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EnglishIn today’s market it is critical to have an overall view of the global trends that affect the way we live and work. It is just as critical to understand which trends will become the most important to follow in the short and medium term. Here we highlight 10 trends, in no order of importance, that we believe should be kept under watch by anyone who makes business decisions.
1. The mobile time machine
Mobility is everywhere: resources, people, products and services, capital, knowledge, beliefs, opinions and much more. Trade in goods and services has grown far beyond global GDP over the last thirty years, while product life cycles are getting shorter. The revolution under way in global communication technologies lets organisations work 24/7 regardless of time zones, while companies in emerging economies can benefit from continuous flows of information at very low cost, which will allow them to quickly close the gap that separates them from the market leaders. Mobile broadband penetration is overtaking fixed broadband, which keeps billions of people constantly online and lets them work from wherever they happen to be, blurring the line between free time and work. The amount of data available is overflowing and information can be spread around the world in a few minutes with a tweet, while an ever-growing variety of digital entertainment and social media competes for our time. In this world shaped by mobile expansion, time is being compressed. Organisations able to manage the dynamics of this mobile time machine will gain an advantage in both capabilities and innovation.
2. Potential crises in water, food and electricity
The world population has more than doubled over the last 50 years, from 3 billion in 1960 to 6.9 billion in 2010, and forecasts speak of 9.1 billion in 2050. The growing number of people, together with growing affluence, will put critical resources under heavy stress. By 2030 the gap between water demand and supply could reach 40%. Food security will be closely tied to this problem, as 70% of the water consumed is used in agriculture. Since basic commodities are hit by events linked to climate change, such as droughts, the FAO suggests that food prices will be structurally higher in the future. The capital required to meet the energy demand expected in 2030 is estimated at 1.1 trillion dollars a year (1.4% of global GDP). Without widespread action on how we use these resources, social and geopolitical tensions could arise, alongside strongly negative economic effects.
3. The global technology race
Technology offers potential solutions to many of today’s most pressing problems, but the key questions are when will the promised answers arrive, and who will provide them? A race is on for leadership in critical technologies, including building-block technologies such as nanotechnology and biotechnology, as well as the applied technologies that will have to solve global problems such as health and ageing and the scarcity of resources. We should expect the BRIC countries to be in pole position together with the industrialised nations, since R&D investment is moving towards the BRICs and their governments encourage innovation: China, for example, is pursuing leadership in clean technologies, while India is establishing itself as a hub of global nuclear knowledge.
4. Competing in the BRICs and beyond
Economic power is shifting relentlessly towards the BRIC countries, and will keep doing so. In 2010 China’s economy overtook Japan’s to become the second largest in the world, and India is expected to be the fifth largest economy by 2025. These countries will be home to most of the emerging middle classes. However, the playing field in the BRIC countries is starting to get crowded with both multinationals and local companies with global ambitions. Companies need to start looking beyond the BRICs for the next tier of markets that will be attractive in the future. Based on size, growth potential, natural resources, position and global influence, over the next 30–40 years these markets could be Indonesia, Mexico, Turkey, Iran, South Korea, Egypt, South Africa, Thailand, Vietnam, Pakistan, Bangladesh, the Philippines and Argentina. Companies from the BRIC countries are already moving to compete in these regions. The dilemma for firms in the advanced economies is how to balance their efforts between Western economies, the BRIC countries and the post-BRIC growth areas.
5. The growing influence of “we and me”, not only “them”
The last 20 years have been, among other things, the stage for the emancipation of influence. People all over the world have seen their ability to make choices grow beyond anything they imagined, and this has happened at the same time as declining trust in governments, religions and business. Innovations in communication and greater democracy have allowed people to find their own voice and to share ideas, knowledge and experiences with an ever wider reach. The power of “me” has been amplified through communities of choice, including social networks and buying communities, which are changing our behaviour and the way we interact. Trust and dialogue, however, are critical in building and maintaining relationships with and within these communities. Thanks to new tools for tracking the dynamics of influence, organisations that actively manage and understand influence have huge opportunities: broadening the horizons of innovation, co-creating with their consumers and using the exponentially growing value of networks to support their offer.
6. The rise of the new power brokers
New power brokers are increasing their influence on the global stage. They include, for example, the centres of economic power in the BRIC countries, social networks and the G20, which gives fast-developing economies a bigger voice in global issues. New financial power brokers have also emerged, such as sovereign wealth funds, private equity and hedge funds, which governments encourage and finance together with their voters. The immense assets of these financial players, in a world where 44 of the 100 largest economic entities are companies, will affect not only the corporate governance of many firms but the very structure of entire industries. These new power brokers will also play a growing role in shaping the global economy and political and social development, since the relative influence of the USA, Japan and Europe will decline sharply under the burden of excessive national debt, which will absorb the internal focus of the advanced economies and reduce their ability to fund international projects of any kind, whether aid, military or scientific programmes. The age of the superpowers is ending; the era of multiple power brokers is beginning.
7. Interdependence and competition between sectors, not only within them
The classic boundaries between industries are blurring, as are the organisations that compete in them. The boundaries of value are increasingly defined by consumers, not by firms. Take health and wellness: in consumers’ minds they go far beyond pharmaceuticals and healthcare and reach into food, fitness, beauty, online services and much more. And what about music? Which player in that sector would you personally invest in? As the boundaries between sectors fade and everything is constantly turned into a mobile version of itself, the players in every sector are more and more interdependent, since they have to balance collaboration and competition with other players, potentially playing several roles in a network or in different industries. This extends to interactions with society, where new low-cost forms of networks and partnerships are emerging to deliver commercial and social benefits at the same time.
8. The battle for the loyalty of the new consumer
Globally there are more, and richer, consumers than a few years ago, with the means and the desire to be involved in co-creation: the battle for the loyalty of the new consumer has begun. This consumer wants more involvement and personalisation, demands them anytime and anywhere, and expects them to be cheap and chic at the same time, just as the climate of frugality brought on by the crisis hits. Businesses, wherever they sit in the value chain, try to connect with consumers to build a reputation, to create relationships of trust and loyalty, to generate revenue and a better market position and, in the end, to earn the licence to compete. The advantage of those in direct contact with consumers is threatened by firms that tend to remove steps from the distribution chain, for example through direct sales, or by building a reputation that makes consumers choose their offer as part of the solution to a problem, the route chosen by Intel Inside. As consumers ask ever more clearly for experiences and solutions, the battle will evolve into new and creative forms of cooperation between firms, as we see between Apple and app developers.
9. The generation gap
For the first time, four different generations are present in the workforce of developed countries. The resulting generational differences concern ambitions, habits, technological skills and ethics, and they affect management style, how work gets done and companies’ ability to attract talent. There are also signs in developed economies that the distinctive traits and values of one generation are more similar across different countries (globalisation) than the values and traits of different generations within the same country. The generation gap, among both workers and consumers, will require businesses to adopt more flexible practices and a wider range of business approaches.
10. Tensions between globalisation and fragmentation
Although the wave of globalisation and integration keeps growing, an opposite trend is emerging: fragmentation, in which tribalism, nationalism and cultural conflict are on the rise, as shown by anti-globalisation protests and the break-up of some states. Even in cyberspace, while recognising the internet as a hugely powerful force for global unification, threats of fragmentation are appearing, as governments raise ever stricter barriers on the flow of information to block or monitor unwelcome content, and technology providers tend to develop proprietary “clouds”. The way the forces of globalisation and fragmentation interact will have a significant impact on the economic, social and political development of the 21st century.