Trends Identified

Polarization

"Polarization the rise of divisiveness and divergence..Rise of ideology: Fueled by individual empowerment, access to information and communication technologies, and growing wealth inequalities, the world is seeing a rise in ideology as people and communities seek dramatic change from the status quo. As individuals engage increasingly over social networks due to the proliferation of ICT technologies, networks of ideological thinkers are no longer constrained by proximity and are able to grow exponentially with new followers who seek sources of insight online. Bursting digital bubble: Driven by the increase of mobile technologies that have enabled constant connectivity, the world around us has fundamentally changed. What has resulted is a pervasive dependence on technology for everything from social interaction to transactions to health monitoring. However, venture capitalists are predicting the burst of the tech bubble as the democratization of knowledge has led to an oversaturation and overvaluation of players in the market. Politicism of science: As people become more entrenched in their individual value systems and as environmental outcomes are increasingly tied to political and financial motivations, a politicism in scientific reasoning has emerged in today’s world. This skepticism is an example of one of the negative consequences of an increasingly polarized world, a “kick the can” mentality about issues which affect the long-term viability of our planet.Skillset divide: Following the Great Recession, the workforce particularly in the United States realized more significant employment declines in middle-skilled white- and blue-collar jobs (e.g., construction, manufacturing, mining) than in the high-skill or low-skill sectors. While those losses have stabilized somewhat in the US, the polarization in skillsets valued in today’s global market still exists. Institutionalized radicalism: While the term “radicals” once meant one-off individual extremists as part of a certain religion or political group, the world has evolved to a place where radicalism has become the norm. In one example, we have the rise of ISIS as a pervasive threat in the Middle East that has now infiltrated global corridors with their terrorism. We also see a different kind of radicalism emerge in the United States, the rise of untraditional political players who capitalize on general dissatisfaction with the status quo to galvanize a new tier of supporters with more money, influence, and power."

2017

Beyond the Noise- The Megatrends of Tomorrow’s World

Deloitte

Hyperconnectivity

Hyperconnectivity the emphasis on interconnectedness and collective behavior.Transparent lives: With the rise in ICT technologies, the proliferation of data has exploded leading to the rise of big data analytics and trend sensing. In today’s world, data is easy to search for, manipulate, and extract insights from. Integrated systems: In a more digital world, we are able to create beautiful “smart cities” which integrate ICT networks and leverage the Internet of Things to create a positive, interconnected, and hyperconnected world for its inhabitants. While hyperconnectivity such as this boasts many benefits, it can also lead to greater risks from the integration from physical and cyber infrastructures as hackers increasingly exploit our reliance on digital technologies. Conflict minerals: As our dependence on smartphones, computers, and technologies has grown, our consumption of the precious metals and minerals required to produce such products has also grown significantly. Smartphones each contain approximately 40 different minerals including tantalum, tungsten, tin, and gold – referred to as the 3TG. Hyper-sensitive markets: As the world becomes increasingly intertwined, significant political and economic structural changes in one region have huge impacts on major financial markets leading to increased volatility. The 2008 subprime mortgage crisis in the United States sent the entire globe into catastrophe as markets were shorted and a Great Recession emerged. Global regimes: From the Roman Empire to the British Empire to Attila the Hun, the story of global regimes is not new. However, today the rise of and reach of global forces is catapulted forward by the ubiquity of social media and ICT technologies which create the possibility of connecting beyond physical borders on ideological platforms.

