David Smith - CiM Dinner July 2009


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David Smith - CiM Dinner July 2009

  1. 1. Radio, Airplanes & X-Rays "Radio has no future. Heavier-than-air flying machines are impossible. X-rays will prove to be a hoax." William Thomson, Lord Kelvin, British scientist, 1899 David Smith mathematician and physicist Chief executive 1824-1907 Global Futures and Foresight "There is nothing new to be discovered in physics now” Global Futures Global Futures © Global Futures and Foresight 2009 & Foresight & Foresight Flying machines Radio with pictures "There will never be a • TV will never be a bigger plane built." serious competitor for radio because people A Boeing engineer, after the first flight of the 247, a twin engine must sit and keep their plane that holds ten people. eyes glued on a screen; the average family A380 hasn't time for it. New York Times, 1939 1,000 seats Global Futures Global Futures http://images.scripting.com/archiveScriptingCom/2005/01/18/380.jpg & Foresight & Foresight Turning the world upside down The Present 1872 2002 Global Futures Global Futures & Foresight & Foresight
  2. 2. 1/2 Trust FTSE 100 (12 months) Do you tend to trust people ? • Trust in UK government rose to 41% in 2008. • Most trusted sectors 75% 75% – Technology (76%), – Biotech(66%) – Healthcare (65%) • Least trusted sectors 50% 50% – Banks (45%) – Media(42%) 66% – Insurance (40%) • Creating Jobs and Socially responsible 25% 25% activities are the top factor for building trust in 44% business 29% • Global warming (77%) is the most important issue for companies to address. • Credibility of ‘a person like yourself’ is 1950’s 1980’s 2000’s influenced by – shared interests (61%) What are you doing to build and reinforce trust? January 2009 According to the ninth annual Edelman Trust barometer, Global Futures Global Futures Source: New Global Survey shows trust levels at a low & Foresight & Foresight http://www.edelman.co.uk/insights/trust/Edelman%20Trust%20Barometer%20Release.pdf The “V or W” Global Futures Global Futures & Foresight & Foresight Recessionary strategies The mother of invention • Market Share • Mergers and Acquisitions • Cost reduction • Efficiencies • Agility • Innovation • New Products & Services • New distribution • New business models • New participants http://news.icm.ac.uk/wp-content/uploads/image/552-1215523032.jpg Global Futures Global Futures & Foresight & Foresight
  3. 3. “Be fearful when others are greedy, and be greedy when others are fearful.“ Warren Buffett The Future Global Futures mycpf.cpf.gov.sg Global Futures & Foresight & Foresight Winning Strategies Winning Strategies “The winners will be the companies who “It's really hard to design products by focus knew how to identify opportunities in the groups. A lot of times, people don't know downturn.” what they want until you show it to them.” Jim Davis, chief marketing officer, SAS Steve Jobs, Co-Founder, Chairman & CEO, Apple 1930 1932 1933 Global Futures Global Futures & Foresight & Foresight Winning Strategies Winning Strategies “We don’t ask consumers what they want. “Great work comes from insight. Insights are They don’t know. Instead we apply our going to come in so many different ways.” brain power to what they need, and will Laura Lang, CEO, Digitas USA, March 2008 want, then make sure we’re there, ready.” Akio Morita, Co-Founder, Sony Corporation Global Futures Global Futures & Foresight & Foresight
  4. 4. Global Trends 1. Global instability 13. Declining trust In 1977, the year that Elvis 2. Volatile worldwide 14. Cult of celebrity economy 15. Individualization died, there were 150 3. Globalisation 2.0 16. Age of brands impersonators in the USA. 4. Global warming 5. Energy, water and talent 17. Social applications Now there are 85,000. 