Managing the Age of Disruption
At a time when powerful forces are disrupting the global economy, bold predictions are even more likely than usual to be wrong. Each of four “great disruptions” is transformational on its own, and all are amplifying the effects of the others, producing fundamental and unpredictable changes on a scale the world has never seen.
NEW YORK – Bold predictions based on intuition are rarely a good idea. Margaret Thatcher, as Education Secretary in 1973, famously asserted that the United Kingdom would not have a woman prime minister in her lifetime. IBM’s president, Thomas J. Watson, declared in 1943 that there was “a world market for perhaps five computers.” And, when movies with sound made their debut in 1927, Warner Brothers’ Harry Warner asked, “Who the hell wants to hear actors talk?”
At a time when four powerful forces are disrupting the global economy, upending most of our assumptions, such pronouncements on the future, shaped by intuitions based on the past, are even more likely to be wrong. Each of these four “great disruptions” is transformational on its own, and all are amplifying the effects of the others, producing fundamental and unpredictable changes on a scale the world has never seen – and that will prove our intuitions wrong.
The first great disruption is the shift of economic activity to emerging-market cities. As recently as 2000, 95% of the Fortune Global 500 was headquartered in developed economies. By 2025, nearly half of the Fortune Global 500 companies will be based in emerging economies, with China home to more of them than the United States or Europe.
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