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Polarisationtrends Polarisationtrends Document Transcript

  • PolarisationTrends2016 Members’ Report #1/2006 Polarisation Trends 2016 Copenhagen Institute for Futures Studies Instituttet for Fremtidsforskning 1
  • MeMbeRS’ RepoRt # 1/2006 PolarisaTion Trends 2016. DevelopeD by the Copenhagen InStItute foR futuReS StuDIeS (CIfS). idea and ProjecT managemenT: tRoelS theIll eRIkSen. ProjecT coordinaTor: tRIne a. SøRenSen. ProjecT Team and wriTers: tRoelS theIll eRIkSen (tRenD #1), henRIk peRSSon (tRenD #2), MaRtIn kRuSe (tRenD #3), klauS Æ. MogenSen (tRenD #4), nIelS bøttgeR-RaSMuSSen (tRenD #5), bIRthe lInDDal hanSen (tRenD #6) og CaRSten beCk (tRenD #7). TranslaTion: fleMMIng R.p. RaSCh, klauS Æ. MogenSen anD allan JenkInS (tRenD #6, #7) graPhic design: nXt. PrinT: StRanDbygaaRD. thIS RepoRt IS ReStRICteD to MeMbeRS of CIfS. CIfS’S MeMbeRS’ RepoRtS aRe publISheD quaRteRly. Copenhagen InStItute foR futuReS StuDIeS 2006, 2007. www.CIfS.Dk2
  • contentsIntro ............................................................................................................................................................................. 3executive Summary ................................................................................................................................................ 5#1: Urban and rural .............................................................................................................................................. 9#2: metropolitan polarisation ........................................................................................................................ 21#3: ethnic polarisation ..................................................................................................................................... 31#4: The creative and the non-creative ...................................................................................................... 41#5: The healthy and the unhealthy .............................................................................................................. 47#6: Uniqueness and mainstream ................................................................................................................. 59#7: luxury and discount consumption ..................................................................................................... 65Sources .................................................................................................................................................................... 72Figures and tables:fIguRe 1. the unequal growth in housing prices in Denmark..........................................................................10fIguRe 2. the polarisation of housing costs. ..................................................................................................12fIguRe 3. the current price level of houses. ...................................................................................................13fIguRe 4.1 level of education 2005. ..............................................................................................................14fIguRe 4.2 growth in education. ....................................................................................................................15fIguRe 5. average capital of Danish families...................................................................................................16fIguRe 6. number of pupils in 9th grade who qualify for secondary school, Malmö 2000, 2005 and 2015 .....23fIguRe 7. Distribution of pupils in 9th grade, Copenhagen 2000, 2005 and 2015. .........................................24fIguRe 8. percentage of pupils in 9th grade in Sweden and Malmö 2005 who qualify for secondary school ..25fIguRe 9. Distribution of pupils in 9th grade in Copenhagen and Denmark 2005. ...........................................26fIguRe 10. percentage and grades of children from homes with social problems ...........................................27fIguRe 11. polarisation axes ..........................................................................................................................32fIguRe 12. Immigrants and descendants ......................................................................................................33fIguRe 13. percentage of non-western descendants finishing higher education ............................................35fIguRe 14. percentage of descendants with basic, mid-level, and high-level incomes ...................................36fIguRe 15. polarisation – adult mortality ........................................................................................................48fIguRe 16. obesity. ........................................................................................................................................48fIguRe 17. adjusted life expectancy at 30, Danish men. ................................................................................51fIguRe 18. proportion of daily smokers, by length of education. ....................................................................52fIguRe 19. proportion of physically active Danish women.. ............................................................................54fIguRe 20. prolonged illnesses and using prescription drugs.. .......................................................................55fIguRe 21. nominal growth of products and services in tier relative to market average 1999–2004. ..............67table 1. Development in housing prices in selected western cities ..................................................................9table 2. lifestyle plays a role in many common diseases. .............................................................................50 1 View slide
  • introDevelopments in our society during the past 5-10 years have made possible a futuresociety characterised by tension, division and marginalisation, which will come true if wedon’t act now. This members’ report lists, documents and elaborates seven of the mostimportant of these developments. These polarisation trends also open up new possibilitiesfor consumers, companies and institutions.what is polarisation?Polarisation may be defined as a process where something moves away from a centre andtowards two opposite points or poles. It doesn’t have to be towards both poles a once, aslong as one or both poles gets stronger and the centre gets weaker, thereby creating a big-ger dispersion. When speaking about increasing differences between groups of people, terms likesegregation, marginalisation, expulsion and inequality are also used. You will find a list ofthese terms at the end of this introduction.why these seven trends?A long process of elimination was used to select the seven polarisation trends of thisreport. We started with a long list of candidates; build up by the participating employeesof the Institute over several months. An edited version of this list is found at the end ofthis report. Some of the suggested trends were ruled out because they where no longer real. Oneof these trends was the online-offline polarisation. Others were eliminated because theydidn’t meet with the criteria we put up. Those were that the polarisation trends should beof importance for society, business, employees and consumers, and of interest to as manyas possible of our members. And the trend should already be strong.structure and contentThe first chapter is about the economic, educational, and general dispersion of resourcesin Denmark, between the urban and rural areas, which has taken place during the last10 years, and is making new demands on the society and businesses of the future. Thesecond chapter is about trend #2, which is the polarisation within the public school sys-tem, with focus on Copenhagen and Malmö. It is a development that is undermining thecoherence of society and can have serious consequences for the labour market. Trend #3deals with the polarisation between groups of immigrants. We will look at the heterogene-ous group of immigrants and their descendants in Denmark, and at developments in thisarea and its consequences for society, business, employees, and consumers. After this weturn to the polarisation between what has been called the creative and the non-creative 3 View slide
  • classes of society, which is connected to the urban-rural polarisation. Trend #5 is about polarisation of people’s health and the causes behind this polarisation. In the sixth trend we discuss the two opposite poles of the unique and the mainstream, which play with and against each other in our progressively individualised world. Closely related to that is the polarisation between luxury and discount consumption, which is the subject of our seventh and final chapter. Among the topics discussed are the consequences for brand- owners, retailers and costumers. The members’ report also has an Executive Summary, where the main points of the seven chapters are summed up. It has been exiting to explore this wide and dramatic subject, and to work with so many diverse and essential trends of polarisation, finding documentation and caching nu- ances. Hope you will enjoy reading it! Troels Theill Eriksen, project manager The Copenhagen Institute for Futures Studies, March 2006 DEFINITIONS SegRegatIon: the separation of e.g. a group of people MaRgInalISatIon: a process towards something becoming increasingly unimportant in society as a whole ReJeCtIon: rejecting someone entirely from a field, region or group – e.g. rejection from the labour market InequalIty: unequal distribution of resources, e.g. income or wealth4
  • executive summaryTrend #1: rural or urban.In the last ten years, the gap in availability of resources in rural regions compared tourban regions has increased. A very strong indicator is that the cost of housing in largecities has increased much more than in other parts of Denmark. In a historical perspec-tive, this is very unusual. Not only cost of housing (and with that the capital) has increased in the cities; so havethe proportion of citizens with a higher education, the investment in research and devel-opment, and the level of employment. This urbanisation of resources is caused by factorslike growing economy of knowledge, the network economy, and globalisation, all of whichhave favoured the large cities. Furthermore, the housing prices in Denmark have increasedrapidly over the past years due to falling interest rates and the booming economy. In the scenario where this trend continues towards the year 2016, it can be expectedthat there will be a constant strain on house construction and infrastructure, especiallyin Copenhagen and environs. It is also likely that there will be an expanding gap ofvalues between urban and rural areas, resulting in growing differences in consumerbehaviour, with city consumers being a very diverse group, and rural consumers beingmore homogeneous. In addition to this, we can expect an increased global struggle over recruitment ofthe best brains and a labour market where the employees set the agenda. Perhaps thecompanies that will be most successful in employing who they want are the companiesclosely cooperating with institutions of education and research, and maybe the compa-nies who focus on the marginalised groups of today’s society.Trend #2: metropolitan polarisationRight now a polarisation is seen in the public schools of Copenhagen and especiallyMalmö. Step by step, the pupils who get high grades are concentrated in some classes,and pupils with low grades in others. In the two cities we study, the number of classeswith low-grade pupils is increasing rapidly. And the dispersion is much higher in citiesthan in general. This trend has many of the same causes as the rural-urban polarisation. The growingindividualisation is crucial, for this is what causes the parents to move their children outof ‘bad’ schools. Research shows that there is a clear relation between grades in schooland the financial and social situation at home, such as the education and occupation ofthe parents and ethnic group of the children. The polarisation is anonymous and stealthy, but may have a crucial effect on labourmarket and business in the future. It could affect the coherence of society, tolerance,mutual understanding, dynamics, social climbing and equal opportunities. It may alsopush society’s level of insecurity and crime in the wrong direction. 5
  • Trend #3: ethnic polarisation Many people have immigrated to Western Europe during the past 40 years. By 2016, about 9 percent of the Danish population will have roots in non-western countries. Most of those will be Muslim. The meeting of two cultures and questions about integration have therefore become important items on the agenda in Denmark and other Western European countries. The ethnic polarisation trend is about the polarisation between the integrated and the non-integrated Muslims. An increasing number of the integrated ones are getting jobs and education, but at the same time a large number less integrated Muslims have no education that qualifies them for a job. What about the future? Will our society be split into ethnic groups, or will it be- come an interacting multicultural society? The increasing number of old people calls for more highly educated immigrants on the labour market, but are there any available? Where are the barriers we are up against, and what consequences will this trend have on consumption and the labour market in 2016. Already we have Muslim products like special bank loans, halal meat and Mecca Cola – and more will come. Trend #4: The creative and the non-creative An increasing part of the population belongs to the so-called creative class. Most of the people belonging to this class live in the large cities, and studies shows that this choice of residence is based on cultural and social scope, economic growth and low unemployment. There is a beginning geographic polarisation between the two classes, and it will probably increase in the future. The creative and the non-creative have different values, as is seen in their opinions about work, consumption and leisure. Where the creative class values the possibility for creative expression, challenging work, personal style in clothes and housing, and creative hobbies, the non-creative value high salary, fringe benefits, job security, and the consumption of luxury and brand products. Trend #5: The healthy and the unhealthy On a global and national level there is a significant difference in mortality and health between the rich and the poor. Over the years this difference has decreased, and the health of many of the poor have increased, but there is an increasing difference be- tween the healthiest and the unhealthiest. Globally, this is most visible in the difference between Africa and the rest of the world. In the western world there is also a growing polarisation between those that lead healthy lives and those with unhealthy lives. It is a difference that to a large degree is determined by social class. There are three main types of causes for disease: 1. Genetic (some people have more disease-prone genes). 2. Conditions of life (housing and work). 3. Lifestyle (obesity, smoking, drinking). One of the reasons why the polarisation of health in Denmark is growing is that many more people now have a choice of lifestyle and must take more responsibility for their6
  • own life. Increased privatisation of healthcare and a growing commercialisation havealso contributed to this polarisation.Trend #6: The unique and the mainstreamUnique and mainstream are two opposite poles also contributing to the trends crea-tive vs. non-creative and luxury vs. discount consumption. In themselves they eachdefine the other. The zeitgeist tells us to create ourselves and be different from others. Modern manseeks out unique experiences and disregards the ordinary. The two poles gets mixedhere, because when it is common to choose the unique, then the unique is also in asense ordinary, and what is all the uniqueness then, other than a staging of the selfwithin a framework of mass-produced lifestyles? The unique encompass things like unusual experiences, lovers and jobs. As consum-ers our quest for the unique makes us buy designer beds, mountaineering holidays, raretypes of truffles, etc.What is unique changes with time and is determined by the zeitgeist. Individualisationand its sanctioning of the unique self, together with a continuing growth in wealth, aremajor causes of this increased search for and dream about the unique. Daily life is still mainstream for most people. Ordinary people live ordinary lives, andthe unique only shows up in dreams and occasionally on vacations and weekends. Toomuch choice and complexity make people stay with the mainstream that they know andare comfortable with. Too much insecurity also makes mainstream the preferred choice.Trend #7: luxury and discount consumptionThe middle road of consumption is under pressure from one side by the advance ofluxury products, and on the other side by the discount market, where price is the mostimportant parameter.There are many indications of an increase in luxury consumption in the future, in areaslike emotional and experience consumption, and the fact that we are becoming moralconsumers, who asks questions about politics, conscience and responsibility. But the consumer market in general is moving towards discount. Big players on themarkets focusing on price, an increasing number of free products, and the spread ofthe internet, are all contributing to this. The increasing number of discount shops inDenmark is a clear indication. This polarisation is also evident globally, according to aMcKinsey study from 1995. A number of developments suggest that this polarisation/ gap in the markets will continue. Among those is the growth in the number of veryrich people, the search for increasingly unusual luxury products as yesterday’s luxurybecomes ordinary, the demand for extreme luxury, and large discount chains expandinginto new areas of trade. The polarisation of consumption will have serious consequenc-es for brand owners and retailers, while their costumers don’t have to worry and canenjoy it. 7
