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Welcome to our guest blogger Jorge Yui. Jorge is a digital media expert, linguist, entrepreneur, and global banking systems specialist. He has over 25 years of strategy, business consulting, and senior program management experience across Europe, Asia and Latin America at Credit Suisse, Deutsche Bank, Julius Baer, Temenos, and IBM. He studied Computer Linguistics at Zurich University. See Jorge’s blog at jorgeyui.wordpress.com or email him at This email address is being protected from spambots. You need JavaScript enabled to view it.

Here's Jorge's view on the WhatsApp deal and what it means for banking.

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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 21st 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!

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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.

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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.

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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.

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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.

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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.

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Ashley Halligan, of Software Advice, recently published an article outlining how organizations are undertaking zero-waste initiatives – specifically, diverting all of their waste from landfills through a series of efforts ultimately tackling their waste stream.

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Is the potential of distributed energy on your radar yet?  If it isn’t, it probably should be.  Energy transforms economies and lives, so it should demand the attention of politicians, thought leaders, industry and, hopefully, the consumer.  And it does, but not necessarily with an eye to the future.  The potential of distributed energy hasn’t really been recognized yet.  The question is why?

Distributed energy (also known as distributed generation) is electricity generated from small-scale power generation technologies, which when combined with load management and energy storage improve the amount, quality and reliability of electricity supplies.  Typically, such technologies focus on renewable sources. Most importantly, however, because distributed generation projects are small in scale and more numerous, they move supply closer to the consumer thereby lowering environmental impacts and improving security of supply.  It also avoids the enormous cost of energy wastage which – if we could figure out how – could cut your bills in half!  For example, in 2009 about 58% of energy generated was wasted. (Source: Good Infographics)

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Information and communications technologies are advancing rapidly, reshaping all aspects of our work and lives, from telecommuting to how we find information to how we interact with others.  The implications for providers of commercial goods and services are enormous, from how they manage their increasingly tech-literate workforce to how they interact with consumers and customers over time.  For the public and non-profit sectors, the changes are equally significant with new ways of connecting with constituencies, gathering tax returns or polling information to new ways of engaging communities in social activities and philanthropy.

With the data deluge increasing, there is an “attention arms race” going on – organizations are competing not only within their industry but across all industries and forms of information to gain – and keep – the attention of their consumers and customers.  It can’t be done alone.  Organizations need to manage a growing array of channels and intermediaries through which their information is filtered, aggregated and relayed to target audiences, including search engines, social networks, news sources, mobile communications providers and purchasing portals such as apps stores.  

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Flying has always been a passionate interest with members of my family and I must admit I have enjoyed airshows myself, even if not the main instigator of visits.  However, I do wish I had had the chance to attend the Paris Air Show last week for just one reason: the Solar Impulse.  The completely solar-powered aircraft is a revolution – and an inspiration: Look Mum, no fuel and no pollution.  While its slow speed, weight sensitivity, and delicate handling means it will not be threatening commercial carriers any time soon, it is undoubtedly a significant breakthrough for the aviation industry and one which will help to shape the future of flying.

According to Solar Impulse founder and Chairman Bertrand Piccard (the first man to have circumnavigated the globe in a balloon) speaking to Reuters:  Now we are starting a new cycle again, it's a new cycle with zero fuel, and this really is important. So of course, the aeroplanes will make some evolution, it will not always stay so big, so light, so sensitive to the weather, but this is a first step, now we are showing that an aeroplane with zero fuel, just on solar power, can fly day and night with a pilot on board.

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NASA reported today that the final voyage of Space Shuttle Endeavour, originally planned for Friday, would be delayed by several more days due to technical problems.  The Space Shuttle was originally to be retired in late 2010, but has been extended until 2011, with the final launch of Atlantis scheduled to herald the end of a 30 year era in June 2011. This leaves the US Space Agency with a void in terms of next generation space passenger vehicles after last year’s cancellation of Project Constellation which was developing a new spacecraft to serve the International Space Station (ISS) as well as voyages beyond Earth’s orbit to the Moon and even Mars. The interim solution for the ISS will be for US astronauts to hitch a ride on Russia’s state-run Soyuz spacecraft.  As for homegrown options, the future looks commercial.  The privatization of space is starting – at least in the US, even as rapidly developing countries including China and India ramp up their space efforts under state banners.  As space becomes more commercial what will this mean for nations and businesses?

Under Obama’s new space policy, the transportation of crew and cargo to the International Space Station will be turned over to the commercial sector. The change came into effect with the signing by President Barack Obama of the NASA Authorization Act 2010 last October.  Obama has proposed to devote US$6 billion over the next five years towards commercial spaceflight.  In the last two weeks the first of this money has started to come through, with NASA offering US$270 million of funds to four firms to help them push forward designs for new orbiting vehicles. 

