A new world order seems to be under way, dominated by disruptive forces changing the way businesses across every sector is rapidly growing in almost every few years.
The global economy has become more demanding as the world of commerce changes randomly. These disruptive changes have such immense power that by 2030, emerging markets like India and China may well be home to more large companies than either the United States or Europe, although at the start of this century, most of the Fortune Global 500—the world’s largest international companies were fundamentally headquartered in developed economies.
Seemingly the hallmarks of the 21st century will be these disruptive business forces shaping up a densely interconnected global economy. Unfortunately, most business houses fear the speed of change! Rightly so, a recent book from McKinsey Global Institute, titled No Ordinary Disruption: The Four Forces Breaking All the Trends brings to fore a timely and important analysis of how businesses around the world need to reset their intuition as a result of four forces colliding and transforming the global economy, namely: the rise of emerging markets; the accelerating impact of technology on the natural forces of market competition; an aging world population, and accelerating flows of trade, capital, people, and data.
Striking the Balance
There is an urgent imperative to adjust to these new realities. While it is full of opportunities, this era is deeply unsettling. And there is a great deal of work to be done. Never in the history of human civilisation did one witness a global auto major thinking of product lines that will find acceptance across the globe, internet majors strive to serve world population, and telecom majors design products keeping in mind the developed world and emerging markets alike. Today, the world acknowledges India’s growing presence in the global market and being one of the resilient emerging economies – India has these disruptive forces in full bloom.
“Some believe India has arrived, some say it’s arriving, whereas some naysayers presume that India might just have missed its opportunity. Some critics say that while Indians do very well all over the world in all the different walks of life, somehow India is left behind. But, there are inherent strengths that made Aristotle call it the seat of the civilisation of the world,” describes Sunil Kant Munjal, Joint Managing Director, Hero Motor Corp and Chairman, Hero Corporate Services, aptly defining the rise of India.
Focussing on the India experience, these disruptive forces had already reshaped every bit of the business landscape. The results had led to deployment of state-of-the-art technology, energy efficiency, enhanced consumer focus, smarter choices and stricter compliances.
On catching up with the developed world, Ravi Shankar Prasad, Minister for Communications & Information Technology, Government of India has an interesting analogy. According to him, India was way behind the rest of the world when telecom revolution started. It still was decades behind in terms of roll out of 2G. India even missed in case of the roll out of 3G by a few years. But, now in the 4G and beyond era, India is going to leap forth with the world’s best economies.
“India is changing and evolving for good every second. Our Prime Minister has envisioned the dream to bring governance to every citizen of India. The government is connecting 2.5 lakh gram panchayats with optical fibre and soon, India will be home to 500 mn smartphones,” the Minister shares, as India works on its tech-led development aspirations.
Consumer is King
The super enhanced consumer focus has helped businesses to be able to mine its consumer needs in such a manner that are able to meet end-to-end consumer needs. For instance, by unbundling its services, the airlines are better equipped to serve its consumers better and make additional revenues for businesses. At the same time, premium airline services are also finding suitable environment to grow as India hopes to turnaround as one of biggest aviation market by 2025.
Likewise, in the power sector, in line with rising environmental concerns, the conventional players are inculcating best practices to reduce harm to environment, while new league of determined entities are eyeing to gain through the new found focus on green and eco-friendly technologies in the alternate energy segment. This sector could generate a million jobs by 2022, if the government reaches its goal of 100 giga watts (GW) of solar photovoltaic (PV) energy and 60 GW of wind energy.
The jury is out and the clear result in a business regime dominated by disruptive business forces is the end of static business model. Be it the Telecom, Hospitality, Automobile, Healthcare, or Power – businesses will have to go through a sea of changes due to rapid disruptive forces and yet manage to grow with an innovative edge to create that magical margin and economies of scale.
Written by Vivek Sethi