  • 8
  • trend #1: Urban and ruralDenmark and other western countries are experiencing an accelerating urbanisation ofresources these years. Resources accumulate in the large cities, which have created a po-larisation between urban and rural areas. The debate in Denmark about geographic dispersion have mostly been about increas-ing cost of housing in the capital, compared to the rest of the country. Figure 1 shows theunequal growth in housing prices since 1995. The grey areas have had less than averagegrowth and the red larger than average. There is a clear pattern: The capital area in andaround Copenhagen has had the largest growth, while areas near the capital and in mediumsize cities like Aarhus, Odense and Aalborg have had lesser growth, but still above average. On the following pages we will look closer at the development in housing costs andother distributions of resources, and discuss some other developments contrary to thistrend. We will also try to predict the consequences for society, business and individuals ifthe polarisation continues for the next 10 years. The focus will be on Denmark, as we have detailed data available about conditions inDenmark. But the trend is the same in many other western countries. Table 1 shows thedevelopment in selected European cities compared to the respective countries in general.As we can see, the trend is the same for these cities, but Copenhagen stands out with asignificantly larger growth. This may be because Copenhagen constitutes a relatively largepart of the Danish population, or the fact that housing prices price is Copenhagen werelow in 1995.table 1. Development in housing prices in selected western cities compared to the respective countries ingeneral, 1st quarter 1995 – 4th quarter 2005. the figures show percentage of additional growth in the citiescompared to general growth. Copenhagen 146 percent oslo (and environs) 63 percent Malmö (and environs) 57 percent london 40 percent Stockholm (and environs) 39 percentSource: Statistics Norway, Statistics Denmark, Nationwide, and our own calculations. 9
  • The unequal growth in housing prices in denmark 50-150% lavere vækst 50–150% lower growth 0–50% lower growth 0-50% lavere vækst 0–100% higher growth 0-100% højere vækst 100–200%higher growth 100-200% højere vækst 200–300% higher growth 200-300% højere vækst fIguRe 1. the unequal growth in housing prices in Denmark. the price of detached and non- detached houses, 1st quarter 1995 – 4th quarter 2005. the percentage figures are growth in price per square meter compared to the average growth nationwide. Sources: The Association of Danish Mortgage Banks and our own calculations.10
  • historical developmentsLets start with a look at the historical development. According to figures from BRFkreditthe housing prices in central Copenhagen was between 20 and 50 percent above Danishaverage prices in the period 1938-1995. But since 1995 this gap has grown, and prices incentral Copenhagen are now more than 100 percent above average. This is caused by the continuing transition in jobs from industry to knowledge andservice, where new jobs are created in the large cities, with their connections to the restof the world, and lack of interest in rural areas. People prefer to live close to where theywork, and the companies wants to be close to their business partners, airports, culturalofferings, public administration and the universities. As a result, 49.9 percent of the total growth in jobs was created in central Copenhagen,20.1 in the city of Århus (12.6 in central Århus), in the period 1995-2004. In other words,two thirds of the growth in jobs took place in the two largest cities in Denmark. In addition to this, the policy of the administration of Copenhagen has been to attractfamilies and high-income taxpayers. And the available housing has only increased slightlybecause of the focus on housing quality and size rather than quantity. A general high level of employment, low interest rates, and new types of loans havealso contributed to higher prices in Denmark, in particular in Copenhagen. Figure 2 showsthe number of homeowners in various categories of average local prices, in Danish kronerper square meter. The 1995 prices are adjusted with the average growth in prices for thewhole country 1995-2005, to be comparable with the 2005 prices. The figure shows a clear polarisation with more homeowners living in expansive ar-eas, and also many more living in the lowest priced areas. As shown in figure 3, the expen-sive homes are mainly in Copenhagen, some areas north of Copenhagen, and in Århus,while the inexpensive homes are located in the areas furthest away from large cities.Brain drainThe brightest Danes move to the cities. The university towns and their environs have thelargest percentage of people with higher education and also the largest growth in high-educated people – figure 4.1 and 4.2 shows this development. It is a familiar pattern; going to the university town to take an education and nevercoming back – in part because it is easier to get work in the city, and in part because it ishard to leave the many things a large city has to offer, especially for singles, but also foran increasing number of families. The brain drain is also apparent in research activity. Not surprisingly, the intensity ofresearch (the share of GNP used for research of development) is far higher in the capitalarea than in the rest of the country, both in the public and in the prvate sector. Researchactivity is also quite high in Eastern Jutland (about 3 percent of GNP), though not as highas in the Copenhagen area (with 4.5 percent of GNP). Higher education usually leads to higher pay when you are working (but to compen-sate, you are older before you start working full time), and the personal income level isthus highest in the areas near the university towns, in particular north of Copenhagen.Fortunes have been made on rapidly growing housing prices, and on tax-law favouredpayments to pension funds, where the growing price of shares have enabled the pensionfunds to pay high interests. The result of this unequal development in fortunes is shownin figure 5, which shows the capital of families in various parts of Denmark. 11
  • The polarisation of housing cost 600.000 6 0 0 .0 0 0 1995 1 9 9 5 2005 2 0 0 5 500.000 5 0 0 .0 0 0 400.000 4 0 0 .0 0 0 300.000 3 0 0 .0 0 0 200.000 2 0 0 .0 0 0 100.000 1 0 0 .0 0 0 0 0 0–8.000 kr. 0 -8 .0 0 0 k r . 8–12.000 kr. 8 -1 2 .0 0 0 k r . 12–16.000 kr. 1 6 - 2 0 . 0 0 0 k r . kr. 2 20–24.000r .kr. 16–20.000 1 2 -1 6 .0 0 0 k r . 0 -2 4 .0 0 0 k More expencive D y re re fIguRe 2. the polarisation of housing costs. number of Danish homeowners in 6 categories of local average prices per square meter, 1st quarter 1995 and 4th quarter 2005, adjusted to 2005 level. Sources: The As- sociation of Danish Mortgage Banks and our own calculations.12
  • The current price level of houses 3.500–5.000 kr. 3.500 – 5.000 5.000–6.000 kr. 5.000 – 6.000 6.000–7.000 kr 6.000 – 7.000 kr. 7.000–10.000 kr. 7.000 – 10.000 kr. 10.000–15.000 kr 10.000 – 15.000 kr. 15.000–20.000 kr 15.000 – 20.000 kr. 20.000–32.000 kr. 20.000 – 32.000fIguRe 3. the current price level of houses. prices of detached and non-detached houses4th quarter 2005, Danish kroner per square mete. Sources: The Association of DanishMortgage Banks and our own calculations. 13
  • Percentage with higher education 0 –- 19% 0 19 % 20 –- 50 % 20 50% fIguRe 4.1 level of education 2005. percentage of population with any higher education. Sources: Statistics Denmark and our own calculations.14
  • growth in education 00–3%point - 3 % growth 33–6%point - 6 % growth 66–8%point - 8 % growth 88–11 % growth - 11 %pointfIguRe 4.2 growth in education – increase in percentage of population with higher population from 1995 to2005 Sources: Statistics Denmark and our own calculations 15
  • average capital of danish families 0–1 mio.kr. 0 - 1 mio. kr. 1,0–1,3 mio. kr.kr. 1,0 - 1,3 mio. 1,3–1,5 mio. kr.kr. 1,3 - 1,5 mio. 1,5–2,5 mio. kr.kr. 1,5 - 2,5 mio. 2,5–5,0 mio. kr.kr. 2,5 - 5,0 mio. fIguRe 5. average capital of Danish families. the average pension saving and net worth of home, at the end of 2005. Sources: Danica Pension, Realkredit Danmark and our own calculations.16
  • One could ask if this development will continue. Before we look at the consequencesif this development should continue over the next 10 years, we will look at argumentsagainst extrapolation of what has happened during the past 10 years.Future developmentsSo far growing wealth, increased international trade, low inflation and low rent havesupported the geographic polarisation. But economic recession is possible within thenext 10 years, and growth in private capital will probably not continue at the speed seenduring the past few years, but a growth comparable to the average of the past 10 yearsis not unrealistic. The demographic profile of Denmark and most other western countries indicates thatthe value of shares and housing might decline some time within the next 10 years (whena large number of people retire and want to sell their homes and shares). Crucial to thisdevelopment is how long the generation who grew up during the Second World Warwill stay in their homes. Another factor is the building of new homes – a lot of housescan be built in 10 years. Also important are the stability of the loan-based US economy,and whether the growth in the BRIC countries (Brazil, Russia, India and China) and otheremerging economies can continue at the current high rate for another 10 years. Consensuseconomic forecasts shows that they can. The concentration of homes in the cities might be reversed in some areas – both em-ployees and companies could move out of the cities to avoid problems with heavy traffic.A continued increase in housing costs could force more people to settle where the pricesare low. In figure 5 we can see a concentration of wealthy families around the motorwaysleading west, north and south out of Copenhagen. The development in commuting is thatpeople working in Copenhagen move further away from Copenhagen. This is mostly be-cause of rising housing costs. Soon the capital area might extend from Zealand to Funen,depending on the bridge toll. Another possibility is that settlements of people with com-mon interests will appear outside the cities, enabling them to do most of their work fromhome, supported by technology that will make distance working much easier than withcurrent technology. If the polarisation slows down during the next 10 years because of these develop-ments, we might get the following scenario: The city will still be more attractive, andthe highest paid jobs will still be there. An increased number of singles will increase thedemand for housing in the large cities. Distance working will spread, but the most sought-after homes will be in the cities. The Danish tax system will have to be changed somewhatto be more like those of neighbouring countries, and this will increase the economicpolarisation. Denmark will do well in competing internationally and continue to be ofimportance in international trade. The movement from the countryside to the city will continue in the next 10 years,according to recent forecasts of demographics and employment from Statistics Denmarkand in particular The Association of Danish Mortgage Banks. Let’s now turn to the conse-quences of a continued urbanisation of resources over the next 10 years.consequences in the year 2016society: From 2006 to 2016 politicians will try to fight the urban-rural polarisation withtransfer of resources, relocation of public administration, more teaching institutions in 17
  • the provinces, tax reduction of transport costs, and more resources for public trains. The polarisation will thus happen at reduced speed, but will not be stopped. Gradually we will accept that the urbanisation of resources is a process that can’t be stopped. Resources will then be moved from Copenhagen to the other large cities, in order to create urban centres in other parts of the country than on Zealand. The housing market in Copenhagen will be under continued strain from people moving in. To relieve this, an unprecedented number of new high-rise buildings will be built, and house construction activity in general will be high in the capital area. As for traffic, it will become necessary to start a number of projects to deal with the heavier traffic. This includes underground car parks, improve- ments in public transportation and road pricing in selected areas. The regions will realize that the capital is under development. The Danish infrastruc- ture will be improved in order to reduce distances, for example by using faster trains. A reduction of the bridge toll on the Great Belt Bridge, which splits the country in two, will make the size of the capital area grow to include most of Funen. In spite of this polarisation between city and country people, standards of living will increase in all parts of Denmark. The fight against this global trend will be given up. The value gap will be greater than ever. Business: Motivated by high cost and heavy traffic, clusters of companies will appear outside city centres, while the movement of companies into the cities will continue. Large companies will maintain small offices in the cities, while most of their offices will be lo- cated further away. The number of office hotels will increase, as more people become free agents and businessmen with their own network. A number of companies will try to establish themselves in the inexpensive and beauti- ful provinces close to nature. Few will be successful, though, in such isolated areas. One difficulty will be to offer employees a large and attractive social network, another to find areas with sufficient potential business partners. Areas of recreation and of project work will be very successful. After periods of heavy work you can move to a recreational area. And the intensive work on projects can be done in areas where other people do the routine jobs. In the labour market, the winning compa- nies will be those who best understand what their employees want and need. The global competition will increase, and the younger employees will be much more at home in the cities and the world outside Denmark, than the employees of today. The fight for the best brains will become (even more) global. employees: The battle for the best brains will make more companies move to where the universities are. This will enable them to be closer to the future graduates they want to hire, and to work closer together with the universities, in order to take more advantage of their research than is usual today. Some of the winners among companies are those who manage to attract the less-edu- cated and marginalised part of the workforce, in order to employ and train them, and gain a competitive advantage. (See also polarisation trends #2 and #3.) consumers: This scenario predicts more differences in opinions, values and consumption between rural people and urban people in 2016 compared to today. Resources and pur-18
  • chasing power will differ, and so will their perception of risk. City people will be more in-clined to buy high-risk products (like exotic holidays and uncertain investments.) Productsthat sell well in cities may be unsellable outside the cities. The need to segment customersand differentiate products according to geography will increase. New products will catch on differently in cities and in rural areas. The people of thelarge cities will be more diverse than in the minor towns – see also trends #2 and #3. Saleof a product liked by the more homogeneous population in the countryside will spreadrapidly, where the products for various segments of the city people takes time to catch on.The selection of products available in cities will grow, and in the countryside, products notfitting the target group will be almost impossible to sell. 19
