Setting aside the burdens
of the past
The possibilities of
technology-driven
change in Australia
Centre for the Edge
Febru...
Copyright © 2014 Deloitte. All rights reserved.1
What is the Shift Index
The driver for the Shift Index
To determine if th...
Copyright © 2014 Deloitte. All rights reserved.2
Key Findings
Business is more intense
The Shift Index shows that the chan...
Copyright © 2014 Deloitte. All rights reserved.3
For more information…
Peter Williams
Chief Edge Officer,
Deloitte Center ...
The evidence
Copyright © 2014 Deloitte. All rights reserved.5
The Shift Index
0
50
100
150
200
250
2000 2001 2002 2003 2004 2005 2006 2...
Copyright © 2014 Deloitte. All rights reserved.6
0
0.05
0.1
0.15
0.2
0.25
0.3
0.35
0.4
0.45
1990 1992 1994 1996 1998 2000 ...
Copyright © 2014 Deloitte. All rights reserved.7
0
0.2
0.4
0.6
0.8
1
1.2
1990 1992 1994 1996 1998 2000 2002 2004 2006 2008...
Copyright © 2014 Deloitte. All rights reserved.8
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1987 1990 1993 1996 1999 2002 2005 2008 2011
...
Copyright © 2014 Deloitte. All rights reserved.9
Wireless Activity
0
20
40
60
80
100
120
140
160
2000 2002 2004 2006 2008 ...
Copyright © 2014 Deloitte. All rights reserved.10
Social Media Activity
0
5
10
15
20
25
30
35
40
1993 1995 1997 1999 2001 ...
Copyright © 2014 Deloitte. All rights reserved.11
Net-Bohemian Score
-40
-35
-30
-25
-20
-15
-10
-5
0
1971 1981 1991 2001 ...
Copyright © 2014 Deloitte. All rights reserved.12
ROA Performance Gap
0
0.1
0.2
0.3
0.4
0.5
0.6
0.7
0.8
0.9
1
1990 1992 19...
Copyright © 2014 Deloitte. All rights reserved.13
ROA Performance
Top & Bottom Quartile
-50%
-40%
-30%
-20%
-10%
0%
10%
19...
Copyright © 2014 Deloitte. All rights reserved.14
Returns to Talent
0
5000
10000
15000
20000
25000
1996 1998 2000 2002 200...
Setting aside the burdens of the past
Upcoming SlideShare
Loading in …5
×

Setting aside the burdens of the past

434 views

Published on

The Shift Index was created as a tool to help us understand if the rapid pace and increasing uncertainty we feel in the business and social spheres is real, or if it is just an illusion created by the always-on environment we live. (This is a bit like how nationalised news brings us stories of shootings in other regions leading us to think that crime has increased, when in actual fact crime has been decreasing.)

As we say in the report:

The world is changing faster than ever. However, we can only respond to and manage a change if we can measure and understand it. If we want to respond as a community, then we need to find a way to quantify the change. We need to ask ourselves whether the perceived change is real, and if it is, how we can capitalise on it.

The short answer is that the world is definitely changing and that Australia, Australians and Australian businesses are successfully adapting to the changes. We can’t, however, rest on our laurels as the drivers of change are still present and it doesn’t look like they will dissipate for some time.

0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
434
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
2
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Setting aside the burdens of the past

