Downloaded 544 times
![159
Nature’s capital
Numerous studies have evidenced
the benefits of nature to our
psychological, physiological and
cognitive, social, aesthetic and
spiritual wellbeing.
In the Anthropocene, humankind is presiding over the Earth’s sixth
major extinction. But as biodiversity declines, nature becomes
increasingly valued and valuable.
We live in the Anthropocene, the proposed epoch
that begins when human activities started to have
a significant global impact on Earth’s geology and
ecosystems. We also live in what many scientists
are calling the Earth’s sixth mass extinction event, a
period defined as a loss of 75% of species. Recent
studies suggest that the rate of extinction for species
in the 20th Century was up to 100 times higher
than it would have been without man’s impact.
According to analysis for Nature a staggering 41%
of all amphibians on the planet now face extinction
while 26% of mammal species and 13% of birds are
similarly threatened. Put simply, as humans degrade
and destroy habitats, so the species that live in them
die. Or as Stanford ecologist Paul Ehrlich put it: “In
pushing other species to extinction, humanity is busy
sawing off the limb on which it perches.”
Following the 2014 Global Biodiversity Outlook 4,
the UN stated that “The global decline of biodiversity
continues, as actions have not been taken on a
sufficient scale and the underlying drivers of loss have
not been addressed significantly” – and that “in most
cases this progress will not be sufficient to achieve
the [Aichi] targets set for 2020”. The UN made it clear
that “drivers linked to agriculture account for 70 per
cent of the projected loss of terrestrial biodiversity”
and that as a result “addressing trends in food
systems is therefore crucial in determining whether
the Strategic Plan for Biodiversity 2011–2020 will
succeed. Solutions for achieving sustainable farming
and food systems include sustainable productivity
increases by restoring ecosystem services in
agricultural landscapes, reducing waste and losses in
supply chains, and addressing shifts in consumption
patterns.”
As a result, the UN’s Sustainable Development Goals
adopted in September 2015 include two specific
goals related to protecting and enhancing global
ecosystems: Goal 15, to protect, restore and promote
sustainable use of terrestrial ecosystems, sustainably
manage forests, combat desertification, and halt and
reverse land degradation and halt biodiversity loss;
and, Goal 14, to conserve and sustainably use the
oceans, seas and marine resources for sustainable
development. These Goals, alongside Goal 13 (Take
urgent action to combat climate change) and Goal
12 (Ensure sustainable consumption and production)
reflect our understanding of the damage we have
caused to our shared natural environment and the
response that is now required.
The case for preserving and enhancing nature’s
biodiversity can be made along three dimensions.
First the moral obligation, that we should protect
nature for its own sake. Why do we have the right
to destroy it? Second, the social benefits to health
and wellbeing that nature provides. Numerous
studies have evidenced the benefits of nature to
our psychological, physiological and cognitive,
social, aesthetic and spiritual wellbeing. Third,
and seemingly increasing in importance in our
capitalist world, the economic benefits - the so
called “eco-system services” provided by nature.](https://image.slidesharecdn.com/theworldin2025finalsinglepages-160408084613/75/The-World-in-2025-Future-Agenda-2016-159-2048.jpg)
![258
thoughts and actions.” The company is now at the
forefront of developing re-usable holocracy apps
for specific processes (e.g. hiring, remuneration).
Hsieh says “Hopefully, there are other companies
out there that can borrow or modify our apps and
then over time, there can be a whole ecosystem of
companies that are thinking about, ‘How can we
move beyond the traditional command and control
type of structure?”
Critical to the new breed of networked organisations
is a changing role for leaders. “In a connected age we
need to instil passion and purpose around a shared
mission. The networking, if encouraged and not
inhibited, will take care of itself.” Deborah Anconda,
Professor of Management and Organisational studies
at MIT, suggests that what is needed in today’s
workplace is collaborative or distributed leadership.
Leaders must increase transparency, teach people
to think with a strategic mind-set and ensure lots of
‘connectors’ are in place.
At the same time as organisations and the role of
leadersischanging,sotooisthenatureofemployment
and the employer. Since the millennium, there
has been sustained growth in freelancers through
organisations including Uber, Lyft, Task Rabbit and
Elance. According to a study by Edelman Berland,
34% of America’s workforce is already working
freelance, with forecasts suggesting that number
will rise to over 40% of the workforce by 2020 and
over 50% by the mid-2020s. So organisations and
managers in the future will need to better understand
how to recruit, manage and reward workers who are
not defined by the traditional employee model. The
same will also be true of governments.
For those that do remain employed, the millennial
generation is shaking up workplace rules. Typically,
they aren’t motivated by the same factors as previous
generations, such as a job for life, but instead value
a good work-life balance and a sense of purpose
beyond financial success. In response, organisations
seek to create relaxed office environments where
staff feel as comfortable there as they do at home.
As co-founder of Airbnb Nathan Blecharczyk, says
“We’re constantly trying to remind our employees of
what business we are in, in creating an environment
where they can be totally comfortable and where
they actually want to hang out after work”. They are
also providing more opportunities for workers to take
sabbaticals. As leadership coach Barbara Pagano
explains “Time is the new currency [of work] …
people don’t want to work for 40 years—and then
retire … They don’t want to wait that long to pursue
their goals ...”. Adjacent to this, and as the world
becomes smaller and a generation of global itinerant
networked workers comes of age, more executives
are consciously seeking to blend business and
leisure, “bleisure”, choosing to work away, to take
longer breaks or even job share and job switch.
Changing business
The millennial generation is shaking
up workplace rules.](https://image.slidesharecdn.com/theworldin2025finalsinglepages-160408084613/75/The-World-in-2025-Future-Agenda-2016-258-2048.jpg)
Uploaded byFuture Agenda
The World in 2025 - Future Agenda (2016)
The Future Agenda document outlines the challenges and opportunities facing the world by 2025, emphasizing the interconnectedness of global systems and the rapid pace of technological change. It highlights key trends, such as imbalanced population growth, resource constraints, and the rise of data as a critical asset, while underscoring the importance of collaboration across diverse sectors. The insights garnered from the Future Agenda program aim to help organizations shape strategies to address these challenges and innovate for future needs.
More Related Content
Similar to The World in 2025 - Future Agenda (2016)
The World in 2025 - Future Agenda (2016)
- 1.
- 3.
- 4. © Future Agenda2016 ISBN 978-0-9932554-2-7 All images © istockimages.com First published in 2016 by Future Agenda Limited 84 Brook Street London W1K 5EH
- 5. Future Agenda The Worldin 2025
- 6. 6 Context 9 Certainties 13 Everythingconnected 15 Imbalanced population growth 19 Resource constraints 23 Shifting power and influence 27 Interconnected systems 31 Affordable healthcare 33 Air quality 37 Autonomous transport 41 Deeper collaboration 45 Energy storage 49 Food waste 53 Intra city collaboration 57 Open supply webs 61 Urban obesity 65 Data revolution 69 Changing nature of privacy 71 Data ownership 75 Enhanced performance 79 Ethical machines 83 Privacy regulation 87 The increasing value of data 91 Truth and illusion 95 Contents
- 7. Unequal access 99 Access totransport 101 Capitalism challenged 105 Caring for those left behind 109 Education revolution 113 Mass engagement 117 Off grid 121 Rising youth unemployment 125 Shrinking middle 129 Our habitat 133 Accelerated displacement 135 Basic sanitation 139 Built-in flexibility 143 Citizen-centric cities 147 Flooded cities 151 Infrastructure deficit 155 Nature’s capital 159 Plastic oceans 163 Sometimes nomads 167 Beliefs and belongings 171 Agelessness 173 Care in the community 177 Female choice dilemma 181 Human touch 185 Keeping the faith 189 Working longer 193 Power and influence 197 Africa growth 199 Companies with purpose 203 Declining government influence 207 Eco civilisation 211 Rise of nimby 215 Standards driving trade 219 Still being stupid 223 The rise of the cult of China 227 Changing business 231 Creative economy 233 Currencies of meaning 237 Digital money 241 Dynamic pricing 245 Full cost 249 Optimising the last mile 253 Organisation 3.0 257 Skills concentration 261 Speed to scale 265 The real sharing economy 269 Conclusion 273 The Future Agenda team 281 Hosts/Partners 287 Future Agenda 2020 289 Further reading 291 Copyright and creative commons 323
- 8.
- 9. 9 Context Taking the longview has never been easy. Rapid technological advances, shifting political movements, changing economic dynamics and accelerating societal change are seldom far from the news headlines and many of us struggle to understand their implications on day-to-day life. Taking the long view has never been easy. Rapid technological advances, shifting political movements, changing economic dynamics and accelerating societal change are seldom far from the news headlines and many of us struggle to understand their implications on day-to-day life. Indeed, such are the challenges that it seems clear that the major issues facing our planet are of such a magnitude that no single institution or organisation can truly understand their impact alone. As change accelerates in an increasingly connected world, more companies are looking further ahead to better understand emerging opportunities and challenges. We believe that sharing knowledge across disciplines and across continents can add real value to this process, particularly as much-needed innovation often occurs at the intersection of different disciplines, industries or challenges. This is what the Future Agenda programme strives to achieve. Our aim is to make it easier for all organisations, large or small, to shape a strategy that will help them to address the major challenges we face and identify ways in which systems could function, consumers behave and governments regulate over the next decade. The first Future Agenda programme ran in 2010. Building on expert perspectives that addressed everything from the future of health to the future of money, over 1500 organizations debated the big issues and emerging challenges for the next decade. Sponsored globally by Vodafone Group, the programme looked out ten years to the world in 2020 and connected CEOs and mayors with academics and students across 25 countries. Additional online interaction connected over 50,000 people from more than 145 countries who added their views to the mix. The results, which were published both online and in print, have been widely shared and have been used around the world by individuals and organizations. TV programmes, talks, workshops and additional discussions have followed as people have explored the potential implications and opportunities in their sector or market. World Now World Future Current Focus Future Focus
- 10. 10 Future Agenda’s successstimulated several organisations to ask that it should be repeated. Therefore the second programme, Future Agenda 2.0, ran throughout 2015 looking at key changes in the world by 2025. Following a broadly similar approach, it added extra features, such as providing more workshops in more countries to gain an even wider input and enable regional differences to be debated. All in all 25 topics were explored in 120 workshops hosted by 50 different organisations across 45 locations on five continents. There was a specific additional focus on the next generation, so we including collaboration with schools, universities and other educational organizations. A more refined use of social networks to share insights and earlier link-ups with global media organizations ensured wider engagement on the pivotal topics. In addition, rather than having a single global sponsor, this time multiple hosts supported workshops on specific topics either globally or in their regions of interest. This book outlines the insights we gained rom all the conversations. We have already witnessed a number of opportunities for positive change. These include suggestions about how to tackle some of the challenges around climate change, sustainable health and food supply for example; ideas about how to use policy to best influence our right to a private life. Our material has also acted as a stimulus for the development of new products, services and business models. We are delighted and humbled that so many people have given freely of their time and intellect to help ensure that Future Agenda has become a reality. Run as a not for profit project with the core team all donating their time, it continues to be a major collaboration involving many leading, forward- thinking organisations around the world. We hope you find the insights useful and thank you for your interest.
- 11. 11 To do thiswe invited recognised experts in each topic from across the academic, commercial and government arenas to answer a number of common questions on the future. These were then edited into initial perspectives and put into a standard format to ease navigation and to ensure a common structure. Each was each grouped into four sections – namely the global challenges, options and possibilities, the way forward, and impacts and implications. We then initiated a nine-month programme of face- to-face workshops across the world in order to build on the initial perspectives. Some of these were within single organisations but many brought together different expertise from multiple different avenues. Some took place in corporate conference facilities, some in hotels and restaurants – whatever worked best. In locations around the world, including London, New York, Singapore, Sydney, Shanghai, Frankfurt, Beirut, Dubai, Mumbai, Lima and Mendoza informed people from many cultures, of varied ages and with many different perspectives shared their views. After the workshops, the Future Agenda core team took the output from all the workshops and identified the major insights that we believe will drive change. These are issues that were raised in several discussions – either across different countries or across different topics. As part of the overall synthesis, they have now been have been broadened into 1000 word summaries and published both online and in-print form. As with the insights gained from the first Future Agenda programme, organisations around the world are already using the new views to variously challenge assumptions, refine strategic directions and identify emerging innovation and growth opportunities. All of the output from the Future Agenda project including all raw insights are made freely available for organsiations around the world to use to help challenge and build more informed views of the next decade. Foresight (5 to 50 yrs) Uncertainty Predictability Time Trends (3 to 5 yrs) Insight (1 to 2 yrs) Our Approach From the very beginning the intention was not only to get views for each topic on what the future would be, but also to get perspectives on which way we should go, why and with what consequences.
- 12.
- 13. 13 Certainties As we lookforward most shifts are seen as being possible, probable and even plausible. Depending whom you talk to and where different changes on the horizon are seen as maybes with varied chances of occurring. Some maybe 50/50 others could be higher. There is however a small select group of future shifts on which pretty well everyone agrees are happening. Across multiple regions, topics and groups, these are seen as being certain. Out of the 800 insights generated by the future agenda programme, only four fit into this group. We call these the certainites. The topics covered in the following pages are: Everything connected Resource constraints Imbalanced population growth Shifting power and influence
- 14. 14 50 billion –SIM cards in use by 2025 80% – new mobile connections occurring in Africa and Asia Everything connected
- 15. 15 Everything connected Over 1trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. By 2025, there will be over 50bn SIM cards in use, we will have digitized all of our archives, and new information will be being created at such a rate that some see us doubling the volume of our total data set every month. Much of this data will come from machines, talking to each other as well as to us - by the end of the decade, pretty much everything that can have a connection, will have one. IBM sees that the Internet of Things (IoT) is bringing over 1 trillion sensors into the world, all connected to each other and multiple networks. This digitization of the world has the potential to provide us with previously unknown levels of information and insight; equally it could open the doors to unpredicted risk. Today there are over 3.3bn of us connected to the Internet globally and we are currently adding another billion every three years. In 2014 China already had over 640m Internet users, the US had 280m and India 240m. With over 40% of the population connected, the general view is that within the decade pretty much all of us will have the capacity to be online, wherever we may be. Smartphones and other devices will be a primary driver of change; with 2.6bn smartphones already in use, Ericsson sees that there will be 6bn by 2020. Indeed, Ericsson and other big mobile technology network firms such as Nokia and Huawei are investing heavily in broadening the reach and performance of their networks. They are planning for a doubling of data traffic per user every 18 months to a point where each of us can access 1GB of information every day. Facebook and Google are looking at vast fleets of balloons and drones to bridge the digital divide and provide connectivity to those currently without coverage. With Africa and Asia accounting for over 80% of new connections, total mobile subscriptions by 2020 are now expected to number over 9 billion. As of 2015, some countries were already very connected. In terms of the number of devices per capita, Germany, Sweden, the Netherlands, Switzerland and the US had already passed the 20 threshold, Denmark was over 30 and South Korea was touching 40. Fast accelerating up the tables was China with 6 devices per capita but India had less than 1. Given the investments taking place looking ahead, a global average of just over 10 devices per capita by 2020 certainly seems credible. While 10 per capita is a handy number, increasingly these devices will not be owned or used by us. The vast majority, maybe 30 to 40 billion of them, will be embedded in machines. Cars, fridges, traffic lights, containers, robots and even surgical equipment will all be connected, creating, accessing and using data. Most of the digital information will be stored in the cloud with users expecting instant access anywhere anytime and thus testing the physical limits of networks. Networks will have to become programmable to create capacity on demand, heralding the advent of self-optimizing and cognitive networks able to handle complex end-to-end optimization tasks autonomously and in real time. All of us will have the capacity to be online, wherever we may be.
- 16. 16 The concept ofinterconnected networks of physical objects, machines, buildings, infrastructure and devices is a focus for many such as Cisco and IBM as part of the vision for a Smarter Planet. Although progress has not been as rapid as some thought, the direction of travel is still clear. Everything that can benefit from an Internet connection will, by 2025, probably have one, be that fridges, toasters, driverless trucks or pallets. The large amounts of data generated from diverse locations will be aggregated very quickly, thereby increasing the need to better index, store and process such data. One critical factor is how all these newly connected things connect to one another. Too many standalone IoT gadgets not taking into account the wider context, and digital ecosystems they exist within, is a concern. Without interoperability of technologies, products and ecosystems, these products will remain separate islands. There is however arguably even more data to be generated from passive tags and sensors. Miniature sensors that can be put anywhere – on food, in clothing, within packaging, inside components, in animals and pretty much anywhere we like – and which can be activated by a multitude of different energy waves from a reading device, can provide location, temperature, orientation, movement or biological information to be remotely read, hundreds at a time. IBM sees that within the decade we could have 1 trillion passive tags and sensors connected to multiple networks. Nokia’s view is that by 2025 we will have 10,000x more data being provided to us and between machines 100x more effectively. The knock on challenge will be the need to make sense of the information that flows. Whether or not we choose to access and hopefully make use of these vast amounts of data and information will, though, be our choice and not a consequence of location, income or education. Certainties A global average of just over 10 devices per capita by 2020 certainly seems credible.
- 17. 17 While the benefitsare lauded in terms of the opportunities to improve efficiency, reduce waste and find out new things that were previously unknown, there are concerns about the risks of everything being connected. Some argue that we are jumping into connecting everything without thinking through all of the consequences, especially as some of the data protection on some devices is very low. People point out that a connected kettle, for example, could become the back door to your Wi-Fi network that bypasses all passwords and so an open door to your personal data. When everything is connected, not just kettles and laptops but power stations, traffic systems and medical devices, then the concerns shifts from privacy to security. Cyber attacks are already happening on a regular basis targeting not just databases but also machines and systems. Security services and consultancies are already busy monitoring, repelling and recovering systems from being hacked and hijacked. As we move forward with everything being linked online, the potential for harmful hacks rises significantly. This is especially true of the billions of passive tags and sensors that don’t have the power to support high levels of encryption. So while everything being connected has lots of upside, there is clearly also some risk. Everything connected We could have 1 trillion passive tags and sensors connected to multiple networks. A connected kettle, for example, could become the back door to your Wi-Fi network. Autonomous transport The shift to fully autonomous transport is an evolution via truck platoons on highways and small urban delivery pods. Connected cars create the network and test the technologies for the eventual revolutionary driverless experience. Built-in flexibility The path to a connected, accessible and distributed infrastructure is fraught with complex, costly and risky issues: Upgrading and repurposing systems to make them more open plus on-going maintenance need significant resources. Ethical machines Automation spreads beyond trading and managing systemic risk. As we approach technology singularity, autonomous robots and smarter algorithms make ethical judgments that impact life or death. The increasing value of data As organisations try to retain as much information about their customers as possible, data becomes a currency with a value and a price. It therefore requires a marketplace where anything that is information is represented. Related insights
- 18. 18 11 billion –global population by 2100 1.4 billion – people aged over 60 by 2030 Imbalanced population growth
- 19. 19 Imbalanced population growth Agrowing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. While there are a number of different views on total population growth over the next 50 years, no one disagrees that this growth is going to be imbalanced. Be it ageing, fertility or geography, we are increasingly going to have more people in the places and demographic zones where we are least comfortable. Dependency ratios in some countries are fast moving into unsustainable areas; thanks to climate change we are going to see significantly increased migration as the system across many societies seeks to rebalance itself. This in turn will lead to economic, political and social stresses around the world, bringing a greater pressure on the overall system in the next decade. The latest medium UN projections see the current global population of 7.4bn rising to 8.5bn by 2030, 9.7bn by 2050 and over 11bn by 2100. Overall, with better use of food and land, this is thought possible. However, regionally the numbers and speed of increase vary considerably. In Europe, the natural population is actually set to decline. Other countries with a naturally declining population include Japan, South Korea, Taiwan and Singapore. In all, the populations of 48 countries or areas in the world are expected to decrease between 2015 and 2050. By contrast, Africa is growing steadily. Africa’s share of global population is projected to rise 25 per cent by 2050 and 39 per cent by 2100, a staggering 4.9bn. Elsewhere, the trend is somewhere in between: In North America the population is expected to reach 500m by the end of the century; In South America 721m. Across Asia as whole, we will see 4.9bn by the end of the century. Overall we will be adding an average of 60m people a year to the planet between now and 2050. While most of the growth is evidently coming from Africa, other expanding nations such as India are experiencing what they see as more manageable growth. Those countries that are seeing population decline however face significant structural issues for the future. If they are to maintain sustained economic growth, one of the biggest challenges is how to achieve this with an increasingly imbalanced domestic population. There are three core drivers of population growth: ageing, fertility and migration. It is the first of these that is most visible in most societies today. One of the great successes of the last 50 years has come from improved healthcare; we are all living longer. 900m people, around 12% of the world’s population, are aged over 60 (projected to rise to 1.4 billion by 2030). While most of the overall increase will come from health improvements achieved in bringing the average in Africa up from 50, it will be in Asia, America and Europe where the elderly will be most visible. We will be adding an average of 60m people a year to the planet between now and 2050.
- 20. 20 In pretty muchevery country the number of babies being born per family is on the decrease. This is widely seen to be a good thing as it both reflects better healthcare and puts a brake on runaway long-term population growth. Infant mortality is decreasing and so families no longer see the need to have so many children to stand a chance of them making it through to adulthood. The single biggest factor in reducing fertility is widely seen to be female education, a major focus for many governments worldwide for the past 50 years and a priority Millennium Development Goal; women who are empowered through education tend to have fewer children and have them later. China’s One Child Policy was introduced in 1978 to manage population growth. Although it has many detractors, many see that it has worked but maybe too well. During this time the population growth has been brought under control but there have been consequences. As a result, the policy is now for two children. China has too many men, too many old people, and too few young people, “a huge crushing demographic crisis. If people don’t start having more children, they’re going to have a vastly diminished workforce to support a huge aging population.” Bringing all this together, within and across countries, demographers look at the balance of society by calculating dependency ratios. These are a measure showing the number of dependents (aged 0-14 and over the age of 65) to the total population (aged 15- 64), the number of people being supported by the system in proportion to the population available to work and so pay taxes into the system. Concern is raised when the total ratio increases beyond 60% and the elderly ratio is more than half of that, showing not only a high level of social burden, but one skewed by an ageing population. As the elderly dependency ratio globally is set to double by 2050, a good number of countries will be worried. Similarly, the potential support ratio (PSR) calculates the number of working age people per single elderly person. By 2050, many countries are expected to have PSRs below 2, underscoring the fiscal and political pressures that the health care systems, as well as the old-age and social protection systems, of many countries are likely to face in the not-too- distant future. Certainties The number of babies being born per family is on the decrease.
- 21. 21 Shorter-term options forrebalancing and imbalanced population are few and perhaps the most visible is migration. Around one in seven people today are migrants: net migration is projected to account for 82 per cent of population growth in the high-income countries. Migration is an increasingly political concern globally; although the current conflict-driven movement of people out of Syria is ever present on our TV screens, globally the great majority of displaced people have been uprooted by weather- related disasters. As the rate of growth globally drops, thanks to longer life spans, and we continue to move towards a steady state of around 2bn babies on the planet, what remains uncertain is how societies will seek to cope with high dependency ratios and low potential support ratios, and the role we will want to give increased migration as the 21st Century’s primary population balancing mechanism. Imbalanced population growth Net migration is projected to account for 82 per cent of population growth in the high-income countries. Accelerating displacement Climate change, conflict, resource shortages, inequality and political elites unable or unwilling to bring about necessary change all trigger unprecedented migration to the North Over the next 50 years, as many as 1 billion people could be on the move. Africa growth With a land mass bigger than India, China, the US and Europe combined, few doubt the scale of the African continent and its resources. However, until recently only some have seen it as the growth market that it is fast becoming. Agelessness A person’s physical age becomes less important as society adapts to the new demographic landscape. New opportunities arise for creators and consumers of all ages, though benefits are often only for the wealthy. Rising youth unemployment With unemployment rates already over 50% in some nations, access to work is a rising barrier. Especially across North Africa, the Middle East and southern Europe, a lost generation of 100m young people fails to connect with or gain from global growth. Related insights
- 22. 22 1.6 – equivalentplanets of resources consumed each year 70% – of all fresh water is used for agricultural purposes Key resource constraints
- 23. 23 Key resource constraints Economic,physicalandpoliticalshortagesofkeyresourcesincrease anddrive increasing tension between and within countries. As we exceed the Earth’s natural thresholds, food and water receive as much focus as oil and gas. People are concerned about the environmental impact of our continuing to consume more resources than the earth can naturally replenish. We currently consume the equivalent of 1.6 planets a year, meaning ‘overshoot day’ – the day each year when demand outstrips natural supply - is coming earlier and earlier. Many worry about us physically running out of important materials but others however are more sanguine, seeing the recent drop in oil prices as a reflection of declining demand. The true picture is itself complex but consistent. While we are not necessarily running out of things, access to many important resources is increasingly constrained - be that physically, economically, politically and environmentally. Over the next decade, many resources are going to become more difficult to get hold of and may become more expensive. When we talk about resource constraints, the usual ones come to mind: food, oil and water. However we should also consider metals, phosphorous, gas and land. All are under pressure – some more extreme than others. At current rates of consumption, there are real physical constraints on several important materials. We have around 8 years production left of antimony, a key ingredient in batteries, 12 years of iridium, important for solar panels, and only 17 years of silver and zinc. We have around 30 years worth of copper, 45 years of titanium. Without a downturn in consumption or a switch to alternatives, these are very big concerns. As we deplete these resources, countries with supplies will seek to keep them and their prices will increase. Other resources are in more plentiful supply but are under pressure politically, environmentally or economically. We have between 40 and 80 years supply left of coal; given its impact on carbon emissions, it is little surprise that its use is being restricted on environmental grounds. Gas and oil, the other two major fossil fuels, are also under pressure but with different emphasis. Gas is cleaner than both coal and oil but, with the main global supplies lying in Russia and the Middle East, is evidently prone to political pressures. The same is true of oil, although unlike in the past when low demand dropped OPEC production, recently Saudi Arabia has kept pumping into an over-supplied market and so instigated the low current prices. With producers such as Nigeria, Angola and even Saudi Arabia itself suffering economically, how long oversupply - and low prices - can continue is a source of hot debate. However what is less contested is that over the next decade or so, overproduction will stop, prices will rebound and, within the context of a greener energy mix, oil will become increasingly more constrained by environmental issues. At current rates of consumption, there are real physical constraints on several important materials.
- 24. 24 Certainties Questions are alsoraised about peak supply for copper, zinc, other rare metals, and phosphorous. Essential for fertilizer, phosphate rock is only found in a few countries (the US, China and Morocco). Demand is directly linked to us wanting more efficient food production; we may become more efficient with food waste, but not reduce the need for modern industrial farming and its dependency on phosphorus. At current rates of consumption, we have around 75 years of supply left, but phosphorous cannot be replaced by something else, nor can it be artificially manufactured. It can only be recycled through organic methods. With peak-phosphorous estimated around 2030, it will increasingly feature on news bulletins over the next decade as another key resource of concern. Beyond phosphorus, anxiety on food supply and demand continues to grow. Globally we face more of a problem in net food distribution than food supply, at both local and regional levels. With more people increasingly in places where food is not plentiful, getting good quality food to people at affordable levels is already a challenge for many. Add in future population growth, more uncertain weather patterns (hence less predictable harvests), and food as a resource will become subject to more political as well as economic interest. Although there is clearly volatility in prices from year to year as weather impacts supply, the recent general trends for wheat, rice and soy are all upward, and expected to continue in that way. Over the next decade, maintaining global food security will become much more difficult as the population increases. Solutions include changing our diets - eating less meat, wasting less, improving yields and the wider adoption of GMO. Some of these may work in some cultures, but not all. The challenge therefore is how to manage an increasingly constrained food supply at the same time as we add another billion mouths to feed into the system. Food as a resource will become subject to more political as well as economic interest.
- 25. 25 Linked to foodproduction for more people, but also driven by mass urbanization, is the quantity of arable land available. The amount of arable land per capita on the planet has already dropped from 0.45ha in 1960 to 0.25ha today – and is set to decline further. More efficient farming has helped manage this transition over the past 50 years, but there are concerns about the next 50. If 2010 was the year of peak farmland, we are going to need to produce more food from less land. As such we must double food production over the next decade - in a sustainable manner. Lastly, water – a resource that is neither running out, nor becoming more plentiful, but increasingly under pressure. We have the same amount of water today as we did 10,000 years ago, the challenge is how we use it. Globally, around 70% of all fresh water is used for agricultural purposes – while, depending where you live, the other 30% is split between domestic purposes, manufacturing and waste in the system. Given increasing demands on food supply, how we provide more water, or manage with less, is a significant test. More people stress the system, while, as many become wealthier, and so consume more energy, food and hence water, managing 10bn with the same amount of water as worked for 1bn is no easy task. Today few regions value fresh water and have little idea of its true cost. Going forward we can expect the challenge of water supply to be more widely recognized. It is clear that we face major supply / demand challenges. Some of these will result in higher prices, some in national hoarding, some in greater competition and some in more transparency. Whatever the resource the manifestations of change will vary. However what will be consistent as we look forward is that more resources will be seen to be increasingly constrained. Managing this is one of our major challenges for the next decade. Key resource constraints Managing 10bn with the same amount of water as worked for 1bn is no easy task. Energy storage Storage, and particularly electricity storage, is the missing piece in the renewables jigsaw. If solved, it can enable truly distributed solar energy as well as accelerate the electrification of the transport industry. Food waste 30-50% of our food is wasted either in the supply chain or in consumption and could feed another 3 billion. Optimising distribution and storage in developing countries and enabling better consumer information in others could solve this. Full cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Imbalanced population growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Related insights
- 26. 26 25% – shareof GDP growth accounted for by China 140 km/h – speed at which world’s centre of economic gravity is moving east Shifting power and influence
- 27. 27 Shifting power andinfluence The centre of gravity of economic power continues shifting eastwards, back to where it was 200 years ago. Recent superpowers seek to moderate the pace of change but the realities of population and resource locations are immoveable. Are we are witnessing the end of an era in globalization and international trade? The structures set up in the wake of the WW2 may no longer be fit for purpose. Western markets are weakening, the US appetite to act as overall arbiter and keeper of the peace diminishes and Europe faces its own constitutional challenges. Asian countries, which have in the main benefitted from a youthful workforce and rising middle class, are beginning not only to influence world trade but also to play a greater role on the diplomatic stage. Africa and South America have yet to make a significant impact, but with a wealth of natural resources at their disposal, the next ten years should begin to change this. Whether or not this is the Asian century as some foresee, the next decade will see the post-war routes gradually being eclipsed by the power of the Indian Ocean region. South-south trade doubled in the decade from 2000 to 2010, and is likely to account for over a third of global trade by 2025. After centuries of growth, Europe’s days in the economic sunshine are, many think, in relative decline. The Euro experiment has had its day and the Europeans will have to spend the next decade dealing with the repercussions of this failure. Some believe that the region will muddle through while others see three possible options: that the Euro will be split in two, probably on a North and South divide; second, a couple of major former currencies such as the Deutschmark and the Lira will be reintroduced, or third, there will be a complete re-fragmentation of the euro zone into individual national currencies and hence economic interests. Germany will remain the primary power within the EU over the next ten years, but overall Europe’s influence will be eroded by its internal problems, such as the UK’s threat of ‘Brexit’. Bridging Europe and Asia, but a long way from being an economic superpower, lies Turkey. Since the establishment of a Customs Union with the EU in 1996, Turkey’s EU exports have grown and in 2014 accounted for nearly $70 billion, or 43.5% of its total. Whether the former description of Turkey as ‘the world’s most progressive Muslim state’ will still hold in 2025, its influence on the regional and global economy seems set to grow as does, given its geopolitical location, its sway on global trade. Things, though, are not looking good in Russia. A declining population, access to secure water and food supplies previously supplied by former Soviet Union neighbours lost, its economy corrupt and dominated by quasi-state firms whose revenues depend on political contacts rather than economic efficiency. GDP growth averaged a paltry 2.4% from 2011 to 2014 despite high oil prices and renewed access to credit markets. Most economists see that Russia will have a less rosy future – with less focus on increasing its global financial interaction. This won’t deter Putin, keen to bolster his status at home, from maintaining a presence on the world stage. Its current military postulating around the Middle East in order to regain influence in key locations is perhaps understandable. The Euro experiment has had its day.
- 28. 28 Wherever you goin the Middle East there are some elements of commonality but also many areas of difference – especially concerning competition and conflict between Sunni and Shia, the financing of ISIS, the changes afoot in Saudi and the future ambitions of Iran to create a new Persian Empire. The US’s influence is declining, for economic and political reasons. Many OPEC economies need to increase diversification; not only is there the climate change challenge, but the potential to act as a growing, pivotal gateway for China and India, not just to the Middle East but significantly (in the long-term) to Africa. Few doubt the scale of the African continent (a land mass greater than India, China, the US and Europe combined, its workforce the world’s largest by 2040) and its resources. With a collective GDP of $2.6 trillion by 2020 and $1.4 trillion of consumer spending, many anticipate the impact of around 500m new middle class consumers. The question here is one of timescale; will there be significant change in the next decade or, like India, a longer period of transition? India’s perfect population pyramid, a massive domestic market, a growing middle class, more successful home-based multinational private companies, little interest in military expansion to secure resources, and world class expertise in IT and process innovation, all add up to the potential for India to be a top 3 economy. With a highly connected Indian diaspora and a number of very progressive business leaders, many see India as a certain long- term bet; but, for others, India is still a tricky place to do business, with a sagging infrastructure and endemic corruption presenting huge obstacles. The government aims to double India’s exports of goods to $900 billion a year by 2020 and improve India’s share of global trade from 2% to 3.5% by 2020. The World Bank, EIU, IMF and UN all expect between 6 and 7% GDP growth for the next decade. But progress on reform has been slow. Also in the region, Singapore will continue to be a major global trade hub, and be the Asian leader in GDP per capita; Indonesia will grow steadily via more progressive government polices and a strong base of raw material exports. But it is China that dominates. IMF figures show over the past decade it has averaged over 25% of the world’s GDP growth. Some are questioning the long-term sustainability of the Chinese economy, especially with the burden of unbalanced demographics stemming from the impact of the One Child policy. If China uses more of its economic might and soft diplomacy to reshape the world order, and if the Remnimbi maybe one day usurps the dollar as the world’s reserve currency, then China could dominate world trade. Certainties Many see India as a certain long-term bet.
- 29. 29 The fortunes ofthe other BRIC nation, Brazil, reflect China’s curtailment of the commodity boom; future growth for the next decade is projected to be under 3%. Other Latin America countries, Chile, Peru and Mexico, will benefit from being in the TPP. By contrast the more ‘inward looking’ Argentina is generally seen to be stumbling from one crisis to another. North lies the United States. Whereas China has 20% of the world’s population and generates around one seventh of global GDP, the US has 6% of the world’s population but still produces up to 25% of its GDP. Increasingly self-supporting both in trade and energy, will the US remain as the world’s naval policeman and ‘guarantee’ to keep global trade routes open? It may be several decades before there is a significant decline in US foreign policy and economic influence. The world’s centre of economic gravity has changed over past centuries. Since the mid-1980s, the pace of that shift, from the West toward Asia, has been increasing dramatically, at a speed of 140 kilometres a year - faster than ever before in human history. Having spent the first 1,000 years in Iraq and then gradually reached its westernmost point just off the Newfoundland coast in the 1950s, a McKinsey model sees that by 2025, with the growing impact of India and Africa, it will be near to the Russian border with China and Mongolia. Changes are on the cards. Shifting power and influence Will the US remain as the world’s naval policeman. Africa growth With a land mass bigger than India, China, the US and Europe combined, few doubt the scale of the African continent and its resources. However, until recently only some have seen it as the growth market that it is fast becoming. Currencies of meaning New trusted currencies of exchange and meaning emerge to better facilitate transactions, trade, authentication and validation. Money is complemented by new systems to which we attach greater significance. Declining government influence National governments’ ability to lead change comes under greater pressure from both above and below - multinational organisations increasingly set the rules while citizens trust and support local and network based actions. Standards driving trade International regulation is progressively aimed at freeing up trade and making it simpler and less bureaucratic – but there are a number of agreements, standards| and protocols that some are seeing as increasingly constraining. Related insights
- 30.
- 31. 31 Interconnected systems A fewchanges taking place in the world are occurring completely independently of others. Far more have a mutual dependency and are increasingly interlinked. Especially when concerned with complex issues that are impacted by several underlying driving forces, these are seen as being increasingly interconnected systems. While an individual trend may be simple to grasp, the causal relationships can be deep and complex. Whether driven by an overlap of resource demands and competing behaviours, these issues are proving difficult to fully address. The topics covered in the following pages are: Affordable healthcare Air quality Intra city collaboration Open supply webs Deeper collaboration Energy storage Autonomous transport Urban obesity Food waste
- 32. 32 70% – ofglobal population without access to decent healthcare 80% – of healthcare costs spent on last 2 years of life Affordable healthcare
- 33. 33 Affordable healthcare The escalatingcost of healthcare is further stressed by the need to support the old and the chronically ill. Spending 20% of GDP on healthcare is seen as unsustainable so hard decisions are taken around budgets and priorities. As nations develop and their economies grow, so does spending on healthcare. Improved health is a priority issue and the challenge for governments is how to provide an efficient, cost effective system. This is no easy task and many are buckling under the pressure of rising costs, ageing populations and increased public expectations; across the world the whole healthcare system seems to be imploding. Fear of failure is not quite at a point that will instigate change, many agree that something has to be done, but fewer know quite what this should be. 30% of the global population has access to decent healthcare; most developed countries use upwards of 9% of their GDP on health care – in the US, it’s over 17%. In India, spending is now over 4%, in China it’s approaching 6% and in Indonesia over 3%. Costs are escalating not only because of the general desire to reach more people but also because of the growth in preventative healthcare, health monitoring solutions and the increasing variety of medicines to treat the sick. Unlike other areas of high consumption, such as energy, where eventually demand plateaus, spending on healthcare is showing no sign of levelling off and there seems little hope in the current circumstances that it will do so. With healthcare the numbers just keep going up. What is paid for drugs in the US generally sets the standard in other markets. In most developed countries funding for this is picked up either by the state or the insurance system so the patient rarely has to come to terms with the real cost of care. But the money has to come from somewhere. The beginning of life can be expensive. Many countries are lowering the threshold at which they are able to support premature births from 26 weeks down to 22, but this costs: around £250,000 for a birth at 23 weeks, thirty times the cost for a full term baby. Meanwhile, global life expectancy increases on average by six months every year, largely due to better healthcare provision. Although each of us needs more overall medical attention because of this, our main requirements are associated with the last 2 years of life where more frequent admittance to hospital will account for around 80% of our healthcare costs. Better end of life provision is therefore a big issue – and one where the balance between hospital and palliative care is key. We cannot, though, blame the elderly for all the escalating cost of care. Our sedentary lifestyles and appetite for alcohol and cigarettes also lead to a huge rise in chronic conditions such as diabetes, heart conditions, emphysema and cirrhosis, all expensive to treat. Most seem to agree that we need an alternative solution, one that focuses on preventative healthcare measures rather than treatment. We also need technology that delivers improvements at scale and at low cost. India has become a standard bearer for redesigning processes delivering high quality healthcare at a fraction of the usual cost. $50 per patent cataract surgery from Aravind, or $2000 cardiac surgery from Narayana Health, innovation that drives the delivery of world class surgery at 1/50th of the cost of the same care in the Better end of life provision is therefore a big issue – and one where the balance between hospital and palliative care is key.
- 34. 34 US. High-tech, personalisedtreatments tailored to an individual’s genetic make-up rather than generic profiles is another fast-developing area. Significant investments have already been made by the biotech industry and will impact soon, particularly in the provision of bespoke drugs that can dramatically increase efficacy. The cost of such treatment is however currently prohibitively high because it requires the development of specific drugs for small populations and in all probability the additional provision of customised support systems. While some are sceptical of large-scale impact by 2025, because of the expense, all agree that personalised healthcare is a great opportunity for those who can afford to pay. Perhaps it all comes down to the business model. For the pharmaceutical industry, the system is based on the expectation of a $1bn revenue windfall from an occasional blockbuster, but as R&D budgets can only to be justified on the promise of a major drug discovery, this takes time and is extremely expensive to deliver – which explains the high average costs of patented drugs. There is a general acceptance of high failure rates in product development, and the reality is that very few of the drugs currently coming out of the system deliver reasonable returns either from a financial perspective or a health care perspective. Some see sequencing technologies helping to improve the efficiency of drug development, while others hope that Big Data will reduce or even eliminate costly clinical trails. While share prices are based on high drug prices, few believe that any of the big pharmaceutical players will seriously consider a different approach. And, while the current system in many countries is tilted towards rewarding sick-care rather than prevention, high development costs and high healthcare costs naturally follow. The principle of preventative healthcare is lauded, especially when tied into improving overall public health, but the system is not set up to align with this and there are few economies that are prepared to fund it at the scale required. Improved public education is an integral part of the process. Little things matter; in India between 4 -16% of pregnant women are anaemic, and better education around diet could have a dramatic impact on child survival rates at birth. However such is the scale of change required that few see a dramatic shift in public awareness any time soon particularly as the financial cost saving benefit does not come for 20 to 50 years down the line.The current system in many countries is tilted towards rewarding sick care rather than prevention, high development costs and high healthcare costs naturally follow. Interconnected systems
- 35. 35 Paying for healthcareis a balance between state intervention and personal responsibility; shifting from a national system towards private healthcare insurance is supported and rejected in equal measure. Some support the notion of each citizen having a personal healthcare budget, where there is a limit of spending beyond which the state either stops providing support or reclaims it via tax or benefits. Generally speaking, there are increasing expectations of ‘co- pay’ where sick patients will directly or indirectly pay for an element of their treatment, whether drug or hospital costs. In emerging economies, where private healthcare is already in place, the big challenge is to develop appropriate systems for everyone else. While most support the concept of the UK’s National Health System, many believe that it is simply not sustainable in the long term. Potential alternatives being explored in India and South America are focused around micro health insurance, where people pay a small amount a month extra on their mobile phone bill, used to fund a workable healthcare insurance system for the majority. Outstanding questions remain: what level of support can be provided, and how much additional government financing is also required? India is never going to spend as much on health care as the US, but will a combination of more innovation, effective use of data, new pricing systems for drugs, micro- insurance initiatives, more public-private partnerships and a slight rise in government funding provide an equivalent service? Certainly scalable, sustainable solutions are needed if we are to see affordable healthcare for all. Most likely we will see few global answers but more probably there will be a host of regional and local shifts, all aimed at a more cost efficient, more effective and more equitable healthcare system for a growing, aging but still, on average, healthier population. As one US health economist put it, ideally ‘we want to die quickly as late as possible’. Achieving that for all in the next decade really would be a success. As one US health economist put it, ideally ‘we want to die quickly as late as possible’. Affordable healthcare Care in the community The desire to ‘age-in-place’ meets a healthcare reform agenda that promotes decentralization. A new care model is customer-centric, caregiver-focused and enhances coordination across care settings. Caring for those left behind Although significant progress has been made positive change has limited reach. Millions of people continue to be left behind from main-stream progress -especially the young, the poor and those who are disadvantaged. Imbalanced population growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Urban obesity Mass urbanisation, reduced activity and poor diets are accelerating the rise of obesity. Levels of obesity in most cities are growing fast and the associated healthcare burden will soon account for 5% of global GDP. Related insights
- 36. 36 15x – Delhi’sair more polluted than the WHO safe maximum 4000 – people killed every day in China due to air pollution Air quality
- 37. 37 Air quality Rising airpollution in many cities is killing people and becomes a visible catalyst for changing mind-sets and policies across health, energy, transportation and urban design. Delhi, Patna, Gwailor and Raipur: the four most polluted cities in the world, and all of them in India. In fact 13 of the top 20 most polluted cities are in India. True, Beijing has a worse reputation because of the visible smog, formed mostly from 10 micron particulates but it is the air in Delhi that is more damaging as it holds many more of the smaller sub 2.5 micron particulates that kills as they go deeper into the lungs. Delhi’s air is 15 times more polluted that the WHO safe maximum. Whether from vehicle emissions, industrial smokestacks or paraffin stoves in the slums, this pollution is manifested across many Indian cities in escalating asthma rates, higher cancer incidence and more heart attacks and strokes. About 620,000 people are dying every year from pollution-related diseases, but they are not alone. Lives in many Chinese cities are over 5 years shorter than the national average because of air pollution - 80 percent of the population are exposed to pollution above safe levels and the air in Beijing is so polluted that breathing it does as much damage to the lungs as smoking 40 cigarettes a day. The omnipresent paper masks of recent years are being replaced by heavy- duty facemasks; parents are even delaying having children because of the poor quality air. Air pollution in China kills about 4,000 people every day - about 17 percent of all deaths. But, according to the World Bank, when measured across whole nations, the most toxic air today is found not in India or China but in the UAE. Globally, in 2012, 7m people died because of the impacts of poor air quality and, as increased industrialization, wider car ownership and climate change all add to the problem, things are going to get a lot, lot worse. The OECD believes that pollution will soon become the biggest cause of premature death. A pivotal issue about poor air quality is that it has multiple causal factors and impacts multiple areas. From industrial strategy and energy policy, to vehicle emissions to city design and transportation choices, the forces driving increased pollution intertwine. Equally the health consequences of rising asthma, heart attacks, chronic obstructive pulmonary disease and cancer combine with poor visibility and grey skies to make many of the world’s cities increasingly unattractive places to live. The lists of the world’s unhealthy cities are increasingly much longer than the healthy ones. In some Western cities some progress in improving air quality has been made over recent years. The Mayor of London has launched public awareness campaigns aimed at helping Londoners make small changes to reduce their exposure to pollution and help improve air quality. Alongside tightening standards with the city’s Low Emission Zone, retiring old taxis, cleaning up the bus fleet and retrofitting 400,000 buildings with clean air facilities, a primary activity to meet 2020 targets is rethinking traffic management. Meanwhile the EU is taking legal action against 17 States with a consistent record of poor air quality. Bulgaria, Latvia and Slovenia are being asked to urgently address an on-going issue that kills more of their citizens than road traffic accidents every year. It has multiple causal factors and impacts multiple areas.