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  • trend #2: metropolitan polarisationThe large cities are becoming more important globally. In Scandinavia they have gonefrom economic stagnation and falling population in the eighties and nineties to growthin economy and population in the recent years. This comeback of the cities is closely con-nected to the development in modern network economy, where large cities with manymeans of communication are essential to the global economy. The development is causedby a number of important megatrends, like speed of technological progress, globalisationand internationalisation. In the industrial society most of the population of Scandinavian cities were a relativelyhomogenous group of workers and their families. There were also middle-class citizensand a number of very poor people. The Scandinavian welfare state policy lessened thegap between those groups and made the standard of living go up for the main part of thepopulation. Today, with the focus once again on the large cities, the situation is very dif-ferent: The gaps between groups are increasing, and the groups are also not the same. Thepolarisation is increasing between those who understand the network economy and howto use it, and those who have a hard time finding their place in the postindustrial society. The trend is particularly clear in the regional centres of Copenhagen and Malmö. Char-acteristic for those and other cities are that they attract both the winners and the losersof global network economy. The winners are often highly educated specialists, drawn bythe connections to other parts of the world, a large and diverse labour market, the open-ness and the many-facetted culture, and the large selection of products and services. Thelosers are often without much education, single parents, immigrants, people with poorsocial networks, and those who have become marginalised on the labour market. They aredrawn to the cities in their hunt for jobs, and because they want to live near people theyshare something with. They also like the higher level of tolerance, and the connections toother parts of the world. It seems that winners and losers move to the city for almost thesame reasons, and this movement may increase the social, economic and ethnic polarisa-tion in the large cities. We wanted to focus on how this much of this development is evident in the publicschools. In order to do that, we chose to look at the grades of pupils in the 9th grade inMalmö and Copenhagen. We assume that the polarisation affects the cities differently ac-cording to personal choices, policy, and the structure and competitive power of businesses.The questions are: Has polarisation increased in the public schools of Malmö and Copenha-gen? How likely is this trend to continue? And what consequences will this have in 2016? The reasons for choosing Malmö and Copenhagen are several: Both cities are part ofthe Øresund Region, and developments in one city may affect the other. The develop-ments in those two cities are also good examples of the developments in Danish andSwedish cities in general. (It was also convenient because many employees of the Institutelive in the Øresund Region.) 21
  • Since the crises of the early 1990s, both cities have become centres of the global network economy, as a result of the political reforms in the late 80s and early 90s, Sweden entering the EU in 1995 and various regional initiatives in the fields of communication, knowledge and experience since the mid 1990s. Apart from the Øresund Bridge, the visible result of this include Malmö Högskola, Västre Hamnen, the Turning Torso of Malmö, the Copenha- gen Metro, the Copenhagen Opera, and the Ørestad and harbour areas of Copenhagen. Seen from the outside, the two cities are well integrated in the global network economy, but what about the public schools? The performance of pupils of those schools mirrors the social development in Malmö and Copenhagen, and that will tell us some- thing about the cities’ ability to cope with the competition of the future. historic development: increased polarisation in the public schools of malmö and copenhagen? Since the 1960s, the aim of the educational policy has been to reduce the social inequali- ties in society. This policy seems to be failing now in both Malmö and Copenhagen. Statistics from the Swedish and Danish administrations show an increased spread in the average grades of public schools in Malmö and Copenhagen – the bright pu- pils are concentrated in some schools, and those with learning difficulties in others. At the same time, the percentage of pupils with very low grades is increasing in both cities. Both factors indicate an increased polarisation in the public schools of Malmö and Copenhagen. The development in Malmö is the most dramatic: More than one-quarter of the pupils in 9th grade are attending a school where less than 65 percent are qualified to continue in the secondary school system. (The requirements are to pass Swedish, English and math). Five years ago, it was only one out of every six pupils who attended such schools, and going two years further back to 1998, it was one out of twenty. From 2000 to 2005 the per- centage of pupils in all schools qualifying for secondary school fell from 80 percent to 77 percent. Compare this to the Swedish average of 89 percent. The development is shown in figure 6. It shows the number of pupils in 9th grade in public schools of Malmö in 2000, 2005 and 2015 (estimated), according to the number of pupils in their schools who quali- fies for secondary school. There are no statistics from Denmark exactly comparable to this, but the spread in grades have also increased. And the number of pupils with average grades below 7 (a little below average in the Danish system – 8 is average) has increased from 3.6 percent in 2000 to 7,6 percent in 2005. But the polarisation is not as unambiguous here. For example, the percentage of pupils attending schools with average grades between 7.0 and 7.4 have been halved from 2000 to 2005. The average for Copenhagen in general has dropped in this period, but only from 8.0 to 7.9. The development is shown in figure 7, which shows the grades of pupils in 9th grade in Copenhagen in 2000 and 2005. The situation in Malmö (and to a lesser degree Copenhagen) becomes clearer if we com- pare with the whole of Sweden or the whole of Demark. In both countries the polarisa- tion in general is relatively small. Figure 8 shows the percentage of pupils in 9th grade in Sweden and Malmö 2005 who qualify for secondary school, and figure 9 shows the distribution of grades in 9th grade, Copenhagen and Denmark 2005. This illustrates a clear difference between the large cities and the countries in general – the frequency of ‘bad’ schools is much higher in the cities.22
  • number of pupils in 9th grade who qualify for secondary school, malmö 1.4000 0 1 .4 2000 2 0 0 0 2005 2 0 0 5 2015 2 0 1 5 1.2000 0 1 .2 1.0000 0 1 .0 8000 0 8A n ta l e le v e r 6000 0 6 4000 0 4 2000 0 2 0 0 0–55 5 % 0 -5 % 55–65 5% 5 5 -6 % 65–75 5% 6 5 -7 % 75–855% 7 5 -8 % 85–95 5% 8 5 -9 % 95–100 % 9 5 -1 0 0 % fIguRe 6. number of pupils in 9th grade who qualify for secondary school, according to the number of pupils in their schools who qualifies for secondary school, Malmö 2000, 2005 and 2015. Source: The Swedish National Agency for Education 2006 and our own calculations. 23
  • distribution of grades in 9th grade, copenhagen 2000, 2005 and 2015 60 6%% 0 2000 2 0 0 0 2005 2 0 0 5 2015 2 0 1 5 50 5%% 0 40 4%% 0 30 3%% 0 20 2%% 0 10 1%% 0 0 %% 0 6,6–7,0 6 ,6 -7 ,0 7,0–7,4 7 ,0 -7 ,4 7,4–7,8 7 ,4 -7 ,8 7,8–8,2 7 ,8 -8 ,2 8,2–8,6 8 ,2 -8 ,6 8,6–9,0 8 ,6 -9 ,0 9,0–9,6 9 ,0 -9 ,6 fIguRe 7. Distribution of pupils in 9th grade according to the average grades of their schools. Source: the Danish Ministry of Education 2006 and our own calculations.24
  • Percentage of pupils in 9th grade who qualify for secondary school600% 6 % Sweden 2005 Sv e r i g e 2 0 0 5 Malmö 2005 Ma l m ö 2 0 0 5500% 5 %400% 4 %300% 3 %200% 2 %100% 1 %00% % 0–555% 0 -5 55–655 % 5 5 -6 65–75 % 6 5 -7 5 75–85 % 7 5 -8 5 85–95 % 8 5 -9 5 95–100 % 9 5 -1 0 0 fIguRe 8. percentage of pupils in 9th grade in Sweden and Malmö 2005, who qualify for sec- ondary school, according to the percentage of pupils in their schools who qualify. Source: The Swedish National Agency for Education 2006 and our own calculations. 25
  • distribution of grades in 9th grade, copenhagen and denmark 2005 606 % 0 % DDenmark r20050 a n m a k 2 0 5 KCopenhagen v 20050 ø b e n h a n 2 0 5 505 % 0 % 404 % 0 % 303 % 0 % 202 % 0 % 101 % 0 % 0 %% 0 5,5–6,6 5 ,5 -6 ,6 6,6–7,0 6 ,6 -7 ,0 7,0–7,4 7 ,0 -7 ,4 7,4–7,8 7 ,4 -7 ,8 7,8–8,2 7 ,8 -8 ,2 8,2–8,6 8 ,2 -8 ,6 8,6–9,0 8 ,6 -9 ,0 9,0–11,4 9 ,0 -1 1 ,4 fIguRe 9. Distribution of pupils in 9th grade in Copenhagen and Denmark 2005, according to the average grades of their schools. Source: the Danish Ministry of Education 2006 and our own calculations.26
  • But what causes this? Studies show a close correlation between pupil’s grades and thefinancial and social situation in their families, parents’ education, and whether they areimmigrants are major factors. Often, low grades are caused by several factors in combination: Immigrant childrenmay have difficulties with the language, and this causes problems with other subjects too.Many immigrant families have huge social problems because lack of education leads tounemployment. This is shown in figure 10. (The Swedish National Agency for Education2005, Olsen 2005, Plougg 2005).Both Malmö and Copenhagen have a large numbers of immigrant children in theirschools. In the first quarter of 2005, 42 percent of pupils in 9th grade in Malmö werechildren born in Sweden, but whose parents were both not native Swedes. (The SwedishNational Agency for Education 2006). Also in spring 2005, 32 percent of pupils in Copen-hagen schools didn’t have Danish as their first language. (The Danish Ministry of Educa-tion 2006). The number of pupils with a foreign backgruond has increased during the last5 years in Malö and Copenhagen, though only by a few percent. During the same five years, the average education of parents has increased. Most sig-nificantly in schools with less than 20 percent pupuils with foreign background, and notat all in schools with more than 80 percent. There are no comparable figures for Copen-hagen, but the average education for parents (persons aged 30-54) has decreased for those average grades and social problems at home, schools in copenhagen 70 %0 7 60 %0 6 50 %0 5 40 %0 4 30 %0 3 20 %0 2 1 0 10 % 0 0% 6 6 6,5 6 ,5 7 7 7,5 7 ,5 8 8 8,5 8 ,5 9 9 9,5 9 ,5 10 1 0 fIguRe 10. percentage of children from homes with social problems (divorce, low education of parents, unemployeed parents) and their grades in 9th grade, Copenhagen 2002 Source: Glavind 2004. 27
  • with foreign background, but increased for the ones with Danish background. (Statistics Denmark 2006.) It seems that socio-economic conditions like those mentioned haven’t changed signifi- cantly in five years. Therefore the increasing number of low grades and ‘bad’ schools may have other causes. Earlier studies have shown that this kind of polarisation often has to do with the well- to-do parents moving their children away from schools with low average grades. Schools with very low grades are the ones suffering most from this. Studies shows that when a class has pupils with high grades, it also raises the grades of those with social problems at home. And pupils who get high grades are generally able to perform well, no matter what school they are in. (Olsen 2005, The Swedish National Agency for Education 2005). This might explain why there is increased polarisation even though the socio-economic condi- tions haven’t changed. Future developments Trying to predict the future is always hard. Even though the figures show increased polari- sation between schools in the recent past, it’s impossible to say what will happen next. It all depends on what the pupils, the teachers, the politicians, the public servants, the busi- ness community and so forth will do. But decreasing polarisation won’t just happen by itself in this globalised network society we live in, where people with very different social and cultural backgrounds are competing on many levels in the big cities. It is therefore likely that the polarisation will increase – especially in Malmö, where the trend is clearest. In figure 6 and 7 we have added our estimates for the situation in 2015. It is based on the assumption that the polarisation increases, but only with half the current speed. We also assume that the demographic trend of families with children tending to stay in Copenhagen and Malmö continues, and that fewer ‘strong’ pupils leave the ‘bad’ schools. Nevertheless we predict that more than 10 percent of Copenhagen schools in 2015 will have average grades below 7.0, and that the number of schools in the area between ‘good’ and ‘bad’ will decrease. In Malmö, the number of pupils attending schools where less than 65 percent qualify for secondary school will increase from about 25 per- cent to about 40 percent in 2015. No change is predicted in the figures for schools where more than 95 percent qualify. consequences in the year 2016 Many factors may change this trend, but what if they don’t? What will the future look like then? Polarisation in public schools might disqualify a large part of the population for the la- bour market. By 2016 many people of working age could be on transfer incomes, while at the same time demand for labour is increasing in many sectors. This development could mean a big strain on business and society, if it spreads from the large cities. But the effect will be stronger in Copenhagen and Malmö. There might be higher rates of crimes and a growing insecurity when a large part of the population becomes marginalised. In Malmö there has already been an increase in juvenile delinquency over the past 10 years. The polarisation could also mean a decrease in the number of people with different so- cial, ethnic and economic background who grow up together. The youth of 2016 may have very diverse values and views. People of 2016 will live more apart from those of different28
  • backgrounds. This may lead to increased segregation in ethnic and religious groups, andbetween those on transfer incomes and those with jobs. When people from different parts of society don’t get together anymore during nor-mal daily life, societal cohesion could suffer. The legitimacy of the welfare state might bedoubted by the large part of the population who works and pays about half their incomein tax, and fails to see why they should pay for people they don’t know, who live in placesthey never visit. And of those, a large part has a different ethnic background, with normsand behaviour quite different from the modern western society. (Olsen 2005:41). For the individual, the polarisation that starts in the public school means fewer choic-es in life, and that they will probably follow in their parents’ footsteps. Danish sociolo-gist Henrik Dahl has said that polarisation makes us lazy, whether we come from a goodmiddle-class home or from the worst part of town. When we only meet people exactlylike ourselves, we become more narrow-minded and less creative, and tend not to opposenorms like having to buy a new car every year or living a whole life on transfer incomes. 29
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  • trend #3: ethnic polarisationsImmigration is debated all over Europe. In 2005, French suburbs saw scenes of violent up-rising and vandalism. In Britain a wave of unrest followed the terrorist attacks on London.In both cases it was caused by groups of frustrated immigrants and their descendants. Going north to Norway and south to Austria, we find the charismatic politicians CarlI. Hagen and Jörg Haider, both with very critical views about immigration. Europe isdivided. On the one hand western values tells us to help people in need and be hospita-ble towards strangers, but on the other hand we want to defend those same values andprotect our national culture. Many European countries are discovering that integrationmeans going from a very homogenous culture to a more heterogeneous culture, also calledthe multicultural society. An oft-debated question is what it means to be western, Dan-ish, etc. Is it possible to unite western culture with being a Muslim at all? Do we want tojust integrate immigrants on the labour market, or should we aim for a complete culturalintegration? And how do we measure integration? The immigration debate often focuses on the clash between two cultures. The debateis often characterised by a lack of understanding of different cultures. But there is anotherpolarisation apart from the ‘them and us’ polarisation. Within groups of immigrants thereis also polarisation. During the Mohammed cartoon crisis, there was a clear differencebetween the statements from Muslim religious leaders and from members of DemocraticMuslims, an organisation created during that crisis. The trend this chapter is concerned with is the polarisation between the integrated immi-grants and the non-integrated immigrants, or the well integrated and the segregated. Roughlyspeaking, the politicians are concerned about integration on the labour market, while thepopulation is more concerned about the cultural integration. But in practice it is impossible todistinguish between the two types of integration, and we won’t try to do it here. Well-integrated here means immigrants and their descendants who are culturallyintegrated in western culture and who have jobs. Cultural integration means being part ofTERMS USEDDane: a person with at least one parent who is both a Danish citizen and is born in Denmark. a non-Danes is either:IMMIgRant: person born in another country.DeSCenDant: person born in Denmark from parents that weren’tfunDaMentalISt: person who believes that religious writings are divine and should be taken literallyfunDaMentalISt eXtReMISt: a fundamentalist that politically is far from the centre and who e.g. believes that ag- gression is justified in reaching goals like the introduction of an Islamic state. Jean-paul Sartre was in his later years a political extremist and taught several of the people that later became khmer Rouge and murdered millions of civilians in Cambodia.ISlaMISM: Islam isn’t just a religion; it can also be a political system where the state is controlled by outside forces, often through a conservative interpretation of sharia 31
