Before the fast approaching winter gets its icy grip on the country, I would like to share my observations on sociological, environmental and technological disruptions that are likely to shape or should shape the environment in which organisations operate.
Ageing population
In 2001 the Population Division of the United Nations Department of Economic and Social Affairs reported the highest ageing rate in the history of humanity across the world (Tulik, Ryan, Harper & George, 2014). This means that the proportion of the world’s population that is approaching retirement age today is the highest it has ever been. Lower birth rates and mortality rates in more developed economies – a result of improved healthcare – have often been cited as the cause. An ageing population has, in turn, placed pressure on organisations to deal more effectively with the loss of skills caused by a retiring workforce, to equip new labour force entrants, and at the same time to put measures in place to address the scarcity of skilled youth. We are therefore likely to witness a change in the traditional norms of career entry, progression and exit – for example negotiating retirement terms with our current key resources. Noting that the latter would not necessarily be sustainable, the principal question that arises is:
What are our leaders putting in place to build the next generation of skills?
Technology, connectivity and innovation
From the 1990s, information technology began to underpin businesses transformation through the optimisation of business processes via the use of ever increasing computing power. The significant improvements in information availability, communication speed and worldwide connectivity via the Internet have led to the adoption of digital resources in order to create value. Furthermore, the very high adoption rate of smartphone technology has brought the point of sale interface to the hands of consumers – a shift that means that no wide-scale digital offering is now possible without making it available through a smartphone application. Technology advances have therefore enabled the transformation of functions such as marketing, supply chain, operations and business interfaces with customers (Bharadwaj, El Sawey, Pavlou & Venkatraman, 2013). The use of digital platforms for business enhancement is different from the high productivity and cheap labour models that China used to rise through the economic ranks since its 1978 economic reforms (Li, Li, Wu & Xiong, 2012). Technological advancement has allowed companies to operate globally, to employ human resources from a wider geography and to have near immediate impact on markets. On the contrary, some would argue that advancement in information technology has brought challenges such as cyber-attacks. For example, it was revealed at the 2015 Security Summit in Johannesburg that South Africa has become the most cyber-attacked country on the African continent.
Are we ready for the next technological disruptions?
Globalisation
Over the years, emerging markets have fuelled globalisation and they continue to change the business landscape. The resulting global business expansion has been a result of saturated local markets and the potential to grow internationally, along with more favourable labour costs and productivity unit costs from further afield. As an example, the success story about Honda taking over the USA and British motor cycle industry (Pascale, 1984) in the 1970s and 1980s illustrates the push into European and USA markets by the Japanese industry to satisfy a need previously unexplored by local players (i.e. smaller motorcycles). Additionally the arrival in 2009 of a group of emerging economies, Brazil, Russia, India, China and South Africa – the BRICS – has impacted financial markets across the world and heightened the competition for scarce natural resources (Nieto, 2012). Institutionally these changes bring forth different challenges to business leaders, both globally and locally. For example, most of our local organisations are realising the need to invest in skills development. The question that arises is: Given the increasing degree of globalisation, what skill sets should organisations invest in?
Yours sincerely,
Oratile Sematle, President
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