7

Global context

As a global professional body operating across all sectors, we are impacted by external factors affecting every part of the global economy. This means we need to be agile and market-led in our response to conditions on the ground. But it also enables us to balance risk across a diverse portfolio of markets and divert resources, as and when needed, to combat challenges and realise opportunities.

The work we carried out to inform our strategy to 2025, prior to the global pandemic, has helped us prepare for a world where even greater agility is demanded of us and online solutions and engagement are increasingly relied upon.

The ten key disruptors we identified to 2025 have greatly enabled a proactive response to the Covid-19 outbreak and its operational and economic consequences for ACCA, as well as helping set our longer-term direction:

Ten disruptors to 2025 and the anticipated impact on ACCA

Pre Covid-19 outbreak

Post Covid-19 outbreak

Technology

The future of work will be different, with robotic process automation (RPA) and machines taking over repetitive and programmable human tasks.

Pre Covid-19 outbreak

Artificial intelligence will also supplement human roles. Technology disruption will enable new business models to emerge. And as homes and workplaces become digital, organisations and education providers will need to anticipate and offer the skills required for the workplace of tomorrow.

Post Covid-19 outbreak

As the global economy seeks to deal with, and recover from, the outbreak, technological solutions are liable to flourish at an even faster rate.

Continuous learners

Portfolio careers, entrepreneurship, the gig economy, cross-functional teams and the need for workers to stay relevant all mean continuous learning is here to stay.

Pre Covid-19 outbreak

We anticipate that learning, for many, will increasingly become self-directed, affordable, accessible, practical, and time critical. Education providers will need to respond to this change, rapidly evolving their content and delivery.

Post Covid-19 outbreak

Being able to provide a rapid response to skills gaps is becoming even more important.

The digitalisation of education

Nearly every consumer activity is now digitised, and businesses are following suit.

Pre Covid-19 outbreak

Digitalisation is now also empowering learners and converting them into consumers of education services. Web, mobile, social, augmented and virtual reality are changing the way people learn. Excellent course content may no longer be enough – and the return on investment is critical.

Post Covid-19 outbreak

The ability to offer digital solutions has been a key enabler of our business continuity through the pandemic. We started an extensive programme of digital transformation in 2019-20 which is set to run until mid-2022. The programme is focusing on delivering early value to members and future members to support them on their ACCA journey and speeding up the build of the future digital capabilities we’ll need. This includes accelerating work on remote supervision of exams while maintaining the rigour and integrity on which ACCA’s reputation is founded.

The blurring of competitor and partner

Dominant incumbents in all industries will be challenged — and not just by traditional competitors.

Pre Covid-19 outbreak

Technology allows disruptors to enter markets quickly, especially as consumer demand becomes ever more digitally based. These changes will encourage organisations to partner with others, including competitors, to survive and thrive, developing more rounded products and solutions for their customers.

Post Covid-19 outbreak

The need to be sustainable for the long term has been heightened by the crisis, intensifying the need for robust, reliable and innovative delivery chains.

The growth of Asia

We’re seeing a clear shift in the centre of economic power to Asia.

Pre Covid-19 outbreak

China, currently the world’s second biggest economy after the US, is expected to continue to gain a greater share of world GDP. In 2018, India became the world’s sixth largest economy – and it’s expected to move up to fourth place by 2022.

Post Covid-19 outbreak

With the outbreak starting in China, the impact on its economy has already been marked with a 6.8% contraction in Q1 of 2020. The IMF is forecasting annual growth in China of 1.2% (compared with 6.1% growth in 2019) and growth in India of 1.9% (down from a pre-pandemic forecast of 5.8%).

While the overall GDP shift to Asia is likely to be unaffected, the rates of economic growth expected before the pandemic have fallen dramatically or may fail to materialise altogether, depending on the length of economic inactivity.

Increasing business and government accountability

Society at large is becoming ethically aware

Pre Covid-19 outbreak

Increasingly, consumers expect government intervention to promote better business ethics.We anticipate a growing number of businesses reporting on the UN Sustainable Development Goals (SDGs) and focusing on improving corporate social responsibility. We also anticipate that losing the trust of consumers will increasingly lead to business instability in the future.

Coupled with this, and continued high profile corporate failures, trust in the profession remains an issue and the purpose and usefulness of audit is a continued debate.

Post Covid-19 outbreak

The disproportionate effect of the pandemic on the socially vulnerable and front-line workers is already leading to a re-evaluation of what really matters in society and how organisations contribute to the greater good.

The dominance of cities

Over half (55%) of the world’s population already lives in urban areas, and this is expected to grow to 68% by 2050 (UN World Urbanisation Prospects Report, 2018).

Pre Covid-19 outbreak

Our research indicates that business opportunities will continue to be concentrated in cities despite two emerging factors: a growing shift towards flexible working and the need for organisations to reduce fixed overheads.

Post Covid-19 outbreak

Having used digital means and remote working to help weather the crisis, the shift to home workers and digital supply and delivery may accelerate.

Diverse workplaces

The workplace is becoming more diverse in all aspects.

Pre Covid-19 outbreak

We now have four generations in the workplace: baby boomers, generation X, millennials and generation Z. The different generations don’t think and act in the same ways: job loyalty, for example, falls significantly in new generations.

Post Covid-19 outbreak

Diversity is likely to be more enabled through remote working and teams collaborating across countries and regions as a result.

Challenged regulation

The size and increasing complexity of the global economy and the disruption caused by technology poses major new challenges for regulators.

Pre Covid-19 outbreak

We anticipate increasing problems for regulators in striking a balance between investing in protecting consumers while also fostering innovation, all in the face of accelerating change.

Post Covid-19 outbreak

The response to the pandemic has accelerated finding the balance between public protection and innovation, with companies manufacturing health products finding ways to speed up research and development while also meeting regulatory needs

The rise of intangible assets

The growth of businesses like AirBnB and Uber, who have very small balance sheets yet high valuations, is changing the definition of business value.

Pre Covid-19 outbreak

Going forward, we’ll continue to see a decline in tangible assets as the primary driver of business value. Intangible assets (brand, data, algorithms etc) and their real value for all businesses will continue to increase. This will build the need for wider and broader corporate reporting.

Post Covid-19 outbreak

The focus on virtual supply chains as a means of keeping afloat through the crisis is likely to intensify the importance

Coupled with the above, the economic downturn experienced as a result of the Covid-19 outbreak is likely to be widespread and severe.

According to ACCA research conducted in late March 2019, 80% of business leaders globally say their organisations are facing significant downturns in expected revenues and profits year-on-year, with 21% of organisations already freezing recruitment.

Owing to the outbreak, the IMF has projected that the global economy is set to contract by 3 % in 2020, significantly worse than during the 2008–09 financial crisis. In a scenario which assumes that the pandemic fades in the second half of 2020 and containment efforts can be gradually unwound, the IMF predicts that the global economy is projected to grow by 5.8 % in 2021 as economic activity normalises.

As a result, ACCA’s global growth is likely to be constrained throughout 2020-21 and this is reflected in our sharpened focus and targets.