2017

Beyond the Noise- The Megatrends of Tomorrow’s World

Deloitte

Disengagement

Disengagement the evolution of ways in which we communicate and interact. Interpersonal divergence: The advent of digital has created incredible impacts in connecting people across the globe, but often at the expense of face-to-face interpersonal interaction. On the one hand, new friendships and relationships are explored through the rise of networking and social platforms. Digital personification: The confluence of artificial intelligence and augmented reality has resulted in a new mode of interaction with the digital world: the space of digital personification where “things” become humanized in a way. One of perhaps the most mainstream and foreshadowing examples of this occurred back in the mid-90’s, where Tamagotchi digital pets from Japan rose in prominence with children. NIMBY: For years, the NIMBY (“Not in my backyard”)phenomenon has been described in economics textbooks as the classic example of how people’s attitudes and behaviors often don’t match up. NIMBY represents the disengagement of society with outcomes that do not affect them at face value. Take the example of the great big trash in the North Pacific Ocean. Despite consumers’ emphasis on being eco-friendly, the spinning vortex of garbage was first detected in the 1990s, formed partially as a result of consumer waste from a materialistic product-driven culture and loose incentives for proper waste disposal and recycling. Fragmented workforce: Mobile technologies have fundamentally changed the way we work today. As virtual connectivity grows, physical co-location diminishes. Gallup data suggests that 37% of the workforce in the US have telecommuted and companies have begun to roll out alternative work schedules (e.g., 4-day weeks). What has resulted is a fragmentation of the workforce. While this enables flexibility and agility, questions of employee engagement and productivity have inevitably risen. Political defiance: While heralded as the hallmark of democracy, political disengagement has become a new normal, where individuals don’t feel as if their voice is heard over the din of mass opinion. Voter apathy is high and campaigns to increase voter turnout in critical election years abound.

2017

Beyond the Noise- The Megatrends of Tomorrow’s World

Deloitte

Aging

Aging the changes in values, cultures, and priorities across generations. 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 center seat. Demographic trends suggest that our population is aging dramatically and at a faster pace than the regular population. Digital rift: The rapid flux of technology and digitalization of the world have fundamentally shifted the ways in which we operate. For example, as mobile technology has grown exponentially in the past decade, it has given a distinct advantage to the millennials and generations X, Y, and Z who more quickly adopt the change. For example, a Pew Research Study found that seniors continued to lag behind all Americans when it came to cell phone ownership, broadband access, and even using the Internet at all. Resource footprint: While not wholly attributable to an aging population, the behaviors and tendencies of this demographic may point to indirect effects on the environment and our planet. For example, data has suggested that as older people retire, particularly in developed and Western countries, their level of leisure consumption and travel rises creating impacts on CO2 and greenhouse emissions. Silver agers: As the Baby Boomer generation prepares to retire, economists are predicting “a silver tsunami” in the workforce, a massive simultaneous exiting in the workforce of the population aged 65 and older. This creates a fundamental change in the way our labor market will operate as employers compete for talent and seek to replace the loyalty, skillsets, and networks lost. Gerontocracy: As societies age, so too does the age of our electorates. Coupled with political apathy and under-representation of the younger generation in governing bodies, this points to an interesting future for our political systems as the value structures and desires of the young and the old diverge.

2017

Beyond the Noise- The Megatrends of Tomorrow’s World

Deloitte

Dematerialization

Dematerialization the shift in the value structure from physical to intellectual. 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 financial assets, intellectual property and human capital have risen in importance, creating huge implications for the way we employ, educate, and communicate. For example, the rise of knowledge societies is partially driven by the proliferation of digital technology, which creates rapid exchange of information relative to the “old world.” Digitalization: As the digital world rises in prominence, consumers find themselves at a fork in the road facing both analog and digital options. For example, telecommunications providers still offer landline connections, but consumers choose smartphones and wireless connectivity, seeing minimal value in the additional cost. Scientification of agriculture: As advances in biotechnology and nanotechnology grow, the future of agriculture is evolving. Genomics are rising in importance as agricultural companies begin to invest heavily in R&D efforts to replicate a crop’s DNA sequence, selectively breed animals through genetic engineering, or use stem cells to produce meat-based products. The Internet of Things also offers significant opportunity as sensor-based technologies become more common — a breakthrough that supports “precision agriculture”. Post-industrialism: While the world was once pre-occupied with an Industrial Revolution and emphasis on a manufacturing-based economy, our world is now characterized by the rise of a service economy. In post-industrial societies, the production of goods has given way to the production of services; knowledge becomes a form of capital (e.g., the emergence of a knowledge society), and information and ideas are commoditized. Shifting power bases: As the world shifts away from an emphasis on physical strength and towards digital prowess, strength is becoming synonymous with countries which display greater technological infrastructure and capabilities. This is in contrast to the days when power was exhibited by those with a strong militia, defense systems, and weaponry.

