The Megatrends of Tomorrow’s World
Beyond the Noise
The Megatrends of Tomorrow’s World 1 The Megatrends of Tomorrow’s World The Megatrends of Tomorrow’s World
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Introduction 04 Drivers 08 Megatrends 82 Empowerment 84 Polarization 90 Hyperconnectivity 96 Disengagement 102
Herausgeber: Deloitte Consulting GmbH Aging 108
2. Auflage, Juli 2017 Dematerialization 114
Alle Rechte vorbehalten. Scarcity 120 Nachdruck, auch auszugsweise, verboten. Kein Teil dieses Werkes darf ohne schriftliche Einwilligung des Verlages Blurring Boundaries 126 in irgendeiner Form (Fotografie, Mikrofilm oder ein anderes Verfahren), reproduziert oder unter Verwendung elektronischer Systeme Erosion of Governance 132 verarbeitet, vervielfältigt oder verbreitet werden. Displacement 138 © Deloitte Consulting GmbH, München 2017 Concluding Words 144 LOGOPUBLIX Fachbuch Verlag, München Sources 148 Satz: Deloitte Design Studios Druck: LOGOPRINT GmbH, München About the Authors 164
ISBN 978-3-927985-50-6 Contact 165 2 3 The Megatrends of Tomorrow’s World
We all have to make Take a step back and consider this: is each other is never the same, and is keep in mind two more points. First, economy. To illustrate this, we provide it easier to make assumptions about extremely specific to the focus of the this book can be read from front to five “stories of the future” for each decisions in spite of the future today, or some years back scenario at hand. back, but you don’t have to stick to megatrend, to give you examples of an uncertain future. in the last millennium? Most people convention. Feel free to jump from how the megatrend might impact the would agree that it is harder to make In other words, drawing up a sensible driver to driver, go back and forth and future across STEEP categories. Imagining the future sense of “it all” today, compared to the list of factors that can explain the pro- explore the points that capture your through scenarios more clear-cut and bipolar world in verbial first 80 percent of our future imagination. Enjoy the ride. which we grew up. is the easy bit of scenario thinking. enables us to identify Selecting the relevant drivers for your Second, there are two parts to this robust strategic choices We live in a world of ever faster tech- specific focal question, country or book, and that structure needs a bit nology cycles, hyperconnected and industry, and combining the overall of explanation. The first section de- that would fit to any nervously flickering financial markets, set into plausible, balanced and chal- scribes 35 drivers of the future, which plausible future, and to and post-factual politics. No wonder lenging stories, on the other hand, is are social or political tendencies, that the gentle art of perceiving, as an art. economic or environment-related keep strategies flexible scenario-pioneer Pierre Wack once processes, or technological develop- in case the future famously described it, has become The objective of this book is two-fold. ments we often rank as relevant when an increasingly critical skill when far- We would like to give you a sense of compiling our trend analyses. These surprises us. ranging decisions are to be taken. structure when thinking about drivers drivers certainly make an interesting of the future. By clustering drivers read on their own, but they are still With this book, we would like to draw into buckets such as societal, tech- rather discrete and unrelated obser- your attention to a number of trends nology-related, environment-related, vations between themselves. that, in our current view, might well economic, and political (which is often drive the future. To do this, we will referred to as the STEEP categoriza- By contrast, the second section describe a selection of the social, tech- tion), you are off to a good start. highlights megatrends, which is a nology-related, environment-related, more abstract concept. Megatrends economic, and political drivers of We would also like to open your eyes emerge at the intersection of two or change that we encounter again and to the fact that the future is already three STEEP categories. For example, again in our daily work at the Center here, you just need to perceive it. hyperconnectivity is a phenomenon for the Long View. After absorbing the list of drivers, you that stems from both technology and might start to read or watch the news society, and therefore qualifies as a There is one striking insight from differently. If you start to feel that megatrend. Yet, even more important- years of scenario work: the set of driv- most of the news we are bombarded ly, megatrends will have an impact on ers that form the general background with on a daily basis actually tie in all aspects of our life in the future. To to the scenarios we draw is surpris- neatly with one or several of the stick with our example, that mega- ingly stable. It changes only slowly trends described in this book, you trend hyperconnectivity not only de- over time, and varies surprisingly little have started to think like a futurist. termines further future technologies across industries, geographies and and trigger new social trends, but also sectors. However, the ways in which As you embark on your personal leaves its mark in politics, the envi- Florian Klein these drivers link up and interact with journey to imagine the future, please ronmental debate, and of course the Head of the Center for the Long View
4 5 The Megatrends of Tomorrow’s World The Megatrends of Tomorrow’s World This century is best described as the era of uncertainty.
Underpinning the future of our world are 35 drivers of change. The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Additive Artificial Augmented Automation Blockchain Climate Cloud Manufacturing Intelligence Reality Systems Change Technology
Competition Concentration Crowd- Data Demand for Digitization DIY for Talent of Wealth sourcing Monetization Customization Movement
Empowered Environmental Focus on Geospatial Globalization Industry Internet of Women Awareness Transparency Technology Consolidation Things
Knowledge Mass Next-Gen Partnership Political Regulatory Resource Worker Migration Workforce Models Fragmentation Landscape Price Volatility
Society Technology Environment Resource Sharing Social Social Technization Terrorist Urbanization Economy Scarcity Economy Media Unrest of Healthcare Organizations Politics
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Additive Manufacturing Framework for understanding AM paths and potential value
Additive manufacturing (AM) or 3D printing refers to a High product change production method whereby three-dimensional products Path III: Path IV: are created by successively layering material using a com- Product evolution Business model evolution puterized or digital process. • Strategic imperative: Balance of • Strategic imperative: Growth and growth, innovation, and performance innovation • Value driver: Balance of profit, risk, • Value driver: Profit with revenue Importance Impact and time focus, and risk • Key enabling AM capabilities: • Key enabling AM capabilities: •• AM already affects an enormous •• AM can improve a product’s - Customization to customer - Mass customization number of industries including value by increasing the efficiency requirements - Manufacturing at point of use - Increased product functionality - Supply chain disintermediation automotive, industrial products, and effectiveness of the design - Market responsiveness - Customer empowerment e medical devices, aerospace and process. The main benefits are e - Zero cost of increased complexity defense, consumer goods, and reduced process time and cost architecture. reduction in the development cycle, as well as quality and design •• From 2013 to 2018, the market improvement of the final product. volume for AM systems and sup- port products/services is expected •• AM’s impact on supply chains in- Path I: Path II: to rise from US $3.1 billion to US cludes material waste reduction, Stasis Supply chain evolution No supply chain chang $12.5 billion. increased production flexibility, and High supply chain chang • Strategic imperative: Performance • Strategic imperative: Performance the possibility of further decentraliz- •• The fastest growing segment within • Value driver: Profit with a cost focus • Value driver: Profit with a cost focus, ing production. However, companies • Key enabling AM capabilities: and time AM, metals, is expected to reach a have to overcome quality assurance - Design and rapid prototyping • Key enabling AM capabilities: market volume of US $3.9 billion by barriers to employ AM for purposes - Production and custom tooling - Manufacturing closer to point 2025. - Supplementary or “insurance” of use beyond rapid prototyping or tooling. capability - Responsiveness and flexibility •• AM is currently already used in some •• Some experts estimate that consum- - Low rate production/no change - Management of demand uncer- form in 24% of manufacturing firms ers might save approximately 80-90% over tainty and in up to 50% of supply chain - Reduction in required inventory of purchase costs by purchasing the leaders. right to manufacture a product at •• By 2017, an additional 21% of manu- home rather than through traditio- facturing firms plan to use AM. nal retail channels. No product change
Sources: Statista 2013, IDTechEx 2015, Deloitte Sources: Deloitte University 2017 University 2014, Deloitte University 2017
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Artificial Intelligence The Three Vs framework for assessing applications for cognitive technologies
New technologies are focused on augmenting the processing capabilities of machines for human-like intelligence (e.g., robotics, natural-language processing, speech recognition).
Importance Impact Screen Cognitive technology indicators Application examples •• Due to the increased use of robotics •• Through suggestions that specifically and artificial intelligence (AI), it is ex- refer to a context, cognitive analytics Viable • All or part of a task, job, or workflow requires low • Forms processing, first-tier customer service, pected that about 50% of US occu- can enhance the accuracy of fore- or moderate level of skill plus human perception warehouse operation • Large data sets • Investment advice, medical diagnosis, oil pations will experience some degree casts and the performance of tasks • Expertise can be expressed as rules exploration of automation in the next 10 years in terms of their efficiency and degree • Scheduling maintenance operations (2014–2024). of automation. Cognitive analytics can Valuable • Workers’ cognitive abilities or training are under- • Writing company earnings reports; e-discovery; support and add to human cognition •• A study conducted by researchers utilized driving/piloting by providing suggestions that a human from the University of Oxford pre- • Business process has high labor costs • Health insurance utilization management mind may not have taken into consid- • Expertise is scarce; value of improved • Medical diagnosis; aerial surveillance dicts that almost half of total US eration. performance is high employment (47%) will transform or vanish because of automation. •• Cognitive analytics are especially Vital • Industry-standard performance requires use of • Online retail product recommendations cognitive technologies • Fraud detection valuable for companies that are •• There are three general categories • A service cannot scale relying on human labor alone • Media sentiment analytics eager to enhance their capabilities into which applications dealing with to predict, sense, and react since they artificial intelligence can be divided. combine the analysis of big data with These are “product applications”, practical decision-making support. “process applications” (such as automation), and “insight applica- tions” (such as machine learning). Sources: Deloitte University 2015, Deloitte 2014, Sources: Deloitte 2014 Deloitte University 2014
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Augmented Reality The evolution of interaction – shortened chains of command
Augmented reality (AR) is a form of technology used to Augmented and virtual reality help accelerate the coalescence of users provide a digitally enhanced view of the real world. This with their device-powered experience of the world, improving the fidelity of intention, increasing efficiency, and driving innovation. technology layers digital information (e.g., graphics, sound, or feedback) on top of the physical environment for the The evolution of interaction user to manipulate.
Importance Impact
•• In 2017, there will be more than •• By using AR devices, users can 2.5 billion downloads of mobile AR experience their physical sur- applications. By 2020, there could be roundings through computer- Interface about 1 billion people using AR. generated inputs (e.g., video, sound and GPS data). These sen- •• It is predicted that the annual rev- Interface sory inputs augment items from enues of mobile AR in the enter- Peripherals the real world in such a way that prise and general entertainment people think their environment is application sectors will each ex- real, even though they may find ceed US $1 billion in 2018. themselves in a totally different •• Copenhagen Airport has introduced surrounding. a pilot project in which an application •• During the past 12-18 months, guides users through the airport. By retailers and brands have been 2020, users could be navigated with a strongly engaged with advertising 3D tool embedded in either a mobile their AR applications via mobile or a wearable AR device. This device channels to influence consumer MESSENGERS SMART SCREENS INTUITIVE INTERACTION will map passengers by means of the Intermediate devices interact with Screens manipulated based on Devices respond to ambient cues and behavior and drive consumer triangulation of Wi-Fi access spots at interfaces; virtually all input occurs environment facilitate direct physical intentional movements to create adoption of AR devices. through a mouse or keyboard or spoken interaction with displays empathetic, personalized experiences terminals and navigate them through the airport. •• At a time when customer focus is becoming increasingly important, mobile is considered the leading POINT CLICKTYPE TOUCH SWIPE TALK GESTURE MOOD GAZE technology driving omni-channel marketing.
Sources: Deloitte University 2016 Sources: Deloitte 2016, Deloitte University 2015 14 15 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Automation Time spent on tasks machines could handle
Physical objects are becoming more and more frequently inter- connected with digital technology (e.g., advanced robotics and T me s ent on tas s ma h nes o ld handle sensing) and able to communicate without human intervention. 20%
Product Demonstrators Importance Impact Promoters Market Research Analysts •• By 2020, the robotics industry could •• Automation reduces errors signifi- Marketing Specialists reach a market volume of US $100 cantly and supports product improve- 15% billion. ments. Companies in all sectors have Merchandise Displayers to decide whether to understand and Window Trimmers Advertising •• During 2014–2024, half of the work Promotions adopt intelligent automation or take Managers carried out by today’s US workers Marketing the risk of falling behind. could be automated to some extent. Managers 10% •• Industry example: in the life sciences •• In that period, the robotics industry and healthcare industry, robots steril- Graphic Designers may create 3 million additional jobs, ize surgical tools without human inter- especially in consumer electronics vention, thus incidents of infection are and the electric vehicle industry. Survey Researchers reduced and hospital staff resources 5%
•• By 2020, the rehabilitation robot are freed up. Share of tasks machines could handle market may grow 40-fold compared •• Robotic systems in pharmacies could to 2014 due to advancements in Commercial Industrial hand out drugs with zero errors while rehab/therapy robots, exoskeletons, Designers in automated kiosk, patients are able wearable robotics, and active to enter medical symptoms and re- prostheses. 0 ceive customized recommendations. $10 $20 $30 $40 $50 $60 hourly wage
Sources: Deloitte University 2015, Deloitte Univer- sity 2015, Deloitte University 2014, Deloitte 2015, Sources: Harvard Business Review 2016 Deloitte 2015
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Blockchain Systems
Blockchain systems use a distributed ledger technology to promote transparency, trust, and decentralized validation among members of the digital network.
Importance Impact
•• Venture capitalists are fueling this •• Due to their similarity to the Internet, development with the investment which increased communication of approximately US $1 billion in 120 dramatically by reducing cost and 01 02 03 04 05 blockchain-related start-ups – half of friction to near zero, cryptocurren- The new block When a miner The algorithm Within ten All the trans- that investment already took place in cies have the potential for a sharp is put in the solves the rewards the minutes of one actions in the network so that cryptographic winning miner Person initiating block are now 2015. increase in transactions. miners can problem, the with 25 the transaction, fulfilled and the •• With the representation of more •• Analysts at one investment bank verify if its discovery is bitcoins, and both parties recipient gets than 50 of the world’s largest banks, commented on this trend recently, transactions announced to the new block is each receive the paid. are legitimate. the rest of the added to the first confirma- the blockchain consortium R3 CEV is saying that venture capital flow Verification is network. front of the tion that the creating a distributed ledger platform accelerated in 2016 and is leading accomplished blockchain. bitcoin was to power the financial services indus- to further the development of the by completing Each block joins signed over to try’s foray into blockchain. foundational and infrastructure complex the prior block the recipient. services necessary to create a cryptographic so a chain is •• Linq, a blockchain-based platform computations. made – the fertile “plug and play” ecosystem and ledger system that manages blockchain. for entrepreneurs and innovation. the trading of shares, was rolled This may ultimately escalate enter- out by NASDAQ (MX Group Inc.) prise adoption from a trickle in 2016 in October 2015. to a multi-year boom starting in 2017.
Sources: Deloitte University 2016 Sources: Deloitte 2016
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Climate Change Global Land-Ocean Temperature Index
As climate change continues, natural disasters and abnormal Global Mean Estimates based on Land and Ocean Data weather patterns will increasingly have effects on our socio- economics, demographics, crop production, food security, 1.0 migration, and political landscape in unprecedented ways. 0.8
Importance Impact 0.6
•• According to the UN Food and Agri- •• 2016 was ranked as the warmest ) (C
cultural Organization, 1.8 billion year since 1884 according to a study y 0.4 people are exposed to absolute published by the NASA Goddard water scarcity and more than 5.2 Institute for Space Studies (GISS). omal An
billion are expected to face water Similar findings were also pub- e 0.2 stress by 2025. lished in studies by the UK Climatic Research Unit (CRU) and the US •• By 2020, an increase of 13% in food -0.0
National Oceanic and Atmospheric mperatur production is needed to meet the Administration (NOAA). Te demand of 890 million tons for 7.8 billion people. •• The need for innovation in food pro- -0.2 duction is increasing, fueled by cli- •• By 2025, water withdrawals will mate change and natural calamities. increase by 50% in developing -0.4 countries and by 18% in devel- •• Aware consumers push for healthy oped countries. This will foster and organic food, reduced food -0.6 local competition for water. footprints, and sustainability. This 1880 1900 1920 1940 1960 1980 2000 2020 results in food waste, recycling, and the redistribution of unused food emerging as the main concerns for Annual Mean Lowess Smoothing burgeoning ecosystems.
Sources: NASA Goddard Institute for Space Studies 2015 Sources: Gartner 2016, The Guardian 2016, Deloitte University 2015, Deloitte University 2015
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Cloud Technology Benefits of using Cloud Technology
Cloud technology allows users to access scalable technology services immediately via the Internet’s existing network, promoting lower infra- structure, inventory, and overhead costs, and creating leaps in com- puting power and speed, data storage, and bandwidth.
Importance Impact • Ability to rapidly scale capacity up and down •• On average, small to medium-sized •• With cloud computing and scalable Scalability • Standardization across locations (including globally) businesses (SMBs) that use an above- computing power delivered as a • Frees up resources for other capabilities average number of cloud services service using a pay-by-use model, Flexibility • Enables mobility – employees can work in any location grow 26% faster and are more profit- retailers, for example, are able to • Improves collaboration and sharing able by 21% than those SMBs that meet hurried, on-the-go, and digitally • No up-front investment in technology (hardware, software) use no cloud tools. connected consumers during various Cost • SMBs can get economies of scale benefits phases of their shopping experience. •• Compared to in-house, cloud-based • Access to technical expertise without paying for full time staff file storage is more cost efficient. For •• The emergence of cloud technolo- • Ability to test and trial new products an enterprise, it costs US $955,000 gies is enabling new and innovative Innovation • Upgrades/new products immediately feasible per year to deploy and operate 100TB customer-facing services and pro- of file sharing space, but only US ducts. For example, 77% of retailers • Lower maintenance requirements Maintenance $141,180 per year to use Amazon S3. deployed or piloted cloud computing • Deploying and integrating technologies (including using APIs) is typically simpler to enable them-selves to provide: •• In a survey carried out by Deloitte, 55% • Software is updated automatically to fix bugs of SMBs used cloud technology in - Seamless retailing Security • Disaster recovery – content is stored remotely some aspect of their business, seek- • Data is not held on transportable hardware - Single view of consumer ing one or more of the six types of
benefit which are scalability, flexibility, - Real time personalization and Sources: Deloitte 2014 cost, innovation, maintenance, and cross-channel visibility security.