- 38. 38 In the US,outdoor air quality has improved since the 1990s, but, according to the CDC, many challenges remain in protecting Americans from air quality problems. Ground-level ozone, the main part of smog, and particle pollution are just two of the many threats to air quality and public health in the United States and, based on current projections, pollution in the US is set to increase not decrease by 2025. With public attention rising and concerns over poor health influencing political agendas, now India and China are ramping up their activities. The Chinese government has set up a nationwide network of sensors, and regularly publishes data online. A comparative index has recently been launched in India to monitor air quality, while three industrialised states—Gujarat, Maharashtra and Tamil Nadu—are about to launch the world’s first market for trading permits in emissions of particulate matter. In the town of Surat, in Gujarat, 300 textile plants, which typically burn coal to produce steam, are likely to be the first to trade such permits. Monitoring equipment has already gathered emissions data from these and other plants. Beyond monitoring and permits, others are trying more radical measures. In the western Chinese city of Lanzhou, officially deemed by the WHO to have the worst air in China, officials have proposed digging great gullies into the surrounding mountains in the hope of trapping polluted air in a gigantic landscape gutter. But Lanzhou’s poor air quality is caused less by burning coal and car fumes than by the local penchant for blowing up mountains. More than 700 peaks are being leveled to provide swathes of flat land for development and blowing out a huge gulley would only add to the problem. New approaches to city design are being called for that will gain by encouraging healthier urban dwellers - reduced healthcare costs, increased productivity, more community resilience, improved life expectancy and fewer demands on health services. Given that most people in India, even in cities, still commute by foot, bus or bicycle—and that only 5% of households own cars—India still has time to set up systems for mass public transport before the car becomes king. Already 14 cities have or are building metros. Interconnected systems Pollution in the US is set to increase not decrease by 2025.
- 39. 39 Most of theworld’s population will be subject to degraded air quality in 2050 if human-made emissions continue as current trends. The OECD believes that air pollution will become a bigger global killer than dirty water and, as such, is encouraging faster change. The challenge in many countries however is in balancing the public health impact with the desire for sustained economic growth – primarily still powered by fossil fuels. In regions where energy access is a higher priority than clean energy, many are increasingly seeing that it may well be air pollution, and not carbon emission targets, that captures the public sentiment and acts as a catalyst for change. More children with asthma, permanently grey skies and increased breathing difficulties for all are seen by some as the triggers for widespread change – both bottom up and top down – and consequently, air quality is fast becoming a core part of the climate change vocabulary. Air pollution will become a bigger global killer than dirty water. Air quality Deeper collaboration Partnerships shift to become more dynamic, long-term, democratised, multi-party collaborations. Competitor alliances and wider public participation drive regulators to create new legal frameworks for open, empathetic collaboration. Energy storage Storage, and particularly electricity storage, is the missing piece in the renewables jigsaw. If solved, it can enable truly distributed solar energy as well as accelerate the electrification of the transport industry. Intra city collaboration Increasing competition between cities overrides national boundaries and drives change. They compete to attract the best but also collaborate to avoid the downside of success – over-crowding, under-resourcing and pollution. Mass engagement As the public voice becomes easier to access and harder to suppress, leaders seek to engage to create, develop, secure and maintain legitimacy for their initiatives and policies – so further reducing their hierarchical power. Related insights
- 40. 40 2020 – launchdate for Google’s car 2020 1.24 million – number of road deaths globally p.a. Autonomous transport
- 41. 41 Autonomous transport The shiftto fully autonomous transport is an evolution via truck platoons on highways and small urban delivery pods. Connected cars create the network and test the technologies for the eventual revolutionary driverless experience. The concept of self-driving, autonomous vehicles has been talked about for years. Whether from the automotive sector, science fiction or big data enthusiasts, the advent of cars, trucks and buses that navigate and drive themselves has been a common aspiration. The reality is however getting increasingly closer and, over the next decade, many expect to see some pivotal advances introduced at scale in some parts of the world, though at different speeds in different sectors and in different regions. Over the past thirty years there have been numerous proof of concept tests, such as the European Prometheus project and the DARPA funded Autonomous Land Vehicle project in the US. The 1997 National Automated Highway System Consortium project brought the idea to wider public attention, when twenty or so self-driving vehicles were demonstrated on Interstate Highway 15 in San Diego. These early projects set the direction, proved the principles and also raising many questions, including data access, ownership and sharing as well as network reliability. Some car manufacturers became confident enough to put major stakes in the ground – Volvo, in particular, declared that by 2020, no one would be killed in a Volvo and saw the ability of a car to take over, when an accident was likely, as a key safety improvement. Recent developments by the likes of Google, Apple and Amazon have shown how innovation from outside the automotive sector can speed up development. The key question is whether the next decade will be an evolution or revolution. By 2025, will we see fully autonomous vehicles at scale or will it be a patchwork approach, where this only happens in certain locations; and, elsewhere, will we see more assisted driving but not the complete autonomous experience? The connected car is certainly a priority for many and a forerunner to a world of autonomous vehicles. In 2013, Nissan announced its plans to launch several driverless cars by 2020 and has a dedicated proving ground in Japan. BMW and Mercedes have connected vehicles now driving along German Autobahns where autonomous driving is working as an evolution of adaptive cruise control and assisted driving - which is already in production cars showing automated lane keeping, parking, acceleration, braking, accident avoidance and driver fatigue detection. In 2014 Tesla introduced its AutoPilot systems in its Model S electric cars and in 2015 a car designed by Delphi Automotive completed a coast-to-coast trip across the US, 99% of which was automated driving. The key question is whether the next decade will be an evolution or revolution.
- 42. 42 The recent acknowledgementby Apple that its autonomous car project, ‘Titan’, is a ‘committed’ project has brought much speculation about what is also underway in Cupertino, after tripling its dedicated team to 1800 including many recruits from across the automotive sector. Google are probably furthest ahead, building over 100 vehicles and already clocking up over 1m miles; they started working on driverless cars as far back as 2005 when they won the DARPA grand challenge and in the past few years have successfully lobbied for regulatory approval for autonomous cars and started road testing in 2012. By June 2015, Google’s fleet had encountered 200,000 stop signs, 600,000 traffic lights, and 180 million other vehicles and had only had between 12 and 14 (depending on who you ask) minor accidents. Launch date for Google’s car is set at 2020. The fundamental issue here is whether or not they can pull off driverless vehicles that work in cities, can deal with roundabouts, avoid unpredictable actions by pedestrians and certainly don’t crash. Much attention is also focused on moving goods. Already in off-road applications such as mining and farming, many of the ingredients of autonomous and driverless vehicles will get large-scale traction in this area. The advent of truck platoons or trains, lines of long distance trucks electronically coupled to each other running along the highway, is upon us – Daimler’s Freightliner highway pilot has been given approval to operate in Nevada and rivals such as Volvo and Scania are undertaking similar trials in Sweden. However the revolution in this space is for small urban delivery vehicles – slow-moving, driverless electric pods delivering packages to homes, offices, drop-off points and even traditional car boots. No surprise that many are looking at Amazon to take the lead here; the opportunity to simplify the last mile of delivery in terms of both reducing human cost and optimizing drop-off schedule is a hugely attractive business proposition. What remains to be determined are the all-important issues that sit around the core platforms. Mobile operators are already sharing data, but who owns the shared data required to make the whole system work and how it is accessed? This is matter of trust, value and liability and, depending where you are in the world, the balance between government, tech companies and vehicle manufacturers shifts significantly. This needs to be addressed, as most business models require visibility of 100% of the vehicles on the road – 99% is not good enough. Interconnected systems However the revolution in this space is for small urban delivery vehicles – slow-moving, driverless electric pods delivering packages to homes, offices, drop-off points and even traditional car boots.
- 43. 43 And then thereis the tricky issue of risk and ethics. From an insurance perspective the advent of autonomous vehicles should mean that cars don’t crash and we don’t need motor insurance. But insurance companies see the risk simply shifting from the owner to others - the vehicle manufacturer, the road network or the whole system. With the costs of system failure significant, this is a big issue that few seem to have yet resolved. Meanwhile, on the ethical side, some are questioning who is going to code the decision to sacrifice the ‘driver’ rather than the child who runs into the road. While the likes of Google DeepMind, helping with the Google car, are leaders in artificial intelligence, ethics professors are not sure how quickly this will be resolved. Varied perspectives from different cultures have to be considered here. Autonomy is not far away. The technology is being proven, the money is being invested and the potential for safer, less congested roads is a big social benefit. Governments are starting to discuss regulatory issues in both the US and EU and some of the ingredients such as automated connections like eCall are becoming mandatory in major markets in the next few years. By 2025 we will certainly see more assisted driving and autonomy on highways for both cars and trucks, where everyone is going in the same direction with controlled entry and exit, and maybe full autonomy in cities for goods delivery pods. However, at the moment, it looks like full autonomy in cities for passenger vehicles is a few years away. Autonomous transport Insurance companies see the risk simply shifting from the owner to others - the vehicle manufacturer, the road network or the whole system. Ethical machines Automation spreads beyond trading and managing systemic risk. As we approach technology singularity, autonomous robots and smarter algorithms make ethical judgments that impact life or death. Everything connected Over 1 trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. The increasing value of data As organisations try to retain as much information about their customers as possible, data becomes a currency with a value and a price. It therefore requires a marketplace where anything that is information is represented. Access to transport The widespread need for individuals to travel short distances becomes a key feature of urban design and regeneration. Planners use transport infrastructure to influence social change and lower carbon living. Related insights
- 44. 44 2.6 million –number of patent applications p.a. 7 million – number of trademark applications p.a. Deeper collaboration
- 45. 45 Deeper collaboration Partnerships shiftto become more dynamic, long-term, democratised, multi-party collaborations. Competitor alliances and wider public participation drive regulators to create new legal frameworks for open, empathetic collaboration. Giventhechallengeswearefacing,manyseetheneed for a different way of working across and between organisations. The time when one company alone could develop scalable solutions is fast disappearing, and even traditional cross-industry partnerships are unlikely to have the resources and reach required. Addressing some of the big meaty future challenges will rely on deeper and wider collaboration that will no longer be driven solely by intellectual property and value considerations; instead more dynamic, agile, long-term, democratised and multi-party cooperation is on the horizon. Take rising air pollution. Tackling this will demand partnerships across transportation operators, energy providers, city planners, public health organisations, governments, regulators, financiers and citizen groups. Or, addressing the obesity challenge isn’t just about food and drink companies changing direction but also involving healthcare professionals, behavioural psychologists, regulators, transport and city planners as well as educational institutions and the media. The type of cooperation needed to innovate and address these and similar challenges will require the collaborating organisations to rethink the fundamental nature of how such partnerships are designed, operated and rewarded. Bilateral agreements, while easier to establish and execute than global ones, are implicitly limiting. The residual approach to intellectual property creation, ownership and trading is more of a barrier to collaboration that an enabler. While concepts such as patent pools have worked within industries, be that sewing machines and cars a century ago or Bluetooth, MPEG and DVD standards in the past 20 years, some see that they too are not the right model for the deeper and wider levels of collaboration envisaged for the future. The answer could be emerging in the way we increasingly collaborate around content production online via layered authorship - copyright is shared as more of us collaborate and swap ideas as thoughts are built upon again and again. As a result, multiple authors are recognised and shared information is not owned by any individual. Clearly, remuneration models for collaborative programmes need to evolve. If we are indeed going to undertake more pragmatic The residual approach to intellectual property creation, ownership and trading is more of a barrier to collaboration that an enabler. Reconciling the need for companies to work together globally and locally will involve making compromises, and we may even see a fundamental shift in how we measure success – away from GDP and income towards a more holistic perspective of progress. Some large, well-established incumbent organisations may argue for short-term incremental shifts, but it’s hoped that, in time, the big banks, energy companies and other controllers of the status quo will shift their positions. Pivotal in this shift is the expectation that many will either seek or be compelled to take a longer-term view around systemic change and that will imply wider collaboration. The residual approach to intellectual property creation, ownership and trading is more of a barrier to collaboration that an enabler.
- 46. 46 Within this, therole of public-private partnerships seems to be in ascendance. Although often criticised in some areas in the West, across Asia and South America the need and benefit for closer collaboration between governments and companies is evident. In Ecuador and elsewhere the successful transformation of Medellin in Colombia was highlighted as an outcome of closer public- private partnerships in city management and facility operation. In India, discussions on improving healthcare, education, transport and food supply all highlighted the potential available when more efficient execution of government ambitions can be achieved through collaboration with faster moving and more flexible private companies. Citizens, part of a shift towards more participatory government in some regions, will increasingly be more involved in both decision-making and execution. The state may take a step back and instead of leading will become the facilitator of building new relationships with people and industry that can co-create and co-provide solutions to problems. Theneedforgreatercollaborationinthefuturewilldrive many companies to re-organise themselves based more on social networks than traditional functional or business unit silos, so changing the structure of collaboration as well as the platforms upon which it operates. This could bring about a divide between meaningful networks based on shared values and emotions and those more superficial connections built purely on data. Within collaboration, time may well become a social currency, and time spent on working on collaborative projects addressing real societal issues could become the metric that drives reputation and social status. Rather than putting in cash, either from a philanthropic standpoint or as a more active investor, we may soon see a shift to individuals proactively seeking to give up their free time to help solve emerging problems, ensuring that the scale of action and impact can be far greater than that achieved when a couple of organisations decide to partner on a traditional joint venture. Already, collaboration in innovation is increasingly becoming more public and shifting from bilateral partnerships to grand challenges such as X-prizes that focus on problems currently seen to be unsolvable, or that have no clear path toward a solution. The future of interconnected systems The role of public-private partnerships seems to be in ascendance.
- 47. 47 One timely exampleof this is the award-winning SunShot initiative run by the US Department of Energy. It focuses on accelerating the point at which solar energy becomes cost-competitive with other forms of electricity by the end of the decade – essentially bring the cost per Watt of solar energy down from $3.80 to $1. Rather than funding research within energy companies, the approach has been to first engage the wider public population to generate new concepts that could help achieve the ambition. By then funding the best ideas through cooperative research, development and deployment projects undertaken by a combination of private companies, universities, state and local governments, non-profit organizations and national laboratories, the SunShot approach is to choreograph the ideal collaboration network for each concept. Halfway into the decade long initiative, it has been able to use its resources more intelligently and fund 250 projects that have collectively already achieved 70% of the target cost reduction. Going forward, big problems are seen to require completely different ways of thinking and cooperating and deeper, wider, more meaningful collaboration is for many an important part of the puzzle. Collaboration in innovation is increasingly becoming more public. Deeper collaboration Air quality Rising air pollution in many cities is killing people and becomes a visible catalyst for changing mind-sets and policies across health, energy, transportation and urban design. Flooded cities The vast majority of our cities are not prepared for flooding. Many districts and households can no longer get flood insurance and are in jeopardy. It’s going to get worse before it gets better. Infrastructure deficit Infrastructure again becomes a source of competitive advantage. Emerging economies invest in new railroads and highways for more effective movement of people and goods, while developed nations suffer from poor legacy. Privacy regulation The push towards global standards, protocols and greater transparency is a focus for many nations driving proactive regulation, but others choose to opt-out of international agreements and go their own way. Related insights
- 48. 48 50% – increasein energy stored in Lithium-ion batteries $5 billion – cost of the Tesla ‘Giga Factory’ Energy storage
- 49. 49 Energy storage Storage, andparticularly electricity storage, is the missing piece in the renewables jigsaw. If solved, it can enable truly distributed solar energy as well as accelerate the electrification of the transport industry. After years of rising prices and increasing demand, there is change in the air for energy supply, with many seeking to accelerate the shift to renewables. Although there are short-term factors in matching current supply and demand in varied regions, most agree that long-term we will move to a renewables- based energy system. At the moment solar energy is playing a small role, contributing around 0.6% of the world’s energy mix, but is expected to increase to between 5% and 20% by 2020 (depending on whose view you believe). The key variable is around cost. Today in some regions solar is already comparable with the cost of electricity from natural gas, in others government subsidies are used to make it competitive. Successful transformation of the energy system is increasingly being linked to the development and scaling of storage solutions and there is much optimism that substantial improvements will be achieved over the next decade. However, it would be rash to expect better storage solutions alone to solve our current energy crisis based as it is on a system focused around fossil fuels which simply hold their energy until it is ignited. It will take many years or even decades to shift to renewables. Controlling how and when energy is provided is implicitly linked to our ability to store it, especially so in locations where energy demand is not in sync with supply – whether that be from solar, wind or wave renewables or a wider energy mix. People have been looking forward to the advent of smart energy grids for some time and having two-way transmission of electricity between supplier and consumer is a core element of this. Today the main options for large- scale energy storage are pumped hydro-storage and batteries. California’s Inland Empire Utilities Agency uses spare energy capacity at periods of low demand to pump water up mountains so that it can be released at peak demand and turned back into electricity using conventional hydroelectric turbines. Meanwhile, though, the role that batteries can play in displacing other energy solutions, even with incremental change, can be significant. Battery costs are falling steadily – they have halved in the last five years. In the past, batteries have been made from materials such as lead-acid and nickel-cadmium. Highly toxic, some of these ingredients are also bulky and heavy. The rechargeable lithium-ion battery helped slim them down and these batteries now power not just smartphones and laptops but also power tools, electric cars and drones. Lithium-ion batteries have been steadily getting better and, with improved chemistry and production techniques, the energy stored in them has increased by 50%. Today the main options for large-scale energy storage are pumped hydro-storage and batteries.
- 50. 50 For some applications,such as electric cars, a better battery would be transformative. Until recently the battery for an electric car could cost $400-$500 per kilowatt-hour, perhaps 30% or so of the overall cost of the vehicle. General Motors (itself involved in about a dozen battery storage projects) expects the battery in its latest Chevy Bolt electric car to cost around $145 per kilowatt-hour; once costs come down to around $100 per kilowatt-hour, electric vehicles will become mainstream because they will be able to compete with petrol cars of all sizes without subsidy. Other organisations are looking at a more radical change in the technology. Sakti3 focuses on a lithium- ion battery with a solid electrolyte that offers about double the energy density; Dyson, the British inventor of the bag-less vacuum cleaner, recently bought the company. As Dyson expands into domestic robotics, expect to see solid-state batteries in the mix. And, with further engineering, maybe in electric cars and grid storage too; in large volumes, such solid-state batteries should cost around the target $100 per kilowatt-hour. Many research groups around the world are hoping for battery breakthroughs. 24M, a Massachusetts start-up, is using nanotechnology to develop a cost- effective “semi-solid” lithium-ion battery, while over in Cambridge, UK, there is much expectation from a new lithium-air cell that has overtaken current lithium- ion batteries in the amount of energy stored per kg. A spin-off of Carnegie Mellon University, Aquion Energy’s nontoxic, saltwater-based batteries are designed to deliver high-performance storage while avoiding the expensive maintenance of competing chemistries such as lead-acid. South Korea’s LG Chem is building on its experience supplying lithium- ion batteries for electric cars to provide residential, commercial and industrial stationary batteries. Alongside LG Chem, numerous other big lithium-ion battery producers, such as BYD, Johnson Controls, Panasonic, Samsung and Sony, are partnering solar installers, inverter manufacturers and innovative product integrators. Interconnected systems Once costs come down to around $100 per kilowatt-hour, electric vehicles will become mainstream.
- 51. 51 Perhaps most significantlyhowever, SolarCity, the largest residential PV installer in the U.S., is rolling out storage systems relying on lithium-ion batteries supplied by electric carmaker Tesla — whose CEO and founder, Elon Musk, is also SolarCity’s chairman. The duo’s entry into stationary energy storage is significant. SolarCity hopes to offer its solution to enable residential customers to take advantage of time-of-use rates, ancillary services and PV system interaction. It is spearheading a 200-kilowatt project to store energy from rooftop solar arrays at Tesla’s factory in Fremont, with the aim of helping Tesla offset millions of dollars in demand charges. Tesla (with its Japanese battery supplier, Panasonic) is building a $5 billion lithium-ion battery factory in Nevada - the ‘Giga Factory’. A new Tesla battery, Powerwall, can be used to store solar electricity generated at home, as well as lower electric car costs. Some see Tesla as much as an energy storage company as a manufacturer of electric cars. Some solar industry leaders see that within the next couple of years consumers will no longer be buying solar systems on their own, but rather a complete energy system, consisting of generation, storage, load-management and an app - all leveraged through big data analytics in the cloud. Each consumer will take more responsibility for storage, generation and usage, but do it in such a way that is less expensive than pure utility energy while the utility has access to what it needs to, to make sure that it plays well on the grid. Tesla’s Elon Musk highlights the possible network benefits of “system-wide implementation” of energy storage, including flattening peaks of electricity demand which could lead to far less conventional generation power plants being required – “you can basically, in principle, shut down half of the world’s power plants if you had stationary storage, independent of renewable energy.” Some see Tesla as much as an energy storage company as a manufacturer of electric cars. Energy storage Air quality Rising air pollution in many cities is killing people and becomes a visible catalyst for changing mind-sets and policies across health, energy, transportation and urban design. Full cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Key resource constraints Economic, physical and political shortages of key resources increase and drive increasing tension between and within countries. As we exceed the Earth’s natural thresholds, food and water receive as much focus as oil and gas. Speed to scale Greater global connectivity, growing consumer wealth and broader reach all combine to accelerate the time to 1bn customers and a $10bn valuation for start-ups and new corporate ventures alike. Related insights
- 52. 52 2 billion tonnes– amount of food wasted each year 50% – target reduction in US food waste by 2030 Food waste
- 53. 53 Food waste 30-50% ofour food is wasted either in the supply chain or in consumptionandcouldfeedanother3billion.Optimisingdistribution and storage in developing countries and enabling better consumer information in others could solve this. We live in a world where 1 in 4 of the calories we create are never eaten. Every day, consumers in the West throw away as much food as is produced in the whole of Sub Saharan Africa, while, globally, the 2bn tonnes of food wasted each year are equivalent to around $1 trillion of financial loss each year. Going forward, if we are to support another billion or so people on the planet this century, with limited land and water resources, reducing this massive wastage is perhaps the most significant shift possible to help us to feed the global population. Depending which region you are in, the nature of food waste shifts from production and storage to distribution and consumption; in developing counties, 40% of the loss occurs post harvest, storage and in processing, while in developed nations 40% of the losses are in retail and with the consumer. In China, losses of rice are at 45% of total production - in Vietnam it is 80%. In India, Delhi has Asia’s largest food produce market but no cool storage facility; so in soaring temperatures how can fruit and vegetables stay fresh? In South Africa, 50% of mangoes are damaged in the first mile of transportation, while in India 20m tonnes of wheat, equivalent to the entire production of Australia, are lost every year due to poor storage. Improving storage with simple, low cost methods such as using crates rather than bags and sacks can drastically cut food loss. The UN FAO has already built well over 50,000 small grain storage silos across 20 or so countries that are significantly cutting food loss. Refrigerated transport is clearly an ideal, but in the absence of that cool storage depots can have significant impact. Productivity around the world varies; India overall is half as productive as global averages – whereas US farmers produced 11 tonnes of food per acre, in India the figure is 3 tonnes. The problem is not about lack of land but inefficiencies of production; 90% of Indian farmers don’t use animal feed and therefore miss out on easy ways to improve yields. Given that we have pretty much used all the arable land we have available and urbanization and climate change are fast shifting the balance, higher productivity per hectare is a major theme. One option is clearly to increase the amount of genetic modification. However, when in some regions this is embraced, in others it is demonized. The GM actions that gain greatest support are for the introduction of drought tolerant and salt-resistant crops but many would argue that the problem can be solved without taking too many steps towards more GM food produce. Given US and Chinese support for this and the significant interests of companies such as Monsanto, ADM and Cargill, we are likely to see a combination of new varieties and the better adoption of today’s leading farming practices. Other actions called for include land reform in Africa and greater investment in funding famer education programmes to reduce post-harvest loss. India overall is half as productive as global averages.
- 54. 54 Also significant inthe list of areas for improvement is water supply and irrigation: as agriculture consumes 70% of our fresh water, reducing food waste frees up more water. In the US, where 30% of purchased food is thrown away, this means that half of the water used to produce food is wasted. Globally, shifting from flooding and spray irrigation to drip-and-trickle feed of water can improve productivity by over a third. In the Western world of retail, quality standards and obsessions with food appearance are the major issues driving food waste. One easy answer is to modify food labelling, as consumer confusion between ‘use-by’, ‘sell-by’ and ‘best before’ dates is a major driver of waste. In the UK, 20% of food thrown away by consumers is incorrectly perceived as being out of date, leading to calls for the wider use of just the use by date – now being piloted by Tesco across Europe. Another simple option is to redistribute food that is not sold. While unfortunately in many countries food safety regulations forbid the reuse of food, firms like Pret a Manger have made a point of giving unsold sandwiches and salads to the homeless while apps such as the US’s Leftoverswap have taken off in linking people with left over food, and in Australia Secondbite has redirected unwanted food to community food banks. A partnership of grocers, food brands and government should focus consumer awareness through education campaigns. Networked smart fridges and storage cabinets that interact with food packing to track supplies, use- by dates and link to on-line delivery firms are a direction of travel in some countries, for many simple attitudinal shifts of the consumer may be just as effective. Similarly, our expectation of perfect looking food 24/7 in every supermarket has to change; in many developed markets 50% of some vegetables harvested do not make it onto the shelves because they don’t look right. Interconnected systems Reducing food waste frees up more water.
- 55. 55 Considerable waste takesplace worldwide also in hotels and catering where 80% of food waste is attributed to events. Because they are cheaper to provide than plated service at tables, hotels typically favour buffets to feed lots of people. Although cost effective in terms of labour, buffets are incredibly inefficient in terms of the ratio of food consumed to that prepared, especially so with banquets. In some countries, more aware of the financial impact of the waste in food, many restaurants are seeking to improve efficiency. In many US cities, food can no longer be sent to landfill and instead it is either being redistributed or turned into energy – anaerobic digesters are popping up all over the place to turn food scraps into gas. In Europe, France has announced measures to reduce food waste and passed a law banning supermarkets from destroying unsold food, while, in the UK, Waitrose is just one of the supermarkets that has already diverted all its shop generated waste from landfill to anaerobic digestion. If we could reduce current food waste by just a quarter, that would be enough to feed all of the world’s hungry. If we can reduce it by half then we will free up enough to cope with an extra billion or so people on the planet. By 2050 the world will need 60 per cent more calories every day to feed 9 billion people. Cutting current food loss and waste levels in half will shrink the gap by 22 percent. As a step to this, in 2015 the US Department of Agriculture announced an initiative to reduce national food waste by 50 per cent by 2030. Driven both by the need for greater food security as well as resource conservation, many see that this may soon become a target elsewhere as well: the EU has the same target by 2050. Today, across the world, we have no meaningful food waste data. If, as we move forward, robust and consistent data collection occurs and is used to both improve famer education, highlight process efficiency opportunities and support clearer guidelines for consumers, then we should be able to make significant progress. By 2050 the world will need 60 per cent more calories every day to feed 9 billion people. Food waste Full cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Nature’s capital In the Anthropocene, humankind is presiding over the Earth’s sixth major extinction. But as biodiversity declines, nature becomes increasingly valued and valuable. Plastic oceans There are increasing high levels of man-made pollution in many of the world’s seas and little actually disappears. By 2050 there will be more plastic than fish in the oceans. Key resource constraints Economic, physical and political shortages of key resources increase and drive increasing tension between and within countries. As we exceed the Earth’s natural thresholds, food and water receive as much focus as oil and gas. Related insights
- 56. 56 80% – globalGDP generated by 600 urban centres 75% – world’s natural resources consumed by cities Intra city collaboration
- 57. 57 Intra city collaboration Increasingcompetition between cities overrides national boundaries and drives change. They compete to attract the best but also collaborate to avoid the downside of success – over-crowding, under-resourcing and pollution. Global trade and power is generally defined between governments at a national level; nations acting collectively to negotiate deals to their mutual benefit, on occasion with the support of organisations such as the WTO. This process is often time-consuming, and fails to deliver benefits for specific regions. For city administrations this can be particularly frustrating as they are disproportionately responsible for most of the world’s output - 600 urban centres generate 80% of global GDP. As a result, some cities have become more actively involved in generating trade and business opportunities, their influence increasing depending on the amount of revenue they generate. Such is their success that some argue the focus in the future will no longer be between nations - rather it will be between cities. The concept of the city-state, last seen in the eighteenth century, is about to enjoy a renaissance. Cities offer opportunities to prosper that cannot be found elsewhere. The sheer proximity of others allows smart people to more easily connect with other smart people to do business, attract funding and find customers. While economic size and growth are important and necessary, several other factors determine a city’s overall competitiveness, including its business and regulatory environment, the quality of human capital and indeed the quality of life. To truly prosper, cities need more than office buildings and research parks. Cafes, concerts, art shows and open spaces are all necessary to allow creative people to meet and interact. Across the world huge investments are being made to create liveable, healthy cities, encouraging more walking or cycling, improving public transport and adding green spaces - New York’s High Line, London’s Olympic Park and Seoul’s rediscovered Cheonggyecheon River are all good examples. In addition urban developers are keen to focus on culture. Abu Dhabi, for instance, is developing the new Saadiyat Island cultural district, an area a quarter of the size of Paris with three new museums (the Louvre, the Guggenheim, and the Zayed) at its centre. It aims to position the city as a leading showcase for art in the Middle East and is at the heart of a plan to reshape Abu Dhabi’s oil- dependent economy by 2030. The city brand is also important, and projecting the right image to attract the right kind of people works. New York for example is proud of its “never sleeps” by-line but Austin, Texas uses the slogan, “Keep Austin Weird”, highlighting the city’s commitment to creativity. It acts as a reminder that urban growth should not drive out the culture that shaped its identity and appeal. Urban developers are keen to focus on culture.
- 58. 58 A group ofelite cities are now playing an increasingly significant role. Mayors of mega cities such as London or New York are directly accountable to their constituents for their decisions, and are more nimble than state and national elected officials. This means they are able to take decisive action, often with immediate and impactful results. From trade to migration to innovation, their influence is key. Congestion zones in London, ‘fat taxes’ in New York, bicycle rentals in Paris (and everywhere) and multiple BRT systems which improve urban transport are all examples. Consider also Melbourne’s 1200 Buildings programme, which encourages energy efficiency upgrades to commercial buildings; or the environmentally sensitive building codes deployed in Hong Kong, New York, Singapore and Sydney. Most recently Oslo has announced that it will ban all private cars from the city centre by 2019. Although arguably not yet as directly influential as the city states of old, many predict that it will be city councils and not state governments that will drive significant urban change in the future. The downside of this is that as city influence extends beyond the confines of their national government, government interest in the rural hinterland will diminish. City dwellers can become increasingly disengaged from those who live in rural areas, leading to growing social problems - an estimated 70 million impoverished Chinese children are left in the provinces whilst their parents find work in the city. They are much more likely to be undernourished, and underperform at school than their urban equivalent. Other countries experiencing large-scale urban migration such as Sri Lanka or the Philippines are experiencing similar problems. Continued growth makes cities vulnerable to the by-products of their success. Cities now consume 75% of the world’s natural resources and produce more than 60% of the greenhouse gas emissions. Rapid urbanization makes them unpleasant to live in, sometimes even for the rich. Cracks are forming in multiple locations; in South Africa the lack of public transport obliges slum-dwellers to take expensive minibus-taxis to work; many cities, from Pakistan, the Philippines, Dar es Salaam and Delhi, are plagued by brownouts and poor sanitation (forcing them to resort to drinking costly bottled water). In London the city centre has become a ghetto for the super rich; it has become simply too expensive for key workers to live in, so there is a shortage of nurses, teachers and policemen. Unless cities provide effective transport, power, sanitation and security, they will not attract the right workers to ensure they fulfil their economic potential. Many are addressing the problems through collaboration. The C40, for example, connects policy makers from 83 cities around the world in order to address climate change by learning from each other about issues such as waste management, building efficiency and transportation. Interconnected systems Elite cities are now playing an increasingly significant role.
- 59. 59 Cities of coursedo not always grow. In some places they are shrinking. This is the case in the US where almost one city in ten is shrinking, as are more than a third of German ones. Chinese cities may well suffer the same fate as its population reaches it peak by the middle of the century – some of its older industrial boomtowns are already in decline. In order to survive, smaller cities will have to decide: do they invest in transport infrastructure so they become commuter towns, or is it better to focus on other areas that generate development and employment in the city? Planners will have to work hard to identify policies that will be successful, with only a few brave enough to follow the example of Dessau-Rosslau in Germany and Pittsburgh in America, where derelict buildings were simply knocked down and the land allowed to return to nature. Many are addressing the problems through collaboration. Intra city collaboration Citizen-centric cities Successful cities will be designed around the needs and desires of increasingly empowered and enabled citizens - who are expecting personalized services from the organisations that serve them Deeper collaboration Partnerships shift to become more dynamic, long-term, democratised, multi-party collaborations. Competitor alliances and wider public participation drive regulators to create new legal frameworks for open, empathetic collaboration. Flooded cities The vast majority of our cities are not prepared for flooding. Many districts and households can no longer get flood insurance and are in jeopardy. It’s going to get worse before it gets better. Skills concentrations The need to build and develop capabilities becomes increasingly challenging for companies and workers alike. Those who benefit from the high-skill reward opportunities remain a select group who move ahead of the urban pack. Related insights
- 60. 60 80% of everythingwe use or consume has been on a ship 18,758,93 – number of TEU containers globally Open supply webs
- 61. 61 Open supply webs Theshiftfromcentralisedproductiontodecentralisedmanufacturing drivesmany to take a ‘smaller and distributed’ approach: Global supply chains are replaced by more regional, consumer-orientated supply webs and networks. In the past companies have sought to manage their own supply chains to optimize control and effectiveness of delivery to production facilities and then on to distributors and retailers. With many organisations now seeking to take advantage of on- line efficiency opportunities while hedging supplier options, leaders see a shift not only to a multiple web of connections but also to one increasingly shared by competitors and collaborators alike. Key to this shift is increasing transparency, the need for fast global access to products and services and rising consumer expectations on product quality, cost and availability. Moving things is clearly big business. Over 80% of everything we use or consume, it’s been estimated, has, at some point or another, been on a ship, either as a finished product or a component or ingredient. Whether importing cocoa from Cote d’Ivoie, sending LCD displays from Seoul or exporting T-shirts from Bangladesh, the need for companies to plan, manage and execute timely provision of product worldwide has become a major source of competitive advantage for many years – and one that has become both strategic and long-term as well as short-term operational and tactical. For some, logistics prowess has altered the basis of competition: “Companies don’t compete – supply chains do.” Over the past few decades, the investment made into setting up and optimizing global supply chains has been considerable. With multinationals manufacturing products in multiple factories across the globe, to supply to a growing yet dispersed consumer base, supply chain management became a core corporate USP. Whether in relatively simple food produce or complex automotive products, companies have set up complex supply chains across multiple tiers. Tier 1 suppliers - such as Bosch - provide myriad finished components, from air-conditioning units to fuel injectors to car brands globally; but they, in turn, acquire components from other Tier 2 and 3 supplies around the world. As companies have sought to ensure continuous availability of products to customers globally, the ownership and control of supply chains has become pivotal to success. However, changes are happening fast – from digital marketplaces and 3D printing to mass personalized distributed, local supply – and they are challenging the status quo. Digital marketplaces are not only improving the efficiency and access possible by more organisations, but are also significant increasing transparency in terms of consignment location tracking and cost of shipment, making what was previously hidden within the organization visible to all. 3D printing, although still in the search for mass- market applications, is redefining the means of product delivery. It has already had significant impact in the aerospace sector and is now moving across to other industries. Rather than shipping product half way round the world, we may soon be able to print off components in our home – obviating the need for a supply chain except for the metal and plastic material and the 3D printer itself. Digital marketplaces are not only improving the efficiency and access possible by more organisations, but are also significantly increasing transparency in terms of consignment location tracking and cost of shipment.
- 62. 62 More companies areoffering local finishing, whether for final assembly of consumer electronics to meet customer specifications or locating option fitting for a BMW at a local dealership, elements of end production is becoming more distributed and hence undertaken in smaller batches. Amazon has already filed patents for installing 3D printers in delivery trucks, thus taking the concept of real time to a new level. Customer proximity is driving a need for more flexibility in a global / local world. This flexibility, or agility, now extends to the need to increasingly hedge options – not only against different production costs and currency exchange, but also against supplier risk. As the age of the vertically integrated corporation has started to recede, so new, more fluid, flexible alternatives have started to emerge. Beingmoreagile,streamlinedandrobustareaspirations to transform supply chains from logistics operations focused on cost management and efficiency into more dynamic networks that facilitate swifter response times. Companies are moving from running supply chains to establishing supply webs where the democratized flow of information, mostly in the cloud, enable a complex, three dimensional network of partners, customers and suppliers operate across a web rather than a chain. When shipping lanes clog, infrastructure fails, currency exchanges fluctuate or a factory shut down impacts component supply, organisations can gain from a more responsive flexible network of different options to maintain product delivery to their customers. At the same time, a more transparent supply web allows low- level suppliers to see their positions and so compete on a more level playing field than before. According to Deloitte, supply chains have evolved into value webs that span and connect whole ecosystems of suppliers and collaborators. These webs can be more effective in many ways – by reducing costs, improving service levels, mitigating risk and driving learning and innovation. Moreover, as new technologies generate more data and so provide greater transparency, the move to the web approach may well accelerate. Organisations such as Caterpillar are ‘driving towards a lean, responsive, and resilient global supply network’ and are seeking to better ‘lead coordinate a vast and decentralized web of interconnected suppliers.’ Interconnected systems Companies are moving from running supply chains to establishing supply webs.
- 63. 63 Although a numberof companies have already moved to proprietary webs, or shared webs across partners, the cost of supporting multiple options has, for some organisations, increased liability. While flexibility has increased, so has the base-line cost of supporting the more complex global infrastructure. This largely technology enabled improvement of inter- firm coordination has also coincided with a long-term political shift – that of trade liberalization by some nations and regions around the world. Together the forces that have enabled offshoring, on-shoring and global outsourcing have changed the nature of trade and production. However, a key issue here has been the balance of local and global. Nestle, for example, sees that ‘food is a local issue’ and so has a core principle to ‘centralize what you must, but decentralize what you can.’ Webs that enable better collaboration are replacing traditional, closed arrangements associated with old-fashioned supply chains. While private supply networks were constrained to a single company’s network and long-term strategy and so compromised by location and capacity of a single company’s facilities, shared supply webs reduced this constraint by sharing partners facilities. In an open shared web, operational efficiency is improved by opening space and assets to other companies’ short-term needs, geographic reach is extended and customers gain from fast and reliable provision from globally dispersed facilities. Companies that join in to exploit a more open supply web have access to more distributed manufacturing, assembly and distribution facilities that can be used for both short and long term contracts – but without the requirement to be involved in large investments, long-term leasing or strategic partnerships that may need to evolve as markets change. It is argued that open supply webs allow companies to achieve better global distribution than ever previously available. Enabled by the digital marketplaces, driven by increasing demand for customer proximity and mass customization and able to provide multiple hedges, open supply webs are seen as the way forward for many manufacturers both large and small. As we move forward, the core questions will be how will organisations seek to balance the reward of greater efficiency from adopting the shared, and open, supply webs approach to distribution against the apparent commercial risk of partnerships with competitors and the like. The reality, so some see, is that the transparency and effectiveness of a more flexible approach will become the main driver in making the open supply web the norm for the future. In an open shared web, operational efficiency is improved by opening space and assets to other companies’ short-term needs. Open supply webs Dynamic pricing The algorithms of Amazon and Uber cross over to affect more businesses, from energy use to parking. Real-time transparency allows better purchasing at the same time as margins and yields are automatically enhanced. Shifting power and influence The centre of gravity of economic power| continues shifting eastwards, back to where it was 200 years ago. Recent superpowers seek to moderate the pace of change but the realities of population and resource locations are immoveable. Optimising last mile delivery Seamless, integrated and shared last-mile delivery replaces inefficient competition and duplication of goods distribution. Greater efficiency in moving things is as important as in moving people and so a major focus for innovation. Standards driving trade International regulation is progressively aimed at freeing up trade and making it simpler and less bureaucratic – but there are a number of agreements, standards and protocols that some are seeing as increasingly constraining. Related insights
- 64. 64 2.8% – globalGDP economic burden of obesity 11.6% – Chinese who are now diabetic Urban obesity
- 65. 65 Urban obesity Mass urbanisation,reduced activity and poor diets are accelerating the rise of obesity. Levels of obesity in most cities are growing fast and the associated healthcare burden will soon account for 5% of global GDP. The obesity epidemic has been a major concern for many developed countries for a number of years. However, with increasing urbanisation and sedentary lifestyles in other regions, it is now accelerating as a primary health issue in India, China and other fast- shifting nations across Asia and Africa. While many in some rural communities are still suffering from poor nutrition, their fellow citizens in the cities are increasingly overweight and obese. Thirty per cent of the global population is overweight or obese and this is set to rise to 50% by 2030. Associated chronic diseases currently account for 5% of worldwide deaths, while the economic burden of obesity is currently around 2.8% of global GDP – roughly $2 trillion – and by 2020, with increasing incidence of heart disease, strokes and type-2 diabetes, could double. Even ignoring the significant loss in economic productivity each year, by 2030, healthcare costs due to obesity are projected to add an extra $550 billion and so account for 16 to 18% of total US healthcare expenditure; the average American is 11kg heavier today than in 1960. Many governments see obesity as the main driver of a healthcare funding time bomb. The prevalence of obesity is still rising in developed economies and now, as emerging markets become richer, they too are experiencing rising prevalence. Globally the nations with the highest ratios of overweight and obese populations continue to be the Pacific Islands followed by many of the Gulf States such as Kuwait, Qatar, Saudi Arabia and the UAE and then the more populous US, Mexico and South Africa. However, although much of Asia and Africa are, on average, well under half the US level of obesity of 35%, things are changing quickly and especially in the cities. In both India and China the prevalence of obesity in cities is three to four times the rate in rural areas. In 2014 in China over 25% of the adult population was overweight or obese. As the Chinese consume more fatty foods and more fizzy drinks, there is a growing health crisis in both heart disease and diabetes – 11.6% of Chinese are now diabetic, almost as high as in the far fatter US. Although the China populations’ average daily calorie intake has dropped slightly over the past decade to around 2,000 calories, it is the shift of people to the cities that is impacting on health. More sedentary manufacturing and office jobs have replaced active rural farming (reducing daily energy expenditure by 300 to 400 calories), while walking and cycling have been replaced by sitting in cars and buses (a further 200 calories). For children in Chinese cities there is even less exercise with the obesity rate for boys around 7% - twice that of men. In 2014 in China over 25% of the adult population was overweight or obese.
- 66. 66 In India, migrationfrom rural to urban areas is also associated with an increase in obesity, particularly abdominal obesity, which drives other health risk factor changes such as insulin resistance, diabetes, high blood pressure, and dyslipidemia. Urban men and women have higher blood pressure, dyslipidemia, and pre-diabetes than rural men while the rates of obesity and diabetes are more than double in urban Indians than rural Indians. National and state government focus will need to shift to micronutrient deficiencies in urban areas. This will help not only to stem the rising tide of obesity incidence but also seek to improve pregnancy outcomes, physical development and decrease the risk of infant mortality. Across Africa, the issue of rising urban obesity, especially for the poor, is evident. In Kenya, Sengal and Ghana urban obesity is running at twice the level found in rural areas, while across the continent the figure is nearly three times – over a third of Africa’s urban population is overweight or obese and most of the recent increase has been in non-educated poor women. Given that obesity has a higher incidence in disadvantaged households, it also imposes a disproportionate burden on these already disadvantaged households in terms of healthcare costs. Cities around the world are coming up with initiatives to combat this. In Paris, car ownership has dropped by 50% since 2001, while in London twice as many people now ride a bike as they did at the turn of the century. Taipei has encouraged many women to take up cycling via its YouBike sharing scheme and New York has joined London and Paris is expanding its bike-sharing programmes while simultaneously reducing speed limits for cars. The challenge is for the fast growing cities in developing countries to emulate this shift – or come up with their own way to get citizens off their bottoms. Alongside healthier meals and smaller portions, other areas of focus to help stem the trend, especially for the escalating challenge of obesity in children, include addressing education and inequality. According to the CDC, in the US childhood obesity for some has been directly linked to both the education level of the head of the household and also lower-income families: obesity among children whose adult head of household completed college is approximately half that of those whose adult head of household did not complete high school while obesity prevalence is also highest amongst families with an income to poverty ratio of 100% or less. Interconnected systems In Kenya, Sengal and Ghana urban obesity is running at twice the level found in rural areas.
- 67. 67 Recognising the dualchallenge of education and income in the mix, many government initiatives aimed at reducing the social impact of obesity are seeking to better inform parents about diet and calorie intakes while also inspiring children to be more physically active. More widely attention is being focused on fast food, often the standard source of daily food for the poor. In the US, while the number of restaurants per head of population has doubled, the average cost of a ‘regular’ fast-food meal has not changed since 1990 and, despite more labelling, many are concerned about the cheapness and quality of what people are eating. So, as part of the regulatory fight-back, expect to see more banned junk food in schools, more fat taxes on carbonated drinks and other sources of sugar as well as more nutritional information on restaurant menus. With the prevalence of severe obesity globally expected to increase by 130% over the next two decades, what was once seen as a rich-country problem has become the top health concern worldwide. Alongside the ageing demographic, obesity is seen as a primary driver of increased healthcare spend which few nations can afford. In the UK, obesity has the second highest social impact after smoking, already accounting for 3 per cent of GDP. Although some say that we may be reaching peak-obesity in some countries, in others the trends, especially in cities, are clearly upward. With mass urbanisation adding more people to cities, food becoming cheaper and cheaper and 1 in 12 of the global adult population now having diabetes, the social and economic burden of urban obesity is, like many tummies, getting bigger and bigger. Obesity has been an issue for a while. We know the problem and we know the solutions. The question is how long it will take us to change? Urban obesity Expect to see more banned junk food in schools, more fat taxes on carbonated drinks and other sources of sugar. Affordable healthcare The escalating cost of healthcare is further stressed by the need to support the old and the chronically ill. Spending 20% of GDP on healthcare is seen as unsustainable so hard decisions are taken around budgets and priorities. Full cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Imbalanced population growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Mass Engagement As the public voice becomes easier to access and harder to suppress, leaders seek to engage to create, develop, secure and maintain legitimacy for their initiatives and policies – so further reducing their hierarchical power. Related insights
- 68.