18. Technological shortages convergence 6. Bio continues to grow If the same rate of growth 7. Aging societies 19. Video everywhere 8. Unretirement 20. VOip & ipTV continues, Elvis impersonators 9. Work-life blend 21. Nano technology will account for a third of the 10. Feminization 22. Digital 24/7 lifestyles 11. Wealth, health and 23. Cashless society world's population by 2019. happiness 24. Mobility & convenience 12. Urbanization 25. Rise of the robots Global Futures Global Futures & Foresight http://www.management-issues.com/2006/5/25/opinion/the-future-of-work-its-life-jim-but-not-as-we-know-it.asp & Foresight New World Order Risk 0 10 5 Global Futures Global Futures & Foresight & Foresight e a tiv Structural change re l Changing influence ‘If one big structural change comes out of the crisis, it will be a shift in ownership of the banking industry from west to east.’ David Lascelles, A former banking editor of the Financial Times http://www.economist.com/finance/displayStory.cfm?source=hptextfeature&story_id=12274054 http:/ /images .google .c o.uk /imgres ?imgurl=ht tp:/ /s tatic . flic k r.c om/50/109139708_79b5b5d6eb. jpg&i mgrefurl=http :// thiv er.wordpres s .c om/2006/03/07/c hina-will-probably -be-bigges t-world-ec onomy-before-2015/&us g=__5Qq92q9y v fqIgk OS6BpC8s Vnrv g=&h=366&w=500&s z =57&h l=en&s tart=29 &um=1 &tbnid= IMv f Se7AF F0EH M: &tbnh=95 &tbnw=130&prev =/i mages %3Fq %3Dthe %2Bworlds %2B larges t%2Bec onom ies %2 Bc hart%26s tart% 3D20%26nds p%3D20%26u m%3D1 %26hl %3Den%26s a %3DN http://www.ft.com/cms/s/0/ea450788-1573-11de-b9a9-0000779fd2ac.html Global Futures Global Futures http://www.businessday.co.za/articles/topstories.aspx?ID=BD4A844188 & Foresight & Foresight
  5. 5. Economic Growth – Next 10 Years Global population growth 1.75bn of next 2.5bn will be born in Muslim countries • BRIC economies: – deliver 40% global growth by 2018. – 30% global GDP - China makes up 18%.(1) "We now conceive of China 2009 challenging the U.S. for number 6.8 billion one slot by 2027. This is around 10 years earlier than when we first looked at the issue.“ Goldman Sachs economist who coined the BRIC concept told Reuters on June 9th 2009 The global population is expected to rise from 6.5bn in 2005 to 7.7bn in 2020 and 9.6bn in 2050 Global Futures Global Futures & Foresight www.watchblog.com Source: Population Research Bureau www.prb.org & Foresight (1) Ernst & Young in December 2008 forecast/ Goldman Sachs June 9th 2009 forecast Changing influence Changing ethnicity Global Futures www.brusselsjournal.com Global Futures Source: United Nations Population Division, & Foresight & Foresight The world Depletion of resources Unabated climate change could cost the world 5% of GDP/year; if more dramatic predictions come to pass, the cost could be more than 20% of GDP. • Tensions over water heightened by 2015, in Middle East, Sub-Saharan Africa, South Asia and Northern China • India uses up/pollutes groundwater by 2020 • Bio-fuels compete with food for land/water. One year of food or a tank of SUV fuel. • 2oC temperature increase means a 12% to 20% fall in global food production by 2100. • By 2050 we will be 9.6bn but eat like 13bn. • Global agriculture output must double in the next 30 years to sustain population growth. World Bank estimates Global Futures Global Futures & Foresight According to Stanford University and Lawrence Livermore National Laboratory researchers & Foresight
  6. 6. Future CSR directions Climate change & staying in business Rising sea levels, increasing droughts and famine, and a decrease in water availability will have dramatic impacts “Companies that are not • By 2030 - global energy demand grows by 55%. adequately managing the • By 2025 - extreme water scarcity impacts 25% of world population. consequences of climate • The scramble for resources will be a major cause of conflict. change on their business • The solution is to be more efficient and promote sustainability. will not be welcomed as our customers in the future” Rick Murray • CSR-led initiatives can: Chief Claims Strategist – Offset rising prices Swiss Re – Provide a competitive advantage – Act as a major tool for the aversion of social crisis. • Do we know the environmental footprint of our activities? • Sustainability & efficiency save cost & increase the company’s value. • Have we assessed the cost advantages of reducing our footprint on the environment? • How close are we to achieving carbon neutral, waste neutral and energy neutral status? Global Futures Global Futures & Foresight Image sources www.mondolithic.com, www.metoffice.com & Foresight http://csr-news.net/main/2008/08/04/megatrends-and-the-future-of-corporate-social-responsibility/ New People Ageing populations Since 1840, the highest average life expectancy has improved by a quarter of a year every year. • Those born in the – 1950’s expect to live to beyond 90 – 1960’s onwards to live beyond 100 • Record 9,000 100 years olds in 2007 • Rising to 40,000 by 2031. • 1.2 million by 2075* UK 79 in 2009 (Total Pop’n) 100 in 2090 110 in 2130 Global Futures Global Futures & Foresight * Office of National Statistics & Foresight and what do older people want ? And we’re living longer lives Dr. Aubrey de Grey of Cambridge • Larger Print University believes that human life expectancies have the potential to • Brighter lights reach 500, or possibly even 1000. • Seating • Parking “The first person to live • Toilets to 1,000 might be 60 • Time already” B.A., M.A. and Ph.D., University of Cambridge, Etc. Cambridge, UK. Global Futures Global Futures & Foresight & Foresight
  7. 7. Obesity Too few kids 35 30 25 20 Men 15 Women 10 5 0 1993 2003 2005 2010 By 2015, approximately 2.3 billion adults will be overweight and more than 700 million will be obese. (The World Health Organisation) Children per woman worldwide Average children per woman in UK now 1.9 highest since 1980 Global Futures Global Futures & Foresight & Foresight Up or down the workers? Upturn Consumer • Aged 15 – 59 by 2050 – India will experience growth – Down 5% - Turkey, Brazil, Mexico, Indonesia – Down 5% to 10% - USA, UK and Australia – Down 15% - China United Nations Global Futures Global Futures & Foresight & Foresight Impact Consumers But which attitudes? • Social attitudes will be shaken: – The deeper the recession Three plausible future scenarios – The longer the recession • A long, deep recession could alter the attitudes of society 1. Goods, Greed and Glamour irrevocably... 2. Modesty and Austerity 3. New Status ...or at least a segment of society Global Futures Global Futures http://www.sxc.hu/browse.phtml?f=download&id=834091 & Foresight & Foresight
  8. 8. Goods, Greed and Glamour Modesty and Austerity • Saving now a habit; deleveraging personal finances • The recession is a pause in the journey to a more seen as virtuous. consumerist society. • Greed resurfaces as soon as the market recovers. • Penny pinching seen as the clever game. • Once price-watching gets boring, people spend again. • Savvy consumers trade down, use comparison and • Government stimulation packages signal spending is voucher websites. good and patriotic. • Back to basics, eg. Fashion is 'body covering‘, food for calories. Global Futures Global Futures & Foresight & Foresight New Status Indicative Projections • Emphasis on ethics - honesty, hard work, social 80 responsibility, ecology. 70 • New status spending non material areas: arts and 60 culture, self education, health, beauty and spirituality; 50 • The focus is towards 'spending on what money can't Greed buy' – a paradox! % population anticipated 40 Austerity • People have got money again & want to spend. 30 New status 20 10 0 Shor t, shallow Short, deep Long, deep Global Futures Global Futures & Foresight & Foresight New Business Models Premise underlying re-invention • Reconfigured relationships. • Mash-up business models. • Consumer increasingly powerful. • Innovation is a key differentiator. • Convenience & Quality expected. http://media.economist.com/images/20050402/1405LD1.jpg Global Futures Global Futures & Foresight & Foresight
  9. 9. 3/4 Change Disintermediation Change • Music Change • – itunes – Individual songs/not albums Travel Agency – Trip Adviser – book hotels/not packages – Easyjet – book flights/not packages • Lending/borrowing money – Zopa – direct to lender/cut out banks • Real Estate – Findaproperty, Tesco Estate Agency Change Part of the rise in people taking control and not relying on others. Change Change Global Futures & Foresight Global Futures & Foresight Doing Business Networks Social Networks Trust & Social Networking • Global relationships • 7% increase in positive word of • Learning mouth unlocks 1% additional company growth (London School of Economics (LSE)) • Sourcing ideas • Co-creation • 2% reduction in negative word of mouth boosts sales by 1%. (LSE Figures) • Recruitment • Building