•• 95% of IT professionals surveyed in Sources: Deloitte 2014, RightScale 2016 2016 are making use of cloud tech- nology.
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Competition for Talent The changing composition of the corporate worker
The mismatch in skills available and capabilities needed in the workforce given today’s technologically-focused world has resulted in fierce competition for talent. The changing composition of the American worker
Importance Impact
•• According to an EIU survey, more •• Personal identities are shaped than 60% of respondents answered through terms like “global citizen” that “talent shortages are likely to and “global community” since 1950 1990 2020 affect their bottom line in the next innovators travel to distant shores THE COMPANY THE LADDER THE FREE AGENT five years” – especially in the highly- to solve problems. skilled talent pool. MAN CLIMBER •• Individuals must deal with much •• 54% of employers state that they are greater professional flexibility. unable to find qualified applicants for Highly-skilled generalists who FREE WIFI open positions. have graduated from the nation’s top universities need to adapt very •• Next to demographic change, com- quickly to changing markets with petition or the war for talent was specialized skillsets. ranked as the second most impor- tant factor for recruiting. Sources: Deloitte 2016, US Chamber of Commerce •• Since global demand for skilled 2014, Monster.de 2015 workers is increasing and the creative class is becoming more Dynamic, Mobile, Flexible, Corporate, Rigid, International, Individual, Lattice-Driven, selective, virtual mobility, reverse Structured, Domestic, Ladder-Drivern, Multiple Income Streams, transfers, and short assignments Career Professional, Firm-Based Freelancer are part of new global mobility forms.
•• By 2017, 58% of firms expect to Sources: Deloitte University 2012 hire more part-time, temporary, or contract employees.
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Concentration of Wealth Shares of household income of quintiles in the United States from 1970 to 2015
As global wealth inequities grow, the divide between the rich and the poor gets greater, coupled with stagnating middle class incomes and the rise of the luxury consumer.
Importance Impact 60%
•• In 2016, more than 3.5 billion adults •• The ever-increasing income gap 51.1% 51% 51% 51.2% 51.1% worldwide had wealth of less than US implies that companies will target 49.8% 50.4% 50.3% 48.7% $10,000, while the wealthiest 0.7% the upper class and the less wealthy 50% 45.6% 45.6% held 46% of the world’s wealth. population through distinct strate- 43.3% 43.3% 44.2% gies. •• In 2015, more than 51% of the house- hold income of private households in •• While the differentiation approach 40% the US was earned by the top 20%. In will entail focusing on branding, the same year, only 3.1% of household customer experience, lifestyles, income was earned by the lowest- and consumer aspirations, the 30% earning 20% of households. cost leadership approach will 24.5% 24.7% 24.6% 24.4% 24% mostly concentrate on low prices 23.3% 23% 23% 23.4% 23% 23% 23% 23.2% 23.2% •• Factors including the aging popula- and a strong sense of value. The tion, rising unemployment, and skill 20% 17.4% 17% 16.8% market in-between is expected income household of Share 16.2% gaps in developing countries foster 15.9% 15.2% to disappear increasingly. 14.8% 14.6% 14.6% 14.3% 14.4% 14.4% 14.3% 14.3% global income inequality. 10.8% 10.4% •• Stagnation of incomes and the 10.2% 9.8% 9.6% •• Trends suggest the upper class will 9.1% 8.9% 8.6% 8.5% 8.4% 8.3% 8.4% 8.2% 8.2% limited ability to take on debt will 10% be able to spend more while the rest lead to slower growing consumer 4.1% 4.3% 4.2% 3.9% 3.8% 3.7% 3.6% of the population may be seriously 3.4% 3.3% 3.2% 3.2% 3.2% 3.1% 3.1% spending in the next decade. constrained about home values. 0% Sources: Deloitte University 2015, Credit Suisse 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 2012 2013 2014 2015 2016, Deloitte University 2011 Lowest quintile Second quintile Third quintile Fourth quintile Highest quintile
Sources: US Census Bureau, Statista 2016
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Crowdsourcing A sampling of crowdsourcing platforms
As consumers are increasingly interconnected through social media platforms and with the rise of digitalization, collective intelligence gathering is being leveraged to elicit perspectives and insights from a wide variety of individuals.
Gigwalk oDesk Kaggle Importance Impact A mobile, flexible workforce for A tool for hiring and managing Competitions for predictive job in the field remote freelancers modeling and analytics •• To identify 2,880 suspects during the •• The current, linear product develop- Founded 2011 Founded 2005 Founded 2010 riots in 2011, the London Metropol- ment and innovation process from itan Police used a crowdsourcing an initial idea to an item available on smartphone application. retail shelves can take years for large companies. •• An open-source talent acquisition via crowdsourcing is a spreading •• The start-up Quirky is challenging alternative staffing model – growing current wisdom by crowdsourcing Tongal Quirky Kickstarter Collaborative contests for A product design incubator A global funding platform for in scale, sophistication, and impor- the development process, shortening video production and marketplace creative projects tance. the invention timeline from years to Founded 2008 Founded 2009 Founded 2009 weeks. •• Leading Fast Moving Consumer Goods (FMCG) enterprises increased •• A future organization’s distributed User Numbers of contributors in the community their usage of crowdsourcing by 27% workforce strategy will contain in 2015 compared to 2014. a crowdsourced labor pool as a 350,000 legitimate component. •• The world’s most valuable global 4,500,000 brands increased their crowdsourc- 134,200 ing of creativity over 30% from 2014 Sources: Deloitte University 2015, Forbes 2015, Deloitte University 2014, eYeka 2016 30,000 to 2015. 659,000 5,419,582
Sources: Deloitte University 2014
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Data Monetization 8 Data Monetization Opportunities
Consumers increasingly collect, track, barter, or sell their perso- nal data for savings, convenience, or customization; companies increasingly value sources of data direct from the consumer as a way of gaining a competitive advantage (e.g., Facebook, Uber).
Importance Impact
•• Before companies start to mone- •• An increased mobile penetration in tize their data, they have to assess the emerging countries of Asia and whether they have the legal, statu- Africa fosters further growth of the Digital advertising: Financial services: Managing traffic: Optimized billboard ads: tory, and/or ethical right to market demand for mobile data services Right content, right Cross and upsell Alleviate congestion, Understand the traffic, consumer data – and move no and increases the potential for data audience, right time & detect fraud optimize delivery routes tailor the message further without the proper rights monetization. and protections in place. •• Researchers believe that more than •• In the near future, there will be 80% of consumers will barter, track, three major trends: or sell their private data for savings, customization, or convenience in the - Consolidation within the data year 2020. economy Public transportation: Retail: Entertainment IoT: Passenger satisfaction, Optimize store place- and events: Add value – - Further expansion into different Sources: Global Information 2015, Deloitte 2015, operational efficiency, ments and staffing, Manage traffic, location data ecosystems Forbes 2016 revenue opportunities monitor competitors target promotions and more
- A shift to customized fulfillment models in response to greater customer centricity
Sources: TM Forum 2016
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Demand for Customization Mass customization interjects buyer participation into product design
Control is shifting away from the manufacturer, giving the consumer Mass customization allows customers to participate meaningfully in the design a greater say in what, when, and how they receive their goods and ofMass products stom at on they will buy. nter e ts er art at on nto rod t des gn Mass customization allows customers to participate services (e.g., customized goods, precision medicine) due to the meaningfully in the design of products they will buy interaction between Web 2.0 and advanced manufacturing trends.
Importance Impact
•• The healthcare sector is increas- •• By offering customized products to ingly making use of so-called bio- customers, companies can increase informatics, with numbers grow- sales online as well as in-store. There- Desi e i se ing exponentially. With the help fore, brands are increasingly engaging of such analytics, which support with customization: sequencing genomes and body - Pepperidge Farm allows its composition, medical treatment customers to decide on the can be customized for each shape of their Goldfish crackers patient specifically. - Jawbone offers its customers the •• Due to the rise of 3D printing, con- ability to create their own speakers sumer goods can be personalized more easily and mass customiza- - Trek customers can build their tion of consumer goods is being own bike from scratch i r er r e introduced by an increasing number - Men can design their own suits of companies who offer “print at at Brooks Brothers home” options to their customers Sources: Forrester Research 2011 (e.g., 3D printed toys, shoes, •• Through customization, companies cosmetics, and food products). can gain a competitive advantage over their competitors as they receive •• Retailers collect and analyze big insights from customized designs. data to adapt product offerings This creates a virtuous feedback loop to their customers’ preferences. which may help them to adapt small Amazon is only one outstanding aspects of their business and differ- example, building a large part of entiate their products for consumers. its success on this approach.
Sources: Deloitte University 2015, Deloitte Univer- 32 sity 2015, Forbes 2013 33 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
The nformat on al e oo r i ere e er e i s e es si ess re e re new value by providing insight to optimize actions. Modified actions in turn give rise to The Information Value Loop Digitization e i r i s r i e e e e rivers e er i e v es is created; their relevance and importance depend on the specific use case.
The proliferation of new mobile technologies, the rise of i i i i the Internet of Things, reliance on sensor and wearable r i i i eve r s e technologies, and increased reliance on digital interaction has shifted the world from an analog to a digital one.
gmented T Importance Impact eha or ensors
•• It is predicted that about 30 billion •• By 2020, the economic impact of the devices with unique IP addresses will “Internet of Everything” could account be connected to the Internet by 2020. for more than US $14 trillion. • The IoT can lead to the emergence •• In 2019, the market of devices • Magn t de Dis er e T se se s rs that are connected to the so-called of new organizations and services. er s e er e One example is the automotive “Internet of Things” (IoT) is expected e s i si eve r s e to be twice as big as the market for industry: through the introduction es ri i s r computers, smartphones, tablets, of telematics services, car manu- re i i s connected cars, and wearables facturers that had formerly concen- T me s combined. trated on manufacturing goods are gmented etwor now offering subscription-based ntell gen e •• Examples from different industries services, turning them into service T show how applications with sensors providers. and wireless communication can M be used to track the location and •• According to Gartner, in 2016, com- T M condition of high-value equipment panies will have invested around US such as construction and mining $5 billion on consulting support and tandards machinery, or vending machines implementation services that deal and ATMs. In addition, digital app- with cellular machine-to-machine lications can support the manage- (M2M) communications. Industries ment and control of commercial such as manufacturing, transporta- es eri i r i r s issi i r created at different times i r e er i trucking fleets, electric power dis- tion, utilities, healthcare, retail, bank- e ies or from different sources r essi i tribution networks, and manufac- ing, and also the government are ex- e Drivers turing operations and processes. pected to have invested the most.
Sources: Deloitte University 2015, Deloitte Sources: Deloitte University 2015 University 2013 34 35 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Maker movement overview and drivers
145K 140k Maker movement overview and drivers Do-It-Yourself (DIY) Movement Maker movement overview and drivers 130K 145K 120k 140k 120K e Driven by the ubiquitous adoption of the Internet and 110K 130K
ker Fair 100k smartphones, individuals are increasingly engaging with 120k 120K e 97K the digital world to make purchasing decisions and per- Ma 110K 90K at 85K
s 83K form tasks without professional assistance. 80kker Fair 100k 97K 74K Ma ndee 90K at te 85K
s 83K 64K at 80k Importance Impact 60k
of 74K ndee 50K •• In 2016, there were more than •• As customers increasingly look te 64K 191 Maker Faires worldwide in 38 for possibilities to buy customized 40kat 60k of Number countries with 1.4 million attendees products and create products 50K and flagship events in the Bay Area, of their own, niche markets will 27K 40k 23K New York, or Chicago alone attracted proliferate. These offer consumers 20k Number more than 260,000 visitors. the opportunity to create their own 27K products according to their needs. 23K •• By launching a program called Live 0 20k did not exist Customs, the shoe brand TOMS •• Manufacturers who concentrate 2009 2010 2011 2012 2013 2014 2015
which is highly popular amongst solely on mass production with did not exist San0 Francisco Bay Area New York millennials, lets its customers design little variety must rethink their 2009 2010 2011 2012 2013 2014 2015 their own pair of shoes. business model and their place in San Francisco Bay Area New York the production landscape, as the •• According to estimates by Make demand for customization increases $274M Media, the market for DIY products Revenue from maker-driven businesses and consumers turn to smaller or Revenue from maker-driven businesses and components that is used by more personalized producers. makers had a turnover of more Revenue from maker-driven businesses $274M than US $1 billion in 2015. $196M Sources: Deloitte University 2015, Deloitte Univer- •• Every day, around 1,600 people sign sity 2014, The Denver Post 2016, Maker Faire 2017 $50M up for the online platform Craftsy $196M $125M which has provided DIY tutorials $50M to its users since 2012. By January $18M $75M $125M 2013, Craftsy already had 840,000 $7M
enrollments and currently has ap- $18M 2011 2012 2013 2012$75M 2013 2014 2015 proximately 6.7 million registered $7M (projected) members. Quirky Etsy 2011 2012 2013 2012 2013 2014 2015 (projected) 36 Sources: Deloitte University 2015, StatistaQuirky 2016 Etsy 37 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Empowered Women Increase in Women-Owned Business between 2007 and 2017 in the US clustered by race
Women are making significant inroads into top leadership positions across the public and private sectors, as well as emerging as an important economic sub-group in devel- oping countries who can serve as an engine for growth.
Importance Impact 100%
•• Between 2003 and 2016, the global •• The number of enterprises that have 87% share of women in national parlia- discovered women as powerful yet ments rose from 15% to 23%. overlooked consumers with specific needs regarding products and ser- •• Women’s Empowerment Principles vices is increasing exponentially. 68% (WEPs) have already been rolled out in various enterprises worldwide, hence •• While emerging markets such as more than 1,368 business leaders are China and India, with growing tech- demonstrating leadership on gender nology and engineering industries, equality, based on these principles. are expecting a faster elimination 44% of gender inequality in the STEM •• According to the World Economic sectors, markets with aging popula- Forum, there is a strong correlation tions are seeing an increase in male between countries that are success- employees in traditionally female- fully closing the gender gap and their dominated caring professions. economic competitiveness. Thus companies with a high percentage of female employees, particularly in Sources: Deloitte University 2014, The Wall Street 10% Journal 2015, The Wall Street Journal 2015, The board positions, perform better than Economist 2013, Inter-Parliamentary Union 2016 competitors.
•• By narrowing the gender gap in White Asian Black Hispanic employment, the global income per
person will increase by at least 20% Sources: CNN 2015 by 2030.
38 39 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Environmental Awareness
The influence of social activism has continued to rise as consumers have become more empowered, demanding environmentally sustainable products, increased corporate social responsibility efforts, and other commitments to society. WHO IS THE Importance Impact •• According to a survey in 2016, 63% of •• Not only “green” buildings as seen all consumers are positive influencers in the first decade of the 21st cen- and encourage others to buy from tury, but entirely “green” cities will CONSUMER? environmentally and socially respon- become the norm and will reshape sible companies. the construction industry. They are not only sustainable, but resilient. •• 65% of consumers can be classified Zero-energy home building, rooftop er e as responsible consumers and are e farming, and permeable pavements willing to pay extra for products pro- are just a few of the advances. duced in a environmentally and so- i ies s s r cially responsible way. •• In addition to sustainability, cities will e e vir e be “smart”, increasingly using sensors •• Independently of whether it is based and wireless networks. on obligation or desire, more than 2 billion aspirational consumers prefer •• By 2020, a sustainable marketplace sustainable consumption. with new industry leaders will have been established. This development •• In China, about 60% of the popu- is driven by consumers with know- lation require the prioritizing of ledge of corporate practices and an environmental protection when interest in environmentally sustain- fostering economic growth. able products. These consumers will likely buy products only from i i re r companies with a “green” reputation. s i res si e r s servi es Sources: Deloitte University 2015, Deloitte Univer- sity 2015, Deloitte University 2015, BBMG 2016 Sources: Deloitte University 2015
40 41 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Focus on Transparency Consumer opinion on data privacy
Expectations of government transparency are growing while personal data is becoming more ubiquitous, creating new implications for privacy, cybersecurity, and accountability.
Importance Impact •• A recent survey interviewing more •• Citizen innovators have been 83% than 1,000 business journalists from encouraged by the production of consumers are aware of recent over 35 countries found that more and use of troves of data to trans- security breaches of personal data than 90% of journalists source news form open data into solutions and stored with retailers from social media. applications.
•• Citizens eager to expose government •• Today’s progressive HR departments 59% of consumers state that a single data and corporate secrets have given particularly value the treasure trove breach would negatively impact their millions of documents to WikiLeaks. of data available through outside likelihood of buying brands from a sources such as social networks. It consumer products company can help monitor and build employ- ment brand, identify and recruit valuable talent, enhance the under- 51% standing of compensation strategies, of consumers would be forgiving of a recognize flight risk, and monitor consumer product company that had employee satisfaction and their one single data breach of their person- al data as long as the company quickly engagement. addressed the issue
Sources: Deloitte University 2015, Deloitte Univer- sity 2015, Deloitte University 2011, Deloitte Uni- Sources: Deloitte University 2014 versity 2015, Deloitte University 2015, Deloitte University 2015
42 43 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Geospatial Technology
The process of gathering and analyzing geographical data to understand the locational patterns of a subject has become prevalent.
