| McKinsey & Company Korea Managing Partner Choi Won-sik delivers a keynote speech during the 2020 Korea Times Forum at The Plaza Seoul, Thursday. / Korea Times photo by Shim Hyun-chul |
McKinsey Korea chief forecasts 'next normal' in Asia
By Park Jae-hyuk
The COVID-19 pandemic has brought a sense of chaos to the whole world, but it will be an opportunity for Asian countries to lead the transformation toward a new business environment, according to Choi Won-sik, the managing partner at McKinsey & Company's Seoul office.
The head of the world's leading consulting firm's local subsidiary indicated that "the next normal" will emerge from Asia with the beginning of the "Asian Century" after the pandemic.
"COVID-19 will not only slow down, but it will accelerate the arrival of the future of Asia towards all of us," he said in a keynote speech delivered at the 2020 Korea Times Forum in Seoul, Thursday.
"It's pretty obvious why that is the case, because if you look farther with longer-term sight, you will know that at some point we will go through COVID-19 and the situation shall pass and the rise of Asia will be in front of us in a much more accelerated timeframe."
According to the renowned consultant, every outbreak of a global pandemic in human history had both its dark and bright sides.
The Black Death that hit 14th century Europe also produced positive changes, such as an inversion in the relationship between labor and landowners, as wages became higher amid a scarcity of workers.
Likewise, Choi forecast the coronavirus outbreak that has had a significantly negative impact on the global economy will also result in a positive megatrend ― the rise of Asia.
In this regard, he introduced Asia's responses to COVID-19 in terms of regionalization, technology and "the social contract" to back up his company's forecast that the continent will represent 40 percent of global consumption and 52 percent of GDP by 2040.
According to McKinsey's previous reports, a massive restructuring of supply has been prominent in Asia, as production and sourcing are moving closer to end users and companies are localizing and regionalizing their supply chains.
Choi also said over half of global trade, foreign direct investment and startup and venture investment are done by and within Asia.
"It is already happening and it has been accelerated by COVID-19," he said. "Again, the future will come much more quickly in Asia."
Regarding technology which will also accelerate the future of Asia, the McKinsey Korea chief noted the importance of "agile technology" for an "agile response" to the pandemic.
"Asia is one of the leading regions where technology really has met its application," he said.
As an example, Choi cited the popularity of e-commerce in several Asian countries amid the pandemic, expecting this trend will remain to some degree even after people resume the physically close activities of the past when COVID-19 is under control.
In order to prove these trends of regionalization and technology across Asia, he introduced Asia's fastest-rising cities in terms of industrialization and innovation networks, which include some regions that most people have yet to become familiar with, such as Karachi and Bangalore.
During his speech, the managing partner also mentioned the social contract as a factor that enabled the "unprecedented" speed in response to COVID-19.
To explain this, he came up with the concept of "social capital" which refers to a set of shared values that allows individuals in a group to work together effectively to achieve a common purpose.
He said although not many people have realized it, COVID-19 brought out a kind of social capital in Korea, considering the country's rapid public response, and its protection of privacy without much disruption.
With this expectation that the "next normal" will emerge in Asia, Choi advised businesses to shift their focus to get ahead of the next stage of the crisis, rather than just doing all they can to keep their employees safe, stay on top of business and deal with uncertainty.
McKinsey said in a previous report that to address longer-term concerns, nerve centers should consider a "plan-ahead team."
Although he admitted his company is not a fortune-teller, he stressed the importance of "planning activity" itself, citing the famous Mike Tyson quote, "Everybody has a plan 'till they get punched in the mouth," and from Dwight Eisenhower: "Plans are useless but planning is indispensable."
He expected planning itself will help businesses gain better insights into the future.
"We need to make sure that we don't lose sight of this tsunami, a positive tsunami that's coming ― the future of Asia ― that we should capitalize on," he said.