The workforce of the future - EY

Professor Tassu Shervani

The workforce of the future

Our time together will focus on….

► Global demographic trends and workforce implications

► Economic trends driving a relook at workforce issues

► Technology trends reshaping the workforce and employer-

employee relations

Global flows continue to outpace global GDP growth, despite the financial crisis and slow recovery

Remittance flows are larger than ODA, and more stable than private capital flows

World Bank “Migration and Remittances: Recent Developments and Outlook” Special Topic: Financing for Development, April 13, 2015, p. 5

Our time together will focus on….

► Global demographic trends and workforce implications

► Economic trends driving a relook at workforce issues

► Technology trends reshaping the workforce and employer-

employee relations

The most important number today…..

2.1

Fertility by Continent

Total fertility per woman

1970-1975 1990-1995 2005-2010 2010-2015 2025-2030

WORLD 4.4 3 2.5 2.5 2.4

AFRICA 6.7 5.7 4.9 4.7 3.9

ASIA 5 3 2.3 2.2 2

EUROPE 2.2 1.6 1.5 1.6 1.7

LATIN AMERICA AND THE CARIBBEAN 5 3 2.3 2.2 1.9

NORTHERN AMERICA 2 2 2 1.9 2

OCEANIA 3.2 2.5 2.5 2.4 2.3

UN World Fertility Patterns, 2013 - www.unpopulation.org

Africa

Total fertility per woman

1970-1975 1990-1995 2005-2010 2010-2015 2025-2030

AFRICA 6.7 5.7 4.9 4.7 3.9

Sub-Saharan Africa 6.8 6.2 5.4 5.1 4.1

Eastern Africa 7.1 6.4 5.4 4.9 3.8

Middle Africa 6.4 6.9 6.2 5.7 4.4

Northern Africa 6.4 4.1 3.1 3 2.6

Southern Africa 5.6 3.5 2.6 2.5 2.1

Western Africa 6.8 6.4 5.7 5.6 4.7

UN World Fertility Patterns, 2013 - www.unpopulation.org

Asia

Total fertility per woman

1970-1975 1990-1995 2005-2010 2010-2015 2025-2030

ASIA 5 3 2.3 2.2 2

Eastern Asia 4.4 2 1.6 1.7 1.7

South-Central Asia 5.5 3.9 2.7 2.5 2.2

Central Asia 5 3.5 2.7 2.6 2.3

Southern Asia 5.6 3.9 2.7 2.5 2.2

South-Eastern Asia 5.5 3.1 2.4 2.2 2

Western Asia 5.7 4 2.9 2.7 2.4

UN World Fertility Patterns, 2013 - www.unpopulation.org

Europe

Total fertility per woman

1970-1975 1990-1995 2005-2010 2010-2015 2025-2030

EUROPE 2.2 1.6 1.5 1.6 1.7

Eastern Europe 2.1 1.6 1.4 1.5 1.7

Northern Europe 2.1 1.8 1.9 1.9 1.9

Southern Europe 2.6 1.4 1.4 1.5 1.6

Western Europe 2 1.5 1.6 1.7 1.8

UN World Fertility Patterns, 2013 - www.unpopulation.org

Latin America & the Caribbean

Total fertility per woman

1970-1975 1990-1995 2005-2010 2010-2015 2025-2030

LATIN AMERICA & THE CARIBBEAN

5 3 2.3 2.2 1.9

Caribbean 4.4 2.8 2.4 2.3 2

Central America 6.4 3.4 2.6 2.4 2

South America 4.6 2.9 2.2 2.1 1.9

UN World Fertility Patterns, 2013 - www.unpopulation.org

North America and Oceana

Total fertility per woman

1970-1975 1990-1995 2005-2010 2010-2015 2025-2030

NORTHERN AMERICA 2 2 2 1.9 2

OCEANIA 3.2 2.5 2.5 2.4 2.3

Australia/New Zealand 2.6 1.9 1.9 1.9 1.9

Melanesia 5.8 4.5 3.9 3.6 3

UN World Fertility Patterns, 2013 - www.unpopulation.org

UN World Fertility Patterns, 2013 - www.unpopulation.org

UN World Fertility Patterns, 2013 - www.unpopulation.org

Simplified population math at 3.0 birthrate

Gen 0 Gen 1 Gen 2

Pop. 100m 150m 225m

M 50m 75m 112m

F 50m 75m 112m

Simplified population math at 1.3 birthrate

Gen 0 Gen 1 Gen 2

Pop. 100m 65m 42m

M 50m 32.5m 21m

F 50m 32.5m 21m

The Future Demographic Map Potential surplus population in working age group (2020)

Japan -9m

Russia -6m Germany -3m UK -2m

Ireland 0m

France -3m

Spain -3m

Italy -2m China -10m

US -17m

Australia -0.5m

Mexico 5m

Brazil 3m

Egypt 4m

Malaysia 1m

Philippines 5m

Indonesia 5m

India 47m

Note: Potential surplus is calculated keeping the ratio of working population (age group 15-59) to total population constant Source: U.S. Census Bureau; BCG Analysis

Global diversity drives mobility

• More women in the workforce Gender Diversity

• Boomers, Gen X, Gen Y (Millennials) • Low participation in science and technology education Generational Diversity

• Rapid growth of minority populations • Low participation in science and technology education

(URM’s) Ethnic/Other Diversity

• Workforce around the world Global Diversity

Global diversity drives mobility

► Cross-border migration reaches a cumulative total of between 194mm and 257mm, depending on the estimate

► Offshoring – up to a quarter of all developed country jobs are highly or somewhat susceptible

► Temporary mobility assignments are on the increase

Global New Partner Program

Offshoring potential

Our time together will focus on….

