Monthly Briefings

   

March 2014: The complex nexus of food, water, energy and climate change presents huge global economic, environmental and societal challenges – heating up the battle to access new resources from the Arctic to fracking. Risks are growing, even as multilateral action stalls.

Today we are using around 50% more renewable resources and land than the planet can generate. By 2030 the annual rate will be 2 times, and by 2050 we will need the equivalent of 2.8 planets, as the population increases along with per capita consumption. Clearly such consumption is not sustainable. These resource challenges are significantly impacted by climatic shifts, with the latest 5th IPCC report on climate change reiterating the risks of continued shifts, including the impact of sea level rises, extreme weather events, and ocean degradation. Meanwhile, the Arctic is rapidly becoming a new battleground for securing natural resources, from oil and gas to minerals, diamonds and fish.

The imperative is not only to do more with less and eliminate waste but to rethink usage, reducing consumption and developing self-sustaining systems that reuse resources effectively, harnessing new technologies and approaches from urban farming to algae-based biofuels. The challenge is that if we do not act, the potential for resource conflicts between countries, organizations and communities will rise.

Yet as resource gaps grow and risks increase – the focus of this briefing – the world seems locked into a vicious cycle of debate and inaction. Media debates around partisan interests obfuscate scientific realities, even as multilateral action remains stalled on critical issues, whether climate agreements or solving the paradox of the hungry and the obese.

It’s a crisis of morals, governance, and above all marketing and media, pitting crisis deniers, often with vested interests in the status quo, against those who recognize the threats but are communicating panic versus reasoned solutions. Expect more debate and calls for responsible capitalism – those that are listening will be taking action at multiple levels in society and business.

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February 2014: Cross-disciplinary approaches and visionary entrepreneurs are driving scientific breakthroughs that could change not just our lives and work but our bodies and intelligence. Labs worldwide are opening up the vast possibilities of mind control and artificial intelligence, shape-shifting materials and self-organizing nanobots, cyborgs and enhanced humans, space exploration, and high-speed, intelligent transportation. These advances are no longer the realm of science fiction but moving rapidly towards commercialization and application, not in the distant future, but in many cases much sooner. Science is making what we thought was impossible, possible.

Neuroscience advances offer the possibilities of thought-controlled objects, and potentially other creatures, even as they offer greater potential to influence behaviors, decision-making, and illnesses. Taking control of minds and machines a step further, human-machine interfaces that could drive enhanced abilities are making rapid advances, whether offering soldiers superhuman strength or managing patients’ health in real time. Wearable technology such as smartwatches, Google Glass, and health monitoring systems are already available – the next step will be taking them inside the body. Technologies such as 3D printing offer other possible body benefits, as soon you may be able to print a replacement for a missing or damaged body part.

Scientific advances will impact many aspects of our lives, for example getting around. Intelligent personal transportation could remove the “middle man,” i.e. drivers, allowing cars to drive themselves or take over to avoid accidents – and could be on the roads in the near future. A little further away is the high speed transportation envisioned by the Hyperloop along with low-cost (relatively) space tourism/travel.

Smart materials and production techniques will revolutionize production and consumption. From graphene and erbium to upsalite and martensite crystals, new materials are offering the potential for products that are lighter, stronger, and more energy and resource efficient.

It’s an exciting age of scientific invention, although The Economist notes the speed of advances needs to be tempered by scientific discipline and challenge. Applications are limited only by imagination. Expect great debate around the ethics, financing, and distribution of public and private benefits of these advances – and the challenge of translating breakthroughs into replicable benefits.

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January 2014: In our briefings on the 10 trends to watch in 2014 (and beyond) we started out by saying: When Moore’s Law was published, its model of exponential rates of change seemed unbelievable. Today it still guides the semiconductor sector. The accelerating global pace of change today is analogous to Moore’s law. Since the turn of the century, emerging markets have moved center stage, the digital revolution has arrived, social networks have become ubiquitous, a sharing economy has been born, scientific advances such as mapping the human genome have changed our lives, and the voice of the people has reinvented markets and overturned governments.

Looking ahead to the next year, and even further, the biggest challenge for leaders, however, is not accurately predicting the future. Rather it is about first having a broad and open understanding of the trends reshaping the world, second an informed point of view on the future and what it means for your organization and third, and most importantly, taking actions today to begin to prepare. In a world of accelerating change, the biggest risk for leaders is not being wrong in their point of view about the future, but beginning to take action too late.

