Rita McGrath knows how important “seeing around corners” is for business leaders. She wrote the book.
Seeing Around Corners: How to Spot Inflection Points in Business Before They Happen was published in 2019, one of five best-sellers penned by the Columbia Business School professor and founder of corporate consultancy Valize.
McGrath is back in Ireland this month as part of a stellar line-up of business leaders speaking at the Reinvention Summit. If you want a heads-up on how to prepare for what’s coming next, you won’t want to miss it.
She has proven form. Back in 2004 McGrath sat on The Enterprise Strategy Group, a high-level independent commission brought together by former tánaiste Mary Harney to help identify the State’s best path forward in terms of economic development and growth.
It was thanks to her input, and that of her 15 co-panellists, that the Republic followed up its previously uber-successful education, research and development, and foreign direct investment strategies with one that saw it also develop its indigenous entrepreneurial base.
Part of the reason for the group’s success was that the government had assembled stakeholders from all aspects of the economy, including academia, foreign and domestic companies, and unions. “Everybody brought a difference of perspective but with respect for each other’s view, which I think was crucial for the result that happened,” says McGrath.
“A big ‘aha’ moment for us was when one of the people, who was building an indigenous company, said, ‘When Dell or somebody comes to town there’s a parade and confetti and everybody’s cheering. But if I build the same plant, in the same location, everybody’s sleeping’,” she recalls.
“We realised that Ireland had gone about as far as foreign direct investment would take it, and that the next phase of growth would be in supporting and developing indigenous companies, which is where Enterprise Ireland came in.”
The group’s report led to a deluge of training programmes teaching Irish entrepreneurs to export globally.
At the time, there were some Irish multinationals, “but not very many”, says McGrath.
“So it was all about, how do you export globally and how do you find niches, and providing a bunch of supports in universities, including a big push towards software, robotics and really knowledge-intensive industries in which Ireland could meaningfully carve out a niche.”
Ireland Inc has benefited from that ever since, while Enterprise Ireland has grown into one of the world’s most active venture capitalists, supporting hundreds of indigenous businesses.
Now, more than two decades on, it may be time for Ireland Inc to take a similarly methodical, and holistic, approach to future proofing its economy. Certainly, given the pace at which the world and global trading patterns are changing, it wouldn’t be a moment too soon.
In the meantime, the best that business leaders can do is make sure they don’t miss McGrath’s keynote speech at the Reinvention Summit, and the VIP events and functions she is hosting.
Right now, as a State whose textbooks often start by describing it as a “small open economy”, the prospect of the Republic reinventing itself in an age of trade wars and rising protectionism is daunting.
McGrath is hosting an Evolving Small Advanced Country Summit, on April 28th, a day before the main Reinvention Summit kicks off. “There is not a person I speak to from a smaller country that is not thinking about how the patterns that have been in place for the last 70 years” are now changing, she explains.
So how do we reinvent ourselves?
McGrath is a huge advocate of British-Venezuelan academic Carlota Perez, who studies the socio-economic impact of technical change and the historical context of growth and development.
“She studies huge waves of change in capitalism and says that what we are seeing now is the end of a capitalism that was based around fossil fuels, suburbs, highways, the automobile and that whole economic construct that can be dated to 1911 and the invention of the assembly line,” says McGrath.
That movement has reached its zenith in terms of its ability to continue to deliver productivity gains, she says. As a result, capital is looking for new opportunities, just as it did during the oil crisis and stagflation of the 1970s, when it seized on the microprocessor which spawned the subsequent digital revolution.
Only now, capital is flowing into artificial intelligence. According to Perez’s analysis, AI in our current economy is not unlike what plastic was to the petrochemical era, McGrath explains.
“It wasn’t the thing that sparked the revolution but it was the thing that made it ubiquitous and everywhere in people’s lives. As we move into a digital world – and I think this is where there are huge opportunities for Ireland – we’re going to see dematerialisation,” she says.
The easiest way to understand it is to think of how we no longer have to buy a whole vinyl album to hear that one song we wanted, she says, and instead we get just the song we want, delivered digitally.
“I wish it were not happening the way it’s happening but we are going to start to see the dismantling of that older order, and have it replaced by services instead of goods,” she says.
This will have radical implications for organisations, for labour and, she points out, for trade agreements.