Importance Impact
•• The Geographic Information System •• The ways in which locational data GIS GPS (GIS) market is being disrupted by is collected, analyzed, and stored Geographic Global Information Positioning innovations that focus on consumers is critical for achieving sustainable System System as these commoditize geospatial data. advantages when the concept of “liquid data” comes into play. •• Oxera, an economic consultancy company, suggests in its recent •• It is important for firms to know study that the value of the geo- to what extent geospatial data services industry ranges between services which are cloud-based US $150 and US $270 billion per and also crowdsourced through year, while accounting for about mobile applications can contribute Geospatial US $90 billion in wages. to enhanced performance. •• Half of new investment in geospatial •• Geospatial data which is available Technology applications had been devoted to for each project or initiative imple- consumer-focused technologies by mented by international develop- 2016, displacing the revenues of firms ment organizations or institutions that provide traditional GIS solutions. such as the World Bank can depict the actual impact of these projects •• Companies analyze social data to and initiatives within the context of map location-specific trends based urbanization, public health, land use, RS Other on consumer behavior patterns while Remote Emerging and climate change. The data will es- consumers demand geospatial data Sensing Technologies pecially support further resilience for mobile technologies. with respect to climate change.
Sources: Gartner 2012, The World Bank 2016, Sources: Deloitte 2012 Deloitte 2012
44 45 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Globalization Brazil, China and India combined are projected to account for 40 percent of global output by 2050, up from 10 percent in 1950
The liberalization of global economic policy has opened borders, supply chains, and trade patterns, creating impacts in one country or region that affect or cascade ra l h na and nd a om ned are ro e ted to a o nt for er ent of glo al o t t from er ent n to others, based on market activity. 60 Projection
Importance Impact
•• Reduced poverty, increased develop- •• People who are employed in shrink- 50 ment, and economic growth have ing industries will presumably need been shown to result from a country’s to learn new skills in order to find integration into the world economy. occupations in different industries, 40 Annual world trade growth has aver- and may have to move from home aged 6% over the past 20 years and with their families to find new job is thus growing twice as fast as world opportunities. output. 30 •• Due to globalization, economies •• Nowadays, flows of data across throughout the world have become countries are 45 times higher com- more competitive and interdependent 20
pared to one decade ago and have regarding trade in goods and services Share of global output (%) a higher impact on the economy and also capital flows. than flows of manufactured goods. •• Major research universities should 10 •• By using e-commerce platforms such focus on attracting the best talents in as Amazon, Alibaba, or eBay, millions order to stay competitive and should of small companies are now able to thus be seeking international partners. export goods globally. 0
Sources: Brookings Institution 2016, Deloitte 1820 1860 1900 1940 1980 2010 2050 University 2014, Forbes 2010 Brazil, China and India Canada, France, Germany, Italy, the United Kingdom and the United States
Note: Output is measured in 1990 purchasing power parity dollars.
Sources: UNDP 2014
46 47 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Industry Consolidation Stage of consolidation by industry
After a minor decline in 2016, merger and acquisition activity – particularly across borders – is expected to increase, especially with the return of private equity buyers to the transaction market.
Stage of consolidation by industry Importance Impact Stage 1 Stage 2 Stage 3 Stage 4 •• Diversifying sources of supply •• The order situation for aerospace Opening Scale Focus Balance and across different countries (35%), suppliers is as high as never before, Alliance re-shoring production to domestic because manufacturers are speeding vendors (33%), and consolidating up their production in response to vendors (28%) represent the top the increased demand for commer- three strategies applied by retailers cial airplanes. Defense Automatic controls nowadays. •• Gartner predicts that one fourth Tobacco n •• Due to the strong last quarter in 2016 of the top 100 providers of IT infra- Shoes Soft drinks and poor organic growth prospects, structure will disappear within the Distillers experts believe the M&A boom will next two years. Shipbuilding Aerospace suppliers carry on in 2017. In particular, a flow Truck builders of capital from Asia to Europe and Sources: The Wall Street Journal 2015, The Wall Toys from Europe to the USA is expected. Street Journal 2012, Financial Times 2016 Rubber & tire producers Automotive OEMs
Level of Consolidatio Food •• The travel industry, which accounts Steelmakers for US $7.6 trillion, faces a small up- Breweries ward trend in consolidations as well. Restaurants & fast food Pulp & paper Railway Automotive suppliers Telecom Chemicals Airlines Drugs Services Utilities Banks Insurance Time
Sources: Harvard Business Review 2002
48 49 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Internet of Things
$2.5 trillion The ecosystem of electronic devices connected to the Internet in increased employee that can be accessed remotely continues to grow (e.g., sensor productivity technology, wearable technologies, connected vehicles).
$2.5 trillion Importance Impact $3.0 trillion in reduced from reduced •• In 2016, global spending on secu- •• The Internet of Things is increasingly costs time to market rity for the Internet of Things (IoT) considered as “purposefully bounded accounted for US $348 million, ac- for deliberate intent and outcomes” cording to a prediction by Gartner. by companies. They see the IoT as This would represent an increase of being focused on particular business 23.7% compared to spending of US processes, functions, and domains. INTERNET of $281.5 million in 2015. •• Many companies, ranging from •• According to Gartner, the number of small- through medium-sized to connected things in use globally will, large companies, design software at 6.4 billion, represent an increase and develop online services that of 30% compared to 2015. By 2020, coordinate smart devices to lever- THINGS the number is expected to increase age the IoT. $14.4 trillion to 20.8 billion overall. •• The large amount of data emerging Est. value of the global •• It is thought that 5.5 million things from IoT applications will be one of Internet of Things market by 2022 $2.7 trillion have been connected every day in the biggest benefits of this new trend, in supply chain 2016. according to industry executives. In and logistics particular, the data can be used to •• Gartner predicts that IoT-related gain more insights into products’ use services spending will be up by 22% $3.7 trillion and operations which can result in from improved (US $235 billion) in 2016 compared enhanced product design. customer to 2015. experience
Sources: Gartner 2016, Deloitte 2016, The Wall Street Journal 2015
Sources: Deloitte 2016 50 51 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Knowledge Worker The Rise of Knowledge Worker
The se of the nowledge Wor er Workers are classified by whether their occupation is primarily cognitive or manual work, Intellectual capital has risen in value compared to Workers are classified by whether their occupation is primarily cognitive or manual work, and physical labor and financial capital, placing a premium whetherand whether or not or thenot tasksthe tasks are areroutine. routine. Knowledge Knowledge work work is nonroutineis non-routine cognitive cognitive work. work. on the creation, acquisition, management, and applica- tion of knowledge to gain a competitive advantage. 70
Importance Impact 60 •• As a result of the rapid increase in •• While the rise of automation reduces information and communication the number of jobs that require little technologies (ICT), knowledge know-how or critical thinking, firms 50 is nowadays generated and dis- should be seeking novel ways of seminated in quantities that have attracting highly skilled people and never been achieved before. retaining them in the company in 40 the long term. •• Since the 1980s, knowledge-inten- sive occupations have led to approx- •• Different business models are neces- 30 imately 2 million new jobs every year, sary to attract and retain skillful per- even though an increasing number sonnel. Google’s 80/20 Program was
of jobs are affected by the rise of once considered a pioneer in intro- Amount of workers in million in the USA 20 automation. ducing the concept of passion pro- jects at work; now several organiza- •• Telecommunications, finance, in- tions have introduced programs to 10 surance, business services, health, promote creative thinking and em- and education represent examples ployee autonomy. of knowledge-intensive industries. 0 •• As knowledge-intensive jobs increase 1985 1990 1995 2000 2005 2010 2015 in importance, companies’ employ- ment costs for these positions rise Non-routine cognitive workers (Knowledge workers) accordingly. Companies should thus Routine cognitive workers focus on enhanced productivity in order to achieve positive returns. Routine manual workers Non-routine manual workers Sources: The Wall Street Journal 2016, Financial Times 2011, Harvard Business Review 2006 Sources: Federal Reserve Bank of St. Louis 2016 52 53 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Mass Migration Europe’s migrant crisis
Immigration, border migration, demographic changes, and Hundreds of thousands of refuges fleeing wars and economic migrants escaping increases in the number of refugees are causing massive poverty have arrived in the European Union in an unprecedented wave. Nearly all first reach the EU’s eastern and southern edges and then press on illegally for demographic shifts, affecting cultural assimilation, integra- richer and more generous EU countries further north and west. tion, and economic development.
Importance Impact
•• Overall, 200 million people could be •• Regulatory and societal structures displaced due to climate change by as well as politics are challenged 2050. by mass immigration, which is also likely to increase conflicts between •• Nowadays, a total number of 60 states. A prominent example for this million people are displaced or have are the diplomatic tensions which fled their countries, representing followed the travel ban by the Trump the highest number ever recorded. administration in January 2017. •• According to the United Nations High •• The rising number of immigrants also Commissioner for Refugees (UNHCR), led to the breakup of local labor and the global number of refugees was company monopolies. 16.1 million at the end of 2015. This represents the highest level in the •• New perspectives and contradictory past two decades and an increase attitudes are disrupting some produc- of approx. 1.7 million compared tion techniques. to one year ago. The total number •• According to the World Bank, evi- has constantly increased over the dence suggests that immigrants will past four years by more than 50% EU to join Schengen contribute more in taxes through (from 10.4 million in 2011). Most of Schengen their hard work than they will con- Non-EU the refugees in 2015 (more than sume in social services. 50%) came from Syria, followed by Afghanistan, Burundi, and South Migrant arrival sites Sudan. Sources: The Guardian 2016, Eurostat 2016, Finan- cial Times 2016, Forbes 2015, BBC 2013, The New Migrant camps / York Times 2017, UNHCR 2016 holding points
Sources: Reuters 2015 54 55 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Next-Gen Workforce US Labor Force by Generation, 1995-2015
The retirement of baby boomers and the growth in the a or or e enerat on millennial workforce requires organizations to create new incentives to attract, develop, and retain a more competitive and flexible labor pool. 70
Importance Impact 60 •• A report by the Kauffman Founda- •• According to Baby Boomers, tion revealed that the proportion of successful careers require long 50 people starting their own business workinghours and a 60-hour work between the ages of 20 and 34 drop- week is considered as a prerequisite ped to 23%, whereas in 1996, new for success. Unlike them, a large 40 entrepreneurs aged from 20 to 34 number of millennials prefer a years accounted for 35% of startups. greater balance between work and private life. They demand less overall •• The workforce in 2025 will likely 30 working hours, occasional overtime, consist of two-thirds millennials and weekends without work. relative to the current proportions.
•• Some researchers and industry Amount of workers in million 20 •• According to consultants, people analysts suggest that non-secure who were born between 1946 and consumer technology has been 1964 (the so-called Baby Boomers) introduced by Gen Y, that wikis and 10 act rather competitively and are social networks must be further convinced that employees need adapted to hire graduates, and that to pay their dues. the email medium may diminish as 0 the younger generation would not 1995 2000 2005 2010 2015 use it. The Millenial Generation Born: 1981 to 1997 Note: Annual averages plotted 1995-2015. For 2015 the first quarter average of 2015 is shown. Duet to Generation X Born: 1965 to 1980 Sources: Deloitte 2016, The Wall Street Journal data limitations, Silent generation is overestimated 2015, The Wall Street Journal 2015, Gartner 2015 The Baby Boom Generation Born: 1946 to 1964 from 2008-2015.
The Silent Generation Born: 1928 to 1945
Sources: PewResearch Center 2015
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Partnership Models Perceived government impact on business (LinkedIn survey results)
There has been an increase in partnerships of all forms, How has the government impact on your business changed in recent years? between public and private sectors, consumers and producers, and even competitors in order to combine capabilities in new and innovative ways.
Importance Impact
•• Automotive manufacturers in •• In 2015, more than half of traditional er e ed go ernment m a t on s nesses n ed n s r e res lts the US have entered into strategic consumer products had native digital “How has the government’s impact on your business changed in recent years?” alliances and/or merged with other extensions and by 2017, 50% of con- 400 automotive manufacturers from sumer product investments will be Europe and Japan. redirected to customer experience innovations. •• Several emerging countries have seen the consolidation of large •• In 2018, the total cost of ownership 300 national private water operators: for business operations will be re- Philippines (Manila Water, Maynilad), duced by 30% through smart ma- Brazil, Malaysia, and Russia but also chines and industrialized services. Africa (e.g., SDE in Senegal which •• The new forces of social structuring became independent of Saur). 200 and the so-called digital natives (Gen Y and younger) will soon disrupt the traditional transaction model for doing out votes of 591 business, as well as the current part- nering model. 100 •• Partnering will begin to happen across great distances, include reciprocity thinking, and even intellectual prop- erty will shift from a closed to a more 0 open system. No change Greatly increased impact Somewhat increased impact Decreased impact
Sources: The World Bank 2015, Forbes 2015, Sources: Deloitte University 2013 Forbes 2014, Forbes 2014, Forbes 2013
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Political Fragmentation Ease of doing business and political stability per country
Political and economic instability and catastrophic global 200 disasters are reshaping the global stage in terms of trade relations, fiscal policy, regional economic health, the price 180 of key commodities, and supply chain risk. 160
Importance Impact 140
•• In a report provided by the World •• The changing political stability in 120 Bank, it is empirically proved that Europe and the Middle East affects economic growth is hindered by investments, consumption, and 100 political instability emerging from economic growth. regional political conflicts, military •• On the one side, Indonesia ex- 80 suppression, violence, and the lack of perienced an increase in inflows resource access, and free movement. of foreign direct investment (FDI) 60 •• In the area of North Africa and the by 66.5% (in real terms) between Middle East, political violence has 2008 and 2013 due to its enhanced 40 increased in more than 60% of the political stability and reformed countries’ regions within three years business environment. 20 following the Arab Spring. •• On the other side, due to its political 191 countries — ranking out of inde 2014 Political stability •• Populist parties in Europe and the US conflicts following the Euromaidan 0 20 40 60 80 100 120 140 160 180 are receiving more and more support movement, the GDP of Ukraine de- Ease of doing business inde 2016 — ranking out of 189 countries as a result of an increasing discontent clined by almost 50% between 2013 amongst voters which leads overall and 2016. to polarized and more fragmented China Egypt Poland Indonesia •• For emerging markets such as Egypt, political landscapes. The movements increased political instability addition- Kazakhstan UA Emirates Brazil Thailand behind Donald Trump in US, the ally impedes their economic growth. Front National in France, or the AfD Vietnam India South Africa Russia In Egypt, the annual growth rate of in Germany are just a few of many real GDP dropped from 5.1% in 2010 Ukraine Philippines Hungary Turkey examples. to 2.1% in 2013.
Sources: The World Bank 2015, The World Bank Sources: The World Bank 2014, CNN 2013, Interna- 2015, Euromonitor 2014 tional Monetary Fund 2016
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Which of the following Impacts on your organization have resulted from Regulatory Landscape regulatory reforms in the major jurisdictions where it operates?
Recent regulations across industries (e.g., financial and Wh h of the follow ng m a ts on o r organ at on ha e res lted from healthcare) have affected business models, increased costs, reg lator reform n the ma or r sd t ons where t o erates and come with a number of global considerations regarding 0 25% 50% 75% 100% legal implications.
Noticing an increased cost of compliance Importance Impact
•• Increased regulations led to a fast- •• As a result of the Affordable Care Act changing market of healthcare play- and an increased Medicaid eligibility Maintaining ers in the US. In 2020, the value of the in the US, millions of Americans will higher capital market is expected to reach US $21.1 receive health insurance while drug billion, which means a CAGR 0f 12.2% coverage is likely to grow as well. over five years. However, after the changes under Adjusting certain product lines the administration of the US presi- •• In a study conducted by Forbes and/or business activities dent Donald Trump at the beginning Insights, 400 CEOs in the US con- in 2017, it is difficult to predict how sider the overall regulatory system the situation will develop. to be a major issue which is likely Maintaining higher liquidity to have a significant impact on their •• Increased regulatory requirements companies. Regulatory/compliance in the US are currently having the risks have been named as being greatest impact on the healthcare among the top three risks that and financial sectors, the latter No significant 2014 impacts are expected to increase most in mainly because of the obligation to 2012 importance for their companies in provide transparency and minimize the next two years. Furthermore, overall market risks. 79% of respondents replied that
increased regulations represented Sources: Deloitte University 2014, Gartner 2014, Sources: Deloitte University 2015 the greatest challenge for them. Forbes 2014, Markets and Markets 2015
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Resource Price Volatility Examples of extreme price spikes in commodities over the past 20 years
Market volatility is causing unexpected shifts in the prices of futures and commodities, affecting investment decisions (e.g., the rise in US oil production and key issues around pipelines raises questions about the future volatility of energy markets). Commodity Est. global annual consumption # of extreme Avg. duration of Avg. Avg. price increases price increase(4) price annual price Importance Impact from 1992-2012 (days) increase volatility(5)
•• Research shows that the global pop- •• Due to the fall in oil prices, alternative Volume Billion $(1) ulation is currently depleting 150% sources of energy (e.g., biofuel) have Corn 836 MM tons 231 4 425 65% 28% of the renewable resources that the become less competitive. earth can produce during one year •• Major oil and gas companies have Cotton 24 MM tons 77 2 353 80% 28% (‘1.5 Earths’). The figure is expected extensively cut down their planned to increase to 300% (‘3 Earths’) by coal investments. Coal investments 2050. Copper 20 MM tons 174 3 279 41% 26% are likely to decrease further due to •• Based on the fact that about 60% the US government’s plans for its of trade with global gas is linked to power sector by 2030 and the fact Coffee 8 MM tons 47 3 609 94% 35% the price of oil, the price of gas fell that coal usage in China is likely to 28,000 MM significantly. reach its peak before 2020. Crude Oil 2,800 4 550 128% 36% barrels •• From 2008 to 2012, the price of coal •• Industries characterized by an inten- in the US dropped by 40%, as demand sive use of energy and a high sensi- 11,000(2) MM Heating Oil 1,386 5 451 113% 34% declined as a result of an increased itivity toward the price of natural gas barrels supply of gas. benefit from low gas prices which are Natural Gas 0.7(3) trillion cubic m 88 5 157 139% 68% expected to remain relatively stable •• Although the global population in- for the near future. Examples of such creased by almost 4 times and the industries are the food industry, the economy is expanding worldwide, (1) Calculated using annual consumption and recent commodity prices Sources: paper industry, or power production. (2) Number denotes consumption of all distillates (heating oil, diesel, fuel oil, etc.) 1 International Grains Council prices have dropped by almost 50% (3) Number denotes US consumption 2 International Cotton Advisory Committee during the past century. However, (4) Duration includes rise and subsequent drop in price 3 Union Bank of Switzerland rises in global commodity prices Sources: Deloitte 2016, Deloitte 2015, BBC 2012 (5) Average of annualized standard deviation of change in daily commodity from 1992 to 2012 4 US Department of Agriculture 5 US Energy Information Administration have erased these declines in the last 10 years.