► Global demographic trends and workforce implications

► Economic trends driving a relook at workforce issues

► Technology trends reshaping the workforce and employer-

employee relations

Geopolitical concerns persist, commodity and currency volatility rises

12th Capital Confidence Barometer

What do you believe to be the greatest economic risk to your business over the next 6–12 months?

37%

35%

10%

9%

7%

2%

Increased global and regionalpolitical instability

Increased volatility in commoditiesand currencies

Economic situation in the Eurozone

Regulatory environment

Slowing growth in key emergingmarkets

Deflation Apr-15

► Continuing geopolitical issues in Eastern Europe and the Middle East cause most concern around economic risk. ► The sharp fall in commodity prices and increasing volatility of currencies make it more difficult to plan ahead. ► Divergent monetary policies may impact currency fluctuations.

Seven years after the beginning of the global financial crisis…….

Pre-crisis period 10 years

Early stage of recession 1 – 2 years

Private-sector deleveraging

3 – 6 years

Rebound and public-sector deleveraging

~ 10 years

Private debt/GDP

Public debt/GDP

Real GDP

Real GDP growth 3% – 4% 0% – (5%) 0% – 2% 3% – 4%

Change in Debt/GDP (% points)

• Public sector + ++ +++ – – – • Private sector +++ + – – – +++

Recession Deleveraging

Seven years after the beginning of the global financial crisis…….

Private debt/GDP

Public debt/GDP

Real GDP

Recession Deleveraging

Pre-crisis period 10 years

Real GDP growth (Annual Avg. %) Change in debt/GDP (% points)

• Public sector • Private sector

3% – 4%

+ +++

Early stage of recession 1 – 2 years

Private-sector deleveraging

3 – 6 years

Rebound and public-sector deleveraging

~ 10 years

0% – (5%)

++

+

0% – 2%

+++

– – –

3% – 4%

+++

– – –

Eurozone crisis

Scenarios: ► Uncoordinated unwinding of the Euro – very low probability ► Some countries exit the Euro and revert to lower valued currencies, or

Germany + exit Euro and revert to higher valued currencies – modest probability

► Greater economic and political integration to further strengthen the Euro – highest probability, >50% ► Common bank regulator – ECB ► Lender of last resort – ECB ► Common bonds – fiscal coordination

Migrants are undertaking dangerous crossings of the Mediterranean

World Bank “Migration and Remittances: Recent Developments and Outlook” Special Topic: Financing for Development, April 13, 2015, p. 7

Global New Partner Program

Rising income and wealth inequality and consumption

Our time together will focus on….

► Global demographic trends and workforce implications

► Economic trends driving a relook at workforce issues

► Technology trends reshaping the workforce and employer-

employee relations

World R&D comparison (2013) Source: Battelle, R&D Magazine, International Monetary Fund, World Bank, CIA Fact Book, OECD

Number 1 sector for R&D spending – Information and communications technology (ICT)

Impact of automation via the internet of things

Strategies to succeed in today’s demographic, technological and global economic environment

Microsoft’s challenge

Time

PC Era

Mobile Device Era

S-Curves Pharmaceuticals - technology

Time

Traditional Pharmaceutical Drugs

Biologics In

dust

ry S

hifts

S-Curves Digital Imaging – technology and business models

Time

Analog Imaging – Kodak, Fuji

Digital Imaging – Canon, Fuji, Kodak, Sony, Etc.

Smart Imaging – Apple, Samsung, Facebook,

Instagram, Snapchat, Etc. In

dust

ry S

hifts

S-Curves Retail

Indu

stry

Shi

fts

Time Department Stores – Sears, JC Penney, Macys

Discount Stores - Walmart

Category Killers – Home Depot

Warehouse Stores - Costco

Online Retail - Amazon

S-Curves Automobiles - Technology

Indu

stry

Shi

fts

Time Electric vehicles

ICE – Daimler, Ford, GM

Advanced ICE - Toyota

Electric Vehicles - Tesla

Fuel Cells -- ???

S-Curves Automobiles – Customer outlay

Indu

stry

Shi

fts

Time Owning

Financing

Leasing

Sharing

S-Curves Automobiles - Mobility

Indu

stry

Shi

fts

Time Taxis

Daily/Weekly rentals - Hertz

Hourly rentals - Zipcar

On-demand rentals/sharing – Uber, Lyft…..Taxis (Didi Kuadi), Bla Bla Car

S-Curves Entertainment - Distribution

Time

Over the Air – NBS, CBS, ABC

Over Cable, Satellite, Telecom – Comcast, DirectTV, Dish,

AT&T, Verizon

Over the Top (OTT) – Netflix, Hulu, Youtube

Indu

stry

Shi

fts

S-Curves Computing - technology

Indu

stry

Shi

fts

Time Mainframes - IBM

Client-server – Sun, HP, IBM, Oracle, SAP, Etc.

Cloud – Amazon, Microsoft, Google, Oracle, IBM, HP,

SAP, Etc.

Workforce of the future – employees, independent contractors and dependent contractors?

Our time together focused on….

► Global demographic trends and workforce implications

► Economic trends driving a relook at workforce issues

► Technology trends reshaping the workforce and employer-

employee relations