Global Trends Blog

We are sitting on a local bus on the lovely tropical island of Penang in Malaysia, longing for the charms of its main city, Georgetown. The old part of town hasn’t changed much since we were here 18 years ago. Then we were backpackers in a Chinatown hostel, suffering salmonella courtesy of an insufficiently fried egg from a street vendor; now with three kids, we are still backpackers, but staying in slightly more comfortable accommodation by the beach. Hence the bus ride into town.  A Western, white-haired couple boards the bus at the Holiday Inn. Looking like cruiseship-escapees, they are a good example of today’s most prolific travelers: retirees nowadays are the cash-laden, internet-savvy baby-boomers, with a lot of time on their hands. They may also be senior travelers in more than one sense – not only are they of an advanced age, but they may well be former travelers on the hippie-trail in the 60’s and 70’s.  So there are backpackers with more grey hair than your occasional correspondent.

Do you ever think about the size and impact of the corporation you, your friends, family members or neighbors work for? If you do, the size might amaze you. Thinking this way offers a whole new perspective on global markets as the revenues of some of the world’s largest corporations are far bigger than the GDPs of many countries.

We are pleased to have just released our annual research on the world’s largest economic entities, Corporate Clout 2013, which reveals that, in 2012, 40 of the world’s 100 largest economic entities (countries and corporations combined) are public corporations. This is the same percentage as in 2011 but down 2% since 2010 (42%).  If you look at the top 150 economic entities in 2012, the proportion of corporations is 58%, slightly down from 2011 (58.7%) but at the same level as in 2010 (58%).

What is one of the essentials for a stable relationship? Trust! And what’s the killer for trust? Deceit! What’s true for human interactions is also true for relationships in the business world. The latest outrageous example of how so-called professionals capitalized on the confidence of their clients was the horse meat scandal, mainly affecting the European continent. The whole food sector is going through a crisis of confidence. Not for the first time though. We had BSE, moldy meat being labeled as fresh, too much antibiotics in turkey and so on. It’s not just Europe. China was just hit by its own meat scandal: Foxes and rats were sold as lamb, some meat was even poisoned. Such actions destroy consumers’ confidence instantly and always leave a sour taste.

So, criminal actions put the meat industry into a crisis, but consumers will gain trust again just by time passing and media coverage going down. Other industries, on the other hand, have a more general image problem as suggested by a recent Eurobarometer survey conducted in the EU, Croatia, Israel, Turkey, Brazil, the U.S., China and India. Finance and banking, mining, oil and gas companies are the least likely to be seen as making efforts to behave in a responsible way towards society. Only 34% of the respondents in Europe perceive them to be making efforts to do so. In comparison, 70% and 67% respectively of respondents thought that agricultural companies and retail companies/ supermarkets were making efforts to be responsible towards society.

After more than 2 years of research and travelling around the world to talk to senior leaders about the challenges facing their businesses, and themselves, 5-10 years in the future we will shortly publish the book summarizing our findings and recommendations – what does this mean for you and your organization in preparing for the future, and what do you need to start doing today.

My time in Asia over the past decade has been dotted with epidemics and epidemic scares. These have mainly involved different varieties of the ‘flu, but also other less deadly but still quite bothersome ailments, such as dengue fever. Having just experienced the latter myself – although admittedly a rather mild bout according those in the know – your occasional correspondent is now back in business and eager to share some thoughts on the topic!

Here in Singapore, we are currently experiencing the worst year for cases of dengue fever since 2005. The city state’s approach to risk management includes a commitment to transparency and public information, and a great deal of public involvement.  The government has a dedicated website to inform the public about outbreaks and prevention measures (where we have learned that one major cluster literally surrounds our children’s school…). With newly infected cases exceeding 500 per week at the end of April, the national dengue campaign “Do the Mozzie Wipeout” was launched, calling on everyone in the community to do their bit to prevent the spread of the disease. Volunteers have even been mobilized to pick up rubbish that may hide breeding grounds for the dengue-carrying Aedes mosquitoes. Scientific studies over the past decade indicate that climate change and rising temperatures are contributing factors to an increased incidence of dengue. Although the jury is still out on the exact causes of the current surge in Singaporean infections, the public health response of choice here is transparency and public information. And this healthy trend seems to be spreading.    