  • Polarisation axes cultural Kulturel integration integration Well integrated Well integrated Velintegreret with problems Velintegreret med belastning lack of Manglende labour-market Arbejdsmarked arbejdsmarked labour-market integration integration integration integration Segregation Segregation Well functioning Velfungerende lack of cultural Manglende kulturel integration integration fIguRe 11. polarisation axes. Source: Copenhagen Institute for Futures Studies. a heterogeneous society with shared basic values. The immigrant groups we look at here are Muslim groups. We have chosen to do that because immigrants from Muslim coun- tries and their descendants are the largest non-Christian religious group, and because of the many conflicts we see with the extreme fundamentalist Muslim groups. The terrorist attack on London, the murder of Dutch filmmaker Theo Van Gogh, and the rising popular- ity of organisations like Hizb-ut-Tahir are signs of increased polarisation between Muslims in Europe. The extreme fundamentalists are the least integrated among the segregated. They are very far from the democratic, well-integrated Muslims we often meet, and who sometimes even find their way to the parliament and is an important part of the multicul- tural society. Where one of the two types of integration, cultural integration and labour market integration, exist without the other, we get two special cases: The well functioning, not culturally integrated and the well integrated with problems (i.e., not having a job). These two cases are important, but we will only deal with them briefly: The well functioning are in many ways well integrated. They work – often having their own businesses – and are an economic asset for society. But the lack of cultural integration means that they may have opinions in opposition to western norms. This can be in areas like honour slayings, circumcision, and woman’s rights. The well integrated with problems are those that have adapted western values like equal rights, democracy and secularisation, but are a burden to society because they are unemployed. In the following we look at immi- grants as a single group, but of course there are many variations within that group. Most data will be from Denmark.32
  • historical developmentsSince the 16th century, there has been a net immigration from most of Europe to coun-tries in the new world like Australia and America. But from the middle of the 20thcentury, this development has been reversed. In Scandinavia it was mostly because of alabour shortage that made the immigration into these countries increase during the 1960s.But oil crises and the economic decline and unemployment that followed put a stop tothis. In Denmark, a total stop on immigration from most countries was passed in 1973.Since then, most immigration to Denmark has been based on political asylum or familyrelations. The immigration laws have been tightened several times in the 1990s, with aresulting drop in immigration to Denmark. This was in part due to a realisation of thefailure in labour market integration of immigrants, with a resulting strain on the Dan-ish welfare state, and in part because of public opinion towards immigrants. Europe ingeneral has passed a number of more restrictive immigration laws in the recent years, andfurther restrictions are frequently debated. European countries differ very much regarding concentration and dispersion ofimmigrant groups. Old colonial countries like the Netherlands, France and Britain havelarge concentrations of immigrants and their descendants from their former colonies.France is the European country with the largest Muslim population, with five millionimmigrants from North Africa. In northern Europe, immigrants from Turkey are thelargest Muslim group. This means that the Muslims of Europe are far from being ahomogenous group – the two groups mentioned share neither language nor culturalbackground. Several factions within the Islamic faith – Shia and Sunni being the two immigrants and descendants300.000 0 3 0 0 .0 0250.000 0 2 5 0 .0 0 total S a m le t200.000 0 2 0 0 .0 0 Immigrants In d v a n d r e r e150.000 0 1 5 0 .0 0100.000 0 1 0 0 .0 0 Descendants E fte rk o m m e re 50.000 0 5 0 .0 0 00 1980 1198211984 1 9 8 6 11988 1 9 9 0 11992 1994 1 9 9 6 1 9 9 8 2 0 0 0 2 0 0 2 2 0 0 4 22006 1 9 8 09 8 2 9 8 4 1986 9 8 8 1990 9 9 2 1 9 9 4 1996 1998 2000 2002 2004 0 0 6 fIguRe 12. Immigrants and descendants from mostly Muslim countries (with and without Danish citizenship) Source: Statistics Denmark 33
  • major ones – are also present. The degree of secularisation varies. The North-European Muslims – mostly immigrants from Turkey and the Balkans – are generally more secularised. The integration problems with the Turkish workers who immigrated in the 1960s were with language and culture and rarely with religion. Today most of them are well integrated. Immigrants from the 1980s and 1990s faced a much harsher labour mar- ket, and are generally much less integrated. And less labour market integration usually means less cultural integration. The integrated In a qualitative study from 2002 the Rockwool Foundation looked at immigrants in Denmark and their relation to the labour market. According to the study, the typical im- migrant is employed, between 25 and 50 years old, is proficient in Danish language, reads Danish newspapers, and has social relations with native Danes. He or she also has a good education and has lived in Denmark for many years. Most immigrants who fit this profile were from Turkey and Pakistan, but Pakistani women did not. If we assume that integrat- ed immigrants in general follow this pattern, we can measure the level of integration by measuring the percentage of immigrants with job-qualifying education. We find that this percentage is rising. The number of immigrants and descendants of immigrants who get an education is rising. Looking at immigrants form non-western countries, the number of immigrants get- ting an education exceeds the number of descendants getting an education. The explana- tion for this is that the descendents are in minority, and that more immigrants now come from countries with stronger traditions for education. A number of the descendants are also too young to have finished their education: In 2004 the number of descendants with a higher education was 74, but the number of university students was 484. The trend is clear: More and more descendants get educated, and many of them even get university degrees. An elite group of highly educated immigrants is forming. Looking at immigrants with mid- or high-level incomes, this group has increased by more then 100% over the last 5 years, though from a very low starting point. In 2016 the descendants of descendants will have Danish citizenship and be a large percentage of the ones who get higher education and the best jobs. Another way to measure cultural integration is to look at the percentage of non-west- ern immigrants marrying someone from their home country. From 2001 to 2003, this fell from 62.7 percent to 43.2 percent. Add to this that if you are an immigrant from a less- developed country, you have a 40 percent reduced chance of finishing higher education if you marry another immigrant. This could result in better cultural integration in the future, even though it is caused by a change in the immigration laws. In addition to the well educated integrated there are the immigrants and descendants who have their own businesses like greengrocer’s shops. Many of those are well integrat- ed, culturally and in respect to the labour market, but are not shown in these figures. The elite among the descendants – those with higher education and well-paid jobs – is definitely starting to form, but it is still very small. The vast majority of descendants are still in low-paid jobs, and almost half of male and more than one third of female descend- ants in Denmark don’t have any education usable on the labour market and are not in the process of taking one either.34
  • Percentage of non-western descendants finishing higher education 1,66% 1 , % 1,44% 1 , % 1,22% 1 , % 1,00% 1 , % 0,88% 0 , % 0,66% 0 , % 0,44% 0 , % 0,22% 0 , % 0,00% 0 , % 1991 1992 1993 11994 1 9 9 5 1 9 9 6 1 9 9 7 11998 11999 2000 2001 2002 2002 2004 1 9 9 1 1 9 9 2 1 9 9 3 9 9 4 1995 1996 1997 9 9 8 9 9 9 2 0 0 0 2 0 0 1 2 0 0 2 2 0 0 3 2 0 0 4 fIguRe 13. percentage of non-western descendants finishing higher education, among 20-39 year old descendants of non-western immigrants. Source: Statistics Denmark.The marginalised and the non-integratedThe marginalised are defined as those who have failed to enter the labour market. Therecan be several causes for this. Four factors seems most important:1. A lack of qualifications.2. Discrimination.3. Language and cultural barriers.4. Lack of motivation, because the gap between minimum wages and transfer incomes is too low (which is the case in Denmark, in particular).As shown in the chapter on metropolitan polarisation, there is a close correlation betweengrades at school and parents’ education. For many immigrants and their descendants, thesocial inheritance is very hard to break. Hopelessness and dejection takes away motiva-tion and makes it very hard to acquire the competences necessary to be integrated in west-ern society. And immigrants and descendants may also have problems with language. Afeeling of inferiority may create a distance between them and a society that they feel theycan never be a part of. And if they only mix with other immigrants and descendants, whohave the same problems they have, then it’s hard to see any way out. Some immigrantsand descendants who live in ghettos and outside the labour market have no contact withpeople from the outside except social workers, and they are often viewed as second-classcitizens and hopeless cases. 35
  • Percentage of descendants with basic, mid-level, and high-level incomes 66 % % 55 % % basic income r e L ø n m o d ta g e g r u n d n iv e a u 44 % % 33 % % L ø n m o d ta g e r Mid-level income m e lle m n iv e a u 22 % % 11 % % L ø n m o d ta g e r e high-level income h ø je s te n iv e a u 00 % % 1997 1 9 9 7 1998 1 9 9 8 1999 1 9 9 9 2000 2 0 0 0 2001 2 0 0 1 2002 2 0 0 2 2002 2 0 0 3 2004 2 0 0 4 fIguRe 14. percentage of descendants with basic, mid-level, and high-level incomes. Source: Statistics Denmark. It was people like this who set the ghettos of Paris on fire in 2005 and started a wave of violence that reached many French cities before the government could react. It is frus- trated people like this that make Islamism (ideologies that uses Islam as a political system) a growing problem in the west. Politicians all over Europe are now realizing that they face a major problem in the future, namely that socially marginalized groups are attracted to ideologies and ethical systems that are in direct conflict with western democratic values. As an example, the number of listeners at Hizb-ut-Tahrir’s meetings has grown steadily over the years. consequences in 2016 In 2016 there will be over 25 million immigrants and descendants from Muslim countries in Europe. They will be concentrated primarily in the large cities and hence seem more numerous there. This is another kind of rural/urban polarisation. The polarisation between immigrants and descendants from Muslim countries and the native population will probably increase in the following years. Fundamentalist versions of Islam, often shown as the only form of Islam in the media, are contributing to this. Shireen Hunter is citing analyses showing that the tolerance of Germans towards Muslims has decreased. 93% of Germans connect Islam with repression of women, and 27% wants to stop all Muslim immigration. If the problems with integration of immigrants are not solved, this intolerance will grow and prejudices towards Muslims will increase, which in turn will turn Muslims towards more fundamentalist and extreme interpretations of Islam.36
  • This will lead to further prejudice and so forth. An opposite trend from this is that thegroup of well-integrated Muslim immigrants and descendants will grow and give Muslimsa more multi-faceted reputation.society: If the polarisation continues, two scenarios are possible: Either society acceptsthe segregation or steps will be taken to prevent it. An example of governments trying toprevent segregation is the ban on Muslim scarves some European countries have imposed.An example of acceptance of segregation is to allow separate courts of law for some mi-nority groups, like Australia has done for its Aboriginals and several countries have donewith the Jewish Beth Din courts.Acceptance of Muslim Sharia Law handled by special courts for Muslims have beendiscussed in Canada. But the likelihood of this happening in Europe is slim, becausemany Europeans regard Sharia Law as incompatible with western values. Muslim scarves,polygamy and halal meat may be accepted, but being stoned to death for infidelity willprobably not be. If a greater polarisation is accepted, will there be more incidents whereMuslims not living according to strict Muslim rules will be punished, and maybe evenbecome victims of ‘honour slayings’? Will Muslims form their own political parties andtry to change society towards Islamic values? This could happen, but a slow integration ofMuslims is more likely. An old French proverb says that it takes three generations to teacha savage how to drink from a wine glass. While this attitude is a bit racist, it also express-es what France learned during the many years as a colonial power: things take time.Business: The so-called Mohammed Cartoon Crisis was an example of how Muslimpublic opinion can affect companies who trade with Muslim countries. In the 1990smany western consumers boycotted French vine, which was a hard blow to Frenchvine production. Brands may be chosen because the company behind supports a certaincause, or brands may be avoided for ethical reasons. Today companies conducting busi-ness with certain Middle East countries have to agree not to use any components madein Israel in their products. If the current anti-American attitude of many people around the world continues, itcould affect sale of US products, and competing products from other countries may gainmarket shares. According to Simin Zadek, author of The Civil Corporation, one fifth ofevery consumer globally considered punishing or rewarding companies for environmentalreasons. Of those, one fifth have actually done it. Polarisation of society could mean thatthis trend gets stronger as consumers realise that their actions actually affect the compa-nies. Political consumption may be one way for a minority to be united against westernsocieties that ignore them. However, the overall effect is very limited. History also shows that marginalisedminorities rarely succeed in acting together. Therefore the positive side of this polarisa-tion – more well-integrated and well-educated immigrants and descendants on the labourmarket – will most likely be the strongest.employees: More integration, higher incomes and better education will be possible forimmigrants and descendants in the future, because large groups of ethnic Danes willreach retirement age. The percentage of descendants speaking fluent Danish will alsoincrease. The number of immigrants and descendants getting the best jobs will also 37
  • increase, and this will create role models showing that it is possible to get important posi- tions in a western society. Many companies are already making an extra effort to attract immigrant and descendant employees. This development will continue because integra- tion will become easier once the companies get experience with it. consumers: As mentioned earlier, by 2016 there will be over 25 million immigrants and descendants from Muslim countries in Europe. That’s the combined population of the Netherlands and Belgium today. This is a large group of consumers that the advertising business must learn how to address, and companies have to produce new products and services for. The way to address a consumer on the West Bank in Palestine is probably very different from the way you do it with a student with Palestinian background living in Stockholm, Sweden. For many years immigrants and descendants have shopped in stores that import products from their homelands. In the future there is a market for many special products. In Britain, Muslim can get loans that are not forbidden accord- ing to the Koran. Mecca Cola is another example of a special Muslim product. 20 percent of the revenue from the sale of this cola is used for what Muslims would consider good causes. Mecca Cola is a very political brand, as its slogan also suggests: “No more drinking stupid, drink with commitment”. Danish slaughterhouses produce halal chickens, which is a good example of companies adjusting to new consumers on new export markets. There will be a large number of this kind of consumers all over Europe. individuals: Many descendants of immigrants are going through identity crises. Their parents grew up in a culture with norms very different form western norms. The question of what it means to be a good Muslim is therefore not agreed upon. If might seem impos- sible that someone used to very strict Muslim values could ever adapt western values like freedom of speech and equal rights. But it appears that many European Muslims can be a part of modern society and still keep their faith. Muslims are not the only religious group having problems with western culture. Progressive Judaism is a religious movement accepting modern western values. In an in- terview, a follower said that she felt like she was changing value system when she entered the synagogue, from a system where man and woman were equal to a system where she was inferior to men according to 2000-year-old rules. That was a problem for her, but she still believed in God and found that her belief stimulated her spiritually and intellectually. Many Muslims also seek this belief. Polarisation means that the extremists on both sides want to define what a good Muslim is. But there might be a way for Muslims to combine faith with western values also.38