To help you open up to the tremendous opportunities and challenges ahead, here’s our annual round-up of where you can find some of the more interesting and important trend forecasts and ideas for 2014. As always, treat them as directional and informed opinions that can supplement your own thinking on what might be possible, feasible and desirable – not accurate predictions. No surprises in that there are plenty of opinions on economic growth as the world emerges slowly from the slump of the last few years, and that technology (social, mobile, science and more) will continue to radically reshape what we do and how we do it, from retailing to manufacturing. In focus too is a growing tide of concern and opinions around privacy and security as our lives and work become more dependent on the digital world and the rise of the internet of things and big data add to the complex web of platforms and networks we use.

Look out for more on many of these trends in our 2014 GT briefings along with examples of how they are being – or could be – translated into action.

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December 2013: Last month, we started our coverage of the 10 Trends to Watch for 2014 by introducing the notion of a “Moore’s Law of Change.” In a world of accelerating and radical changes there will continue to be significant opportunities and challenges for leaders, organizations and individuals that approach change with an open mind, an informed point of view and a readiness to take action today to prepare for the future.

So where should leaders look today for these changes? In our forthcoming Global Trends Report 2014, The Fieldbook, we highlight 10 trends that business leaders need to focus on today. In this December 2013 briefing we highlight trends 6 to 10, but before we head into the examples, let’s briefly take a look back at trends 1 to 5 from the November briefing (click here to read it):

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November 2013: When Moore’s Law was published, its model of exponential rates of change seemed unbelievable. Today it still guides the semiconductor sector. The accelerating global pace of change today is analogous to Moore’s law. Since the turn of the century, emerging markets have moved center stage, the digital revolution has arrived, social networks have become ubiquitous, a sharing economy has been born, scientific advances such as mapping the human genome have changed our lives, and the voice of the people has reinvented markets and overturned governments.

For organizations and individuals the opportunities and challenges that a Moore’s Law of change offers are vast. Look for continued radical changes in retail and social networks and value chains being reconfigured as connectivity and technology redistribute industry. “Hubonomics” will shift how and where we operate and consume. The latest scientific advances will make the impossible, possible. Perhaps the biggest issue looking forward will be to understand and manage the contradictions these changes entail.

The challenge for leaders, however, is not accurately predicting the future.  Rather it is about first having a broad and open understanding of the trends reshaping the world, second an informed point of view on the future and what it means for your organization and third, and most importantly, taking actions today to begin to prepare.  Leaders who continue to act as if the old rules apply will find their organizations left behind, as Kodak and Nokia demonstrate. How long does to take to build new capabilities or business models? To change mindsets about consumers and building relationships with them?  To change organizational culture?  In a world of accelerating change, the biggest risk for leaders is not being wrong in their point of view about the future, but beginning to take action too late. 

So where should leaders look today?  In our forthcoming Global Trends Report 2014, The Fieldbook, we highlight 10 trends that business leaders need to focus on today. These will be the subject of our next two briefings. In this briefing we focus on the first five trends and December’s will focus on the next five trends to watch.

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October 2013: The geopolitical landscape has changed dramatically since 9/11 and the global financial crisis. These two events have driven dramatic government action from West to East and North to South, changing the perception of what’s normal procedure in international politics and economy. The words “political risk” now dominate thinking across the globe – not always with positive results.

At the same time local and global political systems are becoming more diverse, reflecting global economic and power shifts, for example the move from the G8 to the G20 forum. Economic power is shifting to BRICS plus a next tier of rapidly developing economies, due to a combination of increasing financial power, resources, knowledge base, population, and consumer affluence – leading to a much more multipolar market landscape. But it’s one where resource balances are critical for continued development. Access to and control of resources, whether from the Arctic or the South China Sea, continues to be a source of tensions between nations.

Add to this a wave of civil unrest that has hit the world challenging political systems – democratic as well as authoritarian – craving economic, social, and political changes. Government weaknesses – and new communications technologies – have led to a dramatic shift in the balance of power within societies. The voice of the people is being heard and it is clear now that enough motivated people can achieve change.

The sum of these changes gives us a more diverse and less predictable world. From a business perspective the geopolitical shifts of the last decade need to be reflected in a company’s strategy because not doing so equals risky business. Understanding and mitigating geopolitical trends and risk as well as political and social changes is fairly new to many corporations and businesses. With this in mind, this briefing explores some of the more important geopolitical shifts happening today.

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September 2013:

The global financial crisis did not end the war for talent. If anything, it is about to enter a whole new level.

The World Bank predicts that we need to create 600 million new jobs worldwide in the next 15 years, with a particular emphasis on Asia and sub-Saharan Africa, to keep up with the massive need. That could sound like there are more people seeking work than organizations wanting to employ them, but the labor market is a world of contradictions. Companies are desperate for skilled, talented workers to fill empty positions – yet unemployment rates are skyrocketing. Just what’s going on?

