9:59:59.000,9:59:59.000 2014 is a very special year for me: 9:59:59.000,9:59:59.000 20 years as a consultant, 9:59:59.000,9:59:59.000 20 years of marriage, 9:59:59.000,9:59:59.000 and I'm turning 50 in one month. 9:59:59.000,9:59:59.000 That means I was born in 1964 9:59:59.000,9:59:59.000 in a small town in Germany. 9:59:59.000,9:59:59.000 It was a grey November day, 9:59:59.000,9:59:59.000 and I was overdue. 9:59:59.000,9:59:59.000 The hospital's maternity ward[br]was really stressed out 9:59:59.000,9:59:59.000 because a lot of babies were born 9:59:59.000,9:59:59.000 on this grey November day. 9:59:59.000,9:59:59.000 As a matter of fact, 1964 9:59:59.000,9:59:59.000 was the year with the highest[br]birth rate ever in Germany: 9:59:59.000,9:59:59.000 more than 1.3 million. 9:59:59.000,9:59:59.000 Last year, we just hit over 600,000, 9:59:59.000,9:59:59.000 so half of my number. 9:59:59.000,9:59:59.000 What you can see here 9:59:59.000,9:59:59.000 is the German age pyramid, 9:59:59.000,9:59:59.000 and there, the small black point[br]at the top, that's me. 9:59:59.000,9:59:59.000 (Laughter) (Applause) 9:59:59.000,9:59:59.000 In red, you can see the potential[br]working age population, 9:59:59.000,9:59:59.000 so people over 15 and under 65, 9:59:59.000,9:59:59.000 and I'm actually only interested 9:59:59.000,9:59:59.000 in this red area. 9:59:59.000,9:59:59.000 Now, let's do a simple simulation 9:59:59.000,9:59:59.000 of how this age structure will develop 9:59:59.000,9:59:59.000 over the next couple of years. 9:59:59.000,9:59:59.000 As you can see, 9:59:59.000,9:59:59.000 the peak is moving to the right, 9:59:59.000,9:59:59.000 and I, with many other baby boomers, 9:59:59.000,9:59:59.000 will retire in 2030. 9:59:59.000,9:59:59.000 By the way, I don't need any forecasts 9:59:59.000,9:59:59.000 of birth rates for[br]predicting this red area. 9:59:59.000,9:59:59.000 The red area, so the potential working age 9:59:59.000,9:59:59.000 population in 2030 9:59:59.000,9:59:59.000 is already set in stone today, 9:59:59.000,9:59:59.000 except for much higher migration rates. 9:59:59.000,9:59:59.000 And if you compare this red area in 2030 9:59:59.000,9:59:59.000 with red area in 2040, 9:59:59.000,9:59:59.000 it is much, much smaller. 9:59:59.000,9:59:59.000 So before I show you[br]the rest of the world, 9:59:59.000,9:59:59.000 what does this mean for Germany? 9:59:59.000,9:59:59.000 So what we know from[br]this picture is that labor supply, 9:59:59.000,9:59:59.000 so people who provide labor, 9:59:59.000,9:59:59.000 will go down in Germany,[br]and will go down significantly. 9:59:59.000,9:59:59.000 Now, what about labor demand? 9:59:59.000,9:59:59.000 That's where it gets tricky. 9:59:59.000,9:59:59.000 As you might know, the consultant's 9:59:59.000,9:59:59.000 favorite answer to any question is, 9:59:59.000,9:59:59.000 "It depends." 9:59:59.000,9:59:59.000 So I would say it depends. 9:59:59.000,9:59:59.000 We didn't want to forecast the future. 9:59:59.000,9:59:59.000 Highly speculative. 9:59:59.000,9:59:59.000 We did something else. 9:59:59.000,9:59:59.000 We looked at the GDP and[br]productivity growth of Germany 9:59:59.000,9:59:59.000 over the last 20 years 9:59:59.000,9:59:59.000 and calculated the following scenario: 9:59:59.000,9:59:59.000 if Germany wants to continue[br]this GDP and productivity growth, 9:59:59.000,9:59:59.000 we could directly calculate 9:59:59.000,9:59:59.000 how many people Germany would need 9:59:59.000,9:59:59.000 to support this growth. 9:59:59.000,9:59:59.000 And this is the green line: labor demand. 9:59:59.000,9:59:59.000 So Germany will run into a major 9:59:59.000,9:59:59.000 talent shortage very quickly. 9:59:59.000,9:59:59.000 Eight million people are missing, 9:59:59.000,9:59:59.000 which is more than 20 percent[br]of our current work force, 9:59:59.000,9:59:59.000 so big numbers, really big numbers. 