Summary of the Book "No Ordinary Disruption"

 Dear Readers, today I wanted to discuss the expanded summary of the book "No Ordinary Disruption" by Richard Dobbs, James Manyika, and Jonathan Woetzel, which mainly focuses on the four global forces of disruption. Our intuition is based on the previous experiences and our assumption of the continuity of the past. However, it is not true with the four forces effecting the globe that are as follows:

The rise of the emerging markets

The acceleration of the impact of the technology

The aging world population

The greater global connections

The Rise of Emerging Markets

The first force is the rise of emerging markets. This refers to the significant economic growth and development occurring in countries like China, India and Brazil. In the beginning of the first century the economic activity was mainly in the central Asia and it moved gradually to west until 1950s. However, in the last half of the 20th century the economic activity started to travel back to the origins. These markets are rapidly expanding and are expected to contribute a substantial portion of global economic growth in the coming years. For example, the city of Tianjin in China is projected to have a GDP equal to that of Sweden by 2025. Additionally, India is expected to add 300 million new workers to its labor force by 2030 which will significantly impact global labor markets. This shift is creating new opportunities for businesses but also requires them to adapt to different consumer preferences and competitive landscapes. 

More than half of the world’s large companies will be located inside these emerging markets. The companies are more successful if they just don’t invest in the country but also to give freedom to the local leaders to manage the business in the local market rules. Between 1990 and 2025 3 billion people will join to the consuming class (can spend 12$/day). The total amount of people in the consuming class represent more than half of the world population. The emerging economies have shifted to the middle class. Many of the new consumers will come from the middle weight cities which were not known by the world before.

The Accelerating Impact of Technology

The second force is the accelerating impact of technology. Technological advancements are happening at an unprecedented pace, transforming industries and creating new business models. For instance, the rise of artificial intelligence and automation is revolutionizing sectors like manufacturing, healthcare, and finance. Companies like Tesla are leveraging AI to develop self-driving cars, which could significantly reduce traffic accidents and change the way we commute. Additionally, the use of big data analytics is helping companies like Amazon optimize their supply chains and improve customer experiences. However, this rapid technological change also poses challenges, such as the displacement of workers and the need for new skills. The competition doesn’t come from the incumbents but from the new players. 75% of S&P 500 will have been replaced by 2027. New business models have boosted the incomes of the new entrants. 1- the advertisement revenue, 2- subscriptions, 3- B2B offerings. 

The Aging World Population

The third force is the aging world population. Fertility is falling and the population is graying. The portion of the gray workforce will ve higher in the following periods. The retirement age will be expected to rise due to the demographic changes. Plus, flexible work arrangements might be done for the experienced and retirees. Some companies like Toyota have implemented reemployment programs that the retirees can apply for jobs in these companies. Moreover, as the people get older they will have more assets and disposable income. It will be more important than today to serve these old customers. 

As the country become wealthier, their population become less fertile. Many countries are experiencing a demographic shift, with a growing proportion of their populations being elderly. In 2013 60% of the world population was living on the countries where the fertility rate is below the replacement rate. This trend is particularly pronounced in developed nations like Japan and Germany, where the workforce is shrinking, and the demand for healthcare services is increasing. For example, Japan's population is expected to decline by nearly 20% by 2050, leading to a smaller labor force and greater pressure on social security systems. Additionally, the United States is projected to have more people over the age of 65 than under the age of 18 by 2035. Businesses and governments need to find ways to support an aging population while maintaining economic growth. Without migration and policy changes many countries will see their labor force will shrink drastically. 

The Greater Global Connections

The final force is the greater global connections. This refers to the increasing flows of trade, capital, people, and data across borders. Globalization has made the world more interconnected, allowing businesses to access new markets and resources. For example, the rise of e-commerce platforms like Alibaba has enabled small businesses in remote areas to reach customers worldwide. Additionally, the flow of data across borders has increased exponentially, with companies like Facebook and Google facilitating global communication and information sharing. However, this interconnectedness also means that disruptions in one part of the world can have far-reaching impacts, as seen during the COVID-19 pandemic. Moreover, since the external environment gets more volatile, the capital market fluctuations became more volatile in the latest decade. Since the world is becoming more wealthier, the consumption has increased and this has directly affected the resource prices. The Arab Spring was mainly triggered by the increase of the cost of the food. In 2008 alone, more than 60 food riots occurred in thirty countries. The misuse of the resources has become more important and the countries started to act in order to lower the waste. Like in South Korea. SK has banned the banchan which is a traditional side food to save more than 800 million USD. It was easy to replenish the employment after the crises happened in the world. But, to replenish the employment, it started to take longer periods. If we classify the jobs into three; 1- interactions, 2- transactions and 3- productions, the new jobs are mainly opening for the first one. Especially in production, there is no new job opening because there is excess supply. Skill gap results with unemployment. STEM graduates find several job offerings where the others get unemployed. Smart technologies can be used to fill the gap of unskilled labors. 

Solutions

To address these disruptive forces, the authors propose several solutions. First, they emphasize the importance of adaptability and continuous learning. Individuals and organizations must be willing to embrace change and acquire new skills to stay relevant in a rapidly evolving world. For example, companies can invest in employee training programs to help workers transition to new roles created by technological advancements. Second, they advocate for sustainable and responsible business practices that prioritize long-term growth and social impact over short-term profits. This includes adopting environmentally friendly practices and supporting local communities. Third, they highlight the need for collaboration across sectors and borders to tackle global challenges effectively. Governments, businesses, and non-profit organizations can work together to address issues like climate change and income inequality. Finally, they stress the importance of leveraging technology to drive innovation and improve efficiency while addressing ethical concerns related to privacy and security. For instance, companies can use big data analytics to optimize their operations and better understand customer needs. 

Moreover, the governments might enact the following policies:

Labor policy in a time of global consumption and technology disruption.

Fiscal policy in a time of aging populations and raising capital costs.

Trade, immigration and monetary policy in a time of global integration.

By understanding and addressing these four forces of disruption, individuals and organizations can better navigate the complexities of the modern world and seize the opportunities that arise from these fundamental shifts.