McKinsey was the exclusive knowledge partner for this year’s Bloomberg New Economy Forum, which works to unite leaders of developed and emerging economies so they can foster sustainable and inclusive growth. Over four days in Singapore last month, business executives, policy makers, scientists and other leaders were joined by our colleagues to address topics including health, the climate, trade, finance, inflation, and the future.
Read on for edited highlights from our delegates’ takeaways or head to our Future of Asia page to watch them all.
Tracy Francis on growth, tech, and the road to net-zero
We know that organizations that, throughout downturns, are able to both manage resilience and growth emerge significantly stronger than their competitors. So, thinking about, "What are the avenues for growth at this time?” is really important. We are at a moment where tech is obviously critical to everything. There’s talent that’s more available than ever before. And so, particularly for incumbents, there’s a moment to really double, triple down on the elements of tech.
It has become absolutely clear that net-zero also needs to come in a way that is providing energy that is both affordable and accessible to folks. For companies to think through, "What is their path to net-zero, and are there a series of actions that can be taken now that are actually relatively lower CapEx and relatively easier but get them some way along the journey?” is a really important reflection.
Watch: Navigating volatility: Six trends businesses should look out for
The most important imperative is to build resilience. And when I say resilience, I mean both institutional resilience and individual resilience. Institutional resilience means the ability to play both defense and offense. By defense, I mean the “no regret” moves like cost optimization, restructuring, realigning your supply chains, or embedding data and technology into everything you do. When I say offense, I mean mergers and acquisitions, building new businesses, and entering new geographies and product lines. Every leader must think about both defense and offense to build institutional resilience.
When I talk about individual resilience, I mean maintaining your energy—your mental, physical, spiritual, and emotional energy. I mean really leading with a sense of purpose not just for yourself, but also to give your employees and people a sense of purpose because we are also facing a war for talent.
Watch: How companies can build institutional and individual resilience
Dymfke Kuijpers on being a business “triathlete”
In today’s world you need to be triathlete. You need to have three mindsets: one of growth, one of frugality, and one of learning. You need to find the growth and go for it. But at the same time, you must take out cost where it doesn’t add any value to reinvest it back into innovation and growth. Then there is learning. We’re living in times that are so uncertain unless you have a very open mindset.
As a CEO and as a leader, understand that you don’t know what you don't know. You can react fast but also use data to be more ahead of competition so you’re not only fast, but you’re faster than competition. Consumers see zero boundaries between the physical and online. As a consumer company, where are you in that ecosystem? Where am I building brands, where am I selling, and how do I play in that zero-boundaries world?
Watch: How consumer companies can embrace change amid volatility
One of the big questions that business leaders have these days is whether we are heading towards a deglobalized world. Our research highlights that we still remain in a deeply connected world, but the fabric of that connection is changing towards more intangibles and knowledge-driven flows. With this in mind, leaders can explore a couple different actions.
One opportunity is to enhance resiliency for your business. We identified the risk associated with concentration. We analyzed about 6,000 globally traded products and found out that about 20 percent of the products in terms of quantity, and 10 percent in terms of value, are highly concentrated. This means fewer than three countries account for almost all global exports. So, how do you manage this concentration through diversification or substitution? Sometimes, building a long-term relationship with your core suppliers will be very critical.
Watch: Capturing opportunities in an interconnected world
Oliver Tonby on where businesses should invest right now
I think business leaders now need to get sharper views. What do I mean? It’s very important that companies are robust in face of the uncertainty that’s coming. So as a CEO, as the top team, you want to know the capital that your company is going to require in the next three, 12, 24 months. You want to know what portfolio projects you have already committed to, the ones that have potential, next generation, and so on.
We know that there are going to be trillions of dollars required because of the energy transitions that are happening, driven by climate change and the sustainability revolution. We know that there’s a ton of opportunity coming from next-generation technology and digital analytics. So, be ready to invest behind those. But let’s also be clear, know where to invest in the value chain. What are the choke points in that value chain? That’s where you want to be investing behind.
Watch: Placing a premium on resilience: How businesses can thrive through volatility
I think banks have seen tailwinds coming through from high-interest rates and high margins, and costs have generally been under control. The risk environment has been the lowest that banks have experienced. It’s been a fantastic run for banks around the world.
In some ways, the opportunity that banks have had in the last 12, 18 months should give them the breathing room to adjust to some of these changes. I would say don’t miss the oxygen that exists. Take advantage of the oxygen to invest in building a franchise which will be more stable and sustainable in the future. So, invest in new technologies. Invest in new talent. Invest in the digital transformation of your business. Make sure you are raising enough capital to secure yourself in bad times. And over and above this, make sure that your purpose and your focus remains resolute.
Watch: Bracing for headwinds: How banks can navigate disruption