- 69. 69 Data revolution Many ofus are living in an increasingly digital world that is both enriching and adding complexity to our lives. As data becomes increasingly embedded in most of what we do and correspondingly has greater value, issues of data ownership, access and privacy are rising up many a government and corporate risk list. Whether public or private data, open or closed, the impact of big data is becoming pervasive across many industries, geographies and demographics. As our recognition of the capacity and capability grows many see that we are on the cusp of a data revolution. The topics covered in the following pages are: Changing nature of privacy Data ownership Privacy regulation The increasing value of data Enhanced performance Ethical machines Truth and illusion
- 70. 70 40 billion –connected objects by 2020 86% – internet users have taken steps to remove or mask their digital footprints Changing nature of privacy
- 71. 71 Changing nature ofprivacy As privacy is a public issue, more international frameworks seek to govern the Internet, protect the vulnerable and secure personal data: The balance between protection, security, privacy and public good is increasingly political. In 2016 the privacy conversation is still rather low key, a debate taking place in a closed community comprised primarily of academics, lawyers, regulators and security executives. This won’t last. The privacy issue will transition from being considered a dry legal matter to one that is more widely understood and debated both commercially and by consumers. The new opportunities presented by big data, balanced with the increasing risk of data breaches, will ensure it climbs up the public agenda, becoming an important political issue along the way. Currently the main international reference frameworks used for privacy and data protection are the OECD guidelines, the European Union Data Protection Directive and the Asia Pacific Economic Co-operation Privacy Framework. The approach to privacy differs with each organisation; some data protection regimes apply equally to those processing personal data; others apply different rules to specified industries such as the health sector, types of processing entity such as public authorities or categories of information such as data about children. Up till now, personal data has driven the digital economy but the Internet of Things adds a rich new information source that can be collected, transmitted, and stored online at comparatively little cost. In order to maximise the opportunity this presents, technology companies will have to tread carefully around the privacy issue. Citizens will push back against the notion that their personal data can be used, seemingly without consent or direct benefit, for corporate profit, while governments, increasingly concerned about cyber terrorism, will demand more immediate access to personal data as a matter of national security. The challenge will be to satisfy both requirements, separating the practical from the ideological, while at the same time ensuring long- term profitability. Matters will become even more complicated when the networks are faced with the management of the expected torrent of new data from the myriad ‘things’ which will soon generate their own puffs of information. Awareness both of the opportunities and risks this presents is growing as commercial organisations, governments and, increasingly, consumers, all vie to maintain control. Given the global nature of data some suggest the need for international regulation, an independent arbiter that can monitor activity and offer judicial support. But how can this be delivered? One option put forward by Sir Tim Berners-Lee, the founder of the Internet, is the creation of a ‘Magna Carta for the Web’, to ensure the Internet remains open and neutral by enshrining key principles in a global constitution. He states there is a need to “hardwire the rights to privacy, freedom of expression, affordable access and net neutrality into the rules of the game,” and warns that if we are not careful, lack of awareness and general apathy might lead to a gradual erosion of the right to privacy by large organisations. Action should be taken to prevent this. Technology companies will have to tread carefully around the privacy issue.
- 72. 72 Data revolution So somethingneeds to be done but there is a lack of agreement about what this should realistically be; in 2015, the result of this impasse seems to be inactivity. Research by UNCTAD found that by 2013 only 107 countries had developed legislation to secure the protection of data and privacy, while another 33 draft bills were pending enactment. Many of those privacy laws have been developed on an ad hoc basis and are often bitty, disjointed and unable to keep up with the very technology they are designed to influence. Meantime, technology is driving relentlessly onwards, and we are now witnessing the emergence of new business models designed to circumvent third parties and put the individual back in control of their personal data. Tech companies now provide consumers with increased encryption options thus absolving themselves, to some extent, of the responsibility of data protection. This has created problems for law enforcement agencies as end-to-end encryption makes it impossible for the companies that process or carry the data to unscramble it. Despite this, it is becoming the norm, e.g. IBM has licenced its server chip technology to Chinese manufacturers in a way that gives them control over encryption. The implication is that huge swathes of the Internet can now “go dark”. This presents a huge challenge for many of the established Internet business whose default model is based mining and repackaging data. Separating them from the sources of supply also challenges the assumption that the organization should be the natural and legitimate point of ownership and control of personal data. Lack of understanding amongst politicians is delaying much needed privacy regulation that should protect both consumers and business. Perhaps particularly challenged as to how to respond are emerging markets, where the Internet take up was initially slow. Mobile technology has meant connectivity has risen exponentially and legislators are having difficulty in catching up. The UNCTAD report showed that out of 38 countries in Africa, Asia, Latin America and the Caribbean, 75% of government representatives have difficulties in understanding the legal issues related to privacy. This figure was reduced to 68% when understanding cyber crime. Huge swathes of the Internet can now “go dark”.
- 73. 73 Data ownership Individualsrecognize the value of their digital shadows, privacy agents curate clients’ data sets while personal data stores give us transparent control of our information: We retain more ownership of our data and opt to share it. Deeper collaboration Partnerships shift to become more dynamic, long-term, democratised,multi-party collaborations. Competitor alliances and wider public participation drive regulators to create new legal frameworks for open, empathetic collaboration. Off grid People living off-grid, by inequality or choice, can exacerbate societal division or improve privacy, health and wellbeing. Either way, doing so provides fertile ground for innovation. Privacy regulation The push towards global standards, protocols and greater transparency is a focus for many nations driving proactive regulation, but others choose to opt-out of international agreements and go their own way. In addition, cultural differences about the interpretation of privacy also need to be addressed. There is no standard for anonymisation for example. The European ruling on the ‘right to be forgotten’ was described as “disappointing” in the US where the idea of deleting information from the Internet is interpreted by some as a threat to freedom of speech. That, in order to function effectively, personal data, codes and locations are shared across multiple jurisdictions by operators, manufacturers, developers and even the users themselves, complicates things. But differences are still more regional; even in the US every state has its own definition for what constitutes an adequate standard. If a global regulatory framework is possible it is likely that, although the principles will remain consistent, the implementation will be localised and diverse so the idea of privacy having borders will become a reality. The establishment of clear principles is a good start but, such are the complexities that it is difficult for legislators to identify a specific body or organization that can take overall responsibility and in particular create standards around privacy that would be acceptable to all even at this stage of the game. In the next ten years it is hoped that harmonization will take place; the key question will be how this can be achieved, and which organization will take the crown and establish the global standards. The changing nature of privacy There is no standard for anonymisation. Related insights
- 74. 74 2 billion –number of smartphone users globally in 2016 60% – share of all mobile data from video in 2020 Data ownership
- 75. 75 Data ownership Individuals recognizethe value of their digital shadows, privacy agents curate clients’ data sets while personal data stores give us transparent control of our information: We retain more ownership of our data and opt to share it. As public understanding of the value of our digital shadow grows, so does our appetite to retain ownership of it. Individuals, increasingly aware of security issues and the dubious behaviour of some organisations, decide how, when and with whom to share their personal data. Personal data stores provide more transparent control, while privacy agents and data brokers help curate our data sets. Many companies, whose success is based on access to customer data, adapt their business practices to cater for this. Until recently, in general people felt quite comfortable trading elements of their personal life in return for better online services, to assist with health research or traffic surveys and the like, believing that anonymised data is impossible to trace back to source. In fact it’s not that simple. The removal of personally identifiable information such as names, date of birth, addresses do little to cover our tracks. These days the ability to compare databases makes it almost impossible to ensure anonymity is maintained; even participants in a genomics project have been identified by matching their details with data from electoral rolls. This, combined with a growing awareness that companies are benefitting disproportionately from the collection and sale of personal information, is driving the desire for greater individual control of personal data. It has also created a dilemma; how best to balance the benefits and conveniences that open data undoubtedly provides with the desire to retain personal power and control. Total privacy in a connected world may be an impossible goal but there are alternative ways to use the Internet without having to sacrifice everything to corporate search engines. The IndiWeb, for example, is a set of software utilities aiming to secure individual ownership of all the information posted including photos, status updates, blog posts, comments and so on – and all this without being cut off from the rest of the net. It paints a vision of a world where easy-to- use open source software makes publishing - while keeping your own data - possible. The Internet has made value of ourselves. We are not, after all, paying for products such as social network services - so by default connectivity has turned us all into a commodity that needs to be managed and controlled. But not everyone will want to take on this responsibility or to be as hands-on with regard to the management of their data as the IndiWeb requires. What, then, is the alternative? One suggestion is that individuals retain full ownership of their own data in machine-readable format but outsource its management and distribution to professional curators, who will ensure that appropriate policies are maintained and, under instruction from the owner, will be prepared to trade personal data in return for benefits. Look out for ‘privacy agents’, brokers who act as intermediaries and manage the flow of our data. Some customers will even hire ‘personal data managers’ who can operate in the same manner as financial advisors do today to make the process easier still. Expect the number of personal data managers to grow as they seek to manage and protect both ‘free’ individual data sets and the more commercially lucrative aggregated data. Furthermore, developments in authentication Connectivity has turned us all into a commodity.
- 76. 76 Data revolution systems willcreate new personal data platforms that will utilize universally accepted credentials that can be shared with multiple brand partners for marketing purposes. The length of time that companies are able to hold on to data remains a thorny issue, as, although the principle of ‘the right to be forgotten’ has now been established, the process is still evolving and is very complicated. Some decisions - such as the removal of links to revenge porn - seem straight forward; others are not so, for example reports of violent crime committed by someone later acquitted because of mental health issues. For most of us it seems the Internet has a long and unforgiving memory. This will be addressed in part through the development of services that promise to limit the time they hold data; the marketplace for this will grow as customer awareness increases. There is of course a world beyond the familiar Google, Facebook and Amazon. The dark web is epitomized by the encrypted world of Tor Hidden Services, where users cannot be traced and cannot be identified. The Tor project is a not-for-profit organization that conducts research and development into online privacy and anonymity. It is designed to stop people, including government agencies and corporations, learning users’ location or tracking their browsing habits. It is downloadable for free and, alongside many who want to avoid censorship, it is increasingly used by those who choose to opt out of the traditional search engines. Essentially Tor lets people “go dark”. But as consumers make this choice, brands and organisations will fight harder for their customers and at some point “dark” may be expected to pay for the privilege. Meantime the mainstream Internet will certainly be a big market for privacy products as companies attempt to limit the risk of a mass migration of their customers. Indeed they may well find that privacy itself becomes a useful marketing tool. The Internet has a long and unforgiving memory.
- 77. 77 Dynamic pricing Thealgorithms of Amazon and Uber cross over to affect more businesses, from energy use to parking. Real-time transparency allows better purchasing at the same time as margins and yields are automatically enhanced. Mass engagement As the public voice becomes easier to access and harder to suppress, leaders seek to engage to create, develop, secure and maintain legitimacy for their initiatives and policies – so further reducing their hierarchical power. The increasing value of data As organisations try to retain as much information about their customers as possible, data becomes a currency with a value and a price. It therefore requires a marketplace where anything that is information is represented. The real sharing economy Increasing collaboration drives organisations to reconfigure based on social networks and impact. Real sharing enterprises, not driven by profits, seek to share resources, knowledge, and decision-making responsibilities. Given that data has a value, questions are also arising around data ownership on death. What happens to all those images, likes and dislikes and emails stored in the cloud? Some see the inevitability of a citizen- centric data eco-system that empowers individuals with control and visibility over all data created by, or impacting on, them, including data after life – the onward usage of inherited data. Regulation has yet to catch up with the growing amount of digital assets that are stored on shared servers, some in different countries to their users. Currently it seems that the Internet firms and service providers can make the final decision on this but even then procedures vary from company to company. This is not only distressing for those dealing with grief, it is also curiously archaic. As social media ages and the number of deceased users increases, expect this to be addressed either on a country-by-country basis or more effectively by international consensus. Data ownership Regulation has yet to catch up with the growing amount of digital assets. Related insights
- 78. 78 10.90 seconds –Paralympic record 100m for T44 amputee 1500 – electrodes connecting retinal prosthesis to brain in 2015 Enhanced performance
- 79. 79 Enhanced performance We aredeveloping key technologies that could integrate humans and data to make us safer, more informed and potentially super- human in performance - but should we? The idea of human enhancement is not new. For years now we have variously been seeking to improve our cognitive, emotional and physical capabilities using training, drugs or technology. What we are now seeing however is the convergence of a whole series of pharmaceutical, biological and mechanical developments from different arenas coming into view. Whether from DARPA-sponsored military programmes aimed at creating the super-soldier; medical projects looking to overcome blindness, Parkinson’s or Alzheimer’s; or advanced prosthetics aiming to replace functionality of limbs and organs lost in accidents or on the battlefield, a host of proven technologies are passing out of the R&D lab and getting ready to enter the mainstream. Some will take decades to gain widespread acceptance but others are just around the corner. Within the world of enhanced performance, many people are now aware of cognitive enhancing drugs, hearing aids and retinal implants that improve our senses, and even bionic limbs that restore mobility. Most of these have been developed to bring the disabled and the injured back towards full functionality, but many are now being used to take us that little bit further towards supra-human performance - more Iron Man or Batman than Superman. Technology is being used on, within and around the body that can take our eyesight, hearing, memory, stamina, pain thresholds and even cognition beyond the norm. We will work longer, both in years and hours; work harder and operate in more hostile environments; but also work smarter, accessing and using our own and others knowledge and skills more effectively. While they have emerged from a number of areas including neuroscience, computing, engineering and biotechnology, the issues that are now being raised by their further evolution are touching the political, social, ethical and regulatory worlds. Developments in neuroscience and pharmacology have led to a host of drugs that used to treat patients with neurological and neuropsychiatric disorders but are now being trialled with healthy people to enable them to perform with enhanced cognition. Cognitive enhancersnowincommonuse(e.g.methylphenidate, atomoxetine and modafinil) variously increase alertness, prevent sleep, overcome jetlag, improve productivity and raise motivation. Add on integrated implants and wireless-data connectivity, and we enter the world of brain stimulation via both invasive and non-invasive trans-cranial technologies. Advances in molecular biology, neurology and material science are all leading to implants that will be smaller, smarter, more stable and energy efficient. For example, the Wellcome Trust in the UK is trailing a silicon chip that sits directly on the brain of Alzheimer’s patients, stimulating them and warning of imminent episodes. Scientists and Brown University’s BrainGate programme are experimenting with using implants to translate thoughts into actions for people with neurological impairments, inserting a small chip with 100 needle-like wires into the part of the neocortex that controls movement, feeding signals to external robotic devices. The same technology, it is argued, could be used to allow people to control machines and devices outside the body through thought alone. Implants that will be smaller, smarter, more stable and energy efficient.
- 80. 80 As well asproviding enhanced cognition, the US military is looking at how similar approaches can be used to diminish sensitivity to pain and tiredness. While the Geneva and Hague conventions prohibit the use of torture, ethical questions are being raised about what you do with enhanced soldiers who feel little pain and don’t need sleep or food. As we change human biology and seek to create a super soldier, some are asking whether we will have to change the laws of war. While in the past we have created add-on devices such as hearing aids, cochlear implants, glasses, infrared goggles and prosthetics in a bid to correct or improve our physical capabilities, recent advances in bioengineering, microelectronics and computing are all moving the art of the possible forward. Bionic limbs and exoskeletons developed by DARPA for the US military have not only enabled injured soldiers to regain functionality but also provide better-than- human performance. Most significantly wearable is becoming implantable. Outside the research labs, amateurs are bio-hacking their bodies. Starting a decade ago with the insertion of RFID tags between fingers and electromagnets into fingertips, data is now being generated, accessed and manipulated by humans. DIY cyborgs are upgrading their bodies without waiting for corporate bodes or authorities to say okay. Retinal implants are another area of fast change. We are no longer talking about blurred black and white images but sharp, full colour and even high-resolution video. US firm Second Sight gained FDA approval back in 2013 for a bionic eye implant that wirelessly feeds data from a digital camera to a chip implanted on the retina that decodes the data into human vision. Over the next decade researchers expect to develop retinal chips that enable seeing in the dark. There are clearly risks when matching hard technology to soft tissue and brain-cells – from infection to toxicity – and therefore to date a lot of focus has been on external or replaceable technologies. Going forward however the material constraints of metal and silicon are being overcome. Data revolution Most significantly wearable is becoming implantable.
- 81. 81 Tissue engineering andstem cell research has already allowed us to grow and replace simple organ parts and tissue such as found in joints. Regeneration of body parts is happening in the lab and moving into medical facilities; 3D printing of biological tissue is allowing us to redesign nature. The ability to grow a whole organ means that we can start to design in the functionality we want rather than that others are born with. While the growth of cosmetic surgery and laser eye surgery has changed social perceptions about external physical enhancement, how the options for internal enhancement plays out will be more down to regulation and medical ethics. It used to be that enhanced performance was down to education and fitness - to add nurture to what nature had provided. With the advances that have been made to restore natural capabilities to those born with, developed or acquired disability, it is clear that we are able to give many more a longer and more productive life. However, as we push the boundaries of what is natural and deploy the same technologies on the able-bodied to enter the world of cyborgs and super-humans, it is clear that science fiction is fast becoming fact. How far we go in the next decade will inevitably depend a lot on the development of technology and clinical practice; however it may just as much be moderated by ethics, regulation and a view of what society will accept. Enhanced performance 3D printing of biological tissue is allowing us to redesign nature. Affordable healthcare The escalating cost of healthcare is further stressed by the need to support the old and the chronically ill. Spending 20% of GDP on healthcare is seen as unsustainable so hard decisions are taken around budgets and priorities. Everything connected Over 1 trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. Ethical machines Automation spreads beyond trading and managing systemic risk. As we approach technology singularity, autonomous robots and smarter algorithms make ethical judgments that impact life or death. Working longer People are having to work for to support longer retirements. Flexible working practices and policies are emerging, but some employers continue to remain ambivalent about older workers. Related insights
- 82. 82 $400 – amountpaid by Google for Deep Mind 2018 – date Eric Schmidt believes the Turing test will be passed Ethical machines
- 83. 83 Ethical machines Automation spreadsbeyond trading and managing systemic risk. As we approach technology singularity, autonomous robots and smarter algorithms make ethical judgments that impact life or death. In ten years time, driverless cars will fill our roads, machine-learning algorithms combat disease and drones will deliver our shopping. Rapid advances in machine learning, visual and voice recognition and neural network processing mean that computers are getting better at perception tasks. This puts Artificial Intelligence (AI), once the mainstay of science fiction writing, at the forefront of next generation computing. AI brings extraordinary benefits, particularly around disease diagnosis, while it also does a lot of boring but useful stuff, like recommending a specific book for online shoppers. Despite this, many thoughtful people, Stephen Hawkins, Bill Gates and President Obama amongst them, are concerned about the impact that deep learning computing will have, not only from a social and economic perspective, but also on the future of humanity itself. Hawkins, for example, warns of the “technological catastrophe” that could follow if artificial intelligence vastly exceeds that of its human creators. The Internet of Things will generate exponential amounts of data and intelligent machines, as they crunch their way through it all, will increase their accumulation of knowledge exponentially. Algorithms are now designed to learn from raw perceptual data, understand language and recognise images, meaning computers build on the knowledge they amass, learn more skills, understand nuance and ultimately gain what we term common sense. As they become more adept, they can also self-improve, building better versions of themselves without human involvement. The impact of this is not lost on Google, which paid USD 400 million for Deep Mind, a UK-based AI start up. Facebook and Amazon are also making huge investments in this area. In the short term, concerns about AI surpassing its creators are low but what seems certain is that it will soon take over some of the repetitive tasks that until now have formed the basic activity of many traditional professions such as accountants, lawyers, pharmacists and doctors. For a long time now computers have been better at analysing complicated data more effectively than people. Supermarket and factory workers have already found this to their cost. These days computers can read handwritten notes, write and translate reports and even respond to conversations. Despite initial installation costs, they have the added benefit of not getting tired or fed up and are unlikely to demand a pay rise - small surprise that they are gradually replacing their less flexible, human colleagues. Some argue AI is not replacing people, rather it is augmenting their abilities and in so doing making them more effective. Certainly more efficient computers will make some firms much more productive, but most likely at the expense of human capital. AI is not replacing people, rather it is augmenting their abilities.
- 84. 84 AI’s transformational roleis already impacting the automation industry. “Swarm intelligence,” the collective behaviour of decentralized, self-organized systems, is currently being used to improve safety, when one car’s brake sensors register icy conditions, for example, the information is shared with others through the cloud. Cars are therefore becoming more intelligent and the next generation vehicles will have thousands more sensor-connected computers to build on this. When all this is taken collectively, cars will be able to monitor themselves, their environment and even keep a weather eye out for passengers. Widening this out across the transport sector, mesh networks and ubiquitous mobile connectivity will soon be able to offer totally automated highways that will improve safety, increase road capacity and reduce congestion. Pretty soon driverless cars will become an accepted norm. We are almost there; Google’s autonomous vehicles have already covered 2 million miles and with only 14 accidents in that time, have an impressive safety record. Safer and more efficient roads will in turn change how risk is managed and shared, as insurance shifts from the individual and their car to whole fleets and, ultimately, the entire system. Unfortunately however, accidents do and will continue to happen, particularly in built-up areas. Autonomous vehicles will therefore have to make some difficult ethical decisions and there are questions around how they will do this. Getting it wrong has huge legal implications that may well vary across jurisdictions. In Germany, for example, it is illegal to weigh up the value of one life against another, making it almost impossible to programme human life to a value that could be processed by an algorithm – whereas the US is not so rigorous in this regard. Should rules governing autonomous vehicles emphasize the greater good, the number of lives saved, without putting value on the individuals involved? At the moment there seems to be more questions than answers. Data revolution Once created it will be impossible to pull the plug on AI weapons.
- 85. 85 Autonomous transport Theshift to fully autonomous transport is an evolution via truck platoons on highways and small urban delivery pods. Connected cars create the network and test the technologies for the eventual revolutionary driverless experience. Dynamic pricing The algorithms of Amazon and Uber cross over to affect more businesses, from energy use to parking. Real-time transparency allows better purchasing at the same time as margins and yields are automatically enhanced. Everything connected Over 1 trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. Perhaps what is most concerning is the use of AI in warfare. Remote drones are already distancing fighters from the fighting; soldier robots and autonomous weapons are perhaps the next step. In the next decade or so algorithmic intelligence may well have the potential to surpass that of its human creators, identifying who to kill and why; the implications of this are frightening. Some argue that AI might be a better judge than say, extremists. As with the Internet, once created it will be impossible to pull the plug on AI weapons. It is also impossible to foresee where the development of such autonomous weapons will end. The United Nations now convenes regular meetings to discuss this and the matter is so concerning that over 1,000 AI experts have already called for the development to stop. This is unlikely to happen. Perhaps the best we can hope for is a postponement while more consideration is given to regulation and constraint. One proposal is to ensure that the first generally intelligent AI is “Friendly AI” which will be able to control subsequently developed AIs. It seems rather fanciful today but perhaps in ten years this will be normal. Historically, technology ethics has been mainly about the responsible and irresponsible use of technology by human beings. In the future, deeper consideration will be given to the behaviour of machines towards human users and other machines. Trust in the system will increasingly drive success, so organisations will seek to make data ethics a focus. In the short term, regulation is needed to determine whether the designer, the programmer, the manufacturer or the operator is at fault if something goes wrong – whether that is a car on a motorway or robot in a warzone. It all seems a bit sci-fi. But science fiction is often the precursor of reality. What will happen when machines become smarter and more adaptable than their creators? Perhaps we should tread carefully. Ethical machines Deeper consideration will be given to the behaviour of machines towards human users and other machines. Related insights
- 86. 86 78% – peoplefeel concerned about data protection and privacy on the Internet 62% – agree that most businesses will take advantage of the public Privacy regulation
- 87. 87 Privacy regulation The pushtowards global standards, protocols and greater transparency isafocusformanynationsdrivingproactiveregulation, but others choose to opt-out of international agreements and go their own way. Technology has created a new type of geopolitical interaction. As data whizzes across borders, creating workable rules for business out of varying national standards is tricky. It’s also important. Differences in privacy laws act as an unintended trade barrier and restrict innovation. There’s a need to establish global standards that each country can sign up to and use as a basis going ahead. But the task is complex. Garnering local agreement in Europe has been difficult; America has a different approach; China and India, both of which have more people online than Europe and America have citizens, have another. It’s time that the regulation caught up with the technology. Existing data protection regulation emerged in the 1970s and 1980s in response to the developments of the time. The assumption was that data processing would always be a complex and labour-intensive activity and therefore would always be the preserve of large well-resourced organisations. The rules therefore were devised for static organisations and were designed to protect the individual who lacked any means to exercise control. Given that more than 500 million photos are uploaded and shared every day, along with over 200 hours of personal video every minute it is clear this assumption no longer holds true. On top of this the volume of information that people create themselves, including voice calls, pales in comparison with the amount of digital information generated about them each day. It is clear that the technical capabilities of big data, in its myriad forms, have reached a level of sophistication and pervasiveness that demands careful thinking on how best to balance the opportunities it affords with the social and ethical questions these technologies raise. In addition to what happens within national boundaries many governments are also concerned about how their citizens’ information makes its way in and out of other countries’ jurisdictions. Catalysed by the Snowden revelations, some, including South Korea, Russia, Indonesia, Vietnam and Brazil, are now pushing forward new data localisation laws, which in theory ensure the privacy and security of citizens and enable domestic growth within the technology sector. However, given the decentralized structure of the Internet, these requirements alone will not prevent information from flowing across borders. Indeed, some authoritarian regimes seem to be using the policies for other goals, such as enhanced domestic surveillance or to reduce competition for domestic Internet companies. While data localization may succeed in boosting the economic success of local data centres, they could also have costly effects for other domestic businesses that rely on foreign Internet companies and cheap technology such as cloud computing. In the future a global agreement on standards seems a flexible solution. A global agreement on standards seems a flexible solution.
- 88. 88 There is abasis to work from. The United Nations Guiding Principles on Business and Human Rights states that every country has a duty to protect individuals from abuse by business and other third parties. In addition the UN General Assembly adopted a resolution 68/167 which expresses deep concern at the negative impact that surveillance and interception of communications may have on human rights and affirmed that the rights held by people offline must also be protected online, and called upon all States to respect and protect the right to privacy in digital communication. So far so good but although it is not hard to agree with these principles their application is far more difficult. Some suggest that the EU’s consensual style of politics is poorly placed to deal with the problem - being too protectionist, focusing too much on controlling the data and not on managing the users. Others point out that this is because regulators are obliged to deal with legacy legal systems and governance structures bound by geographic borders at a time when the world has moved on. Certainly the current European model is designed to help existing market leaders adapt to change and collaborate with challengers. Brussels is taking a tough stance on privacy, increasing fines, placing requirements on organisations for obtaining consent and creating a “data protection by design” obligation. The US on the other hand is more open to creative disruption. China and India veer to the European approach. In a multicultural, multi-lingual environment there is a lot to be said for this as only the well-established companies can afford the time, money and resources to work with regulators to identify the challenges and opportunities ahead. Data revolution Brussels is taking a tough stance on privacy.
- 89. 89 Deeper collaboration Partnershipsshift to become more dynamic, long-term, democratised, multi-party collaborations. Competitor alliances and wider public participation drive regulators to create new legal frameworks for open, empathetic collaboration. Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. The changing nature of privacy As privacy is a public issue, more international frameworks seek to govern the Internet, protect the vulnerable and secure personal data: The balance between protection, security, privacy and public good is increasingly political. The increasing value of data As organisations try to retain as much information about their customers as possible, data becomes a currency with a value and a price. It therefore requires a marketplace where anything that is information is represented. Despite some important differences, the privacy frameworks in the United States and those countries following the EU model are both based on the Fair Information Practice Principles. The European approach, based on a view that privacy is a fundamental human right, generally involves top-down regulation and the imposition of across- the-board rules restricting the use of data or requiring explicit consent for that use. The United States, in contrast, employs a sectorial approach that focuses on regulating specific risks of privacy harm in particular contexts, such as health care and credit. This places fewer broad rules on the use of data, allowing industry to be more innovative in its products and services, while also sometimes leaving unregulated potential uses of information that fall between sectors. Going forward, the US is keen to encourage bilateral engagement with the European Union, Asia Pacific Economic Cooperation (APEC), and Organization for Economic Cooperation and Development, and with other stakeholders, to collectively take stock of how existing and proposed policy frameworks will address big data. It also aims to strengthen the U.S.- European Union Safe Harbor Framework, encourage more countries and companies to join the APEC Cross Border Privacy Rules system, and promote collaboration on data flows between the United States, Europe and Asia through efforts to align Europe’s system of Binding Corporate Rules and the APEC CBR system. Privacy regulation The US is keen to encourage bilateral engagement. Related insights
- 90. 90 €1 trillion –value of Europe’s digital identities by 2020 $45 – the value of one person’s data if same as Google’s ARPU in 2015 The increasing value of data
- 91. 91 The increasing valueof data As organisations try to retain as much information about their customers as possible, data becomes a currency with a value and a price. It therefore requires a marketplace where anything that is information is represented. It has never been easier for organisations to gather and store information. Companies know more about their customers, governments can have a closer relationship to their citizens and individuals can store and access all sorts of information that was previously too cumbersome to analyse. Data is now the new raw material of business, an economic input almost on a par with capital and labour. It is now cheaper and easier for anyone to collect data as the capabilities of digital devices soar and prices plummet; sensors and gadgets are able to digitise information that was previously unavailable while powerful algorithms and analytical tools create meaning. This is gold dust for organisations, and like gold, data demands a marketplace. By 2020 people and connected objects will generate 40 trillion gigabytes of data that will have an impact on daily life in one way or another. This data will make known about us things that were previously unknown or unknowable. In Europe the value of our digital identities, the sum of all the digitally available information about us will be worth €1 trillion. It’s not just people; ‘things’ are already generating data, and these are predicted to generate an additional value- add of $1.9 trillion globally over the next five years. Much of the value is not likely to be from the ‘things’ themselves, but from the understanding derived about them from the data that is collected. This promises to transform every sector, bringing efficiencies and cost savings, but also entirely new service possibilities. Internet interactions are gathered by tracking our “data exhaust”, the trail of clicks that we, or increasingly our possessions, leave behind. This is where value can be extracted, providing organisations with valuable insights and the ability to influence customer purchasing decisions and other behaviours. Unsurprising perhaps that the sale and resale of “third party data” has already become a mainstay of the Internet economy. Online, cookies, web beacons, e-tags alongside “likes” or “tweets” all carry a code that enables social networking companies to track movements and sell this behaviour on to others. Offline, the installation of a wide range of new sensors in vehicles is already transforming many aspects of motoring, for example usage based insurance schemes which, based on information from sensors that collect data on location, speed, braking and acceleration, determine the risk profile of the driver, and consequently their insurance premium. The value of data lies in its accuracy, so power lies in the hands of those who are able to ensure it is clean and organized. Large numbers count so, generally speaking, personal data alone does not have a true market value. Its aggregation on the other hand is of huge interest to corporates and government, and many are already taking advantage of this. Credit card companies all sell anonomised data about their customers to advertising companies, as do Google and Facebook among others. Although bringing some benefits, more targeted advertising, better search results and so on, there is very little oversight of how these transactions take place and how the data is used or where it is sold. In the next decade expect this process to become more formalized Something approximating a privacy marketplace is now becoming a reality.
- 92. 92 as individuals becomemore aware of the value of what they used to give away for free and regulators bring order to the process. The seeds have already been sewn as something approximating a privacy marketplace is now becoming a reality, consisting of tools that prevent tracking and other counter- surveillance services on the one hand, and personal data vaults and banks that enable the curation and management of one’s own data on the other. Major players in the Internet and communications space have also already begun to lay down their markers. As this market matures, it is hoped that consumers will benefit from the greater control over their personal data that results. But some consider that personal data is already being over exploited by established players and this is pushing up the divide between the haves and the have nots. The inequality is driven by knowledge and technical capability with an asymmetry in power between organisations and individuals. Organisations have an abundance of information about consumers and analytics tools to interrogate it, while consumers suffer information scarcity and possess few tools to make any sense of their own data. This imbalance appears to be getting worse and is a matter of increasing concern, particularly amongst those who created the Internet and whose open access philosophy ensured its success. The World Wide Web Foundation 2014 – 15 Web Index, an annual report measuring the Web’s contribution to social, economic and political progress highlights this, “We stand at a crossroads between a Web ‘for everyone’ ― one that enables all people around the world to improve their life chances and reduces inequalities both between and within countries ― and a ‘winner takes all’ Web that further concentrates wealth and political power in the hands of a few.” In this land grab for information, it may also be worth bearing in mind that what is technologically possible may not be culturally acceptable. This is tricky to manage as different countries have different standards of what data counts as personal information; Germany forbids marketing to specific ethnic groups, but America does not. In order to make the most of the opportunities big-data offers, regulators will have to establish a new legal understanding of the balance between the right to privacy and the use of data for public good. If it is discovered that companies are exploiting data that has been collected without genuine permissions and are using it in ways that have no societal benefit, there is a risk that a negative public response will limit future opportunities for everyone. Data revolution Different countries have different standards of what data counts as personal information.
- 93. 93 Looking ahead, personaldata will increasingly become viewed as a product and will be treated as such. As understanding grows consumers will no longer be prepared to share their personal information for free and organisations will have to work harder to access information. If the corporate world fails to deliver on promises to protect customers’ privacy, those customers may well decide to “go dark” as they become more aware of the value of the data and their need to protect it. At some point we will reach a balance between the social benefit of aggregated information, for example around disease prevention or traffic monitoring, and individual or corporate privacy. Data market places will help to achieve this and will become established in many sectors, allowing individuals or indeed their appointed advisors, acting in a similar way to stockbrokers today, to trade. The focus will be not necessarily about privacy but on a collective understanding of outcomes and products. The way we sort, label, store and share information at scale will change in order to unlock the data benefits. As suppliers are increasingly paid on outcome, the value of data will increase and become part of financial models that will encourage further sharing. Existing information silos will be connected via trusted third parties able to unify, mine and discover new insights. When the public good is concerned it is entirely possible that governments will take the same approach as some have done with organ donation programmes: citizens will have to proactively opt out of sharing their personal information, rather than opting in to do it. It is entirely possible that in the future, world health data will be shared, integrating public and private datasets in order to provide a holistic view of the individual at the same time as contributing to the greater benefit of all. The increasing value of data The way we sort, label, store and share information at scale will change. Data ownership Individuals recognize the value of their digital shadows, privacy agents curate clients’ data sets while personal data stores give us transparent control of our information: We retain more ownership of our data and opt to share it. Everything connected Over 1 trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. Privacy regulation The push towards global standards, protocols and greater transparency is a focus for many nations driving proactive regulation, but others choose to opt-out of international agreements and go their own way. The changing nature of privacy As privacy is a public issue, more international frameworks seek to govern the Internet, protect the vulnerable and secure personal data: The balance between protection, security, privacy and public good is increasingly political. Related insights
- 94. 94 60% – ofthe wealthy trust institutions to do right thing 60% – share of countries where media is distrusted Truth and illusion
- 95. 95 Truth and illusion TheInternet has democratised knowledge and changed the nature of who we trust and why. As confidence in large organisations declines the search for trustworthy alternatives evolves. What we believe is changing how we behave. If pushed, most people would agree that we have always lived in a world of smoke and mirrors where it is difficult to separate what is true from what is not – generations of historians, journalists and politicians have forged careers out of unravelling fact from fiction and explaining it to the masses. Looking ahead, however, it seems that, despite having (almost) perfect information at our finger tips, life is becoming increasing ambiguous and it is ever more difficult for us to decide what is true and what is false, and who or what is best placed to help us interpret meaning. Instead of providing clarity, vast mountains of data have made it almost impossible for individuals to distinguish between fact, accuracy, misinformation, reinterpretation and plain old-fashioned lying. Access to opinion and counter-opinion on every conceivable subject is now available to us all. Interpreting it is increasingly tricky and deciding who or what will help with this process is trickier still. Unsurprisingly perhaps there is a long list of organisations that are keen to lend a hand – so far none of them very successfully - and public faith, battered by revelations of corruption and mismanagement, has become wary of the establishment. A global opinion poll by Edelman in 2015 showed that although trust in government has increased slightly, driven by big gains in India, Russia and Indonesia, overall governments are distrusted in 19 of the 27 markets surveyed. The media does no better, distrusted as they are in 60% of the countries; while trust in business leaders is at a record low, with fewer than 50% of respondents trusting chief executives in most markets. Finally, although NGOs continue to be the most trusted institution, overall faith even in them is in decline, from 66 to 63%. So, where do we go to get the “right” answer? Some argue we are becoming self-referential, turning to friends and family; people in fact who think the same way we do. Online reviews from seemingly like- minded individuals, and comments on social media, help consumers see a product or belief’s underlying merits and demerits, not the image that its makers are trying to build around it. We take a careful note of what our social networks say about quality, or value, or truth about an extraordinary range of products, services and ideas. But whereas historically it has been relatively easy to know the heritage of those we take advice from, in a time-stretched, instant-action society, few of us stop to think about whose recommendations we are really taking, particularly when that advice is found online. This is becoming a problem. One reason for this is because the Internet has made it easy for anyone to publish an opinion, and is based on the premise that other contributors will verify accuracy. For big issues this works most of the time, but not even Wikipedia can get it right all the time. And if the tenth most popular website in the world can’t manage to keep a grip on the information published on its site, what hope for smaller, less nimble players? Internet publishers, either as individuals or even some larger organisations, have little to lose from printing untruths - and plenty to gain in notoriety - if the story they put out is sensational enough. Faking an Internet page is easy, as is faking an online review. Why then, are we so ready to believe what we read online, rather than what we hear from historically trusted sources? The Internet has made it easy for anyone to publish an opinion.
- 96. 96 Worryingly, the Barometeralso suggests that the trust disparity between the informed public and the mass population is growing and indeed is now at double digit levels in more than half of the countries surveyed, with the U.S. heading the field at nearly 20 points followed by the UK (17 points), France (16 points) and India (16 points). The gap is also widening between high income and low-income respondents: 60% of wealthier participants trusted institutions to do “right thing” against only 46% of people on a lower income. The majority feel let down by the very institutions that are meant to support them. It seems that the internet has democratised information and this, alongside high-profile revelations of greed and incompetence amongst corporate and government institutions, and rising income inequality, has ensured that trust in the status quo can no longer be taken for granted. Instead of media-trained career politicians and big brands, there is an appetite for plain-spoken authenticity and a tendency to trust small companies. From a political perspective this may well explain the rise of more extreme phenomena such as Donald Trump in the US, and Marine Le Pen’s National Front in France. From a business point of view, big corporates are trying to match the mood by boasting about the provenance of their products and latching onto “authentic” brands; see Coca Cola’s purchase of Innocent Drinks. Understanding whether or not someone is telling the truth is, of course, not only a problem for the general pubic. A well-executed cyber attack has the potential to destroy a business with the click of a mouse. It is entirely feasible that, unless truly robust solutions are found, we might see a return to old-fashioned pen-and-ink. Michael Lynton, chief executive of Sony Pictures, whose private emails and credit card details were published online, has revealed that since the hack he now writes sensitive messages by hand and sends them by fax. Data revolution The majority feel let down by the very institutions that are meant to support them.
- 97. 97 Human touch Asservice provision and consumption becomes ever more digital, automated and algorithmic, those brands that can offer more emotional engagement and human-to-human contact become increasingly attractive. Mass engagement As the public voice becomes easier to access and harder to suppress, leaders seek to engage to create, develop, secure and maintain legitimacy for their initiatives and policies – so further reducing their hierarchical power. Off grid People living off-grid, by inequality or choice, can exacerbate societal division or improve privacy, health and wellbeing. Either way, doing so provides fertile ground for innovation. The changing nature of privacy As privacy is a public issue, more international frameworks seek to govern the Internet, protect the vulnerable and secure personal data: The balance between protection, security, privacy and public good is increasingly political. Our modern economy depends heavily on free movement and trust. Looking ahead many long- established, heavily advertised but mediocre products may find that consumers grow savvy to their flaws and will be unwilling to pay premium prices. However for those firms that get the product right and have a genuine story to tell, the rewards will still be huge. The textbook example of this is Apple, whose devices’ superior design and ease of use make it a powerful brand in a commoditised market. Politically maintaining trust will become ever more difficult. When politicians tell voters that they can improve quality of life but fail to deliver, the promises may well seem hollow, particularly to those who feel they have little enough to begin with. This many well open the door to more extreme movements, which advocate simple solutions to difficult problems. Building walls may just the beginning. Truth and illusion A well-executed cyber attack has the potential to destroy a business with the click of a mouse. Related insights
- 98.
- 99. 99 Unequal access Inequality isa major concern for the 21st century and one that is increasingly seen as having the potential to open up social conflict. While many focus on the increasing gap between the rich and poor, and hence unequal access to wealth, a good number see that addressing this requires us tackling other areas of inequality. Whether addressing unequal access to healthcare, education, transport, water, land, digital connectivity or power, a common view is that in solving some of the associated problem here we may well be able to resolve the wealth inequality challenge. The topics covered in the following pages are: Access to transport Capitalism challenged Mass engagement Off grid Caring for those left behind Education revolution Rising youth unemployment Shrinking middle
- 100. 100 64 million –km of roads in the world 33% – greenhouse gases contributed by transport Access to transport
- 101. 101 Access to transport Thewidespread need for individuals to travel short distances becomes a key feature of urban design and regeneration. Planners use transport infrastructure to influence social change and lower carbon living. The impact that transport has had on society is all around us. The past century’s near universal love affair with the automobile shows that transport can shape landscapes, stimulate economies and feed individual desires. The US Federal Highway Administration says that every $1 billion invested in highways supports 27,823 jobs. Globally, many road building strategies rest on that premise, and the CIA Factbook estimates that in 2013 there were over 64m kilometres of (paved and unpaved) roads in the world. Car-based systems have brought much accessibility, connectivity and convenience but at the price of introducing pollution, high land-use needs, urban sprawl, urban decay, respiratory issues and in some high-use areas, increased social isolation. Countries like the US are very car-dependent, a need compounded by under investment in maintenance of roads as well as in other transport forms. But not all countries are equally beholden. In the World Economic Forum Global Competitive Index, the UAE and Singapore top the rankings for (all) transport infrastructure and in the EU the Netherlands is the highest ranking country (4th overall). Transport could be used as a transformative tool in shaping the societies that we hope for, addressing significant challenges such as inclusivity, mobility, urban design and adjustment to lower carbon living. Inclusive transport solutions will challenge inequality, while flexible and integrated solutions develop mobility. Design and environment-led transport solutions can improve urban living (better serving our growing urban populations) while low carbon lifestyles help address climate change. Transport is much more than the journey, it can positively influence how we move, and even why we might want to move. Part of the thinking required is to focus less on providing transport and more on providing access. In its Future Demand Scenarios, looking out to 2042, the NZ Ministry of Transport states: We should recognise we are trying to improve access not just mobility. There are three different ways we can achieve this: with good transport systems; with good spatial planning; or by improving digital access. Fuelling these wider conversations is increased urbanisation, where inhabitants require other forms of transport and in a variety of services. Other drivers of this change include new ownership and usage models, such as Uber. But, as many experts of the phenomenon of Peak Car having pointed out, a fundamental shift certainly needs to take place. With transport today contributing around 33% of all greenhouse gases, it is an obvious place to seek improvement. Inclusive transport solutions will challenge inequality, while flexible and integrated solutions develop mobility.
- 102. 102 What can weexpect of integrated, inclusive transport? Greater choice, better connections (and thus efficiency as well as ease for the traveller) as well as more green and sustainable options. Many cities – Sheffield, Belfast, Singapore, Dundee, Shenzhen – are discussing the need for and success of Integrated Transport Hubs (ITH). However, the ingredients for each ITH vary considerably, given the locality. In Singapore, the addition of shops and air conditioning while waiting for buses and trains is critical, while Shenzen aims for an ITH with 5 underground railway stations, a border control point and numerous commercial areas. Transport solutions that address key societal needs, benefitting the urban poor, are a key target. The urban poor suffer from a lack of mobility options and associated issues such as exposure to emissions and to unsafe conditions. To counteract this, avoiding the marginalization of areas inhabited by low income populations, improving opportunities for informal transport options, facilitating bicycle ownership and providing adequate infrastructure for pedestrians (safe footpaths, seating, toilet facilities, etc.) are all vital. This is not just a developing world issue, it is a daily reality for millions in Europe and the US as well. Indeed, New York has its own extensive, quasi legal transport network called dollar vans that serve those lacking in access to public transport. A broadly similar model can be found in Nairobi where the “matatu” remains the most popular mode of travel. In part because of its clogged up roads, South America is at the forefront of pro poor transport - particularly for cyclists. Bogota, Mexico and Buenos Aires all boast effective initiatives, including interest free loans for cyclists and the development of cycle lanes. Unequal access The urban poor suffer from a lack of mobility options.
- 103. 103 However, to havea greater impact there needs to be a significant shift in approach requiring new partnerships that include new players, tech- enabled, and new business models. Doing ‘new’ is hard. But technology and visibility can play a huge part in the transition taking place. These areas can instil a greater expectation on providers and showcase solutions for all to see. But government cannot do this alone; a shift requires new tech-enabled partnerships and business models. models. Hammarby Sjöstad (Hammarby Lake City) is an eco-friendly urban development in Stockholm, and its sustainable transport front features a tramline, bicycle and pedestrian networks, carpooling and a ferry. Infrastructure here was planned as ‘closed loop’ systems for water, waste and energy – all feeding each other. A shift requires new tech-enabled partnerships and business models. Access to transport Autonomous transport The shift to fully autonomous transport is an evolution via truck platoons on highways and small urban delivery pods. Connected cars create the network and test the technologies for the eventual revolutionary driverless experience. Built-in flexibility The path to a connected, accessible and distributed infrastructure is fraught with complex, costly and risky issues: Upgrading and repurposing systems to make them more open plus on-going maintenance need significant resources. Infrastructure deficit Infrastructure again becomes a source of competitive advantage. Emerging economies invest in new railroads and highways for more effective movement of people and goods, while developed nations suffer from poor legacy. Optimising last mile delivery Seamless, integrated and shared last-mile delivery replaces inefficient competition and duplication of goods distribution. Greater efficiency in moving things is as important as in moving people and so a major focus for innovation. Related insights
- 104. 104 99% – populationwhose total wealth less than that of richest 1% 48% – angry about too much money being in the hands of too few people Capitalism challenged
- 105. 105 Capitalism challenged Unable toshake key issues like inequality, capitalist societies face cries for change, structural challenges and technology enabled freedoms. Together these re-write the rules and propose a more participative, collaborative landscape of all working together. Capitalism is under siege from the likes of a sharing economy, a connected world, a slowdown in the take up of democracy, and intractable problems such as inequality and climate change. Many believe capitalism contributed to the global crisis, while providing no solution, and desire to see a fairer system take its place. It is inequality that is at the heart of this backlash. President Obama calls income inequality the “defining challenge of our times”, Pope Francis says “inequality is the roots of social ills” and in the order of 80% of Britons today now think the income gap is too large. Thomas Piketty, author of Capital in the Twenty-First Century, is convinced that rising inequality is a nut that will never be cracked by capitalism. His particular emphasis is on wealth inequality. He argues that wealth inequality in Europe and the US is roughly twice that of income – the top 10% possess between 60% and 70% of wealth but only 25% to 35% of income and that the western growth in equality in the 60 years or so that preceded the 1970s is a one-off, and this is very unlikely to occur again. So, with no resolution for inequality in sight, Piketty’s dark prediction is social unrest – lots of it. As such, tackling wealth inequality makes good economic sense; Wilkinson and Pickett say that economies with greater inequality suffer adverse consequences in areas like health, violence, drug addiction and lifespan. Evidence for a shift towards more egalitarian societies, or perhaps, social democracies is political news - Justin Trudeau in office in Canada, hopefuls Bernie Sanders in the US and Jeremy Corbyn in the UK - all high profile cases in point. That they are enjoying the limelight is testament to the strength of the questions being asked of capitalism. Comingattheissuefromanotherdirectioniseconomic and social theorist, Jeremy Rifkin, who focuses instead on near-zero marginal cost, the by-product of a connected, sharing world. ‘A growing legion of prosumers is producing and sharing information, not only knowledge, news and entertainment, but also renewable energy, 3D printed products and online college courses at near-zero marginal cost on the collaborative commons. They are even sharing cars, homes, clothes and tools, entirely bypassing the conventional capitalist market.’ In effect, we’re seeing what looks like capitalism doing itself out of a job. Wealth inequality in Europe and the US is roughly twice that of income.
