What's Changing? - Business

The 20th Century was about dozens of markets of millions of consumers. The 21st Century is about millions of markets of dozens of consumers - Joe Kraus, dotcom pioneer

Please see below selected recent business-related change.

See also:

March 2023

A report from an Australian think tank suggested that China has a global lead in 37 out of 44 strategic technologies, from defence, space, robotics, energy, biotechnology, AI and quantum tech. China achieved this by importing talent, deliberate design, and long-term policy planning (for example, Shanghai is positioning itself as the capital of AI).

February 2023

Inflationary pressure, supply uncertainty, geopolitical, economic, and ESG pressures caused a rethink of traditional global supply chain models. Linear, lowest-cost supply chains are giving way to more multi-dimensional supply networks that better balance risk, sustainability, speed, agility and cost. Companies need to rethink where they operate, the materials they source, the suppliers they buy from, and their physical supply footprint and operating model, argued EY.

March 2022

Quartz's Next 10 Years series examied the near future of business, which will almost certainly involve autonomous robots using artificial intelligence as key tools for changing the world. In fact, robots that automate recycling, run indoor farms, and help nurses on the front lines of healthcare are already out there, doing their thing. Quartz analysed how industries marked by rapid change are preparing for tomorrow.

January 2021

In 2021, companies and boards faced an acceleration of existing challenges and be compelled to address how they are building resilience and creating sustainable value in a rapidly changing business environment. EY believes that. with increased investor scrutiny and stakeholder considerations, company boards will need to focus on key priorities in 2021, including:
- Overseeing strategy to create long-term value
- Promoting enterprise resilience in the face of uncertainty
- Focusing on workforce transformation and new ways of working
- Leading on diversity, equity and inclusion
- Guiding an Environmental, Social and Governance (ESG) strategy that drives stakeholder engagement and value.

September 2020

Seeing a company’s role as just hitting next quarter’s earnings is really missing the boat, according to the president of Prairie View A&M University, in an interview: "The role of companies is to do more than just make money. You are preserving civil society. You’re advancing democratic values. You are helping people create wealth."
The harsh reality of the coronavirus has forced many businesses to consider what comprises their minimum viable company. “Companies are thinking about resilience in a very different way,” explained a consultant at Sungard, a cybersecurity company. Rather than recovery, people are thinking of resilience. “They’re thinking about it on many fronts: revenue resilience, data security and how can I continue my minimum viable company?”
Apple lost $179.92 billion in market value in one day in September 2020 – more than the combined market capitalisations of 470 of the 500 companies on the S&P 500 index. That doesn’t tell us much about Apple’s long-term value but it says something about Big Tech’s market dominance after this year’s wild bull run for companies that thrived rather than dived with Covid, noted Tortoise Media.

July 2020

The coronavirus pandemic has created a challenging operating climate for multinational companies. Lockdown measures and the collapse in global economic activity have ruptured the traditional arteries for foreign direct investment. A wave of new restrictive foreign investment policies worldwide has dampened the outlook further.

April 2020

The Economist reported on the shock ripping through the business world. With countries in lockdown accounting for over 50% of global GDP, the collapse in commercial activity was far more severe than in previous recessions. Numerous indicators suggest extreme stress. Global oil demand dropped by up to a third; the volume of new cars and parts shipped on America’s railways dropped by 70%. Many firms had only enough inventories and cash to survive for three to six months. The exit path for those that survive will be precarious, with uneasy consumers, an efficiency-sapping stop-start rhythm, and tricky new health protocols. In the long run companies will have to master a new environment. The crisis and the response to it are accelerating three trends: an energising adoption of new technologies, an inevitable retreat from freewheeling global supply chains and a worrying rise in well-connected oligopolies.

February 2020

Deloitte’s 2019 Millennial Survey found that millennials share a growing view that businesses focus on their own agendas rather than considering wider society - 76% agree with that sentiment — and that they have no ambition beyond wanting to make money (64% agree). It also is likely influenced by a continuing misalignment between millennials’ priorities and what they perceived to be business’s purpose.