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  • trend #4: The creative and the non-creativeIn the future, increasingly more people in the West will work with creative tasks:research, product development, storytelling, design, art, etc. This trend is driven by theautomation and outsourcing of routine tasks and the growing competition from the Eastfor the production of physical products such as textiles, electronics, and cars. In additionto these external drivers, the Western citizen has an increasing inner desire to unfold hiscreative talents. In the role of a co-creator, Westerners can achieve the self-realization andthe status that the increase in living standards make increasingly hard to achieve throughsimple material consumption. Even though an increasing number will work with creative assignments 10 years fromnow, many will not. For some, it is because they cannot manage to adjust to the creativeeconomy. For others, it is because they will do the non-creative tasks that cannot immedi-ately be automated or outsourced: production, transport, care, cleaning and maintenance,teaching, trade, administration, and other routine knowledge work, for example. Today, a geographic polarization is developing between the creative and the non-creativeclasses – even in Denmark. If the trend continues, an increasingly greater proportion ofthe urban population will work with creative work, while people with non-creative workwill populate the suburbs and rural areas. The creative will seek inspiration and sparring aswidely as possible, and will be globally oriented. They will often work with people of othernationalities, work abroad for periods, and often take part in international conferences andglobal networks. For the non-creative, ‘abroad’ will often just be a vacation destination. Creative and non-creative work make different demands on the structuring of worklife. Much non-creative work is service or production work with little flexibility in workinghours or conditions. In contrast, flexibility is almost a prerequisite for the creative. Creativeworkers have different ways of working, and pressure to conform to one pattern can drasti-cally affect their creativity. Creative work also has several stages that put different demandson work methods: inspiration, brainstorming, development, polishing, and implementation.Finally, the creative worker functions best when work and family/leisure time are balanced,which is best achieved by allowing them flexible working hours and conditions. On theother hand, while ‘flexible work’ is one the age’s great mantras, it is hard to see how flex-ibility can be spread into traditional service and production industries. For example, no buscompany could stick to its schedule if drivers choose their own working hours. Therefore,much points to a polarization of flexibility between the creative and the non-creative.RIchaRD FlORIDa DEFINES ThREE gROUpS IN ThE cREaTIvE claSSthe CReatIve CoRe: It specialists, mathematicians, engineers, architects, researchers, educators.the CReatIve pRofeSSIonalS: Managers, lawyers, physicians, and employees in trade and finance.boheMIanS: artists, designers, journalists, and employees in the entertainment and media industries.all three groups are made up of knowledge workers, but very few of the “creative professionals” will actually work withcreative assignments as defined in this section. In other words, florida’s definition of creative work is broader than thatused here. 41
  • However, the creative may have greater problems with stress than the non-creative. Crea- tive work can be hard to set aside, even ‘after hours’. The creative work with their minds, and so cannot physically set aside their tools and leave the shop as a craftsman can. In ad- dition, the creative worker can find it hard to know how far along the project is, or decide how well the task has been done. “Will the good idea come today or a month from now? Should I pursue the idea I have now, or wait to see if a better one comes along? I can always do a better job if I spend more time on it, so when should I stop?” The fluidity of creative as- signments can contribute greatly to stress, especially under the pressure of deadlines. The combination can lead to greater demands for overtime in periods, another stress factor. Three types of work typically lead to stress: repetitive work, client work (work with patients, students, inmates, etc), and unbounded work (fluid in time and place, with great personal demands). Repetitive work is increasingly being automated, and so will lose significance as a stress factor. One can also imagine new technology replacing client work to some degree in the future. In contrast, unbounded work is on the march. Many young IT specialists collapse from stress because they cannot handle the flexibility and the fluid demands. Unless tools are developed to address stress in borderless work, stress may very well far more widespread among the creative than the non-creative. work values in the two groups It is far from certain that creative and non-creative salaries will be polarized. As the most routine jobs in production, service, and administration are automated, the jobs that re- main will have a greater average knowledge content and be more emotionally demanding. In 10 years, the creative/non-creative salary situation may be similar to that seen today between academics and craftsmen. Creative workers will face large income variations and high potential incomes. The non-creative will enjoy somewhat lower average wages, but a higher minimum level: when income is the main reason for working, a greater minimum salary is demanded. In contrast, creative employees see the chance to work creatively as a goal in itself, and many creative people, especially younger ones, will accept a lower salary for that chance. For the non-creative, the purpose of work will primarily be a means to make money, so the non-creative will try to demand a higher minimum pay. They will probably succeed in this as Northern European baby-boomers retire over the next 10-15 years, shrinking the labour force and creating a greater demand for labour. Less-attractive professions will be forced to offer high salaries or fringe benefits to attract workers. On the other hand, the creative will see a far greater range of income levels, with the successful earning far more than the less successful. Creative workers will generally take longer to establish themselves solidly on the labour market, either because they must complete a longer education than the non- creative, or because they simply take longer to break into the competitive creative labour market. The creative accept a longer apprenticeship with low incomes, because they see it as an investment in an exciting creative career later in life. For the creative, the mate- rial standard of living is less of a motivation than for the non-creative. The education of the creative will be individually tailored, because the creative do not educate themselves to a title, but to their own personal project. This education will often be a mix of formal education, self-study, and personal projects. In contrast, the non-creative will face specific skills-requirements reflected in standardized education or training.42
  • The non-creative jobs will be more threatened than creative work by technological devel-opments and competition with the growth economics in Asia. That makes fertile groundfor reactionary attitudes. When someone feels his reason for existence is threatened bydevelopment, he becomes easily resistant to change. Globalization and new technology aremet with scepticism or outright fear. On the other hand, the creative, who will typically beinternationally oriented, and work with and use new technology, will be open to progres-sive attitudes and values. The different values of creative and the non creative will be reflected in their attitudesto work. When a company seeks creative employees, it must use, to a great degree, thecreative content of the job to attract them, and the creative will often change jobs to seeknew challenges that can develop their creative skills. On the other hand, the non-creativewill to a great degree focus on pay, benefits and job security.different values for housing and consumptionThe shift to the creative economy will hardly be complete in 2016, but the number of peo-ple in the creative industries will probably have increased so much that the polarizationbetween the creative and the non-creative will be becoming apparent. Not just in differentwork values, but also in the other central areas such as housing and consumption. When more and more creative people are attracted to the city centres, it means thatthe areas that earlier were seen as outside the core, will gain status as core areas. Thesedevelopments are already happening in many large cities such as with Barcelona’s El-Raval district, and the formerly working-class neighbourhoods surrounding Copenhagen’smedieval centre. New city zones spring up and are built or rebuilt to be attractive for thecreative, as seen in the Westergasfabriek area of Amsterdam. When the European countries increasingly are polarized between large city and hin-terland, the creative class in large cities will increasingly have more in common with thecreative in other large cities than with their fellow citizens in the suburbs and rural areas.The creative will thrive in environments characterised by diversity and social experi-ments, while the non-creative will seek security in well-known frames. For the creativein large cities, more and more of the traditional functions of the home will be movedout into the city – dining, social events and entertainment – while the non creative, whotypically have more space because of low housing prices outside the large cities, can placemore functions in the home. The creative are great consumers of metropolitan cultural offering, both the traditionalsuch as museums, theatres and concert halls and the colourful bouquet of subculturalexhibitions, festivals and interactive activities. In contrast, the non-creative in the suburbsand the provinces, where the physical cultural offerings are few and far between, willsatisfy their cultural needs primarily through television, radio, and computers. There canbe a self-reinforcing correlation between creativity and the consumption of cultural offer-ings – the cultural offerings inspire creativity while creativity creates new cultural offer-ings – and hence there may easily arise an increasing polarization between the creative asconsumers of cultural offerings and the non-creative, who do not use cultural offerings. The difference can also be reflected in consumption patters and leisure activities. Forthe creative, it is important to brand oneself as being creative by designing one’s ownpersonal clothing and housing style, and through participation in creative leisure time ac-tivities that at the same time inspire their work. The non-creative, that to a greater degree 43
  • focus on material values, will in contrast be consumers of luxury and branded goods – especially in the home, which to a great degree will be the centre for leisure time activities. Media centres, appliances, and luxury furniture will be high on the wish list. This polari- zation of consumption, together with the geographic polarization between the creative in large cities and the non-creative in suburbs and rural areas, can lead to a geographic polarization of offerings and marketing of products. Polarization in the future? Whether the polarization between the creative and the non-creative will over time lead to an actual class separation (as Richard Florida implies when he discusses ‘the creative class’), depends to a great degree on mobility between the two groups. On the one side, the geographic polarization can have a self-reinforcing effect, and at the same time the children of the creative will, more than those of the non-creative, be encouraged to be crea- tive. On the other hand, many with non-creative work will have creative hobbies that can turn into actually creative jobs, and many creative workers may burn out and be forced to take non-creative work to survive. Many young people on the way into the job market may also deliberately choose to be pattern breakers, a step that the internet and new education forms can make easier for future generations. In the long term, there is hardly any doubt that the number of people with creative work will grow to become the dominant part of the workforce. As technology can perform more complex tasks, the minimum requirement for being in the workforce increases. One could imagine that a growing part of the job force will not be able to meet these minimum requirements and thus be marginalized. Therefore, with time, the polarization might not be between the creative and the non-creative, but more between those with creative work and those with no work at all.44
  • a STRONg wElFaRE STaTE aTTRacTS ThE cREaTIvE claSSthe author of Rise of the Creative Class, Richard florida, has with Irene tinagli in Europe in the Creative Age (2004)tried to assess the size of the creative class in europe. they determined that the size of the creative class in europe in2000 ranged from 13% in Italy and portugal, to 30% in belgium, the netherlands, and finland. at 21%, Denmark liesin the middle. In 2005, Copenhagen business School (CbS) researched the Danish creative class based on Richard florida’sdefinition. the study provides an indication of the development and growth of creative work. It shows that 42.7% ofDanish workers in 2002 belonged to the creative class, which is twice as much as the 21% florida and tinagli arrivedat in their study. the reason for this difference is undoubtedly due to different interpretations of the data, and illustrateshow poorly today’s labour statistics address creative work. CbS found the Danish creative class stagnated from1995-2002, but if one excludes the so-called creative professionals, there was a growth of 13% in creative workersduring this period. the CbS study also shows that urban regions in Denmark, especially Copenhagen and aarhus, have a largershare of the creative class than the national average, whether or not the creative professionals are included. the con-centration is especially great for bohemians, and the share increased from 1995 to 2004. florida and tinagli concludein their work that the turning point for competitiveness is not the company or the nation, but the urban region. It is thecreative workers that create value, and they are more connected to their urban area than to a company or country. florida also believes that the creative class is attracted to diversity. florida and tinagli’s study confirms theconnection between on the one hand self-actualisation and tolerance for minorities and on the other the size of thecreative class. CbS also finds a connection between the concentration of the creative class and the concentrationof bohemians and immigrants. the creative class (as defined by florida) is, in other words, attracted by diversity andtolerance. Moreover, CbS finds a positive correlation between the presence of the creative class (especially the creativecore) and the amount of social offerings, while there is a weak negative correlation with the number of unemployed.as a result CbS concludes that a strong welfare state has a positive influence on the growth of the creative class.this conclusion is supported by the florida-tinagli study. they concluded that dynamic knowledge economies donot create social cohesion, but that some types of social cohesion can create dynamic knowledge economies. theseconclusions are interesting, since they go directly against the widespread economic belief that inequality strengthensprofessional ambition, and that a strong welfare system limits ambition. 45