- 106. 106 Unequal access What pushbackor adaptations can be expected? After all, capitalists will want a say in all of this. For a start, economies and political systems will make best advantage of technology-based participation. These can be very useful for assisting political and societal decision-making processes in areas like sharing data on crime, public information, events and of course, elections. Increased participation encourages the attributes of collaboration and transparency and has the potential to make capitalism (still) more representative of its population. Meu Rio (My River), an online community intent on making Rio de Janeiro more democratic, inclusive and sustainable, is a prime example. In the next decade look for more governments and organisations to put less emphasis on ‘quarterly capitalism’ and instead embrace the concept of a multi-capital focus (a.k.a. integrated reporting). A multi-capital focus not only serves traditional forms of capital like physical and financial, but societal, human and natural forms as well. Are there examples of this activity in play today? Yes, plenty. When Founders Ben Cohen and Jerry Greenfield sold their ice cream business in 2000, they asked the buyer, Unilever to continue the organisation’s Social Mission programme. Unilever not only agreed, but also responded by asking the duo to identify appropriate social metrics to measure success, and thus a high profile, MultiCapital Scorecard was piloted. In 2012, New Zealand celebrated the relationship between indigenous communities and the natural world by declaring the Whanganui River a legal entity with rights and interests, just as organisations have. They weren’t the first with the idea, as Ecuador has embraced Rights of Nature, or Pacha Mama, in its constitution since 2008. Finally, another example from today is the highly successful UK retail partnership, John Lewis, where an official pay ratio is in effect and no one person can earn more than 75x the average pay. A growing legion of prosumers is producing and sharing information.
- 107. 107 Perhaps the bigquestion that will be explored in the coming years is this: what is the point of any economic system? How does it work and what are its consequences? If, for example, the economic system were said to exist in order to meet the needs of its users, would you start with capitalism as the base? Capitalism challenged A multi-capital focus not only serves traditional forms of capital like physical and financial, but societal, human and natural forms as well. Declining government influence National governments’ ability to lead change comes under greater pressure from both above and below - multinational organisations increasingly set the rules while citizens trust and support local and network based actions. Full cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Still being stupid Despite a better understanding of the long-term challenges we face, we individually and collectively continue to make decisions that may make sense in the short-term - but do not lead to better longer-term consequences. Access to transport The widespread need for individuals to travel short distances becomes a key feature of urban design and regeneration. Planners use transport infrastructure to influence social change and lower carbon living. Related insights
- 108. 108 216 million –a quarter of rural India’s population live below the poverty line. 61 million – number of left-behind children in China Caring for those left behind
- 109. 109 Caring for thoseleft behind Although significant progress has been made positive change has limited reach. Millions of people continue to be left behind from mainstream progress - especially the young, the poor and those who are disadvantaged. Progress has always been a pretty bumpy journey; the next ten years looks as if little will be done to improve the ride. Although for some, access to better medicine, education and employment will be transformational; for others, life will just get worse. It may also feel worse as the chasm between the haves and the have-nots is widening, and some expect that it will become progressively difficult for anyone to hear the voices of those left behind. Consider the plight of the children who stay in the countryside while their parents head to the city. In China, where over 270 million people have left their villages to look for work, they are named liushou ertong, or left-behind children. According to the All-China Women’s Federation, there are around 61m of them, only 10 million less that the total child population of the US. China is not the only country whose children suffer as a result of urbanisation; but given the one child policy, and its enormously distorted sex ratio, this mass abandonment may fundamentally alter an entire generation. Not that there is a significant “urban advantage” for the poor living in informal townships; UN Habitat estimates that one in six people in the world live in deprivation in urban slums and squatter settlements. Given the demographics of poor countries and communities, with their relatively high numbers of children, we can estimate that one out of every four children in the world currently lives in urban poverty. As more people migrate, the chances are this number will grow. Slum children’s lives are frequently challenged from the get-go. Their parents are often unable to register their birth, limiting their access to basic services, like education and health. Reliant on the informal economy, many poor urban households are also obliged to push their children into labour. On the surface, things look a bit better in the countryside, but not by much. In many cases farming productivity is pretty woeful; in India, roughly half the population, 600 million people, depend upon growing crops or rearing animals to survive. Volatile prices, poor access to markets, out-dated regulation, limited access to finance and stringent land ownership rules - all combine to make it almost impossible for many to earn a reasonable wage. Low productivity is a bigger long-term problem. One cause of this is the shrinking size of cultivated plots; as India’s population expands, the average plot size has fallen from nearly 2.3 hectares (5.7 acres) in 1970 to under 1.2 hectares today. Oxfam states that 216 million people - a quarter of rural India’s population - live below the poverty line. One out of every four children in the world currently lives in urban poverty.
- 110. 110 A search fora better way of life for a population of this magnitude is never going to be possible only by relying on migration to the cities so, looking ahead, many see that much could be done to improve the lot of farmers. A high rate of suicides amongst Indian farmers has already drawn widespread media attention; an overhaul of regulation would help. Current restrictions on the storage of commodities such as onions and wheat actively discourage farmers from investing in cold storage and warehouses; leasing land is famously hard, since strong tenancy rights discourage owners from renting out fields; state marketing boards restrict trade in fruit and vegetables often making it easier for traders to import from abroad. In addition to advocating a regulatory review, some pointed out that little changes could make fundamental differences. In Bangalore, for example, only those who have no other choice become truck drivers – which explains why there are so many road accidents. The International Road Assessment Programme estimates that, in India, there are 76,000 deaths and serious injuries every year, with most casualties being male and under 30. Often the breadwinner, their deaths take a huge emotional and financial toll, plunging families into generations of poverty and costing the government around USD 2.8 billion. Licencing and improving the working conditions of drivers would it is argued, make a difference. In towns, giving pedestrians a safe place to walk would help too. You don’t have to be poor, living in an emerging economy, to slip through the system. Rich countries face challenges too, not least in the care of the mentally ill. This accounts for more suffering and premature deaths than heart disease and strokes, or than cancer; in many nations it costs around 3-4% of GDP in treatment and lost productivity. Some argue that the US in particular is ill-prepared to cope, leaving prisons and police officers to deal with the effects of untreated mental illness, but across Europe, 40-70% of prison inmates are also mentally ill. In the developed world, the WHO estimates that only about half of all people with depression are diagnosed and treated. Unequal access Many see that much could be done to improve the lot of farmers.
- 111. 111 There are indicationsthat change is on its way, because of the heightened attention now being given to the impacts of urbanisation, rural need and mental illnesses. The United Nations has already declared 2011-2020 the Decade of Action for Road Safety and the new Sustainable Development Goals has an ambitious target to halve road deaths by 2020. Governments are becoming more proactively involved, while small donors make a sizeable difference; indeed their contributions vastly outweigh those of billionaire philanthropists and their foundations, although the Gates Foundation has done a lot to reduce child mortality and improve agricultural activity. Around 200 countries have approved the WHO’s Mental Health Action Plan, calling for better treatment by 2020. In the UK, the NHS has pledged to invest more than a billion pounds a year by 2020 to help more than a million extra people. Within the corporate world, companies are adding mental illness into their diversity initiative; Accenture has recently launching its Mental Health Allies programme. And yet, the most telling moment in any workshop is often the casual comment just before a coffee break. On one such occasion a well-meaning participant observed that nothing would change over the next decade because mostly bad things happen to poor people or to those on the peripheries. Too comfortable and too distant from the reality of others, many of the rich are unprepared to sacrifice their high quality of life to change the status quo. No one disagreed. Let’s hope they’re wrong. Caring for those left behind Affordable healthcare The escalating cost of healthcare is further stressed by the need to support the old and the chronically ill. Spending 20% of GDP on healthcare is seen as unsustainable so hard decisions are taken around budgets and priorities. Care in the community The desire to ‘age-in-place’ meets a healthcare reform agenda that promotes decentralization. A new care model is customer-centric, caregiver-focused and enhances coordination across care settings. Off grid People living off-grid, by inequality or choice, can exacerbate societal division or improve privacy, health and wellbeing. Either way, doing so provides fertile ground for innovation. Rising Youth Unemployment With unemployment rates already over 50% in some nations, access to work is a rising barrier. Especially across North Africa, the Middle East and southern Europe, a lost generation of 100m young people fails to connect with or gain from global growth. Related insights Rich countries face challenges too, not least in the care of the mentally ill.
- 112. 112 6.2 million –new teachers needed in sub-Saharan Africa by 2030 53% – percentage of foreign students who come from Asia Education revolution
- 113. 113 Broader access toimproved education acts as a major catalyst for empowerment, sustained economic growth, overcoming inequality and reducing conflict. We need an education system fit for the digital revolution. In schools and institutions across the world questions are being asked about how to make education fit for purpose, from both a supply and a demand perspective. On the supply side the problem is around quality and quantity; there is a global shortage of qualified teachers and those who are in the profession are often obliged to deliver an inflexible curriculum with an over-dependency on exams not fit for purpose. On the demand side students are often under qualified in the core social skills required for later life and ill-prepared to adapt to a more flexible and analytical professional environment. The shift from factual learning to learning how to work on projects and better meet the future business environment is an issue frequently raised, providing both a challenge and an opportunity for change. It is no surprise that getting every school, and ideally every child, connected to an online resource is a high profile ambition for many. Whether via technology firms like Google and Facebook (using balloons and other solutions to provide connectivity to remote areas), or governments investing in fixed and mobile broadband infrastructures, the ability for every child to have access to the world’s information is a pivotal and potentially transformational shift. Yes, some will get left behind at first, but the digital divide will, it is argued, be reduced and sometime in the next decade every school should be connected. While Internet connectivity has a major role to play, many are also focused on fixing some of the basics, believing that although technology can help improve education it is not a silver bullet. It should be integrated with traditional education techniques which allow young people to develop holistically and become responsible citizens. Moreover, in order to achieve widespread success all teaching approaches have to be sustainable, replicable and scalable. Foremost in terms of global impact is tackling the access challenge. Improving quality and access to education seen as a common need in many countries and not just developing ones. In several Western countries the imperative to engage more students in better education is seen as pivotal in mitigating the risk of a disenfranchised next generation. Not surprisingly, the universal support of enhancing female education is growing and getting input from the UN and governments through to foundations and NGOs. The social, economic and political benefits of making sure girls get the same opportunities as boys is driving a host of initiatives. Some are addressing basic needs (making sure that girls make it through secondary education) and this means not just supporting the cultural shift of valuing daughters as much as sons but also in providing sanitation – the lack of toilets is still highlighted as a reason why so many girls stop going to school when they reach puberty. In other areas the net benefit of reducing population growth by delaying the age of having children is seen as a direct linkage from supporting girls in education for longer. Although technology can help improve education it is not a silver bullet. Education revolution
- 114. 114 Unequal access Across mostparts of Africa, India and Asia there is a strong movement supporting better access to education as a means of helping to empower and enable people to drive progress. Improving the level to which kids are educated means they become more economically productive and so live better lives, but it can also help societies to have a more informed view and so hopefully reduce conflict and inequality. Within this context, in some regions we also need to address other basics. Inequality in many education systems may continue until common standards are adopted across all schools - both public and private. The delivery of education also faces upheaval, using practices from outside education to completely revolutionise the experience. If we can give every child access to the best content, whether via a MOOC or curated YouTube videos, then we are no longer dependent on a teacher transferring standardised knowledge in largely the same way as 300 years ago. Why provide average face-to-face when everyone has access to MIT? For some this becomes an extreme of children being enabled to self-learn, remote from teachers and via peer-to-peer networks, while for others it’s an opportunity to reinvent the way children learn - and how teachers teach, to decouple them from content delivery. If learning can be more project-based rather than pure content acquisition, then not only are we better prepared for the real world but also the role of teachers changes to being coaches, mentors and catalysts for change. And if everything you need to know will be available online, it is vital that there are ways of filtering and curating this overwhelming wealth of information in a way that is simple, intuitive and valuable – a natural role for teachers. Whether online in the cloud or in schools physically, many see this freeing up of teachers as addressing the supply / demand imbalance. The reality for the next decade will probably be a hybrid of face-to-face and online learning but a change in the nature of education is underway. Inequality in many education systems may continue until common standards are adopted across all schools.
- 115. 115 Additionally education isthought of as an increasingly non-linear process, as we enter a world where education for many does not stop on graduation but is a life-long activity where skills and knowledge are updated and upgraded both formally and informally throughout a working life. We may also move from placing all the value on IQ to a system that values, EQ and learning from risk taking, innovation and entrepreneurship. If we are to have a smoother transition from education to work, then maybe we need to make education more aligned with the future of work. In some select schools, new approaches are in development or even in practice, but by 2025 few believe that we will have changed the whole system at a national never mind global level. There will be pockets of innovation around the world testing, enhancing and so proving the new approaches. If we can crack the access challenge and so give every child greater opportunity, then the potential to turn the dial on how and what we learn is certainly on the cards for the next decade. Education revolution The reality for the next decade will probably be a hybrid of face-to-face and online learning. Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. Rising Youth Unemployment With unemployment rates already over 50% in some nations, access to work is a rising barrier. Especially across North Africa, the Middle East and southern Europe, a lost generation of 100m young people fails to connect with or gain from global growth. Skills concentrations The need to build and develop capabilities becomes increasingly challenging for companies and workers alike. Those who benefit from the high-skill reward opportunities remain a select group who move ahead of the urban pack. Sometimes nomads Elective migration, cheap travel, international knowledge sharing, and increasingly transient working models create connected nomads who mix the traditions of home with the values and customs of their host location. Related insights
- 116. 116 650 million –users on WeChat in 2015 5 billion – target number of users for Facebook by 2030 Mass Engagement
- 117. 117 Mass engagement As thepublic voice becomes easier to access and harder to suppress, leaders seek to engage to create, develop, secure and maintain legitimacy for their initiatives and policies – so further reducing their hierarchical power. Every since homo sapiens first appeared some 200,000 years ago, communication and engagement styles have continued to evolve. When we lived in small groups, one to one communication and gossip was enough. The agricultural and industrial revolutions enabled larger groups to form – from organisations to cities and countries. Leaders, and those in, or wanting, to keep power, needed to be able to speak to, and often control, the masses. To do this, broadcast media developed: from town criers, to, following the invention of the printing press, pamphlets, books and newspapers, to radio, TV and now to the digital era. Adjacent to this has been an evolution of engagement. In the past, engagement was rarely mass, it was atomised (e.g. a letter to a newspaper, which may or may not be published). The mass engagement that did exist was typically limited by geographical access (i.e. the ability to join a meeting, a protest, a march) or through physically collated initiatives (e.g. petitions). Digital has changed the rules. From a Tweet or Facebook post, to joining a campaign orchestrated by Change.org or 38Degrees (“38 degrees is the angle snowflakes come together to form an avalanche – together, we are unstoppable”) or a charity, mass engagement has become easier. It has enabled dispersed individuals and communities to engage and ensure their presence is heard and felt. Digital engagement can easily be made public, visible to a large audience and no longer limited to those present. Further, as the transaction cost to engagement has continued to fall, engagement can now occur on micro as well as macro issues (e.g. enabling the Arab Spring). Digital has shifted the power dynamic, placing power in the hands of every one. As a result, in this digital era where the public voice is easier to access and tougher to suppress, it becomes harder to generate support for new initiatives without taking public views into account. Those in power are more easily held to account and less in control of the message. Their hierarchical power is weakened. So to create, develop, secure and maintain legitimacy for their initiatives and policies, leaders in all fields will need to engage to maintain public and political support. It is worth noting that digital mass engagement varies widely across a number of dimensions. It can occur at a transactional (e.g. join X) or a conversational (e.g. what do you think about Y, which direction should be taken) level. It can also be active (e.g. here is my input on X) or passive (e.g. I allow you to access data on my location to help build a better understanding of, say, travel within a city). The strength of engagement can also vary (e.g. a “like” on Facebook or a “follow” on Twitter or WeChat; versus joining a petition to a government or making a donation on JustGiving). Leading brands are now shifting from measuring exposure and impressions to “expressions”. Digital has shifted the power dynamic, placing power in the hands of every one.
- 118. 118 Unequal access In hisbook “Trust me, PR is dead”, Robert Phillips, the former President and CEO EMEA of PR firm Edelman, argues that centralised communications can no longer be a fig-leaf on trust or a cover for the real actions of leaders. As Phillips writes, “In an age of individual empowerment, power is shifting from state to cities; employer to employee; corporation to citizen-consumer. Power and influence have become asymmetrical. Trust is forever fragile and attempts at control futile”. Managing the message simply won’t work in today’s complex and interconnected world. Or, as Margaret Hefferman puts it for organisations, “Instead of talking themselves up, companies should just start doing the right thing - for real. Employ people on decent wages. Eschew stupid bonuses. Pay taxes. Care about customers. Listen. Share ownership. Stop spinning. Don’t say you will - do it for real. Trust isn’t a message; it’s an outcome and the only way to win it is to earn it.” In this world, leaders may need to move beyond politics, profit maximization and adherence to top- down hierarchies and centralised communication. Embracing mass engagement, providing citizens and consumers the opportunity to participate in decisions, enables different, better, more understood solutions to be envisaged and created, going beyond top-down orchestrated answers. Different approaches to business and politics, adapted for this era, will need to emerge. “In this era of social and mobile technology, customers, employees, suppliers, and partners are in direct communication with one another. Those personal networks, and the brands they’re passionate about, influence their decision- making and their spending. Trust isn’t a message; it’s an outcome.
- 119. 119 These new formsof digital mass engagement may also facilitate faster change (e.g. cultural change within a population) and enable new ways for research to be carried out (e.g. citizen science projects). Of course digital mass engagement is not a panacea. Micro-failings, mistakes or miscommunication may have consequences blown out of all proportion and there are examples where the speed and scale of engagement enabled are unwarranted, misplaced or misused. Going forward it is clear that leaders and initiatives will be more easily and more readily held to account, and will need to maintain popular support in order to retain legitimacy with their audience. Autocratic leadership will become harder to sustain. There is likely to be an increase in demand for and occurrence of public engagement (e.g. referenda and single issue votes such as for the UK to remain part of the European Union) or vested party participation and interference (e.g. shareholder activism). More mass engagement will likely require an increased willingness and ability of all parties to enter into sustained dialogue, and may also lead to a growth in trusted and validated networks for mass engagement to protect against fraud. It will also need to actively design and cater for those who are not engaged or who are left behind (e.g. those on the wrong side of the digital divide). Mass engagement Customers, employees, suppliers, and partners are in direct communication with one another. Air quality Rising air pollution in many cities is killing people and becomes a visible catalyst for changing mind-sets and policies across health, energy, transportation and urban design. Everything connected Over 1 trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. Data ownership Individuals recognize the value of their digital shadows, privacy agents curate clients’ data sets while personal data stores give us transparent control of our information: We retain more ownership of our data and opt to share it. Truth and illusion The Internet has democratised knowledge and changed the nature of who we trust and why. As confidence in large organisations declines the search for trustworthy alternatives evolves. What we believe is changing how we behave. Related insights
- 120. 120 90% – ofthe world’s population lives within range of a mobile signal 60% – of the world’s population yet to be connected to the Internet Off grid
- 121. 121 Off grid People livingoff-grid, by inequality or choice, can exacerbate societal division or improve privacy, health and wellbeing. Either way, doing so provides fertile ground for innovation. The world and humanity are unquestionably more connected than ever before. The Industrial and Technological revolutions have transformed our ability to both travel and communicate. From cars and planes, to email, mobile telephony and social media, the world has become smaller. According to Internet.org 90% of the world’s population lives within range of a mobile signal and 3 billion people in 2015 are connected to the Internet. It’s worth noting that this impressive statistic also means that 60% of the world’s population has yet to be connected to the Internet. Counter to this onslaught of increased possibilities to connect and remain connected a number of people are living off-grid. This has the potential to improve wellbeing or to further increase societal division and strain. It also provides new commercial opportunities for organisations that are willing to cater for the off- grid consumer. There are three drivers behind off-grid living. The first and most obvious is inequality of access. The barriers to access are principally quality of infrastructure (can I get on?), affordability (can I afford to get on?) and relevance (is it relevant for me to get on?). Inequality of access applies not only to the Internet, but also to access to education, healthcare, banking and transport. A key consequence of inequality of access can be increased social inequality as the divide between the haves and the have-nots diverges. Thomas Picketty’s Capital in the Twenty-First Century ably describes the evolution of inequality in our mostly capitalist world, while the UN’s Sustainable Development Goal 10 is aimed squarely at reducing inequality within and among countries. The second driver of off-grid living is the positive choice of individuals to be off-grid. Driven by economic, political, social, cultural, mental, trust and privacy concerns or other motivations, increasing numbers of people are opting or buying out. For many, as data becomes more ubiquitous, they are actively choosing to avoid the digital ecosystem or in some cases to hide from it. For others, this is about self-sufficiency and resilience. Being off-grid can be a permanent or temporal choice. Many individuals, families and communities now elect to be temporarily off grid, for example choosing a digital detox to cut down screen and web time, to improve social, health, wellbeing and educational outcomes. Increasingly governments are aware of the public health benefits of choosing to switch off, for example the US President’s Challenge on screen time. The final driver of off-grid living is the choice by some to be on-grid, but invisible. Drivers of this include privacy concerns or a desire to be un-contactable. It also includes those who are operating in the black economy or criminal worlds. One recent arena where this activity has grown significantly is access to and use of the dark web. The dark Web is a part of the deep Web that has been intentionally hidden and is inaccessible through standard Web browsers. Being off-grid can be a permanent or temporal choice.
- 122. 122 For some, thisis shifting the World Wide Web back to how it was originally envisioned: a space beyond the control of individual states, where ideas can be exchanged freely without fear of being censored. Although often characterised as a place where organized crime and paedophiles congregate, the majority of current user of the dark web are actually law-abiding citizens who simply don’t want to be monitored and tracked to the extent that is now the norm on the public ‘surface’ web. While less that 0.03%ofthesizeoftheWorldWideWebwhencounted by sites, the Tor network (as one type of the dark web is sometimes known – named after the underlying software) is used by millions of people keen to mask their IP addresses. Some see that, as increasing government monitoring becomes more widely understood and the value of personal data becomes visible, there will be a significant shift as more users migrate to the dark web. Experts at Chatham House, for one, see that, alongside providing an invisible communication route for criminals and terrorists, the dark web empowers anyone who wants control over his or her online footprint. Ironically it may actually help protect children’s online activity. Going forward it is the potential for anonymity which some see will attract more of us on the surface web to go dark. Off-grid living provides both benefits and challenges. Key benefits include: reducing stress, increasing happiness, reducing environmental footprint, ironically increased connectedness (with the planet, those around you) and reduced cost. Regularly cited challenges are increased inequality. For example digital inequality of access creates division, with many studies showing that that the digital divide exacerbates economic, social and democratic inequality, whether real or perceived. This division can lead to tension and instability between the haves and the have-nots, with organisations and movements developing to redress the balance (e.g. Occupy or, more controversially, Islamic State). New commercial opportunities are already emerging in the provision of products and services for those for those who are choosing to live off-grid, from familiar brands such as Facebook opening presences on the dark web, to un-attributable payments with Bitcoin, to technology leaders such as Tesla creating batteries to power off-grid homes. Unequal access The dark web empowers anyone who wants control over his or her online footprint.
- 123. 123 Looking forward, theintent, enshrined in many of the UN’s Sustainable Development Goals, to ensure that “no-one is left behind”, provides an incredible innovation opportunity for many. This could be around improving access through increased infrastructure investment or subsidy. Or ensuring that those that are left behind are shielded from social and political instability, worker strikes or the potential for increased mental health issues as hopelessness and unhappiness increases in groups that are left behind. It may also be about improving services to those who choose to be off-grid, from Amazon’s drone delivery to hotels creating digital detox offers or employers providing opportunities for their employees to escape. The digital divide exacerbates economic, social and democratic inequality. Off grid Caring for those left behind Although significant progress has been made positive change has limited reach. Millions of people continue to be left behind from main-stream progress -especially the young, the poor and those who are disadvantaged. Everything connected Over 1 trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. The changing nature of privacy As privacy is a public issue, more international frameworks seek to govern the Internet, protect the vulnerable and secure personal data: The balance between protection, security, privacy and public good is increasingly political. Truth and illusion The Internet has democratised knowledge and changed the nature of who we trust and why. As confidence in large organisations declines the search for trustworthy alternatives evolves. What we believe is changing how we behave. Related insights
- 124. 124 212 million –number of unemployed by 2019 99% – of teenagers in Zambia working informally Rising youth unemployment
- 125. 125 Rising youth unemployment Withunemployment rates already over 50% in some nations, access to work is a rising barrier. Especially across North Africa, the Middle East and southern Europe, a lost generation of 100m young people fails to connect with or gain from global growth. There are currently about 75 million young people looking for a job around the world. The International Labour Organisation (ILO) predicts that by 2019, more than 212 million people will be unemployed. Irrespective of location, young people, especially young women, will be disproportionately affected; unemployment is expected to be around three times higher for them than for their older counterparts and will reach 100m by 2025. In some regions, this proportion is already as high as five times the adult rate. Globally, young people are nearly one in four of the working poor, stuck in low quality jobs with no hope of progression. For many, the transition from education to a full-time job does not run smoothly: they lack the necessary skills, there are no available jobs in their area, they find it difficult to move house to find work. Neither does higher education necessarily guarantee a decent job. In Tunisia, 40% of university graduates are unemployed against 24% of non-graduates. In the Middle East and North Africa highly educated young women are particularly disadvantaged. In Turkey, the unemployment rate among university educated women is more than 3 times higher than that of university educated men; in Iran and the United Arab Emirates, the figure is the same; and in Saudi Arabia, it is 8 times. Aside from being unable to contribute to the economy, unemployment can rob anyone of the capacity to enjoy mental and physical well-being; at its worst it can lead to social and political instability, constrained productivity and poor economic growth. Its effects can last for years, and potentially create a generation who have lost all expectation of a full and productive life. New technologies are changing the nature of work across every sector, from agriculture to industry to services, while new skills are needed for even the most traditional of roles. A generation ago manufacturing jobs required manual ability, and perhaps basic literacy, but now require technical capabilities. Worse, increased automation and artificial intelligence means that both unskilled and skilled jobs are decreasing at the same time as the number of people seeking work is increasing. Such is the extent of the problem that, to make up for jobs lost during the economic crisis, and to provide productive opportunities for those in or entering the labour market, including young people, the ILO estimates that 600 million jobs will have to be created globally over the next decade. In Tunisia, 40% of university graduates are unemployed against 24% of non-graduates
- 126. 126 Where they arewill matter; the inability to move to where the jobs are can limit employment opportunity. In the West this may be in part due to attachment to home but rules around social housing and poor transport links also play their part. In Europe, only 2.8 of young people have moved for work, compared to the US where almost 30% of Americans live in a different state to their birthplace. Language barriers, cultural differences and non-transferable qualifications make it much harder for Europeans but public policy also shapes behaviour, as most euro- area countries support their unemployed for more than a year. In most American states, jobless workers qualify for only 26 weeks of unemployment benefits. Those who begin their careers without work are more likely to have lower wages and suffer unemployment again later in life partially because they have missed out on training and experience but also because young workers typically changes jobs and increase their salaries at a much higher rate than those who are older. The economic loss can be substantial, too, and not just in the form of higher welfare payments. Those who are forced into unsatisfactory work or who cannot find work often end up on a productivity trajectory well below what they might otherwise have expected. One estimate suggests that the total economic loss from youth unemployment in Europe in 2011 was equivalent to 1.2% of GDP. Realising this problem, governments are trying to address the mismatch between skills and jobs: apprenticeships in Britain have increased in recent years, for example. There is evidence too that companies are investing more in the young and revamping their training programmes. New technology is providing educational opportunities to people who might otherwise remain outside the job market. There is some cause for hope, then. But the scale of the problem is daunting. Unequal access 600 million jobs will have to be created globally over the next decade.
- 127. 127 The formal sectoris clearly not creating enough jobs so the informal sector looks set to remain the largest provider of jobs for youth going ahead. In developing economies, a relatively high share of youth is likely to be involved in unpaid family work, starting their working life supporting (informal) family businesses or farms. The World Bank estimates that this affects 99 per cent of working teenagers in Zambia for example. In the rich world, it estimates that a third of under-24s are on temporary contracts. Although it is better than not working at all, informal sector jobs are generally unregulated, don’t pay much and often involve poor working conditions with no benefits or protection. Young people in the Middle East and Africa are particularly susceptible to this and there is enormous dissatisfaction in the region over the quality of jobs available. Among youth surveyed by the ILO, 58 per cent reported dissatisfaction with the availability of good jobs. Some people choose not to or are unable to work. About a quarter of the unemployed are south Asian women who do not work for cultural reasons. In the Middle East only 15% of women are in formal employment and in North Africa the number only 16%. To avoid increases in unemployment rates, the ILO estimates that 15 million new jobs will have to be created in the region each year for the next decade. To add an extra layer of complication, after years of declining birth rates some countries with large populations, such as Egypt and Russia, have experienced increasing fertility rates, counter to the global trend. Over the next decade this will mean more young people will live in countries which may not able to sustain them. The total economic loss from youth unemployment in Europe in 2011 was equivalent to 1.2% of GDP. Rising youth unemployment Caring for those left behind Although significant progress has been made positive change has limited reach. Millions of people continue to be left behind from main-stream progress -especially the young, the poor and those who are disadvantaged. Declining government influence National governments’ ability to lead change comes under greater pressure from both above and below - multinational organisations increasingly set the rules while citizens trust and support local and network based actions. Education revolution Broader access to improved education acts as a major catalyst for empowerment, sustained economic growth, overcoming inequality an reducing conflict. We need an education system fit for the digital revolution. Imbalanced population growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Related insights
- 128. 128 66% – Asia-Pacific’sshare of the global middle class by 2030 50% – US working population expected to be freelance Shrinking middle
- 129. 129 Shrinking middle While theglobal middle class grows, in the West increasing inequality for some drives a relative decline in middle-income populations. Coupled with the erosion of secure jobs, the US in particular sees a steadily shrinking middle. When taking a global view, one of the major demographic shifts underway is the growth of the middle class. The middle class growth during the Industrial Revolution and after the Second World War was largely in Western Europe and America, whereas today the growth is in the so-called emerging markets. Asia, Africa and Latin America are collectively set to add 3 billion more middle class by 2030. However across the US and Western Europe some see a shrinking middle class - ‘the middle class is no longer America’s economic majority’. Or perhaps it is about a broader shrinking middle that encompasses not just the idea of the middle class but middle income, jobs and roles? In 2011 13% of the world population were middle income, defined as living on between $10 and $20 a day. Asia-Pacific’s share of the global middle class will have moved from 28% in 2009 to 54% in 2020 and 66% by 2030. Most of the middle class growth is expected to come from more of the 56% low-income people crossing the $10 threshold. By contrast, the middle class in the West is not plummeting but rather stagnating – a bit like its economic growth. In the US there has already been a significant drop in middle-income population. In 1970 65% of Americans lived in middle-income neighbourhoods; by 2010, just over 40%. Meanwhile, the proportion of families living in affluent neighbourhoods doubled to 15% and those living in poor neighbourhoods has grown from 8% to 18%. Hence the term – the squeezed or shrinking middle. Middle class jobs are on the decline – again, a concern in the West rather than the Rest. Intriguingly when you talk to the IT and automation firms keen on using new technology to improve or replace human roles, their core focus is no longer in the manual arena. Replacing a $15,000 hairdresser with a robot with the required dexterity is simply not practical, however there is a wealth of prime middle-class jobs in their sights. The vast majority of back-office legal and accounting roles are repetitive but require good levels of knowledge to undertake, and are ideal for replacement by AI. In the healthcare arena, while fully replacing surgeons is not yet on the cards, pharmacists are another middle- class role ripe for substitution to a friendly, and very well-informed, robot. Primary care doctors and healthcare professionals are unlikely to be replaced completely but many of their data intensive repetitive activities are also on the radar. A growing number of $50,000 roles across the West are, potentially, at risk. Clearly, society and politicians may well say no the technology takeover but the possibility is a cause for concern for many. A growing number of $50,000 roles across the West are, potentially, at risk.
- 130. 130 More hidden fromsome views however is the fast growth of the on-demand or ‘gig’ economy. Whether using Axiom, Eden McCallum, Freelancer.com or Elance, a host of specialist service intermediaries are matching skills to project and cutting out the middlemen. Organisations are providing a disintermediation / connection role for lawyers, consultants, designers, copyeditors and marketers - Elance alone connects 9.3m workers to 3.7m companies. While these networks do not replace fully the middleman role previously taken by traditional agencies and law firms, they are optimizing it and significantly reducing costs. Looking ahead, as half the 160m US working population is expected to be freelance or independent contractors, the scale of the opportunity for replacing this shrinking middleman of service organisations and employment agencies is huge. This isn’t restricted to the US and is already across many other nations; India is a prime example with 25% of its workforce already freelancing, but similar shifts are also occurring in the Philippines, Kenya, Indonesia and Brazil. As the global supply of talent and the growth of the service economy align, some see a levelling of the international marketplace driving more effective matching of people to projects and, over the long term, a normalization of freelance rates to between $40 and $50 per hour. Others are not so sure. While many people already buy insurance direct from the insurer and subscribe to digital news direct from the publisher, estate agents for one are still around, and in some cities flourishing. In some areas middlemen are more important than ever: people are confused by the overwhelming choice the Internet brings, and the need for trustworthy guides and other sorts of intermediary is increasing. Curation and coaching seem to be a growing need. Somebelievethatwewillseetheonlineglobalizationof freelance talent driving both access and competition – providing opportunity for many connected individuals around the world, but also challenging established workers in the West. Incomes in Asia are already increasing and this freelance shift is envisaged to accelerate. As established value chains collapse, small organisations combine to provide scale and agility, some, such as the WTO, see a rise in asset sharing and use of networks all driving greater transparency, efficiency and lower costs for customers. Just as peer-to-peer marketplaces are disrupting parts of the financial and retail sectors, so in the future they will also have impact on accountants, lawyers and their other traditionally safely employed counterparts. Unequal access India is a prime example with 25% of its workforce already freelancing.
- 131. 131 Several Western governmentsare clearly concerned about the implications on tax from this. Not only may personal income tax incomes drop as individuals move from being employees to self-employed, but there could be a big hole in corporation tax revenues as whole rafts of established physically located organisations disappear and are replaced by networks hosted in suitable low-tax regions. This may in turn, it’s argued, reduce the level of state and government expenditure on education, healthcare and social benefits in the US and so further increase the rich / poor gap and shrink the middle. What is clear that this is a lumpy shift – not like the relatively smooth growth in the global population. The overlay of local economic shifts, regional population trends and global connected marketplace are, in some countries, likely to have a significant impact. At the moment, the signs point to the US being where the middle shrinks most and that may be how it plays out. But the same drivers of change are having impact elsewhere - so it may not be long before other countries start to feel that squeeze. Western governments are clearly concerned about the implications on tax. Shrinking middle Imbalanced Population Growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. The real sharing economy Increasing collaboration drives organisations to reconfigure based on social networks and impact. Real sharing enterprises, not driven by profits, seek to share resources, knowledge, and decision-making responsibilities. Skills concentrations The need to build and develop capabilities becomes increasingly challenging for companies and workers alike. Those who benefit from the high-skill reward opportunities remain a select group who move ahead of the urban pack. Related insights
- 132.
- 133. 133 Our habitat A goodnumber of the major challenges for the next decade are concerned with the environments within which we and other animals live. As the impact of our over-consumption of resources collides with emerging concerns around climate change and urbanisation, how best we respond is up for question. Many see that systemic stresses within our habitat are becoming more evident and are potentially passing fundamental thresholds. Where we live and how we live in concert with the planet and its natural resources is fast becoming a mainstream issue around the world. The topics covered in the following pages are: Accelerated displacement Basic sanitation Nature’s capital Plastic oceans Citizen- centric cities Flooded cities Built-in flexibility Sometimes nomads Infrastructure deficit
- 134. 134 1.5 million –Syrian refugees in Lebanon (population 4m) 3 million – people migrating from rural areas to urban areas globally every week Accelerated displacement
- 135. 135 Accelerated Displacement Climate change,conflict, resource shortages, inequality and political elites unable or unwilling to bring about necessary change all trigger unprecedented migration to the North. Over the next 50 years, as many as 1 billion people could be on the move. In 2015 more than 4 million Syrians attempted to escape the conflicts in their home country and moved elsewhere. Of these, more than 1 million made their way to Europe, sparking political crises across the continent as politicians and communities struggled to get to grips with both the physical needs of those at their borders and the political and social implications of mass immigration. International news media outlets were awash with images of an increasingly desperate caravan of people marching, literally from country to country and border-to-border hoping to find their way to a new life. And they are still moving. The Syrian exodus is the single largest conflict-driven mass migration event in living memory, surpassing even the number generated by the Afghan conflicts in 1992. But the European story, for all its impact on attitudes towards migration in the West, masked a far bigger migration story that has been taking place right across the world; one in which the Syrian movement to Europe plays only a minor role. For sheer scale, the number of people migrating from rural areas to urban areas around the world dwarfs Syrian out-migration. Best estimates put this figure at more than 3 million people every week. In China and India for example, we are likely looking at a figure in the tens of millions, in 2015 alone. And this kind of internal movement can happen suddenly, even if some of its impacts are only temporary. Typhoon Haiyan, for example, was estimated to have displaced 4 million residents in the Philippines in as little as a few hours. Many have returned to their original homes, but others have permanently relocated. Cross-border migration too is not a phenomenon unique to the west. Whilst Europe has concerned itself with an influx of migrants from Africa and the Middle East, Indonesia and Malaysia have been coping with periods of similar daily arrival rates from Bangladesh and Myanmar, for example. Historical and economic connections between countries also play a part in regional migration-flows that are often ignored by international media, such as those from former Soviet states to Russia. Often times the scale of this kind of migration is hidden because the receiving countries also have a high rate of out-migration, resulting in negligible net migration figures. Furthermore, whilst citizens in Western countries often see themselves uniquely as victims of a mass migration that imbalances their populations, they would do well to understand that other parts of the world are already defined by such imbalance. Lebanon for example, is home to a far higher proportion of people born elsewhere than the vast majority of Western countries. In fact, Lebanon is currently playing host to over 1.5million Syrian refugees, yet its native population is only 4 million. We cannot yet predict how many of those will stay. The number of people migrating from rural areas to urban areas around the world dwarfs Syrian out-migration.
- 136. 136 The causes ortriggers of this scale of migration are complex. War and conflict are certainly drivers that show no signs of abating, whilst climate change, or rather the localised effects of climate change, are also beginning to have the kinds of displacement impacts predicted over the last two decades. The UNHCR suggests that 2015 saw global records in terms of the number of people who have been forcibly displaced, claiming: “one in every 122 humans is now either a refugee, internally displaced, or seeking asylum.” Meanwhile the factors that lie behind movements to find better economic opportunities, escape from persecution or to gain better access to natural and societal resources are all being exacerbated by regional population growth and widening wealth and access inequalities. Often, attempts are made to categorise different kinds of migration and migrant according to those factors that push and pull. Commentators talk of ‘climate migrants’, ‘refugees’, ‘asylum seekers’, ‘political migrants’ and ‘economic migrants’. But whilst some of these terms have formal legal definitions, the reality is that it is often difficult to distinguish one from another; someone migrating from a warzone may have had their home destroyed or they may be suffering from the deleterious economic impact that war is having in their region, for example. The impacts of mass migration are manifold. The most visible perhaps, are changes in social attitudes reflected in popular and social media comment, as those in receiving countries or receiving cities vocalise perceived threats posed by immigrants to their culture, livelihood and security. These changes in social attitude often lead to macro-level policy shifts. Recent trends in Western migration policy discussion and rhetoric, from all sides of the political spectrum, for example, all seem to point towards a coming slew of ever-more draconian laws and policies designed to discourage immigration. Further weakening of immigrant rights and benefits, tougher asylum rules and tighter border controls are a given, but formal criminalisation and harsh penalties for certain types of migrant, and even military intervention in border- lands, are not impossible in the future. Some of these measures will challenge the very fundamentals of the national ideologies and constitutions that are producing them, causing anguished national soul- searching; a phenomenon we are already witnessing in relation to the plight of the Syrians. Our habitat One in every 122 humans is now either a refugee, internally displaced, or seeking asylum.
- 137. 137 In other partsof the world, more measured (but no less important or restrictive) policies have been designed to slow or halt rural-urban migration, such as the implementation of China’s infamous ‘hukou’ system of residency rights or rural tax and investment incentive schemes in places like Mozambique. And at a more local level, cities have been forced to rethink the ways in which they plan their infrastructure and services to cope with fast-rising and sometimes statistically invisible populations. Most are eager to avoid the pitfalls of the past that have manifested themselves in squalid slums and shantytowns. In these responses we may also see the sides of a more balanced approach to weighing the pros and cons of migration in specific regions. So what of the next ten years? Well, if the consensus of those we spoke to is to be believed, we ain’t seen nothin’ yet! The displacement of people due to the effects of climate change looks set to become a feature of the 21st century as coastal areas become more prone to severe flooding, extreme weather events become the norm, and arable land and fresh water become ever more scarce. Rising economic inequalities will also push even more people to move in search of better jobs (even as automation and robotics eat away at traditional employment sectors in receiving countries and cities): People trafficking, of both voluntary and involuntary migrants, is likely to become too profitable a business to prevent. And local population growths will increase pressure on localised resources, leading more governments to encourage emigration in the hopes of easing local pressures and benefitting from the remittances of overseas diasporas. Despite the bluster emanating from certain politicians, the scale of migration and prediction of its impacts are actually extremely difficult to measure, leaving statistical vacuums that are all too often filled with guesswork, cherry-picking and anecdote, leading to ill-informed and reactionary policy- making. However, over the next decade, as many as a billion people could be on the move and we will need to find sustainable ways of responding to this unprecedented human traffic. Accelerated Displacement Local population growths will increase pressure on localised resources. Flooded cities The vast majority of our cities are not prepared for flooding. Many districts and households can no longer get flood insurance and are in jeopardy. It’s going to get worse before it gets better. Imbalanced population growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Rise of nimby Globalisation of trade and travel, with geopolitical shifts from North to South and from West to East, have delivered many benefits for some - but are causing clashes of cultures and a perspective of political retrenchment for others. Shifting power and influence The centre of gravity of economic power| continues shifting eastwards, back to where it was 200 years ago. Recent superpowers seek to moderate the pace of change but the realities of population and resource locations are immoveable. Related insights
- 138. 138 130 million –households don’t have access to a toilet 2.5 million – people without access to sanitation Basic sanitation
- 139. 139 Basic sanitation Poor sanitationcontinues to impact public health and restrict social progress, particularly for women. Governments and donor organisations prioritise measurement, education and innovation in a bid to drive change. Although investments in sanitation can reduce disease, increase family incomes, keep girls in school, help preserve the environment, and enhance human dignity, the world has missed the UN Millennium Development Goal target by almost 700 million people. Goal 6 of the newly adopted Sustainable Development Goals (SDG) is to ensure availability and sustainable management of water and sanitation for all by 2030. It’s a tough challenge as, according to the World Health Organization, lack of access affects approximately 2.5 billion people, or more than 30% of the global population, the majority of whom are living in extreme poverty across parts of rural Asia and Africa. Some 130m households don’t have access to a toilet. This means that more than a billion people defecate in the open, behind bushes, in fields or by roadsides. One gram of faeces carries up to 1 million bacteria and 10 million viruses, so diseases can easily spread and it’s hard for health workers to control outbreaks caused by contaminated water and unhygienic food preparation. This particularly affects women and young children. For a girl, lack of access to a clean, safe toilet, especially during menstruation, can lead to absence from school and increases the risk of harassment as many have to leave home in the cover of night to relieve themselves. This has long-term impacts on their health, education, livelihoods and safety, ultimately limiting the productivity of half of the potential workforce and therefore impacting the economy. Primary health care facilities, critical in responding to outbreaks of diseases, such as cholera or Ebola, are frequently lacking in good sanitation despite the fact that they are the first point of care, especially for those in rural areas. Lack of basic water, sanitation and hygiene facilities compromises the ability of health care workers to carry out proper infection prevention and control measures, and demonstrate safe practices to communities, both of which are especially important in controlling and stopping outbreaks. SDG status has done much to change the political cache of sanitation policy. However accountability for its provision is complex and crosses a number of different government departments, ministries for health, water and local government, of the environment, and those with central, regional, district, and city responsibilities. All are becoming increasingly aware of the pollution problems which on-site sanitation can cause to groundwater, coastal waters, and surface water, and the net result is often a tangled web of overlapping, uncoordinated, unworkable policies, low budget allocations, and low prioritisation. One gram of faeces carries up to 1 million bacteria and 10 million viruses, so diseases can easily spread and it’s hard for health workers to control outbreaks caused by contaminated water and unhygienic food.preparation.
