people as businesses, consumers and citizens.
B) The best response to changing demographics is to help workers be as productive and contributive over their lives as possible. This requires new modes of education that prepares workers for highly automated work conditions; it gives them skills to strike out on their own when employers are less than willing to hire them late in their work lives. It makes mid- and late-career workers more valuable later in life than they were earlier in life, because of their accumulated skills.
C) Demographic shifts will bring prosperity to parts of the globe that have long been under-appreciated economically. Look to new markets that will develop very rapidly as their people enjoy both the fruits of lower fertility and the demand for their youthful labor forces.
Posted by Bill Raisch, Host – Global Disruptors Forum