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| McKinsey & Company Senior Partner Richard Lee speaks during an interview with The Korea Times at the consulting firm's office in Seoul, Oct. 27. Korea Times photo by Choi Won-suk |
Climate tech seen as another promising sector in post-pandemic era
By Park Jae-hyuk
The COVID-19 pandemic has significantly changed the working environment of most companies locally and globally, prompting employers to adopt work-from-home systems in order to protect their employees from infection and maintain smooth operations.
Tech firms providing IT platforms were among the main beneficiaries of the new trend of remote working, as they have earned handsome profits over the past three years, thanks to the rising corporate use of their programs.
As Korea and most other countries have begun returning this year to the pre-pandemic in-office work format, however, concerns have emerged over the sustainability of the platform economy, prompting a large number of investors to dump their shares in big tech firms here and overseas.
Beyond the debates about the new normal and his own prediction of a return to the pre-pandemic working format, McKinsey & Company Senior Partner Richard Lee dismissed worries over a slowdown in the platform economy.
"If you think about the benefits and the economies of scale that platforms provide, it will absolutely continue to grow," he told The Korea Times during a recent interview.
But at the same time, he advised conventional platform providers dominating the market to brace for challenges from innovative competitors, given that younger generations have already shifted to new platforms.
"It's all media," he said. "In the end, it's all about a fight for people's attention."
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Lee was also optimistic about continuous growth in Korea's biosimilar sector and companies specializing in climate tech, or technologies specialized in reducing greenhouse gas emissions, in spite of worsening investor sentiment amid fears of an economic recession.
He expected that the trend of focusing on environmental, social and corporate governance (ESG) factors, which has been popular among domestic companies since the start of the pandemic, will continue, regardless of inflation and the energy crisis led by Russia's war in Ukraine.
"Korean companies are becoming more and more proactive in these areas," he said, mentioning Korean companies' growing interest in carbon capture technologies, recycling and biofuels.
He also said that the trend of prioritizing ESG management will remain a global phenomenon, because younger employees are more attracted to companies that seek sustainability and consumers are aware of "greenwashing" or deceptive marketing campaigns to persuade buyers that certain products, aims or policies are eco-friendly when fundamentally they are not.
On the other hand, the senior partner warned that the consumer electronics sector will be hit as more workers return to the office, lowering the demand for personal electronic devices compared to last year.
"One sector that has suffered the biggest decline has been the personal computer," he said. "Last year was actually a very good year for laptops, because everyone stayed home. The demand has been pulled forward, so it's very difficult to maintain the same level of growth."
Lee, however, advised consumer electronics manufacturers to continue pushing forward with innovation, even though they are in a difficult situation.
"Apple's iPhone was introduced in the middle of the global financial crisis, and the real innovation happened in 2008, when they announced the App Store," he said. "These innovations in hardware, software and business models that Apple introduced happened in the worst financial crisis."
Saying that there is always room for excellent innovation, the McKinsey senior partner emphasized that people are always willing to welcome innovation.
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| The desks of government officials at the Government Complex Sejong remain empty as they work from home amid the COVID-19 pandemic in this 2021 file photo. Yonhap |
Return to in-office work for most
Regarding the working environment in the post-pandemic era, Lee made a prediction that may sound quite out of touch to most workers.
"The vast majority of workers will get back to the traditional working environment," he said. "Once indoor mask regulations get removed in Korea next year, it will also lead more to getting back to normal."
The senior partner, who works mostly with clients in the fields of consumer electronics and telecommunications, said that the employees of most of his conglomerate clients have already returned to offices.
According to him, employers in Korea and abroad will try to encourage their employees to return to the office using positive incentives for a while, rather than forcing their return.
"Many employers are offering positive incentives for employees to come to work, like good food, massages and other kinds of benefits," he said.
The historically low unemployment rates worldwide have also enabled workers to make their voices heard so far, but Lee says he does not expect the labor shortage to continue if there is an economic recession next year.
"For the last two years, people were forced to save money, because they couldn't go on trips to Southeast Asia or spend their money in restaurants," he said. "People will run out of money at some point, so I don't think the unemployment rate will stay as low as it has been."
From that standpoint, he predicted that highly skilled workers in the knowledge industries will be among the few people who will continue working from home.
"There are certain professionals that will always be extremely scarce and invaluable, especially in high-knowledge areas," Lee said, emphasizing that the demand for IT developers will remain unchanged, even with the pessimistic economic outlook.
"Korea is one of the least digitalized countries in the world, in terms of cloud adoption, so it still needs a lot of talented digital professionals," he added.
He advised businesses to provide incentives like remote work for those workers.