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Resource Scarcity Projected water scarcity in 2025
As the world’s population continues to grow, there is increased demand for and pressure to conserve natural resources that have huge implications for poverty, inequal- ity, demographics, and public health.
Importance Impact
•• Water is jointly responsible for •• Companies must deal with resource about 90% of all disasters, the scarcity such as water shortage, an UN assumes. Nevertheless, water increased demand for energy, and scarcity will become a severe prob- possible supply shortfalls in coun- lem in the future, as only 60% of tries with water shortage. the water needed will be available •• Scholars at the University of Califor- by 2050. nia stressed the loss of approximately •• About one-fifth of the global popu- 17,000 jobs in California’s agricultural lation inhabit areas with great phy- sector in 2014 and predicted the loss sical scarcity and the number is ex- of about 20,000 jobs for the following pected to increase by 500 million year. According to these scholars, people. About one quarter of the 500,000 acres overall constituted 3 global population must deal with se- fallow land in 2014 while this number m /person/year vere economic water scarcity, mean- increased by 30% to 40% in 2015. r i ing that these people live in areas Compared to 2013, acreage in Califor- 500 – 1,000 without an infrastructure required to nia declined by 11% in 2014 according extract water from rivers or aquifers. to the United States Department of ress e e Agriculture (USDA), with the produc- 1,000 – 4,000 tion of crops (e.g., rice, corn, or cot- ton) suffering the greatest declines. r s 4,000 – 10,000 Sources: The Guardian 2016, Deloitte University 2015, Deloitte 2015, United Nations 2014
Sources: Center for Environmental Systems Research 2016
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Sharing Economy What is the Sharing Economy?
The collaborative nature of the online environment has The sharing economy refers to the growing marketplace of economic agreements between led to the rise of the sharing economy, in which technology two parties, usually enabled by a digital platform, which enables use or consumption of a product, service, or activity without full ownership. is leveraged to unlock idle capacity and provide access to products through renting or borrowing.
Importance Impact o t of m ll on •• The value of the rental market in •• The costs and complexity of people believe they will people from 235 countries peer-to-peer (P2P) business alone matching supply and demand have increase their sharing of have couch-surfed in the US is $26 billion, according to been reduced significantly since the physical objects and spaces in the ne t 5 years several studies. introduction of the internet. Through smart-phones and global positioning •• The sharing economy is driven by systems (GPS), people can nowadays different societal trends: ll on easily search for leasable rooms or worth of the consumer - Due to the increasing number make use of car-sharing models. peer-to-peer rental market of people living in cities, sharing •• Collaborative consumption is con- and local services gain greater sidered a new business model under value. Thus, people tend to share which consumers earn money through products and reuse them instead selling the idle capacity of underutilized ll on of buying new ones. was raised in 2015, double assets to peers for a specific time $16 billion in 2014 - A rising concern for environmental period. sustainability and the motivation •• A study conducted by the European to prevent ecological devastation Added Value Unit of the European further promotes the sharing Parliament predicts that the better economy. m ll on use of capacities (which would other- bike-sharing trips are taken •• Another driver for collaborative ac- wise be under-used) constitutes a each month tivities is the fact that renters can maximum potential economic gain increase their monthly income by of € 572 billion in annual consump- offering accommodation to peers. tion across all 28 Member States. The P2P rental market is also likely to offer lower prices and thus less Sources: Forbes 2015, Crowdinvesting.org 2015, Fast Sources: Deloitte University 2014, Deloitte 2014, Company 2011 costs for tenants. The Economist 2013, European Parliamentary Research Service 2016 68 69 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Social Media Business Decision-Makers Rely On Communities
The rise of social media as a dominant channel/platform “For what purposes do you visit or participate in the following places?” (Respondents for communication has led to new forms of rapid connec- who replied, “at least monthly”) tivity and interaction across the global landscape (e.g., Arab Spring, the 2016 US presidential election, Facebook groups “For what purposes do you visit or participate in the following places?” for Syrian refugees). (Respondents who replied, “at least monthly”)
Importance Impact 0 25% 50% 75% 100%
•• The number of social network users •• A survey on the types of social Communities or forums that appear to 18% 63% 4% rose by 18% in urban China and by media that are used by companies be independent of any single vendor or brand 11% in Europe as well as Australia. for investigative reasons found that 26% 48% 7% LinkedIn and Facebook are the two •• According to a survey, TV (28%) LinkedIn most popular websites with 90% and social media (26%) are used of respondents using both sites. 2% 37% 42% almost equally as a news platform However, LinkedIn is considered Facebook by young people between the ages to be more valuable than Facebook of 14 and 25 in the United States. If (51% and 43%, respectively). The Vendor support forums or discussion 23% 52% 5% social media continue to receive high forums on a vendor or brand website, reason could be LinkedIn’s focus attention in future, it is expected that for that specific vendor or brand on professionals. Although 55% of Base: 382 North American and they will replace TV as the prevalent 6% 36% 20% the surveyed companies use Twitter, Twitter European business decision-mak- cultural medium very soon. ers at companies with 100 or only one-fourth considers the social more employees •• Scholars conducted studies which media platform as highly valuable. 4% 30% 15% Google Plus show that the government in China •• By 2019, advertisers will spend is likely to place censorship on infor- for business purposes primarily US $103 billion on interactive mar- 2% 16% 14% mation that triggers collective ac- Pinterest for business and personal purposes keting – as much as they do on tele- tions such as protests against the vision to-day. Search marketing, dis- for personal purposes primarily government. play advertising, mobile marketing, email marketing, and social media will grow to 26% of all advertising spending within the next five years.
Sources: The World Bank 2016, The Wall Street Sources: Forrester Research 2013 Journal 2016, Forrester Research 2014, Forrester Research 2013 70 71 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
Social Unrest Importance of social issues in emerging markets
As political and ethnic groups have become more empowered, When operating in emerging markets, how important is each of the following there has been a resurgence of civil and social rights issues considerations when your company makes business decisions? calling for change or reform (e.g., Pegida, student protests When o erat ng n emerg ng mar ets how m ortant s ea h of the follow ng ons derat ons when o r om an ma es s ness de s ons in Mexico, the Occupy Wall Street movement, the anti-GMO e ives res i e re e ver i r movement, Black Lives Matter, gender pay discrimination, LGBT rights and Planned Parenthood). 0 25% 50% 75% 100%
Importance Impact Minimizing negative environmental impacts •• A sample of protests in Europe be- •• In an alert in 2010, the International tween 1980 and 1995 shows that Labour Organization reported that an average of 700,000 people took high rates of unemployment, espe- Providing a part in demonstrations that dealt cially among the young, provoke in- “living wage” with austerity programs whereas creased social unrest. less than 15,000 people participat- •• In a study in 2011, the International ed in demonstrations against war. Monetary Fund (IMF) analyzed the Promoting •• A study found that the expected relation between food prices and an- worker rights amount of protests per year ti-government demonstrations in 120
decreases by approximately 0.4 countries between 1970 and 2007. events due toa 1% rise in GDP. This Results show that the number of an- Improving the is about half the effect of a similar ti-government protests in low-income local community rise in the governmental budget. countries doubled in the event of a 10% rise in food prices. •• Dissatisfaction among people results for business and personal purposes from the lack of growth and the pre- Enhancing the valence of high unemployment. local infrastructure for personal purposes primarily Sources: Deloitte University 2014, The Economist •• According to the International Labour 2011, International Labour Organisation 2017 Organization, the average social un- rest index increased between 2015 Sources: Deloitte 2013 and 2016 above the long-term ave- rage of the last four decades. Social discontent increased in 8 out of 11 regions, particularly in the Arab States. 72 73 The Megatrends of Tomorrow’s World | Drivers The Megatrends of Tomorrow’s World | Drivers
New business models: ‘beyond the pill’, outcomes and real data are providing Technization of Healthcare health data and transforming what is possible
Advances in technology have enabled digital medicine and bioinformatics, advanced genomics, digital manufacturing, and nanotechnology, and the widespread development of genetically modified products. Medical & patient data Rollout business models Electronic health records (EHRs), tied to patient outcomes health sensors, social media, that also reduce medical Importance Impact and genomics create rich new errors and improve quality data sources for analytics •• Physicians and other caregivers •• Telemedicine enabled e-visits, obtain vital patient biometrics in real mHealth, and tele-mentoring – time through the transmission of where a robot surgeon on site can Big Data analytics Cheap computing power med-tech industry sensor-enabled be guided by a remote surgeon – Discover and deliver and sophisticated analytics targeted and personalized remote monitoring devices. may take pressure off the health- drive insights into patient therapies with real world care system, while creating oppor- behavior, treatment •• By 2020, ingestible “smart pills” with evidence of impact tunities to improve the quality costs and R&D sensors could be in use to wirelessly of care. Influence patients behaviors Mobile/Health relay information on health indicators Health information ‘beyond the pill’ and sustain Pervasive mobile and within the body to a smartphone. •• The convergence of biomedicine, technology enabled engagement outside the smart phone adoption This would permit health indicators wireless and mobile devices, IT ,and opportunities traditional care setting creates new engagement to be tracked more closely and enable health data initiated the transforma- models within daily routines doctors to receive precise information tion of medicine from an art to a data- on which medications their patients driven science, providing the right actually took, and when. care in the right place at the right time Healthcare professional and at manageable costs. digital workflow Drive population management, Increasing integration of protocol driven patient risk pool •• Life science companies are increasing EHRs and telehealth and stratification management their focus on patient and healthcare driving new digitally- outcomes and expanding the use of enabled coordinated workforce models of care social media to reach patients and caregivers.
Sources: Deloitte 2014 Sources: Gartner 2015, Deloitte University 2015, Deloitte 2014
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Terrorist Organizations New Global Terrorism Index from 2016
Political uprisings, instability, or other social unrest has led to a rise in terrorist organizations around the globe (e.g., an increasing number of organizations publicly affiliated with ISIS or the rise of Boko Haram).
Importance Impact
•• 82% of people who died in terrorist •• Terrorism can have a strong nega- attacks were living in one out of only tive effect on per capita income. In five countries. the Basque Country, while there was a major threat of terrorist attacks, per •• The number of deaths caused by capita income fell to 10% below the terrorist attacks is nowadays five actual amount budgeted. times higher compared to 2000. •• In the United States, financial markets •• Between 2012 and 2013, there was and flights slowed down and came to a significant rise in terrorist activities: a halt after the 9/11 attack. the overall number of people killed during terrorist attacks increased •• The financial impact of terrorism in re- by about 60% (from 11,133 in 2012 cent years has been estimated at US to 17,958 in 2013) as did the number $13.6 trillion, which represents about of countries that count more than 13.3% of global economic activity. 50 deaths (increased from 15 in 2012 to 24 in 2013). Sources: Forbes 2016, Institute for Economics & Peace 2016 i es i es i i •• Between 2007 and 2016, about 1% of err ris err ris err ris i e people worldwide (approximately 60 million people) fled from their homes Sources: Institute for Economics & Peace 2016 due to political or regional conflicts.
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clever headline Urbanization clever Shareheadlin ofe urban population 55 55
Cities are growing more quickly than suburban and rural 50 50 areas, and are simultaneously witnessing an increasing 45 concentration of wealth. As a result, the quality of life 45 population l population l continues to improve in urban centers relative to suburban ta
ta 40 communities, and demand for services is increasing. 40 % of to
% of to 35 35 Importance Impact 30 30 •• Nowadays, more than half the global •• As cities account for more than 80% 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 1960 1965 1970 1975 1980 1985 1990 1995 2000 2005 2010 2015 population (54%) already lives in cities of the global GDP, the increase in ur- Urban population and the number of city dwellers is as- ban population can promote sus- Urban population sumed to rise continuously in future. tainable growth. Therefore, urbani- zation requires good management, Development of urban and rural population •• It is expected that by 2030 two-thirds which can then lead to higher pro- of the world population will live in 7000 ductivity, new ideas, and innovations. cities. This would mean an increase 7000 from 3.5 billion to 5 billion in under •• Cities account for more than 70% of 6000 6000 20 years. global greenhouse gas emissions and ) ) use two-thirds of the world’s energy. 5000 5000 While cities are constantly growing, the risk of disasters or climate catas- 4000 4000 trophes is augmenting as well. 3000 3000 Sources: The World Bank 2016 Population (millions Population (millions 2000 2000 1000 1000 0 0 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 1950 1960 1970 1980 1990 2000 2010 2020 2030 2040 2050 Urban population Rural population Urban population Rural population
Sources: The World Bank 2016 78 79 The Megatrends of Tomorrow’s World The Megatrends of Tomorrow’s World
intersect
and create resulting in complex and overlapping These M T s ries e re which are universal trends Drivers collide affecting multiple aspects of our world …
catalyze
80 81 Megatrends of Tomorrow’s World | Megatrends Megatrends of Tomorrow’s World | Megatrends Stories of the future 1 Empowerment 5 Aging 9 Erosion of Governance the growth and re-invigoration the changes in values, cultures, the decline of the traditional of ideas and self-worth and priorities across generations world order Direct democracy Society Rise of the individual Intra-generational fairness Direct democracy Collaborative consumption Digital rift Decentralization Triple bottom line Resource footprint Resource disputes New markets Silver agers Free markets Unconventional regimes Gerontocracy Alternative governments
2 Polarization 6 Dematerialization 10 Displacement the rise of divisiveness the shift in the value structure the movement of people, ideas 1 3 Technology 2 and divergence from physical to intellectual and challenges across the globe Rise of ideology Knowledge society Mass migration
Politics Bursting digital bubble Digitalization Infrastructure shift Politicism of science Scientification of agriculture Ecological pressure 10 4 Skillset divide Post-industrialism Global supply chains Institutionalized radicalism Shifting power bases Allocation conflicts
Hyperconnectivity Scarcity 9 5 3 7 the emphasis on interconnected- the unsustainable consumption ness and collective behavior of our natural resources 8 6 Transparent lives Middle class angst Integrated systems Innovation 7 Conflict minerals Sustainability Hyper-sensitive markets Qualitative growth Global regimes Wealth distribution Economy
4 Disengagement 8 Blurring Boundaries Environment the evolution of ways in which the emergence of business eco- we communicate and interact systems across traditional silos
Interpersonal divergence Melting pots Digital personification Co-development NIMBY Mass epidemics The overlap of the five circles reveals ten groups of stories. Some them are new and surprising, Fragmented workforce Shadow markets while others are more obvious and have been visible in plain sight to many of us. Political defiance Nation state 2.0
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Empowerment: Social Implications
Rise of the individual
In today’s society, it’s all about the individual over the collective. A culture of “me” has risen over a culture of “we” as individuals become empowered to demand specific outcomes, resulting in the decline of social cohesion and the mass market. Individual empowerment comes from significant advances in education, technology, and healthcare, and as the global extreme poverty rate Empowerment goes down, the middle class has risen in importance. This demographic places importance on different value struc- tures, resulting in a number of signifi- Change will not come if cant examples today: we wait for some other the growth and •• Rise of civil liberties movements in the United States (e.g., Black Lives Matter, person or some other Occupy Wall Street). time. We are the ones •• The 2016 Brexit Referendum in we’ve been waiting for. which the United Kingdom voted to re-invigoration of leave the European Union in favor of We are the change that independence. we seek. •• The rise in focus on women’s rights and issues (e.g., equal pay, women’s -Barack Obama, 44th President of ideas and self-worth health). the United States of America Sources: Deloitte 2016
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Empowerment: Empowerment: Technological Implications Environmental Implications
Collaborative consumption Triple bottom line
The emergence of collaborative con- convenience. Or consider the home- As consumers’ expectations evolve, has resulted is an emergence of new sumption models has led to the rise owner who is able to rent out his flat to an increasing importance is placed on business models (e.g., the buy-one, give- of the sharing economy, which allows eager families on holiday for a portion measuring not only a company’s profits, one model of TOMS and Warby Parker) consumers to make use of their idle of the profits. Collaborative consump- but its impact on people and the planet and the rise of disruptive players who assets to contribute in existing markets. tion models touch upon key aspects of as well. This focus on what’s referred capitalize on this consumer preference Collaborative consumption models are user experience, including desire for to as a triple bottom line emphasizes to capture key segments of the market augmented by technological platforms convenience, more affordable prices, business models and metrics that touch (e.g., The Honest Company’s organic, that connect discrete players through and network connectivity. Technology upon key elements of society (e.g., eco-friendly product line as direct com- the use of networks and geo-located de- is used as the platform that connects diversity and equal opportunity) as well petition to traditional CPG providers). vices. Consider the car owner who can individuals in this new economy, making as environment (e.g., sustainability and As consumers grow in importance, their provide rides to users in need through use of underused assets and creating carbon dioxide emissions), in addition opinions now begin to dictate the growth the use of a mobile app allowing them new opportunities for value creation to the standard measures of economic models and profitability of companies in to access a nearby driver at their and value capture. health like profitability and growth. What unprecedented ways.