December 2019

Further reading:
- Strategy is just as important as technology - Raconteur

November 2019

Further reading:
- How to Cultivate a Corporate Strategy to Serve All Stakeholders - BCG
- Management research is clear as mud - The Economist

October 2019

Further reading:
- Are academics lagging in debate on the future of business? - Financial Time

September 2019

Further reading:

July 2019

Further reading:

June 2019

Further reading:
- Five ways business can make a real difference - Raconteur
- Toxic workplaces can be found in every sector - The Economist

May 2019

For The School of Life, office life makes some peculiar demands on us. We cannot be properly ourselves, but nor can we be entirely faceless either. We may, for example, be asked to affect topics in which we all have a purely financial interest. We are likely to be a group of almost random strangers of varied ages and backgrounds who have only been temporarily aligned in the determined pursuit of money. But we are nevertheless, called upon to treat each other with a high degree of tolerance, kindness and empathy.
Further reading:
- Bureaucracy is holding business back: how to cut the red tape - Raconteur
- The Organisation of the Future - BCG

February-April 2019

Further reading:

January 2019

Over the next 10 years, the world of work is set to change rapidly. The World Economic Forum predicts that disruptive changes to business models will have a profound impact on the employment landscape. Sector by sector there is evidence of some industries beginning to change their models while others continue with business as usual.
Further reading:

November 2018

Incumbent businesses can learn a lot from nimbler competitors. No matter size or legacy, today’s organisations must rapidly react to consumer preferences and shifting market conditions, lest they fall behind. That’s where strategic agility comes in, suggested Quartz, inviting its readers to step into the role of COO and see if they could improve their company’s strategies with strategic agility.

October 2018

A recent book addressed such questions as: how do risk and complexity affect change strategy; why do some companies deliver 75% change success rates, and some 15% and what do leaders need to do to get maximum value from "big-data" implementations?
Benefit corporations are one product of a global re-examination of corporate models in recent years - from employee-owned companies to mutuals and co-operatives – after the financial and economic crisis. Now legal in some US states, benefit corporations have to take account of non-financial interests, such as social, environmental or community objectives.
A leading businesswoman believes a fundamental shift is coming in how we do business. We are on the cusp of change driven by a more female-centric set of working principles that consumers, as well as employees, are demanding. Characteristics like flexibility, intuition, empathy and resilience are powerful tools with which to create better businesses.
The Fortune Future 50 is a ranking of the global companies that show the best prospects for sustained growth. All of these companies demonstrate an impressive combination of strong execution capabilities and forward-looking strategic agility.
In How Vital Companies Think, Act, and Thrive, BCG argued that, to survive long term, companies need vitality - the capacity for growth and reinvention that creates an ongoing sense of urgency and the ability to address the challenges of lasting success.

September 2018

The FT believes big companies are bending themselves out of shape to behave like smaller enterprises. They are encouraging individual teams to take more decisions closer to the frontline. Agile management is all the rage. Head offices are either disappearing altogether or morphing into shared working spaces.
However,, the FT also noted that many millennials end up at big companies. A 2016 survey by the US think-tank the Economic Innovation Group and EY found nearly two-thirds of American millennials had considered starting their own business, but only just over a fifth believed entrepreneurship was the best way to advance their career. In fact, 44% thought staying with one company and working their way up the ladder - like their parents may have done - was the preferable route.
Further reading:
- Stakeholder theory: helping business do good and do well - Raconteur

August 2018

July 2018

June 2018

May 2018

April 2018

March 2018

February 2018

January 2018

December 2017

November 2017

October 2017

September 2017

August 2017

July 2017

June 2015

The Financial Times published an FT Focus - Asia special edition.

According to BankofAmericaMerrilLynch, for Asia Pacific’s most influential CFOs, 2015 will be a year of growth but will require a heightened level of courage, commitment and care to deliver on expectations. Change will be inevitable. Challenges will be multi-faceted. Risk and market volatility will remain a reality. But with an actively managed finance strategy and a clear understanding of the diverse headwinds, opportunities will materialise. These are some of the projections of Asia Pacific’s leading CFOs.

integrAsian, a new Economist Intelligence Unit study, sponsored by ANZ Banking Group, looked at how trade and investment ties between Asian economies are evolving, and the opportunities as well as risks this process is creating for the private sector. This report is based on a survey of senior executives at 525 companies in Australia, China, Hong Kong, India, Indonesia, Singapore and Taiwan, as well as interviews with business leaders and experts. It also examines how growing integration affects the business strategies of firms in the region through profiles of companies in three industries: information technology, consumer electronics and energy.

