Global mega trends

Economics, Society and Business

In a world undergoing change where there are few certainties, it is useful to anticipate and plan for trends. These trends will affect us as individuals and the types of organisations we work with.

As a regular facilitator of strategy planning workshops I am always interested in the analysis of future trends. Today I share with you the views of Professor Joe Nellis of the Cranfield management school.

The trends themselves are unsurprising but the accelerated pace of change is what impresses – and frightens. Our question is what are the implications of these trends?

Professor Nellis divides the trends into three areas; Economics, Society & Environment and Business.

Economics – 3 trends

The massive realignment of economic activity from the West to the East is unprecedented. Today China accounts for less then 10% of world GDP, by 2050 it will be probably be the world’s biggest economy and have a GDP share of 25%. India is also pressing strongly behind China, and of course the US will remain a dominant force.

This economic growth in emerging economies will generate a demand for improvements in living standards. Citizens from emerging market countries look for improved public services; more schools, hospitals, infrastructure and better policing. This demand will result in an anticipated huge growth of the public sector in these countries.

Finally, the third economic trend is the unprecedented rise in the number of consumers in emerging and developing economies. Consumers with similar spending power to that traditionally associated with the West. It is predicted that there will be 1 billion of these consumers with needs to satisfy. Nellis says “such a demand to satisfy has never happened before in such a short time scale”.

Society & the environment – 4 trends

For the first time in the history of the world, people all over the world will be able to communicate with each other. Increasingly people in developing economies are gaining access to technology. In this connected world there will be a massive growth in interactivity. More companies will interact with other companies, and interact with individual consumers. This deepening globalism will, says Nellis “have profound implications for the world of business and society”.

Taking the number of university graduates as a measure of the future talent pool; the developed world produces about 16 million graduates per year. The rest of the world is graduating 33 million students annually. There will be an “exponential growth in the talent pool coming from countries of the emerging markets and the developing world.”

The shortage of natural resources is a trend that is widely accepted. The search for natural resources is intensifying. China is securing natural resources all over Africa to feed its economic growth, in Cornwall tungsten mines are about to open and closer to home there are plans for oil exploration offshore from Dalkey in Dublin.

The last societal trend he mentions is the increase in the lack of trust in big business (and in politicians). Corporate governance is increasingly important for larger companies, and how it can be used “to their advantage and to the benefit of society”. Pay and remuneration must be tied in to performance, and directors must be accountable to shareholders and realise the consequence of their poor decision making. (What measures have been made to recover the 1990s bonuses from Irish bankers? And why are failed Irish politicians being paid large pensions before they reach the pension age of 67?) 

Building trust is about actions, delivering promises and not the empty words from corporate PR and “public affairs” executives.

Business – 2 mega trends

There are “massive issues” to be faced in industry and in business.

The first is the availability of information through search engines on the internet and sites like Wikipedia. How will managers deal with information overload? Can products and services be mass customised for individuals and not only for market segments? The use of information is a huge opportunity for businesses, and “dealing with the overload a significant challenge”.

A combination of all of the above, of the increasingly connected and trading global village is that industry structures will change. New global networks will emerge as well as bigger companies (many of them state owned in emerging markets). Nellis anticipates “different business models and developments concerning the way in which companies interact with each other”.

Big Change is here

How can managers “manage” in this world of increasing complexity? Nellis suggests there is no choice, “if you don’t like complexity, don’t go into management!” The right talent must be recruited to run companies in a much more complex environment.

Gone are the 50 year economic cycles identified by the Russian economist Kondratiev. There has been a major seismic shift, the cycle of economic change is now much shorter, 10 to 15 years. Challengingly, a manager’s career will endure several seismic shifts. Previously managers would have lived through for example one or two economic cycles of ‘growth to recession’. Organisational change will need to be delivered quicker, and better.

Short term focus will no longer suffice, “a successful manager must stay focused on the horizon”. The pace of change is accelerating as has never happened before. “Address these long-term drivers of change now”, Nellis asserts, “or you may be heading for extinction”.

The question facing leaders is how can an organisation take advantage of these global movements?

Joe Nellis, Professor of International Management Economics, Cranfield School of Management, www.som.cranfield.ac.uk/som/

Billy Linehan of Celtar has much experience in strategic planning with clients, facilitating workshops in planning for change. Based from Dublin, Billy has a long term interest in future thinking and is available to work with you in anticipating future trends and how they will affect your business or organisation. Contact Billy at billy.linehan@celtar.ie to benefit from the input of an external adviser into your strategic thinking and business planning.  

