Senior Accenture Executives Participate in World Economic Forum Discussions
NEW YORK, Jan. 31, 2002 – As world business leaders gather here today for the World Economic Forum’s Annual Meeting, a study by Accenture urges them to seize the initiative and shape their own futures in an increasingly uncertain environment.
The study, “Business in a Fragile World,” examines the impact that the rise of the anti-globalisation movement, the global economic downturn, the September 11th terrorist attacks and ensuing war on terrorism have had on the globalisation of business environment. By analyzing the forces which have driven these developments, it proposes four possible scenarios by the year 2012. These are not predictions of the future but they do indicate a range of possibilities:
In this relatively stable and integrated world, tensions between different countries and social groups are increasingly resolved by collaboration and negotiation. Economic growth is relatively slow but steady, and wealth is shared more equally around the world, within and between countries. Business is better connected with society. Most people are more secure and wealthier, and there is greater tolerance of diversity. But concerns are growing, particularly in richer countries, about the high costs of this stability, including rising inflation, higher taxation, and excessive bureaucracy.
Survival of the Fittest
Free markets and democracy have spread to many countries. Regulation and taxation are light and competition is fierce, forcing firms to be efficient and dynamic. Rewards are high for those who do well and many people are better off. But life is hard for those who do not succeed. Inequalities within and between countries have barely narrowed. The influence of the United States in business and in international security has grown stronger as other countries and regions have been preoccupied with internal matters. While the world is in many ways quite stable, resentment around the world of the influence of ‘big business’ and the perceived dominance of US culture sometimes spills over into hostility and violence.
Economic integration and liberalization have continued but at the cost of greater social tension. Effective dialogue between governments, business and society has ceased. Global corporations are taking over many services previously provided by governments. Sharp divides around values and wealth have emerged, and media channels have become battlegrounds. While some people are quite prosperous, many have been left behind. Security has become the number one concern for both business and individuals.
Driven by political and economic insecurities, countries have withdrawn inside their borders. They still co-operate in a limited way, particularly on a regional basis, but make little attempt to address global problems. There have been sharp increases in protectionism and a partial reversal of market reforms in many countries. Countries with large internal markets have coped reasonably well with isolation and some groups have found cause for cautious celebration in this new world. But overall, economic growth has been slow and uneven, while living standards for many people, especially among the world’s poorest, have fallen sharply.
The study addresses what business leaders should do to prepare for a future that is increasingly unpredictable. Resilience and flexibility will be key words, both in strategy formulation and organization. Strong leadership will be vital.
Two senior Accenture executives will be participating in the World Economic Forum discussions which directly relate to leadership in an uncertain and fragile world. “A key requirement for successful business leaders will be to understand and address the connections between their business and the wider social and economic environment in which it operates,” said Accenture’s International Chairman, Vernon Ellis, who will speak on “Corporate Citizenship: A luxury in difficult times?”
Another big issue is leadership of people. “Businesses today are operating in a state of ‘unsteady equilibrium’ and their employees are looking to their corporate leadership to provide reassurances and stability,” said Stephan A. James, chief operating officer, Accenture. “CEOs need to take the long view, continue to invest in their people and keep them motivated. Companies that are able to forge a bond with their employees in these tough times will emerge as winners in the long-term, no matter which scenario the world most closely resembles in ten years’ time.” James will participate in a World Economic Forum panel discussion on “Nurturing Talent in a Downturn: The Role of the CEO.”
The study’s authors worked with Accenture partners from around the world and experts in economics, politics and business to develop the scenarios. They also drew on a significant amount of published research, opinion and data.
The full text of the study is available at www.accenture.com/Global/Research_And_Insights/Policy_And_Corporate_Affairs/TheDecade.htm
Accenture is the world’s leading management and technology services organization. Through its network of businesses approach -- in which the company enhances its consulting and outsourcing expertise through alliances, affiliated companies and other capabilities -- Accenture delivers innovations that help clients across all industries quickly realize their visions. With more than 75,000 people in 47 countries, the company generated net revenues of $11.44 billion for the fiscal year ended August 31, 2001. Its home page is www.accenture.com.