Have you ever found a science experiment – or rather some badly rotten food – in your child’s school bag, because nobody checked it for a few days? Ever found clothes on a laundry rack in exactly the same position you put them days ago? Any similar experiences? Then, you must be a working Mum, who now and then goes on a business trip and leaves family tasks to your cherished male partner. Sorry, partners, the above mentioned examples are too common to have been made up by me and, of course, I have some statistics to support my case.

A study done by the Institute for Public Policy Research shows that in the UK eight out of 10 married women do more household chores than the men they are married to, while just one in 10 married men does an equal amount of cleaning and washing as his wife. The shift towards women bearing the burden of household tasks increases when they have children. These numbers vary only slightly from country to country in the developed world and haven’t changed a lot over the last decades. Really, we live like our parents? Just for the record: It’s the year 2013 right now and we are re-living the domestic patterns of the last millennium?

Picture a world of bright green cities – not just in terms of being eco-friendly, but bright green as in color! My research for the May Global Trends Briefing on Securing Resources (register here to receive it when it comes out) threw up an interesting article about the world’s first algae powered building in Germany. It’s an apartment complex with a bright green façade thanks to its covering of biofuel-producing algae, and will be the first building in the world to fully integrate algae into the building’s construction. While it’s an exciting – as well as aesthetically pleasing – development, it will no doubt take time to spread. However, the article made me think about how our next generation of cities will be different from the ones we know today.

Cities are magnets for people with hopes for a better and more prosperous life. Around the world urbanization is rapidly increasing: today half of humanity – some 3.5 billion people – lives in cities and by 2025 that number will increase to 60%. No question that the future presents huge challenges for city planners and local governments.  It’s not just about building enough living space for the urbanizing crowd, but also about creating a functional infrastructure while reducing the environmental footprint of every single citizen. Fortunately numerous cities have already taken up the challenge of realizing the living spaces of the 21^st century. A couple of years ago climate strategist Boyd Cohen, Ph.D., LEED AP, developed what may have been the first ever global ranking of smart cities. As I found, some of the cities on the list might surprise you!

As a journalist I receive dozens of invitations for press conferences and public speeches every day. Of course, I can’t attend all of them, but I have been to many over the years. Somehow they all seem to sound the same – especially the speeches from the European Institutions: “The EU sets global standards for a better world.” “Europe has the toughest legislation on consumer rights, use of chemicals, or climate change – and the rest of the world would do well to follow this example.” All good intentions and maybe one day even a competitive advantage.

My 16-year-old son has been home with the ‘flu, so we watched the movie "In Time." A sci-fi thriller, the movie imagines a future where time is – literally – money. You work today to earn time to live tomorrow. Interesting concept. I work part-time, so in relation to the movie, my time would run out a bit early I guess. However, sitting there as a working mother, watching a movie in the late morning with my son made me reflect on my job situation. Working from home can be long and lonely at times, but I have to say the flexibility it gives is fabulous, and for that I'm grateful.

When we hear the word "job," most of us think about a worker with an employer and a regular paycheck. In reality, according to the "World Development Report on Jobs" from the World Bank, the majority of workers in some of the poorest countries are completely outside the scope of an employer-employee relationship. Worldwide, more than 3 billion people are working, but their jobs vary greatly. Some 1.65 billion are employed and receive regular wages or salaries. Another 1.5 billion work in farming and small household enterprises, or in casual or seasonal day labor. Across the world, the nature of work varies hugely as statistics from the report show:

Many thanks to former UN colleagues Todd Smith and Odkhoi Bold for your up-to-date perspectives from Mongolia! 

I will never forget what economist Jeffrey Sachs said in 2002 about Mongolia’s prospects for development: “Half of the people live in yurts. Their connectivity is low. They have no viable industry right now […]. The real economic answer for Mongolians is to leave. But that's not the answer for Mongolia” (my italics). Looking up my Mongolian friends on Facebook, most of them are still there, and one Canadian friend, Todd Smith, has even stayed on in Ulaan Baatar and started a family.

I have a clear memory of my first 'online identity' – the first time I was asked to choose a 'screen name', so I could interact online with other people, while still keeping my real identity private. It was exciting to be able to take on a different (and perhaps better?) personality than the original. When online, I did indeed feel stronger and 'protected' by my character.

I’m not alone in exploring new identities. No doubt you can also remember your first avatar or online identity? A recently released Foresight report on social identity for the UK Government Office for Science investigates how identities in the UK are changing – along with the possible implications for policy-making over the next 10 years, and makes an interesting read. In short, the report points out that as people have become accustomed to existing both in cyber space and in the 'real' physical world, social media is a must when pursuing friendships, continue conversations and making arrangements, essentially dissolving the divide between online and offline.