KPMG Australia announced a record 51 new partners and executive directors. The breakdown by line of service is as follows: Advisory 50% (dominated by management consulting and deal advisory); Private Enterprise 18%; Tax 18%; Audit 10% and Shared Services 4%.

A stronger-than-expected jump in mining exports helped Australia’s economy to expand by 2.3% in the first quarter compared with the same three months last year. Joe Hockey, the Treasurer, said the figures reflected the “deep resilience” of the economy. But with consumer spending still weak, the Reserve Bank of Australia erred on the side of caution and kept interest rates on hold at a record low of 2%.

China will increase support for cross-border e-commerce as the world's second-largest economy shifts from manufacturing to higher-value services, the government said. China's e-commerce industry has been booming in recent years, with companies like Alibaba Group Holding Ltd and JD.com Inc benefiting from a rising middle class with more disposable income. The government released policy guidelines that include tax policies aimed at boosting domestic consumption and pilot projects to ease overseas payments, according to a statement posted on the central government's website www.gov.cn.

According to Eurasia Group, China’s leadership is undertaking an historic reform agenda, seeking to overhaul political and corporate governance in order to shift toward more sustainable growth. To facilitate this process, senior leaders will work to strengthen their internal standing within the government and to bolster popular legitimacy by demonstrating progress on issues such as the environment and income inequality.

China aimed to pledge a multi-billion dollar investment in Europe’s new infrastructure fund at a summit in late June in Brussels, Reuters reported. The exact sum has yet to be decided. In return for the investment in Europe, China is expected to ask Europe to invest in its revival of the Silk Road. The “One Belt, One Road” initiative is expected to build energy and communications links such as railways, highways, oil and gas pipelines, power grids, Internet networks, maritime and other infrastructure links across Central, West and South Asia to as far as Greece.

The Economist Intelligence Unit now expects the Chinese economy to grow by 6.8% in 2015, as rising incomes support household spending growth but as slowing growth in investment - especially in property- holds back the pace of expansion. falling global oil prices and excess local industrial capacity will cause average consumer price inflation to slow to 1.2% in 2015, from 2.1% in 2014. The renminbi is expected to weaken against the US dollar in 2015, depreciating on an annual average basis for the first time since 1994.

Japan’s economy grew in the first quarter at a much faster rate than had been thought. A revised estimate found that GDP expanded by 3.9% at an annualised rate, up from the 2.4% that was first reported last month. Inventories remained very high, prompting more warnings about a possible oversupply of goods in the economy, but the upward revision also reflected a surge in business investment.

Deloitte appointed its first Asia Pacific leader to come from Japan. Yoichiro Ogawa, who has a 30-year career with Deloitte Japan, will serve a four-year term. In his role, Ogawa will be responsible for driving market leadership and quality across the region, strengthening the firm's brand and client services and identifying further growth opportunities while working with member firm leaders to enhance bonds and collaboration. In addition to the Asia Pacific regional leadership role, Ogawa will also become the Deloitte global managing director of regions and will serve as a member of the network's executive and operating committees. Ogawa's appointment is part of the new leadership team set up by Punit Renjen, Deloitte's global chief executive as of 1 June 2015.

May 2015

China’s state secrets are set to be more effectively secured with a far-reaching five-year state-run cybersecurity programme, announced against the ever-growing cyber confrontation with the US, The plan is expected to refocus software purchase of the national government agencies and institutions to domestically-developed products. State-owned enterprises, financial institutions and government departments should improve software security, said the director of the ministry's software bureau.

China will probably take a 25-30 % stake in the Asian Infrastructure Investment Bank and India is likely to be the second-largest shareholder. The bank will also be operational by the end of this year, prospective founding members said after meeting in Singapore to discuss policies. However, Japan then unveiled a plan to expand Japan’s financing for infrastructure projects in Asia by 30%, suggesting Tokyo’s intent to counter China’s push to spearhead a new regional investment bank.

See Oxford Economics Asian City Outlook May 2015.

