APRIL 2010

Change and opportunity is the theme in the April issue of Agility Update. The articles highlighted this month include the risks and opportunities in Australia over the next decade as identified by the Australian Davos Connection and the six industries which must transform if they are to survive the structural changes sweeping through. Another huge wave about to break is the 4G wireless revolution which is predicted to upset the traditional top-down command and control model of the organisation today. Finally, the Big Mac index is whispering caution where the value of the Australian dollar is concerned.

Six Industries in Search of Survival
Read on if you are involved with the chemicals, retail banking, consumer packaged goods, engineered products and services, oil and gas, and technology industries. Management consultants Booz & Company are warning that these six industries must transform to survive and succeed in the future despite improvements in the global economy.  The article argues that they are being impacted by underlying structural changes - in demographics and consumer economics, globalisation, and sustainability – which are having a more irrevocable, dislocating effect than the financial meltdown ever could. The impact of these trends varies by industry. For example, they argue that in the Chemical Industry there is far too much capacity to support viable margins, and new supply from cost-advantaged companies around the world continues to come on line.  In Retail banking it is suggested that for the foreseeable future, retail banks will face a weakening of consumer demand.. For more detail on each industry, please go to: http://www.strategy-business.com/article/00022?gko=2c2d5

Wireless Technology: Get Ready for 4G
Just when you thought you had your 3G wireless devices all figured out, it's now time to start getting a grip on 4G, the fourth generation of wireless technology. Scott Snyder, the author of The New World of Wireless: How to Compete in the 4G Revolution as well as President and COO of consulting firm Decision Strategies International, predicts 4G will revolutionise the way we work and play by creating "one giant wireless ecosystem" that buzzes with innovation. Three changes which will come with 4G are:

1. The speed of data transfer to wireless devices will be between 10 to 100 times faster.
2. Wireless technology will become more cloud-like where many devices will be able to connect across different types of networks.
3. The connection of wireless-enabled devices – already happening below the surface now – will become very apparent.

These three changes coalesce into the iconic phrase for 4G: “digital swarm” or “swarm”, taking over from the phrase “smart mobs”. In the world of 4G, wireless networks connect a virtual mass of users and networked objects (or ‘things’), allowing them to converge around specific places, ideas, or activities in a semi-coordinated fashion. A current example was the Twitter and Facebook-escalated fund raising for victims of the Haiti earthquake in January. As far back as 2001, in the Philippines, a text message forwarded from citizen to citizen (''Go 2EDSA, Wear blck'') barely an hour after fresh news of corruption arose summoned thousands of black-clad protesters to a public plaza and helped topple then-Philippine President Joseph Estrada.
To gain sustainable competitive advantage in this emerging wireless environment, Snyder says companies should start thinking about a new overarching model: the 4G ecosystem that will include all the players - customers, partners, vendors and even employees. For more details, read Snyder’s interview with Knowledge@Wharton at: http://knowledge.wharton.upenn.edu/article/2450.cfm 
Sample chapters of Snyder’s book is available at: http://www.ftpress.com/articles/article.aspx?p=1377269

Risks and Opportunities in Australia
Company executives may be interested in the Australia Report 2010: Risks and Opportunities report as it provides a valuable context in which to consider important investment and transaction decisions. Prepared by the Australian Davos Connection in collaboration with KPMG, the study involved discussions with risk management professionals, economists and actuaries to identify 47 key risks facing Australia over the coming decade. Some of the risks and opportunities identified include:     

• Security: Instability in the Asia Pacific region, ongoing or escalating unrest in the Middle East and terrorism remain high risks for Australia, both in terms of their probability of occurring and their expected impact.
• Training and development: Australia’s unrealised potential in an increasingly linked and sophisticated global economy can be tapped only if our technology, knowledge and skills remain up to date and relevant.
• Water and food: New technologies for the preservation and processing of water and energy (including a reconsideration of nuclear power) are critical to address the twin issues of climate change and a growing population.
• Research, development and design: Many of the challenges facing our country - an ageing population, water scarcity, and climate change - could be mitigated through innovations in technology, processes and human capital.

A summary of the report is available at:
 http://www.ceoforum.com.au and a pdf copy of the report can be downloaded from
 http://www.kpmg.com

Australian Dollar Overvalued on Big Mac Index
According to the Economist’s Big Mac Index, the Australian dollar is almost 4% overvalued. The same metric, based on the theory of purchasing-power parity, in which exchange rates should equalise the price of a basket of goods across countries, suggests that China’s yuan is 49% below its fair-value benchmark with the U.S. dollar.  See how other currencies fare at:
  http://www.economist.com/daily/chartgallery/displayStory.cfm?story_id=15715184