We spend a lot of time researching, debating and talking about trends. But behind the trends are major shifts - the higher level changes in how our world works that drive or enable a wide range of economic, social and technology trends.
Mega shifts tend to be slow acting and take a long time to impact business and society. While their long term impacts are powerful, the changes they bring can be subtle in the short term. Because of this, the mega shifts are often underestimated, ignored or dismissed as common knowledge.
We believe there are 3 mega shifts that have reached the tipping point and are having major impacts on businesses big and small. These are:
1. Workers are Expensive, Machines Cheap: The economic order that emerged from WWII was based on an economic assumption that workers were cheap and machines expensive. This is no longer true. Today workers, and expecially highly skilled workers in high demand fields, are expensive and often difficult to hire and retain. Machines, on the other hand, have gotten cheaper and even free in some cases.
2. Intellectual and Social Capital Trumps Financial Capital: This might not seem true to those having a hard time getting a loan or raising venture capital, but the world today is awash in money. This is very different from the past, when capital was scarce and our business and economic systems were designed to minimize its use and favor large, capital rich firms. Increasingly, leading firms (and workers) win because they have the power of knowledge and effective social networks on their side.
3. Access Trumps Ownership: Owning the means of production used to be required for business success. But the use of outsourcing, partnering and business infrastructure service companies (UPS for logistics, Amazon for IT, etc.) has created the ability to start and operate businesses using variable cost business models. Often referred to as the Sharing Economy or Collaborative Consumption, variable cost business models are disrupting industries and changing how consumers and businesses view and use assets (incuding human assets).
The impacts of these mega shifts are far reaching. They are the main long term drivers behind the break down of the traditional employment contract and the shift to a contingent workforce. They're also behind the disruptive changes happening in a wide range of industries.