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Mc Kinsey:Five world megatrends that are converging to great effect.

The churn rate of companies has gone up significantly. In 1935, the average lifetime for an S&P 500 company was 90 years; today, it is about 18 years, says 

A recent Economist article indicates that the global consulting industry is going 'gangbusters' at the moment, with double-digit growth amidst all the economic doom and gloom. Why this is?

I think it's because we're in such a period of profound change - and I actually believe that this will continue for the next 20 to 30 years. There are five particular megatrends that are converging to great effect. The first shift is the re-rise of Asia and Africa's emergence: 2.2 billion people will join the middle class in Asia and Africa in the next 15 to 20 years - half from China alone. The second shift is disruptive technology: this is changing three times faster than management and presents both an opportunity and a challenge. The third shift is resource scarcity. With so many new consumers wanting to live and consume like a 'regular' middle class person, food, energy and water are going to be under severe constraints.

The fourth major shift is population ageing around the world (even though some countries, like India and Nigeria are 'young'.) And last but not least is the struggle that Western governments are facing to deal with all of this. They have become increasingly short-term in their thinking and as a result, they are gridlocked and face significant fiscal challenges.

The combination of these five things all happening at once has major implications for all organisations - including McKinsey. Whenever there is volatility or disruptive change, there is a strong demand for objective perspectives and analysis. Alongside all of this, the churn rate of companies has gone up significantly. In 1935, the average lifetime for an S&P 500 company was 90 years; today, it's about 18 years. There is a growing need at the moment to innovate and to make bolder choices, as well as to focus on risk management tools. These are just some of the reasons why consulting is so in demand these days.


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