Sources: The Economist 2013 Sources: University of Pennsylvania 2015, Stanford University 2014
Businesses need to go There is a book yearning to come out of me: about beyond the interests of how we can build the new collaboration economy, their companies to the and the role of ‘openness’ in our quest for efficient communities they serve. use of resources and as a driver of innovation. -Ratan Tata, Former chairman of the -Robin Chase, CEO of Zipcar Tata Group
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Empowerment: Empowerment: Economic Implications Political Implications
New markets Unconventional regimes
The advent of globalization and techno- As the age of empowerment grows, seek to revolt against traditional political logy have led to what’s referred to as a often this is not accompanied by the structures. And in still other cases, we “Maker’s Movement”, a growth in the cre- commensurate and required rise in see the rise of singular dictatorships ative class of people (e.g., craftspeople, education which can lead to the rise who rail against the Western way of life. app developers) who derive their identity of unconventional regimes. In some The emergence of these regimes is of- through creation. Often this is spurred cases, this occurs through the advent of ten the outcome of dissatisfaction with on by technological advances that have terrorist organizations such as ISIS and existing policies, which are thought to democratized means of production and Boko Haram, who take advantage of benefit an elite minority over the welfare enabled a more open and collaborative weak societal integration and an impov- of the majority. Therefore these groups, production environment. A resulting erished community to wreak havoc on empowered by the masses, often hide economic impact of this movement will world order. In other cases, we see the behind the guise of broad societal revo- be the growth of players in this frag- rise of new political parties (e.g., the Tea lution, while promoting self-interest and mented part of the economy, leading Party in the United States, the Five Star chaos instead. to organizational and structural shifts You never change things Movement in Italy, AfD in Germany) that within traditional enterprises. Consider Sources: Deloitte 2016 Etsy, a global e-commerce market that by fighting the existing connects over 29 million users with over reality. To change some- 40 million artisanal, handicraft products from all over the world. Or consider thing, build a new model the UK-based start-up MakieLab which that makes the existing allows customers to create one-of-a-kind The world will not be destroyed by those who dolls using its FabLab app. The growth model obsolete. do evil, but by those who watch them without of individualized products will result in a resurgence of entrepreneurship as in- -R. Buckminster Fuller, 20th doing anything. dividual makers connect with the larger, century American inventor and global market. visionary -Albert Einstein, 20th century German physicist
Sources: Etsy 2016, Deloitte University 2015, Deloitte University 2014
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Polarization: Social Implications
Rise of ideology
Fueled by individual empowerment, the rise of Islam as a powerful influence access to information and communica- shaping the political and economic tion technologies, and growing wealth regimes of the Middle East, as well as inequalities, the world is seeing a rise the rise of extremists who sully the in ideology as people and communities name of the religion in order to convey seek dramatic change from the status dominance over tradition. Furthermore, quo. As individuals engage increasingly driven by values and religion, we see over social networks due to the proli- a world that lives divided along social feration of ICT technologies, networks dimensions. Debates about gay and of ideological thinkers are no longer lesbian rights, women’s health, and Polarization constrained by proximity and are able racial equality dominate the stage as to grow exponentially with new followers groups become more and more divided who seek sources of insight online. In along ideological lines. one particular example, we have seen the rise of Sources: Deloitte 2016 divisiveness Religion doesn’t make people bigots. People are bigots and they use religion to justify their ideology.
-Reza Aslan, Iranian-American author, public intellectual, religious and divergence studies scholar
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Polarization: Polarization: Technological Implications Environmental Implications
Bursting digital bubble Politicism of science
Driven by the increase of mobile tech- As people become more entrenched nologies that have enabled constant in their individual value systems and as connectivity, the world around us has environmental outcomes are increasing- fundamentally changed. What has ly tied to political and financial motiva- resulted is a pervasive dependence on tions, a politicism in scientific reasoning technology for everything from social has emerged in today’s world. This interaction to transactions to health mo- skepticism is an example of one of the The most important nitoring. However, venture capitalists are negative consequences of an increa- thing about global predicting the burst of the tech bubble singly polarized world, a “kick the can” as the democratization of knowledge has mentality about issues which affect the warming is this. Whether led to an oversaturation and overvalu- long-term viability of our planet. Several humans are responsible ation of players in the market. Concerns examples demonstrate the divide: about data privacy have called into for the bulk of climate •• The constant dispute over climate question whether digital technologies Startup investment change and the extent to which change is going to be left will continue to grow at this rate. Social has cooled. Valuations global warming and greenhouse media hinges upon the willingness of to the scientists, but it’s gas emissions affect our planet. people to share and the cultivation of an are falling. But many all of our responsibility intimate environment, but the concern investors and entre- •• The debate over the Keystone XL over privacy and focus on expansion Canada-US oil pipeline project to leave this planet in have sometimes resulted in a decline in preneurs haven’t which pits energy independence better shape for the usage. Consider Facebook’s 21% decline grasped the new reality. against environmental costs. in “original sharing” from its 1.6 billion future generations than •• The divide between parties who monthly active users. With such division support hydraulic fracking as a we found it. about the trade-offs about technology, -Keith Rabois, American means of natural resource extraction the bubble that has emerged comes entrepreneur, investor and former and parties who oppose it due to -Mike Huckabee, American dangerously close to popping. EVP at PayPal and Linkedin the threat of contamination of toxic politician, 44th Governor of chemicals. Arkansas from 1996 to 2007 Sources: CNBC 2016, The Wall Street Journal 2016, Fortune 2016 Sources: Bloomberg 2016, Voice of America 2014 92 93 The Megatrends of Tomorrow’s World | Megatrends The Megatrends of Tomorrow’s World | Megatrends
Polarization: Polarization: Economic Implications Political Implications
Skillset divide Institutionalized radicalism
Following the Great Recession, the work- While the term “radicals” once meant force particularly in the United States one-off individual extremists as part realized more significant employment of a certain religion or political group, declines in middle-skilled white- and the world has evolved to a place where blue-collar jobs (e.g., construction, manu- radicalism has become the norm. In one facturing, mining) than in the high-skill Innovation has nothing example, we have the rise of ISIS as a or low-skill sectors. While those losses to do with how many pervasive threat in the Middle East that have stabilized somewhat in the US, the has now infiltrated global corridors with polarization in skillsets valued in today’s R&D dollars you have. their terrorism. We also see a different global market still exists. As the world When Apple came up kind of radicalism emerge in the United changes to a more digital landscape and States, the rise of untraditional political a more millennial next-gen workforce, with the Mac, IBM was players who capitalize on general dissat- the skillsets needed for competitive ad- spending at least 100 isfaction with the status quo to galvanize Our enemy is not Islam. vantage have shifted. Emphasis is placed a new tier of supporters with more Islam is not the enemy on careers in the science, technology, times more on R&D. It’s money, influence, and power. Boko engineering, and math (STEM) spaces, not about money. It’s Haram in Nigeria and Nicolás Maduro in of America; Americans and coding has risen in importance. The Venezuela demonstrate that radicalism are not the enemy of focus on the digital economy high- about the people you is not just a religious or ideological con- lights an estimated 900,000 ICT jobs in have, how you’re led, and cern, but a truly political challenge. As Islam. Our real enemy Europe that would be unfilled by 2020 if societies become increasingly conflicted is extremism and investments in education are not made. how much you get it. and value systems increasingly distinct, This change in what the market values radicalism has evolved as a new norm, radicalism. highlights significant disparities between -Steve Jobs, American entrepre- making its way into formal political struc- today’s workforce and what will be neur, inventor, and co-founder tures and creating a dangerous dynamic -Feisal Abdul Rauf, Kuwaiti required in the future. of Apple Inc. for collaboration and cooperation. American Sufi imam, author and activist
Sources: Forbes 2014, MIT 2010 Sources: Deloitte 2016
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Hyperconnectivity: Social Implications
Transparent lives
With the rise in ICT technologies, the logies and social media of today, the proliferation of data has exploded more public and transparent their life leading to the rise of big data analytics becomes. This opens new doors of and trend sensing. In today’s world, data connectivity, networks, and markets as is easy to search for, manipulate, and head-hunters are now able to find us extract insights from. Our Facebook online, collaborators are able to access and Instagram pages convey the stories our credentials, and new partnerships Hyperconnectivity of our lives, our Yelp and Four Square are able to be created. The catch-22 of check-ins geo-tag where we are at any technology demonstrates that in order given point, and our LinkedIn and Xing to fully benefit from technology, we profiles share with the world where we must fully embrace it and understand the emphasis on have worked and studied. The more a the trade-offs with privacy that accom- user engages with the digital techno- pany that decision. interconnectedness Sources: Deloitte 2016 and collective In a digital era, privacy must be a priority. Is it just me, or is secret blanket surveillance obscenely outrageous? behavior -Al Gore, American politician and environmentalist
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Hyperconnectivity: Hyperconnectivity: Technological Implications Environmental Implications
Integrated systems Conflict minerals
In a more digital world, we are able to system. In 2016, hackers demanded As our dependence on smartphones, poor wages are all the by-product of an create beautiful “smart cities” which US $17,000 in bitcoins after hacking computers, and technologies has grown, emphasis on these minerals to produce integrate ICT networks and leverage the into and holding ransom a US hospital’s our consumption of the precious metals smartphones. Furthermore, key players Internet of Things to create a positive, data records. Furthermore, beginning and minerals required to produce such in the tech space recently revealed that interconnected, and hyperconnected in 2013, Russian hackers managed to products has also grown significantly. proceeds from some of the mines in world for its inhabitants. While hyper- infiltrate the bank’s internal computer Smartphones each contain approxi- conflict zones such as the Democratic connectivity such as this boasts many systems using malware for two years. mately 40 different minerals including Republic of the Congo are sometimes benefits, it can also lead to greater risks For stealing around £650 million, they tantalum, tungsten, tin, and gold – used to fund the ongoing conflict. This from the integration from physical and infected networks of more than 100 referred to as the 3TG. However, the emphasizes a critical supply chain issue cyber infrastructures as hackers increas- financial institutions worldwide - the mining procedures required to extract that needs to be brought to light as ingly exploit our reliance on digital tech- largest cybercrime ever uncovered. these resources are often quite contro- our dependence on smartphones and nologies. A country’s financial systems, While hyperconnectivity has created versial. Pollution, dangerous working the minerals required to produce them electrical grid, nuclear power structures, massive positive social and economic conditions, human rights violations, and increases. and other critical infrastructures are change, the technological consequences all tied to digital networks and attacks will become increasingly important to Sources: Time 2014, Michigan State University 2014 against this infrastructure are increasing safeguard against. in number. In 2015, hackers blacked out a region of Western Ukraine by access- Sources: Reuters 2016, The Telegraph 2015, ing its power grid’s connected control Tripwire 2015 We require all of our suppliers to certify in writing We are vulnerable in the military and in our that they use conflict-free materials. But honestly governments, but I think we’re most vulnerable to there is no way for them to be sure. Until someone cyber attacks commercially. This challenge is going invents a way to chemically trace minerals from the to significantly increase. It’s not going to go away. source mine, it’s a very difficult problem.
-Michael Mullen, retired United States Navy admiral and 17th Chairman -Steve Jobs, American entrepreneur, inventor, and co-founder of Apple Inc. of the Joint Chiefs of Staff
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Hyperconnectivity: Hyperconnectivity: Economic Implications Political Implications
Hyper-sensitive markets Global regimes
As the world becomes increasingly inter- From the Roman Empire to the British twined, significant political and economic Empire to Attila the Hun, the story of structural changes in one region have global regimes is not new. However, to- ISIL’s widespread reach huge impacts on major financial markets day the rise of and reach of global forces leading to increased volatility. The 2008 is catapulted forward by the ubiquity of through the Internet subprime mortgage crisis in the United social media and ICT technologies which and social media is States sent the entire globe into catas- create the possibility of connecting trophe as markets were shorted and a beyond physical borders on ideological most concerning, as Great Recession emerged. As Greece platforms. The rise of the Islamic State the group has proven plunged into economic darkness in 2015 of Iraq and the Levant (ISIL) represents and closed its banks, restructurings and one of the most serious and deadly dangerously competent bailouts became the central topic of by-products of our increased focus on at employing such discussion for members of the European hyperconnectivity, as they actively use Union. And as the world woke up to the social media and digital networks to tools for its nefarious news of the United Kingdom voting to recruit, radicalize, plan, and orchestrate strategy. ISIL uses high- leave the European Union in June 2016, violent acts of terror. Furthermore, ISIL Brexit resulted in the Japanese yen is able to spread its propaganda in more quality, traditional media jumping 13% against the British pound far-reaching ways by conquering digital platforms as well as and the Dow closing down 600. Global- distance in ways previous global regimes ization and the liberalization of trade never could. Hyperconnectivity has widespread social media hugely drove the interconnectedness of created the platform for a bully pulpit, campaigns to propagate today’s markets, and as volatility grows in Markets love volatility. and made the possibility to galvanize social and political spheres, the impact global regimes easier. By using informal its extremist ideology. of wealth inequality and political apathy -Christine Lagarde, Managing methods of connectivity, groups gain on our macroeconomics has risen in Director (MD) of the International access to the formal political sphere to -James Comey, current Director of significance. Monetary Fund create radical implications. the Federal Bureau of Investigation
Sources: The New York Times 2016, Forbes 2015 Sources: Deloitte 2016
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Disengagement: Social Implications
Interpersonal divergence
The advent of digital has created incredi- as they sit down to eat. The headphone ble impacts in connecting people across industry grew 32% in 2012. Further- the globe, but often at the expense of more, the reliance on platform-based face-to-face interpersonal interaction. technology has generated interesting On the one hand, new friendships and implications on developmental psy- relationships are explored through the chology. Attention spans are shorter, rise of networking and social platforms. retention has diminished, and creativity Disengagement Connections are made where previously has gone down because the imagina- serendipity was the medium of choice. tion has become obsolete. The effects On the other hand, interpersonal dis- are unknown because we are still in the integration seems to prevail. Instead of preliminary phases, but the divergence the evolution of discourse at a dinner table, the glow of in our interpersonal interactions is a smartphones illuminates diners’ faces future worth exploring. ways in which we Sources: The New Yorker 2016 You’re talking about a younger generation, Generation Y, whose interpersonal communication skills are communicate and different from Generation X. The younger generation is more comfortable saying something through a digital mechanism than even face to face. interact -Erik Qualman, author and keynote speaker
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Disengagement: Disengagement: Technological Implications Environmental Implications
Digital personification NIMBY
The confluence of artificial intelligence •• The 2013 American science-fiction For years, the NIMBY (“Not in my back- consumer waste from a materialis- sites. However, there is no guarantee and augmented reality has resulted in a film, “Her”, which portrays the yard”) phenomenon has been described tic product-driven culture and loose whether the storage will offer sufficient new mode of interaction with the digital development of a relationship in economics textbooks as the classic incentives for proper waste disposal protection. The Yucca Mountain in Neva- world: the space of digital personification between a man and a smart example of how people’s attitudes and and recycling. Now as a result, marine da is an exemplary case where industry where “things” become humanized in a computer operating system. behaviors often don’t match up. NIMBY life faces severe threats from the patch, plans have been disclosed as flawed. As way. One of perhaps the most main- represents the disengagement of soci- which some estimates guess is roughly a result, since the 1980s due to billions •• In 2017, a Japanese insurance com- stream and foreshadowing examples of ety with outcomes that do not affect the size of Texas. Toxins from the plastic of dollars of investment, not even one pany replaced 34 of their employees this occurred back in the mid-90’s, where them at face value. Take the example waste also threaten both marine and gram of waste has been stored there. with an artificial intelligence system. Tamagotchi digital pets from Japan rose of the great big trash in the North Pacific human life. Another example is the Ultimately, the dissonance between The system is based on IBM Watson in prominence with children. Today, Ocean. Despite consumers’ emphasis atomic waste problem – perhaps the people’s attitudes and behaviors leads which IBM calls a “cognitive technol- stories of digital personification and its on being eco-friendly, the spinning vor- mother of all NIMBY problems. Most to ramifications that, while seemingly ogy that can think like a human”. potential applications are plentiful: tex of garbage was first detected in the proposals for dealing with radioactive disconnected, will have impacts on our 1990s, formed partially as a result of waste involve burying it in underground way of life unless properly mitigated. •• Creation of online avatars that gamers Sources: BBC 2017, Forbes 2016 use to connect across virtual reality Sources: Greenpeace 2006, Nuclear Energy Insti- platforms. tute 2015, National Ocean Service 2014
