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Pandemic has accelerated digital upskilling, but key groups still miss out

A new survey of 32,500 workers in 19 countries paints a picture of a global workforce that sees the shift to remote working as just the tip of the iceberg. Reflecting the fact the pandemic has accelerated a number of workforce trends, 60% are worried that automation is putting many jobs at risk; 48% believe ‘traditional employment won’t be around in the future’ and 39% think it is likely that their job will be obsolete within 5 years.

However, this is not a counsel of despair, as 40% of workers say their digital skills have been improved through the prolonged period of lockdown, and claim they’ll continue to embrace training and skill development. 77% are ‘ready to learn new skills or completely re-train’ and 74% see training as a matter of personal responsibility. And, 80% are confident they can adapt to new technologies entering their workplace, with a large majority of those asked in India (69%) and in South Africa (66%) saying they are ‘very’ confident.

In addition, 49% of respondents are focused on building entrepreneurial skills with an interest in setting up their own business.

Half of workforce report missing out on career opportunities or training due to prejudice

The survey also found that 50% of workers say they’ve faced discrimination at work which led to them missing out on career advancement or training. 13% report missing out on opportunities as a result of ethnicity and 14% of workers have experienced discrimination on the grounds of gender, with women twice as likely to report gender discrimination as men. 13% report discrimination on the basis of class, with post-graduates and others with higher qualifications more likely to report prejudice. Younger people are as likely as older people to report discrimination based on age.

On top of that, the survey found there are disparities in access to upskilling opportunities. While 46% of people with postgraduate degrees say their employer gives them many opportunities to improve their digital skills, just 28% of people with school-leaver qualifications say the same. Industries like retail or transport, which are most at risk of disruption, score just 25% and 20% respectively; while banking scores 42%.

“If current patterns in access to training persist, upskilling will increase social inequality when it should be doing precisely the opposite,” said Bhushan Sethi, Joint Global Leader of PwC’s People and Organisation Practice. “Government and business leaders need to work together to intensify efforts to ensure people in the most-at risk industries and groups get the opportunities they need. Automation and technological disruption are inevitable, but we can control whether its negative effects are managed or not.”

Younger people more focused on maximising income than ‘making a difference’ if forced to choose

Three-quarters of workers globally (75%) say they want to work for an organisation that will make a ‘positive contribution to society.’ This feeling was especially acute in China (87%), India (90%), and South Africa (90%).

However, economic insecurity is limiting people’s ability to pursue purpose driven careers, with younger people particularly affected. Overall, 54% of those polled said, if forced to choose, they would prefer a job that enabled them to ‘take every opportunity to maximise their income’ over a job that ‘makes a difference’ (46%).

Interestingly, those between 18 and 34 are more likely than other generations to prioritise income over purpose in their job with 57% prioritising ‘maximising their income’ over ‘making a difference’ (43%), a margin of 14 points. Those over 55 prioritise making a difference by a margin of 8 points, which rises to 22 points amongst workers over 65.

“As the world continues to grapple with a global health crisis and economic uncertainty, we’ve seen workers come to demand more from the business community, expecting their employers to make a positive contribution to society,” said Peter Brown, Joint Global Leader of PwC’s People and Organisation Practice. “Fortunately, focusing on societal impact and maximising profit are not mutually exclusive, and being a purpose-led business can actually help boost your bottom line.”

Employees want the option to work remotely moving forward

The survey concludes that remote working will persist post-lockdown. Of those who can work remotely, 72% of say they prefer a mixture of in-person and remote working, with only 9% stating they’d like to go back to their traditional work environment full-time. This is particularly true of professionals, office workers, business owners and the self-employed, all of whom are able to perform their jobs remotely using technology. Home working need not be limited to professional jobs. 43% of manual workers and 45% of semi-skilled workers say there are many elements of their job that they are able to do remotely.

People’s attitudes to working from home also change by location, providing further evidence of how the pandemic has increased the global digital divide. Workers in metropolitan areas (66%) are more likely to work in roles that could allow remote working than those who live in rural areas (44%).

Workers torn on privacy and technology

44% of workers globally would agree to let their employer use technology to monitor their performance at work including sensors and wearable devices, with 31% against. However, many would not go as far as allowing their employers access to their personal data. 41% of respondents said that they were unwilling to give their employer access to their personal data including social media profiles, with only 35% willing.

PwC appoints Jan Sijbrand and Troy Paredes as external directors

PwC has appointed two external directors to join its global oversight board. Jan Sijbrand and Troy Paredes will join the board of PricewaterhouseCoopers International Limited (PwCIL), which is responsible for the governance of PwCIL and the PwC Network, oversight of PwC’s network leadership team, and approval of the standards by which each PwC firm must abide.

