AICPA CFO ConferencePosted: May 15, 2017
I recently attended the 2017 AICPA CFO conference. I know what you are thinking, “Bill is not a CFO, what was he doing at that conference?” My first answer is that you don’t have to be a CFO to attend the conference. A more accurate answer is that I was invited to give a GAAP update to the conference participants. None-the-less, as an invited speaker, I was privileged to be able to attend the entire conference, and I wanted to share a few key quotes and highlights from the conference.
James Glassman of JP Morgan Chase gave an economic update and said “manufacturing jobs are not ‘going overseas’.” Instead, they are being replaced with automation and the remaining jobs are fewer, higher skilled jobs. In fact, routine jobs all over the economy are going away. We won’t be able to stop it, the question is what are we going to do about the societal disruption it is creating?
Aaron Beam, former CFO of HealthSouth provided a great overview of the fraud that occurred there starting in the 1990’s, but the thought that hit me the hardest was a quote he included from Dan Ariel of Duke University. He said, “A society without trust isn’t a society. It’s a collection of people who are continuously afraid of each other.” I’ll let you decide if we are already there or if there is still hope of reversing course.
Finally, Nandu Nandkishore, formerly Global CEO of Nestle’ Nutrition, discussed the emerging new reality we are all facing in the world. First, he went back to 1820 when China and India were 50% of Global GDP. At that time the world economy was dominated by land and labor with capital not being as important. With lots of people and land, India and China dominated. With the importance of capital increasing, and changes brought on by the European focus on human and property rights, by 1980 China and India had dropped to 3% of Global GDP. There were many reasons why China and India missed the initial move to a more capital-centric GDP from the impact of colonization to some internal structural issues, but whatever the reasons, China and India are now gaining the benefits of capital and they still have the benefits of lots of labor and land.
This means the U.S. will drop from the largest to the 3rd largest contributor to Global GDP around 2040 or 2050; China will be number one by 2020 or 2030. Overall, six of the top 10 economies in 2050 will be from Asia and Africa. This is the world that is coming, In fact, in some ways it is already here. 2010 was the first time after 150 years that “emerging” economies were more than 50% of world GDP. This is the new reality we face. The question isn’t what can be done to stop it. The question is what are we, as business leaders, going to do the position our companies to take advantage of the opportunity it creates.