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  • trend #5: The healthy and the unhealthyThroughout history, good and bad health has always been unequally distributed, globallyand nationally. Death rates and health risks are very different for the rich and the poor,whether you compare rich and poor nations or rich and poor people within the same nation. Health is a combination of many factors. Living conditions and lifestyle choices in-crease or decrease the risk of getting sick, while the quality of hospitals affects the chanceof being cured. Over the long run this polarisation trend have lessened, but some recent developmentsare suggesting a higher polarisation in the future. Lifestyle diseases, privatisation of partsof the public health system, individualisation, focus on preventing diseases, rising incomegaps, and marginalisation are some of the important factors. Another is the fact thathealth has become a megatrend, on the agenda in all parts of society. On one hand we have people living healthy lives, with low mortality rates and highlife expectancies. On the other hand we have people living unhealthy lives, being moreoften sick and having lower life expectancies. Current trends point towards a growingpolarisation between these two groups. In the rest of this chapter, the health polarisation trend will be elaborated, startingwith a historic account followed by a detailed review of the causes.health through historyThe long-term health trend in the past has been one of equalisation. With increasedwealth, progress in medical science and expansion of the public health system, the generalhealth level has been vastly improved, as have the minimal standards. More poor peopleget medical help, malnutrition has become very rare, and housing and working conditionshave improved for almost everyone. In Scandinavia and a number of other European countries, most of the health sectorhas been public since the birth of the welfare state, with free and equal access to its serv-ices. Focus was on sick people and how to treat them.glObal pROgRESS IN hEalThglobally there have been major advances. In 1970, 17 million children aged five years or less died. In 2002 it wasdown to 10.5 million. but more gaps have developed globally. the life expectancy for women in developed countriesis now 78 years, but for men in the southern parts of africa it has dropped from 46 to 20 during the last 20 yearsSource: WHO, World Health Report 2003, Shaping the Future. 47
  • Polarisation – adult mortality 600 6 0 0 africanl nations ewith A frik a - a n d e m d very ehigh mortality h e d m e g t h ø j d ø d e lig 500 5 0 0 africanl nations ewith ø j A frik a - a n d e m d h highe mortality d ø d lig h e d 400 4 0 0 european nations dwith j E u r o p a -l a n d e m e h ø highs adult d e l i g h e d v o k e n d ø mortality 300 3 0 0 Southeast i asian nnations with S y d ø s t a s e n - la d e lowd adultv mortality d e l i g h ed m e la v o k s e n d ø 200 2 0 0 world n V e r d e average 100 1 0 0 00 1970 1 9 7 0 1980 1 9 8 0 1990 1 9 9 0 2000 2 0 0 0 fIguRe 15. : polarisation – the risk of death between the age of 15 and 60, part in 1000 people. Source: WHO, World Health Report 2003, Shaping the Future. obesity 14 4% 1 % low education K o r t u d d a n n e ls e 12 2% 1 % 10 0% 1 % 8 8% % 6 6% % 4 4% % L a n g high education u d d a n n e ls e 2 2% % 0 0% % 1991 1 9 9 1 2004 2 0 0 4 fIguRe 16. obesity. adults in Copenhagen (18+ years old) with bMI greater than 30, according to level of education. Source: City of Copenhagen Health Report 2005.48
  • in the futureThere are several indications that the long-term tendency to equalise health will be replaced byincreasing polarisation: This is in part caused by a growth in lifestyle diseases, but contribut-ing factors are increased individualisation, privatisation of services, the growing income gap,and more marginalized groups. Health will to a certain degree be determined by lifestyle. WHO predicts that in 2020, peo-ple with lifestyle diseases will claim 70 percent of the capacity in the health sector. The focusin policy will therefore shift from taking care of the sick to preventing disease. This goes handin hand with individualisation trends, where it is expected that individuals take hand of theirown health and maybe keep in touch with the hospital or the doctor via the internet. But theability for self-care is not equal for all groups. At the same time the health system is gradually becoming privatised, both in regards tofunding and with access to services.lifestyle diseasesThe causes for more and more diseases become known. There are three main types of causes:genetics, environment, and behaviour, including having a particular lifestyle. However, thereare often several causes for a disease. Type-2 diabetes is e.g. caused by a combination of ge-netic disposition and lifestyle. Lifestyle is more often pointed to as the cause of disease. Getting enough exercise is recom-mended for the prevention of many diseases like type-2 diabetes, cardiovascular diseases,osteoporosis, depression, and Alzheimer’s. Since lifestyle diseases can be prevented by chang-ing behaviour, whereas genes can’t be changed, and many environmental factors are difficultto change, the focus in the health system is shifting from treatment of diseases to preventingdiseases by changing people’s behaviour.genesGenes, living conditions and lifestyles are unevenly distributed. It is not well known ifthere is a long-term selection process that concentrates the ‘good’ genes among the richin society and the ‘bad’ genes among the poor. However, in any case there may be such aprocess in the future when the rich can afford to screen their prenatal offspring for badgenes. Getting children with close kin can also harm the genetic material, and we canperhaps expect this to happen more often among the less-educated lower classes.hEalTh aND SOcIal INEqUalITySocial status affects health: the risk of getting a Coronary heart Disease is more than twice as high if you are amale cabdriver (index 128) than if you are a male physician (index 58), and more than two and a half times higheris you are female social worker (index 132) than if you are a female secondary school teacher (index 55). the average life expectancy is 78 if you live the Copenhagen suburb Søllerød, but only 69 if you live in nør-rebro in the inner city. at the age of 60, a highly educated person can expect to live for another 16.9 more yearswithout disabling diseases, whereas a person with little education can only look forward to an average of 13.3years without disability, according to Danish statistics from 2000. 10-12 percent of children with parents in the highest social group are suffering from long-term diseases, but19 percent of children with parents in the lowest social group do so, according to a 2005 study form the City ofCopenhagen.. 49
  • living conditions The general high level of wealth in Denmark has made problems like malnutrition and unhealthy housing and working condition very rare. This also means that there is not much room for improvement in basic living conditions. But lifestyle diseases are still very much products of living conditions. In a study from the Country of Aarhus, low social sta- tus and obesity predicts bad health better than smoking, alcoholism and sedentary work. Polarisation of lifestyles The importance of lifestyle on health will increase in the future and result in more polari- sation between those with many resources and those with few. Defining resources as level of education and social status, figures show that those with many resources have a healthier lifestyle when it comes to exercise, food, smoking, alco- hol consumption, and drug abuse. In the City of Copenhagen, the percentage of smokers with high levels of education fell from 28 percent in 1991 to 14 percent in 2004. For people with low levels of educa- tion, the corresponding figures are 44 percent and 36 percent. The number of adults living in Copenhagen that exercise four hours or more in an average week has from 1991 to 2004 increased from 28 percent to 32 percent for the highly educated, while it has dropped from 20 percent to 16 percent for those with little education. Stress, however, is not clearly polarized. People with higher education may lead more stressful lives. The percentage of Danes who feels stressed increased from 35 percent in 1987 to 44 percent in 2000. Only 24 percent of those with only basic school education felt stressed, while the percentage was 58 for those with higher education. But diseases typically caused by stress are more common among the lower social classes. Depression is three times as common among manual labourers than among higher-ranking office work- ers. A possible explanation for this is that it is easier to handle stress when you have more TablE 2: lIFESTylE playS a ROlE IN MaNy cOMMON DISEaSES. the 10 most common diseases (some of which may be caused by lifestyle) and their Disability adjusted life years, as a percentage of all disability caused by disease.: Depression 7.39% Coronary heart Disease 6.91% CopD (‘smokers’ lung’) 5.36% alcoholism 4.54% apoplexy 4.49% lung Cancer 4.04% alzheimer’s and dementia 3.34% hearing impairment 3.27% Diabetes 3.04% back and neck pains 2.43% Colorectal cancer 2.39% the number of people diagnosed with diabetes has since 1974 increased by 21 percent for women and by 58 percent for men. In the City of Copenhagen, mental illness is claiming 25% percent of the resources in disease treatment and is the cause of 40% of early retirements. these percentages are growing. Source: City of Copenhagen Health Report 2005.50
  • adjusted life expectancy at 30, danish men 6 0years 50 5 0 N years ewithutolerable or o g n l n d e e l l e r d å r l i g t bad health 8 ,5 h e l b r e d 1 0 ,8 40 4 0 14 years twithe good health G o d h l b r e d Å r 30 3 0 20 2 0 3 9 ,3 3 4 ,7 2 9 ,5 10 1 0 0 0 high H ø jt medium M e lle m low v t L a level of education fIguRe 17. adjusted life expectancy at 30 for Danish men (the average years of life left at current mortality rates for at man of age 30). Source: National Institute of Public Health 51
  • Proportion of daily smokers, by length of education 606 % 0 % 1987 1 9 8 7 1994 1 9 9 4 2000 2 0 0 0 505 % 0 % 404 % 0 % 303 % 0 % 202 % 0 % 101 %% 0 0 %% 0 10 dyears orr less u n e r 1 0 å 11–12åyears 1 1 -1 2 r 13–14 åyears 1 3 -1 4 r 15+ years 1 5 + å r fIguRe 18. percentage of daily smokers in Denmark, by length of education). Source: National Institute of Public Health52
  • resources and are more in control of your own life. But it is also possible that those withpredisposition for depression have a lesser chance of finishing a higher education or getthe best jobs.individualisationHealth is becoming a personal matter as individualisation increases in all areas. Much ofhealthcare will become ‘self-care’ as the technological advances make it possible to get treat-ment at home. But those with few resources will probably not benefit much from this. The shift from treatment to prevention of disease has put behaviour and lifestyle infocus, but to choose your own lifestyle requires a certain amount of resources. Not all peo-ple can afford to buy healthy food, have the time to get enough exercise, or can motivatethemselves to stop smoking. Being part of a community is no longer a certainty in our individualised society. Youchoose you own communities and networks. If you build a network by yourself, you willprobably not have a very good one, and statistics shows that people with bad networkshave an increased risk of getting a heart disease. As the percentage of old people rises, the number of people suffering from bad healthand disease may also rise. The effect of many years of living either healthy or less-healthylives will result in very different kinds of 75-year-old people, and thus in more polarisation. However, the health statistics are not unambiguous: According to a study from theDanish National Institute of Public Health from 2000, the percentage of young men whothought of themselves as being very vigorous dropped from 40.5 percent in 1994 to 33percent in 2000. But for older women, the corresponding figures showed a rise from 18.9percent to 26 percent.Privatisation and commercialisationThe privatisation of the health sector is growing, both in financing and in availability. Es-pecially Britain under Margaret Thatcher and later Tony Blair has experienced a growingprivatisation, but other countries have been through increased privatisation and commer-cialisation of the health sector. Charging citizens for health services is one way of financing the growing cost. Privati-sation is often favouring the financially strong and could thus lead to increased polarisa-tion. Until now it was the most sick that benefited most from the system, but privatisationmay change that. The supply of hospital beds, specialist treatment, etc., has mostly been financed bytaxes. But several privately financed services have become available, often driven by com-panies’ need for the best possible treatment for their employees. This includes both heathinsurance and preventive health measures in the workplace. This development favoursthose who have jobs, and especially those with the most resources, who are often also themost valued employees. But increasing the privately financed part of the heath sector doesn’t have to be to thedisadvantage of the less resourceful. Better private health services might result in a similarincrease in the public services for political reasons. 53
  • Proportion of physically active danish women 25 5 % 2 % 1987 1 9 8 7 1994 1 9 9 4 2000 2 0 0 0 20 0 % 2 % 15 5 % 1 % 10 0 % 1 % 55% % 00% % 10 years or less u n d e r 1 0 å r 11–12 years 1 1 -1 2 å r 13–14 years 1 3 -1 4 å r 15+5 years 1 + å r fIguRe 19. percentage of Danish women who are moderately or very psychically active in their spare time, by length of education. Source: National Institute of Public Health, 2005.54
  • income inequality and marginalisationThe percentage of marginalised people in the City of Copenhagen increased from 8percent in 1995 to 10 percent in 2005, even though the unemployment rate fell from 18percent to 6 percent. Among immigrants from Somalia, Lebanon and Syria, the percent-age was close to 50. In homes where parents are from countries outside Europe and NorthAmerica, 25 percent of children have marginalised parents. (See also Trend #3.) Even when there is equal access to health services, the more resourceful may be betterat using this access. Language barriers between Danish staff and patients of other ethnicgroups who don’t speak Danish very well may result in less efficient treatment.other types of polarisationPolarisation is not only about inequality with respect to disease and access to health serv-ices. In some countries like the USA there is a polarisation between established scientifictreatments and various alternative methods of treatment. As more advanced methodslike gene therapy become available, it is possible that a similar polarisation will developbetween those who accept those methods, and those who prefer the old methods. Prolonged illnesses and using prescription drugs 60 % 6 0 % 50 % 5 0 % 40 % 4 0 % prolonged illnesses L a n g v a r i g s y g d o m 30 % 3 0 % Rusing prescription idrugsu e c e p t m e d i c n b r g 20 % 2 0 % 10 % 1 0 % 0 %% 0 under r100 år r u n d e 1 å 11–12åår 1 1 -1 2 r 13 –14 år 1 3 -1 4 å r 15+ år 1 5 + å r fIguRe 20. prolonged illnesses and using prescription drugs, length og education. Source: Na- tional Institute of Public Health, December 2005. 55
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  • trend #6: Uniqueness and mainstreamThe unique, the special, the avant-garde, the different and the individually tailored arein focus. The ideals of the age demand authenticity, originality, uniqueness and per-sonal design. Children and young people are raised to it, and the somewhat older oldercrowd tries to keep up. Personality and character are expected: if you do not manageto “create yourself,” be different and set yourself apart from the “ordinary,” you areout of step with the times. And, ideally, the things we surround ourselves with shouldbe unique – things no one else has. Things that send clear individual signals and tellthe story of a unique and suitably different lifestyle. It is modern that something is dif-ferent and unique. Often characteristics give meaning and value only because of theirdifference. The modern person seeks unique experiences away from the “ordinary.”But when the “ordinary” should also be unique, are we not all just unique ordinaries –pseudo-individualized persons who stage-set themselves within the narrow boundariesof a mass-produced lifestyle?The unique lives side by side the mainstream. They are not mutually exclusive; infact, they require one another. Take a walk down the street. No matter if you are indowntown Copenhagen or downtown Dublin, you pass many of the same shops youwould pass in Stockholm or Amsterdam. McDonald’s, Vero Moda, Woolford and B&O,for example. If you glance at the people you meet, you will see they are all astound-ingly alike. Not that you cannot see differences – some are always more smartlydressed, or more extravagant or more sloppy than others. Still, the differences areslight, especially since our times challenge us to individualism, and many of us pleadthe right to be different and something special. It can be surprising, in these individu-alized times, when the original is in focus, that we do not see more people who makeus turn our heads and think “wild.” Why do most dress in black and jeans? Why dopeople want to live the same places? And why do they stand in line when so manyunique alternatives exist? If you turn right, into a side street, the scene changes. Where once there were emptyshops, kiosks, hairdressers and pubs, now there are potters, delicatessens, avant-gardeclothing shops and goldsmiths. A different and far more exciting world, one that temptswith new things and different variations you have never seen. The “new” old neighbor-hoods bear witness to the trend toward more uniqueness and the individual’s need forthe special. In the “new” neighborhoods, designers sell unique products found nowhereelse -- individually tailored design, or limited collections. Customers of the avant-garde and unique appear almost the same as people on themain street – perhaps a little different, but the difference is not remarkable. They, too,dress in black and jeans. But there is a little twist. It can be hard to spot the special andunique – originals often live in anonymity. A thing that is special, unique and original in 59
