ADAPT provides grip in a complex world
The world is continuously changing. Megatrends such as climate change, the potential of technology, demographic developments and economic and political power shifts continue to re-shape our world. Governments, organisations and citizens are struggling with how to respond. We have developed the ADAPT framework to help them with this. ADAPT summarises urgent, global issues to which governments, companies, organisations and individuals must find an answer in the coming years. COVID-19 has accelerated these trends and made them more visible.
The world is complex: it is hard to get a grip on developments and on their consequences. ADAPT offers guidance: it is a framework to understand and analyse the world in order to be able to take the right actions for the future.
Wealth disparity increases while the middle classes erode.
This leads to:
- growing disparities in opportunity and reduced social mobility;
- a larger risk of regional disadvantages;
- a decline in traditional sources of money (for example savings, pensions);
- an even greater disparity between people and countries due to differing technological capabilities.
Consequences of Covid-19:
- The crisis has hit poor people, regions and countries hardest, because of difficult living conditions, limited access to healthcare and job losses.
- Unemployment at the bottom of the wealth pyramid will grow, due to (among other things) less opportunities for working from home among those workers.
- The number of bankruptcies is particularly high among small businesses, as these companies have smaller or no buffers.
Technology and climate change are disrupting the way we live and operate as individuals, organisations and as society.
This leads to:
- the need for continuous adaptation of (new) business models;
- organisations face increasing resource shortages, asset impairments and supply chain threats;
- institutions struggle to adapt and run the risk of no longer being relevant to citizens;
- work transforming while ‘traditional jobs’ disappear;
- continuous change in the relationship between people and technology;
- technological capital determines success or failure.
Consequences of Covid-19:
- The power of big tech platform companies will increase, partly due to the network advantages that a large market position brings.
- Economic recovery is at the top of the societal and political agenda, but also provides an opportunity to re-build our societies in a more sustainable way.
Demographic pressures on businesses, institutions and economies is increasing.
This leads to:
- significant shifts in consumer needs and consumption patterns;
- critical workforce shortages in some professions;
- unequal opportunities between countries, but also between people along the lines of access to work and/or capital;
- problems with the financing of pension schemes in ‘old economies’ which may mean that some people cannot afford to retire;
- challenges for ‘young economies’ to create jobs for young people at a large scale.
Consequences of Covid-19:
- Unemployment affects relatively more young people because they more often work on the basis of flexible contracts, are over-represented in the most affected sectors (such as the hospitality industry) and because of their lack of previous work experience.
- Pressure on pensions and social security will increase due to a larger number of older people, who also have fewer resources at their disposal, and due to increased unemployment.
- Developing markets will struggle to stimulate job creation.
Global consensus is breaking down while nationalism and populism are growing.
This leads to:
- people’s local concerns become more acute and crowd out other issues;
- increasing societal polarisation;
- competition among nations for the best and the brightest;
- political decisions that are increasingly focused on the local and regional perspective.
Consequences of Covid-19:
- Economies will become more localised, due to the shortening of supply chains and an increase in international trade barriers.
- On the one hand, there will be more competition for scarce resources between countries.
- And there will be more international cooperation, for example in the development of a drug or vaccine against covid-19.
Confidence in the institutions that underpin society is declining.
This leads to:
- lower levels of trust in institutions and less public support for regulation;
- increased concerns about personal and digital security;
- more distrust for other people, that do not belong to the ‘own group’.
- harder to make meaningful changes due to rising skepticism;
- increasing debate over what is true versus false.
Consequences Covid-19:
- Shaky confidence in the management of the Covid-19 crisis by governments and other institutions.
- Some institutions and leaders could come out of the crisis stronger because their actions inspire confidence.
PwC's book 'Ten Years to Midnight' explores causes and solutions for current crises
Building on ADAPT, PwC's Blair Sheppard analyses the causes and consequences of the current major global problems and provides suggestions for solutions. According to Blair Sheppard, the problems we face are urgent, but the time to solve them is limited, and they require a fresh look at reality. “We cannot use 20th century logic to meet this challenge. That logic has led to steady improvements in living standards across the world, but it has also given rise to the challenges and failed to meet them.”
Blair Sheppard is PwC's global leader in strategy and leadership. He is Emeritus Professor and Dean of the Fuqua School of Business at Duke University in North Carolina.
Blair Sheppard is an advocate of ‘local first’, an economy that, while seeking to connect with the rest of the world, focuses first and foremost on the importance of the immediate environment. He also argues that more than economic indicators, such as the gross national product, are needed to measure success. He believes in a more humane technological development and advocates for new leadership styles.
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