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Under the shadow of the sobering anniversary of 25 years since the nuclear disaster at Chernobyl, Japanese workers continue to battle to contain the recent nuclear crisis in Japan.  Today, Ukraine launches a week of commemorations to mark the Chernobyl disaster and to seek international funds to continue containment efforts, while intense debate continues over the long-term health effects of the radiation released by the explosion and fire.  Thousands of kilometers away, Japan’s Tokyo Electric Power company (TEPCO) is still struggling to stabilize the Fukushima nuclear power plant 240 km from Tokyo that was seriously damaged by the March 11 earthquake and tsunami. As radiation continues to leak and the Japanese economy faces significant negative effects from power shortages, the world is looking for cleaner answers to future energy needs. After a period when nuclear power had been put squarely back on to many countries’ agendas, plans are being put on hold and public opinion is mounting against nuclear, as the massive risks once again become devastatingly clear.  So what do we need and what are the options?

The demand for energy is rising rapidly. According to IEA’s International Energy Outlook 2010, total world consumption of energy is projected to increase by a staggering 49% from 2007 to 2035 with the largest projected increase in demand in the non-OECD economies. This increase in energy consumption represents an average of about 1.4% per year, with demand projected to rise from 495 quadrillion Btu in 2007 to 739 quadrillion Btu in 2035.  Adding this vast amount of electricity production capacity will in itself be an enormous challenge; doing so in a sustainable way raises the bar significantly.

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Now the world’s second largest economy, a critical geopolitical player, home to the largest population on earth and the world’s largest consumer of raw materials, how China charts its future will have a major impact on the rest of the world. China’s National People’s Congress met this week to approve China’s new five year plan to 2015, outlined by Premier Wen last weekend.  The key objectives: Slower more sustainable growth to help deal with the issue of rising domestic inflation; more renewable energy sources and greater energy efficiency; and more inclusive growth to help address social imbalances and boost domestic consumption. So what does this mean in practice for both China and the rest of the world?

Economic growth: China’s guideline GDP target growth rate has been reduced from 7.5% to 7% per annum.  Bear in mind of course, that China has exceeded its growth targets by a significant amount over the course of its last five year plan, growing 10.1% last year, so 7% is the least we could expect. Let’s put this in context – or rather allow Goldman Sachs to do so: If China grows around 10% in US$ terms this year – which is highly likely, an underestimate as this would be achieved with no inflation, 7 pct real GDP growth and a 3% annual rise of the renminbi against the Dollar), China will create more than another Indonesia or Turkey next year. The implications: More Chinese goods coming on to world markets, but also the creation of large potential consumer markets in China as incomes are distributed.

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There is no shortage of information on information.  Even if you are getting a little tired of data on data, an interesting article last week on The World’s Technological Capacity to Store, Communicate and Compute Information by Martin Hilbert and Priscilla Lopez in Science magazine is worth a bit of thought. According to their research, the digital age “officially” arrived in 2002 when digital storage capacity overtook analog capacity.  Since then the digital data deluge has exploded. By 2007, 94% of information in the world was stored digitally, versus just 25% in 2000. The introduction to the special edition on Dealing with Data suggests: “We have recently passed the point where more data is being collected than we can physically store.”  Digital dilemmas are growing: How do we manage the data deluge? How do we filter or aggregate information so we get rid of the “noise” and focus on what matters? If we can’t store everything, what information do we keep and what do we discard? What’s the exploding digital world going to mean for us and our industry?

To give you some context on the size of the digital deluge, here are a few highlights from the study and a related interview with Dr. Hilbert on the BBC:

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The Wall Street Journal has set tech and investment banking pulses racing today with an article suggesting that Twitter may be a prime takeover target.  Although reported talks with Facebook and Google have been “low-level” and don’t seem to be going anywhere fast, the article has well and truly put Twitter on the block at an estimated valuation of US$8 to 10 billion. Round numbers are so much easier when we are talking tech-based financial excitement, don’t you think? So let’s make it easy and stay with the 10 figure.  Based on the report, that’s 222 times reported 2010 revenues of US$45 million or 100 times estimated 2011 revenues of US$100 million.   And the reason it made a loss in 2010 is that it was investing in growth, both of data centers and employees. With 175 million users worldwide (more than the WSJ and New York Time and growing) plus new advertising revenues (and growing too), it sounds like a good deal, right?

Last time I had these sorts of conversations was about ten years ago.  That’s when various friends and family were comparing notes about the Caribbean islands they were thinking about retiring to.  We don’t live on a Caribbean island today, neither do they.  So why are we back in bubble-land? (By the way since my last post on bubble or no bubble reports of secondary trading of Facebook suggest it is valued at more than Amazon now. Meanwhile the Huffington Post is being acquired by AOL for US$315 million.) There is no financial calculation that can make sense of these estimated valuations and yet venture-capital firm Andreessen Horowitz (of Andreessen/Netscape fame) said it bought more than US$80 million of Twitter shares through exchanges for private-company stock.  They have been there and done that, so why are they along for the ride?