The rise of powerful artificial intelligence will be It’s a national concern, I mean how we dispose either the best or the worst thing ever to happen of nuclear waste in a safe way, how we deal with to humanity. We do not know which. this incredible amount of nuclear waste we have created over the years. -Stephen Hawking, English theoretical physicist -Tom Udall, Senator from New Mexico
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Disengagement: Disengagement: Economic Implications Political Implications
Fragmented workforce Political defiance
Mobile technologies have fundamen- While heralded as the hallmark of demo- for public services, and the ending of tally changed the way we work today. cracy, political disengagement has be- free movement of labor, the Leave As virtual connectivity grows, physical come a new normal, where individuals party’s campaign promises quickly un- co-location diminishes. Gallup data don’t feel as if their voice is heard over raveled. What remained was a concen- suggests that 37% of the workforce in the din of mass opinion. Voter apathy is trated anger at and mistrust of the lies the US have telecommuted and compa- high and campaigns to increase voter told to gain favorable votes. While Brexit nies have begun to roll out alternative turnout in critical election years abound. started as a story of trying to re-engage work schedules (e.g., 4-day weeks). What We like to give people Even in the case of relatively high voter a disgruntled populace, what has now has resulted is a fragmentation of the the freedom to work turnout, such as in the 2016 Brexit Re- surfaced is a frustrated group of young workforce. While this enables flexibi- ferendum, disengagement and defiance British who have lost their old system, lity and agility, questions of employee where they want, safe is reinforced by the untruths promised do not trust the new system, and feel engagement and productivity have in the knowledge that by politicians to gain favor in minds of lost in the sea of political decisions being inevitably risen. Disengagement in young voters. While promising freedom made. the workforce has also taken another they have the drive and from the European Union, extra surplus form. Exacerbated by the recession, the expertise to perform Sources: The Guardian 2016 younger generation is facing challeng- es engaging with the traditional labor excellently, whether they market, so much so that the acronym [are] at their desk or in I always believe that ultimately, if people are paying NEETs (“not in education, employment, attention, then we get good government and good or training”) has taken foothold. Some their kitchen. Yours truly have termed this “The Disengagement has never worked out of leadership. And when we get lazy, as a democracy Economy” with estimates suggesting and civically start taking shortcuts, then it results in that this could cost our society US $4.7 an office, and never will. trillion in the long-term. Daunting as this bad government and politics. figure may seem, it remains to be seen -Richard Branson, founder of Virgin whether this future will prevail. Group -Barack Obama, 44th President of the United States of America
Sources: Fast Company 2015, The Wall Street Journal 2013
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Aging: Social Implications
Intra-generational fairness
Striking the balance between the present and future has always had its challenges, but as demographics, political structures, and technological advances collide, the intra-generational equity issues are gaining a front and cen- ter seat. Demographic trends suggest Aging that our population is aging dramatically The aging and and at a faster pace than the regular decreasing population population. Among many things, this trend can be attributed to advances is a serious problem the changes in in medical technology and healthcare, in many developed changes in diet, and an overall lower fertility rate. However, as we continue countries today. In to live at an unsustainable pace of life, Japan’s case, these the challenge of ensuring equity for our values, cultures, children remains at bay. Social services demographic changes are strapped as the elderly require more are taking place at a long-term care, the ratio of dependents to workers in a society rises, and retire- more rapid pace than ment ages are pushed back. Coupled any other country has and priorities with the volatility in the economy, the pressure on the younger generation is ever experienced. therefore mounting, as they pay into a system of social services and politics that -Toshihiko Fukui, Japanese are not necessarily designed with their economist and 29th Governor of across generations interests in mind. the Bank of Japan (BOJ) Sources: Census 2016, Forbes 2016, Ledevoir 2014
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Aging: Aging: Technological Implications Environmental Implications
Digital rift Resource footprint
The rapid flux of technology and digitali- I think there’s a gigantic While not wholly attributable to an aging parts, and therefore consume more zation of the world have fundamentally generation gap in terms population, the behaviors and tenden- energy in their households through shifted the ways in which we operate. cies of this demographic may point to heating and cooling. Another consider- For example, as mobile technology has of how people under- indirect effects on the environment ation is the amount of waste generated grown exponentially in the past decade, stand the Internet and and our planet. For example, data has by hospitals per patient, 15% of which is it has given a distinct advantage to the suggested that as older people retire, considered infectious, toxic, or radioac- millennials and generations X, Y, and Z how much they think particularly in developed and Western tive, that without proper disposal poses who more quickly adopt the change. For technology is an impor- countries, their level of leisure consump- significant environmental problems. It is example, a Pew Research Study found tion and travel rises creating impacts on safe to say the data is not conclusive or that seniors continued to lag behind all tant factor in social CO2 and greenhouse emissions. Other causal, but as societies continue to age, Americans when it came to cell phone change. data has suggested that the elderly monitoring and mitigating the potential ownership, broadband access, and even occupy a greater residential square environmental implications will be of using the Internet at all. While this has footage than their younger counter- utmost importance. -Alex Steffen, futurist, speaker, and created a digital rift between the young author and the old, it has also opened a “silver Sources: WHO 2015, European Commission 2008 market” to design innovative products for the elderly. Furthermore, the connectivity of technology has addressed feelings of social isolation and loneliness, and cre- We are in the midst of a silent revolution. It is a ated a sense of freedom. The digital rift that has emerged places technological revolution that extends beyond demographics, constraints on senior citizens who can- with major economics, social, cultural, psycholo- not keep up with the pace of change, but with proper support, could be the key to gical and spiritual implications. enabling happier and more connected lifestyles into the golden years. -Kofi Annan, seventh Secretary-General of the United Nations
Sources: PewResearch Center 2015, PewResearch Center 2014
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Aging: Aging: Economic Implications Political Implications
Silver agers Gerontocracy Europe is one of the con- As the Baby Boomer generation pre- tinents with the oldest As societies age, so too does the age of pares to retire, economists are predict- our electorates. Coupled with political ing “a silver tsunami” in the workforce, population worldwide. apathy and under-representation of a massive simultaneous exiting in the This offers opportunities the younger generation in governing workforce of the population aged 65 bodies, this points to an interesting and older. This creates a fundamental but also poses massive future for our political systems as the change in the way our labor market societal challenges to sus- value structures and desires of the will operate as employers compete for young and the old diverge. In the 2016 An important antidote talent and seek to replace the loyalty, tain our care and pension Brexit Referendum, the generation gap skillsets, and networks lost. This impend- systems, and to maintain was incredibly stark. The older genera- to American democracy ing future has many implications for our tion was about three times more likely is American gerontoc- world. For example: our quality of life. While to want to leave the European Union, resulting in a 52% vote to leave versus racy. The positions of •• Social service strain: as retirement seizing the opportunities a 48% vote to stay. This brings other rises, the cost of pensions, social eminence and authority of the Silver Economy, we issues into the limelight, such as voter security, and healthcare will rise. must not deepen inequal- turnout. The highest turnout was in in Congress are allotted •• Tax slowdown: as silver agers retire, areas where British pensioners made in accordance with tax bases will shift based on changes ities. Innovation for Active up more than 25% of the population, for in income levels. and Healthy Aging must example. The challenge with an aging of length of service, our electorate thus results in long-term •• Next-gen workforce: as Baby regardless of quality. benefit our citizens – all of political decisions made by a generation Boomers retire, organizations will who will probably not have to face the have to shift their business models them. -John Kenneth Galbraith, one of the consequences in full. Thus, this potential and strategies to recruit and retain most influential economist in the rise in gerontocracy due to the aging of a digital native millennial workforce. -Günther Oettinger, European 20th century our societies has massive implications Commissioner for Digital Economy for the future of our world. Sources: Forbes 2015, Deloitte 2013, and Society in the EU Commission The Economist 2010 Sources: Time 2016, Intergenerational Foundation 2012
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Dematerialization: Social Implications
Knowledge society
The emergence of a knowledge society is fundamentally transforming the way we create and capture value in today’s world. Rather than land, labor, or finan- cial assets, intellectual property and human capital have risen in importance, creating huge implications for the way Dematerialization we employ, educate, and communicate. For example, the rise of knowledge soci- eties is partially driven by the prolifera- tion of digital technology, which creates the shift in the rapid exchange of information relative to the “old world.” However, knowledge societies differ from information soci- eties. Information is a commodity, and true knowledge generation is derived value structure from open networks and a culture of Knowledge is power. knowledge transfer. While generally Information is liberating. a positive implication, the rise of the knowledge society must be monitored Education is the premise so that a societal knowledge divide of progress, in every from physical to doesn’t lead to further fragmentation or to the perpetuation of a system in which society, in every family. only those who can afford the education required for knowledge capture will -Kofi Annan, seventh Secretary- benefit. General of the United Nations intellectual Sources: The Wall Street Journal 2016, Unesco 2005
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Dematerialization: Dematerialization: Technological Implications Environmental Implications
Digitalization Scientification of agriculture
As the digital world rises in prominence, browsing for clothes, banking, automo- As advances in biotechnology and consumers find themselves at a fork in tive, even dating have all taken a digital nanotechnology grow, the future of the road facing both analog and digital form. Internet users have surpassed agriculture is evolving. Genomics are options. For example, telecommuni- 40% of the world’s population, emerging rising in importance as agricultural cations providers still offer landline countries are leapfrogging to mobile companies begin to invest heavily in connections, but consumers choose connectivity, and phenomena such as R&D efforts to replicate a crop’s DNA smartphones and wireless connectivity, the Internet of Things are creating new sequence, selectively breed animals seeing minimal value in the additional ways of connecting disparate industries through genetic engineering, or use cost. As Amazon offers both hardcopy for the good of the macro environment. stem cells to produce meat-based pro- books and Kindle applications on tablets Fundamentally, what we are seeing is a ducts. The Internet of Things also offers on their e-commerce site, the conve- full digitalization of our formerly analog significant opportunity as sensor-based nience and ease of the digital book world, as physical products and process- technologies become more common — option often prevails. Grocery shopping, es fall prey to the world of digital. a breakthrough that supports “precision agriculture”. For example, sensors are Sources: Deloitte 2016 used to conduct multi-spectral analysis I have seen first-hand to understand levels of nitrogen based that agricultural science on how plants absorb or reflect different wavelengths of sunlight. This emphasis has enormous potential on advanced science that incorporates to increase the yields of digital technologies represents a trend towards more advanced production small farmers and lift Everything has gotten less expensive. Digitalization has processes, but threats to bio-diversity them out of hunger and made content, whether it’s print or music, less costly. must be increasingly managed with this shift so that new crops or species poverty. Today, anyone can read the news for free online. of animals do not succumb to some unknown threat and further endanger -Bill Gates, CEO Microsoft, -Hubert Burda, German art historian and publisher our world’s food security. entrepreneur
Sources: The Economist 2016, Stratfor 2015
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Dematerialization: Dematerialization: Economic Implications Political Implications
Post-industrialism Shifting power bases
While the world was once pre-occu- workers (e.g., bankers, doctors, engi- As the world shifts away from an em- net. The US Intelligence Community’s pied with an Industrial Revolution and neers) and blue-collar professions (e.g., phasis on physical strength and towards 2015 “Worldwide Threat Assessment” emphasis on a manufacturing-based construction). Furthermore, the world’s digital prowess, strength is becoming report named Russia and China as the economy, our world is now character- focus on technology and digitization synonymous with countries which “most sophisticated nation-state actors” ized by the rise of a service economy. In has placed a high premium on fields display greater technological infrastruc- with regard to cyber-warfare, with a post-industrial societies, the production in these spaces, such as information ture and capabilities. This is in contrast particular emphasis on the Kremlin’s of goods has given way to the produc- technology, cybersecurity, and artificial to the days when power was exhibited technical proficiency, sophistication, and tion of services; knowledge becomes a intelligence. As the world shifts towards by those with a strong militia, defense inventiveness. These examples suggest form of capital (e.g., the emergence of a a post-industrial society, the stratifica- systems, and weaponry. While Russia that today, power doesn’t necessarily knowledge society), and information and tion along socioeconomic lines increa- was once a force to be reckoned with reside with the physically brawny but ideas are commoditized. The pursuit ses, exacerbating wealth inequities and because of its emphasis on artillery and more likely with the digitally nimble. The of education has risen in importance turmoil, creating new complexities in tanks, its focus now is on establishing implications of this for our political world as the labor force becomes polarized our society. dominance in a new war field: the Inter- order will therefore be massive. between technical and professional Sources: The Wall Street Journal 2016 Sources: Newsweek 2015, The Diplomat 2014
We must deal quickly with the fusion of the online Cyber warfare is the new warfare of the world and the world of industrial production. In asymmetrical enemies we face in this country. Germany, we call it Industrie 4.0. -Mike Pence, incoming Vice President-elect of the Unites States of America -Angela Merkel, 8th Chancellor of Germany
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Scarcity: Social Implications
Middle class angst
Propelled by growth, urbanization, critical emergencies as the middle and a concentration of wealth, a global class faces suppression from political middle class has emerged with varying dictatorship. And in China, a new term sets of values and needs. This group has emerged to describe the middle still faces significant barriers in the way class, “zhongchanjieji”, which translates of economic resources and a result roughly to “tragic middle class.” Across of wealth inequities, and a pervasive the world, as the middle class swells due frustration has emerged with the social to changes in wealth structures, a new status quo. In the US, rising tensions set of challenges around the tensions with Wall Street culminated in the that come with socioeconomic dispar- Occupy Wall Street movement in 2011 ity have emerged. The question that and continue to dominate the 2016 remains is how these will be managed in Scarcity election discourse. In Venezuela, food the future to ensure the viability of the scarcity and running water have become middle class.
Sources: The New York Times 2016, PewResearch the unsustainable Center 2015 consumption of our Our goal is to upgrade the life of China’s middle class. We all want to live better. natural resources -Guo Guangchang, Chinese billionaire, business magnate and investor
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Scarcity: Scarcity: Technological Implications Environmental Implications
Innovation Sustainability
Scarcity is a tale often told which results safe water kiosk system in India). Stem The limitation of natural resources has nies such as Mattel, a global toy maker, in negative consequences but in the cells are being used to manufacture led to a significant focus on environmen- have banded together to purchase case of technology, the scarcity of meat products in laboratories without tal sustainability, resulting in the rise recycled water, cut utility bills by 40%, resources is prompting new and inno- endangering the lives of animals. And in of new markets, an active lobbyist and and save 2 million gallons of drinking vative ways of managing, saving, and in Germany, Wendelstein 7-X experienced political base, and renewed efforts in water per year. Furthermore, Starbucks some cases creating new resources to recent breakthroughs in nuclear fusion social responsibility. “Going green” has Corporation recently announced a mitigate growing challenges. Innovation as a way of addressing the world’s ener- become a business strategy, and new plan to sell 10-year bonds to pay for prizes are offered to teams who can gy crisis. As natural resources become players specifically targeting environ- sustainability projects, such as programs come up with unique solutions to so- more scarce, our world faces significant mental concerns have risen in prom- to support coffee growers. Sustainability cietal challenges (e.g., Water XPRIZE). constraints. However, the limitations inence. Consumer watchdog groups has become a global focus, and a goal New ways of design thinking are incor- force us to think more creatively about such as Greenpeace continue to lobby towards which government, consum- porated into engineering to develop how to collectively address the resource for change. And businesses have begun ers, businesses, and universities work products and services that fit the constraints we face. to take a more active role. As drought towards collectively to secure a better populations in need (e.g., Spring Health’s threatens the State of California, compa- future. Sources: Phys.org 2016, Tech Times 2015 Sources: The Wall Street Journal 2016, The Environmental Leader 2016
Above all, it is important to point out that we can In the 21st century, I think the heroes will be the only maintain our prosperity in Europe if we belong people who will improve the quality of life, fight to the most innovative regions in the world. poverty, and introduce more sustainability.
