Emerging Global Trends: A Q&A with Erik R. Peterson

 

September 27, 2019
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​Erik R. Peterson, partner and managing director of A.T. Kearney's Global Business Policy Council and a speaker at this year's Society for Human Resource Management (SHRM) Global Mobility and Immigration Symposium, has devoted more than two decades to assessing long-range global trends and determining what they mean for government and business leaders. A former senior vice president at the Center for Strategic and International Studies and former director of research at Kissinger Associates, Peterson answered some of SHRM Online's questions on emerging global trends.

What are some top long-range global trends that business leaders face?

Peterson: Virtually all of the trends seem to be focused on four key forces of disruption.

The first is the profound change in the global economy. After a quarter century of rapid globalization, a number of indicators now suggest we are entering a "post-global" period marked by higher levels of protectionism and mercantilism. Much of this is keeping business leaders awake at night. They need to weigh whether they should rework the extended supply chains they built during the rapid-globalization years; how they should customize their operations at every node of their global value chains to account for local requirements, what we call "multi-local" strategies; and what tech advances might change the rules of the game in their respective sectors and what disruptions—including onerous national government policies and regulations—might affect their future operations.

There is also the human capital dimension, starting with shifts in the international flows of workers. These kinds of decisions will be all the more difficult as the global economy continues to slow down, as we predict it will.

Second, business leaders are intensely focused on the impact of technology and what company-level transformations they need to carry out to keep their core competencies and competitiveness—no small task, especially in the face of amazing and sometimes game-changing tech discoveries and innovations. In many cases, this is "end-to-end" work requiring significant transitions in virtually every stage of business. Beyond that, they also need to account for the big international competition for dominance in tech and where their companies fit into that environment.

Third, global corporations are concerned about geopolitical trends—and for good reason. Last year, for the second year running, our annual survey of global CEOs revealed that executives regarded an unstable geopolitical environment as their top risk. The rationale goes well beyond the headlines. Aside from concern among business leaders about the instability—and uncertainty—that are part and parcel of geopolitical developments in many corners of the planet, there is also concern that the foundations for global commerce are fraying.

Finally, a growing number of companies are thinking long and hard about trends in the physical environment. This runs the gamut, from climate change to deforestation to water scarcity to loss of biodiversity, among others.

[SHRM members-only toolkit: Introduction to the Global Human Resources Discipline]

What are some of the emerging challenges for employers?

Peterson: First, employers continue to face the already huge and still growing challenge of attracting and retaining good workers. For starters, that means creating and maintaining a workplace that has a competitive advantage. The SHRM Global Mobility and Immigration Symposium will throw the spotlight on whether the major economies will change their practices when it comes to worker mobility.

Second, employers are under increasing pressure to address social issues outside the traditional purview of business. We are currently in a fundamental—and welcome—rethink about the very nature of business and whether it should go beyond the long-standing goal of focusing exclusively on increasing shareholder value.

Third, in one way or another every employer will be challenged with how—and how fast—they adopt new technologies. In some cases, tech and digital transformations will be a force multiplier with positive and significant reverberations for all stakeholders. In other cases, as the current debate over artificial intelligence and worker dislocation constantly emphasizes, [adopting new technologies] will be a tremendous challenge to both employers and employees.

Fourth, shifting demographics have to be a major preoccupation for employers. It starts with generational cohorts of workers with profoundly different styles and expectations. It also translates into wholesale changes in consumer preferences and consumption patterns.

Finally, in my view, employers need to focus on the stability of the operating environment. The level of ongoing change—demographics, macroeconomics, geopolitics, social institutions, technology—is so significant that we could see core shifts in the way people live, consume, work and interact with one another. It could also change the balance between governments and the private sector.

What is the "fourth industrial revolution," and how will it affect HR and managers around the globe?

Peterson: The first Industrial Revolution occurred at the end of the 18th century with the introduction of rudimentary mechanical engineering. The second revolution came at the beginning of the 20th century with the arrival of mass manufacturing and the assembly line. In the 1970s, as many of us remember, the electronics industry triggered the third revolution. Now we are reaching what Klaus Schwab, the founder and executive chairman of the World Economic Forum, has coined the "fourth industrial revolution" of ubiquitous connectivity between devices and the rapid rise of artificial intelligence and other exponential technologies, including the Internet of things, advanced robotics, 3-D printing and augmented reality.

The 4IR [fourth industrial revolution] phenomenon, all hype aside, is a really big deal. We believe that these technologies are each in takeoff mode, and the impact of simultaneous advances will affect business leaders, HR, workforces, managers and others around the world. How? First, it could change the very nature of how we work, how we produce, how we consume, how we learn, how we entertain ourselves and how we interact with one another. Second, there is a massive global contest already underway on how ready economies are for the 4IR.


Register to hear Peterson and many other global experts at the SHRM Global Mobility and Immigration Symposium, Nov. 3-6, in Washington, D.C.

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