From 5 March 2021, Jan and Troy will work with the existing 18 board members who are made up of partners and principals from 13 PwC firms from across the world and as of June 24, 2021 they will formally join the new PwCIL board which is currently being elected.

Jan has enjoyed a long career in banking, including head of risk management for ABN Amro, Chief Risk Officer and member of the managing board of NIBC Bank, and member of the executive board and chairman for supervision of De Nederlandsche Bank. In addition Jan was a member of the supervisory board of the European Central Bank from 2015 -2018 and a member of the board of supervisors of the European Banking Authority from 2011-2018. Jan brings a wealth of experience of financial services, risk management, oversight and supervision. Jan also currently serves as deputy chairman of the supervisory board of PwC Netherlands.

Troy is the founder of Paredes Strategies LLC, a consulting firm. He served as an SEC commissioner in the United States from 2008 to 2013 — during the financial crisis and its aftermath. During his time with the SEC, Troy played a key role in rulemakings and other regulatory matters concerning all aspects of securities regulation. Troy brings to the PwCIL board a truly extensive breadth of experience, including governance, compliance, strategy and regulatory. Troy also currently serves as an external director on the oversight board of PwC US.

“I am delighted to welcome Jan and Troy to the board of PwCIL. We are fortunate to have attracted two such talented and experienced individuals and I look forward to working with them,” said Paul Kepple, PwCIL Governance Board Chairman. “Troy and Jan will bring much appreciated outside perspectives, and help us to challenge our thinking and enhance our culture as we work together to build the PwC of the future.”

“Understanding the needs of all our stakeholders across the world has never been more important for PwC. Having Jan and Troy on our global board will bring a wealth of experience and depth of knowledge and add new and unique perspectives to our board discussions,” added Bob Moritz, global chairman of the PwC Network.

PwC appoints Ron Chopoorian as Global Leader, Health Industries

PwC has appointed Ron Chopoorian (PwC United States) as the Global Leader of its Health Industries practice. Ron has extensive client experience and deep industry knowledge across health industries, including payer, provider and pharmaceutical and life sciences. He brings more than 24 years of experience assisting private equity and corporate clients with a broad range of mission critical strategic initiatives, including improving business and commercial strategy, mergers, acquisitions, and divestitures focused on improving shareholder value.

In his new role, Chopoorian will lead the Global Health Industries team, which advises a large network of clients in healthcare and pharmaceuticals, as well as policymakers on a range of key areas including advanced data analytics, integrated patient experience, digital transformation in healthcare, social determinants of health, precision medicine, assurance, tax and legal services, and strategy. He will also continue his role as the Global Relationship Partner for one of the world’s largest multinational pharmaceutical companies.

“I’m excited to take on the role of Global Health Industries Leader during a time when clients, policymakers and society face profound changes, challenges and opportunities,” says Chopoorian. “The COVID-19 pandemic serves as a reminder of how PwC’s purpose – to build trust in society and solve important problems – guides our work with health industries stakeholders. By bringing our capabilities together, we have a unique opportunity to connect payers, providers, pharma and policy makers in order to address common challenges across the health ecosystem. We can provide solutions that make a real impact in delivering the best outcomes for patients, communities and clients.”

Kevin Burrowes, PwC’s Global Clients and Industries Leader, says “The opportunities and challenges facing our clients are unparalleled. In collaboration with other industries, our Health Industries practice, under Ron’s leadership, will continue to help governments and organisations repair, rethink and reconfigure their business models to emerge stronger from the crisis.”

Chopoorian previously was the New York Metro Deals Leader and has launched and served as the national leader of the PwC United States Divestiture Services practice. He also co-led the “Digitising Deals” initiative to enhance value creation and customer experience through the use and deployment of technology in the M&A process. During his career with PwC, he has advised various multinational pharmaceutical, biotechnology and medical device companies on a number of strategic and operational issues, from digital enablement and transformation to business and financial due diligence.

Chopoorian earned a Bachelor of Business Administration degree in accounting from Southern Methodist University and a Master of Business Administration from Manchester Business School. Ron is also a CPA and a member of both the AICPA and the New York State Society of CPAs.

Health and social care to gain the most from 5G efficiency gains

Productivity and efficiency gains enabled by 5G’s application will drive business, skills and service change worth US$1.3 trillion to global GDP by 2030.

In Powering Your Tomorrow, PwC quantifies for the first time, the economic impact of new and existing uses of 5G in utilities, health and social care, consumer, media, and financial services across eight economies with advanced rollout: Australia, China, Germany, India, Japan, South Korea, United States and the United Kingdom.

More than a faster version of mobile connectivity on 4G, 5G’s speed, reliability, reduced energy usage and massive connectivity will be transformative for businesses and wider society, enabling ubiquitous access to super fast broadband. Used in combination with investments in artificial intelligence and the internet of things, 5G can be used as a platform to enable business and society to realise the full benefits of emerging technology advances.

