No Ordinary Disruption: The Four Global Forces Breaking All the Trends

by Richard Dobbs, James Manyika, Jonathan Woetzel

Overview

Our intuition on how the world works could well be wrong. We are surprised when new competitors burst on the scene, or businesses protected by large and deep moats find their defenses easily breached, or vast new markets are conjured from nothing. Trend lines resemble saw-tooth mountain ridges.

The world not only feels different. The data tell us it is different. Based on years of research by the directors of the McKinsey Global Institute, No Ordinary Disruption: The Four Forces Breaking all the Trends is a timely and important analysis of how we need to reset our intuition as a result of four forces colliding and transforming the global economy: the rise of emerging markets, the accelerating impact of technology on the natural forces of market competition, an aging world population, and accelerating flows of trade, capital and people.

Our intuitions formed during a uniquely benign period for the world economy — often termed the Great Moderation. Asset prices were rising, cost of capital was falling, labour and resources were abundant, and generation after generation was growing up more prosperous than their parents.

But the Great Moderation has gone. The cost of capital may rise. The price of everything from grain to steel may become more volatile. The world's labor force could shrink. Individuals, particularly those with low job skills, are at risk of growing up poorer than their parents.

What sets No Ordinary Disruption apart is depth of analysis combined with lively writing informed by surprising, memorable insights that enable us to quickly grasp the disruptive forces at work. For evidence of the shift to emerging markets, consider the startling fact that, by 2025, a single regional city in China — Tianjin — will have a GDP equal to that of the Sweden, of that, in the decades ahead, half of the world's economic growth will come from 440 cities including Kumasi in Ghana or Santa Carina in Brazil that most executives today would be hard-pressed to locate on a map.

What we are now seeing is no ordinary disruption but the new facts of business life — facts that require executives and leaders at all levels to reset their operating assumptions and management intuition.

Product Details

ISBN-13:	9781469061634
Publisher:	Gildan Media Corporation
Publication date:	07/14/2015
Edition description:	Unabridged
Product dimensions:	5.30(w) x 7.40(h) x 0.60(d)

About the Author

Richard Dobbs, James Manyika, and Jonathan Woetzel are the directors of the McKinsey Global Institute, the business and economics arm of the global management consulting firm McKinsey & Company.

Richard Dobbs, based in London, has led research on global economic trends, including urbanization, resource markets, capital markets, lifestyle diseases, productivity, and growth. He is a coauthor of Value: The Four Cornerstones of Corporate Finance and has taught at the Said Business School at Oxford University.

Dr. James Manyika, based in Silicon Valley since 1994, has led research on the global economy, disruptive technologies, the digital economy, and productivity. He is the author of a book on robotics as well as technical and business articles. He was appointed by President Obama as the vice chair of the President's Global Development Council. He is a senior fellow at the Brookings Institution, and is on advisory boards at Harvard, UC Berkeley, and Oxford, where he was a research fellow.

Dr. Jonathan Woetzel, based in China since 1985, has led research on urbanization, the global economy, sustainability, and productivity. He also leads McKinsey's Cities Special Initiative and is cochair of the Urban China Initiative. He has authored four books on China, including The One Hour China Book, and is an adjunct professor at the China-European International Business School.

Table of Contents

An Intuition Reset 1

Part I The Four Disruptive Forces

1 Beyond Shanghai: The Age Op Urbanization 15

2 The Tip Of The Iceberg: Accelerating Technological Change 31

3 Getting Old Isn't What It Used to Be: Responding to the Challenges of an Aging World 53

4 Trade, People, Finance, and Data: Greater Global Connections 71

Part II Intuition Resets

5 The Next Three Billion: Tapping the Power of the New Consuming Class 93

6 Reversing the Cycle: Resource Opportunity 111

7 End of an Era: Farewell to Increasingly Cheaper Capital? 131

8 The Jobs Gap: Overcoming Dislocation in the Labor Market 149

9 From Minnows to Sharks: Rise of New Competitors and a Changing Basis of Competition 165

10 Policy Matters: Challenges for Society and Governance 181

Concluding Thoughts 201

Acknowledgments 209

Notes 213

Selected Bibliography and Further Reading 253

Index 259

Editorial Reviews

A BookPal Best Business Book of 2015

“Danger! Opportunity! In this snack from the business-class galley, three McKinsey Global Institute researchers serve up a view of a future that ‘presents difficult, often existential challenges to leaders of companies, organizations, cities, and countries.'… Libertarians may squall, but investors just beginning to look at emerging market trends may find value in this book.” –Kirkus Reviews

“An intriguing work for those interested in the business impacts of globalization.” –Library Journal

“What's unique is how the book ties these four major forces together in a book that's packed with insights and anecdotes while remaining free of management-speak…What this book excels at is quickly summarizing these forces and the challenges they pose to businesses and policy makers. And using real-world examples to illustrate these forces.” –Global by Design

