The Impact on Society
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Video: Paul Hodges discusses the outlook for individuals, companies and countries
We are about to set out on a great journey as the world transitions to the New Normal.
The reason for the journey is that the world economy has changed irrevocably as a result of the financial crisis and the demand changes created by the ageing of the Western BabyBoomers.
There is no going back. In this chapter, we provide our view of how individuals, companies and politicians can best prepare for the journey ahead.
We suggest that parents tell their children: “Go and take a degree that will allow you to work for the right kind of company. This type of company will be constantly innovating to make products which meet the needs of the future: the 55+ generation in the West and those emerging from poverty in the developing world. The firm that you work for must also be mindful of the other megatrends – food and water scarcity, carbon footprint – in everything it does and everything it makes.”
We argue that companies should escape the tyranny of short-term financial metrics and instead plan for the longer term. They need to establish, and stick by, a set of values that will enable them to meet the needs of society and be successful – one and the same thing in the New Normal world.
In the political arena, Western politicians need to tackle unemployment in order to avoid wave after wave of social unrest further damaging already weakened demand growth. Good social policy is required, as without a healthy society there cannot be a healthy economy.
Many developing countries already have social policies in place that emphasize job creation over corporate profitability. But they face their own set of challenges. They have to compensate for the loss of export markets in the West. Equally, countries such as China risk their populations becoming old before they become rich – with all the social strains this could cause. Whilst from a Western viewpoint, the transition to the New Normal is already starting to expose the flawed thinking of financial markets. The rise of developing countries cannot inevitably replace lost demand in the West.
Making the transition to the New Normal could become very difficult, if our leaders fail to recognise the changes required. It might then involve moving through the “five stages of grief” identified by Elisabeth Kübler-Ross, the Swiss American psychiatrist. These are Denial, Anger, Bargaining, Depression and Acceptance.
We hope that the book has helped to highlight how we can all help to accelerate the transition to Acceptance where individuals, companies and countries work together in a search for solutions.
This will allow creativity to really flourish and encourage confidence to return. New opportunities will then emerge as we arrive in the New Normal.