PwC published its Japan Rebooted Series: ASEAN, the next frontier: Tapping Southeast Asia’s surging growth.

PwC's 0wn ASEAN, the next frontier found that Japan’s economy has just experienced its fastest quarterly GDP increase in over a year, based on first quarter numbers released by the government. This has raised hopes at home and abroad that the world’s third largest economy is on the road to recovery. To rapidly expand market share and insulate themselves from a stagnant domestic market, aging population and declining workforce, Japanese firms must increasingly look to emerging markets such as the ASEAN region for future growth. While Japan has traditionally been a strong FDI contributor to ASEAN, PwC believes that Japanese firms must continue to stride forward and seize this window of opportunity while it remains open.

Capital is flowing out of China at a record pace, sparking fears over financial stability and complicating efforts by the central bank to support a slowing economy with lower interest rates. China ran a balance of payments deficit of $80bn in the first three months of the year, the largest quarterly net outflow on record, according to official data. The outflows are all the more striking because China’s trade surplus remained strong over the period. As falling commodity prices slashed the country’s import bill, it recorded a $79bn current-account surplus - the largest in nearly five years.

Mainland China needs at least five million more qualified accountants if the country is to raise corporate governance standards, claimed the president of the Association of Chartered Certified Accountants (ACCA), who believes that China needs accountants for roles in government and regulatory organisations, as well as for private companies. The quality of Chinese accounting and audit standards has been called into question by international investors, following a series of scandals that have seen mainland Chinese companies listed overseas investigated for fraud or delisted.

Are your headquarters in the right place? If you are based in New York, London or Paris, you might want to start thinking about moving east, according to Tham Sai Choy, Asia-Pacific chairman of KPMG. Despite the rise in wages, Asia is the place to be, and the launch of the ASEAN Economic Community at the end of the year will make that abundantly clear, he told the Nikkei Asian Review.

Forum for the Future outlined seven trends that could make or break a sustainable future for Southeast Asia. It’s one of the fastest growing economic regions in the world, but rapid growth and the rising aspirations of a growing middle class is increasing pressure on natural resources. The area has lost 13% of its forests since 1992 - an area equivalent to the size of Vietnam, the UN Environmental Programme reported. The impacts of global deforestation on the climate will be felt close to home: the region is one of the world’s most vulnerable to climate change impacts, such as droughts, floods, typhoons, sea level rise and heat waves.

India signed trade and economic co-operation deals worth $22bn ($14bn) in Shanghai as PM Narendra Modi's visit to China drew to a close. The agreements cover a range of industries including renewable energy, the financial sector and ports, along with more agreements worth $10bn (£6.3bn) covering education, railways, and scientific research.

China is planning to invest up to $50bn (£32bn) in Brazil for new infrastructure projects. The deal was due to be signed by banks from both countries during a visit by Chinese Prime Minister Li Keqiang to Brazil. The money will go towards building a railway link from Brazil's Atlantic coast to the Pacific coast of Peru to reduce the cost of exports to China. The fund will also finance a joint venture to produce steel. Brazil currently exports much of its iron ore to China.

According to PwC's own Overview of the Philippine Economy report, in 2014, the Philippine economy generated a total gross domestic product (GDP), at current prices, of more than 284.5 billion U.S. dollars, a slowdown in growth rate to 6.1% from the 7.2% in the previous year. Independent commentators and analysts attributed much of the underperformance in growth to the drop in government spending. Indeed, in 2014 government final consumption expenditures only grew by 1.8%, a sharp slow decrease from the 7.7% growth rate in 2013.

In Australia, PwC holds the lion's share of big listed company audits. It performs 58 of the ASX 200 audits, worth $228 million in combined fees. PwC also generates the most revenue per audit, earning $4.1 million for each engagement on average, according to UNSW's analysis. (See also PwC's CEO Insights blog post - Future-proofing Australia’s workforce.)

Strategy& worked with the World Economic Forum to develop and launch the Emerging Best Practices of Chinese Globalizers: Develop the Innovation Models report. This is based on a series of interviews and surveys of 120 Chinese globalising companies conducted over the past 12 months. Half of the surveyed companies are regarded as globalisation champions within China that have outpaced their peers in establishing global presence.

