Author Q&A: Disruption! McKinsey & Company's Richard Dobbs Discussing His Latest Book

NoOrdinaryDisruption

McKinsey’s Richard Dobbs says changes are coming—some positive and some negative—and the people who can adapt best will be the winners.

In No Ordinary Disruption: The Four Global Forces Breaking All the Trends, the directors of the McKinsey Global In- stitute (MGI), the flagship think tank of McKinsey & Com- pany, interpret masses of data from MGI’s 25 years of research to guide readers through the next two decades of a dramatically different future. For instance, in just ten years, some 140 million knowledge workers’ jobs could be replaced by computers and 75 million jobs by robots. The authors go behind the current headlines to analyze emerging trends caused by four disruptive forces trans- forming the global economy. They are: Emerging markets and cities; the pace of technology breakthroughs and adoption; aging demographics, and, the global trading system. To shed light on these forces, along with other disruptions, McKinsey’s Richard Dobbs, one of the authors of the book, the director of MGI and a Senior Partner based in London, sat down with Consulting to discuss No Ordinary Disruption and its implications for the future.

Consulting: Can you give me a sense of where the idea and inspiration for the book developed?

Dobbs: For 25 years, McKinsey has funded a think tank, the McKinsey Global Institute to produce research as well as to help policy makers, business leaders, investors etc. around the world. The idea is to help inform them how the world is chang- ing and the opportunities to improve productivity and growth. James [Manyika], John [Woetzel] and I are the three directors of MGI and do a lot of deeper dive reports. But increasingly clients and other policy makers have asked us to put them all together. Instead of us telling them about one area or another, pull them together and tell us how the world is fundamentally changing. Over the last five years, we’ve been stringing together a lot of what’s in various reports and making presentations, but we hadn’t published anything around those insights. We started to realize that the world is changing at a such a rapid pace that company leaders, policy makers and others’ intuition about how the world works is wrong. So, the three of us decided to write this up as a book.

Consulting: How did you come up with the four global forces? Did you have pre-conceived ideas about them when you began or did they develop over time as you did the research?

Dobbs: We had a pretty good feel for the first three, I think, but that forth one—the interconnectivity of the global trading system—came a bit later. It sort of evolved as part of our overall research agenda.

Consulting: Are the four forces equally important or do you see one that’s more important than the others?

Dobbs: If you’re a government in the West, the aging demographic is prob- ably bigger than the rise of emerging markets. But if you’re in an emerg- ing market than that one would be more important and so on. If you’re in a legacy business than technology and the rise of emerging markets are probably the most important to you. It’s not that one or another is bigger or more important in and of itself, it depends who you are. One thing we can say is this: As far as we can tell, these forces are larger than anything the global economy has ever seen be- fore. Over the next decade, 440 cities in emerging markets are going to be half of the world’s GDP. Actually, emerging markets will account for three-quarters of the world’s GDP. There is an example that comes to mind as I think about the impact of this: There is a city called Tianjin, which is just outside Beijing. When I talk to executives in the West, maybe 5 percent have ever been to Tianjin. Tianjin’s GDP at the moment is the same as Stockholm, one of Europe’s fastest growing cities, but it’s not on people’s radar at all. By 2025, Tian- jin’s GDP will be about the same as the entire country of Sweden. But when I asked executives who cov- ers Stockholm, they have a answer for me. When I ask them who covers Tianjin, they don’t know and have to go digging through the files to find out and it usually turns out the person, if there’s one at all, is a junior-level person. The rise of emerging markets is not a surprise, but re-allocating our resources to cover those emerging markets is the challenge.

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