2017

Beyond the Noise- The Megatrends of Tomorrow’s World

Deloitte

Scarcity

Scarcity the unsustainable consumption of our natural resources.Middle class angst: Propelled by growth, urbanization, and a concentration of wealth, a global middle class has emerged with varying sets of values and needs. This group still faces significant barriers in the way of economic resources and a result of wealth inequities, and a pervasive frustration has emerged with the social status quo. Innovation: Scarcity is a tale often told which results in negative consequences but in the case of technology, the scarcity of resources is prompting new and innovative ways of managing, saving, and in some cases creating new resources to mitigate growing challenges. Innovation prizes are offered to teams who can come up with unique solutions to societal challenges (e.g., Water XPRIZE). Sustainability: The limitation of natural resources has led to a significant focus on environmental sustainability, resulting in the rise of new markets, an active lobbyist and political base, and renewed efforts in social responsibility. “Going green” has become a business strategy, and new players specifically targeting environmental concerns have risen in prominence. Consumer watchdog groups such as Greenpeace continue to lobby for change. Qualitative growth: In a market-driven economy, growth is often synonymous with progress and high performance. However, unbridled growth over the past several decades has placed a high toll on our resources and capacity, necessitating more efficient and quality-oriented means of production in order to sustain current levels of consumption. Wealth distribution: As families continue to pull themselves out of the global recession, the stark truth remains that the socioeconomic order has tilted further towards inequity as 1% of the population is now as rich as the rest of the world combined. As the rich have grown richer and the poor have grown poorer, a new global middle class has emerged with a new set of values and priorities which now dictate political discourse. Politicians’ platforms globally contain policies and proposals to affect the inequities in wealth.

2017

Beyond the Noise- The Megatrends of Tomorrow’s World

Deloitte

Blurring Boundaries

Blurring Boundaries the emergence of business ecosystems across traditional silos. Melting pots: As ICT technologies have permeated the fabric of our lives, we have entered an 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 with regard to careers, interpersonal relationships, and political beliefs, today there is much more fluidity between one choice and another, leading to a culture of increased autonomy and thoughtful ambivalence. Co-development: As business ecosystems have formed, convening players across traditional silos, a swath of new opportunity in co-development and collaboration has emerged. In part this has emerged because of a blurring of the producerconsumer boundary, as consumer usage data and metrics feed into the design of new products and services versus in the past, when consumers were merely the recipient. Mass epidemics: An unintended consequence of open borders, free movement, and climate change, mass public health epidemics have begun to increase in outbreak frequency and impact. Blurring boundaries between species create new forms of antibody-resistant bacteria which affect animals and humans in significant ways. Mosquito-borne infections such as Dengue fever, West Nile virus, and malaria are transmitted across borders, often from affected countries in Africa and Asia. Shadow markets: As boundaries have blurred, the line between the traditional sectors and shadow markets has emerged, creating market complexity. A major contributor to the 2008 financial crisis was the emergence of a shadow market in financial services, in which risky loans were repackaged and sold as triple-A bonds. The opacity of these transactions was a critical contributor to the downfall of the big banks. Nation state 2.0:In recent years, there have been several political conflicts in which regions are demanding sovereignty as they protest against the political structures and physical borders within which they exist. Some conflicts have been in existence for many years, such as the political disputes between Hong Kong and the People’s Republic of China. Some states have succeeded in their political disputes to form new nation states, such as the 2011 creation of the Republic of South Sudan.

