It’s official – new millennium off to a rocky start
It was 9pm on New Year’s Eve 1999 and the night was still young and full of promise. I’d been married two and a half weeks, my wife Melanie was pregnant, and we stood on a muddy beach somewhere near Thames in New Zealand’s North Island shooting off the occasional skyrocket and talking loudly to feel less small beneath the enormous clear, black basin of the sky. There was much talk of a social phenomenon called Y2K – a structural issue affecting the IT industry that might see airliners fall from the sky at midnight, ATM machines spit out money, power cuts and possible chaos in the streets. One IT consultant I knew withdrew $4,000 and had a whole prepper thing going on. 10, 9, 8, 7… we counted down to midnight – letting out a ragged cheer when the distant lights across the bay stayed on!
Apocalypse averted then. Ahem, not so fast – we have had apocalypses - just not the one we expected.
For an era that American political scientist Francis Fukuyama dubbed the “The End of History” due to the seeming ascendence of liberal democracy , and which New Zealand Prime Minister Helen Clark famously described as an ‘incredibly benign’ strategic environment , it’s now official – the millennium is off to a rocky start.
The first 21 years of the 21st century have inflicted a series of shocks on Western societies. The attacks on the twin towers of New York (2001), set the scene for waves of social and environmental trauma such as Hurricane Katrina (2005), Global Financial Crisis (2008), the BP Deepwater Horizon disaster (2010), rise and fall of the Arab Spring (early 2010’s), and more recently climate-induced emergencies, domestic terrorism, Donald Trump (2016), and now the biggest of them all, Covid-19 (2020-??). These have all been set against the backdrop of ongoing U.S. wars in Iraq and Afghanistan (2001-2021) and have been amplified by the addictive power of social media.
New Zealand and Australia have experienced localised versions of these shocks. In New Zealand there has been major earthquakes (2010, 2011, 2016) and a massacre of Muslim worshippers at mosques in Christchurch (2019), while Australia’s experience has included drought, bushfires, Covid-19 lockdowns and confronting human rights issues with refugees.
A battle is raging in the streets, supermarkets and fashion racks
A battle is raging in the streets, supermarkets and fashion racks; ethical food, animal welfare, fast fashion, fake meat, air miles, slave labour, living wage, #metoo, and #blm. As soon as we cottoned on to green washing, other kinds of washing kicked in; rainbow washing, sports washing, and arts washing.
Battling for airtime amid this myriad of crises is the grand-narrative of the 21st century – global warming and climate change. There is an increasing scientific and political consensus around the urgent need to de-carbonise the economy in order to limit global warming to a maximum of 1.5 degrees and avoid climate catastrophe.
Today, global bodies, governments, businesses, activists, and literally millions of conscious consumers are driving a grand narrative to de-carbonise the economy.
Against this backdrop, new ideas and models are emerging to challenge the dominant concept of extractive, carbon-intensive capitalism. Many companies are rethinking their place in the world as they attempt to recalibrate to a more restorative and inclusive stakeholder capitalism. This is epitomised by the reinvention of ‘purpose’ by Simon Sinek in his book Start with Why . Companies are seeking their ‘why’ and aligning their productive energies with broadly understood social and planetary needs. Amid this crucible of grinding social, geological, climatical and military forces five key trends are shaping the way we conduct business 21 years on.
1. Changing societal expectations of business
Broad social awareness of the risks of global warming and climate change is driving an expectation that business leaders put much more emphasis on sustainability, to protect both their future business and the planet. This expectation is baked into the 17 United Nations (UN) Sustainable Development Goals (SDGs), which recognise that businesses have a vital role in addressing the SDGs.
In line with this, financial flows are being redirected toward sustainable practices as investors, lenders, and insurers start to realise that sustainability risks generate financial risk. Both New Zealand and Australia have seen their sovereign investment funds adopt stronger ‘responsible investment’ approaches and the accompanying launch of a flood of index products with a bias towards companies assessed as ‘sustainable’.
Covid-19 has accelerated the return of big government in New Zealand and Australia
2. Return of big government
Covid-19 has accelerated the return of big government in New Zealand and Australia. Central, federal, state and local government leadership is critical not just in managing health impacts of the pandemic but in performing CPR on the economy, making massive cash injections and investing urgently in infrastructure as a means of economic stimulation. As economist Cameron Bagrie put it; "Governments are going to get bigger. They're going to be a lot more interventionist, they're going to be a lot more active."
3. The rise of bi-culturalism/multi-culturalism
Following generations of doing the opposite, governments in New Zealand (particularly) and Australia are more intent on recognising indigenous rights, paying reparations for past injustices, and improving the livelihood of their nations’ first people.
