Bill McDonald: Economic crisis can be an opportunity, not a problem

ARE we really condemned to ten years of financial misery following the Great Recession or are there new opportunities to realign our troubled economy?

Research by Accenture suggests that, contrary to the doom-laden views of many commentators, there is significant potential to enhance our prospects by identifying future demand and supply. But the opportunities are far from assured and could easily be lost.

Emerging countries such as China and India are leading the world in the race towards economic stability but developed countries such as the UK can also ignite new industrial growth and job creation.

We have highlighted five areas we believe provide fertile ground for economic expansion: our changing demographics, low carbon, more demand for public services, new information and communication technology and the rise of the middle class in emerging countries.

As the world's population grows older, there is a shift in the young-old balance with the profile becoming skewed towards older age groups. This trend will dramatically change the levels and patterns of spending.

In the UK, the 56-plus age group will increase from 27 per cent to 33 per cent by the year 2030 and will create greater demand for products and services in finance, tourism and leisure.

The shift towards a low-carbon economy will be a dominant trend over the next ten years. Natural disasters and freak weather events are changing the behaviour of consumers, employees and investors while governments introduce new policies to build a low carbon economy. This will accelerate the growth of intelligent solutions that can be exported around the world. Demand for electric cars will increase while there will be a rapid expansion in the global market for carbon trading. As Scotland is already realising, low carbon economies will open up vast opportunities in infrastructure: buildings, transport networks, energy sources, power generation and industry will all need to be upgraded.

While governments seek efficiency savings in public-service delivery, there is greater demand for improved public services. Adopting new, interactive technologies can help meet these goals.

A key growth market with significant benefits will be in cloud computing, which provides access to processing power and software from a remote provider without high infrastructure costs. This opens up the digital economy to more small and medium-sized firms.

Many of the new opportunities will be boosted by the burgeoning consumer markets in Asia and the Far East where emerging economies now account for more than 50 per cent of global GDP which is estimated to increase to 61 per cent by 2030. This rapid growth is creating rising employment and incomes, expanding the global middle class, and providing tantalising opportunities for the UK and the United States.

There is much demand in emerging countries in areas of education, healthcare and culture. UK universities, for example, export learning services and award degrees to hundreds of thousand of long-distance students. Many have established satellite campuses in China, Malaysia and the Middle East. As the size of cities in these countries grow, the demand and growth of infrastructure projects offers unrivalled opportunities.

Developed countries, such as the UK, need to play to their competitive strengths and recognise they require a strong strategic direction and a clear view of their comparative advantage. What do they want to be famous for? What can they do best?

The next question is what steps they need to take to kindle these new sources of growth. Getting the right mix of skills is undoubtedly important. As Scotland is already discovering, securing a world-class renewable energy industry demands a wide array of skills from blue collar workers through to entrepreneurs and highly qualified technicians, engineers and managers who have to be planned for through the schools curriculum and vocational training through to university courses.

Governments and businesses can play a role in creating and pulling the right levers. But, given the complexity and scale of the action required, this approach also demands new collaboration and thinking, marshalling critical resources and the expertise to make it work.

• Bill McDonald is managing director of Accenture Scotland.