When I was sixteen, my parents and I went on a 21-day Outward Bound course in the Gila Wilderness in western New Mexico. When my father first suggested it, I was all over the idea. I had read and heard about Outward Bound, and I loved camping and being in the outdoors.
On arriving, my parents and I were split into different groups and I didn’t see them until the end of the course. I had already been at boarding school for a year so being separated from them was no big deal. But being in a group of total strangers, negotiating duties and route plans while being one of the youngest in the group, was a challenge.
After seven days of trudging multiple miles on trails in the New Mexico mountains, with no shower, no bed (unless you count a sleeping bag under a tent), campfire-cooked gruel, and a combination of keen and recalcitrant companions, I was numbed. The next day would be a hike by a select group to the resupply van - the first contact with the outside world since we started.
The camping fantasy had hit hard against backcountry reality, and I was done with it. I saw that Carl, our instructor, was chatting with a few people off and on, and so I waited for an opening. When I saw he was alone for a minute and went over to him. With my head down, I quietly confessed that I wasn’t feeling too well, I was exhausted, I thought it best if I left with the van (the mirage of a warm bed, shower and a burger shimmered in my mind). Carl listened intently, and quietly empathized with my situation. He then said that he thought I had performed very well, in fact better than most, and suggested I give it until the next resupply. (Earlier in the trip, I had loaded his backpack with two hefty rocks in defiance of the lengthy miles hiked – he found them only at the end of the day and figured out it was me). This surprised me, but I also realized that Carl was not giving me my out so easily. I then watched as the next team member ambled up to Carl to have a chat. He was having a busy evening.
To make matters worse my group selected me as one of three to hike the 7 miles to the resupply and back again - with the new stores for the coming week. On the way back our group of three ate all the M&Ms that were provided to our group. We took this as payment for our efforts, though we didn’t share this information.
I later learned that Outward Bound and similar organizations were founded after World War 2. It was noticed that when planes were shot down over water, the older soldiers had more endurance, or perseverance than the younger ones. The consequences were dramatic, with young men who were strong and fit perishing in conditions where older men survived. The training programs came about to put younger recruits through rigorous conditions that would challenge them mentally and physically, to foster a sense of resilience, perseverance and grit. The idea was to engage young folk (or people of any age) to teach them to successfully face real life conflicts and challenges.
The notions of perseverance or resilience have come up a several times recently. We all will be confronting change that will affect us many ways. Over the next 10 years our economy is projected to undergo dramatic change. According to a March 2018 RBC report entitled “Humans Wanted”, it is expected that the annual GDP growth rate in Canada will come in around 1.5%, where it has averaged 2.3% over the past two decades. 40% of global GDP will come from emerging markets in the G20, surpassing that of the G7, where today the G7 represents half of global GDP and emerging markets account for just 30%. 75% of global GDP will come from the service sector, and will account for 84% of jobs, where today it accounts for 70% of GDP and 80% of jobs. Change is coming.
These shifts are occurring as the G7 population ages and retires, while the emerging markets have younger work forces. These shifts are also being accompanied by dramatic technological innovations.
At RBC we were recently told how artificial intelligence (AI) is being used to improve document processing. It is expected that admin related jobs will be supplanted by AI algorithms. Another study conducted by Columbia University tested human lawyers against their artificial counterparts. Each was given a series of non-disclosure agreements with various loopholes. AI found 95% of them, while the lawyers caught 88%. More telling was that the lawyers took 90 minutes to review the files, while AI completed the task in 22 seconds. Disruption will affect professional workers as well. Are we prepared?
Over the past number of years we have seen how technology has eliminated many factory jobs while creating new careers that require higher education or training. Clearly this trend will continue and spread. When hit by the initial impact of disruption, the natural reaction is panic, anger, fear or something similar. Just as when a pilot is shot down over the water, we are forced to confront a life changing event. How we deal with it will determine the future of our existence. Being mentally prepared will ensure a positive outcome.
But - with crisis comes opportunity. This applies to every aspect of our lives, from our careers to our investments.
No one likes change, nor a threat to the status quo. We have the choice of rising to the challenge that change brings, or being swallowed by it. Our adaptability and ingenuity is what allows us to continue to survive, and indeed flourish in constant change. As an Investment Advisor and Portfolio Manager, it is also my job to constantly be aware of change and how to adapt, and benefit from it. My Outward Bound leader, Carl, would say – adversity is the breakfast of champions.