9:59:59.000,9:59:59.000 And we calculated several scenarios, 9:59:59.000,9:59:59.000 and the picture always looked like this. 9:59:59.000,9:59:59.000 Now, to close the gap, 9:59:59.000,9:59:59.000 Germany has to significantly 9:59:59.000,9:59:59.000 increase migration, 9:59:59.000,9:59:59.000 get many more women in the work force, 9:59:59.000,9:59:59.000 increase retirement age. 9:59:59.000,9:59:59.000 — by the way, we just[br]lowered it this year — 9:59:59.000,9:59:59.000 and all these measures at once. 9:59:59.000,9:59:59.000 If Germany fails here, 9:59:59.000,9:59:59.000 Germany will stagnate. 9:59:59.000,9:59:59.000 We won't grow anymore. Why? 9:59:59.000,9:59:59.000 Because the workers are not there[br]who can generate this growth. 9:59:59.000,9:59:59.000 And companies will look 9:59:59.000,9:59:59.000 for talents somewhere else. 9:59:59.000,9:59:59.000 But where? 9:59:59.000,9:59:59.000 Now, we simulated labor supply 9:59:59.000,9:59:59.000 and labor demand 9:59:59.000,9:59:59.000 for the largest 15 economies in the world, 9:59:59.000,9:59:59.000 representing more than 70 percent 9:59:59.000,9:59:59.000 of world GDP, 9:59:59.000,9:59:59.000 and the overall picture looks like this 9:59:59.000,9:59:59.000 by 2020. 9:59:59.000,9:59:59.000 Blue indicates a labor surplus, 9:59:59.000,9:59:59.000 red indicates a labor shortfall, 9:59:59.000,9:59:59.000 and grey are those countries[br]which are borderline. 9:59:59.000,9:59:59.000 So by 2020, we still see a labor surplus 9:59:59.000,9:59:59.000 in some countries, 9:59:59.000,9:59:59.000 like Italy, France, the U.S., 9:59:59.000,9:59:59.000 but this picture will change 9:59:59.000,9:59:59.000 dramatically by 2030. 9:59:59.000,9:59:59.000 By 2030, we will face[br]a global work force crisis 9:59:59.000,9:59:59.000 in most of our largest economies, 9:59:59.000,9:59:59.000 including three out of[br]the four BRIC countries. 9:59:59.000,9:59:59.000 China, with its former[br]one-child policy, will be it, 9:59:59.000,9:59:59.000 as well as Brazil and Russia. 9:59:59.000,9:59:59.000 Now, to tell the truth, 9:59:59.000,9:59:59.000 in reality, the situation 9:59:59.000,9:59:59.000 will be even more challenging. 9:59:59.000,9:59:59.000 What you can't see here[br]are average numbers. 9:59:59.000,9:59:59.000 We de-averaged them 9:59:59.000,9:59:59.000 and broke them down 9:59:59.000,9:59:59.000 to different skill levels, 9:59:59.000,9:59:59.000 and what we found 9:59:59.000,9:59:59.000 were even higher shortfalls 9:59:59.000,9:59:59.000 for high-skilled people 9:59:59.000,9:59:59.000 and a partial surplus 9:59:59.000,9:59:59.000 for low-skilled workers. 9:59:59.000,9:59:59.000 So on top of an overall labor shortage, 9:59:59.000,9:59:59.000 we will face a big skill[br]mismatch in the future, 9:59:59.000,9:59:59.000 and this means huge challenges 9:59:59.000,9:59:59.000 in terms of education, qualification, 9:59:59.000,9:59:59.000 upskilling for governments and companies. 9:59:59.000,9:59:59.000 Now, the next thing we looked into 9:59:59.000,9:59:59.000 was robots, automation, technology. 9:59:59.000,9:59:59.000 Will technology change this picture 9:59:59.000,9:59:59.000 and boost productivity? 9:59:59.000,9:59:59.000 Now, the short answer would be 9:59:59.000,9:59:59.000 that our numbers already include 9:59:59.000,9:59:59.000 a significant growth in productivity 9:59:59.000,9:59:59.000 driven by technology. 9:59:59.000,9:59:59.000 A long answer would go like this. 9:59:59.000,9:59:59.000 Let's take Germany. 9:59:59.000,9:59:59.000 The Germans have a certain[br]reputation in the world 9:59:59.000,9:59:59.000 when it comes to productivity. 9:59:59.000,9:59:59.000 In the '90s, I worked in our Boston office 9:59:59.000,9:59:59.000 for almost two years, 9:59:59.000,9:59:59.000 and when I left, an old senior partner 9:59:59.000,9:59:59.000 told me literally, 9:59:59.000,9:59:59.000 "Send me more of these Germans, 9:59:59.000,9:59:59.000 they work like machines." 9:59:59.000,9:59:59.000 (Laughter) 9:59:59.000,9:59:59.000 That was 1998. 