relationships • Community engagement • Networked business models Over 1.5 billion people in top 40 Social Networks http://www.dreamsystemsmedia.com/imgs/social-media-marketing.png Global Futures http://www.bazaarvoice.com/industryStats.html Global Futures Source: The GFF Pulse expert panel survey & Foresight & Foresight Innovation Networks In a crowded 24/7 world • You can’t know it all or have all the best ideas • Context • Ford spent $8bn on R&D in 2005 and lost $17bn in 2006 • Community • Conversation • Learn to connect - Proctor & Gamble did • Relevance – For every P&G researcher 200 more existed outside. – Built an external development network of 3m – Launch time halved and innovation rate up 75% Global Futures Global Futures & Foresight Gerd Leonard – Media Futurist & Foresight
  10. 10. Technology Global Futures Global Futures Gerd Leonard – Media Futurist & Foresight & Foresight Technology - What will it be doing Nanotechnology Breakthroughs – Connection Nanotechnology Breakthroughs • Nanotechnology — the manipulation of materials and machines at the nano- – Image scale — one billionth of a meter — promises exciting new developments. – Video everywhere – Voice recognition Two to five years from now: – Robotics • Complete medical diagnostics on a single computer chip. – Cognitive recognition Five to 10 years – Health diagnostics • Drugs that turn AIDS & cancer into manageable conditions. – Nano ‘surgery’ – Virtual reality 10 to 15 years – Simulation • Artificial intelligence so sophisticated you can't tell if you're – Tracking talking on the phone with a human or a machine. – Surveillance – Security Highest Growth over the next 5 years : – Vehicle control – electronics (30.3%) – Personalisation – biomedical (56.2%) – Integration – consumer applications(45.9%) – Outside Technology Global Futures http://www.wfs.org/tomorrow/index.htm Global Futures & Foresight & Foresight Internet traffic The Grid • Internet could soon be obsolete. • Annual growth of 50% - 60%. • The Grid is 10,000 times faster • IP traffic in 2012 will be 100 than a typical broadband times larger than 2002. connection. • Mobile data traffic will double each year from 2008 to 2012. http://www.grid.phys.uvic.ca/assets/sun_figures/Grid-2.jpg Andrew Odlyzko - Cisco “With this kind of computing power, future generations will have the ability to collaborate and communicate in ways older people like me cannot even imagine” http://www.cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ns827/images/white_paper_c11-481374-03.jpg David Britton, professor of physics at Glasgow University Global Futures Global Futures http://gigaom.com/2008/06/16/big-growth-for-internet-to-continue-cisco-predicts/ & Foresight & Foresight
  11. 11. 5 Telepresencing Virtual World Networks The social networking application market: $ 46.8 million in 2006 Global Futures Global Futures & Foresight $428.3 million by 2009 & Foresight 10 Artificial Intelligence New communication channels • Artificial Intelligence’s - we will Actroid 1 Interactive billboard interact with them just like humans. • e-technology will have advanced to the point where there are fewer human interactions with a more strategic focus and broader capabilities • Face recognition that identifies emotional changes. 24 hours a day, 7 days a week online and available 24 x 7 x 36 availability Global Futures All around the world at the same time Global Futures Source: http://www.supplymanagement.co.uk/EDIT/Featured_articles_item.asp?id=16394 & Foresight & Foresight Summary 1. Attitude to risk 2. Drivers of change 3. Strategic Capability 4. Product/Service Innovation “If things seem under control, you’re just not going fast enough.” Mario Andretti Global Futures Global Futures & Foresight & Foresight
  12. 12. • Agree the top three drivers that could impact you most? Imagine it • Who would you extend your EXTERNAL network to, to generate ideas for innovation? If you want to get ahead – you need to look ahead • What’s your attitude to risk .and those around you? Thank you • Discuss what EXTERNAL stimuli you david.smith@thegff.com +44 7932 408901 engage with at the start of your strategic www.thegff.com planning cycle? Global Futures Global Futures & Foresight & Foresight