  • the right way needs little exposure – the originality alone is often enough. Uniqueness can never be sold in great quantities like mainstream – the budget hardly allows it. Uniqueness on the one side Rarely has there been such focus on unique design, avant-garde and the special, so this is a real trend that must be taken seriously. The many choices and possibilities in our everyday life are affected by the trend, and its obvious influence is seen all over. Large monopolies are ignored in favor of the small and unknown. Our daily life is spiced up with travel to unknown regions and unusual experiences. The bed is designed by architects to match the transparent glass floor and emphasize the house’s location on the water. Mountains are climbed and, since you are there anyway, why not pick truffles for the special Sunday dinner. Portraits shot by professionals hold people in memories of themselves, if an author has not done it in a biography of his own life. Examples speak their clear language, and we know the trend from our own life and dreams. The trend toward the special, unique and personal stage-setting continues, and is strengthened and supported by the other develop- ment trends of our times. This applies both on the personal level and in our relationship to things. To be different in the right way is a competitive advantage in a time when it is al- ways about being in front and being able to do what others cannot. Is your idea better than the others, can your product do something the others cannot, or does your company offer different and attractive values? If so, you are easier to see, and success is a little closer. The unique and special do not necessarily need other positive characteristics. Occasion- ally, there are examples of people, things or, for example, art, the only positive advantage of which is that they are unique and special. Even though the unique and special are in fashion, it is worth remembering that there are very narrow boundaries for being unique or original in the “right” way. The definition of what is unique or original in the “right” way is hard to formulate. Contemporary ideals, the fashion of today and, to some extent, trend- setters and arbiters of taste define the difference between that which can be called unique in the “right” way and that which cannot. If you are unique because you have an odd figure no one has seen the likes of, you are unique in the “wrong” way. But you can be unique in the “right” way by, for example, dressing in old, ragged clothes for the 1970s or traveling to unknown, distant destinations. From the United States, we recently heard the term “quirky.” A Quirky is someone who is original, and who has personal and special characteristics. Quirkies often live alone because they value their originality, unique lifestyle, and want to maintain their authentic- ity and independence. In that way, they stay original. Original here is a positive thing, and at the same time it must be emphasized that living alone does not make one original. The number people who can be called original in the positive sense is hard to calculate, but the term almost defines itself. Not everyone can be original. The boundary between the “ordinary” and the unique is ambiguous, but few are so original and in possession of such unique characteristics that they differentiate themselves from the flock. It can also be hard to see in what unique thing the greater quality lies, because in a time when the unique is modern, there is much that is unique but without quality or other values. The trend toward the unique and special is due to several things: individualization and its accompanying legitimization of the self’s personal and unique realization. You need no longer follow tradition, duty or the others, but do what feels best for you. The modern person has become the director of the film of his own life, and who wants to60
  • see a film that is like every other? To boast of special experiences, running the marathonon the Great Wall, internship in Tokyo, mastering Arabic or a famous girlfriend is worthgold on the CV and gives positive social status. An improved and good economy is another driver behind the uniqueness trend. Wheneveryone can afford to consume, consumption alone brings no status – now somethingspecial must be consumed. It is modern to have your own clothes tailored or buy collectionsamples, of which there is only one. Countless potters, jewelry designers and other artisanslive well on the uniqueness trend. People buy hand blown glass, expensive art vases andpersonally designed cufflinks from these artisans. Designers of unique objects and artisansalso play another important role by helping brand a city or area as something positive,exciting and attractive, precisely because it is something special. The more monuments andshops to uniqueness a city has, the more attractive it becomes – and the more its own. Your education should also qualify you for the personal and special career in a job thatyou want to create, increase the influence of and step in character in. Education and jobalone no longer do it; there must be more. Self-realization, personal freedom, development,special and different challenges, attractive working conditions and “hot” jobs that give sta-tus are what the modern person seeks. Freelancer, consultant and director are popular titleson today’s business cards, in perfect step with today’s independence ideals and the dreamof being something special – something unique. There are many examples of manifestations of the uniqueness trend. Irma, a Danish su-permarket chain, has recently emphasized more high-quality products from niche produc-ers, and this strategy has been a success. There is increasing demand for architect-designedhouses tailored to the demanding buyer. The sale of special brews with special stories andtaste characteristics confirm the trend – as does the number of parents christening theiroffspring with such names as Linus, Papilla or Rosa-Bella. Unique children should haveunique names.mainstream on the other sideThe trend toward more uniqueness speaks clearly. The “ordinary” and doing the same aseveryone else is not in step with the ideals of the times. The modern person wants to beunique, at least a little. But when we all want to be a little unique, the result easily is thatthe unique to a great degree also becomes mainstream and totally “ordinary.” Mainstreamand “the ordinary” live alongside the ideal of the unique. If we analyze the uniqueness trend, we discover that even though it is widespread,it is not necessarily deep, and so is only a pseudo-phenomenon for most people. Mostpeople are, in fact, still totally “ordinary” people who live totally “ordinary” lives, taketotally “ordinary” actions and buy “totally” ordinary things in, for example IKEA or Netto(a discount supermarket – Ed.) – “ordinary” people who have mainstream opinions, raisemainstream children, and eat mainstream food, but who would disavow it to live upto the spirit of the age that prizes the unique. But the disavowal is not sustainable. The“ordinary” still takes up the most of people’s daily life, and the unique is often just a spiceoccasionally tasted in the form of a vacation outing or a picture on a wall. Most still followthe prevalent pattern, get married, have children, buy a house and live a average life withwhite walls and six weeks vacation. Most take part uncritically in the mass market’s latentconsumer culture and stressed daily life, where they must achieve a great deal to live upto the norm. Perhaps the masses have never before put so much energy into living up to 61
  • the norm as they do today. A norm that, let us note, has very narrow borders. However, some still exist for whom being “normal” and “ordinary” is still an ideal – those who are obviously so lopsided and wrong that is a problem for them. This group just wants to be “ordinary” – like everyone else. There are critics of modern society who claim that modern society is far more con- formist and gray than we claim. There are arguments that say that even though the mod- ern society abounds with tolerance, diversity and room for the individual, there are today very narrow norms and clear categories that we should ideally match. Modern society develops more and more standard sizes and normality-terms, and if these are not met, the answer is special measures and other approaches to put people on the right path, which directly counters the idea of more uniqueness and originality. People in the past may have been unique because of their geographic origins, folkloristic characteristics, incom- prehensible dialects, job or social class. Today, the world’s population to a greater degree adjusts to globally standardized norms and lifestyles, so people on some points become more alike. Two random people on the street can be hard to identify – neither nationality nor style make it easy to pick out the global citizens from everyone else. Exactly as a meal at a Chinese restaurant or an hour in a bookstore can seem the same whether you are in Manhattan or in Russia. If we look at people’s possibility to be something special and original, we speak about greater tolerance and diversity, but if tolerance is only the result of indifference it hardly matters. If no one is able to differentiate himself from the crowd in the “wrong” way, and there is no place for the odd, half-crazy and those want to and can do something different, we are not necessarily speaking of greater diversity and originality. If tolerance is only acceptance without inclusion, diversity will undoubtedly be killed over time, since we see it as a basic rule that people want to be a part of the community and are willing to make great adjustments to be included in it. If we speak of odds and ends, there is also a pattern that points toward orthodoxy rather than diversity and mass produced consumer culture. The majority of all consumer goods are mass produced industrial goods that are produced for the whole world and that are consumed by most. Modern people look more and more like residents of the same global tribe. They wear Nike shoes, take their children to Disneyland, buy discount in hy- permarkets and furnish their suburban house with mass-produced furniture, exactly – or almost exactly – like their neighbor. Why does mainstream thrive in the face of individualization, financial surplus, the uniqueness trend and global diversity? There are several explanations. Increased complex- ity is an unavoidable part of the modern society; everything is becoming more complex and less transparent, and so most look for simple solutions so as not to use too much energy on the insignificant. Many of us cannot and will not take a position on everything, and therefore we often choose the first and best solution. A solution that requires no form of involvement, explanation or special engagement – an “ordinary” and recogniz- able solution. Microsoft’s software could be an example of a good standard solution that we choose, not necessarily because it is the best, but because it is easily available, most people use it already, it is easy to get support, and is, in other words, the most “ordinary.” Another example could be the popular suburban tract house. It is close to the larger cit- ies, it is a secure investment, neighbors resemble us, and one is part of the community – where everyone else is. The third example could be McDonald’s, which offers standard-62
  • ized burger concepts, security, recognizability and cheap food. Mainstream products andstandardized solutions make life easier and cheaper. The more people who buy the sameproduct, the more cheaply the product can be produced, and the more customers line upto buy it. At the same time, the purchase of cheap mainstream products offer financialsurplus to buy even more mainstream products or to invest more in unique products. Theneed for social acceptance is also a decisive parameter behind most people’s impulse tochoose the “ordinary” and follow the herd. People exist only if they are recognized andacknowledged by others, and so most do everything in their power to be recognized. If wealready experience a great deal of approval from others, it is perhaps easier to veer a littlefrom the center and behave uniquely than if the approval was lacking. To follow normsand the masses is the safe way to avoid failures or being shunned. If you act like everyone else, it can hardly go completely wrong, and therefore people constantly resemble oneanother and reproduce orthodox lifestyles and attitudes. The “ordinary”/mainstream and the unique live side by side, and the two trends canclearly be seen as a polarization that pulls in both directions. The polarization betweenthe uniqueness and mainstream trends is, however, difficult to map. It is hard to definethe unique in relation to the “ordinary,” a definition that can be discussed and criticizedendlessly. The two trends are manifested, however, together. For most of us, the uniqueis not an integrated part of the daily life, but something we seek as an ideal; for a few, itis an implemented part of their attitudes and lifestyle. What we can call unique is oftenfound among society’s “spiritual elite” – or other original types, those with cultural capital,surplus and many resources. At any rate, unique compared to the “ordinary” – and uniquein relation to the fashion ideals of today. If we look at the general picture of people andlifestyles, the fewest of us for whom unique cuisine, crafted furniture, the improvisedtrack in the Andes, crafts in drawers and closets, and open attitudes for original personali-ties are a part of us. For most of us – the “ordinary” – it is still only in art, films, the stageand literature that original personalities are allowed to be original and be praised for it.Most often, it is only on Saturday and special occasions that “ordinary” people buy home-brewed beer and bread with histories and unique tastes. The fewest of us have hand-paint-ed porcelain service in the cupboard. Even though designers of unique goods fill our cityscapes, and personal design ismodern, few of us give hand-sewn bags and unique newly forged gold hearts as gifts. Themass produced gifts that can be bought in every town are often cheaper and “style-safe;”they are, after all, “ordinary,” and there’s an exchange guarantee. At the end of the day,the uniqueness trend is possibly more popular and modern, but it has not manifested it-self in the broader public yet. The trend toward more uniqueness is today more a fashionideal than a norm for most people, and therefore a trend only at the most superficial levelfor most people. Uniqueness is something many talk about, dream about and sometimesbuy to sweeten the normal daily life, and maybe acquire a bit of prestige, but the mass-produced and “ordinary” is still that fills our everyday life and our shopping carts. Main-stream is a part of most people’s lives – uniqueness more a part of those with resources.But the uniqueness trend will take hold, and has taken good hold in the broader public,especially in the ideal, and therefore there will be more uniqueness in the future. 63
