The Great Rewiring

The global economy is undergoing the biggest transition we will see in our lifetime. Enabled by policy, technology and long-run social change, the way the world produces, distributes and consumes services is being disrupted across all sectors and in all economies. The transition is massive and it is permanent.

In ten years, the world will look radically different from the way it does today. Everything will be electrified, nature will be valued, regenerative and renewable will be the norm.

For decades, individuals and institutions have been calling for action on climate and nature. In 1987, the Brundtland Commission released Our Common Future, a call to arms for nations to acknowledge nature’s role at the core of our economy.

Five years later, the original Climate Change Convention was signed by world leaders, including US President George H.W. Bush. But at the time, there wasn’t the policy framework, technology, finance or mainstream business will to act.

Fast-forward to today and the world has changed almost beyond recognition. International frameworks have been established that provide commercial markets for carbon, institutional investors recognise natural capital as a distinct asset class, the technology exists to make what was once a pipedream a reality and people are demanding products that are smart, fair and sustainable.

In 2022, forty years after General Motors made its first, ill-fated attempts to produce electric vehicles in response to the 1970’s oil shock, the world’s highest-valued car company makes only electric vehicles. Its founder is the world’s richest person. This company is worth more than all major automakers combined. It has pioneered a new platform that provides fast, aspirational vehicles, enabled by radical new technologies and production systems that see it deliver profit margins that are the envy of any automaker in the industry.

We are only at the beginning. Over the next decade, industries and markets from agriculture to aerospace and microchips to mangroves will be radically transformed. Some organisations will adapt, others will die. Then there will be those few leaders who see the opportunities and can Think Big, Dream Big, Commit, and Act. Not just survival of the fittest but survival of the smartest.

Those who move swiftly will be writing a new rulebook that will set the agenda for the next fifty years. Businesses that are early adopters will be more profitable than the legacy organisations that they leave behind. Because no matter how much things change, that will always be a key consideration.

For every fortune made in the old economy, there will be more made in the new one. It all comes down to today’s leaders to make it possible.