How Fast Life Of CAs Is Changing

Fortune's Geoff Colvin has a fascinating article “Why every aspect of your business is about to change” that lays out how modern companies have to change or perish. It is strongly recommended that every CA worth his salt must read it to know what to expect in the future.

But for those of us who are busy in the ritual of ICAI Elections here are six great ideas from the said
article:
1) You don't need a lot of physical capital.
Alibaba is the world's most valuable retailer but holds no inventory; Airbnb is the largest provider of accommodations but owns no real estate; Uber is the world's largest car service but owns no cars.
2) Human capital will matter more than ever.
With less physical capital, employees become more important. You need to identify the ones critical to the company, and recognize that increasingly, they are the company.
3) The nature of employment will change.
Former Cisco CEO John Chambers predicts: "soon you'll see huge companies with just two employees - the CEO and the CIO." An exaggeration, perhaps, but not by much.
4) Winners will win bigger, and the rest will fight harder for the remains.
McKinsey Global Institute puts it: "tech and tech-enabled firms destroy more value for incumbents than they create for themselves."
5) Corporations will have shorter lives.
The average life span of companies in the S&P 500 has already fallen from 61 years in 1958 to 20 years today. It will fall further.
6) Intellectual property knows no natural boundaries.
A must-read this morning is a fascinating story by Brian O'Keefe and Marty Jones about Uber's "double dutch" corporate tax structure, which you can read here. As more of the value of modern corporations comes from intellectual property, income can easily be shifted to tax havens (…at least until authorities wise up and fix the global tax system.)

Apple is classified as a manufacturer, and with some 500 brick-and-mortar stores worldwide, its total capital—$172 billion of it—is immense. But in traditional models it would need much more. Its achievement is using that capital to stunning effect, creating a market value of $639 billion.

By comparison, Exxon Mobil 1.90% uses far more capital, $304 billion, to create a market value, $330 billion, that’s barely half as much as Apple’s.

But just a minute—actually, Alibaba, Uber, Airbnb and all 21st-century corporations own tons of capital. Accounting rules just don’t always call it that. There is intellectual capital in the form of software, patents, copyrights, brands, and other knowledge; customer capital in the form of relationships with buyers; and especially human capital. The 21st-century corporation, even if it makes or sells physical products, is above all a human-capital enterprise, which raises a profound question: Who really owns it?

Time to think is with you. But right now only think of besides voting for CA Amresh Vashisht as Central Council Member from Central Region, who else is worthy of our valuable support as Central Council Member .  If we do not support meritorious CAs who else will?

We owe it to our children, to our families, to ourselves,  to our profession to send good, sincere CAs as Central Council Members to our Alma Marta - ICAI.

Sanjeev Josh B.Sc LLB DMB FCA MTax IRS