9:59:59.000,9:59:59.000 Sixteen years later, you'd[br]probably say the opposite. 9:59:59.000,9:59:59.000 "Send me more of these machines. 9:59:59.000,9:59:59.000 They work like Germans." 9:59:59.000,9:59:59.000 (Laughter) (Applause) 9:59:59.000,9:59:59.000 Technology will replace 9:59:59.000,9:59:59.000 a lot of jobs, regular jobs. 9:59:59.000,9:59:59.000 Not only in the production industry, 9:59:59.000,9:59:59.000 but even office workers are in jeopardy 9:59:59.000,9:59:59.000 and might be replaced by robots, 9:59:59.000,9:59:59.000 artificial intelligence,[br]big data, or automation. 9:59:59.000,9:59:59.000 So the key question is not 9:59:59.000,9:59:59.000 if technology replaces some of these jobs, 9:59:59.000,9:59:59.000 but when, how fast, and to what extent, 9:59:59.000,9:59:59.000 or in other words, 9:59:59.000,9:59:59.000 will technology help us 9:59:59.000,9:59:59.000 to solve this global work force crisis? 9:59:59.000,9:59:59.000 Yes and no. 9:59:59.000,9:59:59.000 This is a more sophisticated[br]version of "it depends." 9:59:59.000,9:59:59.000 Let's take the automotive industry 9:59:59.000,9:59:59.000 as an example, 9:59:59.000,9:59:59.000 because there, more than 40 percent 9:59:59.000,9:59:59.000 of industrial robots are already working 9:59:59.000,9:59:59.000 and automation has already taken place. 9:59:59.000,9:59:59.000 In 1980, less than 10 percent 9:59:59.000,9:59:59.000 of the production cost of a car 9:59:59.000,9:59:59.000 was caused by electronic parts. 9:59:59.000,9:59:59.000 Today, this number is more than 30 percent 9:59:59.000,9:59:59.000 and it will grow to more than 50 percent 9:59:59.000,9:59:59.000 by 2030. 9:59:59.000,9:59:59.000 And these new electronic parts 9:59:59.000,9:59:59.000 and applications require new skills 9:59:59.000,9:59:59.000 and have created a lot of new jobs, 9:59:59.000,9:59:59.000 like the cognitive systems engineer 9:59:59.000,9:59:59.000 who optimizes the interaction 9:59:59.000,9:59:59.000 between driver and electronic system. 9:59:59.000,9:59:59.000 In 1980, no one had the slightest clue 9:59:59.000,9:59:59.000 that such a job would ever exist. 9:59:59.000,9:59:59.000 As a matter of fact,[br]the overall number of people 9:59:59.000,9:59:59.000 involved in the production of a car 9:59:59.000,9:59:59.000 has only changed slightly 9:59:59.000,9:59:59.000 in the last decades, 9:59:59.000,9:59:59.000 in spite of robots and automation. 9:59:59.000,9:59:59.000 So what does this mean? 9:59:59.000,9:59:59.000 Yes, technology will[br]replace a lot of jobs, 9:59:59.000,9:59:59.000 but we will also see a lot of new jobs 9:59:59.000,9:59:59.000 and new skills on the horizon, 9:59:59.000,9:59:59.000 and that means technology will worsen 9:59:59.000,9:59:59.000 our overall skill mismatch. 9:59:59.000,9:59:59.000 And this kind of de-averaging 9:59:59.000,9:59:59.000 reveals the crucial challenge 9:59:59.000,9:59:59.000 for governments and businesses. 9:59:59.000,9:59:59.000 So people, high-skilled people, 9:59:59.000,9:59:59.000 talents, will be the big thing 9:59:59.000,9:59:59.000 in the next decade. 9:59:59.000,9:59:59.000 If they are the scarce resource, 9:59:59.000,9:59:59.000 we have to understand them much better. 9:59:59.000,9:59:59.000 Are they actually willing to work abroad? 9:59:59.000,9:59:59.000 What are their job preferences? 9:59:59.000,9:59:59.000 To find out, this year we contacted 9:59:59.000,9:59:59.000 a global survey 9:59:59.000,9:59:59.000 among more than 200,000 job seekers 9:59:59.000,9:59:59.000 from 189 countries. 9:59:59.000,9:59:59.000 Migration is certainly one key measure 9:59:59.000,9:59:59.000 to close a gap, at least[br]in the short term, 9:59:59.000,9:59:59.000 so we asked about mobility. 9:59:59.000,9:59:59.000 More than 60 percent 9:59:59.000,9:59:59.000 of these 200,000 job seekers 9:59:59.000,9:59:59.000 are willing to work abroad, 9:59:59.000,9:59:59.000 for me a surprisingly high number. 