China has for the first time overtaken the United States as Australia's largest source of foreign investment, according to official data, laying out Aus$27.7 billion (US$21.8 billion) in 2013-14 as real estate purchases more than doubled. Chinese spending in Australia for the year ending June 30, 2014 far outstripped the Aus$17.5 billion from the United States - which was the biggest investor for more than a decade - and Canada's Aus$15.4 billion, the Foreign Investment Review Board (FIRB) said in its annual report.

The Industrial and Commercial Bank of China signed a deal to invest US$26 billion in Equatorial Guinea. The ICBC, China’s biggest lender, said most of the fund will go to providing infrastructural and financial support for the Equatorial Guinea government and Chinese enterprises located in the country. The pact, which marked another of the many spending sprees of China into Africa, follows a state visit paid by the President of the Republic of Equatorial Guinea to Beijing.

April 2015

A Chinese state-owned rail company signed $5.5bn worth of contracts in Africa, in the latest sign that the country’s “New Silk Road” strategy to build infrastructure around the developing world is showing tangible results. African units of China Railway Construction Corp will build a $3.5bn intercity rail line in Nigeria and a $1.9bn residential real estate project in Zimbabwe, the company said in exchange filings.

Thailand’s central bank reduced its key rate to 1.5% to boost the country’s flagging economy.

The EIU forecast that Chinese economic growth will slow to 7% in 2015, but lower inflation will provide support to real household consumption. ThePeople’s Bank of China may cut interest rates again in the second quarter of 2015, in order to offset the effects of slowing inflation, but monetary policy will remain fairly tight. Owing partly to lower global oil prices and also to excess supply in the economy, the EIU expects annual consumer price inflation to an average of 1.2% in 2015.

Fitch slashed Japan’s sovereign rating from A plus to A, judging the world’s fourth-largest economy a worse credit risk than Malta or Estonia. The credit rating agency said it acted because the government of Shinzo Abe did not offset the lost revenue from last year’s delay in raising consumption tax.The downgrade is unlikely to have much immediate effect - domestic confidence in Japan’s public debt has survived bigger shocks - but it highlights a steady deterioration in the country’s public finances at a time when the central bank has embarked on an unprecedented Y80tn ($670bn) a year bond-buying programme.

China's factory activity declined at its fastest pace in a year, according to HSBC/Markit's Purchasing Managers Index. PMI fell to 49.2 in April, beneath the 50-point level that separates growth from a contraction. Factories reported a second consecutive month of falling volumes of new orders, causing production to more or less stagnate. The weakening order book trend signalled an increased downturn in domestic demand.

The Boao Forum for Asia Competitiveness Report 2015 showed that the “Four Dragons of Asia,” namely Singapore, Hong Kong of China, South Korea, and Taiwan of China, kept their lead as the top four.

According to a new report, in the first quarter of 2015, 34% of business leaders in mainland China were optimistic in the economic outlook over the next 12 months, up from 25% in Q4-2014. Expectations toward profitability also rose accordingly. Some 30% of businesses expect to increase profits, and 38% anticipate revenues to go the same way, up from 13% and 37% over last quarter respectively. Businesses are also planning an increase in investment. Expectation for investment in new buildings (23%) and in plants and machinery (31%) both increased from 10% and 27% of last quarter.

Official data revealed that Chinese exports fell 15% in March compared with the same month last year. This means export growth over the first quarter of the year, which saw double digit growth in January and February, slowed to 4.7% compared with Q1 2014, and 8.7% compared with Q4 2014. Imports also fell over the month, down 12.3%, while the nation’s trade surplus stood at $3.1bn, considerably below expectations. Bloomberg chief Asia economist Tom Orlik said that China’s government will look to cut interest rates to ease domestic conditions as a response.

After some delay China at last announced that it would implement a deposit-insurance scheme starting on May 1st. By setting limits to the protection of savers, this is an important advance in the government’s promise to liberalise the financial system and encourage competition among banks. The scheme will insure bank deposits of up to 500,000 yuan ($81,000), which should cover up to 98% of accounts.

Taiwan applied to join the new Asian Infrastructure Investment Bank, a rival to the World Bank that has been devised and will be unofficially led by China. More than 40 countries, including Britain, Germany and Russia, have signed up to the AIIB, despite American misgivings about its openness and creditworthiness. China was cool to the idea of admitting Taiwan: a foreign-affairs spokesman said Beijing wants “to avoid the two Chinas…situation”.