Economic gains are projected across all economies assessed in the study, as 5G offers the potential to rethink business models, skills, products and services, with the gains accelerating beginning in 2025 as 5G-enabled applications become more widespread

Based on the study, the United States (US$484bn), China (US$220bn) and Japan (US$76bn) will experience the largest uplift as a result of 5G technology applications, due to the size of their economies and strong modern industrial production sectors.

At a regional level, Europe, Middle East & Africa (EMEA) is expected to benefit the most from manufacturing applications of 5G, due to the size of the manufacturing sectors. It demonstrates the potential for regional competitive advantage through approaches to the adoption and regulation of the technology.

Wilson Chow, Global Technology, Media and Telecommunications Industry Leader, PwC China, comments: “These numbers quantify impact, but perhaps more important, our study reflects the value of 5G – new levels of connectivity and collaboration mean companies will be able to see, do and achieve more. It will open up new opportunities for growth and change as organisations rethink and reconfigure the way they operate in the post-pandemic world.”

“With the pandemic accelerating digitalisation across all sectors, 5G will act as a further catalyst. It will emerge in this decade as a fundamental piece of our societal infrastructure and as a platform for driving the competitiveness of national economies, new business models, skills and industries.”

Achieving better, faster outcomes in health and social care

Over half the global economic impact (US$530bn) will be driven by the transformation of health and social care experience for patients, providers and medical staff within the next ten years.

While the acceleration of telemedicine during the COVID-19 pandemic provided a glimpse of the future of healthcare, remote care is just one area in which 5G can enable both better health outcomes and cost savings.

5G’s applications include remote monitoring and consultations, real time in-hospital data sharing, improved doctor-patient communications and automation in hospitals to reduce health care costs.

Regional & Sector impacts

At a sector level, impacts vary for individual economies. The United States and Australia are projected to gain the most from financial services applications: India from smart utilities; China and Germany in manufacturing. Other industries analysed in the study show the significant potential of new and existing applications over the next decade, driving changes in skills, jobs, consumer products and regulation:

  • SMART utilities management applications will support environmental targets to reduce carbon and waste through enabling combined smart meters and grids to deliver energy savings, and improving waste and water management through tracking of waste and water leakage (US$330bn).
  • Consumer and media applications include: over the top gaming, real time advertising and customer services (US$254bn)
  • Manufacturing and heavy industry applications include: monitoring and reducing defects, increased autonomous vehicle use (US$134bn)
  • Financial services applications including reducing fraud and improving customer experiences (US$86bn)

Wilson Chow comments: “5G is more than mobile connectivity. It puts a new lens on advancing productivity and rethinking entire business models for the future. Given the scale of potential and its impacts, every organisation will need a plan for 5G’s implementation within five years across technology and business strategies to maximise opportunities and prepare for how they integrate their technology and business strategies, and engage with customers, supply chain and regulators.”

Policy & Trust

The study highlights that the reach of 5G’s technology potential will require businesses and government to consider new approaches to regulatory and consumer engagement – focusing on how the technology is used.

Wilson Chow comments: “With any technology, policy engagement, transparency and public trust are critical factors. Whether it’s considering the use of self driving vehicles or telemedicine, how data is managed, infrastructure deployed, or how different sectors collaborate, business and government need to shit from focusing on regulating a technology, to promoting transparency in 5G’s application, building and sustaining public trust in its use and potential.”

Private markets forecast to grow to $4.9tn globally by 2025

The report, Prime time for private markets: The new value creation playbook, examines prospects for four primarily illiquid asset classes of private equity (including venture capital), infrastructure, real estate and private credit across a range of scenarios for 2019-2025.

The report projects significant growth for the value of private markets of $5.5tn (best case), $4.9tn (base case) and $4.2tn (worst case) depending on how global economic conditions respond to the disruption caused by COVID-19.

Will Jackson-Moore, global leader for private equity, real assets and sovereign funds at PwC says: “The report highlights the continued emergence of private markets as a fast growing and highly impactful portion of global capital markets. Investors continue to look to the sector to deliver the yields that lower risk and more liquid asset classes struggle to match.

Yet this is also an opportunity for private markets to take a lead on ESG and net zero commitments and demonstrate the impact they can make in public perception beyond public markets.”

Opportunities across asset classes

Even in the worst case scenario of a prolonged recession, the projections look ahead to growth of almost 50% up to 2025.

While private equity is very much “the asset class of the moment” there is evidence that there are significant opportunities for growth and returns in areas such as real estate, infrastructure and private credit.

Will Jackson-Moore says: “While opportunities for growth are out there, it is important to emphasise that returns will be harder to find and be more aggressively fought for. Managers will need to be innovative in their approach to value creation and respond swiftly to changing investors and governmental expectations as economies recover from the effects of the crisis.”