- 140. 140 As better understandingemerges on the health impacts that improved water, sanitation and hygiene (WASH) can have on populations, expect new collective government bodies to make more strategic investments in projects. The World Bank Group is currently taking a lead in this area and is integrating WASH, nutrition and health in at least 13 projects across India, Pakistan, Lao PDR, Cambodia, Vietnam, Ethiopia, Mozambique, Uganda, Zambia, and Haiti at a cost of around US$440 million. Alongside this is the need to strengthen the mechanisms for tracking investments, as better measurement and research is vital. Although the number of public toilet facilities available is relatively easy to monitor, personal sanitation habits are not. Often developing countries are ill-equipped to monitor the many sector indicators simultaneously, especially if these indicators are themselves not easily measurable to begin with. The WHO and UNICEF1 are now committed to addressing this and are working with a number of countries to identify and use simple, measurable indicators essential to provide planners and decision-makers with relevant information. Many previous government and NGO initiatives have often come to nothing, primarily because of the failure to address the need to change the behavioural habits of generations. As a result toilets have been built but not maintained or perhaps not used for their original purpose. Developing behaviour-focused sanitisation campaigns alongside providing the necessary facilities will gain more traction. This is not a simple task, as it will require considerable investment in human capital at both national and local levels; it will also require citizens’ involvement, smart targets and good monitoring systems, as well as room for experimentation and learning. Alongside improved basic education, addressing cultural habits is key to instigating change. SDG status has done much to change the political cache of sanitation policy. Our habitat
- 141. 141 In particular campaignsmay benefit from turning the spotlight on the personal advantages of sanitation, such as convenience, status and safety rather than the more distant, albeit important, impact of sanitation on public health. Such campaigns not only mean government-built latrines have a better chance of being used; they may also encourage households to build them for themselves. Aside from education and investment in facilities, innovation, both in the process of building new facilities and in funding, will have a significant role to play going ahead. In emerging markets one of the main obstacles is often complexity; people have to cobble all of the components and tradesmen together from different places and then find the materials for the toilet separately. This can take time and effort; efforts to change this will make a huge difference, as will improve efforts around the mechanical waste removal and treatment. Recently, the Gates Foundation challenged designers to reinvent the toilet, suitable for the developing markets. The winning product, by Michael Hoffman of the California Institute of Technology, uses solar panels to power an electrochemical system that produces hydrogen and a compound that oxidises the salts in urine to generate chlorine. This creates a mildly disinfecting solution that can be used to flush the toilet. The hydrogen is suitable for cooking or for powering a fuel cell to produce electricity. The solid residue from the process can be employed as fertiliser. Prototypes will soon be tested in the field, and may well be deployed in as little as two years. The foundation now intends to spend up to $80m a year on sanitation, an investment that the World Health Organisation estimates will produce a return of 900% in the form of social and economic benefits coming from increased productivity and reduced health care costs. Innovation, both in the process of building new facilities and in funding, will have a significant role to play going ahead. Basic sanitation Affordable healthcare The escalating cost of healthcare is further stressed by the need to support the old and the chronically ill. Spending 20% of GDP on healthcare is seen as unsustainable so hard decisions are taken around budgets and priorities. Air quality Rising air pollution in many cities is killing people and becomes a visible catalyst for changing mind-sets and policies across health, energy, transportation and urban design. Caring for those left behind Although significant progress has been made positive change has limited reach. Millions of people continue to be left behind from main-stream progress -especially the young, the poor and those who are disadvantaged. Infrastructure deficit Infrastructure again becomes a source of competitive advantage. Emerging economies invest in new railroads and highways for more effective movement of people and goods, while developed nations suffer from poor legacy. Related insights
- 142. 142 100% – renewableenergy target in Denmark by 2050 50% – share of households with water meters today Built-in flexibility
- 143. 143 Built-in flexibility The pathto a connected, accessible and distributed infrastructure is fraught with complex, costly and risky issues: Upgrading and repurposing systems to make them more open plus on-going maintenance need significant resources. Infrastructure, the backbone of a functioning society, provides roads, buildings, power, water and communications systems. Much of the world around us today is shaped by legacy infrastructure, such as canals, railways and roads. Infrastructure through the years has naturally morphed as new opportunities are realized (the introduction of the steam engine to sailing fleets, and digital communications displacing analogue). Often, this world of large, often state- owned suppliers, distributing product to consumers in one direction only, was developed to operate individually. Why would electricity providers want to talk to water distributors? Indeed, regulatory bodies have a remit to prevent overzealous collaboration within a sector. But today the infrastructure around us is changing in a different way. It is becoming more flexible, more open to multiple parties, and more capable of separating its various flows. The effects of this shift will be profound. By 2025, infrastructure will not only be smarter but also inherently adaptable. Energy flows will become more bi-directional and distributed as more prosumers – individuals who both consume and produce energy – come on line. Water supply will be more readily captured, treated (or not) and separated to make best use of individual water types such as grey-water, storm water and tap water for more specific usage. Transport will become smarter, with vehicles that know (or can be told) of errors and repairs, that can communicate with their manufacturer, owner and service provider, as well as with the environment and road around them - by 2018, EU cars will be required to be fitted with the ability for the car to contact emergency services after a crash. As a move to intelligent infrastructure, buildings and communication systems today are already demonstrating smarter operations, via temperature, lighting controls and intelligent connectivity. The Global Change Institute’s Living Building in Brisbane, for example, is a pacesetter in this space. The GCI states that the building generates more energy than it consumes, is naturally ventilated, captures its own power through solar panels and stores up to 60,000L of rainwater. One driver for the rise in built-in flexibility is the need for increased efficiency, particularly where key resources are involved. Infrastructure providers and their regulators will continue to aim to do more with less, reuse products, produce less waste and avoid misdirected supplies. Doing so not only saves costs and (often precious) resources in the short term, but also feeds a hunger for the same organisations to develop longer-term plans. The creation of what have been termed “virtual plants” by aggregating swarms of smaller decentralised plants (i.e. wind and solar farms) into what the grid recognises as one is already under way. Grids in countries like Denmark, currently converting their energy/heating system to build a 100% renewable energy system by 2050, are managed so well that they can accommodate more than a 40% share of renewable electricity. When using ICT for modernising distribution grids, the share can even be higher. Infrastructure will not only be smarter but also inherently adaptable.
- 144. 144 The interconnected natureof the world around us is another driver of more flexible infrastructure. Commonly referenced as the Internet of Things, the ‘connected’ threshold before us is immense. The IoT really began to take off in 2013 once there were enough IP addresses, increased bandwidth and reduced costs of data storage. How swift the change in 2025 depends, like the numbers of prosumers of energy we may see, on how many people will be sharing key assets like cars and how many will reuse and repurpose vital resources like water. The answers will come from heavily weighted subsidies, feed-in tariffs, tax breaks, market penetration and more. Of course, wider proliferation of smart metering will help greatly with forecasting; currently only half of the estimated 2 billion households and buildings worldwide have water meters installed. With $6,6bn of investment a year by 2025, global water metering is set to grow. But until this time, if the outputs of COP21 the 2015 UN Conference on Climate Change in Paris, are in any way adhered to, look for the pace of change in adaptability and openness of infrastructure to quicken. Efficiency, after all, matters to practically everyone. In developed economies, the transition from the ‘old state’ to new thinking will predominantly come from innovations in and repurposing of existing systems instead of a new build, greenfield scenario, as there is too much legacy in play. For regions where infrastructure is absent, or obsolete, wholesale change is possible as illustrated in the 1990s with the arrival of mobile phone networks that ‘leapfrogged’ the need for building out further fixed telephony networks. For most situations, hard assets are still required – plumbing, roads, wires and buildings - and there could well be limits to leapfrogging. Fuelling the whole of built-in flexibility and intelligent decision-making is data. Whether more data or Big Data, personalized or anodized, access to data and the ability to intelligently utilize it remains key. And of course, collaboration, because truly flexible infrastructure systems will require much coordination with other systems. The Global Apollo Programme is calling for just such a collaborative spirit with regards to energy. With its stellar list of climate scientists and economists, including Lord Nicholas Stern and Sir David King, the authors of this report are calling for a major programme of sustained, publicly funded renewable energy research. It believes that only a global initiative can combat climate change and help contain the costs of production, storage and distribution of clean energy. Our habitat Providers and their regulators will continue to aim to do more with less.
- 145. 145 Viewing water, resources,food and energy as an integrated system, not as individual industries, is the way ahead. Rather than independent conversations that pit one resource/industry aims against the other today, the increased ability for systems to communicate and change their flow/supply/direction will help the previously independent systems and managers of those systems to communicate with each other. One simple example of such a nexus is in using solar energy to operate water pumps to irrigate crops to feed local populations. Energy, Water, Food, People. There is a price to pay, well beyond the pain and costs that transition brings: increasingly open and connected systems will, by their very nature, be more vulnerable to cyber-terrorism. Infrastructure is an enticing target for any group hoping to gain a little attention, cause disruption or worse. Infrastructure providers will need to be diligent in their cyber security measures, while at the same time opening up their systems to all and sundry. A balancing act, if ever there was one. Benefits that we can expect to see are increased specificity of supply for particular uses, more adaptable supply/demand relationships, improved efficiencies and the much welcome by-product of helping infrastructure providers to incorporate a longer-term view. Built-in flexibility is not an either/or concept to fret over; rather it is a wave of change coming our way. Only the rate of adoption is still in question. Built-in flexibility Wider proliferation of smart metering will help greatly with forecasting. Citizen-centric cities Successful cities will be designed around the needs and desires of increasingly empowered and enabled citizens - who are expecting personalized services from the organisations that serve them Everything connected Over 1 trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. Infrastructure deficit Infrastructure again becomes a source of competitive advantage. Emerging economies invest in new railroads and highways for more effective movement of people and goods, while developed nations suffer from poor legacy. Access to transport The widespread need for individuals to travel short distances becomes a key feature of urban design and regeneration. Planners use transport infrastructure to influence social change and lower carbon living. Related insights
- 146. 146 41 – megacitiesglobally by 2030 80% – of older people will live in cities in developed economies by 2050 Citizen-centric cities
- 147. 147 Citizen-centric cities Successful citieswill be designed around the needs and desires of increasingly empowered and enabled citizens - who are expecting personalized services from the organisations that serve them. The connectivity of people, governments, decision-makers and the IoT will enable each to contribute to a city as a product. If we are going to live in cities, then we will certainly expect them to suit our needs and desires. Cities, it seems, have always have been products, with citizens as the customers, but now the marketplace for cities is on the move. And in a big way. The UN predicts 8.5 billion people globally by 2030, 9.7 billion by 2050 and more than 11 billion in 2100 and that by 2100, some 84% of us will live in cities. What’s more, by 2030, just under 9% of global population will be living in 41 megacities (defined as 10m+ inhabitants). A city will increasingly need to provide for its inhabitants, attract newcomers and compete alongside the offerings of other cities. And with direction given by the collective voice of the people that live there, as cities deal with a more connected world, one that expects to have a voice. We already expect personalization, relevance and traceability of the products we use, so surely this will be the same for the city (as a product)? Cities face a complex stakeholder environment and will need to demonstrate an ability to work across systems and boundaries while improving co-operation and trust. The connectivity of people, governments, decision-makers and the IoT will enable each to contribute to a city as a product. In Sydney, Australia, the provision of bike parking and end-of- trip facilities for cyclists within new developments is now obligatory. In an era where the public voice is easier to access and harder to suppress, it becomes more difficult to generate support for new initiatives without taking public views into account. FixMyStreet is a rudimentary expression of this in the UK today, where citizens report local issues (like graffiti, fly tipping, broken paving slabs, or street lighting) which are then forwarded to the appropriate local council. So what will we want as global city dwellers? The familiar issues of feeling safe, good jobs, parks and recreation, and arts, culture and nightlife - it is the interaction of these (and other) factors that make a place truly great. Some participants suggest more areas of emphasis - innovative environmental solutions, a focus on connected, healthy, efficient cities and user-friendly goods and services shaped by consumers that will transform companies and the way that cities work. We can expect that cities will become closer, more connected communities, or sets of communities that emphasise and create particulars of the environment that each community needs or wants. Along with improved safety, and transport upgrades, ageing is one specific concern for cities because in developed countries, 80% of older people will live in cities by 2050, while in developing countries the figure is 25%. Designing with nature is another key concern. Building with nature is not about creating greenbelts and buildings as separate from each other by containing nature in specific locations, but instead working with nature - Singapore today has vertical gardens and is leading in wastewater management, water reclamation activities and drains that support biodiversity.
- 148. 148 The shape thatour cities take will obviously differ for each situation, but there may be particular lessons to be learned today. As well as Singapore, there is Songdo, South Korea’s super-connected city of the future, attracting partners like Cisco’s Global Innovation Lab, among others. The UAE is another pacey city development with ‘origins’ (oil discovery and exploitation) around the same year as Singapore’s founding. Here, Dubai is positioning itself as the hub to the UAE focusing especially on business and tourism. Abu Dhabi brings lessons of a different kind, as it launched (with great fanfare) Masdar City, a purpose-built zero carbon project, but it looks more like a green ghost town today. Finally, a US example of a city grasping the idea of ‘city as product’ is Chattanooga, TN. Chattanooga is building a ‘Giga City’ and it is the first city in the Western Hemisphere to offer 10-gigabit-per-second fibre Internet service to all residents and businesses. That ought to attract a pioneering spirit. Cities will become closer, more connected communities. The future of our habitat
- 149. 149 It looks stronglylike cities will be designed with more human values in mind. Each will shift from a set of well understood but siloed industries that feed the current economic models to a new, joined-up model of how we live, work and play. Expect to see demonstrations of local creative solutions and projects as well as a thirst for differentiation that will drive change. Underpinning these solutions is technology as an agent for change. New technologies will be integrated with big data to facilitate healthier, enriched and more connected lifestyles. And design? Beautiful space design and architecture will help attract people to cities, meeting the needs of consumers and/or citizens across aesthetics, functionality and experience. Future generations will be more aware of the legacy they leave for the next generations, as quality of life will be key to deciding where we want to live. New technologies will be integrated with big data to facilitate healthier, enriched and more connected lifestyles. Citizen-centric cities Care in the community The desire to ‘age-in-place’ meets a healthcare reform agenda that promotes decentralization. A new care model is customer-centric, caregiver-focused and enhances coordination across care settings. Intra city collaboration Increasing competition between cities overrides national boundaries and drives change. They compete to attract the best but also collaborate to avoid the downside of success – over-crowding, under-resourcing and pollution. Skills concentrations The need to build and develop capabilities becomes increasingly challenging for companies and workers alike. Those who benefit from the high-skill reward opportunities remain a select group who move ahead of the urban pack. Access to transport The widespread need for individuals to travel short distances becomes a key feature of urban design and regeneration. Planners use transport infrastructure to influence social change and lower carbon living. Related insights
- 150. 150 68,000 – averagedeaths per year from natural disasters 150 million – combined populations of the ten most ‘at risk cities’ globally Flooded cities
- 151. 151 Flooded cities 2015 wasthe warmest year on record and, arguably, with many natural disasters. The Nepal earthquake, the worst flooding for 100 years in Chennai, a long heat wave in India that claimed 2,000 lives, huge monsoon rains in Myanmar, Bangladesh and India, massive flooding in Mozambique and Malawi, another drought in Ethiopia. Add to that flooding in Europe, the US and South America - and many are getting ready for more of the same; the occurrence of a strong El Nino in 2015/16 warmed the Pacific and therefore led to heavy rainfall, flooding in the US as well as more storms, poorer harvests and more flooding in South America. However, in all, only 23,000 people were killed in 2015, many in the Nepal earthquake in April, more than the 7,700 deaths the previous year, but well below the 10-year average of 68,000. Insurers say that though the overall cost of natural catastrophes dropped to its lowest level since 2009, and claims fell to $27 billion, looking ahead, demand for cover will double in high-growth markets and rise by around 50% in mature markets by 2020. So are things getting better or worse? The consensus today is that climate change is here and we need to do something about it. As some have suggested, since 2000 we have been in the Anthroprocene – the epoch that begins when human activities started to have a significant global impact on Earth’s ecosystems. What we have done in the past and are still doing now is having a potentially irreversible long-term effect on the planet. While ocean acidification, the nitrogen cycle and biodiversity loss are often highlighted as the most significant of these, there is little doubt that it is in the area of climate change where there is greatest political attention. With the recent agreements in Paris at COP21 now being worked through, some hope that actions to be taken will mean that overall global warming can be kept down to 1.5C or 2C. Others are less confident and see that our actions to date have already contributed to at least this and that, within this century, we are more likely to see 3C or even 4C of global warming. There has to be not only significant change in the energy system but also in our behaviours. In the UK, the energy consumed in just driving cars each day is greater than what can be conceivably be supplied domestically from all three renewable options of wind, solar and wave. Add in heating, air-travel, manufacturing and electricity for all our devices, and we are using way more than can be provided from existing green technologies. With current consumer behaviours, few countries can deliver a carbon neutral energy supply and, as such, without a growth in nuclear or solar energy coupled with hyper-efficient batteries, preventing the 2, 3 or 4C rise in average temperatures is a big ask. The vast majority of our cities are not prepared for flooding. Many districts and households can no longer get flood insurance and are in jeopardy. It’s going to get worse before it gets better. Since 2000 we have been in the Anthroprocene – the epoch that begins when human activities started to have a significant global impact on Earth’s ecosystems.
- 152. 152 No one reallyknows exactly what this means, but the Met Office has created one map of likely consequences based on the IPCC Assessment Report. Alongside further melting of the Artic and Antarctic ice sheets, this shows desertification in the Amazon, South West USA, Southern China and large parts of Africa. However, although drought and hurricanes are going to increase in frequency and strength and seasons will shift, the biggest issue that we need to prepare for seems to be flooding. Either directly from rising sea levels and more heavy rainfalls or as a by-product of more unstable weather patterns, dealing with more water than our systems were designed for is the top risk in many regions. As most of us live in cities and most of the largest of these are on the coast, the numbers likely to be affected are huge. New York, Miami and Boston, alongside Guangzhou, Mumbai, Kolkota, Shenzen and Jakarta are among the most vulnerable. The ten most ‘at risk cities’ globally already have combined populations of over 150m and are projected by the UN to have grown by a further 50%, adding another 75m by 2025. 22 of the top 50 wealthiest cities are prone to serious flooding that will also impact housing, poverty, cost of energy and social breakdown. By 2070, the total asset exposure could rise more than tenfold from today, reaching $35 trillion, more than 9% of projected annual global economic output. In the longer term, experts estimate that globally up to 1 billion people will have to migrate inland or north as a consequence of climate change. On the upside, we are seeing success in the development of salt-water tolerant and more drought resistant crops, and Canada and Siberia will both be warmer and able to accommodate more people. However for the majority, unable to move, dealing with the impact of climate change will become the biggest priority. Over the past decades, many of us have consistently built where we should not and in many regions flood plains have not been respected. Moreover, other than in the Netherlands, few buildings have been designed to accommodate regular flooding. Learning visits to the Netherlands and Belgium are frequent but as yet, few tangible schemes have been proposed. Our habitat 22 of the top 50 wealthiest cities are prone to serious flooding.
- 153. 153 The opportunity isto rethink infrastructure in terms of resilience, and not just rebuild it. In a few cities more effort is being put into building new infrastructure similar to the Thames barrier in London. Designed in the 1960s and operational since 1982, this helps to defend London from high tides. Originally planned to only be used once or twice a year, in 2014 it was closed 48 times. Sustainable flood-risk management schemes are being discussed and planned for areas like the Pearl River Delta in China where currently the practice is to deliberately flood rural areas in order to protect the cities. Nobody is expecting people to stop migrating to cities or for cities to voluntarily relocate any time soon, but with insurance being withdrawn from some and more regular flooding occurring in many, the need for action to occur will be evermore visible over the next decade. If global warming plays out as many expect, attitudes to flooding with shift considerably and a more prevalent view around better preparing for resilience will become clear. The opportunity is to rethink infrastructure of resilence and not just to rebuild it. Flooded cities Accelerating displacement Climate change, conflict, resource shortages, inequality and political elites unable or unwilling to bring about necessary change all trigger unprecedented migration to the North Over the next 50 years, as many as 1 billion people could be on the move. Deeper collaboration Partnerships shift to become more dynamic, long-term, democratised,multi-party collaborations. Competitor alliances and wider public participation drive regulators to create new legal frameworks for open, empathetic collaboration. Infrastructure deficit Infrastructure again becomes a source of competitive advantage. Emerging economies invest in new railroads and highways for more effective movement of people and goods, while developed nations suffer from poor legacy. Intra city collaboration Increasing competition between cities overrides national boundaries and drives change. They compete to attract the best but also collaborate to avoid the downside of success – over-crowding, under-resourcing and pollution. Related insights
- 154. 154 US$1 trillion –annual gap in current infrastructure spend vs. demand 60% – increase in the world investment in infrastructure needed by 2030 Infrastructure deficit
- 155. 155 Infrastructure deficit Infrastructure againbecomes a source of competitive advantage. Emerging economies invest in new railroads and highways for more effective movement of people and goods, while developed nations suffer from poor legacy. Infrastructure - ports, pipelines, hospitals, highways, water, sewage and phone systems – matters, providing the bedrock of national prosperity and well-being. Facilitating transport, promoting communication, providing energy and water, boosting the health and education of the workforce and enabling the whole economy to flourish. The costs of building infrastructure are vast, but the costs of failing to make such investments are incalculable. For a country to be competitive, it needs roads and airports to provide access to markets, power sources to fuel homes and businesses, reliable water to generate productivity. In today’s globally connected world, information and communication technologies (ICTs) are increasingly important, with growing empirical literature on how ICTs facilitate innovation and impact firm and country productivity by giving decision makers more complete information. Improved infrastructure produces abundant benefits for the economy, environment and social progress, unlocking growth and generating economic and social benefits and progress. Infrastructure projects are a source of major employment, catalyse local economic growth, develop skills at all levels in the workforce which then provides the underpinning for developing new products and services, opening access to new markets and reducing waste and environmental impact. As INSEAD academic and co-author of the World Bank’s global innovation index Bruno Lanvin says: “Infrastructure spending will be increasingly important for future economic growth, especially for the development of high-tech and knowledge- based industries … Major infrastructure projects help to diversify the economy by indirectly encouraging new industries. There are things you can do in countries with good infrastructure that you just cannot do anywhere else”. According to the World Bank “Research shows that every 10% increase in infrastructure provision increases output by approximately 1% in the long term”. These findings are consistent with a substantial EU study that demonstrated causality of electricity and transport infrastructure investment driving GDP growth in the long-run. While the case for investing in infrastructure would appear clear, there is a problem: there is an enormous infrastructure deficit. The World Bank believes that there is a US$1 trillion p.a gap (or 1.4% of global GDP) between what is required and what is currently being spent. The development of environmentally clean infrastructure would raise this estimate by an additional $200-300 million yearly. According to the McKinsey Global Institute Infrastructure Practice, “the world needs to increase its investment in infrastructure by 60%” through to 2030 just to maintain current levels of infrastructure capacity and service relative to GDP. Critically this figure does not include the cost of maintenance, renewal and backlog in many countries - or the cost of climate change adaptation - and will not raise the standard of infrastructure in emerging economies beyond their natural level. Every 10% increase in infrastructure provision increases output by approximately 1%.
- 156. 156 Our habitat The demandfor infrastructure investment in the developed world never wavers. “In the developed world, a particular concern is that so much legacy infrastructure needs maintenance and rehabilitation, owing to the ageing of assets, stricter environmental regulations and the globalization of supply chains. The supply of new infrastructure cannot keep pace with demand because of various impediments; notably, the public sector’s budget constraints following the global financial crisis, and the reluctance of private financiers to commit capital to long- term and risky projects. In addition, the delivery of infrastructure programmes is hampered by several issues in the project origination and preparation phase, including biased project identification and prioritization, low-quality master-planning, slow permit and procurement processes, and inadequate risk allocation and delivery models.” Looking forward, there are a number of actions that can be taken to narrow or close the infrastructure deficit. Governments can theoretically pull three levers: reduce infrastructure demand, build new assets, or optimize existing infrastructure assets through efficient operation and maintenance. It will take all three, but many believe it is the last that may offer the most potential, with big-data and digital networks helping us to use current infrastructure more efficiently, or even bypass it entirely. It is also likely that policy makers will increasingly bet on longer- term options with built-in adaptability for changing technologies and infrastructure use. One emerging challenge, as cities and government become ever more transient, is who will take, and be trusted to take, overall responsibility for its infrastructure? The supply of new infrastructure cannot keep pace with demand.
- 157. 157 Adjacent to thiswill likely be a continued evolution in the source and mix of infrastructure funding. According to PWC, “the trend for governments to seek private-sector involvement in projects rather than go it alone will likely grow, as will participation by funds dedicated to specific kinds of infrastructure – water, for example. And high-growth economies such as China, India, Russia, Brazil, South Korea and Indonesia may consume an increasing share of world investment capital.” To collectively address major urban challenges, as shown by Medellin in Colombia, governments will need to increasingly openly collaborate with business to improve not only the institutional fabric of cities but also core infrastructure. Core infrastructure needs to evolve to accommodate future technical opportunities. These include: driverless cars will require driverless highways, complete with a myriad of sensors, to enable increased road capacity, reduced journey times and fewer accidents; Tube transportation networks, such as Elon Musk’s superfast hyperloop; Atmospheric water harvesters to access more of the planet’s clean water; Japan’s Aerospace Exploration Agency (JAXA), a 25-year plan to build the world’s first 1-gigawatt power plant in space, as harvesting solar in space is an order of magnitude more efficient than doing so on earth; the development and roll out of drone delivery networks; the development of mass energy storage solutions; the roll out of the infrastructure required to support the Internet of Things, with a trillion-sensors embedded in the environment. These and other initiatives will increase the complexity for decision makers in which infrastructure choice to make. Infrastructure deficit Policy makers will increasingly bet on longer-term options. Basic sanitation Poor sanitation continues to impact public health and restrict social progress, particularly for women. Governments and donor organisations prioritise § measurement, education and innovation in a bid to drive change. Built-in flexibility The path to a connected, accessible and distributed infrastructure is fraught with complex, costly and risky issues: Upgrading and repurposing systems to make them more open plus on-going maintenance need significant resources. Deeper collaboration Partnerships shift to become more dynamic, long-term, democratised,multi-party collaborations. Competitor alliances and wider public participation drive regulators to create new legal frameworks for open, empathetic collaboration. Flooded cities The vast majority of our cities are not prepared for flooding. Many districts and households can no longer get flood insurance and are in jeopardy. It’s going to get worse before it gets better. Related insights
- 158. 158 41% – ofall amphibians on the planet now face extinction 70% – of the projected loss of terrestrial biodiversity linked to agriculture Nature’s capital
- 159. 159 Nature’s capital Numerous studieshave evidenced the benefits of nature to our psychological, physiological and cognitive, social, aesthetic and spiritual wellbeing. In the Anthropocene, humankind is presiding over the Earth’s sixth major extinction. But as biodiversity declines, nature becomes increasingly valued and valuable. We live in the Anthropocene, the proposed epoch that begins when human activities started to have a significant global impact on Earth’s geology and ecosystems. We also live in what many scientists are calling the Earth’s sixth mass extinction event, a period defined as a loss of 75% of species. Recent studies suggest that the rate of extinction for species in the 20th Century was up to 100 times higher than it would have been without man’s impact. According to analysis for Nature a staggering 41% of all amphibians on the planet now face extinction while 26% of mammal species and 13% of birds are similarly threatened. Put simply, as humans degrade and destroy habitats, so the species that live in them die. Or as Stanford ecologist Paul Ehrlich put it: “In pushing other species to extinction, humanity is busy sawing off the limb on which it perches.” Following the 2014 Global Biodiversity Outlook 4, the UN stated that “The global decline of biodiversity continues, as actions have not been taken on a sufficient scale and the underlying drivers of loss have not been addressed significantly” – and that “in most cases this progress will not be sufficient to achieve the [Aichi] targets set for 2020”. The UN made it clear that “drivers linked to agriculture account for 70 per cent of the projected loss of terrestrial biodiversity” and that as a result “addressing trends in food systems is therefore crucial in determining whether the Strategic Plan for Biodiversity 2011–2020 will succeed. Solutions for achieving sustainable farming and food systems include sustainable productivity increases by restoring ecosystem services in agricultural landscapes, reducing waste and losses in supply chains, and addressing shifts in consumption patterns.” As a result, the UN’s Sustainable Development Goals adopted in September 2015 include two specific goals related to protecting and enhancing global ecosystems: Goal 15, to protect, restore and promote sustainable use of terrestrial ecosystems, sustainably manage forests, combat desertification, and halt and reverse land degradation and halt biodiversity loss; and, Goal 14, to conserve and sustainably use the oceans, seas and marine resources for sustainable development. These Goals, alongside Goal 13 (Take urgent action to combat climate change) and Goal 12 (Ensure sustainable consumption and production) reflect our understanding of the damage we have caused to our shared natural environment and the response that is now required. The case for preserving and enhancing nature’s biodiversity can be made along three dimensions. First the moral obligation, that we should protect nature for its own sake. Why do we have the right to destroy it? Second, the social benefits to health and wellbeing that nature provides. Numerous studies have evidenced the benefits of nature to our psychological, physiological and cognitive, social, aesthetic and spiritual wellbeing. Third, and seemingly increasing in importance in our capitalist world, the economic benefits - the so called “eco-system services” provided by nature.
- 160. 160 These ecosystem servicesare typically grouped into four broad categories: provisioning, such as the production of food and water; regulating, such as the control of climate and disease; supporting, such as nutrient cycles and crop pollination; and cultural, such as spiritual and recreational benefits. Many ecosystem services are now being assigned economic values. As UN Secretary General Ban Ki Moon puts it: “It is time to recognize that human capital and natural capital are every bit as important as financial capital.” The global initiatives TEEB (The Economics of Ecosystems and Biodiversity), led by Pavan Sukhdev, seeks to “make nature’s values visible” through mainstreaming the values of biodiversity and ecosystem services into decision- making at all levels. Its approach to valuation helps decision-makers recognize the wide range of benefits provided by ecosystems and biodiversity, demonstrate their values in economic terms and, where appropriate, suggest how to capture those values in decision-making. More broadly, as our understanding of the social and economic value of nature evolves, new means of measuring the cost and benefit of nature are being developed, for example through natural capital accounting. According to some estimates, the total annual global value of ecosystem services is in excess of $125 trillion, more than total global GDP itself. Importantly however “the valuation of ecoservices (in whatever units) is not the same as commodification or privatization. Many eco-services are best considered public goods or common pool resources, so conventional markets are often not the best institutional frameworks to manage them. However, these services must be (and are being) valued, and we need new, common asset institutions to better take these values into account.” Our habitat New means of measuring the cost and benefit of nature are being developed.
- 161. 161 Governments and corporationswill seek to enhance nature’s capital. Nature’s capital Looking forward, as these values - and this value - becomes better understood, both governments and corporations will seek to enhance nature’s capital or reduce their impact on it. A number of governments are developing long term plans for enhancing long- term natural capital, for example in the UK taking forward the recommendations of the Natural Capital Committee. Similarly growing recognition of the economic value of ecosystem services will lead to core business considerations that recognise their explicit value. Natural capital will therefore become more commonplace in accounting systems, and will impact the way that leading organisations choose to operate and report (e.g. Unilever’s Sustainable Living Plan; Puma’s ground breaking environmental P&L. Indeed a number of workshop attendees spoke of increasingly becoming conscious stewards. As one put it: “As we become more aware of the consequences of our actions, there is a sense of stewardship of the world - not only in how we manage our home, but also in how we live in our ecosystem. We start to behave as conscious stewards.” Let’s hope so. Food Waste 30-50% of our food is wasted either in the supply chain or in consumption and could feed another 3 billion. Optimising distribution and storage in developing countries and enabling better consumer information in others could solve this. Full Cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Plastic oceans There are increasing high levels of man-made pollution in many of the world’s seas and little actually disappears. By 2050 there will be more plastic than fish in the oceans. Key resource constraints Economic, physical and political shortages of key resources increase and drive increasing tension between and within countries. As we exceed the Earth’s natural thresholds, food and water receive as much focus as oil and gas. Related insights
- 162. 162 60% – ofthe plastic waste in the ocean comes from just 5 countries 40% – of the planet’s surface is unregulated ocean Plastic oceans
- 163. 163 Plastic oceans There areincreasing high levels of man-made pollution in many of the world’s seas and little actually disappears. By 2050 there will be more plastic than fish in the world’s oceans. We live on a blue planet; the world’s oceans cover three quarters of the Earth. They contain 97% of the Earth’s water and are currently absorbing around a third of the CO2 being produced by our activities and so helping in part by acting a buffer for some of the impacts of climate change. (30 to 40% of the carbon dioxide from human activity released into the atmosphere dissolves into oceans, resulting in the creation of carbonic acid.) Ocean acidification is therefore a rising concern. The average pH balance is dropping and as a result the growth of calcifying organisms such as corals and shellfish is being reduced. Acidification alone, though, is not the only pollution problem faced by the world’s seas, and others are escalating at an even faster rate. The impacts and implications are huge and growing. Around 80% of marine pollution comes from land- based activities. Waste runs or is dumped into drains and rivers and hence the seas. Oil, fertilisers, sewage, plastics and toxic chemicals are all part of the mix. Oil spills are less frequent but in many countries without an established recycling system, used oil is thrown down the drain or poured directly into rivers. Nutrients in fertiliser runoff from farms and lawns produce algae, depleting dissolved oxygen and suffocating marine life, causing dead zones in places such as the Gulf of Mexico and the Baltic. In many regions, untreated sewage still flows into the seas – 80% of urban sewage discharged into the Mediterranean is untreated. A recent addition to the challenge is the role of desalination plants, cropping up in areas of water stress from the Middle East to Australia and California. As a core by-product of their water purification process, they add salt into the seas, so increasing salinity and hence acute toxicity. While all of the pollutants are having severe negative impact, perhaps the most visible - hence one that will drive the biggest change in the next decade - is plastic. Around 275 million tons of plastic waste is generated each year around the world; between 4.8 million and 12.7 million tons is either washed or dumped deliberately into the sea. The World Bank expects the planet’s municipal solid waste to double within 15 years, much of this in the form of single-use plastic items. Bottles, bags, balloons, packaging, shoes - all take decades to break down. This waste is ingested by pretty much every marine animal including fish, dolphins, seals and turtles. So far, plastic has been found to be blocking the digestive tracts of at least 267 different species. Although this is a global problem, the epicentre of plastic pollution is clear. Today 60% of the plastic waste in the ocean comes from just 5 countries – China, Indonesia, the Philippines, Thailand and Vietnam. The media already talks about the Great Pacific Garbage patch. By 2025, plastic consumption in Asia will increase by 80%, surpassing 200 million tons; some are calling for specific interventions in these 5 countries. Regionally, the EU is aiming to halve plastic bag use by 2018 but this is not an international standard. Industry experts expect that by 2050 we will be producing three times as much plastic as we do today; on a volume basis, the WEF sees that by 2050 there will be more plastic than fish in the world’s oceans. 80% of marine pollution comes from land-based activities.
- 164. 164 Our habitat Plastic pollutionis however not alone as an increasing danger to the world’s seas. One politically sensitive issue now is associated with dredging and land reclamation. Whether in the South China seas, where China is creating islands built on coral reefs, or in Indonesia, where sand mining has been providing Singapore with the resource to add 130 square kilometres of artificial ‘reclaimed’ land in the past 40 years, mining has evidently moved from land to sea. With all the consequences of our actions now becoming apparent, the question is what will change going forward? Has ocean pollution become such a significant issue that there will be tangible change within the next decade? Some think so. Foremost, and largely because of plastic waste, the visibility of the impact is clear in the media and policy bodies. The UN has included as its 14th Sustainable Development Goal the ambition to “conserve and sustainably use the oceans, seas and marine resources.” A core 2025 objective is to prevent and significantly reduce marine pollution of all kinds, especially land-based activities, including marine debris and nutrient pollution. Unfortunately, much of the world’s oceans are not part of any one country’s territorial waters. More than 40 per cent of the planet’s surface (80 million square miles – seven times the area of the whole African continent) is ocean that belongs to everyone and no one – and hence is largely unregulated. While fishing, environmental, tourist and defence policies all unite to seek to protect and manage the sea close to a nation’s shoreline, beyond a notional 12 to 200-mile limits it is largely a free-for-all. This is where the fish, dolphins and plankton are taking the hit. No one is setting the global rules and few are agreeing on a better way. By 2050 there will be more plastic than fish in the world’s oceans.
- 165. 165 When will thebalance tip? When will the negative impacts on our environment, the ecology and, most significantly from a financial perspective, a good share of our food resources start to change attitudes? Some are putting their faith in China to set new standards, but these may only apply locally. At a global level some see that a rethinking of the value of the ‘blue-economy’ is required. The Global Ocean Commission, for one, has called for adoption of an ambitious, long-term goal of zero plastic waste into the marine environment. This will require partnerships and behaviour changes that simply do not exist today, and the end of Europe and the US shipping its waste to Asia. If we start to see waste as a resource in the next decade, will perceptions - and maybe behaviours - shift? Whether seeking to protect food supplies or looking to fulfil UN development goals, bringing order to the high seas is seen as critical for the future. We have already overshot the planetary limits on biodiversity and nitrogen; as the consequences become more apparent, can we avoid the same for ocean pollution? Plastic oceans No one is setting the global rules and few are agreeing on a better way. Food Waste 30-50% of our food is wasted either in the supply chain or in consumption and could feed another 3 billion. Optimising distribution and storage in developing countries and enabling better consumer information in others could solve this. Full Cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Nature’s capital In the Anthropocene, humankind is presiding over the Earth’s sixth major extinction. But as biodiversity declines, nature becomes increasingly valued and valuable. Key resource constraints Economic, physical and political shortages of key resources increase and drive increasing tension between and within countries. As we exceed the Earth’s natural thresholds, food and water receive as much focus as oil and gas. Related insights
- 166. 166 20 million –Number of people living outside their country of birth 42% – share of Tajikistan GDP from global remittances Sometimes nomads
- 167. 167 Sometimes nomads Elective migration,cheap travel, international knowledge sharing, and increasingly transient working models create connected nomads who mix the traditions of home with the values and customs of their host location. People move around for all sorts of different reasons, good and bad. The World Bank estimates that about 250 million people live outside the country of their birth and, adding in those who have moved internally, about one in every seven of us could be defined as a migrant. Increasing numbers of people are fleeing violence but many others move for work, love and adventure. This mass movement of humanity, combined with cheap and easy travel options and free-flowing communication technology, is creating a world where cultures are dissolving and the traditional understanding of what it means to belong is being challenged The privileged few, fortified by sought-after skills and protected by the passports of their choice, dominate the top echelons of the corporate world. Their lifestyles, irrespective of location, remain broadly unchanged; tapping into local culture is an option but not an obligation. Their peers also hail from diverse corners of the globe and many will find more in common with those in similar circumstances than friends and family from home. Corporate executives, working on a global scale, are able to use the power and influence of the organisations that employ them to drive material change in ways that national governments can only dream of. Unilever, for example, has set a target for 2020 that aims to help more than a billion people improve their health and hygiene and help to reduce obesity. The Tata Group spends around 3% of its net profits, (USD17 million in 2014), on programmes related to education, health and the environment. Many people who migrate for professional reasons use their education as a ticket to riches, making their homes in centres such as Silicon Valley, Singapore or Berlin. The US is the number one destination of choice for many, and the previous record high of 14.8% foreign-born population in 1890 will be passed by 2025, rising to nearly 19% by 2060. These days most arrivals are qualified in some way - in 2013 41% of newly arrived immigrants to the US had at least a bachelor’s degree. In 1970, that share was just 20%. Indian Americans are now the richest ethnic group with a median household income of about $88,000, compared with economic output of less than $1,600 a head in India. As the focus of world trade shifts, and the opportunities for corporate development expand, expect this tiny but influential group to look towards new locations in the emerging economies in South America or Asia. China has been encouraging students to learn abroad in order to improve its education since the late 1970s. Chinese youths currently make up over a fifth of all international students in higher education in the OECD, with more than a quarter of them in America - making it likely that that there are more US-based Chinese PhD students than American. Meanwhile the number coming back has grown even faster; more than 350,000 Chinese returned from overseas study in 2013, up from just 20,000 ten years earlier. Many people who migrate for professional reasons use their education as a ticket to riches.
- 168. 168 Our habitat The westernpopulation’s absorption of other cultures is not always reciprocal, however. During the 2013/14 academic year the US hosted 886,000 of the world’s 4.5m mobile higher education population - more than twice the UK, the next entry on the list – yet fewer than 10% of US college students travel abroad in their undergraduate years. If this imbalance remains, it could begin to create questions around the readiness of the US workforce to participate in a more globalized world. From cleaners in Hong Kong to lawyers in London, migrants also send cash to their families, a huge impact in developing economies. The World Bank estimates that Nigerians abroad sent back some $21 billion in 2013, adding up to a quarter of their country’s earnings from oil exports. Many send money either through Facebook or via their mobile phone. Such has been the impact of technology on economic migration that global remittances are now worth more than twice as much as foreign aid, comprising 10% of the Philippines’ GDP and 42% of Tajikistan’s. Last year India received $70 billion — more than any other country. For the majority of migrant workers the “hubs” of choice are New York, London and Singapore and it is there that the influence of that cultural blending is most obvious. Few would think it curious for an Indian woman to eat at a Japanese restaurant in London before enjoying an evening watching a Russian ballet but this internationalism, even for London, has been a transformation of the past three decades. Fewer than 10% of US college students travel abroad in their undergraduate years.
- 169. 169 Not every migrantis privileged. Increasingly the less fortunate find themselves in unfamiliar places where there is little opportunity or hope for a better life. Obliged to leave all their possessions behind to start again, these displaced people may only have tradition and belief to give them a sense of self. Low- cost connectivity links the poor and the displaced to their past, enabling them to retain a sense of identity and belonging in the most taxing environments. What seems certain is that the next decade will see an increase in the number of people who feel, at least for some of the time, that they do not fully belong to a specific nation or country. As a result they are likely to fashion new forms of belonging, reflecting new types of social membership, a reaction to what they are experiencing or the transient results of increasingly fluid social networking, the automaticity of easy travel and instantaneous communication. As the world becomes smaller through migration and mobility, both virtual and real, it may be that people and groups will express themselves more insistently through multiple identity lenses. Blended cultures may become the new norm. Key questions remain however. How will we protect and respect apparently contradictory and multiple identities? Will it be through multiple personas that we define others and ourselves or will it be from an integrated set of values? Given the multi-layered and multi-dimensional nature of nations, communities and individuals, the challenge to coexist peacefully is twofold: how to develop a set of values with due regard for diversity and individual rights to which all can agree, and how to find successful ways of promoting difference while also identifying and embedding a shared identity among community members. Sometimes nomads Blended cultures may become the new norm. Education revolution Broader access to improved education acts as a major catalyst for empowerment, sustained economic growth, overcoming inequality an reducing conflict. We need an education system fit for the digital revolution. Imbalanced Population Growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Intra city collaboration Increasing competition between cities overrides national boundaries and drives change. They compete to attract the best but also collaborate to avoid the downside of success – over-crowding, under-resourcing and pollution. Skills concentrations The need to build and develop capabilities becomes increasingly challenging for companies and workers alike. Those who benefit from the high-skill reward opportunities remain a select group who move ahead of the urban pack. Related insights
- 170.
- 171. 171 Beliefs and belongings Astechnology and resources drive transformation in many areas,inothersitisdemography, religion, gender and culture that are variously seeding significant change. A globally ageing population is altering the make up of many societies at the same time as migration and shifting affiliation to faiths. What some of us believe in and where we feel we belong is influencing how we see our individual and collective identity. In addition, in an age of increased automation, many sectors are seeing a resurgence of a need for more human interaction. The topics covered in the following pages are: Agelessness Care in the community Keeping the faith Working longer Female choice dilemma Human touch
- 172. 172 2 billion –people over 60 by 2050 $15 trillion – value of over 60s healthcare market in 2020 Agelessness
- 173. 173 Agelessness A person’s physicalage becomes less important as society adapts to the new demographic landscape. New opportunities arise for creators and consumers of all ages, though benefits are often only for the wealthy. “Chronological age is completely irrelevant”, says Sarah Harper, professor of gerontology and director of the Oxford Institute of Population Ageing. While exaggerated for effect, the comment speaks to how society is increasingly adapting to an older population and reducing age-based limitations. Adaptations will be felt in particular at work, in patterns of consumer spending and in culture at large. The demographic transition the world is going through is as unprecedented as it is profound. In historical terms, change has come very quickly. There will be a billon people over 60 by 2020 and 2bn by 2050. By then, one third of people will be over 50 (up from 18% in 2000). The pace of change is accelerating. According to Credit Suisse, in the 80 years from 1900 to 1980 the U.S. median age rose seven years, from 23 to 30. In the following three and a half decades it rose another eight to 38. These dramatic shifts are taking place in countries all across the world. In January 2016 the first of the baby boomers (born between 1945-1964) will start turning 70, and they are changing the experience of ageing, just as they have led cultural and societal changes over the past half- century. The cohort is been the largest and wealthiest the world has ever known, and continues to adapt society to meet its needs; baby boomers control 80% of personal financial assets. Over the next ten years they will change the nature of the workforce, the consumer market and shift societal attitudes around ageing – as well as dictating insurance and healthcare financing. One of the main changes we will see will be around work. Financial concerns will mean that for many the dream of a long retirement will remain just that. 2015 was the year in which the working-age population (15-64 year olds) in developed economies peaked. From now on it will start to decline and by 2050 it will have shrunk by 5%. Corporations in need of talent will have increasing incentives to make their workplaces suitable for all ages and capture the value of ‘wisdom workers’ who are rich in experience and judgment. For individuals with good health, a longer life will allow them to extend their careers, remaining creative and involved, and potentially develop new businesses. As the populations age, businesses will be developed to support them. Organizations such as Encore.org work on having a productive and engaging ‘third age’, retraining older professionals as teachers without having to join a class of 20 year olds. Workforce productivity is another area of innovation – BMW made changes on its production line in Germany to accommodate the needs of older workers, and found that the productivity of all workers went up. Expect more companies to follow suit. Financial concerns will mean that for many the dream of a long retirement will remain just that.