9:59:59.000,9:59:59.000 If you look at the employees aged 21 to 30 9:59:59.000,9:59:59.000 this number is even higher. 9:59:59.000,9:59:59.000 If you split this number up by country, 9:59:59.000,9:59:59.000 yes, the world is mobile, 9:59:59.000,9:59:59.000 but only partly. 9:59:59.000,9:59:59.000 The least mobile countries 9:59:59.000,9:59:59.000 are Russia, Germany, and the U.S. 9:59:59.000,9:59:59.000 Now, where would these[br]people like to move to? 9:59:59.000,9:59:59.000 Number seven is Australia, 9:59:59.000,9:59:59.000 where 28 percent could imagine moving to. 9:59:59.000,9:59:59.000 Then France, Switzerland, Germany, 9:59:59.000,9:59:59.000 Canada, U.K., and top choice worldwide 9:59:59.000,9:59:59.000 is the U.S. 9:59:59.000,9:59:59.000 Now, what are the job preferences[br]of these 200,000 people? 9:59:59.000,9:59:59.000 So what are they looking for? 9:59:59.000,9:59:59.000 Out of a list of 26 topics, 9:59:59.000,9:59:59.000 salary is only number eight. 9:59:59.000,9:59:59.000 The top four topics[br]are all around culture: 9:59:59.000,9:59:59.000 number four, 9:59:59.000,9:59:59.000 having a great relationship with the boss; 9:59:59.000,9:59:59.000 three, enjoying a great work-life balance; 9:59:59.000,9:59:59.000 two, having a great[br]relationship with colleagues; 9:59:59.000,9:59:59.000 and top priority worldwide 9:59:59.000,9:59:59.000 is being appreciated for your work. 9:59:59.000,9:59:59.000 So do I get a thank you? 9:59:59.000,9:59:59.000 Not only once a year 9:59:59.000,9:59:59.000 with the annual bonus payment, 9:59:59.000,9:59:59.000 but every day. 9:59:59.000,9:59:59.000 And now, our global work force crisis 9:59:59.000,9:59:59.000 becomes very personal. 9:59:59.000,9:59:59.000 People are looking for recognition. 9:59:59.000,9:59:59.000 Aren't we all looking for recognition 9:59:59.000,9:59:59.000 in our jobs? 9:59:59.000,9:59:59.000 Now, let me connect the dots. 9:59:59.000,9:59:59.000 We will face a global work force crisis 9:59:59.000,9:59:59.000 which consists of[br]an overall labor shortage 9:59:59.000,9:59:59.000 plus a huge skill mismatch 9:59:59.000,9:59:59.000 plus a big cultural challenge. 9:59:59.000,9:59:59.000 And this global work force crisis 9:59:59.000,9:59:59.000 is approaching very fast. 9:59:59.000,9:59:59.000 Right now, we are[br]just at the turning point. 9:59:59.000,9:59:59.000 So what can we, what can governments, 9:59:59.000,9:59:59.000 what can companies do? 9:59:59.000,9:59:59.000 Every company, 9:59:59.000,9:59:59.000 but also every country, 9:59:59.000,9:59:59.000 needs a people strategy, 9:59:59.000,9:59:59.000 and act on it immediately, 9:59:59.000,9:59:59.000 and such a people strategy consists 9:59:59.000,9:59:59.000 out of four parts. 9:59:59.000,9:59:59.000 Number one, a plan 9:59:59.000,9:59:59.000 for how to forecast supply and demand 9:59:59.000,9:59:59.000 for different jobs and different skills. 9:59:59.000,9:59:59.000 Work force planning 9:59:59.000,9:59:59.000 will become more important[br]than financial planning. 9:59:59.000,9:59:59.000 Two, a plan for how to[br]attract great people: 9:59:59.000,9:59:59.000 generation Y, women, but also retirees. 9:59:59.000,9:59:59.000 Three, a plan for how to educate 9:59:59.000,9:59:59.000 and upskill them. 9:59:59.000,9:59:59.000 There's a huge upskilling challenge 9:59:59.000,9:59:59.000 ahead of us. 9:59:59.000,9:59:59.000 And four, 9:59:59.000,9:59:59.000 for how to retain the best people, 9:59:59.000,9:59:59.000 or in other words, 9:59:59.000,9:59:59.000 how to realize an appreciation 9:59:59.000,9:59:59.000 and relationship culture. 9:59:59.000,9:59:59.000 However, one crucial underlying factor 9:59:59.000,9:59:59.000 is to change our attitudes. 9:59:59.000,9:59:59.000 Employees are resources, are assets, 9:59:59.000,9:59:59.000 not costs, not head counts, 9:59:59.000,9:59:59.000 not machines, not even the Germans. 9:59:59.000,9:59:59.000 Thank you. 9:59:59.000,9:59:59.000 (Applause)