2017

Beyond the Noise- The Megatrends of Tomorrow’s World

Deloitte

Erosion of Governance

Erosion of Governance the decline of the traditional world order. Direct democracy: As power is shifting more into the hands of individuals, direct democracy has the potential to severely affect the trajectory of several political and economic debates. Consider the 2016 Brexit Referendum in the United Kingdom, which resulted in a 52% to 48% vote to leave the European Union. Direct democracy played a major role in this referendum as every vote mattered in a race with such tight margins. Decentralization: Historically, transactions were managed with the use of handwritten accounting ledgers in which the type, amount, and parties of a transaction were captured. Over the years, this private ledger has evolved with the advent of computing. Today, we see the emergence of a decentralized form of governance aided by technology: the blockchain. The blockchain is an open-source distributed ledger system to which an infinite number of parties can contribute, promoting accountability and trust in a system previously managed by a few. Resource disputes: Land and sea disputes have always existed but as governance models shift and resource scarcity rises, territorial disputes have started to have significant environmental undertones. For example, recently an international tribunal voted that China’s claim to territorial rights to the oil and gas reserves in the South China Sea had no legal basis, and that its actions (such as the construction of artificial islands) had endangered the marine environment and interfered with the Philippine’s fishing and oil industries. Free markets: Support for free market ideologies has started to grow as societies begin to get tired of a series of public policies that are thought to benefit only the rich. With socioeconomic inequities widening, the clamor for a reduction in government intervention is at an all-time high and the desire to return to a free market economy in which the “invisible hand” directs outcomes is gaining traction. Alternative governments: As political tensions increase, countries become more nationalistic, and socioeconomic inequities continue to divide nation states, the old models of global governance are being tested and challenged. New, alternative governments are rising to power, capitalizing on the pervasive frustration felt by the middle class and the lack of consensus about collaborative governance.

2017

Beyond the Noise- The Megatrends of Tomorrow’s World

Deloitte

Displacement

Displacement the movement of people, ideas, and challenges across the globe. Mass migration: As terrorism and violence in the Middle East and surrounding nations grow, the world is facing a massive international refugee crisis. Half of Syria’s pre-war population has been killed or forced to flee their homes and at least 4.7 million Syrian refugees have fled to neighboring countries, with at least 1 million applying for asylum within Europe. The refugee crisis places immense pressure on the social support and political systems of European countries, and in some cases (e.g., Hungary and some Balkan countries), we see nations beginning to consider closing their borders as the pressure mounts. Infrastructure shift: The world is becoming more mobile and as a result, the infrastructure needed for our daily lives is shifting from roads and pathways to cell towers and digital networks. Our increasingly technological lifestyles demand constant connectivity, and as a result, bandwidth, reception, megahertz, and signal become more ubiquitous concepts. Internet-based economic activity was expected to reach US $4.2 trillion in the G-20 nations by 2016 and the digital economy was growing at about 10% per year (12-25% in emerging markets) to serve the more than 2.5 billion people connected to the Internet. Ecological pressure: Typically climate change and other environmental disasters are viewed as the drivers of displacement, but can also be affected quite significantly by migration patterns. As the world faces massive displacement due to political conflicts, for example, the pressure placed on our environmental ecosystems has risen. Refugee crises concentrate large numbers of people, resulting in strain on natural resources. Global supply chains: The liberalization of economic policies over the past several decades has contributed to a relaxing of trade barriers and free movement of labor and capital across boundaries, leading to a more rapid diffusion of ideas and cultures across political and geographic borders. As supply chains become increasingly international, countries have started to locate different stages of the production process in different locations. Allocation conflicts: As international wars and political conflict dominate the scene in many developing countries, resource fighting has led to the displacement of millions of residents. Consider the Eastern Congo, which has been undergoing a massive political conflict since the early 1990s, facing two international wars and multiple militia invasions. The value placed on its untapped raw mineral ores is around US $24 trillion and the political infighting to gain access to these resources has displaced millions of Congolese over the last several decades, who seek asylum in neighboring countries.

2017

Beyond the Noise- The Megatrends of Tomorrow’s World

Deloitte

The rise and rise of emerging markets

It would not be an exaggeration to say that the 21st century will be marked by the dominance of emerging markets. Already a force to reckon with, emerging markets will in the next years become equal competitors with mature markets and command more economic and political power. As trade and investment occur across emerging markets, newly emerging markets will flourish. An explosive combination of large, young increasingly educated and urban populations with greater levels of disposable income (e.g., in Indonesia) and (or) natural resources (e.g., in Nigeria) is propelling newly emerging markets forward. The latter have provided the more established emerging markste with investment opportunities.

2010

Business Redefined - A look at the global trends that are changing the world of business

EY