Mega-trends

Introduction

Megatrends refer to the overarching themes that will impact on our world and communities for decades.

Need to understand the big picture, ie
"...Longevity and nutrition: the consequences of all of us living longer. Oil: the inalienable fact that it is running out, and that we need to get our energy elsewhere. Populism: the fact that countries that once led globalisation now shun it, and those that were once insular now embrace it..."
Chris Wright, 2017

We need to get out of the trenches and take a helicopter view of what is happening.

Four examples

1. Food security

The world has enough food to feed itself
"...the world produces enough food for 10 or even 12 billion people. But a third of it is lost during harvest, transportation or storage - and much of it is often thrown away by end consumers..."

However
"...it calculated by 2030 (from a base of 2013), demand for food will have risen by 35%, water 40% and energy 50%, worsening existing shortages, creating new ones and potentially endangering health and destabilising political systems. The three elements are interconnected: the agriculture sector, for example, consumes 70% of all freshwater worldwide, and not just for the food but to grow biomass for energy..."

US National Intelligence Council Report entitled Global Trends 2030 as quoted by Chris Wright, 2017

Industrial farming is causing problems, ie
"...the source of around one third of the world's greenhouse gas emissions. And that doesn't include the energy necessary for food transport and cooling......responsible for much of the species loss, environmental pollution and water shortages that plague our planet. Intensive use of pesticides and other pollutants, chemical fertilisers and heavy machinery endanger soil, water and wildlife. And, by extension, the basis of food production..."
Bartholomaus Grill et al, 2017

This is linked with developing countries leasing land to foreign agricultural companies that produce food for export only, ie the locals go without

Interdependence and connectivity has risks, ie
"...a globalised......system in which many countries are dependent on imports contains many risks......the problem is that if foods like rice or wheat suddenly become scarce - due to a conflict, because of a natural disaster, as a result of speculation or a disruption to the transportation system through a terrorist or cyber attack..... Then the producing countries will reduce exports in order to provide for their own population...... food, as much as possible, should be produced where it is eaten and needed..."
Bartholomaus Grill et al, 2017

 Hunger
"...Since 1990, the number of people suffering from hunger has dropped by more than 200 million..."
Bartholomaus Grill et al, 2017

Despite this there are still around 800 million people starving

What happens when you are starving, ie
"...In the first days without food, metabolism slows, a kind of natural power saving mode, and the organism obtains glucose for the brain by breaking down glycogen reserves in muscles and the liver. Then, fat reserves are targeted before the body begins to break down proteins from muscles and organs. Starvation victims feel confused and fearful and brain activity slows. Many suffer from diarrhoea and infections or slip into a coma; some suffer heart attacks. Children, in particular, develop oedema, causing their bellies to swell. After 20 to 60 days, death results..."
Bartholomaus Grill et al, 2017

An impact of climate change is that the rich industrial world caused it, yet suffer less than the poorest nations. Climate change is causing wild, unpredictable fluctuations in weather patterns like flooding, droughts plus rising sea level, increasing saltiness of soils, deforestation (leads to landslides, produces charcoal, etc),.

Hunger is more a product of war than climate change, eg corrupt authoritarian regimes will give preference in food supplies (local or imported, including aid) to their armies and supporters.

Additionally, corruption can consume a large proportion of state revenues and there are significant amounts of wasted efforts from aid projects that lack coordination or are of questionable benefit.

Malnutrition, especially amongst children under 2 years old, can cause brain damage that is permanent.

"...On average, the world's poor spend 70% of their money on food..."
Bartholomaus Grill et al, 2017

If food prices rise for the basics like rice, wheat or corn, the world's poor can find themselves in life-threatening situations. Fluctuations in commodity prices can be accentuated by the activities of the financial industry including investment banks, speculators, investors, commodity traders, etc who are active players in the commodity markets. This happened in 2010, when rapidly rising prices between summer and winter of that year pushed around 44 m people into poverty.