- 174. 174 Companies are increasinglyrecognizing that older people are an economic powerhouse and source of growth. The over 50 demographic accounted for an estimated $1.6tn of the $2.7tn U.S. healthcare market in 2012; by 2020, the 60+ market will account for around $15 trillion total globally – approaching half the GDP value in many western countries. As marketers will be keen to capitalize on those who can afford to pay, expect a shift away from the youth sector, created by Madison Avenue in the 1950s, to a broader audience. Growth will come from the overlap of health and lifestyle – senior living, new opportunities for lifetime planning, ageing in place, pharmaceuticals, travel & leisure, beauty & cosmetics, fashion and retail, with brands such as Superdry selling their teenage-oriented apparel to parents as well. Work by Silvergroup.asia has identified a number of attributes that manufacturers of products and services should pay close attention to in order to design for the older population. Key is to provide an ageless experience all the way through the product lifestyle: design, marketing, distribution and support. Physical (vision, hearing, dexterity, mobility) and cognitive impairments don’t necessarily exclude older people from being active and engaged consumers, and companies who’ve developed very customer- centric product design processes, such as Apple, tend to develop products that work for all ages. Also, expect older performers to increasingly be active in the media and many to see them as role models in popular culture. The music industry is leading the way, as the artists baby boomers grew up, such as Mick Jagger, Paul McCartney, Bob Dylan, Paul Simon, Art Garfunkel, Aretha Franklin and Leonard Cohen, all well into their 70s, remain active. Hollywood is following, celebrating positive roles for older people with films such as The Best Exotic Marigold Hotel, Intern, and Quartet. Dove’s Real Beauty commercials and MAC Cosmetics’ use of Iris Apfel (born in 1921) are also beginning to challenge the prevailing youth-obsession. Companies are increasingly recognizing that older people are an economic powerhouse and source of growth. Beliefs and belonging
- 175. 175 However, the pictureis not universal. Life expectancy, while growing on average, is not growing for all. Income, health and life expectancy are highly correlated. Noted gerontologist Bill Thomas says, “As long as you have your health you are ageless”, however the converse is also true. In the UK and the US, the difference in life expectancy between the poorest and the richest sectors of society is around 10 years; across Northern Europe, around 7. In certain demographic groups, for example middle and lower income American women, life expectancy has actually fallen over the past decades. White males with only high-school level education have been dying early at an unprecedented rate, due to early onset heart disease and suicide. As the divide between the haves and the have nots increases, so will this trend. Addressing these health and longevity disparities present some of the greatest opportunities for innovation and for new models of collaboration between government, community- based organizations and the private sector. As we look forward to 2025, the extent to which we achieve an ageless society will be determined largely by how readily we embrace a new model of long life. How older workers are kept on or taken back into the workforce, what skills these wisdom workers can pass on, what products and services they will need and wish for, and how society will adapt to embrace a positive view of older people – these are the challenges ahead. Life expectancy, while growing on average, is not growing for all. Agelessness Caring for those left behind Although significant progress has been made positive change has limited reach. Millions of people continue to be left behind from main-stream progress -especially the young, the poor and those who are disadvantaged. Care in the community The desire to ‘age-in-place’ meets a healthcare reform agenda that promotes decentralization. A new care model is customer-centric, caregiver-focused and enhances coordination across care settings. Enhanced performance We are developing key technologies that could integrate humans and data to make us safer, more informed and potentially super-human in performance - but should we? Working longer People are having to work for to support longer retirements. Flexible working practices and policies are emerging, but some employers continue to remain ambivalent about older workers. Related insights
- 176. 176 $300,000 – Thelifetime cost of being a caregiver 90% – share of people wanting to age-in-place Care in the community
- 177. 177 Care in thecommunity The desire to ‘age-in-place’ meets a healthcare reform agenda that promotes decentralization. A new care model is customer- centric, caregiver-focused and enhances coordination across care settings. Most people, when given the choice, would elect to stay in their homes and in their communities rather than move into residential senior care - a 2015 survey by AARP in the US put the numbers of people wanting to ‘age-in-place’ at over 90%. However until recently the services, enabling technologies and business models didn’t support this individual desire, especially as people start to get sick. And people do get sick: according to the World Health Organization, 70% of people aged 65 or older need some form of support and two thirds of Europeans will have two or more chronic conditions by the time they’re 65. Already dementia costs society more than all cancers (yet receives much more limited research funding). By 2030, chronic conditions in total are estimated to cause a global GDP loss of $47tn. Our health systems were designed for acute care not chronic care. The challenge ahead is managing decline and improving quality of life, rather than curing disease. Europe devotes around 75% of its healthcare spend to managing and treating chronic disease, but only 3% on prevention. US studies found that clinical interventions only account for around 20% of health outcomes – the other 80% being the result of lifestyle factors. Public and private payers are increasingly realizing the challenges of the current system and its unsustainability in light of the demographic changes underway, and a new model is emerging in which the metric of success shifts from preserving life to enhancing the quality of life. This new care model can be characterized in three ways: customer-centricity, caregiver support and care-coordination. There are many reasons why healthcare is not like other industries – for a start, most people would prefer to “consume” zero healthcare – but, among other factors, it has been too easy to lose sight of the patient, who often gets shuttled between disconnected parts of a healthcare system. This is especially the case for older people who tend to have the most need for healthcare and suffer from multiple conditions. Customer-centricity is now finally arriving to healthcare, with care being delivered on the patient’s terms – where, when and how they want it. The home is increasingly becoming the focal point of care, and technologies such as Internet of Things / Smart Home solutions, wearables, and robots all play a role in delivering remote care that allows patients to stay in their homes longer. Smart gadgets, consumer- friendly mobile apps, ‘tele-health’ and other sensors in the home allow for ubiquitous tracking and data creation, used to make predictions about the patient’s future needs, develop the most effective care plan and triage high-risk patients. Shareable electronic medical records are now commonly available at the touch of a button, giving the patient more visibility and control over their own conditions. Patients, especially those with multiple chronic conditions, effectively become their own care managers – tracking drugs, interventions, stakeholders and finances on a daily basis. This is challenging for anyone, in particular older people and those with impaired sight, mobility or cognition, which is why caregivers are such an important part of the equation. The challenge ahead is managing decline and improving quality of life.
- 178. 178 Beliefs and belonging Caregiversgenerally fall into two camps - family (unpaid) and professional (non-medical) caregivers. Family caregivers, providing the informal care necessary to keep frail elders independent, perform the highly stressful and underappreciated role with limited support. The lifetime cost of being a caregiver (in terms of missed earnings) is more than $300,000, according to a 2011 MetLife study – billions of dollars if the 44m unpaid caregivers in the US were compensated at the market rate. However, family caregivers are generally not rewarded financially, and often suffer professionally and personally. A family caregiver can expect a 19% reduction in their professional productivity, incur significant stress, and face accelerated decline into their own chronic disease or depression. However, new caregiver platform services such as CareLinx, Honor and Hometeam are aiming to help family caregivers find professional aides and have been supported by over $100m in venture funding in 2015, while online portals (Unforgettable.org), social robots (Jibo) and on-site education and support (Care at Hand) will also change the picture by aiding care-coordination. The need for care-coordination, where two or more participants (including the patient) organise appropriate healthcare services, increases significantly with older patients who are in multiple care settings over a long period of time, and may be less comfortable taking personal ownership of their care plan and using digital tracking technologies. It’s a necessary response to more fragmented care across multiple institutions, and is being initiated by new government policies that shift rewards from processes to outcomes. A new reimbursement model in the US pressures health providers to improve care coordination in order to improve patient outcomes and receive reimbursement. For example, hospitals are actively penalized if a patient returns to hospital for a recently treated condition, providing the motivation for the provider to check in regularly with their patient and deliver care in the community setting where possible. Customer-centricity is now finally arriving to healthcare.
- 179. 179 Lowering hospital costsshould lead to rewards for those developing innovation in home care. Maintaining human contact and overcoming isolation brought on by more people living at home alone will be an issue, though, as will introducing the new technologies and new models of care into the home care market in the first place. As we advance into a new model of care in the community, we should see costs come down and quality of care increase. Care in the community Family caregivers are generally not rewarded financially, and often suffer professionally and personally. Agelessness A person’s physical age becomes less important as society adapts to the new demographic landscape. New opportunities arise for creators and consumers of all ages, though benefits are often only for the wealthy. Affordable healthcare The escalating cost of healthcare is further stressed by the need to support the old and the chronically ill. Spending 20% of GDP on healthcare is seen as unsustainable so hard decisions are taken around budgets and priorities. Citizen-centric cities Successful cities will be designed around the needs and desires of increasingly empowered and enabled citizens - who are expecting personalized services from the organisations that serve them. Working longer People are having to work for to support longer retirements. Flexible working practices and policies are emerging, but some employers continue to remain ambivalent about older workers. Related insights
- 180. 180 58% – ofOECD students will be women by 2025 $28.4 trillion – boost to world economy by 2025 if gender gaps were bridged Female choice dilemma
- 181. 181 Female choice dilemma Womenin richer economies have greater choice, and with it increased control and influence. This continues to drive change and decision-making but globally the battle for female equality has a long road to travel. Debates about equal rights for women have been on the agenda for over a century but much is still to be achieved. Despite the best efforts of the UN’s Millennium Goals, more girls than boys still don’t go to school; in Africa and South Asia boys remain 1.55 times more likely to complete secondary education than girls. Even in rich countries life isn’t equal; the average wage gap between men and women is 20%. And yet, when girls do go to school, almost universally, they do better than boys and these days their educational dominance persists into university. In the OECD women now make up 56% of students enrolled, up from 46% in 1985 and by 2025 that may well rise to 58%. Women who go to university are more likely than their male peers to graduate, and typically get better grades. In the next ten years this, surely, will have an impact on equality. Most governments are keen to encourage more women to work as it makes good economic sense. Some estimates suggest that global GDP would rise by between 5-20% if women’s participation in the workforce increased. McKinsey’s Global Institute research shows if gender gaps in participation, hours worked and productivity were all bridged, the world economy would be $28.4 trillion (or 26%) richer by 2025. The potential gains are proportionately greater in places where fewer women are already in paid employment. India, for instance, could be 60% richer. To date however gender parity in business is a long way off pretty much everywhere. Across the EU only one third of managers are women. In some countries, such as Luxembourg, it can be half that. Only one in 20 bosses of a Fortune 500 company is female. Equality isn’t everything, and equal opportunities are distributed unequally. The smallest gaps in participation rates are in some poor African countries, where men and women are almost equally likely to work outside the home, probably growing food. India, despite its impressive economic record, remains one of the world’s most unequal societies: women make up less than a quarter of the paid workforce and account for just 17% of GDP, a measure of output that excludes unwaged work. The UN Development Programme recently ranked it the worst performing Asian country, excluding Afghanistan, for gender inequality, 132nd out of 137 countries. In other parts of South Asia, women carry out up to 90% of unpaid care work. They are far less visible than men in work outside the home. By contrast, women contribute 41% of GDP in China. Consistently across the globe the lower representation of women in paid work is in sharp contrast to their representation in unpaid work. However this is not counted in traditional GDP measures despite the benefits it brings. Equal opportunities are distributed unequally.
- 182. 182 In richer countries,however, opportunities for many women are on the up. Better access to education, effective contraception and, arguably, increasing divorce rates, all mean that more women choose to build a career and delay having children until their later years. As more women work, they became less accepting of discrimination. Women whose level of education is on a par with men are more likely to find well-paid jobs in technical professions, but there remains an overall imbalance in pay, earning about three-quarters as much as men. Since 2006, the number of women in the workforce has risen from 1.5bn to 1.75bn, but the average annual pay for women today is the same that men were earning in 2005. This, in part, is due to the type of career path women choose and the choices they make. Although men and women may start work on relatively similar salaries, family responsibilities often take priority for women and therefore decrease their earnings relative to those of men as they age. In some countries the cost of childcare makes going back to work financially challenging, so the primary carer, generally female, either cancels or postpones their return. Anyone who chooses to put their career on hold to have a family and still do the bulk of the baby-minding, will find it hard to catch up. The challenge for an ambitious corporate executive is that the key time to show your metal by working long hours and being constantly on call are in the first 15 years of working life which is about the same period in which many women would like to start a family. Simple biology dictates that this needs time and so women have to make decisions between family life and careers. Given this and the current way that work is structured means it is hardly surprising that men find it easier forge ahead and progress professionally. So, although men and women may start work on relatively similar salaries, family responsibilities often take priority for women and therefore decrease their earnings relative to those of men as they age. In some countries the cost of child care makes going back to work financially challenging so the primary carer, generally female, either cancels or postpones their return. Anyone, who chooses to put their career on hold to have a family and still do the bulk of the baby minding, will find it hard to catch up. The great need is for increased flexibility but a flexible schedule often comes at a high price because for many corporates hours of work are worth more when available at particular moments and when the hours are more continuous. Given this, some argue that the gender gap in pay would be considerably reduced if firms could consider a different approach to working and did not, for example, have an incentive to disproportionately reward individuals who work long and particular hours. There will of course always be jobs where flexibility is not an option those of CEOs, trial lawyers and surgeons for example but for many others pay does not need to depend on being available all hours—and well-educated men who want a life outside work would benefit from change, too. Beliefs and belonging The average annual pay for women today is the same that men were earning in 2005.
- 183. 183 Female choice dilemma Oftenwomen get fed up waiting to be accommodated by their employers and decide to go it alone. This in part may explain why nearly 30% of all US businesses are majority female-owned and that in the UK women have accounted for more than half the increase in self-employment since the 2008 recession. In emerging economies, innovations such as mobile phones, microcredit and even the humble scooter (over 60% of which are bought by women in India), have freed up female entrepreneurs. There are further promising ideas to reduce the daily grind: foot-pedalled water pumps, the “micro-franchising” of heating and lighting provision in rural areas not served by the electric grid, and the “crowdsourcing” of work to local communities. The traditional relationship between men and women is also changing and, as it does, is opening new doors for women. Marriage, for example used to be near-universal and unequal, but in recent decades it has become a deliberate option and more equal. Well-educated women have been able to form strong relationships with similarly minded men, in which both parents earn and both do some childcare. Many agree that for women to be truly equal in the work place men will need to be equal in the home and this change is gradually happening. To encourage this, women who in the past have focused on the redefining femininity might themselves have to change their perception on the nature of masculinity. Rather than embrace the image of male success as being a high-flying, high-earning superhero they should look out for a man who can care for children and be content to earn less than his partner. A few more role models would perhaps help. Gender equality is still a frequent topic of conversation at high profile events in high profile places such as Davos or Brussels or at the UN; often these converstations even include men. Politicians and executives will continue to debate how future skill requirements will affect change, ask whether women should take more leadership roles in science and technology and determine what can be done to end gender biases. Every conversation will raise awareness and sometimes the debate, and therefore the opportunities for women will progress; inch by inch. Women have accounted for more than half the increase in self-employment, since 2008. Caring for those left behind Although significant progress has been made positive change has limited reach. Millions of people continue to be left behind from main-stream progress -especially the young, the poor and those who are disadvantaged. Education revolution Broader access to improved education acts as a major catalyst for empowerment, sustained economic growth, overcoming inequality an reducing conflict. We need an education system fit for the digital revolution. Imbalanced Population Growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. Related insights
- 184. 184 72% – customersprefer to self-serve 85% – customer relationships in 2020 will have no human interaction at all Human touch
- 185. 185 Human touch As serviceprovision and consumption becomes ever more digital, automated and algorithmic, those brands that can offer more emotional engagement and human-to-human contact become increasingly attractive. Since the Industrial revolution, the world has become more automated. In the 19th century, machines removed the dirty and the dangerous, from looms to the cotton gin, relieving humans of onerous manual labour. In the 20th century, machines took away the dull and the repetitive, with automated interfaces relieving humans of routine service transactions and clerical chores, from airline kiosks to call centres. Today, a world increasingly awash with connected and artificial intelligence and with virtual reality emerging quickly, machines are taking away and making better choices than humans, reliably and fast: Google Now may be a glimpse of what our tomorrow will look like. Driven largely by the digitisation of customer service channels, digital automation and connectivity has enabled consumers to self-serve. 72% of customers prefer to self-serve when supported by an appropriate contact-centre experience. Web chat and social media interactions can often be automated so the customer is signposted to the help they need without a human being involved at all. With this trend set to continue, by 2020 over 85% of customer relationships will have no human interaction at all. Automation will be the norm, with machines responding to humans themselves responding to machines. Automation and intelligence can increase the functional outcome of an interaction - improving speed or accuracy. It also removes people cost, which reduces per customer cost to serve and ultimately results in a lower price point for consumption – or an opportunity for profit margin gain. From Google to Amazon and Alibaba, the leaders in automation, make it extremely difficult, if not impossible, for customers to meet or speak to an employee. These benefits however come at a price, namely the cost to a customer’s emotional experience of contact with the brand. Recent JD Power research confirmed the importance of personal service in a large study of the hospitality industry. Those customers who interact more often with service staff, and with a broader cross-section of that staff, reported greater satisfaction. A brand, so the phrase goes, is only as strong as the next engagement. Automation can only go so far - it is hard to imagine automating the service provision of a funeral director. What is needed is an appreciation of where human interaction can be applied to make a positive difference to the overall customer experience. This might be in functionally complex problem solving or perhaps giving assistance in intuitive or more emotional situations. Or being an integral part of a competitive strategy to stand out on a differentiated level of service – consider Apple’s use of in- store Genius’ providing service and reassurance, something its competitors couldn’t afford to match. Leaders in automation, make it extremely difficult, if not impossible, for customers to meet or speak to an employee.
- 186. 186 Beliefs and belonging Humantouch provides fertile opportunities for brands to engage with their customers and build a deeper sense of connection, relationship and affinity. In a world of digital marketing and consumption, consumers may increasingly prefer those brands that can offer more emotional engagement and human- to-human contact. The new model for organizations is to treat customers not as mere consumers but as the complex, multi-dimensional human beings that they are, Customers, in turn, have been choosing companies and products that satisfy deeper needs for participation, creativity, community, and idealism. A human touch arguably assists in delivering this, even though it comes at a cost, in recruitment, training, wages and management and compliance overhead. As a result, the provision of a great human service is likely to be associated with more premium or luxury offers, and made available first to those who can afford it. Premium grocery retailers like Whole Foods or Waitrose are investing in more store and checkout service staff. Great human service will also be judiciously used to differentiate brand and service experience, Webchat or Facetime augmenting a user’s online service. It’s true that while human touch is celebrated as warm, friendly and helpful, humans get it wrong too - it’s what makes us human, after all. Mercifully, humans possess a wonderful innate, self-correction mechanism that is difficult to replicate in machines – people can apologise when it all goes horribly wrong. A core component of ‘human touch’ staff training is to ensure that they know how to say sorry when mistakes happen. The new model for organizations is to treat customers not as mere consumers.
- 187. 187 Looking forward, leadingorganisations are seeking ways to avoid making a trade-off between automated transactions and managing proper customer relationships. Cosmetics company Sephora uses social media and community engagement to increase human touch for customers online, but doesn’t miss the opportunity to sell products at the same time. Siri, Cortana and Google Now are proactive digital personal assistants, bridging the gap between humans and automation. Apple programmers have even hidden ‘easter eggs’ in Siri that trigger ‘her’ sense of humour. While in Japan, robots are already tasked with relieving the burden on caregivers and in 2015 Hasbro introduced its ‘Joy For All’ line of robotic cats designed to provide companionship for the elderly. Where will it all stop? Ray Kurzweil, futurist and advocate of ‘The Singularity’ says that technology changes at an exponential rate. This means that we always misunderstand just how much technological change will take place over a given time span: ‘we won’t experience 100 years of progress in the 21st century — it will be more like 20,000 years of progress (at today’s rate)’. Intelligent self-service is likely to continue to transform customer service in the years ahead, with conversational IVR becoming the new standard for automated phone experiences, reactive virtual assistants becoming proactive virtual advisors, and self- and assisted-service converging. Indeed, if we take to heart Mr Kurzweil’s point of view, intelligent automation will feature in services that we can’t yet fully imagine. The human touch however, will always be valued and as machines step up to the plate, it is the human touch that will increasingly provide the differentiation. Human touch Humans possess a wonderful innate, self-correction mechanism that is difficult to replicate in machines. Ethical machines Automation spreads beyond trading and managing systemic risk. As we approach technology singularity, autonomous robots and smarter algorithms make ethical judgments that impact life or death. Everything connected Over 1 trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. Truth and illusion The Internet has democratised knowledge and changed the nature of who we trust and why. As confidence in large organisations declines the search for trustworthy alternatives evolves. What we believe is changing how we behave. Related insights
- 188. 188 80% – shareof global population who identify with a religion 73% – projected increase in the Muslim population by 2050 Keeping the faith
- 189. 189 Keeping the faith Aspeople move they take their beliefs with them. For many, religion is one of the few remaining aspects of their previous life, and key to their identity - stronger than the citizenship of their adopted country or the nation they left behind. The world’s religious landscape is changing dramatically, thanks to differences in population structure such as age and sex, demographic processes such as fertility, mortality and, of course, religious conversions between different groups. Increasing migration has meant that most countries are becoming more religiously diverse - most evident in major cities, often the first port of call for new arrivals. Christianity covers most of Europe, the Americas and large swathes of Central and Southern Africa, while Islam is mainly centred in North Africa, the Middle East and Asia. How these different faiths co-exist will have a profound effect on society in the coming decade. Why is this important? Over eight out of ten people around the world identify with a religion and are, to a greater or lesser extent, influenced by it. For many it provides a sense of belonging and definition in society, both in terms of behaviour and orientation, and can influence trade patterns, female employment levels, legal systems and societal structures. On a personal level it can affect marriage and fertility choices and even health-related behaviour. Recent research projects that, over the next four decades, Christians will remain the largest religious group, but Islam will almost equal their number around the world by 2050. If current demographic trends continue, the world’s population is expected to increase by 35% by 2050; over the same period the Muslim population is projected to increase by 73% (Christians rise by about 34%), simply because of its comparative youth and high fertility rates. Young religious people of the developing world are in sharp contrast to ageing and increasingly secular westerners (content to keep their families small), so expect the number of religious people in developing countries where there is a high birth rate and declining infant mortality to grow more quickly. The Yearbook of International Religious Demography describes the Religious Diversity Index as the inter- religious diversity of a particular country or region’s population. Among the six regions analysed in this study, the Asia-Pacific region has the highest level of religious diversity followed by sub-Saharan Africa. Europe and North America in comparison have moderate religious diversity, while the Latin America- Caribbean and Middle East-North Africa regions have low religious diversity. Unsurprisingly perhaps non-religious people tend to live in religiously diverse places, as do Christians whose number living in religiously diverse countries has increased by approximately 50% over the past century. The opposite is true for the Muslim faith; a century ago 20% of all Muslims lived in countries with low religious diversity but by 2010 this had increased to more than 30%. The Asia-Pacific region has the highest level of religious diversity.
- 190. 190 Although still akey aspect of many western societies, there has been a gradual separation of religion and state in many Christian nations, however this is not the case for Islam - some more extreme than others. Saudi Arabia does not tolerate any form of overt religious practice other than the officially approved interpretation of Sunni Islam, whereas Indonesia and Malaysia, countries with Muslim majorities, have a tradition of syncretic Islam that is more tolerant. There is growing concern across the globe that the stricter forms of Islam imported from the Middle East, seen as more modern and correct, are gaining popularity. At its most extreme these are the ultra-conservative views of Wahhabis, which form the basis for Daesh (ISIS). Increasingly the concept of religious freedom, a human right, is being challenged. The latest US State Department report on the matter points to terrible violations of basic freedoms in dozens of countries. It says that this is due not to cruel governments, but more to the kind of forces which step in to a vacuum when legitimate authority collapses; warlords, racketeers and terrorist groups. On the Syrian-Iraqi border, Daesh is reported to have “forcibly displaced hundreds of thousands of people, conducted mass executions, and kidnapped, sold, enslaved, raped and or forcibly converted thousands of women and children...” Daesh is not the only fanatical organization. In its quest for religious domination, Boko Haram has been similarly barbaric in Nigeria, Niger, Chad and Cameroon. Some expect that the rise of Islam in Europe, boosted as it is by immigrants from North Africa, Turkey and South Asia Islam, will challenge the secular nature of state governance - and may well re-shape the balance between religion and state. Others consider that Western democracies lack the mechanisms for dealing with the powerful transnational ideological forces of extreme faith and may well struggle to maintain a balance between the desire to maintain a society which upholds the right to religious freedom, and adherence to a common set of values which all can agree. There are also fears that countries such as Indonesia and Malaysia will retreat from diversity and cede greater control over beliefs, customs and freedom of expression to a dominant orthodoxy. Beliefs and belonging The concept of religious freedom, a human right, is being challenged.
- 191. 191 Keeping the faith Thenext decade will see different countries approaching the matter in different ways. France, much like the United States, has a clear constitution with a specific set of founding principles, and it expects all citizens to accept them, including the idea that universal education should help to reinforce the messages. Britain, though, lacks a specifically written constitution, and has taken a different approach, allowing immigrant sub-cultures to develop and accepting faith-based schools, including ultra- conservative ones. Germany, keen to avoid any fanatically professed ideology, religious or secular, has always supported religious education and is making room for Islam through its classrooms. Clearly migration and population growth amongst Muslims in Europe is re-shaping society. Governments will have to tread carefully to manage this and in particular their response to radicalization amongst the young. Rather than mete out harsh penalties, in the future community-based programmes designed to divert young people from extremism may well be the solution. Against this backdrop, Christianity drifts south. There are 277m adherent Christians in sub-Saharan Africa and 250m in Latin America. That has moved the centre of Christianity to Niamey, the capital of Niger (calculated by taking the Christian-adherence weighted-average latitude and longitude of countries’ capital cities). Should the Vatican follow? Accelerating displacement Climate change, conflict, resource shortages, inequality and political elites unable or unwilling to bring about necessary change all trigger unprecedented migration to the North Over the next 50 years, as many as 1 billion people could be on the move. Education revolution Broader access to improved education acts as a major catalyst for empowerment, sustained economic growth, overcoming inequality an reducing conflict. We need an education system fit for the digital revolution. Shifting power and influence The centre of gravity of economic power| continues shifting eastwards, back to where it was 200 years ago. Recent superpowers seek to moderate the pace of change but the realities of population and resource locations are immoveable. Sometimes nomads Elective migration, cheap travel, international knowledge sharing, and increasingly transient working models create connected nomads who mix the traditions of home with the values and customs of their host location. Related insights
- 192. 192 212 million –reduction in Chinese workforce by 2020 $2,500 – median retirement account balance across all US households Working longer
- 193. 193 People are havingto work for to support longer retirements. Flexible working practices and policies are emerging, but some employers continue to remain ambivalent about older workers. People are staying in the workforce longer. In Europe, 50% of 55-64 year-olds continue to work, compared to just 37% a decade earlier. While in the US, the number of people who say they retired after the age of 65 rose from 8% in 1991 to 14% in 2015. Underlying this of course is longer life expectancy. Older people are healthier - the average 65-year-old today is as healthy as a 58-year-old was 40 years ago - are more active and don’t necessarily just want to retire. With better health, older people are looking for ways to continue to be engaged, productive and connected. Moreover, many older people simply can’t afford to retire. The National Institute for Retirement Savings estimates that the median retirement account balance across all American households in 2015 was just $2,500, while just one in three working Americans aged 55-64 has accumulated a year or more of salary in savings. Coupled with lack of a meaningful social safety net, poor access to universal healthcare and far-flung families, these numbers mean that retirement is increasingly challenging for many in the US. In Europe, where social safety nets have been lauded, current policy changes and budget cuts are threatening commonly-held expectations of comfortable retirement. Women everywhere have lower lifetime earnings, take more time off for family caregiving and have longer-life expectancy; older women in particular are looking to get back to the workforce to make ends meet. As a result, the US Department of Labor is seeing increased labour-force participation rate for women age 65 and older, from 8% in 1980 to a forecasted 19% by 2020. This is adding up to a new kind of retirement – less binary, more nuanced than the traditional notion. To make 40-year working careers 30-year (and more) retirements will require a fresh approach from employers, individuals and policy makers. Some employers are recognizing the benefits of employing older workers. Although memory and processing speed become impaired with age, other capacities, such as judgment, pattern recognition and decision-making, improve. These improved skills are well suited to the advanced knowledge work that makes up our economy as we move from manual to knowledge-based work. Younger and older workers also tend to benefit from each other’s presence and a recent US study found that all ages prefer a mixed-age workforce; surprisingly, older workers used less sick days than younger workers. A survey in the UK by insurance company RIAS found that only one quarter of over- 50s had taken time off sick during the previous twelve months, compared to half of those in their twenties. More experience can make older workers more effective as entrepreneurs too. The Kauffman Foundation found that business creation by older adults increased 60% between 1996 and 2012, and entrepreneurs older than 45 were the most successful demographic creating sustainable businesses. Many older people simply can’t afford to retire. Working longer
- 194. 194 Beliefs and belonging Theflexible work experience sought by older workers is becoming increasingly possible with the advent of new technology platforms and the ‘sharing economy’. Uber reported in 2015 that one quarter of their drivers are over 50; they have more drivers over 50 than under 30. 10% of Airbnb’s hosts are over 60, driven by the desire to generate additional revenue (which can serve as an alternative to a reverse mortgage) and to stay connected, social and active. There is an enormous economic benefit to supporting an older workforce. A June 2014 report by the UK’s Department for Work and Pensions found that if there had been as many older people in the workforce (defined as those between the age of 50 and the State pension age) as those in their 40s, British GDP would have risen by 1% in 2013 - a not insignificant number, given trends of shrinking working-age populations. By 2050, working-age populations will have shrunk by a quarter in the advanced economies of South Korea, Japan, Germany and Italy; and the workforce will contract by 21% in less affluent Russia and China. To put this in stark relief, by 2020 China will have 212m fewer workers available - approximately equivalent to the entire population of Brazil. The US fares somewhat better – its working age population is set to expand by 10% due to more favorable demographics and more migrant workers. Globally, this reduction in labour force over the next 50 years could reduce GDP growth by up to 40%. As such, a number of countries, particularly in Europe, are developing innovative public policies. In Sweden, employers can qualify for a subsidy of up to 75% for employing older workers; Germany is opening up sabbaticals for its older workforce and the Dutch government has introduced age discrimination legislation and policies to promote flexible working. Japan, having been one of the first ‘super aged’ societies, provides part-time options for older workers and encourages them to be mentors. In the UK, groups such as Trading Times match employers with 50+ workers while Age of No Retirement aims to have a conversation about creating meaningful and successful longer working lives. In the US, the Columbia Center on Aging and the Center on Aging and Work at Boston College have been developing innovative initiatives to provide data and best practices to support productive later life employment. More experience can make older workers more effective as entrepreneurs.
- 195. 195 Holding older workersback are subconscious biases in hiring practices such as a desire for very specific qualifications, as well as simply ageism. This can be changed with improved training for line managers, investing in training for people of all ages, retraining for older workers, providing resources for maintaining good employee health, creating more flexible working schedules and providing support for workers who are caring for elderly relatives. The arrival of robots and automation into the workplace will have positive and negative effects: while robots (or smart exoskeletons) could complement an older person’s physical attributes, others will provide a way to avoid employing people - of any ages – at all. Similarly, migration by younger workers, from countries affected by environmental disasters, political conflict and continued economic disparities, and willing to do the jobs that locals don’t want to, will alter the market. Finally, will pension policies evolve? While someone of typical retirement age is now healthier, it doesn’t mean that the pension age should increase, since manual workers and those with lower income and skill levels – precisely those who need pensions the most - have not benefitted to the same extent. Working longer The arrival of robots and automation into the workplace will have positive and negative effects. Agelessness A person’s physical age becomes less important as society adapts to the new demographic landscape. New opportunities arise for creators and consumers of all ages, though benefits are often only for the wealthy. Affordable healthcare The escalating cost of healthcare is further stressed by the need to support the old and the chronically ill. Spending 20% of GDP on healthcare is seen as unsustainable so hard decisions are taken around budgets and priorities. Enhanced performance We are developing key technologies that could integrate humans and data to make us safer, more informed and potentially super-human in performance - but should we? Imbalanced Population Growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Related insights
- 196.
- 197. 197 Power and influence Asthe balance of authority tilts away from the centres of 20th century muscle, we are seeing transitions taking place at multiple levels. Re-emerging regional powers are changing the leadership around several issues at the same time as several developing economies come to the fore for the first time. While China is on the top of many people’s minds, others are also driving change. Simultaneously we are seeing a shift influence in some countries away from governments, multinational corporations that is starting to change some fundamental assumptions. The topics covered in the following pages are: Africa growth Companies with purpose Rise of nimby Declining government influence Eco civilisation Still being stupid Standards driving trade The Rise of the cult of China
- 198. 198 Africas 1.1billion workforcewill be the world’s largest by 2040 500,00 – the number of additional 15 year-olds in Africa each year Africa growth
- 199. 199 Africa growth With aland mass bigger than India, China, the US and Europe combined, few doubt the scale of the African continent and its resources. However, until recently only some have seen it as the growth market that it is fast becoming. With a steadily growing population heading towards 2bn, Africa’s 1.1bn workforce will be the world’s largest by 2040. Equally, with a collective GDP of $2.6 trillion by 2020 and $1.4 trillion of consumer spending, many see the impact of around 500m new middle class consumers. Africa as a continent has, on average, grown its economy by at 5% per annum over the last decade. It is already as urbanized as China and has as many cities of over 1m populations as Europe. However clearly there are many ‘Africas’, with varied economies: from the oil exporters of Nigeria, Angola, Libya and Algeria to the already more diversified economies found in Egypt, South Africa and Morocco, there is a host of nations already with GDP per capita well over $2000. Elsewhere there are many countries such as Kenya, Tanzania, Ghana and Cameroon in transition from agricultural to manufacturing and service economies. For years, Africa’s growth has been shaped by commodity prices – the continent has a third of the planet’s mineral resources, 10% of the world’s oil reserves and produces nearly 70% of the global diamond trade. While this has clearly been good for growth in the past, the dependency on a few key commodities, and hence their global price, has led to high levels of market uncertainty – especially around many of Africa’s currencies: at least ten African currencies, for example, lost more than 10% of their value in 2014. Although oil prices are volatile, oil and gas will however continue to be an important factor in the future of Africa – Africa will remain an important producer of oil and natural gas, accounting for 10% of global oil and 9% of natural gas production in 2035. In a bid to diversify away from resources, several nations have been pushing hard to grow other sectors of the economy. To date, manufacturing, services and tourism in particular have all shown growth (although, whether from ebola, localized terrorism or national political change, growth from the latter source is evidently volatile). For example, while Nigeria is still very much an oil exporting economy, its service sector now accounts for 60% of its GDP - and ‘Nollywood’, its $3 billion film industry, is now the second largest in the world – bigger than Hollywood and just behind Bollywood in Mumbai. Likewise in Angola, Africa’s second largest oil exporter, where fishing, agriculture and manufacturing growth now means that a third of government revenue comes from non-oil sources. On the back of the success of m-pesa mobile payments that kicked off in Kenya in 2007, many African states, from Nigeria to the DRC, are seen as world leaders in adapting mobile technology and social networks to deliver potentially life-changing new financial platforms – many of which operate across borders and so engender greater transparency and cooperation. Older, protected, and often niche, monopolies are being superseded by collaborative, mass-market platforms from IT-enabled and, most importantly, more trusted, challengers. Africa’s growth has been shaped by commodity prices – the continent has a third of the planet’s mineral resources.
- 200. 200 Although the growthis occurring across several key economies including Nigeria, Ethiopia, Kenya, Angola, Ghana, Zambia and Mozambique, there is little doubt that South Africa continues to be a major driver in the region. It is the country that many see as economically representative of the continent as a whole – or at least Sub Saharan Africa. However, South Africa is not a proxy for the way that Africa as a whole will play out. South Africa’s GDP growth has fluctuated and averaged around 2% over the past decade and is likely to continue on a similar trajectory for the next. Other experts see that maybe the focus on GDP growth is only part of the view and one highly dependent on statistical data that is, when compared to other regions, very poor. They see that other measures are better indicators of the real progress that is taking place in Africa and highlight things such as life expectancy, infant mortality and energy consumption. As global life expectancy has averaged 70 for the last decade, in Africa as a whole major improvement has been seen with a more than 10% rise from 49 to 55. This includes significant change in countries such as Zimbabwe where, despite economic turmoil, life expectancy has risen from 37 to 46. By 2030, average life expectancy across the continent will have climbed to 64 years. Meanwhile, infant mortality remains high at 81 deaths per 1000 population (compared to a global average of 42) – but this has dropped from 177 in 1990. At the same time, energy use per capita has grown significantly, from 500KWh in 1990 to around 600 KWh per capita in 2014. This, a key metric, is not far behind Asia but still at only 20% of Europe’s use. Despite longstanding commercial ties with Europe, Africa now conducts half its trade with developing economic regions - the so-called “South–South” trade. China has the majority and doubled its share of trade to 17% over the last decade, and wider connections across Asia, South America and via the Middle East are all being developed. India has a 6% share of Africa’s trade and Brazil 3%. Both are expected to grow significantly and, with rising local suspicion over China’s business practice, take over a chunk of China’s land-grab. Many see the significance of increased intra-African trade; bilateral agreements between nations with differing political standpoints but common growth agendas are linking with emergent cross-continent agreements, the growth of trading zones and increased investment in infrastructure. Many African nations remain flawed democracies or authoritarian regimes, but over the next few years, a number of breakaway countries will show economic and political progress, and barriers to trade will be lifted as infrastructure is improved. Power and influence ‘Nollywood’, its $3 billion film industry, is now the second largest in the world.
- 201. 201 By 2030, halfthe African population is projected to live in urban environments and the continent’s top 18 cities will have a combined consumer spending of around $1.3 trillion. In many African countries, urbanisation is boosting productivity (which rises as workers move from agricultural work into urban jobs), demand, and hence investment. Half of the region’s population is under 25 years of age. Each year between 2015 and 2035, there will be 500,000 more 15-year-olds than the year before. The challenge will be to transform this youth bulge into an opportunity. Africa will undoubtedly become one of the world’s primary growth markets, the question here is one of timescales. Despite years of rapid economic growth, Africa’s middle class is still relatively tiny. The key question is; will there be significant change in the next decade or, like India, is it a longer period of transition? Africa growth By 2030, average life expectancy across the continent will have climbed to 64 years. Imbalanced Population Growth A growing population adds another billion people but it is also rapidly ageing: a child born next year will live 6 months longer than one born today. While migration helps to rebalance, increasing dependency ratios challenge many. Key resource constraints Economic, physical and political shortages of key resources increase and drive increasing tension between and within countries. As we exceed the Earth’s natural thresholds, food and water receive as much focus as oil and gas. Shifting power and influence The centre of gravity of economic power| continues shifting eastwards, back to where it was 200 years ago. Recent superpowers seek to moderate the pace of change but the realities of population and resource locations are immoveable. Standards driving trade International regulation is progressively aimed at freeing up trade and making it simpler and less bureaucratic – but there are a number of agreements, standards| and protocols that some are seeing as increasingly constraining. Related insights
- 202. 202 204 – averagepay ratio of a CEO to median worker in the US 10,000 – community Interest Companies registered in the UK Companies with purpose
- 203. 203 Companies with purpose Astrust in ‘business’ declines, structures and practices of large corporations are under scrutiny. Businesses come under greater pressure to improve performance on environmental, social and governance issues. Today, particularly in Anglo-American markets, many see that it is the responsibility of the management of ‘the company’ to protect the interests of its shareholders. However, with little or no distinction between short or long-term interest, the tendency has been towards maximizing immediate profits at the expense of society and the environment, rather than creating long-term value. Publicly listed companies are under tremendous pressure from some investors, activist shareholders, takeover threats and general market dynamics to generate short-term value. The banking crisis, where society paid for the risky (and sometimes fraudulent) activities of the finance sector, a new-found transparency on the human and environmental impacts of global supply chains, and a succession of revelations around tax avoidance, have diminished public trust in business. Some questions go to the very core of business: what is the purpose of the corporation, and specifically of the large, listed company with dispersed shareholders? Will the current model of large publicly listed companies survive the next decade, and if not, what will it be replaced by? The inequity between executive and worker pay is at the greatest ever. A wider dissatisfaction with the inequities of modern capitalism sets a backdrop for similar critiques for corporate practices. In the US the average pay ratio of a CEO to median worker is 204 to 1 - in the UK, 183 to 1. In response, and in a bid to bring some balance back towards 1995 levels, in 2015 the US SEC approved a rule requiring transparency of the pay gap. With growing realization that growth, as traditionally defined, is difficult to find in the current global economy, and particularly in the West, there is growing interest in the role of business in solving global problems rather than simply ‘making a profit’. The concept of ‘creating shared value’ has moved from academic proposition to business strategy, where companies are searching to articulate their purpose with their consumers and wider stakeholders. Global business organisations such as the WBCSD are transforming the UN Sustainable Development Goals into a business framework for action and Unilever starts its purpose to be ‘To make sustainable living commonplace’. NGO campaigns are highlighting the decreasing diversity of brand ownership. Whether in consumer goods or media companies, consolidation through mergers and acquisitions has brought about limited ownership in many sectors. A steady stream of high profile incidences of corporate tax avoidance (Alliance Boots, Starbucks and more recently Google) has highlighted the ability of global companies to aggressively manage their tax affairs. This has met with public disapproval and finally in 2016 agreement around OECD rules against complex tax avoidance arrangements. The EU is now also starting to talk about action on this, although how quickly change may come is up for debate. There is growing interest in the role of business in solving global problems rather than simply ‘making a profit’.
- 204. 204 A widespread responseto the call for greater transparency has been the growth in corporate reporting and the move towards Integrated Reporting – reporting of non-financial performance on environment, society and governance (ESG). Supported by a growing community of major multinationals, the aim is for organisations to share progress against a multi-capital view that alongside financial capital growth also reports on headway for intellectual, human, natural and social capital. The International Integrated Reporting Council has launched its Breakthrough Phase 2014-2017 with the intention of achieving a ‘meaningful shift towards early adoption of the International Integrated Reporting Framework’. Some wonder whether this will be the decade where the wider public see the positive role models such as Tata, Toms and Patagonia – organizations that are successful outside the constraints of the US and European stock markets by following a different path. Tata, the largest conglomerate in India, has bold ambitions for growth, and Its varied company shares are some of the highest performers on the Mumbai exchange; yet the company gives over 50% of its profits to trusts that support social actions from building new hospitals and schools to helping alleviate urban poverty. Compare that to an average of 0.7% of pre-tax profits apportioned to CSR activities by companies in the FTSE 100. There has also been the birth of the Social Enterprise movement. Organisations such as B Corp are providing a process and certification for Benefit Companies or companies with a purpose. Started in the US, B Corp was launched in Europe in 2015. While many B Corps are small, the influence of the approach is being seen in wider business, and organisations focused on delivering community value are on the increase - there are now 10,000 Community Interest Companies registered in the UK. Power and influence The aim is for organisations to share progress against a multi-capital view.
- 205. 205 In addition toidentifying and creating business value out of solving social problems, there is a call for longer- term thinking and a willingness to wait for a return on investment. Unilever’s controversial move away from quarterly reporting in 2011 has not yet been widely copied, but it appears not to have harmed the value of the business which continues to be seen as one of the world’s most progressive leaders. Major changes are on the way for company boards. Strengthening ‘shareholder democracy’ by giving shareholders additional powers such as a say-on- pay seems a good way to encourage institutional investors to steer companies in the right direction, but it is unclear whether investors will take on this responsibility. It may be that other stakeholders will take on an increasingly important role; Board level employee representation is well established in much of continental Europe and has started to receive some attention at the EU level. Board diversity is also a key topic now and will almost certainly be into the future. We may well see reserved seats for women, visible minorities, and other traditionally under-represented groups. Consumer demand for authenticity, transparency and connection will mean that there will still be strong demand for local, small, challenger business models and companies. Integrated Reporting has been picked up by an increasing number of companies welcoming the ability to show the whole picture of the company. As these changes gather momentum, many are hoping for a shift forwards to a more holistic view of the benefit that an organization provides beyond profit, and back to the days when maximizing shareholder value was not the only purpose of a company. There is a call for longer-term business thinking. Companies with purpose Capitalism challenged Unable to shake key issues like inequality, capitalist societies face cries for change, structural challenges and technology enabled freedoms. Together these re-write the rules and propose a more participative, collaborative landscape of all working together. Full Cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. The real sharing economy Increasing collaboration drives organisations to reconfigure based on social networks and impact. Real sharing enterprises, not driven by profits, seek to share resources, knowledge, and decision-making responsibilities. Related insights
- 206. 206 24 – numberof full democracies today according to EIU 52 – number of flawed democracies today according to EIU Declining government influence
- 207. 207 Declining government influence Nationalgovernments’ ability to lead change comes under greater pressure from both above and below - multinational organisations increasingly set the rules while citizens trust and support local and network based actions. Government and governance itself is in a state of flux. The 20th century move towards greater democracy seems to have halted at the same time as multinational global and regional bodies are setting, or seeking to set, more of the rules of significance. The majority of governments are feeling less influential on the global scale and so are seeking to collaborate more - whether as part of trade alliances, military pacts or multipolar groups. After the global financial crisis, the power and influence of the IMF, G20, the World Bank and the AIIB has come to the fore. Multinational trade agreements such as TPP and TTIP are now seeking to control pivotal standards and protocols that will influence future economic growth. Other intergovernmental organisations such as the WHO, FAO, IPCC, OECD and IEA are all variously seeking to influence future global directions. Within regions, the EU, ASEAN, GCC, African Union and OAS are, to different levels, also aiming to set the future agenda. For some, sovereignty itself is being given away, and many national governments find that global, non- elected bodies that increasingly sit above sovereign states are deciding regional imperatives. Within many countries trust in national politicians and the political process is in decline. At the same time, preference for both local actors and global networks is on the rise. From mayors and the C40 to Greenpeace, Facebook and Twitter, alternative views are being shared and supported. At the same time the shift to democracy seems to have halted. From having only 11 democracies in the middle of WW2, by 2000, US think-tank Freedom House classified 120 countries, 63% of the world’s total, as being democracies. Yet today the EIU sees that we only have 24 full democracies – the US, Canada, Australia, New Zealand, Japan, over half of Europe plus Uruguay and Costa Rica. These are followed by 52 flawed democracies including in their number the likes of Taiwan, Indonesia, Greece, Israel and Mexico. Underneath them in the democracy index are 39 hybrid and 52 authoritarian regimes. Challenges for many who think democracy is the best option for government are threefold. Firstly, some of the countries that either jumped ahead as part of decolonisation or had democracy forced upon them are evidently struggling: South Africa, Pakistan and Ukraine just as much as Iraq and Libya. Secondly, some of the long-term shining lights for democracy seem to be in paralysis; Washington and Brussels are both viewed as perpetually struggling with consensus and gridlock. Lastly, other non-democratic countries, many benevolent dictatorships such as the UAE or the Chinese Communist Party, are doing quite well. Public support for many governments is clearly shifting - twice as many Chinese as Americans are very satisfied with their country’s direction, and voter turnout has fallen by a third across the EU in the past thirty years with participation in parliamentary elections in France, Britain and Germany now nearly as low as Russia and the US. The shift to democracy seems to have halted.
- 208. 208 Power and influence Citizensare gaining more confidence in people like them to do something significant. Meanwhile trust and confidence for state or city level types of governance is on the increase. Citizens are gaining more confidence in people like them to do something significant about the issues that are most present. With the C40 helping mayors around the world share best practice, the power and influence of mayoral offices has increased – almost universally with public support. Whether in New York, London, Paris, Quito or Istanbul, support for greater city level powers is growing. Similar support can also be found for state level governors. At an even more local level, the rise of the real sharing economy and more community level collaborations is helping to cement responsibility and leadership closer to home. One of the consequences of governments, and particularly cities, making more of their data open has been great empowerment of communities and networks. London leads the world in making public data, so seeding multiple platforms for new innovations and efficiency improvements. At a country level an interesting combination of Taiwan, the UK, Denmark, Colombia and Finland are the top 5 nations in the global open data index. As we move forward, open public and private data will together drive transparency from the bottom up. It is envisaged by many that citizens will be able to access and use their public data and share what they wish of their private data to collectively co-create better ways of using social resources. At the same time as engagement increases, so crowdsourcing of policies and decision-making may well reduce further the need for politicians but increase the roles of platform designers and choreographers of discussion. If this direction is followed, the more connected citizen will arguably become more empowered. Less influence of national government is probably certain along with greater decentralisation. Singapore for one sees that decentralised service provision at the hyper-local level can help to reduce inequality. Lastly, in this world of more top-down and bottom- up strain on national level influence, some also see governments facing greater challenges from NGOs and religious groups. As the third sector has grown, a host of NGOs have gained in reach and influence. Oxfam, Amnesty, World Vision and Greenpeace have now been joined by the likes of MSF, Save the Children, Ashoka, Grameen Bank and The Gates Foundation. These have seats at the table not only for national issues but often at an international level, and are just as much of the Davos entourage as many governments. Open public and private data will together drive transparency from the bottom up.