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Food security is making the headlines again.  On Thursday the UN Food and Agriculture Organization’s (FAO) Food Price Index showed global food prices at the highest level since records began in 1990. Up for the seventh month in a row, prices are well above the 2008 levels which sparked riots, and the FAO noted they were likely to rise further. This is one of the reasons Nicolas Sarkozy, taking over the rotating Presidency of the G20 for 2011, put addressing commodity prices including food as one of the priorities on his agenda.  The World Economic Forum in Davos discussed growing food security challenges, with World Bank President Robert B. Zoellick suggesting ahead of the meeting that the biggest challenge facing the developing world in 2011 is the risk of a big boost in food prices.  With the events unfolding in Tunisia, Egypt and beyond it is clear that this warning was very prescient.  While the fundamental reasons for the civil unrest are many, increasing food prices combined with increasing poverty have played a role.  The question is where to from here in terms of future food security?  Can we actually do anything to rebalance supply and ever-increasing demand?  What are the implications for business?

Since the end of last year it has become more and more obvious that the world is facing greater challenges in terms of security of basic needs: food, water and electricity.  As the world population hurtles towards the 7 billion mark in the next year and possibly over 9 billion by 2050, the pressures will increase – but it’s not just population which is impacting our ability to fulfill basic needs.  Natural disasters, which the UN estimates cost the world US$ 109 billion in 2010, have flooded arable land, damaged crops and more.  Climate change is leading to desertification of large parts of the world and more volatile weather conditions impacting crops.  High levels of waste in the food supply chain – estimates suggest between 30% and 50% of food grown – mean we grow much more than we need.

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Last weekend bankers, including Goldman Sachs’s big guns, were actively courting GroupOn to lead its speculated IPO this year. This week Goldman (again) announced that it had raised a US$ 1 billion fund to invest in Facebook from non-US investors. This, along with the US$ 500 million the firm itself and Russia’s Digital Sky Technologies have invested, puts the value of Facebook at around US$ 50 billion.  You can be excused for thinking you are in a time warp.  No, it’s not 2000 again, although those who experienced the internet bubble may be excused for a quick double-take.  I don’t want to be a party-pooper, but is it “bubble or no bubble” as we look at these enormous valuations? Is Facebook really worth more than media giant Time Warner (market cap: US$ 36 billion) or internet veteran Yahoo (market cap US$ 21 billion) – or the equivalent of one sixth of Apple, one quarter of Google or two-thirds of Amazon?

Despite the continued sluggishness of developed world economies, stock markets are rallying and the bulls are out, promising a good year. Institutions are back in equities and emerging markets look good, so everything is rosy… right?  It doesn’t quite fit with the real world as some nations tackle spiraling national debts and others the threat of inflation and over-heating, while some market watchers such as the FT’s John Plender suggest it’s a time to look for the least bad investments.

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GUEST BLOG from Greg Rice, CEO Activate Media, long-time Silicon Valley investor and tech guru:  FaceBook now has 600 million users, less than six months since it passed the 500 million mark, and membership growth shows no signs of slowing down anytime soon. It seems almost unbelievable that in less than seven years we have witnessed its transformation from a protected walled garden for the best universities to the fastest growing social medium the world has ever known. But, explosive growth usually comes at a cost. In this case we have relatively inexperienced and trusting users sharing their lives on social networking systems that are evolving quickly and with unknown consequences.  This has implications both for the users and the businesses that reach users through social networks.

For me, the real issues for users are anonymity and trust. Most people feel protected and insulated using social networks because they think they are posting content in their own environment and using the internet makes them anonymous. They seem to think that the only way their information will be found or used is if they tell someone about it and give them access to use it.

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Look out for our January 2011 GT Briefing, which gives you a single source to find some of the more interesting and important trend forecasts and predictions for 2011. There’s so much out there – typing Trends for 2011 into Google on January 1st 2011 gave us around 46 million results – that we did this partly for our own sanity but also (hopefully) so others will find it useful.  Do let us know!  It’s an eclectic mix of forecasts, on topics including: Global trends/macro trends (including us of course!), consumer trends, economic trends, financial markets trends, technology trends, social media trends, mobile trends, design & fashion trends, health & wellness trends, retail trends, travel trends and marketing trends.  Sources range from the FT, Trendwatching.com and McKinsey to the IMF, Mashable, TripAdvisor and The Food Channel.  No doubt we have missed some (feel free to let us know) and there are still more coming out daily (of which a couple below), but all have offered us some food for thought as we look ahead. Here are just a few of the themes across the forecasts that we took away.

A two-track world for economic growth

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