-Angela Merkel, 8th Chancellor of Germany -Bertrand Piccard, Swiss psychiatrist and balloonist
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Scarcity: Scarcity: Economic Implications Political Implications
Qualitative growth Wealth distribution
In a market-driven economy, growth is produce in smarter and more efficient As families continue to pull themselves often synonymous with progress and ways. A classic example can be seen in out of the global recession, the stark high performance. However, unbridled the automotive industry today, where truth remains that the socioeconomic growth over the past several decades the focus is not necessarily on producing order has tilted further towards inequity has placed a high toll on our resour- more cars, but on identifying consumer as 1% of the population is now as rich ces and capacity, necessitating more desires, technological advances, inno- as the rest of the world combined. As efficient and quality-oriented means of vations in materials, and partnership the rich have grown richer and the poor production in order to sustain current models that can lead to a more efficient have grown poorer, a new global middle We can’t leave people levels of consumption. Inextricably linked production function for the sector. The class has emerged with a new set of to the knowledge economy and systems focus on qualitative growth emphasizes values and priorities which now dictate in abject poverty, so thinking, the need for qualitative growth the importance of the development and political discourse. Politicians’ platforms we need to raise the has spurred greater investments in evolution of industry, instead of globally contain policies and proposals to R&D and innovations in collaborative just growth. affect the inequities in wealth. Countries standard of living for consumption as our society looks to such as Finland, Namibia, and Kenya 80% of the world’s Sources: Audi 2015, Automotive World 2014, are now experimenting with a concept Automotive World 2014, Institute if Chartered Accountants 2010 called universal basic income, to provide people, while bringing a flatrate income to every citizen, in part it down considerably to remedy the growing wealth inequities that have emerged as a result of the for the 20% who are Great Recession. Results from these pilot destroying our natural schemes have yet to be seen, but the mere fact that socioeconomic programs resources. such as this are taking a front seat on Quality means doing it right when no one is looking. the political scene speaks volumes to the -Jane Goodall, British primatologist, injustices for all that were created as a ethologist, anthropologist and UN -Henry Ford, American industrialist and founder of the Ford Motor Company result of the behavior of few. Messenger of Peace
Sources: Independent 2016, Independent 2016, BBC 2016
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Blurring Boundaries: Social Implications
Melting pots
As ICT technologies have permeated the fabric of our lives, we have entered an Blurring age of inundation with data and stories which have made decision-making a more challenging feat. While perhaps traditionally, individuals would fall in line with traditional societal expectations Boundaries with regard to careers, interpersonal relationships, and political beliefs, today there is much more fluidity between one choice and another, leading to a culture the emergence of increased autonomy and thoughtful ambivalence. Several examples emerge across the social aspects of our lives:
•• The rise of the global workforce, who live in one country, work in another, of business eco- and consider mobility a critical hallmark of employment. •• The increase in intermarriage across America’s a melting ethnic, religious, and cultural lines. pot, all races, cultures, systems across •• The walk between the left wing and the right wing in the political sphere religious choices. as conviction becomes predicated on candidate trustworthiness and -Tiger Woods, American traditional silos personal emotion. professional golfer Sources: Telegraph 2014, HRO 2012
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Blurring Boundaries: Blurring Boundaries: Technological Implications Environmental Implications
Co-development Mass epidemics
As business ecosystems have formed, capitalize on both internal and external An unintended consequence of open convening players across traditional knowledge to gain an advantage in the borders, free movement, and climate silos, a swath of new opportunity in market. Consider Airbus Helicopters’ change, mass public health epidemics co-development and collaboration has new website for its Open Innovation have begun to increase in outbreak emerged. In part this has emerged initiative, which is targeted at external frequency and impact. Blurring bounda- It is a tragedy, at rate because of a blurring of the producer- organizations for partnerships, or the ries between species create new forms consumer boundary, as consumer new collaboration between Fiat Chrysler of antibody-resistant bacteria which at which EBOLA VIRUS usage data and metrics feed into the and Google focused on self-driving vehi- affect animals and humans in significant is spreading in West design of new products and services cles. Regardless of the size of company, ways. Mosquito-borne infections such as versus in the past, when consumers co-development represents a powerful Dengue fever, West Nile virus, and ma- Africa. It is a fatal were merely the recipient. Co-creation opportunity for companies to combine laria are transmitted across borders, of- disease in the history and open innovation are a critical focus knowledge areas to address complex ten from affected countries in Africa and for today’s companies, as firms seek to problems. Asia. The 2009 H1N1 swine flu epidemic, of the world. Intensive aptly nicknamed for a similar strain of vi- education (formal and Sources: Deloitte University 2015, Deloitte rus found in pigs, resulted in thousands University 2015 of deaths globally. In 2014, the world informal approaches) of faced a severe outbreak of Ebola in West the citizens of African African countries which resulted in the occurrence of the disease on both UK can help prevent the and US soil. Finally, the 2016 Zika crisis spread. International in Central and South America has posed Open source isn’t about saving money, it’s significant implications for pregnant cooperation is urgently women in the region. Mass epidemics needed to combat the about doing more stuff, and getting incremental have always existed but with increased innovation with the finite budget you have. travel, globalization, and converging EBOLA virus. trade routes, the risks of outbreak seem -Jim Whiteburst, CEO at Red Hat to be at an all time high. -Lailah Gifty Akita, Ghanaian
Sources: Deloitte 2016
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Blurring Boundaries: Blurring Boundaries: Economic Implications Political Implications
Shadow markets Nation state 2.0
As boundaries have blurred, the line Another example exists in health- In recent years, there have been several of formal organization and now seek in- between the traditional sectors and care. With the blurring of boundaries political conflicts in which regions are dependence such as Scotland and Great shadow markets has emerged, creating between physical and digital, a range demanding sovereignty as they protest Britain. And still others have fought for market complexity. A major contribu- of self-service websites have become against the political structures and independence but cling to a partial state tor to the 2008 financial crisis was the popular where consumers can enter physical borders within which they exist. recognition status, such as Kosovo. Final- emergence of a shadow market in finan- symptoms and be diagnosed online for Some conflicts have been in existence ly, there are those disputed regions that cial services, in which risky loans were a nominal fee as against participating for many years, such as the political hang in the balance, such as Kashmir repackaged and sold as triple-A bonds. in the formalized healthcare sector. disputes between Hong Kong and whose administration is in the hands of The opacity of these transactions was a While these shadow markets facilitate the People’s Republic of China. Some three separate nations. As borders over- critical contributor to the downfall of the access to sectors otherwise difficult to states have succeeded in their political lap and converge, the chaos that ensues big banks. Today, this shadow market break into, the limited regulation will be disputes to form new nation states, such in establishing political order remains has reappeared as new intermediaries an important factor as to whether they as the 2011 creation of the Republic of one of the most pressing international provide similar bank-like services (e.g., become the new norm. South Sudan. Others have been a part governance issues of our day. peer-to-peer lending, mobile payments). Sources: The Economist 2016 Sources: Deloitte 2016
We need to increase the transparency of shadow banking markets so that authorities can monitor for An independent Scotland—like all countries— signs of excessive leverage and unstable maturity will face challenges, and we will have our ups transformation outside regulated banks. and downs. But the decisions about how we use our wealth will be ours. -Janet Yellen, Chair of the Board of Governors of the Federal Reserve System (FED) -Nicola Sturgeon, fifth First Minister of Scotland
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Erosion of Governance: Social Implications
Direct democracy
As power is shifting more into the hands Switzerland, 50.3% of people voted for a of individuals, direct democracy has the limitation of immigration. The results of potential to severely affect the trajec- the poll vary widely between urban and tory of several political and economic rural areas. For example, in cities such debates. Consider the 2016 Brexit Refe- as Zurich, Genf, and Basel with higher rendum in the United Kingdom, which portion of migrants, the iniative to limit resulted in a 52% to 48% vote to leave immigration was less supported than Erosion of the European Union. Direct democracy in rural areas such as Tessin. While in played a major role in this referendum some cases direct democracy mitigates as every vote mattered in a race with some challenges seen in a representa- such tight margins. Voter turnout, tive democracy (e.g., campaign contri- education, and age seemed to play butions influencing election outcomes), Governance large roles in the outcome of the vote. it also creates other concerns about For example, polls showed that across the danger of a majority populace with the UK, only 19% of people aged 18 to different priorities and values driving the 24 supported the Brexit compared to political and economic outcomes for our the decline of 59% of pensioners, leading to a margin societies. of approximately 1.3 million votes. In Sources: NewEurope 2016, Time 2016, The the traditional Diplomat 2016, Spiegel 2014 Direct democracy can pose risks if people vote on complex topics. world order -Joachim Gauck, 11th President of Germany
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Erosion of Governance: Erosion of Governance: Technological Implications Environmental Implications
Decentralization Resource disputes
Historically, transactions were managed Land and sea disputes have always with the use of handwritten accounting existed but as governance models shift ledgers in which the type, amount, and and resource scarcity rises, territorial parties of a transaction were captured. disputes have started to have significant Over the years, this private ledger has environmental undertones. For example, evolved with the advent of computing. recently an international tribunal voted Today, we see the emergence of a that China’s claim to territorial rights to decentralized form of governance aided the oil and gas reserves in the South by technology: the blockchain. The China Sea had no legal basis, and that The emergence and blockchain is an open-source distribu- its actions (such as the construction of development of the new ted ledger system to which an infinite artificial islands) had endangered the number of parties can contribute, marine environment and interfered with regime of the law of the promoting accountability and trust in the Philippine’s fishing and oil industries. sea has given rise to a system previously managed by a few. Consider another example on the other While Bitcoin is the obvious example side of the world, as Denmark, Russia, dispute between China that comes to mind, blockchain tech- Canada, and the United States all lay and the Philippines over nologies have massive opportunities claim to the North Pole because of the in government, insurance, music, and I do think Bitcoin is the potential for untapped gas and oil re- maritime delimitation other industries which involve transac- first [encrypted money] serves. It is unclear how this dispute will in certain areas of the tions or digital claims. While the future play out. What is clear however, is that in of blockchain remains unclear, it cannot that has the potential regions where territorial boundaries are South China Sea which be refuted that technology is enabling to do something like ambiguous, major world superpowers needs to be resolved new, decentralized methodologies that have taken up infighting to gain access will have massive possibilities for the change the world. to precious environmental resources, through negotiation. fundamental ways through which our suggesting that control of environmental world operates. -Peter Thiel, Co-Founder of PayPal resources is the indicator of power in -Liu Zhenmin, Vice Foreign Minister today’s world. of the People’s Republic of China Sources: UCL CBT 2016 Sources: The New York Times 2016, The Guardian 2015, BBC 2014 134 135 The Megatrends of Tomorrow’s World | Megatrends The Megatrends of Tomorrow’s World | Megatrends
Erosion of Governance: Erosion of Governance: Economic Implications Political Implications
Free markets Alternative governments
Support for free market ideologies has As political tensions increase, coun- professional networks — which are started to grow as societies begin to get tries become more nationalistic, and calling into question whether the global tired of a series of public policies that I want completing the socioeconomic inequities continue to governance bodies of today (e.g., the are thought to benefit only the rich. With divide nation states, the old models of World Bank and the International Mon- socioeconomic inequities widening, the single market to be our global governance are being tested and etary Fund) are in need of reform. The clamor for a reduction in government inter- driving mission. I want challenged. New, alternative governments implications of this shift are massive, vention is at an all-time high and the are rising to power, capitalizing on the suggesting a potential new world order desire to return to a free market economy us to be at the forefront pervasive frustration felt by the middle not grounded in the shared values and in which the “invisible hand” directs out- of transformative trade class and the lack of consensus about principles that once bound powerful comes is gaining traction. Consider the collaborative governance. These new countries together. The erosion of the Movimento Brasil Livre (MBL). Driven deals with the US, governments are primarily non-state global governance structures paves largely by a younger demographic fighting Japan and India as part actors — regional institutions, activist the way for a more shaky and unstable against Brazil’s tradition as a social welfare movements, coalitions, transnational future for the world. state, this movement recently walked 600 of the drive towards miles to promote free markets, lower Sources: The Economist 2015, Ethic International global free trade. And I Affairs 2015 taxes, and privatization, and organized massive demonstrations in São Paulo. Cit- want us to be pushing ing Margaret Thatcher as an inspiration, to exempt Europe’s MBL’s platform stands in strict opposition to former President Dilma Rousseff’s smallest entrepreneurial administration and the Workers’ Party, companies from more and the movement is gaining traction. As It has been said that democracy is the worst form of socioeconomic tensions continue to grow EU directives. and led to the impeachment of Dilma government except all the others that have been tried. Roussef, the story of if and how a return -David Cameron, Prime Minister of to free market society unfolds in Brazil will the United Kingdom from 2010 to -Winston Churchill, Prime Minister of the United Kingdom from 1940 to 1945 be an interesting tale to follow. 2016 and from 1951 to 1955
Sources: The New York Times 2017, The Guardian 2015, The Economist 2015, Bloomberg 2012 136 137 The Megatrends of Tomorrow’s World | Megatrends The Megatrends of Tomorrow’s World | Megatrends
Displacement: Social Implications
Mass migration
As terrorism and violence in the Middle East and surrounding nations grow, the world is facing a massive international Europe and Africa share refugee crisis. Half of Syria’s pre-war population has been killed or forced to proximity and history, flee their homes and at least 4.7 million ideas and ideals, trade Syrian refugees have fled to neighboring Displacement countries, with at least 1 million applying and technology. You for asylum within Europe. The refugee are tied together by the crisis places immense pressure on the social support and political systems of Eu- ebb and flow of people. the movement ropean countries, and in some cases (e.g., Migration presents Hungary and some Balkan countries), we see nations beginning to consider closing policy challenges—but their borders as the pressure mounts. also represents an While mass migration due to terrorism is of people, ideas, a major social issue, urbanization is also a opportunity to enhance leading factor affecting the displacement human development, of particular socioeconomic groups. As cities grow in size, gentrification pushes promote decent out key sectors of the economy and work, and strengthen and challenges a massive suburbanization of poverty results. Today’s migration issues are thus collaboration. a critical social challenge that must be addressed to prevent further disintegra- -Ban Ki-moon, Former Secretary- tion of our society. General of the United Nations across the globe Sources: MercyCorps 2016, Brookings 2010
138 139 The Megatrends of Tomorrow’s World | Megatrends The Megatrends of Tomorrow’s World | Megatrends
Displacement: Displacement: Technological Implications Environmental Implications
Infrastructure shift Ecological pressure
The world is becoming more mobile and Typically climate change and other en- Some global hazards as a result, the infrastructure needed vironmental disasters are viewed as the for our daily lives is shifting from roads drivers of displacement, but can also be are insidious. They and pathways to cell towers and digital affected quite significantly by migration stem from pressure networks. Our increasingly technological patterns. As the world faces massive lifestyles demand constant connectivity, displacement due to political conflicts, for on energy supplies, and as a result, bandwidth, reception, example, the pressure placed on our en- food, water and other megahertz, and signal become more Digital infrastructure is vironmental ecosystems has risen. Ref- ubiquitous concepts. Internet-based ugee crises concentrate large numbers natural resources. And economic activity was expected to reach the base for everything of people, resulting in strain on natural they will be aggravated US $4.2 trillion in the G-20 nations — everyone should enjoy resources. For example, refugee camps by 2016 and the digital economy was have resulted in major deforestation in as the population rises growing at about 10% per year (12-25% adequate connectivity to order to meet survival needs as trees to a projected nine in emerging markets) to serve the more fully benefit from digital are cut down for firewood and habi- than 2.5 billion people connected to the tat formation. Land degradation and billion by mid-century, Internet. As investments in digital infra- opportunities and from soil erosion occurs due to overpopula- and by the effects of structure grow, cell phone real estate Digital Single Market. For tion. Food scarcity also abounds as wild investment trusts (REITs) have risen in game, fruit, herbs, and other plants are climate change. An prominence. As a trade-off, investments me the adequate level of rapidly consumed, and often unsustain- ‘ecological shock’ could in physical infrastructure may fall behind connectivity is a Gigabit able groundwater extraction and water because of the priorities placed on the pollution occurs. While migration is irreversibly degrade our digital world and the returns investors society by 2025. typically thought of as a social or po- environment. expect to see. As a result, displacement litical issue, the long-term effects on not only affects the type of technologies -Günther Oettinger, European our environment will be important as -Martin Rees, British cosmologist we use, but where we see investment Commissioner for Digital Economy the challenges grow in magnitude. and astrophysicist going as well. and Society in the EU Commission Sources: Population Reference Bureau 2014, Sources: World Economic Forum 2014 United Nations Environment Programme 2007
140 141 The Megatrends of Tomorrow’s World | Megatrends The Megatrends of Tomorrow’s World | Megatrends
Displacement: Displacement: Economic Implications Political Implications
Global supply chains Allocation conflicts
The liberalization of economic policies As international wars and political last several decades, who seek asylum over the past several decades has conflict dominate the scene in many de- in neighboring countries. The pressure contributed to a relaxing of trade barriers In Globalization 1.0, veloping countries, resource fighting has placed by displacement on political rela- and free movement of labor and capital led to the displacement of millions of tionships therefore mounts as refugees across boundaries, leading to a more which began around residents. Consider the Eastern Congo, seek access to social services, state insti- rapid diffusion of ideas and cultures 1492, the world went which has been undergoing a massive tutions, land ownership, and/or employ- across political and geographic borders. political conflict since the early 1990s, ment opportunities. The cycles of war As supply chains become increasingly from size large to size facing two international wars and multi- and violence that are perpetuated by international, countries have started to medium. In Globaliza- ple militia invasions. The value placed on corrupt political constructs is thus exac- locate different stages of the production its untapped raw mineral ores is around erbated by further displacement of resi- process in different locations. This shift tion 2.0, the era that US $24 trillion and the political infighting dents who seek asylum and peace in has introduced new risks into ensur- to gain access to these resources has neighboring conflict countries. ing quality and standardization in the introduced us to multi- displaced millions of Congolese over the production process. Human trafficking, national companies, it Sources: UN Refugee Agency 2016, United Nations 2016, Los Angeles Times 2014, BBC 2013 black markets, and labor cost play a more significant role as companies make their went from size medium supply chains increasingly cross-bor- to size small. And then der. For example, in 2014, 36% of the around 2000 came Glo- fastest-growing exporters were based in We don’t know if the diamonds are coming from countries rated as high or severe risk for balization 3.0, in which human rights or environmental violations. the world went from the Central African Republic where there is a war, or The globalization of today’s supply chains from artisanal mines in Sierra Leone where people emphasizes the importance of prediction being small to tiny. and forecast models as the impact of ex- are paid next to nothing. ternal trade shocks, input price variations, -Thomas Friedman, American and natural disasters is magnified. journalist -Ian Smillie, Chair, Diamond Development Initiative
Sources: Deloitte 2016, International Monetary Fund 2014, World Economic Forum 2012
142 143 The Megatrends of Tomorrow’s World | Sources The Megatrends of Tomorrow’s World | Sources
As you reflect on the drivers, mega- interaction will produce distinct scenar- trends, and stories of the future, let’s ios. And it is precisely these scenarios recall the purpose of this book. We which will determine your position in present these ideas with one purpose in the future – how the future feels to you mind. That is, we hope these points help and which strategic options you will you to start thinking about the factors have. Hence, the ideas presented in this which will shape the future of your orga- book are only the starting point of your nization, or your future as an individual. particular story. They are examples, and should not be confused with predictions. You will need Now that you have made the first step, to refine and update this list according you should explore how your journey to yourspecific circumstances. might play out. To do this, may we recommend scenario design? Please keep in mind that the drivers presented here will interact in many Concluding Words unpredictable ways in the future. This
144 145 The Megatrends of Tomorrow’s World | Sources The Megatrends of Tomorrow’s World | Sources
What stories of the future are top of mind for you?