Under the Labour Government in New Zealand there are signs of a genuine bi-cultural approach emerging. This is most clearly seen in environmental management, dual justice systems and healthcare. This trend is set to continue with the recent advent of He Puapua, a government report commissioned in 2019 that sets out a roadmap to co-governance between the Crown and Māori by 2040 .
In Australia, greater recognition of indigenous rights is reflected in procurement policies such as the Commonwealth Government’s Indigenous Procurement Policy and the Victorian Government’s Social Procurement Framework.
Alongside this, there has been an explosion in the ethnic diversity of both New Zealand and Australia. The latest census recorded 213 nationalities living in New Zealand. In 2019, 30% of the Australian resident population were born overseas . This makes it the world's eighth largest immigrant population. In the 2016 census , more than 75% of Australians partly identified with an ancestry other than Australian.
4. Diversity, inclusion and generational change
There has long been concern and activism to increase gender diversity in workplaces in both New Zealand and Australia . One example are the campaigns to increase the proportion of women on boards and in senior management teams. As of August 2020, women make up 31.3% of ASX 200 boards, a new record. This beats a long-term voluntary goal from the Australian Institute of Company Directors and diversity groups. But the reality is, it’s the largest companies doing the ‘heavy lifting,’ and more than half of the ASX201-300 have only one female board member, or none at all.
In New Zealand by contrast, State Sector Boards were comprised a creditable 49% of women, but the private sector lagged badly by comparison, with NZX listed companies achieving women board member ratios of between 16% and 31.5% depending on which sample set you look at .
Generational change is also a major issue in the workplace. In New Zealand the number of people aged over 65 will double by 2031 to reach 1.2 million, and around 1 in 5 of over 65s currently work well into their 70s.
With an ageing population, and a decrease in fertility, 2025 will see a ratio of 64 dependents for every 100 people in work. A smaller number of younger working people will be supporting a larger number of non-working older people. This will mean even greater competition for young talent, particularly in the light of recently tightened immigration settings on both sides of the Tasman.
5. The technologisation of everyday life
Technology is a huge driver of social change . Forget Y2K - vast swathes of traditional industry are being ‘disrupted’ by emerging technology players. The advent of Covid-19 has driven an explosion of e-commerce and necessitated the re-invention of global and local supply chains – amid unprecedented disruption.
Perhaps the single biggest impact has been the competition for the ‘attention’ of almost every single person on the planet with the addictive power of social media .
Mass broadcast and print media has splintered media into millions of shards
The rapid collapse of the mass broadcast and print media has splintered media into millions of shards. This ability to customise your own media consumption has been held up as a cause of the erosion of the social contract, civil discourse, anti-corporate activism, and a rise in extremist behaviour. Witness the rampant spread of reality franchises such as ‘Married at First Sight’, ‘The Block’ and ‘The Voice’ to all corners of the globe. One way or another, we’re all trying to keep up with the Kardashians.
No wonder there is an emerging consensus that global businesses today exist and operate in a world with ‘VUCA’ characteristics: Volatility, Uncertainty, Complexity and Ambiguity. This is a business environment where it’s hard to figure out what’s happening, surprises often occur, and where closely inter-twined natural and manmade systems can amplify problems manyfold.
Six months ago, a giant container ship called the Ever Given got jammed sideways in the Suez Canal, and last week a giant property company called Evergrande started defaulting on US$300 billion of debt. It’s 2021 folks – when will we Ever Learn?
This week a group of 19 Harvard-linked scientists, who clearly have never watched Jurassic Park, announced they will shortly start work to bring Woolly Mammoths back to life from a single fragment of DNA lifted from the melting permafrost .
When I stood on the beach that fine, clear evening in December 1999, I had no idea any of this would happen. I fired off some of those Warehouse rockets into space. My son Felix who was present, but in Melanie’s body, has now turned 21.
Today, it reminds me of an Allen Curnow poem I studiously ignored at university .
Never turn your back on the sea.
The mumble of the fall of time is continuous
I got so caught up in the dopamine of drama , I missed the true eclipse of time.
3. Sinek S., Start with Why, Penguin Books, 2011
4. Cameron Bagrie - A new era of 'big government and higher taxes', NZ Herald, 21 June 2021.
11. NZX Gender Diversity Statistics – for the year ended 30 September 2020
12. Kelly K., The Inevitable – Understanding the 12 technological forces that will shape our future, Penguin, Random House 2017
13. Carr N., The Shallows – What the Internet is doing to our Brains, Atlantic Books, 2020
14. Bennet N. and James Lemoine G, What VUCA Really Means for You, Harvard Business Review Jan-Feb 2014
17. Allan Curnow – A Dead Lamb (1972), cited page 137, An Anthology of Twentieth Century New Zealand Poetry, Oxford University Press, 1976.