ESG and going beyond financial return

Will Jackson-Moore says: “Our research highlights the extent to which financial return is no longer the sole driver of private markets growth. ESG and Net Zero commitments now represent a significant source of value preservation and creation.

Private market managers need to respond by looking at how to apply an ESG lens to investment strategy and product development. Whether it is in impact turnaround initiatives in which ‘dirty’ production facilities are turned green, or building strong commitment to diversity and inclusion at your organisation, these matters are no longer an overlay.”

Asset management industry set to grow by up to 5.6% per annum

Currently controlling more than US$110tn (more than 20 times the US federal budget), the power the asset and wealth management industry has in shaping the future is unparalleled. With global assets under management projected to grow by up to 5.6% per annum to US$147.4 trillion by 2025, it can shape a future which is better for investors, shareholders, the economy and the wider society. This is according to PwC’s new global report ‘Asset and Wealth Management Revolution: The Power to Shape the Future’ published today drawing on data, analysis and expert insights as well as the econometric modelling of PwC’s Asset and Wealth Management (AWM) Research Centre.

The report focuses on a number of key findings and areas for the industry to address, which are pivotal to helping the global economy. Asset and wealth management firms can:

  • Fund the future: There is a widening funding gap which will need to be filled to support recovering economies.
  • Provide for the future: With aging populations, widening pension gaps and challenging demographics, the AWM industry has a key role to play in supporting investors in meeting their savings’ goals.
  • Embrace ESG as the future: With US$110 trillion in assets under management, and growing, this industry has the power to literally change the world from an ESG perspective.

Repair, reconfigure and report are the key areas the industry needs to address as it rethinks its strategy to be fit for the future.

Olwyn Alexander, PwC Global Asset & Wealth Management Leader, commented: “Asset and wealth management firms can channel capital and target investment opportunities to lift economies out of recession. It is important to understand the power the industry has in influencing the future. A better future for everyone; investors, shareholders and the economy as a whole. The world we leave for future generations matters. The industry can act now to realise beneficial change.

“While financial return will always be important, increasingly investors are deciding that social return is just as important. What we’re seeing is asset and wealth management firms that deliver standout returns on both the social and financial fronts will be the clear winners over the coming decade — magnets for investment and able to sustain superior returns for shareholders and partners.”

According to the report, the industry can be a powerful engine of recovery and a force for good in a world facing uncertainty and upheaval. Funding the future, providing for the future and embracing environmental, social and governance (ESG) matters are pivotal to this.

Funding the future: Asset and wealth management firms can achieve superior fund returns as alternative providers of capital.

At US$41 trillion, non-bank lending now exceeds bank lending in advanced economies and continuing low interest rates, coupled with higher capital adequacy ratios, will increase pressure on banks and their ability to lend. This has created an opportunity for private market funds to help finance businesses with strong growth potential but limited access to mainstream funding. By engaging in financing all along the capital structure, the AWM industry can address one of the key goals of the EU’s Capital Markets Union Action plan and improve the private capital markets.

Providing for the future

Pension fund assets are expected to grow to almost US$65tn by 2025.

Within retirement saving, specifically, pension funds now manage more than $50tn in pension assets, and we forecast that this will grow to almost $65tn by 2025. Providing for the future is the other side of the coin to funding the future — the more wealth we can create as a society, the more we can save and the more that will be available to invest. And as people live longer, the asset and wealth management industry can contribute to the resolution of escalating pension gaps and retirement poverty. Saving cash on deposit is no longer tenable in a world of ultra low interest rates and fixed income yields, forcing savers to look for higher yielding, attractive options.

Assets under management in infrastructure funds are expected to double by 2025.

Further opportunities for asset and wealth management firms to provide for the future include making up for the growing shortfall in available infrastructure investment, especially from governments. Within developed markets, there are considerable openings to refurbish roads, airports, hospitals and other such opportunities while accelerating developments in areas such as 5G and renewable energy. As a result, we expect assets under management in infrastructure funds to double by 2025.

Embracing ESG as the future: ESG-aligned funds cumulatively have already outperformed their traditional counterparts.

Increasingly, investors are putting the environmental and social profile of AWM firms on a level playing field with financial return. A growing number of investors expect asset and wealth management firms to make environmental, social and governance (ESG) issues integral to their investment strategies. This shift is already having a revolutionary impact on product design, fund allocation and performance objectives.

PwC’s analysis shows that ESG-aligned funds cumulatively outperformed their traditional counterparts by 9% from 2010 to 2019. Research also shows that diverse companies, in which more than 30% of leaders are women, are, on average, 15% more profitable than those that aren’t diverse, and businesses that score highly on sustainability tend to outperform those that don’t.

A few tech fixes here or a nod to investors’ ESG demands there won’t be enough to survive and thrive in an industry where the front-runners are already embracing these changes and seizing the opportunities.