Staying in the game: 15 trends impacting the global business landscape

Change is a constant. Business leaders cannot rely on a rear-view mirror in a fast changing world. To provide context for the next section, we highlight 15 trends that will shape the global business landscape in the next 15 years.

1. PLANET UNDER PRESSURE

Human activity is driving negative changes in the global environment resulting
in climate change, deforestation, loss of biodiversity, ocean acidification, soil
degradation and pollution. We are crossing planetary boundaries and changing
fundamental earth systems, which risks triggering abrupt and irreversible
damage to the planet. This will have catastrophic consequences for humanity,
threatening long-term development opportunities and prosperity.

2. RESOURCES – FROM ABUNDANCE TO LIMITS

The world has entered a period of intensified resource stress. Three planets are
needed to meet human consumption by 2050. The essentials for human life –
water, food and energy – are under pressure. In 2050, severe water stress will
affect 45% of global GDP. The challenge of increasing food production by 70%
to meet future demand will be enormous.

3. ENERGY TRANSITION

Changing regulations, dramatic reductions in renewable energy costs and
concerns about energy security will impact energy markets. Scarcity and new
divestment initiatives will put pressure on fossil fuel-based energy companies.
Developing countries will have the opportunity to leapfrog into the renewable
age; however the entrenched position of fossil fuels will make the timing of this
transition uncertain.

4. FUTURE DEMOGRAPHICS

The population will pass 8 billion by 2030 with most growth in low-income
countries. Western countries face stagnant and aging populations and a
shrinking pool of workers. Developing regions face youth bulges that pressure
education and employment. Environmental stress makes areas uninhabitable
and may force up to 1.6 billion people to migrate, destabilising societies and
fuelling conflict.

5. THE GROWING WEALTH GAP

The rich are getting richer and income inequality is widening both within and
between countries. Today, the richest 1% own more than 50% of the world’s
wealth, although absolute poverty is likely to fall and the middle class grow.
Wealth is concentrating and extreme inequality poses great risk to global stability,
erodes trust in governments and fuels social unrest.

6. EMPLOYMENT UNDER PRESSURE

Automation will continue to reduce labour intensive industries, lowering employment opportunities. The full impact of large scale automation has yet to be
felt - income generating work designed to pay for basic needs may cease to be
the norm. Mass unemployment and accumulated wealth in the hands of the few
will become one of the defining issues of our age.

7. GENERATION NEXT

The Millennial Generation are digital natives and understand the opportunities
inherent in crowd-sourcing and connectivity. Better-educated, empowered
and more self-reliant, Generation Next knows the challenges of their time and
demand transparency and accountability. Unprecedented access to information
and innovation platforms is nurturing new relationships, and drives co-creation
of solutions between business and change makers.

8. LOCAL IS KING

Small is beautiful in economies where people matter. Local entrepreneurship
is growing to foster more sustainable lifestyles as a backlash to globalization.
The global citizen is trying to re-root and reconnect with place and locality. The
“think global, act local’ movement will favour urban farmers, local producers
and community groups working to transform their communities.

9. FRAGMENTING POWER

Economic power is moving South and East. Power is dispersed and congregating
around new countries and entities. A reassertion of nationalism and protectionism
will create a less open world, putting global agreements and multilateralism
under stress, closing the space for business. New transnational networks
can bridge this governance gap by bringing actors together under shared global
policy objectives.

10. DETERIORATING SECURITY

Fierce competition for natural resources, crowded urban centres, mass migration,
and a widening gap between rich and poor will intensify social pressures
and cause violence to erupt. The rise of religious extremism and populist nationalist
movements makes states vulnerable and unstable, and fuels terrorism.
Business activity is increasingly more difficult and dangerous in vast regions
around the world.

11. RISE OF THE CITY

60 percent of the world’s population will be urban by 2030. Affluent cities will
be powerhouses with smart technology driving green and resilient environments.
By contrast, rapid and unmanaged urbanisation in the developing world
leads to overcrowded slums with poor sanitation, polluted air, poverty, unemployment, crime and social tension.

12. HYPER-TRANSPARENCY

Digital technology will continue to revolutionise communications. There will
be even greater demand for hyper-transparency in business supply chains, at
all levels. Social Media will escalate the pressure on business to disclose and
self-regulate. Hyper-transparency is a powerful force as wealth in the information
age will be held in ‘intangible’ assets such as brands, patents and customer
trust.

13. INTERNET OF THINGS

The Internet of Things will reach a tipping point. By 2020, an estimated 50
billion devices will be connected to the Internet making it possible to autonomously
monitor, optimize and control our lives. Threats to security and our
privacy will increase, nevertheless the Internet of Things will revolutionise
manufacturing, resource use, smart grids and profoundly change personal
health care.

14. SUSTAINABLE BUSINESS

Full cost accounting will become the norm and ‘all inclusive’ pricing systems
will reflect social and environmental impacts. Accounts will recognise a broader
set of ‘capitals’ than merely financial. Traditional business models will be
challenged as entrepreneurship flourishes with ‘bottom of the pyramid’ models,
crowd-funding, open source tools, the sharing economy (e.g. Airbnb, Cleanweb,
Uber) and circular “cradle-to-cradle” thinking.


15. RADICAL INNOVATION UNLEASHED

Transformative breakthroughs ranging from nano- and biotechnology,
graphene, bio mineralization, robotics, artificial intelligence to 3D printing will
revolutionize our world. But technology in the hands of ill-intended groups can
do harm. Deliberate large-scale manipulation of the planet like geoengineering,
fears of corporate ownership of the genome, cross species genetic fusion gone
wrong, create reasons for concern.