The Big Shift
The global business landscape is fundamentally changing
The world around us is changing. Long-term trends, driven by the liberalization of public policy and the exponential cost-performance improvement of digital infrastructure—computing, storage, and bandwidth—are fundamentally altering the business environment across all industries. This is what we call the Big Shift.
Wassili Bertoen & Maarten Oonk - 6 januari 2017
The Big Shift
The Big Shift is a set of fundamental macroeconomic trends that are reshaping the global business landscape and unleashing flows of information, people, and capital. It is measured and described through the 25-metric Shift Index, but it can be understood in terms of two fundamental drivers:
- Technological advances. Exponential improvements in the cost-performance ratio of core digital technologies have led to exponential advances and innovations in other technologies that employ the digital infrastructure and have blurred many traditional lines between industries and technologies.
- Public policy liberalization. Over the past six decades, public policies have broadly trended toward freeing movement of people, capital, and other resources across geographic and political boundaries, making it generally easier for individuals to start and scale businesses.
The Big Shift - Part 1: What is the Big Shift?
The Big Shift impacts both individuals and organizations. Individuals able to quickly adopt new technologies and participate in knowledge flows, are benefiting from this shift as consumers and as talented human capital. This top workforce talent is highly sought after by organizations as the key to growth, innovation and performance improvement. However, the short-term efficiency measures companies have taken to respond to mounting performance pressures are also having an important impact on individuals. These measures have eliminated many of the benefits of working for a large organization and undermined the financial and emotional security of many workers.
Many organizations are struggling to cope with these changes and the impact can no longer be ignored. Companies initially respond to these changes and mounting pressure by working harder within existing institutions and practices. Companies are resorting to short-term cost-reduction tactics such as layoffs and outsourcing, or using mergers and acquisitions (M&A) to increase scale (and buy revenue). These tactics, while effective in the short term, offer diminishing returns and do not tap into new opportunities.
Thrive in the Big Shift
Companies configured to succeed in the scale efficiency-driven models of the 20th century are struggling to create value in the rapidly changing world of the Big Shift. The old approaches are not working anymore. In a fast changing and dynamic environment, organizations need the ability to adapt as rapidly as the world is changing around them, continuously learning from each challenge. Organizational resilience and responsiveness are key to tap into new knowledge flows. The structures and regulations of specific industries have in some cases accelerated, and in others postponed, the impact of the Big Shift; however, the effects will spread across the economy. It is therefore important to understand and anticipate on the Big Shift.