- 209. 209 Influence and trusthas shifted significantly over the centuries. We first moved from respecting and following tribal leaders and kings to being led more by religions. In the last millennium as states emerged, national allegiance and identity came to the fore; in the last century, we added brands, multinational organisations and now social networks into the influence mix. As we move forward the question will be whether there are a new cross-society bodies that take the next step, or whether we take advantage of our increasing connectivity to follow and give more influence to groups from the past and today that resonate most – be that local communities, regional leaders, religious, NGOs or networks. Whichever direction we take, it looks that in many countries a steady decline in national government influence is on the table. Declining government influence A host of NGOs have gained in reach and influence. Capitalism challenged Unable to shake key issues like inequality, capitalist societies face cries for change, structural challenges and technology enabled freedoms. Together these re-write the rules and propose a more participative, collaborative landscape of all working together. Rising youth unemployment With unemployment rates already over 50% in some nations, access to work is a rising barrier. Especially across North Africa, the Middle East and southern Europe, a lost generation of 100m young people fails to connect with or gain from global growth. Shifting power and influence The centre of gravity of economic power| continues shifting eastwards, back to where it was 200 years ago. Recent superpowers seek to moderate the pace of change but the realities of population and resource locations are immoveable. Sometimes nomads Elective migration, cheap travel, international knowledge sharing, and increasingly transient working models create connected nomads who mix the traditions of home with the values and customs of their host location. Related insights
- 210. 210 65% – China’starget CO2 reductions by 2030 1000GW – China’s target for solar energy Eco civilisation
- 211. 211 Eco-civilisation Over the past40 years China has grown apace, mostly without concern for long-term environmental impacts. However, now faced with major challenges, a bright light of sustainable development is emerging. If you ask the man in the street which countries have some of the most ambitious targets for protection of natural resources and improving the environments, few, if any, would name China. And if you look at the academic rankings such as Yale’s Environmental Performance Index then you would find it way down at number 118 out of 178 in the overall rankings - and even lower when you look at specifics around issues such as air quality and agriculture. But in Shantou, Shenzen, Taijin or Chengdu, or any of the other fast growing Chinese mega-cities, people have a different perspective. They will talk about how China wants its local officials to stop ignoring the environment in favour of the economy. They will talk about an Ecological Civilization, how the Chinese Communist Party is driving a huge shift in direction and, in order to do this, is making major changes to the whole government system. More than pretty much any other nation, China is taking the sustainability imperative to heart and literally rewriting the rulebook. Whereas many other countries debate, publish reports, develop frameworks and guidelines and lobby for potential changes 20, 30 of 50 years out, China has set in process real changes that will take place by 2020. It has to. At the Paris COP 21, many commentators were inspired by China’s recent change of tone and tack on climate change, and its pledge, at a preceding UN Summit in September 2015, to be a carbon neutral state by 2030. Experts such as Dr. Jackson Ewing, of the Asia Society commented, “China’s position has seen the greatest evolution on environmental and climate policy in the past years.” However if you look at what is underway this should come as no surprise. Not only does China face some of the greatest environmental challenges, but given its scale and industrial capacity, it also has the wherewithal to do something about them. To address these and other challenges going forward, the Central Committee of the Communist Party of China (CCCPC) is driving the concept of the Ecological Civilization. The Central Committee, the highest authority in the system, is where significant change starts. It was at the third plenum of the 11th Party Congress in 1978 that the historic ‘Reform and Opening-Up’ policy launched the recent economic growth. Since then China’s GDP has increased from US$59 billion to over US$10 trillion, and more than 470 million people were lifted out of poverty between 1990 and 2005. With the economic growth now slowing, attention has shifted to a more sustainable view of future direction – linking growth with the environment and not focused purely on GDP. At the third plenum of the 18th Party Congress in November 2014 the Ecological Civilization blueprint was officially launched. The former Chinese leader, Hu Jintao, sees that “the essence of the construction of the ecological civilization is building a resource-saving China is taking the sustainability imperative to heart and literally rewriting the rulebook.
- 212. 212 and environment-friendly societybased on the environmental carrying capacity of resources, the laws of nature and sustainable development.” Eco- civilization, the Chinese interpretation of the notion of sustainable development, is also fast becoming a new path for China’s innovation focus. By 2015 the UN saw that “China’s commitment to ecological civilization as a national strategy and the new post-2015 development framework are of huge significance to the world.” Some Chinese thinkers see the Eco-civilization term as the next stage in the chain of human civilization. What started out as the original hunter/gather civilization evolved into the agricultural civilization and then onto the third stage of industrial civilization. So the shift to eco-civilization is a fundamental turning point – a phase of transition for society away from the destructive consequences of human activity towards ecological mindfulness. Specific actions now on the table and coming into play cut across the economy, politics, culture, and society. They include: establishing property rights instructions for the first time and using regulatory systems to mange natural resources; establishing a system for paid use of resources that better reflects the true costs rather than the previously heavily subsidised price; establishing a system for developing and protecting China’s geography including more zoning of key areas and monitoring natural resource depletion; drawing ecological red-lines around sensitive terrestrial and maritime resources; and implementing eco-compensation mechanisms in accordance with the ‘polluter pays’ philosophy now gaining ground internationally. That said, eco-civilization as discussed in China is also very much a China-focused strategy, but in its use the term is also seen as a critique of western-style industrialization. Power and influence Attention has shifted to a more sustainable view of future direction – linking growth with the environment and not focused purely on GDP.
- 213. 213 Amongst a hostof targets and edicts, perhaps one of the most significant top-down shifts is the rebuilding of the government’s performance indicator system. Whereas GDP has been the primary focus for China for the past few decades, the Central Committee has proposed a performance evaluation system that moves away from this. New indicators will include resource consumption, environmental change, and eco-efficiency - all underpinned by international COP commitments. HSBC, for one, sees that the shift towards a low-carbon economy will be a challenge, but will also provide multiple new opportunities, especially around mandatory environmental pollution liability insurance. Although few report it, the change is underway: China has doubled its solar production to 20GW in the past 12 months and is targeting 1000GW. By 2030 China will cut its CO2 emissions per unit of GDP by 60-65 per cent from the 2005 levels. The country sees that the battle against climate change is a major opportunity to accelerate its economic restructuring and so achieve more sustainable future development. Although off-radar for many, it is clear that China’s leadership means business. The nation is still very much driven by the CCCPC; its edicts set direction and have power to change the status quo. Whether or not China will be able to balance a possible economic slowdown with the move to the next stage in the chain of human civilization is clearly up for debate. But against a background of global imperatives around climate change, the national dependency on coal-powered energy having significant detrimental impacts on public health, and the opportunity to take a world-leading position on green technologies in the mix, few would bet against China’s Eco-civilization having impact in the long term. Eco-civilization as defined in China is also very much a China-focused strategy. Eco-civilisation Air quality Rising air pollution in many cities is killing people and becomes a visible catalyst for changing mind-sets and policies across health, energy, transportation and urban design. Full Cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Key resource constraints Economic, physical and political shortages of key resources increase and drive increasing tension between and within countries. As we exceed the Earth’s natural thresholds, food and water receive as much focus as oil and gas. Rise of the cult of China As China’s economic influence on the world increases there is a rise in the cult of China in popular imaginations elsewhere. Myths of both hope and fear will proliferate as China’s cultural influence increases. Related insights
- 214. 214 21 million –annual visitors to Venice (population 270,000) 52% – of Americans want it to mind its own business internationally Rise of nimby
- 215. 215 Rise of nimby Globalisationof trade and travel, with geopolitical shifts from North to South and from West to East, have delivered many benefits for some - but are causing clashes of cultures and a perspective of political retrenchment for others. Through globalization, the world has opened for many. Whether travelling, trading or just taking an interest, the world today really is your oyster, not least because of the window of opportunities that the Internet provides and enables. However, nativism, protectionism, isolationist thinking and its ilk is featuring in many more ways than in political rhetoric. Even in the seemingly innocuous area of tourism. In a more accessible, ‘smaller’ world, travellers can go anywhere, see anything, buy anything and through the help of peers and more, seek an enormously personal experience at the same time. However, locals are fed up with visitors running roughshod over their communities, and the sheer volume of people. In Amsterdam, residents are concerned over its tourist crush in central areas and with it, ‘beer bikes’ and the dreaded sound of ‘trolley terror’ (aka suitcases lugged over cobblestone streets). City leaders here are doing their best to devise ways to spread the increasing number of tourists – and their spending - over a wider footprint in the city. Similarly, Luigi Brugnaro, Mayor of Venice, says that his city of 270,000 cannot cope with the 21m visitors that they receive annually, and is taking steps to pare back the onslaught, and is considering priority lanes for locals on the city vaporettos (ferries). Another concern is the rise in those seeking more authentic, local experiences, driven in part by house swaps, and the collaborative economies in the travel community. Barcelona’s leaders are seeking to increase its visitor numbers from 7.5m to 10m per year, and are feeling the heat as locals begin to assemble and protest, particularly in the historic and ‘authentic’ La Barceloneta district. Meanwhile a key tourist issue in Hong Kong is more specifically about loss of revenue - mainlanders buying goods in Hong Kong, only to sell them at higher prices once back on their turf. Beyond tourism, there’s the much uglier push back; that of nativism. Having absorbed more than 1m migrants in 2015, primarily from war-torn Syria and its surrounds, Europe is now feeling real backlash. There are already demands for better border controls or the Schengen system of visa-free travel to be temporarily suspended. Or there’s the town of Randers, Denmark, which has started ‘the meatball war’ by passing a law demanding that pork be included in school lunches. Critics say that it stigmatizes Muslims and in effect, creates a problem that did not exist previously. This type of response is not unusual, given the extreme EU migration influx of the past year. Locals are fed up with visitors running roughshod over their communities.
- 216. 216 Power and influence Nationalistpassions are indeed alive and well as many EU countries feel economically less able while they stare austerity programmes in the face. Front Nationale (France), UKIP (UK), Golden Dawn (Greece) and the Scottish National Party being just a few of the nationalist parties enjoying their moment in the sun. Although, to be fair, these parties are not formed solely around the issue of migration, as inflation, unemployment, the euro, EU membership, parliamentary representation and economic situation of their country are also very much in the mix. Equally some other nations are reeling from the early stage impact of an emerging new world order. The US is sensing the end of the ‘American Century’, effectively a decline in its global influence. As might be expected, there is renewed scepticism from within the US about its international leadership role: 52% of Americans want it to mind its own business internationally. Of course, the US did exactly this when it successfully operated an isolationist strategy in the 1930s, and it took a surprise attack on Pearl Harbor in 1941 to wake the giant and to shift the US gaze upwards and outward again. The US is sensing the end of the ‘American Century’.
- 217. 217 What impacts willthis have on the cities and nations of an emerging new world order and the policies that they choose to pursue? Will Donald Trump get to build his wall against Mexico? Well, first, keep in mind that the desire to travel and explore is an innate human condition and is very unlikely to change, even over the longer-term. Look for the world and its citizens to continue to seek open and accessible ways of working, living and travelling for at least two reasons. Second, the Internet changes everything that we do and how we do it, connecting us all to each other and it is nowhere near complete yet. The local travel skirmishes that we are seeing will ebb and flow, but travel will continue. Developing nativism has the potential for more staying power; however, it’s not an overnight shift, not by any stretch. Nor is it especially well orchestrated. We’re not yet ready to build walled gardens - physical or otherwise - for those ‘not like us’. Rise of nimby We’re not yet ready to build walled gardens. Accelerating displacement Storage, and particularly electricity storage, is the missing piece in the renewables jigsaw. If solved, it can enable truly distributed solar energy as well as accelerate the electrification of the transport industry. Citizen-centric cities Successful cities will be designed around the needs and desires of increasingly empowered and enabled citizens - who are expecting personalized services from the organisations that serve them Full Cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Shifting power and influence The centre of gravity of economic power| continues shifting eastwards, back to where it was 200 years ago. Recent superpowers seek to moderate the pace of change but the realities of population and resource locations are immoveable. Related insights
- 218. 218 $400 billion –value of world food trade $115 – saving per container shipment from automating customs processes Standards driving trade
- 219. 219 Standards driving trade Internationalregulation is progressively aimed at freeing up trade and making it simpler and less bureaucratic – but there are a number of agreements, standards and protocols that some are seeing as increasingly constraining. As the world seeks to optimize global trade flows, there are high and low points emerging that may well influence future regulatory direction and support. Much of the development in global trade has been led by the US, which, in the eyes of some, means that, while enabling global trade to develop significantly, the US has also gained more than others. For instance, over the past decade or so the vast majority of international transactions have had to go through the US clearing banks (even those not in USD), which can lead to blocking of transfers due to flagging triggers set up as part of the US anti-terrorism regulation. As the Indian Ocean becomes as important for trade as the Pacific, questions are being raised as to how the US will maintain its leadership and control – and the role that standards will play in this. The Transpacific Partnership (TPP) links together twelve Pacific countries, including Japan but excluding China, that collectively account for 44% of US goods exports and 85% of US agricultural exports. Its ambition is to build a fully integrated economic area and establish the rules for major future growth of services and hence capital flows across the region. Critics are suspicious that this favours US technology companies and banking institutions, and further cements the role of the dollar in international trade. Supporters see that it will raise governance standards for many of China’s trade partners and so put pressure on China to adhere more closely to international standards. The potentially more controversial Transatlantic Trade and Investment Partnership (TTIP) links the US and the EU. Supporters speak of an “economic NATO” that cements the world’s democratic powers at an unstable time. However, several foresee a number of risks. As the US does not regulate all new types of genetic engineering of plants, animals and microbes, the argument goes that the TTIP will open the back door for such foods to enter the EU, bypassing strong current regulation and standards. The ability, for example, of individual countries to inspect food for pests and diseases will arguably be reduced, and the freedom to introduce higher local standards, that often raise the quality bar for everyone, will be reduced. Many in Asia are keen for an alternative, non- US driven agenda, seeing their needs are better met through the RCEP (Regional Comprehensive Economic Partnership) as a separate FTA (Free Trade Agreement) that brings 16 countries together, but not including the US. FreetradeareassuchastheEU,NATFAandpotentially both the TTP and TTIP all restrict the use of tariffs to either tax international trade, so alternative ways for countries to protect their own interests have gained ground: quotas, licences, anti-dumping regulations, standards, import credits, export subsidies etc. Such customs procedures, technical standards and labelling / packing requirements are not directly aimed at restricting trade but add to administrative bureaucracy, so lead to the same result. Many in Asia are keen for an alternative, non-US driven agenda.
- 220. 220 Power and influence Thosethat want to gain from increasing automation and system efficiency have to join in the club. Securing the safety of the global supply chain is a priority shared by governments regulating the cross- border flow of goods. It requires a dual focus: to promote and facilitate legitimate commerce, while simultaneously mitigating supply chain risks. The processes that enable government agencies to balance these dual priorities rely on data, cross- border standards, widely embraced policies, as well as cutting-edge technologies that are dramatically changing the global economy. Adoption of automation, with the growth in the use of sensors and other M2M mobile technologies, is helping to make trade more frictionless. There are increasingly better information flows not just between different governments but also between trading partners across manufacturing, shipping and trucking, so streamlining processes. However, this greater connectivity requires higher security and therefore standards and protocols also playing a major role here. Those setting the standards not only set the rules but are, by implication, also define the landscape. Those that want to gain from increasing automation and system efficiency have to join in the club, so this becomes another lever to bring them inside the tent. With the promise of greater efficiency from predictive analytics that make the global trade system safer and more secure, the case for joining in is compelling. The key benefits of automation will include reduction of paperwork and lower transaction costs. As different parties all agree the standards for exchanging data, enabling the sharing of data will more effectively release cargo across borders. Matching internal and independent third party data sets via trusted trader platforms will, it is hoped, give border agencies real- time access to the most up-to-date information and so ease international trade. The days of stamping paper documents is fast being replaced by electronic verification via RFID and other M2M and IoT platforms. But to make this work there needs to be clearer, recognized digital standards that enable all parties to collaborate. Here again the US is very much in the driving seat. Sector or regionally focused consortiums such as the IIC (industrial Internet Consortium) formed by AT&T, Cisco, GE, IBM and Intel are a key step forward but the aim is for global standards across all industries – and all probably using a global unique entity identifier.
- 221. 221 While some arguethat it is the global and regional mega-agreements that are setting the future trading landscape, it is clear that, underneath these, varied standards are actually driving trade. Whether safety standards for food, cars or services, communication and data standards for increased automation, they are the gateways for many imports and exports. They are being used positively to enable better, faster and safer trade, but they are also used negatively especially as non-tariff barriers to restrict trade. Going forward, standards will increasingly be used as the tactical responses to defend domestic markets, manifest change in target export markets and maintain a degree of control over importers. Without them it might be a completely level playing field and few nations really seem to want that. Standards driving trade Standards will increasingly be used as the tactical responses to defend domestic markets. Africa growth With a land mass bigger than India, China, the US and Europe combined, few doubt the scale of the African continent and its resources. However, until recently only some have seen it as the growth market that it is fast becoming. Declining government influence National governments’ ability to lead change comes under greater pressure from both above and below - multinational organisations increasingly set the rules while citizens trust and support local and network based actions. Open supply webs The shift from centralised production to decentralised manufacturing drives many to take a ‘smaller and distributed’ approach: Global supply chains are replaced by more regional, consumer- orientated supply webs and networks. Shifting power and influence The centre of gravity of economic power| continues shifting eastwards, back to where it was 200 years ago. Recent superpowers seek to moderate the pace of change but the realities of population and resource locations are immoveable. Related insights
- 222. 222 83% – peoplesee cyber attacks in the top three threats facing organizations today 3 minutes to midnight – time on the Doomsday Clock in 2016 Still being stupid
- 223. 223 Still being stupid Despitea better understanding of the long-term challenges we face, we individually and collectively continue to make decisions that may make sense in the short-term - but do not lead to better longer-term consequences. The Doomsday Clock has been maintained since 1947. It is a symbolic clock face that represents a countdown to possible global catastrophe such as nuclear war, climate change or cyber-terrorism. It is maintained by members of the Science and Security Board of the Bulletin of the Atomic Scientists who are in turn advised by the Governing Board and Board of Sponsors including 18 Noble Laureates. In 2010 it was set at 6 minutes to midnight and in 2016 the dial has moved to 3 minutes to midnight. It seems, despite growing public awareness, huge amounts of evidence, and constant reminders, we are incapable of changing our downward trajectory. What is going wrong? What, then, are the disasters we’re trying to avoid? There are many. Mark Carney, Governor of the Bank of England, is not alone when he points to Climate Change, ‘The challenges currently posed by climate change pale in significance compared with what might come’; The WEF’s list is long, adding geopolitical instability, water crises, food shortages, constrained economic growth, weaker societal cohesion and increased security risks; In ISACA’s global security survey 83% of people said that cyber attacks were in the top three threats facing organizations today. We could also add the global refugees crisis and the threat of nuclear attack. But none of the above is a new issue. The point is that as a society we have known that we are teetering on the brink of global disaster for a long time and yet despite this, and despite the wealth of innovation, technology prowess and sheer talent at our disposal, we seem incapable of doing anything about it. Why? One reason may be the sheer size and complexity of the problems we face. They all have similar traits such as an inherent complexity, a need for extensive collaboration to drive change, not to mention the need for huge investment. They also need time for solutions to have an effect - and the possibility of extreme change/disruption if left unresolved. Some say that we are already too late in regards to cracking the problem, or that the correction required would require too significant change from our current way of life, so corrective traction will never willingly occur. Others are more even more direct, pointing out that many of the challenges we face need to be addressed in corners of the world that simply don’t have the necessary infrastructure to deal with the problem, are too poor to carry much weight on the global stage, and so find it hard to get the necessary support. As a society we have known that we are teetering on the brink of global disaster for a long time.
- 224. 224 Politics and globalleadership can of course make a huge difference. On a positive note the Pope’s acknowledgement that “human-induced climate change is a scientific reality and its decisive mitigation is a moral and religious imperative for humanity” will change lives as does the work of the Bill and Melinda Gates Foundation. This however is countered by lack of political action, which, some suggest, is often too driven by expediency to be able to drive change. Think of the limited support from the United Kingdom’s present government on climate policies and the continued intransigence of the Republican Party in the United States, which stands alone in the world in failing to acknowledge even that human- caused climate change is a problem.” Collectively, it seems we lack understanding of the complex nature of the issues, we disagree on how to address them and even if we do achieve consensus, we struggle with capacity building to do anything impactful. In addition, we have little or no global coordination, few frameworks and our regulation is often behind the curve. Our institutions such as the World Economic Forum, the United Nations and World Health Organisation work hard to make a difference and are successful at maintaining awareness but they are unwieldy, consensus-driven and usually have to follow the path of least resistance to achieve anything. Often their actions are in response to a crisis, not because they weren’t aware of impending problems but simply because they can’t get political traction for things that might not happen for a while, or indeed might not happen at all. The recent Ebola crisis and indeed the current migration crisis in Europe are both good example of how, despite previous warnings, the global community failed to act in time to avert disaster. Power and influence We lack understanding of the complex nature of the issues.
- 225. 225 When it comesto individual action, many of the issues are largely too distant from every day life to inspire much change. Sometimes this is because the language is often wrong or patronising – conversations around air quality for example gets on-the-ground response; climate change less so. Sometimes because the subject is quite simply too distasteful – talking effectively about sanitation is a challenge. Sometimes consumer/citizen awareness is robust, but there’s an acceptance that nothing can be done – many believe that disease, hunger and poverty will always be with us for example. It can also be a financial issue, of course it’s better to buy local and organic but if you operate on a strict budget those sorts of priorities are secondary to the need to feed your children. Sometimes we are just too used to our lifestyle to be prepared to change. Avoiding catastrophe is said to require swift, collective action. It needs ‘whole party’ participation with new corporate forms and multi-capital success measures that genuinely value people, society and nature alongside traditional assets. Also needed is a shift in perceptions where humans become more connected to nature, social development and legacy thinking as well as focused social movements, such as the emerging fossil fuel divestment activity today. While there is a vast array of all of the above in place already, at the time of writing this does not seem to be enough. We are just too used to our lifestyle to be prepared to change. Still being stupid Capitalism challenged Unable to shake key issues like inequality, capitalist societies face cries for change, structural challenges and technology enabled freedoms. Together these re-write the rules and propose a more participative, collaborative landscape of all working together. Declining government influence National governments’ ability to lead change comes under greater pressure from both above and below - multinational organisations increasingly set the rules while citizens trust and support local and network based actions. Full Cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Key resource constraints Economic, physical and political shortages of key resources increase and drive increasing tension between and within countries. As we exceed the Earth’s natural thresholds, food and water receive as much focus as oil and gas. Related insights
- 226. 226 30% – China’sshare of all Uber journeys $140 billion – Chinese investment overseas in 2013 The rise of the cult of China
- 227. 227 The rise ofthe cult of China As China’s economic influence on the world increases there is a rise in the cult of China in popular imaginations elsewhere. Myths of both hope and fear will proliferate as China’s cultural influence increases. It’s a platitude to say that China is going to be important over the next decade; the more interesting question is how? To some, China is a land of promise; to others it’s an unwieldy behemoth, blighted by heavy-handed governance, out-dated ideology, and selfish insularity. The point perhaps is this: it does not so much matter where the truth of these views lies (reality will always lie somewhere in the middle anyway), but the fact that China is being viewed through such extreme lenses. It seems China will either save the world - or doom us all. The trend in this kind of thinking seems set to continue as more industries, more governments and more people become aware of the influence of China (or Chinese things) on their day-to-day lives. The importance of Chinese consumption is already apparent. Apple’s stock rises and falls based on its Chinese sales figures, Uber says that China accounts for 30% of all Uber journeys, Chinese drinkers now consume more fine whisky than the Scots, and Chinese film-goers can now determine the success or failure of Hollywood films, with “Fast and Furious 7” making over $180m in 3 days in China alone. For smaller companies, the Chinese market can quickly become a major source of sales as Chinese consumers turn their attentions to things like Dutch Edam cheese, Spanish chorizo or Brompton’s folding bicycles. These figures are driven by the sheer scale of the Chinese population; in 2015, the number of ‘middle class’, or ‘relatively affluent’, consumers in China overtook the equivalent number in the US. That gap is only going to grow in China’s favour. Accordingly, many companies (large and small) located outside China now see the Chinese market as the pre-eminent (and sometimes ‘only conceivable’) opportunity for growth over the next decade. China is presented as an Eldorado, promising riches to those successful in penetrating its borders. The flipside is that the fortunes of many western companies are now inextricably linked to the slightest movements in Chinese consumption, and fluctuations can lead to a slew of panic-stricken analyses. For every visioneer that sees boundless opportunity, there is a naysayer who points to fickle, unfathomable Chinese consumers, opaque debt, property and stock market bubbles, and a Chinese state that intervenes cack- handedly in markets. But China is not just a consumer of value-added products. Its rapid economic rise has only been possible thanks to an equally rapid scaling-up in consumption of natural resources. Unsurprisingly, China is the largest emitter of carbon, driven in part by its massive production and consumption of coal, and is also the world’s largest consumer of precious (and not-so-precious) metals. And, while we are at it, fresh water, livestock, and phosphorous (a finite resource essential to agriculture). China is presented as an Eldorado, promising riches to those successful in penetrating its borders.
- 228. 228 Power and influence Onthe other hand China is also the world’s largest investor in renewable energy technologies. It has broken new ground (literally) in exploring the limits and possibilities of hydro-electric power, most notably through the Three Gorges Dam project, and is now the world’s largest producer of both photovoltaic solar energy and wind energy. Whilst China may indeed be causing natural resource problems, it is also, for some, the most likely source of immediate solutions. In 2005 few Western consumers would have consciously been aware of any consumer-facing Chinese brands. That was the year that Lenovo acquired IBM’s personal computer business - one year later, Lenovo dropped the IBM brand and is perhaps the first familiar Chinese brand on Western high streets. Today, Western consumers will be familiar with (even if they are not yet personally buying into) brands such as Huawei, Tencent, Alibaba, Xiaomi, Haier, Air China, China Eastern Airlines and China UnionPay. Tencent (especially through its instant-messaging service WeChat) and Alibaba are leading the way in the technology sector, but there are many others set to follow, from personal care, through clothing and home appliances to retail and food. Further,Chinesecapitalandinvestmentnowsitbehind many large Western companies, from Pirelli tyres, to Barcelona’s Espanyol football club and Smithfields Foods in the US; not to mention the increasing role that Chinese finance and expertise plays in global property markets and national infrastructure projects, from railways in Gabon to nuclear power in the north of England. For some, China’s shift in role from workhouse churning out goods for overseas companies, to innovative producer competing on its own terms, is a worrying sign; anti-competitive practises, copyright theft, patent infringement and protectionist state policy, all make it difficult to compete for access to the Chinese market. But for others, a new player on the global scene, driving innovation, bringing fresh ideas to the table, investing imaginatively and challenging existing multi-national oligopolies is exactly what the world needs. China is also the world’s largest investor in renewable energy technologies.
- 229. 229 The rise ofChina as a political force (backed by military might) is, for many, something to be feared; they point to an increasingly expansionist posture (especially in the South China seas), threats to cyber security and data privacy, a poor record with respect to upholding human rights and a ‘let them eat cake’ attitude to resource consumption. Others will point to China’s enlightened attitudes to the care of the elderly, its supposedly dedicated work-ethic, its relatively insular approach to foreign policy - and see a more benign influence on the world. If, crudely speaking, the 20th century saw the political and economic encounter between China and the rest of the world, the next few years are likely to give birth to the cultural one. With Chinese economic dominance growing steadily (at least for the foreseeable future), the challenge of understanding the ideas that drive it will rise to the fore. Expect to see fevered commentary on the actions and behaviours of the Chinese state, attempts to decode the meaning of ‘socialism with Chinese characteristics’ and Confucian policy ideals, and confused diatribes about the ‘Chinese mindset’. For many of us however, the most immediate encounter with Chinese culture will come in the form of having to learn new business etiquettes (such as ‘guanxi capitalism’) or coming face-to-face with emboldened Chinese travellers demanding Chinese food and signage, while looking incredulously at our ageing infrastructure and peculiar religious beliefs. In return, our fascination with this infamously inscrutable nation will come to resemble the world’s 20th century love-hate-obsession with the USA. The rise of the cult of China Chinese capital and investment now sit behind many large Western companies. Capitalism challenged Unable to shake key issues like inequality, capitalist societies face cries for change, structural challenges and technology enabled freedoms. Together these re-write the rules and propose a more participative, collaborative landscape of all working together. Eco civilisation Over the past 40 years China has grown apace, mostly without concern for long-term environmental impacts. However, now faced with major challenges, a bright light of sustainable development is emerging. Shifting power and influence The centre of gravity of economic power| continues shifting eastwards, back to where it was 200 years ago. Recent superpowers seek to moderate the pace of change but the realities of population and resource locations are immoveable. Sometimes nomads Elective migration, cheap travel, international knowledge sharing, and increasingly transient working models create connected nomads who mix the traditions of home with the values and customs of their host location. Related insights
- 230.
- 231. 231 Changing business The natureof how we create, exchange and reward value is in flux. Growing transparency, efficiency and flexibility are all variously challenging some of the models that have supported industrialisation and globalisation. As such many see that the nature of business is in a state of transition where an increasingly digital, connected and scalable organisation is emerging able to adapt to new challenges and so flex in form, focus and structure. As the commercial environment in many sectors changes, so does the demands on and hence the role of the corporation. The topics covered in the following pages are: Creative economy Currencies of meaning Organisation 3.0 Skills concentration Dynamic pricing Full cost Digital money Speed to scale Optimised last mile The real sharing economy
- 232. 232 £8.8 million –generated by UK creative economy every an hour $698 billion – value of creative industries to US economy Creative economy
- 233. 233 Creative economy The creativeeconomy helps to build inclusive and sustainable cultures. What’s more, it generates wealth. To build scale it requires a workforce comfortable with collaboration, critical thinking and the ability to take a risk. Publishing, film, television, music production, broadcasting, architecture, advertising, visual and performing arts are all part of the creative economy. Together many now see these industries not only as a vital part of the new knowledge economy but also as capable of revitalising depressed areas and building cultural heritage. While many other sectors are suffering, creative individuals are blending culture and technology to generate jobs and build organisations based on social value and inclusion. The creative industry is increasingly profitable; in the UK the industry generates £8.8 million an hour. It is also increasingly influential, attracting tourists, enhancing the overall cultural life of citizens and acting as a focus for social cohesion, irrespective of age, geography and religious belief. The creative economy has an abundance of renewable resources, using knowledge, experience and imagination to generate value and create goods and services that can often be developed, bought and sold, and even delivered online. Those who work creatively generally fare much better in cities where they can easily meet and collaborate with likeminded individuals: Hollywood, Mumbai and Lagos for the film industry, Seoul for electronics and digital media, New York and London for the performing arts. Artists of all kinds however are often poorly paid, so, despite their importance to economic growth and the vitality of neighbourhoods, rising rents and high living costs often means those in the industry do not have the funds to live in the very cities they enhance. Affordability is therefore key; hence the ongoing need for continued government or philanthropic support. Artistic centres often act as magnets to attract other professionals, who want to be involved in and enjoy the creative arts as a form of relaxation. The Museo Soumaya, now the most visited museum in Mexico, acted as a catalyst to the transformation of Plaza Carso from a rundown industrial wasteland into one of the most sought-after areas of Mexico City. Sometimes the effects of an artistic community can last for generations, take Paris’s left bank for example which still attracts thousands keen to catch a whiff of the bohemian counterculture belonging to Collette, Henri Matisse and Jean Paul Sartre. Some cities try to recreate this, subsidised rents in Dublin’s Temple Bar have been used to attract musicians and film- makers and other core creatives. Even Singapore, not yet widely known for its cultural endeavours, has classified an area of the city-state as a creative zone. From one end of the globe to the other, a growing number of cities are attracting high flying professionals thanks, in part, to burgeoning arts and culture sectors which make them an attractive places to live and work. From London to Singapore, Berlin to Mumbai, cities have worked hard to exploit their cultural credentials in order to attract people who want, one way or the other, to participate in or be touched by the arts. Based on the collective strength of their creative industries, these cities are driving The creative industry is increasingly profitable.
- 234. 234 new business, spurringinnovation, attracting talent and investment, accelerating urban development and in the process improving the overall quality of life for their residents. A good example of this can be found in Austin in Texas, which has built its reputation around its creativity, adopting the catchphrase “Keep Austin Weird” to reinforce the city’s commitment to its core values – and act as a reminder that urban growth should not drive out the cultural assets that shaped its identity and appeal. In some instances the creative economy offers developing countries a feasible option to leapfrog into emerging high-growth areas of the world economy. Some are embracing this challenge. The Chinese government for example, leveraging low cost connectivity and a large domestic market, has invested significantly in the video games industry, aiming to compete with Korea. Many East Asian cities are now becoming creative hubs. Latin America countries, most notably Brazil and Mexico, already have significant local music industries and with the emergence of new music genres such as Cumbia, many are reaching new global market places. Changing business Cities have worked hard to exploit their cultural credentials in order to attract people
- 235. 235 Given the possibilitiesset out above, it seems curious to many who attended Future Agenda workshops that more schools are not better preparing students to be creative. Professor Sugata Mitra, author of the Future Agenda initial perspective on Education pointed out, “The education systems in almost all countries are obsolete,” and this view was echoed in workshops from London to Dubai, India to Singapore. Put simply, many children are obliged to be part of a old-fashioned, over-structured, bureaucratic system which does not allow them time or provide them with the skills to work in the collaborative and increasingly creative world we now live in. Although there are some indications of change ahead, such as the rise of Liberal Arts degrees in universities such as Ashoka and Flame in India, Habib in Pakistan, Warwick and University College London in the UK, for example, the pressure to produce similarly qualified, systems driven students is difficult for many to resist. This is particularly challenging in developing countries where often the difficulty is to provide any sort of education let alone one that with a focus on free expression. In the future it is clear that we must adjust the way we teach and the way we learn to ensure that the next generation is able to think more discerningly, learn to collaborate not compete, to be curious and most importantly to be able to adapt. Beyond that, governments must do what they can to support the development and growth of the sometimes hidden creative economy. Creative economy Many East Asian cities are now becoming creative hubs. Deeper collaboration Partnerships shift to become more dynamic, long-term, democratised,multi-party collaborations. Competitor alliances and wider public participation drive regulators to create new legal frameworks for open, empathetic collaboration. Education revolution Broader access to improved education acts as a major catalyst for empowerment, sustained economic growth, overcoming inequality an reducing conflict. We need an education system fit for the digital revolution. Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. The real sharing economy Increasing collaboration drives organisations to reconfigure based on social networks and impact. Real sharing enterprises, not driven by profits, seek to share resources, knowledge, and decision-making responsibilities. Related insights
- 236. 236 21% – pricepremium earned by eBay sellers with higher feedback 1.5 petabytes – data on Experian’s North America credit databases Currencies of meaning
- 237. 237 Currencies of meaning Newtrusted currencies of exchange and meaning emerge to better facilitate transactions, trade, authentication and validation. Money is complemented by new systems to which we attach greater significance. In the past things were relatively more straightforward. People were known in a local community. If they moved to a new location, state issued papers or passports would verify their identity. The provenance of goods or an object was known and if it was falsified, the identification of the perpetrator was simple. Truth and trust was easy. Globalisation and digitization has changed this. People move and interact with each other more. Supply chains and webs are longer or more complex. As we move further into the Fourth Industrial Revolution, “characterized by a fusion of technologies that is blurring the lines between the physical, digital, and biological spheres”, issues of truth and trust will become ever more important. As the World Economic Forum states, “the breadth and depth of these changes herald the transformation of entire systems of production, management, and governance”. Moreoever, “the possibilities of billions of people connected by mobile devices, with unprecedented processing power, storage capacity, and access to knowledge, are unlimited. And these possibilities will be multiplied by emerging technology breakthroughs in fields such as artificial intelligence, robotics, the Internet of Things, autonomous vehicles, 3-D printing, nanotechnology, biotechnology, materials science, energy storage, and quantum computing”. In this new world, the breadth, frequency and volume of reputational data will grow exponentially. For every action we take, every movement we make, every trade we make, every like or comment we leave or friend we tag, we leave a reputation trail of “how well we can, and can’t, be trusted … how well we behave, or misbehave”. The reputation, of people, organisations and objects will become the dominant currency of meaning. Today, we are already familiar with a number of reputation mechanisms that have developed in the last decade. Think of the trusted reviews of hotels and restaurants available on TripAdvisor or of rooms and hosts on Airbnb. Or the seller rating’s available on eBay or Amazon. This information allows people to make more informed choices and transact with confidence. It has also made things easier. We inherently trust HTTPS secure websites to transact securely. Facebook Connect, allows us to port one login credential and data exchanges into a new organization. More disruptively, digital trails have enabled new trust mechanisms to be developed. For example the decentralized ledger, or Blockchain, which underpins the crypto-currency Bitcoin, uses crowd-sourced computational power to authenticate and validate both transactions and ownership. Indeed, such is the influence of the rising data swirl that “truth” may well become what the online crowds agree, a world where ‘crowd truth verification’ is prioritised over search and media. The debates over individual Wikipedia entries veracity illustrate this well. The reputation, of people, organisations and objects will become the dominant currency of meaning.
- 238. 238 Organisations too havealso been enabled to make better choices and keep their brands, products and users safe. Think of the credit performance data available to banks and businesses from credit bureaux (e.g. Experian) or the increased confidence in identification and secure authentication available using biometrics in passports of payment tokens such as Apple Pay. It is no surprise then that many of the world’s leading organisations now employ a Chief Reputation Officer. Beyond consumption, individuals are starting to value and protect their data and its interpretation and meaning. From skills and endorsements on LinkedIn or Stack Overflow for the developer community, reputation matters; individuals, their peers, organisations, and society recognize that “the reputation they generate in one place has value beyond the environments from which it was built.” (e.g. Super Rabbits on TaskRabbit becoming more confident, more in control of their economic activity and more employable elsewhere). This recognition is leading to the emergence of online personal reputation start-ups who are figuring out how individuals can aggregate, monitor, protect and use their online reputation (e.g. Digit.me, TrustCloud or Legit - now part of Facebook). As Sir Tim Berners- Lee, the father of the Internet, put it: “The data we create about ourselves should be owned by each of us, not by the large companies that harvest it.” The dark side of the emergence of new currencies of meaning may be further discrimination between the haves and the have-nots. For example, certain data indicators (sociological, biological, economic) may predict, restrict or grant access (e.g. medical care denied because your DNA is not in a national database; lack of data participation limits financial access or access to education, economic participation, employment). Not only are data inequalities a concern but also the means to act on the data could create even greater disparities in health, wealth and quality of life. This may therefore require governments to regulate in order to preserve and promote both access and opportunity. Changing business Many of the world’s leading organisations now employ a Chief Reputation Officer.
- 239. 239 More generally, andas revealed in Edelman’s 2016 Global Trust Barometer, inequality of trust and the flipping of traditional trust hierarchies have significant implications for both business and government. Moving forward it seems that digital trust networks, and the reputational capital they generate, have the potential to reinvent the way we think about wealth, markets, power and personal identity. This may shift who has power trust and influence. The new currencies of meaning will have value and as such data marketplaces will likely develop, to price and manage the flow of data. Multi-layered ecosystems for those trading data will emerge consisting of buyers, sellers, creators, analysts, aggregators, governments and policy makers. New exchange and distribution models, sensitive to individual and cultural differences, will likely emerge, often local in nature. This will see an expansion in the potential for more relevant and target offers and solutions and a reduction in waste. Increasingly it will be the combination and intelligent application of data and its’ meaning from different sources that is creating new sources of value. For example, we can already see the use of mobile location, traffic and accident data to assist town planners in the location of new cycle routes. Or the use of Apple’s health appdata to determine anticipatory actions to improve an individual’s wellbeing. Multi-layered ecosystems for those trading data will emerge. Currencies of meaning Digital money Cash continues to be gradually replaced by digital money, providing consumers with more convenience and choice – and organisations with lower cost transactions. Wider adoption enables new offers to proliferate. Dynamic pricing The algorithms of Amazon and Uber cross over to affect more businesses, from energy use to parking. Real-time transparency allows better purchasing at the same time as margins and yields are automatically enhanced. The increasing value of data As organisations try to retain as much information about their customers as possible, data becomes a currency with a value and a price. It therefore requires a marketplace where anything that is information is represented. The real sharing economy Increasing collaboration drives organisations to reconfigure based on social networks and impact. Real sharing enterprises, not driven by profits, seek to share resources, knowledge, and decision-making responsibilities Related insights
- 240. 240 $60 trillion –total sum of money in the world (M2) 90% – share of money in the world already digital Digital money
- 241. 241 Digital money Cash continuesto be gradually replaced by digital money, providing consumers with more convenience and choice – and organisations with lower cost transactions. Wider adoption enables new offers to proliferate. Money is not coins and banknotes; it’s anything that people are willing to use in order to represent systematically the value of other things for the purpose of exchanging goods and services. Money enables people to compare quickly and easily the value of different commodities, to easily exchange one thing for another, and to store wealth conveniently. Before coins and banknotes, different cultures chose objects or materials to represent value: shells, cattle, skins, salt, grain and cloth. The sum total of money (M2) in the world is about $60 trillion of which c. 1/10th is held as coins or bank notes. The remaining 90% is held as digital money on computers servers; the vast majority of transactions by value are executed by moving electronic data from one computer file to another without any exchange of physical cash. The on-going adoption of digital money has been driven by three factors. The first factor is that digital money is cheaper than cash to handle, cash costs society as much as 1.5% of GDP. Savings arise from: 1. Reduced administration costs (governments can save up to 75% with electronic payment programs). 2. Reduced security costs and loss of funds from theft (75-80% of the $22 billion in benefits of shifting India’s government payments to electronic would come from reducing leakage of funds in government transfer schemes ending up in the wrong hands). 3. Reduced costs from saving time or transportation. The second factor is the ability for people and systems to connect digitally, enabled by the growth of mobile and fixed line networks, and underpinned by maturing technology standards and protocols (e.g. credit and debit card payment schemes; SEPA – the Single Euro Payments Area). Increased connectivity is also at the core of efforts to increase financial inclusion through digital money, where a lack of bank and cash infrastructure and ability of individuals to authenticate their credentials is traditionally cited as an underlying challenge. Safaricom’s M-Pesa solution in Kenya demonstrates how connectivity can assist in leapfrogging traditional cash-based infrastructure. The final factor driving adoption is mobility. People, devices and transaction locations are literally moving and consumers are seeking more convenient ways to pay. Consumers can and want to shop from their own home, send a payment from an app on their PDA, wave a contactless card to use mass transit or pay for their Uber ride automatically. And as people have migrated, so too has boomed the digital money of International remittances. Cash costs society as much as 1.5% of GDP.
- 242. 242 On a twintrack to the three underlying drivers comes innovation and competition. As banks and payment schemes struggle to cope with legacy technology and stifling regulation, new entrants have arrived. AliPay and ApplePay seek to offer more convenience to consumers whilst increasing the firm’s share of the financial transaction. In the case of Square, Paypal and Stripe, the competition is aiming to reduce the cost of accepting digital money or making digital payments. These new entrants in the main seek to digitise and substitute previous cash-based payment. The most disruptive new entrants may prove to be the crypto- currencies, for example Bitcoin, and the associated underlying and de-centralised blockchain technology. Alongside the commercial innovation sits moves by both governments and central banks to accelerate the move towards digital money. While reduced costs form part of the logic to do this, so too does the inherent ability of digital money to carry a negative interest rate, something which it is not possible to do with cash. In Denmark, the Government has gone further, announcing in 2015 that selected retailers will be able to refuse cash, paving the way for a truly cashless society. Supporters say that not only will this enable banking systems to become more productive but that it will also ensure that taxes will be paid and only legal transactions will take place, putting pressure on both the informal and black economy. One downside of the shift to digital money has been the enormous growth in fraud. According to Nielsen, the cost of global payment card fraud reached $16Bn in 2014. The theft of $450m from MT. Gox, the worlds leading Bitcoin exchange, in 2013 provided another example of the downside potential of digital money. But while many have hailed the “end of cash”, its death appears premature. Physical money has been with us for thousands of years for a reason. Cash is essentially untraceable, it’s easy to carry, it’s widely accepted and it’s reliable, even if the power goes out. There is, arguably, simply no alternative system of payment that is as convenient, reliable and anonymous. Libertarians are at pains to point out the benefits of retaining economic privacy, not having digital money transactions surveilled or giving government the ability to block payments or central banks more power. The result, as can be seen in the US, is that the absolute value and volume of cash in circulation has continued to grow. Changing business The most disruptive new entrants may prove to be the crypto-currencies.
- 243. 243 Looking ahead willsee the existing payments and banking chain spreading out and fragmenting, leading to further growth in non-traditional financial institutions seeking to control the payments interface and developing their own financial services (e.g. Amazon Payments, Amazon Lending Programme) and retail offers (e.g. Alibaba, Google Shopping). To enable this, there is also likely to be further collaboration between organisations (e.g. device manufacturers, telecoms players, associations, banks e.g. Google Wallet). There will also be growth in alternative currencies and money networks, and the first state issued flat digital currencies. Consumers will continue to adopt digital or contactless payment over cash and digital wallets will start to eclipse the physical wallet. Checkouts will move from place to device as payments continue to shift from an active to a passive process (e.g. as exists today in exiting your Uber ride). To combat fraud, and keep transactions simple and safe, multi-factor authentication will become the norm (e.g. growth in real time geo-tagging, biometrics and tokenization), with more appropriately authenticated transactions taking place. More digital money will bring about increased socio- economic mobility, increase the ability for itinerant workers to live and work in a new country, and will enable 1Bn more people to be financially included within 10 years. Digital money Multi-factor authentication will become the norm. Currencies of meaning New trusted currencies of exchange and meaning emerge to better facilitate transactions, trade, authentication and validation. Money is complemented by new systems to which we attach greater significance. Data ownership Individuals recognize the value of their digital shadows, privacy agents curate clients’ data sets while personal data stores give us transparent control of our information: We retain more ownership of our data and opt to share it. Full Cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. The increasing value of data As organisations try to retain as much information about their customers as possible, data becomes a currency with a value and a price. It therefore requires a marketplace where anything that is information is represented. Related insights
- 244. 244 2.5 million –prices altered by Amazon every day 20% – of prices of Amazon’s total inventory changed daily Dynamic pricing
- 245. 245 Dynamic pricing The algorithmsof Amazon and Uber cross over to affect more businesses, from energy use to parking. Real-time transparency allows better purchasing at the same time as margins and yields are automatically enhanced. In the past, prices of things, whether the cost of a loaf of bread, a litre of petrol or a train ticket, have changed on a regular but not constant basis. By contrast, in the world of trading stocks, commodities or currencies, prices and rates have always been in constant flux, moving up and down by the millisecond as buyers, sellers and increasingly automated trading platforms around the world vie for advantage. Now an increasing transfer of technology applications across different sectors enables consumers and providers alike to see and act on fast changing prices in many areas – be that taxi fares, sports tickets, electricity supply, hotel rooms or training shoes. For the consumer, greater transparency of pricing is allowing better purchasing; while for providers, margins and yields are being enhanced as automated algorithms optimize dynamic pricing by the second. Supported by an overlay of predictive data analytics, flexible business models and more data, better matching supply-and-demand and improving yield is becoming possible in a host of new areas. While profit maximization is a primary driver for many businesses, this has the capability to help improve resource utilization, reduce waste and optimize system efficiencies. Five years ago, one of the big areas for future application of dynamic pricing was seen to be in the provision and consumption of utilities. The advent of smart meters would not only allow households to have more accurate views of their consumption, but prices could be changed in real time to better balance demand against supply. Consequently, it was argued, demand could be smoothed away from high and low peaks and so better fit with energy generation and water supply. In some markets, this has now started to happen. In others the connected infrastructure that enables it is still being rolled out. Today, perhaps the area where most of us have experienced dynamic pricing most directly has been in booking air-tickets. Using Expedia, we see a host of different fares and choose the one we want, only to find that the cost has changed when we return to the site a few minutes later. On their own websites, airlines, and especially low-cost flyers, track the IP address you are using and use that to nudge prices at the key moment in the booking process. The same principles are true in the hotel sector, although less obvious. Less well known, but more widespread, is the way that companies like Amazon have embraced dynamic pricing. Not only does the company alter its prices more than 2.5 million times a day but it also changes the price of around 20% of its total inventory every day. Wal-Mart can, by comparison, currently only change the price of 50,000 products per month. As well as, allegedly, showing higher prices to Mac users than PC users, Amazon monitors customers’ behaviours to determine the best time to raise or lower prices to get the sale, and amend prices by what else is already in a customer’s basket. The area where most of us have experienced dynamic pricing most directly has been in booking air-tickets.