“Richard Dobbs, James Manyika and Jonathan Woetzel offer a stimulating analysis of the major trends that might make or break nations. By combining data from disparate fields, they make a compelling argument about the disruptive forces that are re-shaping the world before our eyes.” –BusinessWorld

"No Ordinary Disruption is no ordinary management book. Everyone in and around business and technology has heard about disruption for awhile now, but the way Dobbs, Manyika and Woetzel dissect the phenomenon and give it meaning is truly new and exciting. They not only provide a prescient diagnosis of what's to come, but also offer compelling thoughts on how we succeed in a world that's moving faster and faster every day. The massive changes they describe can be overwhelming, but they do a remarkable job of inspiring us to confront them with intellect, humanity, and a profound optimism about our future." –Eric Schmidt,Google Executive Chairman

"A compelling and rigorous illustration of how the pace of change in the last two decades has grown by orders of magnitude. Leaders from all spheres must now face up to these developments, and change their old models and processes for decision-making to handle the massive increase in shorter term volatility -- while still keeping their eyes on the longer term. Important reading for policy-makers, financiers, industrialists and NGOs interested in updating their worldview and making it fit for modern purpose." –Andrew Mackenzie,CEO of BHP Billiton

“A timely and important analysis of how we need to reset our intuition as a result of four forces colliding and transforming the global economy...What sets No Ordinary Disruption: The Four Global Forces Breaking All the Trends apart is depth of analysis combined with lively writing informed by surprising, memorable insights that enable us to quickly grasp the disruptive forces at work.” –ValueWalk

“As a new book, titled No Ordinary Disruption, based on research by the directors of the McKinsey Global Institute, notes: ‘A radically different world is forming. The operating system of the world is being rewritten even as we speak. It doesn't come in a splashy new release. It evolves, unfolds, and often explodes.' Authors Richard Dobbs, James Manyika and Jonathan Woetzel add: ‘Technology–from the printing press to the steam engine and the Internet–has always been a great force in overturning the status quo. The difference today is the sheer ubiquity of the technology in our lives and the speed of the change.'” –Singapore Straits Times

From the Publisher

04/01/2015
Technology and extreme growth in developing countries is changing the marketplace and challenging years of conventional market wisdom, with emerging-market companies able to challenge world markets faster then ever. Coauthors Dobbs, James Manyika, and Jonathan Woetzel, directors of the McKinsey Global Institute, identify four disruptive forces creating a dramatic transition in the world economy, a transition they argue will have a greater impact than the industrial revolution. The forces include the shifting of economic activity from the developed to the developing world, the speed and economic impact of technological advancement, changing world demographics as birth rates decrease, and global interconnectivity—allowing for competition from every corner of the world. The authors state that this work is not intended as a business self-help guide with steps to follow. Instead, they defend their claims while utilizing a multitude of examples from Facebook and WeChat to textile companies, thereby illustrating unexpected market challenges and the impact of technology. VERDICT While, as the authors acknowledge, this is not a how-to resource, it is nonetheless an intriguing work for those interested in the business impacts of globalization.—Casey Watters, Shanghai Jiao Tong Univ.

Library Journal

2015-03-15
Danger! Opportunity! In this snack from the business-class galley, three McKinsey Global Institute researchers serve up a view of a future that "presents difficult, often existential challenges to leaders of companies, organizations, cities, and countries." Creative destruction is one thing. Plain old destruction is quite another, and in the modern marketplace, it's not always easy to tell the two apart. "Ours is a world of near-constant discontinuity," write Dobbs, Manyika, and Woetzel, which will come as little comfort to those seeking peace and quiet. It's a world of interrupted development, disequilibrium, and a thorough overhaul of whatever once passed for normal. The United States is now exporting oil, India is emerging as a leader in space exploration, and China is developing a large consumer class with new holidays such as Singles Day, a kind of antidote to Valentine's Day. Trend watchers who read the Financial Times and the Economist will know all this, but readers who don't bother to look far beyond our shores may be a little disquieted to learn that part of the disruption is a remaking of the world's emerging markets, especially in unexpected places and to unexpected ends. "Seven emerging markets," write the authors, "will be fueling almost half of all global GDP growth over the coming decade," the news there being that Indonesia and Turkey now figure on the list. Other pieces of the authors' puzzle should surprise no one: the world, for instance, is getting grayer, they observe. Some of the authors' closing recommendations are standard business dictums: get more agile, get smarter. But some go deeper, such as the idea that government regulation, so often the bugaboo of the financier class, can actually be put to advantage to "set standards and define the rules of conduct and markets." Libertarians may squall, but investors just beginning to look at emerging market trends may find value in this book.

Kirkus Reviews