  1. 1. Setting aside the burdens of the past The possibilities of technology-driven change in Australia Centre for the Edge February 2014
  2. 2. Copyright © 2014 Deloitte. All rights reserved.1 What is the Shift Index The driver for the Shift Index To determine if the incredible pace of change and the turmoil in the market today is real, or simply a perception brought on by our hyper-connected, always-on environment. The Hypothesis • Relentless improvement in technology is slashing the cost of communication and data processing. • This is creating knowledge flows that are changing the balance of power in the market. • Astute individuals and firms are using these knowledge flows to improve their performance. • The result is the creation of new winners, and the elimination of firms that are unable to adapt. The Method The Shift Index is constructed from from three sub-indices: • The Foundation Index, the lead indicator, which measures the improvement, penetration and regulation of computing and mobile technology. • The Flow Index, which measures the resulting increase in knowledge flows. • The Impact Index, the lagging indicator, which measures that the impact on the people, firms, and the market as a whole. This approach is based on the framework developed for the US Shift Index.
  3. 3. Copyright © 2014 Deloitte. All rights reserved.2 Key Findings Business is more intense The Shift Index shows that the change in the Australian market has been measurable and significant. • Competitive Intensity of the Australian market has increased 34% since 2000 • Stock Price Volatility has increased an average of 1.1% per year over the last 23 years The development of ubiquitous mobile and global communications networks has driven the Australian market to become both measurably more competitive and measurably more turbulent than ever before. The balance of power is changing The change is driven by one of the highest adoption rates for networked and mobile telecommunications, and social media, in the world. • Local consumers’ rapid adoption of social media and mobile technology is tipping the balance of power in their favour • Improvements in global communications and logistics networks, that allow anyone from anywhere to compete for everything Adapt or die The change is creating new winners and losers. • The gap in financial performance between the top and bottom firms is increasing • The gap in salaries between creative individuals (engineers, designers…) and others is increasing Companies that cannot adapt are being eliminated from the market at an increasing rate.
  4. 4. Copyright © 2014 Deloitte. All rights reserved.3 For more information… Peter Williams Chief Edge Officer, Deloitte Center for the Edge Tel : +61 3 9671 7629 pewilliams@deloitte.com.au The full report Contact us Robert Hillard National Leader, Technology Consulting Tel : +61 3 9671 7971 rhillard@deloitte.com.au Peter Evans-Greenwood Fellow, Centre for the Edge Tel : +61 439 327 793 pevansgreenwood@deloitte.com.au View the report at bit.ly/1mudcKc
  5. 5. The evidence
  6. 6. Copyright © 2014 Deloitte. All rights reserved.5 The Shift Index 0 50 100 150 200 250 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Foundation Index Flow Index Impact Index Linear (Foundation Index) Linear (Flow Index) Linear (Impact Index) Australia’s digital infrastructure has seen rapid development, increasing the flow of information and capital, and changing the structure of our economy as a result.
  7. 7. Copyright © 2014 Deloitte. All rights reserved.6 0 0.05 0.1 0.15 0.2 0.25 0.3 0.35 0.4 0.45 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Australia US Competitive Intensity Herfindahl–Hirschman Index (HHI) for Australia and the US (down is more competitive). Australia continues to trend toward the same level of competitive intensity as the US, as the Australian market grows.
  8. 8. Copyright © 2014 Deloitte. All rights reserved.7 0 0.2 0.4 0.6 0.8 1 1.2 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Australia Stock Price Volatility Short-term stock price volatility (standard deviation in stock prices over the year) is increasing as firms find it more challenging to maintain a competitive advantage.
  9. 9. Copyright © 2014 Deloitte. All rights reserved.8 0 0.2 0.4 0.6 0.8 1 1.2 1.4 1987 1990 1993 1996 1999 2002 2005 2008 2011 MobilesubscriptionsperindividualMobile penetration Australian consumers’ tendency to have multiple accounts per capita (one person owning a phone and a 3G-connected tablet, for example) and use mobiles to communicate with devices (such as drinks machines that send an SMS to the supplier when they need to be refilled) accounts for the adoption rate of over 100%.
  10. 10. Copyright © 2014 Deloitte. All rights reserved.9 Wireless Activity 0 20 40 60 80 100 120 140 160 2000 2002 2004 2006 2008 2010 MinutesofUse Captures the increasing flow of information between individuals (rather than between locations) via the total number of wireless minutes used in Australia per year.
  11. 11. Copyright © 2014 Deloitte. All rights reserved.10 Social Media Activity 0 5 10 15 20 25 30 35 40 1993 1995 1997 1999 2001 2003 2005 2007 2009 2011 The number of minutes Internet users spend on social media websites relative to the total minutes they spend on the Internet generally.
  12. 12. Copyright © 2014 Deloitte. All rights reserved.11 Net-Bohemian Score -40 -35 -30 -25 -20 -15 -10 -5 0 1971 1981 1991 2001 2011 Shows that the relative proportion (% creative population - % industrial population) of Australian’s with creative professions (engineers, designers…) has steadily increased over time.
  13. 13. Copyright © 2014 Deloitte. All rights reserved.12 ROA Performance Gap 0 0.1 0.2 0.3 0.4 0.5 0.6 0.7 0.8 0.9 1 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Australia US Linear (Australia) Linear (US) Other than for the period from 1997–2000, covering the dot-com crash and the investment bubble leading up to it, Australia has had consistently larger ROA performance gap than the US. The gap between winners and losers is increasing.
  14. 14. Copyright © 2014 Deloitte. All rights reserved.13 ROA Performance Top & Bottom Quartile -50% -40% -30% -20% -10% 0% 10% 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010 Australia Top Quartile Australia Bottom Quartile Linear (Australia Top Quartile) Linear (Australia Bottom Quartile) The gap in ROA performance between the top and bottom quartile is increasing. The top performing companies in Australia are consistently delivering ~10% return on assets, while the bottom performing companies are being cleared from the market.
  15. 15. Copyright © 2014 Deloitte. All rights reserved.14 Returns to Talent 0 5000 10000 15000 20000 25000 1996 1998 2000 2002 2004 2006 2008 2010 2012 Australia Linear (Australia) We are seeing increased returns to the creative professionals who are best positioned to leverage increased knowledge flows and create additional value in the gap in compensation between creative professions and other professions.

×