Local production is the key to handling hunger
"...local production and local consumption stimulate each other and create a cycle that helps curb hunger..."
Jose Graziano as quoted by Bartholomaus Grill et al, 2017

For example India
"...If there is any country out there that is well-positioned to feed its hungry, India is one. Its economy is growing faster than that of almost any other country, and according to the International Monetary Fund, it will replace Germany as the world's fourth largest economy within five years. In recent decades, the country has also managed to double its food production and has become a net exporter of rice and beef. India has a functioning government and a growing middle class. But India is also home to more undernourished people than any other country in the world: 195 million. almost 40% of children under five are underdeveloped because they have not received the nourishment they need......the problems India has with feeding its population are rooted in distribution shortcomings and in inequality..."
Bartholomaus Grill et al, 2017

"...Never in the history of humanity has a country created so much prosperity while achieving so little social justice..."
Jean Deeze as quoted by Bartholomaus Grill et al, 2017

Diet

There are 3 categories of foodstuff
"...Those that build the body, those who protect against disease and those that give strength and energy. Meat belongs the first group......vegetables to the second and rice to the third. Every day, we should choose something from each group..."
Bartholomaus Grill et al, 2017

NB Most people assume that dieting is about losing weight. Many people have lost weight, many times.

Dieting is about losing weight and keeping it off. To be successful you need to change your mindset and behaviours.

2. Ageing

As people are living longer, eg in Australia, the average life expectancy is projected to rise from 83 years to 89 by 2050.

Ageing and the falling fertility rates are leading to lower population growth which will have an impact on the labour force, dampen economic growth and increase the pressure on government budgets. As a result, governments are encouraging people to work longer, especially as they are mobile and healthy.

3. Urbanisation and the rising middle classes

There is a continuing worldwide trend with people moving to urban areas with rising income levels. This is most obvious in places like China, eg
"...China is turning from the world's factory to the world's innovator.....Three of the top five smart phone producers in the world are Chinese. the e-payment market size is 50 times larger than that in the US; it is the number one e-commerce market in the world..."
Cheuk Wan Fan as quoted by Chris Wright, 2017

China is at the
"...intersection of numerous supportive underlying themes: large population, rising middle class, comfort with the smart phone for transactions, a historically weak banking service for retail and lots of young people wanting to consume..."
Chris Wright, 2017

India also has a surging middle-class.

Furthermore, China is becoming the world's main engine of globalisation with its 'belt and road' initiative. This is resulting in an enormous amount of infrastructure development across Asia, into the Middle East and Europe.

4. Artificial intelligence

Major misconceptions around AI

i) information (AI is more about the value of the data and information rather than the software or computers, ie
"...People think the intellectual property value is in the silicon - in the software, the algorithms. But it is not, it's in the data. If you don't have data you can't access the analytical potential..."
Martin Reeves as quoted by Robert Bolton, 2017

ii) the fear of job losses (much false anxiety about the impact of job losses from AI, ie
"...the business of making judgements: there are some decisions that an algorithm cannot make, which is why there will always be work for people. Evolution has made humans good at pattern recognition. It means we good at perceiving threats. We see anomalies. We are also good at 'level shifting' - we can quickly put a problem or threat in perspective......we're good at doing this with relatively little data. If anything AI should make the human side of work more effective..."
Martin Reeves as quoted by Robert Bolton, 2017

However, while manufacturing jobs greatly declined, jobs in the service industry have boomed, ie
"...the long-term decline in US manufacturing jobs is mainly due to machines replacing workers, 2008 Great Recession and a transition to a booming services economy......Since George W Bush took office in 2001, nearly 4 million manufacturing fraction jobs were erased over the eight years. This period coincided with the technological innovation boom whereby machines replaced humans undertaking repetitive tasks......During the financial crisis in 2008 and 2009, almost 2 million manufacturing jobs were wiped out......over the same period 31 million extra service jobs have been added..."
John Kehoe, 2016

iii) the fear of machines being uncontrollable (once new technology becomes commonplace and accepted like all the uses of smart phones, etc)

NB A computer is only as good as the date put into it, ie garbage in, garbage out.

Human intervention is essential, despite its fallibility!!!

Need look at all data (both positive, negative and interesting data, eg need to understand catastrophes that are relevant to your business)

Big data sets allow traceability, ie
"...If failures arise, it is possible to dig into the history of events to find the weak points..."
Martin Reeves as quoted by Robert Bolton, 2017

Need to understand geopolitical and historical trends, and their impact on your markets, industry and organisation. There are no easy answers to deciphering the forces at play in global markets.

Need to turn information and knowledge into insights. This requires imagination, curiosity and context plus understanding the transmission mechanism, eg in 2016/17 events like BREXIT, Trump's election in USA, terrorist attacks in western countries, North Korea dispute, mass shooting in Les Vegas, growing power of China, etc. For example, technology is a far bigger threat to jobs than trade. In the current situation with information overload there is a need to prioritise information

 

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