We are delighted to welcome Judith Wedel as our occasional correspondent from Brussels. She is a sociologist and journalist and she will keep us updated on the latest trends from Belgium, the Netherlands and Germany. Her focus is on political developments with regards to business, social and environmental issues. In her first blog she shares her insights about how monitoring EU institutions has become a growth industry for Europe

After some years abroad we’re back to Brussels – the European melting pot. The unofficial European Capital doesn’t offer an easy welcome initially. The sky above the city seems to be stuck in shades of grey, public administration often appears somewhat Kafkaesque and signposting is not a Belgian strength. It takes a lot of patience, effort and tenacity to find your way around.  Skills you also need when working in the surroundings of the European Institutions.

The Yale Center for the Study of Globalization through its YaleGlobal online service has just launched an ebook A World Connected: Globalization in the 21st Century which is well worth the read for anyone interested in how globalization has – and will in future – impact our world, lives and work.  It’s a seminal collection of essays collated from over ten years of work by scholars, practitioners, politicians, and experts in the study of globalization. 

One of its most compelling points is its broad scope, covering the complex array of ways in which globalization is changing our world – often discussions of globalization narrow in to areas of economics and trade, or to the global capital markets which have had such an impact in recent years, or to the geopolitics of a new world order. With the notions of interconnectedness and interdependence as its lenses, the book not only explores these topics, but also the many ways in which globalization touches all of our lives and interweaves communities, countries and continents – including how cultures and societies develop, how we seek security, how ideas moving around the world are impacting creativity, how rising inequalities are changing societies, how China’s rise is impacting the world, and how we as people interact around the world.

The winds of reform are blowing in Asia at the moment. Or so it seems when one reads the headlines. Are the loosening of the authoritarian regime in Burma (sometimes called Myanmar) and the recent protests by Chinese journalists really manifestations of openness in these countries? 

To first check out the longer term trends, your occasional correspondent turned to the internationally recognized indices relevant for political governance. It turned out to be depressing reading. In terms of press freedom, both Burma and China score in the bottom five percent of the Reporters Without Borders’ Press Freedom Index over the past decade. The Freedom House Index, measuring political rights and civil liberties, shows similar results. In terms of corruption, represented by Transparency International’s corruption perception index, China’s result is near the middle among the world’s countries, whereas Burma is consistently cited as one of the three most corrupt countries in the index since 2004.

The news from the latest Consumer Electronics Show(CES) 2013 in Las Vegas got me thinking how much life has changed since I was a kid back in the seventies and early eighties. It doesn’t feel like that long ago, but maybe it is. At least that’s what technological developments are telling me. Like many other parents I am hugely concerned about my kids and their friends spending too much time on the iPad, computer, television and every other electronic device you can name – but in reality they are just doing the same things that I do and, for that matter, the rest of the world. Born in the early 2000s they are typical of generation Z or C – the connected generation. Technology and connectedness is in their DNA and being tech-savvy is critical for our future generation, as technology changes ever faster than before.

The internet is probably the most beloved invention since the car. More than 2.4 billion or 34.3% of the world’s population is online and Facebook, the world’s biggest social network with 1 billion users, just confirms the fact that we love being online, connected and living our life in real-time.  However, the internet is not only used as tool to connect people. Increasingly it is also used to fight inefficient transport services, outdated water and waste networks, rising pollution levels and increased demands for energy and housing in our ever more urban communities. Today cities are becoming more intelligent as high technology firms, including IBM and Cisco, cross industry boundaries to take on the challenge of city management. In many different forms, they offer highly efficient, next-generation computerized planning, information and control systems. For example, IBM has worked with Brazil’s Rio de Janeiro to use technology to better handle the challenges of running the city, from managing traffic flow, or coordinating public works crews to anticipating disruptive storms. Another smart new technology making a difference to city planning is Urban OS from Living PlanIT, which works like a PC operating system, monitoring buildings, traffic and services in order to help a city to run smoothly. Test beds for the Urban OS are currently being built in Portugal as well as London’s Greenwich peninsula, while Living PlanIT was selected as one of the World Economic Forum's Technology Pioneers of 2012 for its work in developing smart cities. Another interesting Internet-led development is connectedness in manufacturing. According to the recent report “Industrial Internet: Pushing the Boundaries of Minds and Machines” from  General Electric, the Internet of Things has the potential to add US$10-15 trillion to global GDP by 2030 and reduce billions of dollars’ worth of waste across major industries such as healthcare, energy and transportation.