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  • trend #7: luxury and discount consumptionThe market split within retail is thought to be growing. Consumers flock to high-interestareas, where luxury solutions win, and to the discount part of the market, where priceis the decisive parameter. Retail concepts in the middle risk disappearing one by one,unless they decide to move up or down the market. In both mature economies and the new booming economies of Asia, private con-sumption continues to grow. In a country like Denmark, private consumption grewmore than 15% from 1994-2004, measured in volume. Eastern Asia is starting thethird consecutive decade with GNP growth rates of more than 6% a year. The contin-ued growth in private consumption has led to a number of different hypotheses aboutwhere consumption development is headed in the future. Among the most commonhypotheses are:- Emotions – and thereby brands – win on all markets. We buy feelings, experiences and much more.- We stop consuming because we find it difficult to imagine how we could spend more money in extra consumption – “and, anyway, who says we have a better life or are made happier by consumption?” On the other hand, consumers can also surprise – in 1999, the number of DVD-players sold was not even calculated in Demark, and in 2005, about 60% of all families owned one.- We become “good” – political, conscientious, responsible and with a strong focus on quality rather than quantityAll three hypotheses contain a grain of truth. All point to consumers moving up market,putting greater weight on quality and luxury. Therefore, we can here point to one pole inour sketch of consumption in the future: luxury. At the same time that the luxury pole has attracted more and more attention, marketdevelopment has unambiguously pointed to the opposite pole as being just as important.For a lack of a better word, we can call this pole “discount.” The discount pole springs from the simple fact that we live in world of surplus and allpeople have become professional consumers. In this way, much consumption has becomebanal. We have become accustomed to lower prices, greater selection, etc. The trend towardbanality means price becomes the decisive parameter for more and more products. This re-sults in the cutthroat pricing strategies we see from a range of retail’s biggest players – withWal-Mart at the forefront. At the same time, we have seen a range of market shifts within,for example, telecommunication and air travel, where the message to the consumer is: in thefuture, consumption is free (Skype, Southwest Airlines, easyGroup and Ryanair). So we see soft and hard discount making progress, just like parts of e-commercecan be seen as an extension of the trend toward banality. With these trends expected to 65
  • continue, we can already point to one conclusion: there is no product category or product/ brand that cannot be sold through discount e sales channels. If we look at Denmark as a case, we can cite Stockmann Gruppen (a retail analyst)’s survey “Dansk kunder 2005” (Danish customers 2005): the number of discount shops increased from 696 in 1996 to 855 in 2001, and the increase has continued, with 1114 dis- count shops in 2005… There is no doubt that the most important overall trend in the retail market, in this entire period, has been the progress of discount.” A peculiar trait in connection with the discount sector is the prestige-based element that lies in discount – or, rather, the lack of one. One uninvestigated assertion could be that, for many companies who are considering whether to go up or down the market, the discount solution may not be attractive, simply because it is not prestigious enough. This may be one reason many companies cling to their position in the middle of the market. Thus, polarization is already strongly present on the market today. In the rest of the article, we will see how the polarization trend has different consequences for different submarkets. This makes generic conclusions about the future development of the polariza- tion trend difficult to draw. In the same way, it must be presumed that the polarization trend plays out in different ways for different individuals; in other words, what appears as trivial discount consumption for one individual may be of great interest, and thus potentially luxury consumption, for another. A side note: this author made a presentation in autumn 2005, in which he postulated that toilet paper would presumably fall into the low-interest category. That led the managing director of one of Denmark’s largest discount chains to point out that he has known customers to come to blows in the shop over toilet paper. Highly emotional consumption can appear, apparently, anywhere! The development The continued deep market split is most recently illustrated by a global survey taken in 2005 by McKinsey & Company, a management consultancy. The survey looks at 25 differ- ent industries and product categories. As for growth rates in the top, middle, and bottom of the market, the picture looks like figure 21 shown on the opposite page and elaborated on below. The survey covers three main categories of market characteristics: 1. Balanced polarization. Markets where the both the high-end and low-end segments are growing significantly faster than the market as a whole. Examples include beer (Europe), banking (Germany), refrigerators (USA and Europe). 2. Discount. Here, the discount end of the market is growing markedly faster than the whole market and that high end. Examples include notebook PCs (globally), everyday staples (Germany and USA) and air travel (USA). 3. High end/luksus. Here, sales are rapidly increasing for solutions with a high price and a high experience value for the customer. Examples are coffee makers (Germany), digital cameras (globally), MP3 players (globally), razor blades (USA) and toothpaste (USA). In addition, the survey notes there are large difference between geographic markets, and that the speed away from the middle varies greatly. Our main conclusion for the development up to today must be that more and more companies risk finding themselves in market positions that are new to them. Partly be-66
  • nominal growth of products and services122 % 1 % Hhigh-endn i g h e d MMiddle l e i d d low-endn L o w e d100 % 1 % 88 % % 66 % % 44 % % 22 % % 00 % %-22 % - %-44 % - % -6 % fIguRe 21. nominal growth of products and services in tier relative to market average 1999–2004. Com- pound annual growth Rate (percent). Source: McKinsey. -8 % 67
  • cause customers make new and different demands, and partly because the competitive picture is changing so dramatically. Future development As always when evaluating future perspectives, we should think in terms of scenarios. In theory, we could argue for a reduction of the market split in the future. In a world that grows tired of big-box retailers (and thereby reducing price pressure on the market), at a time when globalization is in decline (thus removing purchasing possibilities in east Asia), we could see a resurgence of the middle position. At the same time, such a scenario would presumably lead to a slowing down of the increase in living standards, thus making life difficult for companies in the high-end/luxury part of the market. Whether the scenario described above will come to pass is highly uncertain. A break- down in the global economy is the best guess of a factor that could prompt this scenario – for example, caused by further global instability or imbalances in especially the American economy. However, a realistic evaluation points to the continuation of the market split.The follow- ing trends point for a continuation: 1. Standard of living The improvement of living standards naturally leads to more consumption. It leads to the global middle class growing at the same time that there is significant growth in the number of rich people. The number of HNWIs (High Net Worth Individuals, with over USD 1 million in assets) grew from 7.7 million people in 2003, to 8.3 million in 2004, an increase of 7.3%. At the end of 2004, there were 236,000 Chinese US dollar millionaires. The larger the global middle class becomes, the harder it becomes for the really rich to differentiate themselves. One consequence is that high prices will not be enough to scare off middle class con- sumers. This points to exclusivity as a trend – exclusivity in the form of limited numbers, consumption by “invitation only”, etc. 2. Been-there-done-that syndrome “Been there, done that” means it will become harder to surprise consumers. The amount of me-too solutions is exploding, and we can expect increasingly more consumers to react with a shrug – they have tried it already. One example comes from a bank that invites its young customers to rock concerts. Over time, the bands become “bigger and better” be- cause it takes more to get the young customers out of their seats. But what happens when the bank runs out of bands? After they have invited U2 to play? 3. Über-premium Today, “luxury” comes in so many forms that the term is almost meaningless. Whether we speak of service concepts, designer products, contests or the like, more and more products can be said to have a whiff of luxury about them. We typically see this with loyalty pro- grams and club concepts which are found at every level and of which most offer the same. So the luxury segment is pressed up into an even higher category than before. When all have access to the prestige-giving brands – typically in for the form accessories of one68
  • form or another – the mystique of the brand disappears. The consumers become one. Socompanies must distance themselves from the masstige (mass+prestige) market, and somore extreme or luxurious products are on the drawing boards. Already today, we clearlysee the sings in the form of short production runs – down to one – or extreme offers suchas trip in space).4. Communities as a starting point for high-interest consumptionCommunities on the Internet create the opportunity to become more deeply involved invery special interests. This gives companies the opportunity to create solutions that focusdirectly on creating a high-end experience for chosen groups. Or the opposite: price com-parison for generic products. Here we can expect an internet platform that creates furtherprice transparency for the consumer.5. Sector creepSector creep continues. The large retail chains throw themselves into new categories. Atthe same time, for example, easyGroup is trying to spread the low cost message from sec-tor to sector – most recently with easyCruise. Even though not all attempts are immediatesuccesses, the decisive factor may not be short-term effects but long-term effects. Whensome large customer groups have first grown used to it being natural to talk about fallingprinces, the expectation may spread to all actors on the market. This trend is most appar-ent in air travel on continental routes.6. New technology screens consumers from middle-of-the-road messages from middle-of-the-road companiesNew technology. The Internet in itself can pull markets toward the discount pole – justlook at retail banking. Over time, we can expect even more price transparency -- if acategory is accepted as a discount category, you risk that the consumers you want to reachwill partly have screened themselves against communication from categories/companiesthat do not interest them, and partly, in the end, have left a great deal of the buying deci-sion to the technology. Image a piece of software that continuously checks all insurancecompanies, with the aim of finding the cheapest household insurance for you – and whichin the end, moves your insurance around without your lifting a finger.7. GlobalizationContinued globalization points in the direction of continued negative price pressure. Here,however, we need scenarios for the individual submarkets --- the degree of free trade onthe individual submarket cannot be forecast.consequences: 2016Notwithstanding that we can argue for the use of scenarios, we think many markets arecharacterized by the polarization trend already. As noted above, we can argue that custom-ers are in interested in the differences and that in addition is supported by many trends. 69
  • For brand owners, it means: 1. You must be realistic with respect to your market position. If you hold a middle position, you should create scenarios for the three paths of the market split: 1. Flight to discount. 2. Flight to high-involvement/luxury/über premium. 3. The split, in which the market divides. Scenario 1 will often be the hardest – but maybe often the most realistic. 2. Consider your position in relation to retailers. Private labels are winning ground – at both ends of the market. 3. Put yourself in your customer’s place. Would you be excited and want to get involved if you received your company’s marketing communication? 4. Take brand-value measurements seriously. If you stagnate today, you may die tomorrow. 5. Stop believing you can cover both poles of the market. Toyota can. H&M can. But the list is short. For retailers, it means: 1. Continued sector creep. There is no product that cannot be made into a high-interest product, and there is no product category that cannot be sold through a hardcore dis- counter. 2. If you trumpet your professionalism as a counterweight to discount sellers, think again. If you meet customers in the shop who know more about the product than you do, you have problems. 3. Consider how you could create a high-interest environment in your world. What is your microbrewery? What is your Build-a-Bear, etc? Consider whether high-interest environments can, over the long term, be created in the existing big-box stores, malls, etc. For customers, it means just one thing: 1. Lean back and enjoy – because it is you who decides!70
  • sources http://www.gallup.dk/test/kompas_segmenter.asp florida, l Richard (2005). Den Kreative Klasse, klim 2005 Instituttet for l fremtidsforskning (2004). Creative Man, gyldendal 2004 www. l arbejdsmiljoviden.dk Trend #1: Urban and rural andersen, hans thor (2002). Globalisation, spatial polarization Noter: and the housing market, geografisk tidsskrift/Danish Journal CBS-undersøgelse: kristina vaarst andersen & Mark lorenzen: The of geography, 102: 93-102 andersen, Jørgen goul (2003). l Geography of the Danish Creative Class, Copenhagen business Over-Danmark og Under-Danmark?, aarhus uni-forlag l School 2005, www.kreativeklasse.dk/uploads/media/Rapport.pdf. arbejderbevægelsens erhvervsråd (2005). Regionale forskelle i Kulturvaneundersøgelse: trine bille, torben fridberg, Svend forskningsindsatsen arbejderbevægelsens erhvervsråd (2006). 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Trend #6: Uniqueness and mainstream bauman, Zygmunt (2002): Fællesskab. københavn, hans Reitzels Trend #2: metropolitan polarisation forlag Community (2001) polity press oxford brinkmann, Svend l l DSt (2006). http://www.dst.dk/ glavind, niels (2004). l m. fl. (2006): Selvrealisering. forlaget klim, Randers giddens, l Skolekarakterer og social baggrund. ugebrevet a4, anthony (1996): Modernitetens Konsekvenser. københavn, hans arbejderbevægelsens erhvervsråd. http://www.ae-dk.dk/. 25 Reitzels forlag, The Consequences of Modernity (1990) polity februar 2006 olsen, lars (2005). Det delte Danmark. københavn: l press, Cambridge. Modernitet og selvidentitet (1996). københavn, gyldendal ploug, niels (2005). Social arv – Sammenfatning l hans Reitzels forlag Jensen, henrik: (1998) Ofrets Århundrede. l 2005. Socialforskningsinstituttet. http://www.sfi.dk/sw28981. Samleren, københavn. asp. 20 februar 2006 Skolverket (2006). Statistik. http://www. l skolverket.se/sb/d/175/a/1374. 23 februari 2006 Skolverket l (2005). Om skolors olikheter och deras betydelse för elevernas Trend #7: luxury and discount consumption studieresultat. Rapport 273. http://www.skolverket.se/. 23 februar knudsen, Randel & Rugholm (2005). The vanishing Middle Market, 2006 Skolverket (2005a). Elever med utländsk bakgrund – En l Mckinsey quarterly 2005 no 4 Stockmann gruppen (2005). l sammanfattande bild. http://www.skolverket.se/. 21 februar 2006 l Danske kunder 2005 Mckinsey-undersøgelse: hele undersøgelsen l undervisningsministeriet (2006). Undervisningsministeriets statistik- findes på Mckinsey quarterlys hjemmeside: http://www.mckinsey- databaser. http://www.uddannelsesstatistik.dk. 20 februar 2006. quarterly.com. Trend #3: ethnic polarisation PolariseringsTrender, bruttoliste australian law Reform Commission Social Justice library (1985). 1 offentligt forsørget vs. selvforsørgende The Recognition of Aboriginal Customary Laws Summary Report l 2 Socialt mobile vs. ikke-socialt mobile bradney, anthony (2002). Legal Aspects of Islamic Integration in 3 Rig vs. fattig, mobile vs. stedbundne, globale vs. lokale Europe. paper submitted to the symposia on the Integration of 4 lavt- vs. højtuddannet Muslim Migrants in europe (noCRIMe), la Sorbonne, february 3, 5 Resourcestærke familier vs. ressourcesvage familier 2002 Danmarks Statistik hunter, Shireen t (ed) (2002). European l l 6 Creative Man (CM) vs. ikke-CM Islam: A profile: “Islam in Europe and in the United States, A 7 Ressourcestærke kvarterer vs. ressourcesvage kvarterer Comparative Perspective”. Center for Strategic and International 8 online vs. offline Studies, washington DC landman, nico (2001). Dutch respon- l 9 Sunde vs. usunde, fed vs. slank, (køn vs. grim) ses to Muslim religious practices. utrecht uni, presentation for the 10 unika vs. mainstream fachtagung der katholische akademie / friedrich-ebert-Stiftung l 11 nationale vs. udlændinge og efterkommere Ministeriet for flygtninge, indvandrere og integration (2005). Årbog 12 boligejer vs. boliglejer om udlændinge i Danmark 2004 – Status og udvikling Rockwoll l 13 aktive vs. passive fondens forskningsenhed (2002). Indvandrerne og arbejds- 14 Magt vs. ikke-magt markedet. Mødet med den danske velfærdsstat. Spektrum. l 15 luksus vs. discount velfærdskommissionen (2005). Analyserapport. 16 afrika vs. resten af verden 17 kristendom vs. islam, folklore vs. multikulturelt 18 for meget tid vs. for lidt tid, stress vs. ikke-stress, on vs. off Trend #4: The creative and the non-creative 19 Middellevetid tjenere vs. andre andersen, kristina vaarst & lorenzen, Mark (2005). The Geography 20 globalisering vs. antiglobalisering, uSa vs. anti-uSa of the Danish Creative Class, Copenhagen business School 2005 l 21 ondt i livet vs. magt over livet bille, trine; fridberg, torben; Storgaard, Svend og wulff, erik (2005). 22 natur vs. teknik Danskernes kultur- og fritidsaktiviteter 2004, akf forlaget l 23 ghetto/parallel-samfund en beskrivelse af gallups kompassegmenter kan læses på 24 politiske polariseringer/værdikamp72