EY added 55-lawyer South Korean firm Apex Legal to its legal network, as it looks to expand its footprint across the Asia-Pacific network. The planned 200-strong network of lawyers will span key commercial centres throughout the Asia-Pacific region, and the next step is likely to be in Hong Kong. Talks are also due to start with two small firms in Malaysia. Last year, EY added Shanghai-based law firm Chen & Co and Singapore law firm PK Wong & associates to its network. It also has legal services capability in Vietnam, as well as member law firms in India and Japan.

Inflation in South Korea fell to a 16 year low of 0.4% in February, while the country reported its largest ever trade surplus last month of $US8.4 billion as imports and exports fell.

March 2015

A new Financial Times report on Japan, jointly produced with Nikkei, asked whether success in reigniting growth and dealing with Japan’s public debt would allow a happier, more optimistic country to emerge.

Australia’s GDP increased by 0.5% q/q and 2.5% p.a. in Q4 2014, below the long-term average growth rate of around 3.25% p.a. (inflation adjusted and seasonally adjusted), but not much lower than the average GDP growth rate since 2010 (2.7% p.a.).

China will target economic growth of “around 7 per cent” this year, Premier Li Keqiang told parliament, signalling that the leadership expects the country’s economy to slow further following the slowest expansion for 24 years in 2014. The country, which has enjoyed some of the fastest growth rates in the world in the past two decades or so, is now slowing as it approaches middle-income levels. Mr Li reiterated Beijing’s refrain that economic development has entered “a new normal”

China's state owned banks are about to begin the painful process of writing off billions of dollars in bad debts, as Beijing seeks to avoid Japanese-style stagnation from a failure to address problem loans. Accounting firms in China are preparing for a spike in bad loans this year and fear it may further destabilise China's already-slowing economy.

February 2015

2014 figures from the Chinese Institute of Certified Public Accountants suggest China has 8,295 accounting firms, 86 more than a year prior, providing services to more than 2,500 listed companies & 4.2 million businesses and government agencies. Only six of these firms have revenue greater than 2 billion yuan ($326 million) and 46 have revenue greater than 100 million yuan.

Japan’s economy emerged from recession in the fourth quarter of 2014, but even after two years of Abenomics is still struggling for momentum. Overall growth for the year was zero. According to new data, the economy grew at an annualised pace of just 2.2 per cent in the final quarter, well below analyst forecasts. Quarter-on-quarter growth of 0.6% compared with expectations of 0.9%.

The China affiliates of the Big Four agreed to pay a combined US$2 million as part of a settlement with the US SEC over their failure to produce documents from audits of Chinese companies. But the SEC stopped short of suspending the firms from auditing Chinese companies listed in the US. An administrative law judge called for a six month suspension from such work. In a joint statement, the four Chinese firms said they were “pleased” to have reached the settlement and added that their “ability to continue to serve all their respective clients is not affected by this settlement.”

China's largest legal practice, Dacheng Law Offices, and multinational law firm Dentons agreed to merge, creating the world's largest law firm, with more than 6,500 lawyers in 50 countries.

January 2015

Investing into Asia’s reform landscape: Asia Business Outlook Survey 2015 is an Economist Corporate Network report. It is based on a survey of more than 700 business leaders from across the Asia Pacific region.

In Singapore, KPMG outlined plans to grow its capabilities in cyber security, energy trading and international tax. The firm says there is a global shortage of talent in these areas and plans to invest $15 million, recruiting 50 new staff with the relevant specialist skills.

China’s economy grew at its slowest pace in nearly a quarter of a century last year, even as it overtook the US to become the world’s largest in purchasing power terms. The annual expansion of 7.4% in 2014 is the slowest since 1990, when the country faced international sanctions in the wake of the 1989 Tiananmen Square massacre.

The inaugural Australia Industry Report 2014 provided an overview and analysis of the major economic factors affecting Australia’s industries. It finds that "business services" is now the largest sector in the country and that Australia is well on the way to responding to the 21st century's challenges of the rapid expansion of China, an ageing population and technological disruption.

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