Aged 30? You’ll be working until 2050!

 This topic from Incite 75 has provoked much comment, and added several new subscriptions. There is an intense interest in how we can manage our own destiny in these uncertain times. Look out for further postings on “future thinking”.

In her book “The Shift: the future of work is already here” Lynda Gratton discusses how work will change in the future. Based on extensive research she describes how to craft a career that can best stand the test of time.

The perspective that is described below will affect how you think about your career, and gives food for thought to directors and senior managers on their resource planning and how to support individual career expectations.

Looking at present trends she explains that if you are now aged 30, you can expect to work for the next 40 years – that means in 2050 you will be a member of the workforce. If you are 50, you can expect to be actively employed for another 20 years – that’s 2030. If you have young children, they could be working until 2070.

Professor Gratton identifies 5 forces that will shape work and careers;

1. the globalisation of talent,
2. the development of connective technologies;
3. the changes in demography and longevity;
4. broad societal forces that will see trust in institutions further decrease and families become ever more re-arranged;
5. and the effect of carbon use [and presumably the rising cost of energy, and the challenge of sustainability].

From her blog Lynda offers 10 tips about skills, networks and choices to which I have added some additional comments, see below.

1. Keep informed and up to date on the forces that are shaping work and careers where you wish to be employed.
2. Learn to be flexible & virtual – If you are a young ‘digital native’ you are already connected to this – but if you are over 30 the chances are you are already behind on your understanding. Work will become more global and that means that increasingly you will be working with people in a virtual way – it is crucial that you learn to embrace these developments and don’t let yourself become obsolete through lack of technical knowhow.

3. Search for the valuable skills – think hard about the skill areas that are likely to be important in the future – for example sustainability, health and wellness, support for older people, design and social media are all likely to be areas where work will be created over the next decade. Remember that personal service jobs that involve working closely with people (chef, hairdresser, physiotherapist, nurse & business mentor) are unlikely to move to another country.

4. Become a Master – don’t be fooled into spread your talents too thinly. Being a ‘jack of all trades’ will mean you are competing with millions of others around the world, or tens of thousands in your own country, who are similar. Separate yourself from the crowd by really learning to master a skill or talent that you can develop with real depth.

5. Be prepared to strike out on your own – there will always be work with big companies. We have entered the age of the ‘micro-entrepreneur’ when ever decreasing costs of technology will significantly reduce the barriers to getting off the ground, and when talented people across the world will be connected and keen to work with each other.

6. Find your own crew – to create valuable skills and knowledge you will need to quickly reach out to others who can help and advise you. This small  ’crew’ of like-minded and skilled people is a network that will be central to your really building speed and agility in your career.

7. Build the Big Ideas network – the future is about innovation, and sometime your best, most innovative ideas will come as you talk and work with people who are completely different from you – perhaps they have a different mindset, or come from a different country – or are younger. It is this wide network, the ‘big ideas crowd’ that will be a crucial source of inspiration.

8. Go beyond the family - your career success will depend in part on your emotional well being and resilience. In a world of ever shifting relationships, it’s important that you invest in developing deep restorative relationships with a couple of people – this is your ‘regenerative community’ and they are crucial to your well being and happiness. [This is part of Lynda Gratton’s prediction that the family as a unit is fragmenting, and in future people will create their own “families” though not linked by blood].

9. The new hard choices – your working life will be shaped by the shifting patterns of longevity (you are likely to live considerably longer than your parents) and demography (in many regions there will be a much higher proportion of people over 50). So you need a strategy for the long term.

You have three new choices:  1. Build a career that enables you to work longer (at least into your late 60′s or early 70’s), 2. Be prepared (like the Chinese who save around 40% of their income) to save a significant proportion of your income throughout your working life, 3. Consider ways to reduce your consumption and live more simply. It does not matter which hard choice you make – but you are going to have to make at least one of them. [Think also of how your parents are living much longer then their parents, and how will this affect your chosen career].

10. Become a producer rather than a simple consumer – the old deal at work Lynda describes as:  ’I work, to earn money, to buy stuff that makes me happy’ is rapidly becoming obsolete. Engaging in meaningful work where you can rapidly learn to create value will become a priority.

For more on Lynda Gratton, her publications and the Future of Work Consortium

see www.lyndagratton.com

Gratton is Professor of Management Practice at London Business School

To have a facilitated discussion on this or related topics, contact Celtar billy.linehan@celtar.ie