I’ve just read the new book from Guy Kawasaki and Shawn Welch, APE (Author, Publisher, Entrepreneur): How to publish a book – my major criticism: It wasn’t out three months ago when we were navigating the murky waters of self-publishing! Otherwise, I am delighted to have a review copy – many thanks!  More on the book in a moment, but let’s put the whole phenomenon of self-publishing in context first.

We recently wrote in The Global Trends Report 2013: For many years the publishing industry believed that people simply did not want to buy online or read a book or newspaper on a screen. Amazon proved them wrong and today the potential “death” of printed books is no longer unlikely. In 2007 Kindle e-readers quickly gained a 90% share of the e-book market. Only the launch of Apple’s iBookstore in 2010 encouraged innovation and competition. Now Amazon’s e-book publishing business threatens the traditional publishers’ value proposition as the intermediary between writers and readers.  Innovation in publishing is exploding, from authors with multiple options for content creation and channels to market, to publishers reinventing their role between content providers, distributors and consumers. And don’t forget the consumers with an insatiable desire for information and convenient solutions to immediate needs, who can increasingly create their own custom content through third-parties – or simply through the blogosphere.

Your occasional correspondent is tuktuking south on Chamkardoung boulevard on a steamy hot October day. Red dust and nauseating diesel fumes fill my lungs and eyes as we approach the infamous Khmer Rouge killing field outside Phnom Penh. The nausea is exacerbated by seeing the physical remnants and listening to vivid accounts of a horrendous time in Cambodia’s history in what is nowadays an open air museum.  Historical images of forced labor and starvation in the rice paddies, torture and execution in the killing fields fill my head. Later, returning northwards, zigzagging through the sprawling urban landscape, history fades and today’s reality grabs my attention and fills me with a glimmer of hope. The small independent businesses along the road are seemingly thriving: bakeries, furniture-, hardware- and appliance-stores, delivery companies, the larger beer breweries and garment industries. Only a few decades after Pol Pot and his regime were forced out of power in 1979, Phnom Penh has gone from ghost-town to this dynamic hustle and bustle. 

Note to self: Stay here! Singapore is buzzing. There is no other way to describe the activity and creativity visible in every corner of this miniscule adopted home country of mine. And it is buzzing in a sort of planned and structured way that makes you feel as if everything is moving onwards and upwards. Therefore, the fact that Singapore scores among the top third in this year’s Global Innovation Index and at the top of the Global Innovation Policy Index comes as no surprise.

Here's another quick preview from The Global Trends Report 2013, due out in just 2 days on November 14th. Look out for it soon.

Social needs, mobility, communities, societal impact and connectedness are at the heart of the business environment of the future. In this world the consumer can no longer be regarded solely as an individual, self-determining entity. They are connected, for better or worse, and that means the impact of the business-consumer relationship extends beyond the “target” of the relationship, i.e. the consumer, out to the extended networks and communities of which that individual is a part. This is a world where word of mouth and, increasingly, word of mouse dominate. There is nothing new about using our friends as source of best advice. What is relatively new is the way more and more people do it. We are moving away from “wisdom of crowds” to the “wisdom of friends.” Trust is the currency of the connected world.

In The Global Trends Report 2013, one accelerating challenge is the Fight for Control & Access to Resources.  As the world scrambles to deal with increasing natural resource scarcity and the explosion of digital resources, competition is increasing at both a corporate and national level to build the capabilities that will drive long-term success.  For some this means concentrating power over resources, for others it means new business models and approaches which allow greater control over resources at regional and community levels.  As control & access to resources becomes more distributed, one of the implications for organizations that we highlight in this year's report is the need to shift mindsets from control and ownership of resources to shaping the network that needs the resources.

Changes in resource availability and the competitive landscape mean not only that competition will come from new directions, but also that companies will require a mix of collaborative as well as competitive strategies and tactics to succeed in future. Traditional business patterns are being disrupted by the explosion of social media and other digital platforms, with organizations increasingly turning to open source and collaborative networks that allow them to find, create, and leverage resources and knowledge faster, more effectively and at lower cost than in old “closed loop” models controlled within a company. Firms are moving from being the central players in a physical value chain, to being nodes in open networks of value creation that span the physical and digital worlds. In this connected world, no single organization can ever hope to meet all of its customers’ needs alone. Partnerships will also be required to deliver on the increasing demands of customers for solutions and experiences as well as to deal with commoditization.