146 147 The Megatrends of Tomorrow’s World | Sources The Megatrends of Tomorrow’s World | Sources
Sources
Page Source Title Year
10 Statista Projected global additive manufacturing market size from 2013 to 2020 2013
10 IDTechEx 3D Printing of Metals 2015-2025 2015
10 Deloitte University 3D Opportunity Additive manufacturing paths to performance, innovation, and growth 2014
10 Deloitte University 3D opportunity for business capabilities 2017
11 Deloitte University 3D opportunity for business capabilities 2017
12 Deloitte University Artificial Intelligence 2015
12 Deloitte University Cognitive analytics 2014
12 Deloitte Artificial intelligence (AI) goes mainstream 2014
13 Deloitte University Cognitive technologies The real opportunities for business 2014
14 Goldman Sachs The Real Deal with Virtual and Augmented Reality 2016
14 Deloitte University Augmented reality 2015
14 Deloitte University Augmented airports 2015
15 Deloitte University Augmented and virtual reality go to work 2016
16 Deloitte University Robotics technology 2015
16 Deloitte University Artificial Intelligence 2015
16 Deloitte University Intelligent automation: A new era of innovation 2014
16 Deloitte The robots are coming 2015 Sources 16 Deloitte Automate this: The business leader’s guide to robotic and intelligent automation 2015
148 149 The Megatrends of Tomorrow’s World | Sources The Megatrends of Tomorrow’s World | Sources
Sources
Page Source Title Year Page Source Title Year
17 Harvard Business Review The Upside of Automating Part of Your Job 2016 27 US Census Bureau, Statista Shares of household income of quintiles in the United States from 1970 to 2015 2016
18 Deloitte University Blockchain: Democratized trust 2016 28 Deloitte University Crowdsourced crime prevention 2015
19 Deloitte Blockchain Enigma. Paradox. Opportunity 2016 28 Forbes The State Of Crowdsourcing 2015
20 Gartner Top Global Megatrends Impacting Data Center Strategies 2016 28 Deloitte University Crowdsourcing—Plugging into the wisdom of the crowd 2014
20 The Guardian 2016 locked into being hottest year on record, Nasa says 2016 28 eYeka The State Of Crowdsourcing 2016 2016
20 Deloitte University Twin forces collide: Water scarcity and climate change 2015 29 Deloitte University Industrialized Crowdsourcing 2014
20 Deloitte University Innovation in food production 2015 30 Global Information Global Mobile Data Monetization and Pricing Strategies by Telcos - Analysis and Key Trends 2015
21 NASA Goddard Institute for Space Studies Global Land-Ocean Temperature Index 2015 30 Deloitte The Dangers of Monetizing Data 2015
22 Deloitte Small business, big technology: How the cloud enables rapid growth in SMBs 2014 30 Forbes Driving Value By Monetizing Data From The Internet Of Things 2016
22 RightScale State of the cloud report 2016 31 TM Forum 8 ways to monetize customers’ data 2016
23 Deloitte Small business, big technology: How the cloud enables rapid growth in SMBs 2014 32 Deloitte University “Tailor-made” medicin 2015
24 Deloitte University Talent: The new comparative advantage 2016 32 Deloitte University Additive Manufacturing 2015
24 US Chamber of Commerce Mind the Gap: Skills Gap Weighs on US Jobs Growth 2014 32 Forbes Having It Their Way: The Big Opportunity In Personalized Products 2013
24 Monster.de Recruiting Trends 2015 2015 33 Forrester Research Mass Customization Is (Finally) The Future Of Products 2011
25 Deloitte University Brawn from Brains: Talent, Policy and the future of American competitiveness 2012 34 Deloitte University The Internet of Things 2015
26 Deloitte University Rising income inequality 2015 34 Deloitte University The Internet of Things 2013
26 Credit Suisse The Global Wealth Report 2016 2016 35 Deloitte University Inside the Internet of Things (IoT) 2015
26 Deloitte University Mind the Gap 2011 36 Deloitte University The future of manufacturing 2015
150 151 Megatrends / Stories of the Future | Sources The Megatrends of Tomorrow’s World | Sources
Sources
Page Source Title Year Page Source Title Year
36 Deloitte University The hero’s journey through the landscape of the future 2014 42 Deloitte University Government and the Publicly Accountable Enterprise 2011
36 The Denver Post Colorado lands at #11 for top-grossing mobile apps 2016 42 Deloitte University Resolving the privacy debate 2015
36 Maker Faire Maker Faire Growth 2017 42 Deloitte University People data everywhere 2015
37 Deloitte University The future of manufacturing 2015 42 Deloitte University Starting over: Imagining a new intelligence community 2015
37 Statista Etsy’s annual revenue from 2012 to 2015 2016 43 Deloitte University Building consumer trust 2014
38 Deloitte University The age of empowered women 2014 44 Gartner Consumerized Geography Will Change Your Utility GIS Strategy 2012
38 The Wall Street Journal Want to Boost Global Growth by Trillions? Improve Gender Equality, McKinsey Report Says 2015 44 The World Bank The Global Urban Footprint: A map of nearly every human settlement on Earth 2016
38 The Wall Street Journal 17 Countries Where Women Are the Majority of Wage-Earners 2015 44 Deloitte Imagining the Geospatial Future 2012
38 The Economist Why the world needs women entrepreneurs 2013 45 Deloitte Imagining the Geospatial Future 2012
38 Inter-Parliamentary Union Women in National Parliaments 2016 46 Brookings Institution When globalization goes digital 2016
39 CNN US sees big spike in black and Hispanic women entrepreneurs 2015 46 Deloitte University Navigating the next wave of globalization 2014
40 Deloitte University The socially conscious consumer 2015 46 Forbes The Globalization Of Higher Education 2010
40 Deloitte University Sustainable, resilient cities 2015 47 UNDP Human development report 2013: The rise of the south 2014
40 Deloitte University “Aspirationals” drive sustainable consumption 2015 48 The Wall Street Journal Has Industry Consolidation Held Back Home Construction? 2015
40 BBMG Five Human Aspirations 2016 48 The Wall Street Journal Suppliers Drive Consolidation in Aviation Industry 2012
41 Deloitte University The socially conscious consumer 2015 48 Financial Times M&A boom set to continue in 2017 2016
42 Deloitte University Data as currency and asset 2015 49 Harvard Business Review The Consolidation Curve 2002
42 Deloitte University Radical openness becomes the norm 2015 50 Gartner Gartner Says Worldwide IoT Security Spending to Reach $348 Million in 2016 2016
152 153 Megatrends / Stories of the Future | Sources The Megatrends of Tomorrow’s World | Sources
Sources
Page Source Title Year Page Source Title Year
50 Deloitte Internet of Things: From Sensing to Doing 2016 56 Gartner Are Millennials the “GRC Generation”? 2015
50 The Wall Street Journal Companies See Market in Managing ‘Internet of Things’ 2015 57 PewResearch Center Millennials surpass Gen Xers as the largest generation in US labor force 2015
51 Deloitte Internet of Things 2016 58 The World Bank 5 trends in public-private partnerships in water supply and sanitation 2015
52 The Wall Street Journal The Rise of Knowledge Workers Is Accelerating Despite the Threat of Automation 2016 58 Forbes 10 Top Trends Driving The Future Of Marketing 2015
52 Financial Times Companies must treat knowledge workers as assets 2011 58 Forbes Gartner Predicts Top 2015 And Beyond Trends For Technology, IT Organizations, And Consumers 2014
52 Harvard Business Review The Cost of Knowledge 2006 58 Forbes Future Business Growth Drives A New Partner Paradigm 2014
53 Federal Reserve Bank of St. Louis The Rise of Knowledge Worker 2016 58 Forbes The Secret Behind Rent The Runway’s Success 2013
54 The Guardian Mass migration is no ‘crisis’: it’s the new normal as the climate changes 2016 59 Deloitte University Partnerships for the Future 2013
54 Eurostat Migration and migrant population statistics 2016 Instability and Fragmentation Continue to Constrain Private Sector Growth 60 The World Bank 2014 in the Palestinian Territories 54 Financial tTimes Mass migration into Europe is unstoppable 2016 60 CNN Political instability on the rise 2013 54 Forbes Another Great Argument In Favor Of Immigration 2015 60 International Monetary Fund World Economic Outlook Database October 2016 2016 54 BBC Mass migration: Who benefits and why? 2013 61 The World Bank Doing Business 2016 2015 54 The New York Times Donald Trump’s Muslim Ban Is Cowardly and Dangerous 2017 61 The World Bank Worldwide Governance Indicators 2015 54 UNHCR Global Trends – Forced Displacement in 2015 2016 61 Euromonitor Changes in Political Stability Impact Business Environments in Emerging Markets 2014 55 Reuters Europe’s migrant crisis 2015 62 Deloitte University Global risk management survey, ninth edition 2015 56 Deloitte The Deloitte Millennial Survey 2016 2016 62 Gartner Market Trends: US Healthcare Payer Trends in an Affordable Care World 2014 56 The Wall Street Journal Why Millennials Aren’t Starting Businesses (and Why That’s a Problem) 2015 62 Forbes Regulatory Environment Has More Impact on Business Than the Economy, Say US CEOs 2014 56 The Wall Street Journal How to Manage Different Generations 2015 62 Markets and Markets Healthcare Payer Services Market by Service Type 2015
154 155 Megatrends / Stories of the Future | Sources The Megatrends of Tomorrow’s World | Sources
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Page Source Title Year Page Source Title Year
63 Deloitte University Global risk management survey, ninth edition 2015 70 The Wall Street Journal The Uses of Social Media Data in Investigations: Five Questions 2016
64 Deloitte Deloitte’s Oil & Gas Price Forecast 2016 70 Forrester Research US Digital Marketing Forecast, 2014 To 2019 2014
64 Deloitte Energy and Water: A Market Reality Check 2015 70 Forrester Research In Business, Everybody Uses Social Media For Work; The Question Is How 2013
64 BBC Resource depletion: Opportunity or looming catastrophe? 2012 71 Forrester Research In Business, Everybody Uses Social Media For Work; The Question Is How 2013
66 The Guardian UN launches heads of state panel on global water scarcity 2016 72 Deloitte University Business and social impact 2014
66 Deloitte University Deflecting the scarcity trajectory: Innovation at the water, energy, and food nexus 2015 72 The Economist Unrest in peace 2011
66 Deloitte Energy and Water: A Market Reality Check 2015 72 International Labour Organisation World Employment and Social Outlook: Trends 2017 2017
66 United Nations Water scarcity 2014 73 Deloitte Deloitte Globalization Survey 2013 2013
Center for Environmental Systems 74 Gartner Predicts 2016: Digital Generates Busines Value Opportunities in Life Science 2015 67 Projected water scarcity in 2025 2016 Research 74 Deloitte University Remote Monitoring 2015 68 Deloitte University Big companies now have a hand in the collaborative economy 2014 74 Deloitte Healthcare and Life Sciences Predictions 2020 - A bold future? 2014 68 Deloitte The sharing economy 2014 75 Deloitte Healthcare and Life Sciences Predictions 2020 - A bold future? 2014 68 The Economist World retail: The rise of the sharing economy 2013 76 Forbes The World’s Most And Least Peaceful Countries In 2016 2016 European Parliamentary Research The Cost of Non-Europe in the Sharing Economy – 68 2016 Service Economic, Social and Legal Challenges and Opportunities 76 Institute for Economics & Peace Global Terrorism Index 2016 2016
69 Forbes Trends Show Crowdfunding To Surpass VC In 2016 2015 77 Institute for Economics & Peace Global Terrorism Index 2016 2016
69 Crowdinvesting.org Crowdfunding Industry Report 2015 78 The World Bank Urban Development 2016
69 Fast Company Sharing Economy 2011 79 The World Bank Urbanization and Cities - Facts & Figures 2016
70 The World Bank Digital Dividends 2016 85 Deloitte Social Empowerment 2016
156 157 Megatrends / Stories of the Future | Sources The Megatrends of Tomorrow’s World | Sources
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Page Source Title Year Page Source Title Year
86 The Economist The rise of the sharing economy 2013 98 The Telegraph Hackers steal £650 million in world’s biggest bank raid 2015
87 University of Pennsylvania The Triple Bottom Line: Making a Convincing Case for Sustainability 2015 98 Tripwire Cyberterrorists Seek to Cause Physical Harm 2015
87 Stanford University Inside the Buy-One Give-One Model 2014 99 Time There May Be Conflict Minerals in Your Smartphone 2014
88 Etsys About Etsy 2016 99 Michigan State University When the world’s hyperconnectivity impacts sustainability 2014
88 Deloitte University Blurring boundaries, uncharted frontiers 2015 100 The New York Times E.U. Referendum: After the ‘Brexit’ Vote 2016
88 Deloitte University A movement in the making 2014 100 Forbes The Impact Of Greece On Financial Markets 2015
89 Deloitte Unconventional regimes 2016 101 Deloitte Global regimes 2016
91 Deloitte Rise of ideology 2016 103 The New Yorker Headphones Everywhere 2016
92 CNBC People are spending much less time on social media apps: Report 2016 104 BBC Japanese insurance firm replaces 34 staff with AI 2017
92 The Wall Street Journal This Tech Bubble Is Bursting 2016 104 Forbes What Is ‘Pokémon GO,’ And Why Is Everybody Talking About It? 2016
92 Fortune Facebook Users Are Sharing Fewer Personal Updates and It’s a Big Problem 2016 105 Greenpeace Nuclear waste 2006
93 Bloomberg Clinton Doubles Down Against Fracking in Debate, Raising Alarms 2016 105 Nuclear Energy Institute Top 10 Facts About Yucca Mountain 2015
93 Voice of America 9 questions about the Keystone XL pipeline debate you were too embarrassed to ask 2014 105 National Ocean Service The Great Pacific Garbage Patch 2014
94 Forbes Coding Is Not Just For Geeks, Say Industry Experts 2014 106 Fast Company How These Companies Have Made Four-Day Workweeks Feasible 2015
94 MIT The Polarization of Job Opportunities in the US Labor Market 2010 106 The Wall Street Journal Wanted: Jobs for the New ‘Lost’ Generation 2013
95 Deloitte Institutionalized radicalism 2016 107 The Guardian We need a second referendum. The consequences of Brexit are too grave 2016
97 Deloitte Transparent lives 2016 109 Census An Aging World: 2015 2016
98 Reuters Los Angeles hospital paid hackers $17,000 ransom in bitcoins 2016 109 Forbes Older And Wiser? How An Aging Population May Impact The Economy 2016
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109 Ledevoir Population Aging, Generational Equity & The Middle Class 2014 121 The New York Times China’s Middle-Class Anxieties 2016
110 PewResearch Center For vast majority of seniors who own one, a smartphone equals ‘freedom’ 2015 121 PewResearch Center A Global Middle Class Is More Promise than Reality 2015
110 PewResearch Center Older Adults and Technology Use 2014 122 Phys.org Wendelstein 7-X: Upgrading after successful first round of experiments 2016
111 WHO Health-care waste 2015 Scientists Produce Beef From Cow’s Stem Cells: Lab-Grown Burgers Could 122 Tech Times 2015 Be On The Menu By 2020 111 European Comission Environment and Ageing 2008 123 The Wall Street Journal Starbucks to Raise $500 Million in 10-Year Bond for ‘Sustainable’ Projects 2016 112 Forbes A Silver Tsunami Invades The Health Of Nations 2015 123 The Environmental Leader Mattel Plans to Cut Utility Bills 40% Using Recycled WaterBy 2016 112 Deloitte The Aging Workforce: Finding the silver lining in the talent gap 2013 124 Audi Qualitative growth and economic stability 2015 112 The Economist The silver tsunami 2010 124 Automotive World Hyundai Motor makes qualitative growth gains in 2014 2014 113 Time The UK’s Old Decided for the Young in the Brexit Vote 2016 124 Automotive World Volkswagen Group stays firmly on course for qualitative growth 2014 113 Intergenerational Foundation The rise of gerontocracy? 2012 124 Institute if Chartered Accountants Qualitative Growth 2010 115 The Wall Street Journal The Rise of Knowledge Workers Is Accelerating Despite the Threat of Automation 2016 125 Independent Canadian province Ontario plans to trial universal basic income 2016 115 Unesco Towards Knowledge Societies 2005 125 Independent Finland to consider introducing universal basic income in 2017 2016 116 Deloitte Digitalization 2016 125 BBC Oxfam says wealth of richest 1% equal to other 99% 2016 117 The Economist Factory fresh 2016 127 Telegraph Love across the divide: interracial relationships growing in Britain 2014 117 Stratfor How Science Is Changing Agriculture 2015 127 HRO RPO’s Melting Pot 2012 118 The Wall Street Journal The Rise of Knowledge Workers Is Accelerating Despite the Threat of Automation 2016 128 Deloitte University Blurring boundaries, uncharted frontiers 2015 119 Newsweek Russia’s Greatest Weapon May Be Its Hackers 2015 128 Deloitte University Patterns of disruption 2015 119 The Diplomat Russia Is Doomed 2014 129 Deloitte Mass epidemics 2016
160 161 The Megatrends of Tomorrow’s World | Sources The Megatrends of Tomorrow’s World | Sources
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Page Source Title Year Page Source Title Year
130 The Economist How shadow banking works 2016 140 World Economic Forum The Digital Infrastructure Imperative 2014
131 Deloitte Nation state 2.0 2016 141 Population Reference Bureau Migration and the Environment 2014
133 NewEurope Direct Democracy and Brexit 2016 141 United Nations Environment Programme Population Displacement and the Environment 2007
133 Time The U.K.’s Old Decided for the Young in the Brexit Vote 2016 142 Deloitte The Big Shift 2016
133 The Diplomat Brexit: The American Founding Fathers Had it Right: Direct Democracy Is a Dead Duck 2016 142 International Monetary Fund A World of Change 2014
133 Spiegel Schweiz will Kontingente für Einwanderer einführen 2014 142 World Economic Forum The Rise of International Supply Chains: Implications for Global Trade 2012
134 UCL CBT Blockchain Technology and Decentralized Governance: Is the State Still Necessary? 2016 143 UN Refugee Agency Democratic Republic of the Congo 2016
135 The New York Times Tribunal Rejects Beijing’s Claims in South China Sea 2016 143 United Nations Conflicts in the Democratic Republic of Congo 2015
135 The Guardian The new cold war 2015 143 Los Angeles Times Congo’s land conflicts prolong warfare in east 2014
135 BBC Denmark challenges Russia and Canada over North Pole 2014 143 BBC DR Congo: Cursed by its natural wealth 2013
136 The New York Times The End of the World? In Brazil, It’s Already Here 2017
136 The Guardian Brazil activists to walk 600 miles for ‘free markets, lower taxes and privatisation’ 2015
136 The Economist Niche no longer 2015
136 Bloomberg Brazil Gets a Dose of Free-Market Remedies 2012
137 The Economist Unsustainable goals 2015
137 Ethic International Affairs Global Governance and Power Politics: Back to Basics 2015
139 MercyCorps Quick facts: What you need to know about the Syria crisis 2016
139 Brookings The Suburbanization of Poverty: Trends in Metropolitan America, 2000 to 2008 2010
162 163 The Megatrends of Tomorrow’s World | Authors The Megatrends of Tomorrow’s World | Contact
About the authors Contact
Florian Klein Head of Scenario Design | Center for the Long View | [email protected]
Florian Klein is an advisor, corporate Megha Bansal is a former senior con- Julian Wohlers is a former senior strategist, and future thinker with exten- sultant with Deloitte’s Strategy practice consultant with Deloitte’s Strategy & sive experience in providing strategic with over five years of experience work- Operations practice. Before joining counsel to senior decision-makers at ing with public sector, not-for-profit, Deloitte, Julian worked in the consulting leading multi-national corporations and commercial clients on strategy department of a major German inves- and governments across Europe and projects, assessing emerging trends tor. During his professional life, Julian globally. He is an expert in facilitating to understand market disruptions and supported and led several projects in the creation of robust strategies today, business model innovation. Megha also different European countries and in- in the light of an uncertain tomorrow. supported Deloitte’s US CEO Program dustries. The projects included procure- Florian founded the Center for the Long on research initiatives relating to CEO- ment initiatives, process optimization/ View, which is Monitor Deloitte’s global led strategic transformations. Currently, digitalization, and business transforma- center of excellence for scenario design. she is pursuing an MBA at The Wharton tion programs. Furthermore, Julian was School at the University of Pennsylvania. part of Deloitte’s Center for the Long View where he was developing long term strategies for international clients based on the scenario design approach.
The CLV focuses on topics of strategic relevance that often transcend specific industries. Building on our rich heritage and world-class reputation in this field, we have adapted the methodology to the client needs and the technical possibilities of the 21st century. We have developed customized artificial intelligence and online collaboration tools to dramatically increase the quality of scenario planning.
164 165
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