It’s nothing as simple as poor education, at least in the traditional sense, as each new generation is entering the workforce better qualified than the one before it. The problem is an emerging split between unemployable workers – those who do not have the specific knowledge or skills needed in the future – and the in-demand workers, who have these things in abundance. “Skill development is amongst the single biggest issues that will impact India’s growth in the future,” according to Sanjeev Asthana, Founder & Managing Partner of I-Farm Venture Advisors Private Ltd in India. “We have almost 14 million youths coming into the job market every year, and they are largely unskilled. While they can find some form of employment at the most basic level, the difference between them earning US$100 a month and US$300 a month is simple skill sets.

“It’s a huge disconnect that in a country like India with a huge pool of labor, the big issue for any industry or services sector is that they don’t have enough employable people to work, whether it is in agriculture, textiles, hotels, transport, logistics, you name it. There’s a mass of people and a mass of jobs out there but the two are simply not getting matched. There’s a difference between unemployment and unemployability. Yes, you’re available for employment, but you’re not employable because you don’t possess the skills required.”[i]

This mismatch is not just an issue for India or other high-growth countries, but one that is confronting societies and businesses around the world. The only way to close the gap is to make sure that workers are prepared to fill the jobs of the future, which means that governments, educators, and businesses need to rethink education and training, including who delivers it.

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  July/August 2013: The industrial revolution reshaped the world and built efficient and productive economies. Mass production and increasing affluence allowed us to consume an increasing range of goods and

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June 2013: The effects of the internet and associated digital technologies including mobile communications are both evolutionary and revolutionary. They have transformed the world, touching billions of lives in just two decades. Digital technologies continue to impact consumers, communities, institutions, governments and businesses worldwide, creating a completely new infrastructure that has allowed many people to gain access to a new and better life by breaking down economic, educational and social barriers. Businesses and industries, as we knew them, no longer exist as technology has spurred the creation of new types of connected and networked organizations, as well as value creation opportunities that cross traditional industry boundaries. Even more, they have spawned a deeply connected and digitized society which has created a completely new economy – the digital economy.

But what is the digital economy? The term has been in use since the 1990s but there is no authoritative definition. Most definitions expand on the definition of the internet economy (economic value derived from the internet) to include economic and social activities resulting from other information and communication technologies (ICT). (Source: Infocomm Development Authority of Singapore). While this latter definition is very broad, it is also very general as it could include a huge range of activities. In our work we have chosen to define the “digital economy” as social and economic activities that demonstrate the following characteristics: are enabled by internet/mobile technology platforms and ubiquitous sensors; offer an information-rich environment; are built on global, instant/real-time information flows; provide access 24/7, anywhere, i.e. are always-on and mobile; support multiple, virtual, connected networks.

Whatever definition and characteristics are chosen for the term “digital economy” the fact is that we can no longer afford not to include it as an important part of the traditional economy because it is growing rapidly every day. In this briefing we explore the impact of increasing digitization. What role does it play in the world’s economy? How does it impact growth? Where? What are the challenges and opportunities for governments, organizations and consumers in this hyper-connected world where not everyone is equally ready? 

 

The networked readiness index map

The networked readiness map highlights the new global digital divide. It is measured by using four sub-indices – environment for ICTs (information communication technologies); the readiness of a society to use ICTs; the actual usage of all main stakeholders; and, finally, the impacts that ICTs generate in the economy and in society.

 

A redraw of the networked readiness index map from WEF, “The Global Information Technology Report,” 2013

 

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May 2013: Securing adequate natural resources to meet demand is a pressing economic as well as an environmental challenge for governments, organizations and consumers worldwide. Competition is increasing and shortages of critical resources have the potential to cause social and political instability, geopolitical conflicts and irreparable environmental damage. Emerging powers such as China and India are hungry for resources in order to fulfill the needs of their growing and increasingly prosperous populations, while developed economies are also feeling the heat of the rising competition for the world’s limited resources. While most people agree that resources are limited, nations, organization and individuals are choosing to respond in different ways – for some rethinking the use of resources and innovating is the way to move forward. Others, however, are seeking to control and even fight for access to resources. For yet others, cooperation is the key.

How competition to secure resources, both today and in future, will evolve is complex and it is not yet clear which strategies will prevail. What is clear is that the quest to secure resources has already begun for many government and organizations around the world, who are seeking to control their own economic and social destinies, and to reduce dependence on other entities. As this competition plays out, the risks of possible resource-based conflict and misunderstandings between countries, organizations and people are rising worldwide.

What is your organization doing to tackle the challenge of securing resources for the future – and to manage the risks? In this briefing we explore the changing energy landscape as an example of the shifting resource environment, and examine how some of the strategies to manage resources, both today and in the future, are starting to play out.

 

 

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