- 246. 246 Currently only afew companies have the ability to combine data collection and analytics in such a way, but others, so-called pure-play analytics companies, are providing the capabilities across the board with the aim of benefiting both consumers and suppliers. One such example is Qcue that focuses on providing analytics for pricing of sports events; ticket prices may be adjusted on a real-time basis, either upwards or downwards, based on market demand. Rather than having a set price, tickets for less popular games drop in response to demand while those for others rise, allowing the business to fill their stadium to capacity. Transit systems across the world are increasingly connected and will be soon able to use variable pricing via apps to nudge users onto, for example, the next train to decrease congestion. In several cities, smart parking is being rolled out. Following successful pilots in San Francisco, parking rates are altered in real-time with the objective of keeping parking spots 60 to 80% full. Rates are adjusted by time and location with the aim of offering the lowest possible hourly rates but high enough to make sure that there is always a free space. However, in the transport area, it is Uber that has, somewhat controversially, been one of the major adopters of dynamic pricing. Uber is, at one level, just another Internet marketplace where prices vary against demand – just as on Airbnb and Google’s Adwords platform. Changing the price of a fare to be more competitive than the competition is evidently a core part of the value proposition. The more contentious area is in the use of surge pricing. At peak times, when there are more potential passengers than available Uber cars, the company’s algorithms change prices to better match supply and demand. Prices go up so that more of the freelance drivers are incentivised to be on the roads and available for passengers. The balance is in having the prices high enough to attract the drivers without alienating customers; the real- time analytics that sit behind the system are key to maintaining this. Economists term this ‘responsiveness to price elasticity’ but Uber is pushing the dial of what behaviour changes can be orchestrated. When Uber Changing business Parking rates are altered in real-time with the objective of keeping parking spots 60 to 80% full.
- 247. 247 first tested dynamicpricing in Boston in 2012, it was able to increase on the road supply of drivers by 70 to 80%. Clearly there is a push back from some customers as well as from competitors who have fixed rates, but for most users, paying extra at peak times for a guaranteed car is part of the trade-off. Moving forward, many expect that more organisations keen to optimize their business models and revenue models will further embrace dynamic pricing. for some it is clearly about profit maximization, but for others it is just as much about resource utilization. While the airlines and retailers will seek to make an extra penny wherever they can, the advent of smart grids in the energy sector provide an opportunity for more socially beneficial applications. The past few years have seen dynamic pricing technologies evolve and be tested by suppliers keen to maximize profits, but smart meters connected to distributed renewable energy systems will be where the greater overall impact is made. Dynamic pricing Uber is pushing the dial of what behaviour changes can be orchestrated. Currencies of meaning New trusted currencies of exchange and meaning emerge to better facilitate transactions, trade, authentication and validation. Money is complemented by new systems to which we attach greater significance. Data ownership Individuals recognize the value of their digital shadows, privacy agents curate clients’ data sets while personal data stores give us transparent control of our information: We retain more ownership of our data and opt to share it. Full Cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. The increasing value of data As organisations try to retain as much information about their customers as possible, data becomes a currency with a value and a price. It therefore requires a marketplace where anything that is information is represented. Related insights
- 248. 248 $4.7 trillion –cost of top 100 environmental impacts to the global economy $15 – the true cost of 1 litre of water in areas of extreme scarcity Full cost
- 249. 249 Full cost Increasing transparencyof society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. In many of today’s commercial activities with historical accounting practices, decisions are often taken on the basis of measurement of a narrow view of profitability and performance. Transparency provided by technology and a growing understanding of supply chain impacts and dependencies are leading to a re-evaluation of value and accounting practices that aim to include ‘whole value chain’ costs and benefits – taking into account costs and benefits to people, planet and profit. Businesses have benefitted from reflecting only a partial view of the impact of their actions, and need to move towards a system that measures business success by their broadest contribution to society and their creation of ‘shared value’. Instead of simply providing value for shareholders, and ignoring any negative impacts on stakeholders such as exploitation of workers, and degradation of societal wellbeing or the environment, shared value will be created for and shared by customers, employees, shareholders and wider society. This move towards a ‘Net Positive’ position will necessitate business understanding and accounting for the full costs of negative impacts, as well as the positive benefits, often termed ‘externalities’, brought to those (in addition to the traditional customers and shareholders) such as staff and supply chain communities and wider society. A positive externality may arise from such things as inventions that are then widely used or investments in infrastructure such as a road that creates opportunities for housing, shops, tourism. Negative externalities occurs in communities when a factory is closed down but are more often associated with the environment in relation to free goods, produced or provided by nature and available to everybody, such as air, rivers, lakes and ecosystems. This can be thought of as a ‘liquidation of natural capital’ where nature is degraded to be turned into goods and services for human benefit – man-made capital. In an attempt to account for these hidden costs of business on the environment and wider society, Trucost have estimated that the world’s top 100 environmental impacts cost the global economy around $4.7 trillion per year. Of these 100 externalities, the majority of un-priced natural capital costs are related to free usage of ecosystem services and natural resources such as the greenhouse gas emissions to the atmosphere (38%), water use (25%), land use (24%), and air land and water pollution (12%). In some industries, the damage actually outstrips the value of products created. We will see the rise of accounting methods and practices that aim to recognise these externalities and bring transparency to business operations. The Natural Capital Protocol, being developed by the Natural Capital Coalition, and the Sustainable Development Goals agreed by the UN at the end of 2015 are being adopted by businesses as a framework for what ‘good’ looks like. Triple Bottom Line accounting, including financial, environmental and social, is being developed into Integrated This move towards a ‘Net Positive’ position will necessitate business understanding and accounting for the full costs of negative impacts.
- 250. 250 Reporting by theIIRC (a global coalition of business, investors, and regulators); global businesses such as Puma have calculated their environmentally extended P&L accounts to support their decision-making. As accounting methods shed light on these hidden costs it becomes more apparent that they are paid for by wider society while the profit from the use of these free services is largely enjoyed by private individuals or companies. The issue of balancing private and public good and who pays the cost has been with us for a long time and the debate will escalate in the next decade. Similarly energy producers and users benefit considerably from the ‘free’ carbon sink services provided by the atmosphere, while the cost of disruption from the build-up of carbon in the atmosphere is borne by global society. Several efforts have been made by governments to assess the ‘social cost of carbon’ to illustrate the true costs of producing and using fossil energy. Some argue that this higher price of carbon (estimates range from $37 to $220 per tonne) should be taken into account in any carbon trading schemes although as yet there are no mandated schemes which use these alternative figures. The use of water is also subject to externalities - direct users benefitting at the expense of wider society or the environment - while rigid pricing structures often exacerbate the problem. Variability in water availability is highly localized and it would be expected that pricing would reflect its availability. Variability might be geographical (water stressed areas versus water abundant areas) or seasonal (between dry times of years and wet). This is often not the case however and price may be more influenced by cultural and political issues rather than availability. For example, contrast Singapore and the UAE. Although not lacking in rainfall, Singapore has been dependent on importing water from its neighbour Malaysia – who fixes the price. With water harvesting, low-cost desalination and grey water reuse, water in Singapore costs around $1 per cubic meter. By contrast, in the UAE - where most water comes from desalination plants - for some customers water costs nearly $3 per cubic meter while for Emirati nationals, just like energy, it is free. Dubai gives quite different messages to its populations. Changing business The issue of balancing private and public good and who pays the cost has been with us for a long time and the debate will escalate in the next decade.
- 251. 251 Trucost sees that“Based on current production locations, if water were to be priced according to its availability, 27% of profits would be at risk across the world’s largest companies” and that environmental and social costs of global business water use now add up to around $1.9 trillion per year. It estimates the true cost of one cubic meter of water ranges between $0.10 where it is plentiful and $15 in areas of extreme scarcity. In addition, wider social costs of depleting a water source through over use are often not included in pricing of water. The development of tourism infrastructure such as hotels and golf courses in water stressed areas mean that local communities have reduced access to water for their everyday activities – another case of privatizing profits while socializing losses. There is an inevitable link between this and the inequality issue exacerbating the situation where 1% of the global population owns nearly 50% of the wealth and the least well-off 80% only own 5.5%, with the potential for the poor to be priced out of access to those public goods intrinsic to progress. With water harvesting, low-cost desalination and grey water reuse, water in Singapore costs around $1 per cubic meter. Full cost Dynamic pricing The algorithms of Amazon and Uber cross over to affect more businesses, from energy use to parking. Real-time transparency allows better purchasing at the same time as margins and yields are automatically enhanced. Food Waste 30-50% of our food is wasted either in the supply chain or in consumption and could feed another 3 billion. Optimising distribution and storage in developing countries and enabling better consumer information in others could solve this. Plastic oceans There are increasing high levels of man-made pollution in many of the world’s seas and little actually disappears. By 2050 there will be more plastic than fish in the oceans. Still being stupid Despite a better understanding of the long-term challenges we face, we individually and collectively continue to make decisions that may make sense in the short-term - but do not lead to better longer-term consequences. Related insights
- 252. 252 50% – shareof last mile delivery in typical cost of distribution 15% – percentage of sales that fulfilment costs Amazon Optimising last mile
- 253. 253 Optimising the lastmile Seamless, integrated and shared last-mile delivery replaces inefficient competition and duplication of goods distribution. Greater efficiency in moving things is as important as in moving people and so a major focus for innovation. In the complex world of logistics, vast improvements have already been made in the efficiency of moving goods around the world. The speed at which packages are sorted, loaded and transported has increased substantially over recent years. The main efficiency challenge is in the last mile – from distribution centre to final destination, be that a home, an office, a car or an individual. This, costing typically up to 50% of distribution, is the most difficult and expensive leg of a package’s journey. Proposed solutions lie mostly in drones or autonomous delivery vehicles. Amazon Prime Air videos are already showing how a 30-minute drone delivery system might work, and the company has filed patents for several advanced vehicle systems. But other, equally nimble players are also making bets on future options, Uber, for instance. With its rapidly extending infrastructure and heavy investment in algorithms to help route deliveries, be that people or things, Uber is the only newcomer who can match up to the size and scale of incumbents such as UPS, FedEx and their counterparts. UPS delivers 35m parcels a day and is investing heavily in new technologies to make these deliveries cleaner and more efficient. Meanwhile, shared capacity models have been tried out as other organisations have collaborated in Uber-esque networked business models that also seek to bring down driver and vehicle costs per delivery. Amazon’s Flex programme in the US is one of the more recent of these, allowing independent drivers to make between $18 and $25 an hour delivering packages. A core aim, no matter what system is deployed, is to deliver goods the same day that they are purchased. Whether through using its own fleet of trucks, rather than delivery firms like UPS and FedEx, or even drones, the ability to offer timed delivery 24/7 is seen as a major drive for customers – at a low cost. Fulfilment costs currently account for 15% of sales for Amazon and so reducing these whilst improving service is a fine balance. But it is not only Amazon looking to make an impact; Alibaba and Google are also in the mix. Google’s ‘Project Wing’ is aiming to have a commercial drone business up and running by 2017. Whilst gaining approval from the FAA, CAA and other regulators is currently in negotiation, many see these and similar activities starting to have significant impact by 2020. Back on the ground, interest lies in the adoption of autonomous vehicles. Warehouses and fulfilment centres for years have been using autonomous vehicles, moving products and packages around as directed. While in the past they have largely followed pre-determined routes (so requiring a fixed infrastructure), the next generation of vehicles uses 3D vision guidance systems. These vehicles not only transport goods, and can load and unload packages quickly and safely, they also automatically join together to transport large products - and whenever an obstacle is encountered instinctively re-plan routes. Shared capacity models have been tried out.
- 254. 254 What many findinteresting is how this technology can migrate from inside buildings to the outside, and start to change how goods are moved around cities. If multiple white vans can be replaced by a swarm of autonomous electric delivery vehicles then the efficiency improvements can be significant. Although they will be slow moving for safety reasons, supporters argue that they can navigate through urban districts, choose routes that avoid causing congestion, and deliver goods when and where required. This will work not just for deliveries to end consumer but also in the B2B environment. Offices, restaurants, retailers and even manufacturers, it is argued, can gain from the network efficiencies that will be realized. Evidently the elimination of the need for drivers has social and economic implications, but within the logistics arena would lead to significant cost savings. Although there are a number of regulatory hurdles to be overcome, supporters, including many in the logistics sector, see that the technology is fast- becoming scalable; the business case is compelling and the environmental benefits attractive. At one extreme these vehicles can be so small that effectively they are only slightly larger than the parcels themselves and we end up with a fully automated system with self-driving parcels. One such example is the Starship project from the founders of Skype. This is a self-driving robot that can hold up to 10kg of goods and travels along pavements at a sedate 4mph so as not to disrupt pedestrians. Changing business The business case is compelling and the environmental benefits attractive.
- 255. 255 Another option beingexplored is to make self-driving passenger vehicles also carry packages. As we move into a world of driverless taxis and autonomous cars, many see an opportunity to use them for moving goods around whenever they are not moving people. So, rather than sitting stationary in a car park or on the street, when not required by human customers they can be seen as a shared resources and provide a crowd-sourced fulfilment of first mile and last mile delivery. Another level up in complexity, but one even more attractive in terms of overall system efficiency, is to coordinate the simultaneous movement of people and goods. If someone is using a taxi to take them home, then the same vehicle can deliver a package to a neighbour. Coordinating putting the right package into the right vehicle in this scenario is no easy task but Volvo for one has already developed its On Call app to give access to shared vehicles and not just driverless ones. By overlaying package distribution with known customer journey plans and routes, Volvo sees that delivery companies will pay for access to cargo space, put the packages in the car and the customer would use a digital key to open the car and collect their parcel when it has arrived at its destination. Audi have already taken a different but related approach. Trials in Munich have allowed Audi owners to use their car as a shipping address for online orders. Using the Audi in-car communications system, delivery drivers track the location of the vehicle and use a one-off digital access code to unlock the boot and deliver a package. The trails to date have been in partnership with Amazon and DHL but the principle can clearly extend. Whether in Mumbai, Shanghai, Dubai or New York, the potential is evidently one attracting much attention. Optimising the last mile Volvo for one has already developed its On Call app to give access to shared vehicles. Full Cost Increasing transparency of society’s reliance on nature, intensify requirements for business to pay the true cost of the resources provided by ‘natural capital’ and so compensate for their negative impact on society. Open supply webs The shift from centralised production to decentralised manufacturing drives many to take a ‘smaller and distributed’ approach: Global supply chains are replaced by more regional, consumer- orientated supply webs and networks. Key resource constraints Economic, physical and political shortages of key resources increase and drive increasing tension between and within countries. As we exceed the Earth’s natural thresholds, food and water receive as much focus as oil and gas. The real sharing economy Increasing collaboration drives organisations to reconfigure based on social networks and impact. Real sharing enterprises, not driven by profits, seek to share resources, knowledge, and decision-making responsibilities. Related insights
- 256. 256 34% – ofAmerica’s workforce is already working freelance 50% – of America’s workforce expected to be freelance by 2025 Organisation 3.0
- 257. 257 While there aremany different types of organisation, spanning both for-profit and not-for-profit, virtually all are defined by five common features: they are composed of individuals and groups of individuals; they are oriented towards achieving collective goals; they consist of different functions; the functions need to be coordinated; they exist independently of individual members who may come and go. Organisations exist because groups of people working together can achieve more, because of efficiency and effectiveness gains, but also because of a reduction in transaction costs. In the second half of the twentieth century, the dominant organization structure, from governments to corporations, was one bureaucratic hierarchical command and control, based on a strict hierarchy of authority. In recent decades, fuelled by changing worker attitudes – not easily motivated by commands nor wanting to be controlled - and enabled by technology, alternative organization structures have arisen. There has been a trend towards de-layering or flattening the organization, by the removal of mid- management levels. At the same time, management has sought to devolve authority, decision-making and action through empowerment. Common benefits cited include cost reduction, improved worker attraction, motivation and performance and faster communication. More recently network-centric organisations have developed as a response to the emergence of the “knowledge economy” which has moved the focus from production to innovation and created a world in which command and control techniques are viewed as counterproductive to creativity. With a network- centric configuration, knowledge workers are able to create and leverage information to increase competitive advantage through the collaboration of small and agile self-directed teams. For this, the organizational culture needs to change from one solely determined by a single form of organizing (e.g., hierarchy) to an adaptive hybrid enabling multiple forms of organizing within the same organization, often based on social networks. Heterarchy permits the legitimate valuation of multiple skills, types of knowledge or working styles without privileging one over the other. Network organisations are generally viewed as more nimble and more adaptive to changing market conditions, but less well suited to situations in which a high degree of discipline is required or when decision making authority must be clear and fast (e.g. the military in a conflict situation). More extreme, and consequently more rare, are holocracys – radical self-governing systems in which authority and decision-making are distributed throughout a holarchy of self-organizing teams rather than being vested in a management hierarchy. Holacracy is claimed to increase agility, efficiency, transparency, innovation and accountability within an organization. The most well known example is Zappos. Zappos CEO Tony Hsieh says, “Holacracy makes individuals more responsible for their own Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. What is needed in today’s workplace is collaborative or distributed leadership.
- 258. 258 thoughts and actions.”The company is now at the forefront of developing re-usable holocracy apps for specific processes (e.g. hiring, remuneration). Hsieh says “Hopefully, there are other companies out there that can borrow or modify our apps and then over time, there can be a whole ecosystem of companies that are thinking about, ‘How can we move beyond the traditional command and control type of structure?” Critical to the new breed of networked organisations is a changing role for leaders. “In a connected age we need to instil passion and purpose around a shared mission. The networking, if encouraged and not inhibited, will take care of itself.” Deborah Anconda, Professor of Management and Organisational studies at MIT, suggests that what is needed in today’s workplace is collaborative or distributed leadership. Leaders must increase transparency, teach people to think with a strategic mind-set and ensure lots of ‘connectors’ are in place. At the same time as organisations and the role of leadersischanging,sotooisthenatureofemployment and the employer. Since the millennium, there has been sustained growth in freelancers through organisations including Uber, Lyft, Task Rabbit and Elance. According to a study by Edelman Berland, 34% of America’s workforce is already working freelance, with forecasts suggesting that number will rise to over 40% of the workforce by 2020 and over 50% by the mid-2020s. So organisations and managers in the future will need to better understand how to recruit, manage and reward workers who are not defined by the traditional employee model. The same will also be true of governments. For those that do remain employed, the millennial generation is shaking up workplace rules. Typically, they aren’t motivated by the same factors as previous generations, such as a job for life, but instead value a good work-life balance and a sense of purpose beyond financial success. In response, organisations seek to create relaxed office environments where staff feel as comfortable there as they do at home. As co-founder of Airbnb Nathan Blecharczyk, says “We’re constantly trying to remind our employees of what business we are in, in creating an environment where they can be totally comfortable and where they actually want to hang out after work”. They are also providing more opportunities for workers to take sabbaticals. As leadership coach Barbara Pagano explains “Time is the new currency [of work] … people don’t want to work for 40 years—and then retire … They don’t want to wait that long to pursue their goals ...”. Adjacent to this, and as the world becomes smaller and a generation of global itinerant networked workers comes of age, more executives are consciously seeking to blend business and leisure, “bleisure”, choosing to work away, to take longer breaks or even job share and job switch. Changing business The millennial generation is shaking up workplace rules.
- 259. 259 Further, with thecollaborative economy growing quickly and with more “workers” becoming producer participants there is a blurring between the very definition of worker, producer and consumer – and even the notion of an organisation’s workplace. Shared, collaborative and co-working spaces have emerged as very real alternatives to organisation specific spaces, which dominated the 20th century. What is clear is that the emerging organisation feels very different from its 20th century counterpart. More networked, collaborative, flatter, human-focused, hyper-specialised, informal, localised, out-sourced, project-based, purpose-led and virtual. The shift in the role of the company from employer to facilitator will challenge many. The shift in the role of the company from employer to facilitator will challenge many. Organisation 3.0 Companies with purpose As trust in ‘business’ declines, structures and practices of large corporations are under scrutiny. Businesses come under greater pressure to improve performance on environmental, social and governance issues. Privacy regulation The push towards global standards, protocols and greater transparency is a focus for many nations driving proactive regulation, but others choose to opt-out of international agreements and go their own way. Speed to scale Greater global connectivity, growing consumer wealth and broader reach all combine to accelerate the time to 1bn customers and a $10bn valuation for start-ups and new corporate ventures alike. The real sharing economy Increasing collaboration drives organisations to reconfigure based on social networks and impact. Real sharing enterprises, not driven by profits, seek to share resources, knowledge, and decision-making responsibilities. Related insights
- 260. 260 173,000 – unfilledjobs in Germany requiring maths and computer skills in 2015 440 – McKinsey alumni running businesses with annual revenues of at least $1 billion Skills concentrations
- 261. 261 Skills concentrations The needto build and develop capabilities becomes increasingly challenging for companies and workers alike. Those who benefit from the high-skill reward opportunities remain a select group who move ahead of the urban pack. Across the world it is difficult for companies to recruit the right people for the right jobs – while many professionals find themselves either with the right skills in the wrong place or with the wrong skills to cope in an increasingly technical and interconnected world. This mismatch of skills and requirements has a knock-on impact on economies globally. The next decade will see governments, corporations and individuals becoming increasingly focussed on getting the right people with the right skills in the right place to ensure growth. In every Future Agenda discussion on this issue there was agreement: education and training is falling behind corporate need, so unless action is taken, the gap between skills required and workers available will continue to grow. For Western Europe, part of the problem is that the working population is declining and labour shortages across all sectors are becoming a pressing issue, forcing employers to select from shrinking talent pools. In Germany, an estimated 173,000 unfilled jobs (requiring maths and computer skills) is expected to quadruple by 2020. Sweden lists dozens of professions, from midwives to physicists, where the lack of skilled workers is acute. In the UK, the 2013 Employers Skills Survey reported that 15% of employers said that they faced skill gaps, equivalent to 1.4 million staff or 5% of the workforce. Countries like Argentina and South Africa also find it difficult both to recruit and then more particularly retain workers as the allure of foreign cities, such as London and New York, prove to be too tempting for home-grown highfliers to stay put. On a more positive note, India has benefitted from the international experience of its many graduates who left for California during the dotcom bubble and have since returned, upgrading the country’s talent-pool and global connections in the process. Efficiencies are being made across multiple sectors, and all sorts of jobs, from accountancy to engineering to nursing, are being transformed because of the existence of robotics and computer science. But it is still unclear whether ‘robots’ will mean the end of work for humans or whether they will simply augment human capability. We will still need scientists, engineers and nurses, which suggests it’s not so much that the requirement is changing, it’s just the skills required to do traditional jobs are changing fast. On top of this, the digital economy is hungry for highly skilled workers. This is particularly evident in Asia where e-commerce is mushrooming and early adoption is seen as a way to “leapfrog” inefficient legacy infrastructures. Alongside new skills, professional certification is also an issue as it often lags behind requirements. Its lack of effectiveness means that companies have to spend unnecessary time and money identifying suitable candidates. Web and mobile designers, for example; without certified standard skills, it is difficult for employers to know who to hire and whose experience is valuable, because the technology is changing so fast. Equally employees have limited India has benefitted from the international experience of its many graduates
- 262. 262 incentives to puttime and effort into learning on the job if they are uncertain about the future prospects of the particular version of technology their employer uses. Workers will more likely invest when standardized skills promise them a secure career path with reliably good wages in the future. In addition to this, as enterprises of the future respond to the increasingly networked corporate world where relations with suppliers, outsourcing partners and customers become more dispersed and nuanced, the ability to negotiate, encourage collaboration and manage cross-cultural relationships is increasingly important. The most valuable workers, those who are good at interacting with others, exchanging ideas and providing a service, have skills not taught at college and seldom communicated in the work place itself. Until this is addressed, technically literate, degree-educated candidates, who may well have ambitious salary expectations but fewer social skills, will struggle. For the top graduates, management consulting is one of the best training grounds for flexible learning, alongside investment banking or a job in one of the big law firms. Not only are these companies good learning centres, because they recruit similarly minded and talented individuals, they also open doors to other professions. McKinsey, for example, says more than 440 of its alumni now run businesses with annual revenues of at least $1 billion. Looking ahead, as the bright young things who eschewed this traditional route to success for a life in technology venture come of age, and the start-ups mature to join the likes of Google, Facebook and Amazon, it will be interesting to see how their very different and collaborative approach influences corporate life. Perhaps the strong grip the old guard has on corporate culture may wane. Changing business The skills required to do traditional jobs are changing fast.
- 263. 263 For lesser mortals,talent and qualifications can only take them so far. Experience matters – and most importantly international experience. Many professionals are keen to work abroad and there is general acknowledgement that a better understanding of different cultures has an impact on the bottom line. In the UK at least the ambition to travel is proving increasingly attractive to women. A recent report by the Centre for Economics and Business Research found that women between 25-34 years old are driving the greatest demand for international career opportunities – with over half (57%) currently considering taking up a more international role compared to just 29% of men. This drops off as women age. The report also uncovered that, despite the clear benefits to business, the demand for travel is often driven by employees rather than the companies they work for; 62% of employees say they speak about international opportunities but only 13% say this actually happens. As the next generation of senior managers take over there is every expectation that this anomaly will change. Of course employment is only the beginning. For some it is almost as difficult to stay in work and to maintain relevance as it is for those outside work to get a job. To address this it seems likely that over the next ten years greater emphasis will be put on specific qualifications, but such is the rate of change the normal skills lifecycle is shrinking. Employees will need to train, re-train and train again, just to stay in the game. Skills concentrations Over the next ten years greater emphasis will be put on specific qualifications. Citizen-centric cities Successful cities will be designed around the needs and desires of increasingly empowered and enabled citizens - who are expecting personalized services from the organisations that serve them Education revolution Broader access to improved education acts as a major catalyst for empowerment, sustained economic growth, overcoming inequality an reducing conflict. We need an education system fit for the digital revolution. Intra city collaboration Increasing competition between cities overrides national boundaries and drives change. They compete to attract the best but also collaborate to avoid the downside of success – over-crowding, under-resourcing and pollution. Sometimes nomads Elective migration, cheap travel, international knowledge sharing, and increasingly transient working models create connected nomads who mix the traditions of home with the values and customs of their host location. Related insights
- 264. 264 $50 million –valuation to headcount ratio of Snapchat in 2015 economy 25% – world population target for customers of Tata Group by 2025 Speed to scale
- 265. 265 Speed to scale Theachievement of reaching 500m users is no mean thing. Greater global connectivity, growing consumer wealth and broader reach all combine to accelerate the time to 1bn customers and a $10bn valuation for start-ups and new corporate ventures alike. Founded in 2004, Facebook reached 500m users within six years and had a billion by October 2012. This may be the new norm: we are in a world where we are all increasingly connected, where new ideas spread globally overnight and where there is a plentiful supply of capital available to support the best new business concepts. Looking ahead, as we move from 4.5bn to 7bn mobile phone users and reach 99% connectivity globally, many are expecting multiple new industry disruptions (first Napster and now Airbnb and Uber) to occur. Whether in banking, retail, logistics or transport, the ability to use data analytics and ubiquitous connectivity in different ways is driving a plethora of new business models; most based on achieving scale quickly. Reaching 100,000 customers within the first year is increasingly considered to be conservative. Why not 1m, 10m or even 100m? But is this realistic? How quickly are we speeding up and what levels of scale are credible? In the first decades of the 21st century we have seen that the iPod, launched in 2001, took 12 years to reach 500m; Gmail, launched in 2005, took 7; and Facebook and Twitter both took 6 years. Following the launch of the iPad in 2010 it took only 3 years for the tablet user base to reach 500m. For some this acceleration is down to the fact that the global Internet infrastructure is now largely in place and so one barrier to scale has been removed. However, others argue that with far greater competition and multiple new businesses being launched, the achievement of reaching 500m users is no mean thing. If it was simply down to connectivity, then by now surely Skype would have surpassed its 300m active user figure, Tumblr would be over its 420m and Linked-In would have exceeded its 400m current user base. Yes, there is the access issue, but there is also the all-important proposition and support. In terms of financial support, a common theme in the investor community is associated with the signals from so called ‘Unicorns’ – start ups whose value exceeds $1bn. Some are questioning whether we are in a second Internet bubble and so are seeing inflated valuations, but others suggest that the speed at which such valuations are being achieved is another indicator of how quickly scale is possible for the right proposition. Certainly the number of start-ups hitting the $1bn threshold is rising. In 2011/12 there were 17, including the likes of Square, Spotify, Dropbox, Evernote, Pintrest and Airbnb; in the following two years there were over 70. Looking beyond the unicorns to ‘decacorns’ - companies valued over $10 billion - we can again see strong evidence of acceleration. Elon Musk’s Space X was founded in 2002 and has taken 13 years to reach a $10bn valuation and similarly Palantir, the data analytics specialist, was founded in 2004 and took 11 years to reach the same point. Move forward a couple of years and both DropBox and FlipKart were founded in 2007 and went on to reach the $10bn threshold within 8 years. The following year saw the
- 266. 266 launch of Pintrestand Airbnb that hit $10bn valuation seven and six years later respectively. Launched in 2009, Uber got to the same point within 5 years and, more recently, Chinese electronic company Xiaomi rocketed ahead to become the worlds 4th largest smartphone manufacturer and hit a $10bn valuation within 3 years of its 2010 launch – an achievement only matched by Snapchat, launched in 2011. What makes this escalating speed to scale so significant for some is the physical size of the organisations seems to have been decoupled from their reach and value. We are in a world where there is no longer a link between size, most often seen as number of employees or other resources, and scale. Whereas Uber has nearly 200,000 contractor drivers in its ecosystem, it actually employs less than 4,000 people; Airbnb has only 1,600 employees. Corresponding valuation to headcount ratios have been spiralling. When you consider that a successful company like Nike has 44,000 employees and is worth over $110bn, then it has a ratio of $2.5m per employee. Microsoft by comparison comes in at just under $4m per employee. In the lead by this ratio today is SnapChat; with only 300 employees and a 2015 valuation of $15bn, it has a valuation to headcount ratio of $50m, double that of Facebook, Airbnb, Pintrest and Uber, 5 times the likes of Google, over 10 times Microsoft and 20 times that of Nike. In the past value was largely linked to a combination of brand and tangible assets such as resources and facilities. What has happened over the past few years, as the speed at which companies can scale has risen exponentially, is that the valuation of some companies has become increasingly linked to the intangibles. As such the ambitions for start-ups are growing; seeking to become a unicorn within 5 years is increasingly the norm. Changing business The physical size of the organisations seems to have been decoupled from their reach and value.
- 267. 267 Equally for establishedcompanies, creating new ventures at significant scale is no longer a decade long target. In Mumbai, a new business created by conglomerate Reliance Industries, Reliance Jio, a mobile and fixed telecom business, launched in December 2015 and was aiming to have 100m customers within 100 days. Based in the same city, Tata Group’s 2025 ambition is to be in the top 25 globally by market capitalisation and to reach 25% of the world’s population. Already India’s most valuable group and accounting for 8% of the Bombay Stock Exchange’s total market capitalization, that means doubling its value from today, so probably a ten-fold increase, and adding 1.1bn new customers within ten years. Looking ahead, one can see a world where many of the world’s most valuable companies maybe less than ten years old. The top 20 may have an average age of 20. By comparison, the top ten today is, on average, 75 years old. While this includes Google (17 years old), ICBC (31) Apple (39) and Microsoft (40) it is also has companies such as Wells Fargo, Johnson and Johnson, Exxon Mobil and Novartis, some of which go back up to 160 years. Whether making it to $100bn or just $1bn, what is clear is that we are in an era of faster scaling, where the case studies need rewriting every year and where traditional rules for company growth no longer apply. Speed to scale The valuation of some companies has become increasingly linked to the intangibles. Many of the world’s most valuable companies maybe less than ten years old. Autonomous transport The shift to fully autonomous transport is an evolution via truck platoons on highways and small urban delivery pods. Connected cars create the network and test the technologies for the eventual revolutionary driverless experience. Energy storage Storage, and particularly electricity storage, is the missing piece in the renewables jigsaw. If solved, it can enable truly distributed solar energy as well as accelerate the electrification of the transport industry. Everything connected Over 1 trillion sensors are connected to multiple networks: everything that can benefit from a connection has one. We deliver 10,000x more data 100x more effectively but are concerned about the security of the information that flows. Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. Related insights
- 268. 268 12 billion –annual investment in online exchange economy 9,192,654 – member of Freecycle.org The real sharing economy
- 269. 269 The real sharingeconomy Increasing collaboration drives organisations to reconfigure based on social networks and impact. Real sharing enterprises, not driven by profits, seek to share resources, knowledge, and decision- making responsibilities. Based on online marketplaces creating transparency of demand and matching it to supply, at a competitive price, the sharing economy already encompasses a wide range of models, the likes of Airbnb, Uber and TaskRabbit, most founded on a for-profit approach. Many of them have been established around the more open and transparent sharing of information that enables more peer-to-peer business models to be developed. While many of the current successes are labelled as being part of the sharing economy, a good number are using Internet platforms to run disruptive and profitable new businesses. Many see that going forward a more meaningful approach to sharing may emerge and so we will see a real sharing economy – one where people genuinely share skills, information and knowledge with each other in a way that creates additional value for everyone, and not just for some. Whether considering eBay - the original online marketplace, Lyft - the car sharing competitor to Uber, or TaskRabbit – that connects odd jobs to people in your neighbourhood, the majority work on the basis that the platform takes a cut of every transaction. Whether that is 5%, or 30% as with Uber, as more customers are attracted to these and similar marketplaces, the corresponding attraction for investors is that the companies both control and acquire the majority of the value. Although often creating a more efficient system than the incumbent, and so seen as being disruptive to the status quo, as can be seen by the valuations now attached to these companies, many have proven to be far more profitable than original service providers – largely because the new models mean that the marketplaces don’t need to support any of the assets. They simply match supply to demand as and when needed but don’t own or therefore pay for the resources when they are not being used. Little surprise therefore at the resistance seen by taxi drivers around the world to Uber and its like. There may be limitations to how this approach goes forward, especially in terms of the premise of sharing both assets and value. As airbnb entrepreneurs are seen to be accelerating the prices of homes in San Francisco and elsewhere, the sharing platforms are themselves distorting communities. They are less about sharing and more about access. What began as a peer-to-peer idealistic and egalitarian movement has, in some eyes, become a commodifier of other people’s resources. The platforms are extracting most of the value created by their users and seeking to create, often unregulated, monopolies with little if any competitors of scale. Government regulators in some cities are also starting to raise concerns about how some of the recent start-ups are going against the public interest - Airbnb is being challenged in Singapore. What began as a peer-to-peer idealistic and egalitarian movement has, in some eyes, become a commodifier of other people’s resources.
- 270. 270 Many, such asthe New Economics Foundation, are seeking a real sharing economy where information, power and profits are more genuinely shared. There are several existing not for profit examples of what good sharing is like; the challenge is how to make them and others more influential. Localised sharing platforms such as freecycle allow people to recycle products without payment; apps are enabling excess food to be made freely available to the homeless; couch-surfing freely matches people to spare sofas but without the airbnb intermediary overhead; and tool library networks are enabling pools of farmers to share access to specialized machinery and equipment that are too expensive for individuals to acquire. These are popular and growing, but currently tiny compared to the for-profit platforms. As resources become more constrained and waste is seen as a resource, some argue that more cooperative platforms will help to give access to goods to those who can’t afford them, accelerate more sustainable consumptions, especially in cities, reduce environmental impacts of society and maybe even help build stronger communities. What some initially termed as the gift economy has been taken over by market capitalism. Going forward many hope that this can be reversed. With the evolution of the smart grid allowing consumers of energy to also be producers, many see that this infrastructural shift could drive a change in the systemic view of sharing – one that may, in the end, lead to improving quality of life through greater social interactions, fairer wealth distribution, and stronger community relationships. Local time-banking projects, such as those run via Echo in the UK, are seen to be a more equable and overall effective approach to TaskRabbit; OuiShare has expanded from France across Europe, the Middle East and Latin America as it creates a global network of collaborators; and organisations such as the European Sharing Economy Coalition are seeking to create policies to support wider adoption of the real sharing economy. Changing business There are several existing not for profit examples of what good sharing is like.
- 271. 271 Rather than focusingon supporting the ‘gig’ economy where the low-paid self-employed compete to provide a service as cheaply as possible, more are seeking to use sharing as a means for better wealth redistribution. Instead of creating enterprises that let well-off people pay less well-off people to do their chores - without providing anyone the benefits and security of traditional employment – many are looking at more cooperative collaborative platforms that share as a means to both improve efficiency and collectively create a good or service and then share the results equitably. As an alternative to creating the market pull to put an extra 10,000 cars onto the London streets for Uber, others are looking at how existing cars can be better used 24/7 and not left in car parks and so simultaneously provide more land for much-needed housing. The question therefore is how far will we get to this more egalitarian view of sharing by 2025? The momentum behind the likes of Uber, Airbnb and their peers is evidently significant – both in terms of financial support and customer pull. Globally, the advantage of for-profit online marketplaces over the legacy systems is clear. The challenge is whether the not-for-profit alternatives can draw in wider support and hence scale. The real sharing economy More are seeking to use sharing as a means for better wealth redistribution. Companies with purpose As trust in ‘business’ declines, structures and practices of large corporations are under scrutiny. Businesses come under greater pressure to improve performance on environmental, social and governance issues. Currencies of meaning New trusted currencies of exchange and meaning emerge to better facilitate transactions, trade, authentication and validation. Money is complemented by new systems to which we attach greater significance. Organisation 3.0 New forms of flatter, project-based, collaborative, virtual, informal organisations dominate - enabled by technology and a global mobile workforce. As such the nature of work and the role of the organisation blurs. The increasing value of data As organisations try to retain as much information about their customers as possible, data becomes a currency with a value and a price. It therefore requires a marketplace where anything that is information is represented. Related insights
- 272.
- 273. 273 Conclusion As in 2010,the rationale behind the second Future Agenda project was twofold: open foresight and to stimulate innovation. We all need to be more informed about the big issues and challenges we face, so a primary focus has been to get better impression of what the world will look like in 2025. To do this we have combined different perspectives and cut across different sectors to create a richer, deeper picture of the future. This has allowed us to have a clearer view of the probable versus the possible and make connections between different events that may occur in order to help us to make more informed decisions. While this has been the central theme of the programme to date, it was always intended that the insights that make up the majority of this book should act as stepping-stones to additional activity. We want to encourage people to think about the ‘so what?’ in order to help companies, governments and individuals build strategies to prepare for the future. This is why we decided to make the information we collated as widely available as possible so that everyone could have immediate access and use it to stimulate their thinking. One notion that we all seem to agree on is that ‘business as usual’ isn’t an option and therefore something has to change. In addition, it seems clear that the choices we make in the next few years will greatly define not just the world in 2025 but also the shape of the world that our grandchildren will inherit. This is why we believe that, when thinking about the future, it is important to be open to different approaches and consider the opportunities presented by different industries and seemingly unrelated initiatives. After all, real innovation often occurs at the intersection of disciplines and the crossover between sectors as technologies and business models jump from one area to another. It is also worth considering the possibility that change could emerge from unlikely places, stimulated by unexpected events rather than being driven from a top-down global initiative. Policymakers, businesses and key influencers can often take advantage of this and have a significant role in amplifying and accelerating the pace and scope of change by investing in supporting infrastructure, encouraging the ‘right’ habits and choices through education, information and incentives, developing reinforcement policies and bringing to market new products and services. Throughout all our discussions, there was general agreement that if we are to deal with some of the major challenges that evidently face us over the next decade we need to innovate across the board. We need new policies and regulations to both accommodate and moderate some of the events that we can now see on the horizon, and we also need to create new products, services and business models that will both create value as well as change the rules of the game so that, as an increasingly global society, we can make tangible, sustainable and positive progress.
- 274. 274 Seeing the biggerpicture If progress is to be made from innovation at a higher, broaderlevel,thenitisnecessarytotakeaviewbeyond the usual horizons. This is not just about seeing further into the future in your own sector but also means better understanding forthcoming developments in other, adjacent areas and recognizing how they could have an impact on your future. Previous initiatives have demonstrated that before you can start to take decisions on your potential future focus, you first need to gain a clear overview, which should be a combination of what you know from within your industry and what you can learn from outside your industry that could potentially have implications for you. Matching the ‘inside-out’ and the ‘outside-in’ views enables organisations to identify a host of innovation opportunities beyond an internal extrapolation of today. This is an approach that was initiated by Shell and has been widely adopted by others, ranging from P&G and Mars in the private sector to government bodies from Dubai to Singapore in the public arena. Understanding the bigger global picture ahead of making decisions on the ‘so what?’ has helped them all see emerging opportunities ahead of their peers. Challenging existing views For many organisations, making use of credible foresight to validate existing thinking is top of the agenda. Many a company and many a government have strong views built up from years of experience and these often form the basis of their core strategic assumptions. As most organisations seek to have differentiated and robust growth strategies for the future, we hope the Future Agenda insights will be used to challenge and then support their existing perspectives. Governments will, for example, have validated perspectives and policies that they may already have in place around issues as varied as food and energy security, migration, privacy and healthcare costs. Equally companies may have been able to verify existing views on the demographic shifts around an ageing and an increasingly urban population; the challenges of operating in a networked world where capabilities are temporary; the opportunities available in better managing increasingly scarce resources; or the potential that lies in rethinking and reinventing business models. While this is very useful in areas such as economic planning and government research funding prioritisation, other organisations also see value in using new insights to challenge and change their existing views. As well as picking the elements that map onto the ‘organisational mindset’, some will use the Future Agenda insights to see how they could change the status quo and undermine the assumptions that have been made in the past. Rather than using new insights to prop up current views, having them challenge these perspectives and see how a challenger brand or nation could usurp the current leadership is a great way to spot the issues that may need attention. Accommodating wild cards Within this context, it is often easy to focus only on the high-impact, high-probability futures. While these are clearly important, focusing solely on these can be problematic. High-impact, low-probability events can also be the source of major change and, if they occur, can significantly undermine a government’s or company’s growth strategies. To address this, some companies complement what they know and believe with consideration of ‘what if?’ scenarios. As Nassim Nicholas Taleb describes in his book The Black Swan, this is a way of understanding the possible effects of high-impact low-probability events. Recent cases would include, for example, the Trump Republican nomination race. In the main, these events are ignored by governments and companies alike because the minute likelihood of their occurrence – perhaps a one in a million chance – makes them almost impossible to plan for. They are therefore not automatically resourced but when they do happen, their impact is significant. Wesuggestthatpragmaticorganisationsneedtofocus just as much on the possibilities as on the probabilities as they plan for the future. By gaining a view of what might potentially have an impact on their plans and
- 275. 275 Conclusion what the implicationscould be, they can then decide where to make the necessary investments. For some organisations, the answer is to direct the majority of attention towards scoping and delivering the big deals for the future but, at the same time, ensure there is a dedicated team in place to look at the potential wild cards. By setting up an ‘early warning system’ that tracks identified high-impact/low-probability events, organisations, be they government or corporate, can then have a richer picture of the opportunities and threats ahead of them. Building scenarios As Peter Schwartz outlined a few years back, ‘Scenario planning is a methodology designed to help guide groups and individuals through exactly this creative process. The process begins by identifying potential forces of change, then combines them in different ways to create a set of diverse stories — or scenarios — about how the future could evolve. Scenarios are designed to stretch our thinking about both the opportunities and obstacles that the future might hold. They explore the dynamics that might alter, inhibit, or enhance current trends, often in surprising ways. Together, a set of scenarios captures a range of future possibilities, good and bad, expected and surprising — but always plausible. Importantly, scenarios are not predictions. Rather, they are thoughtful hypotheses that allow us to imagine, and then to rehearse, different strategies for how to be more prepared for the future — or, more ambitiously, how to help shape better futures ourselves.’ Creating such views of the future as clear stories has been part of the strategic process in companies and countries for a number of years. Looking ahead, as the global interconnection between events grows and the speed at which change occurs accelerates, we can already see many more organisations adopting this process. However, in doing so, there is a risk that some will use scenarios simply to explain the development of their market or region within the known/known boundaries. We think this is a mistake and has led to identikit growth scenarios in numerous corporations where a technology-enabled future is believed to be inevitable, which means the only questions that are raised are around priority and speed of application. In the cosmetics sector, different organisations have similar views on the future impact of wellness and the cross-over with healthcare. In the world of food, many companies have scenarios around the impact of convenience and nutrition, but not so many also consider security-of-supply issues or the rethinking of waste. Accommodating the broader view is critical. Rather than keeping the scope close to the core, the leaders in scenario development look at the big picture beyond their specific area of interest and then filter out the implications for their own activities and interests afterwards. Identifying growth opportunities By using the insights from the Future Agenda programme that apply within and around an area of focus, and combining them with existing internal views of how the future may unfold, we hope organizations will be able to build different pictures of the future that can be used to stimulate new thinking. At a time when others may be more focused on the predictable, shorter term, having a strong, longer term perspective is essential. From government departments and intergovernmental institutions to multinationals, major organisations around the world are looking for the future view to drive innovation. Implicit within this is the need to explore key options and implications. The questions to ask include: What are the consequences to us if X happens? If we bet on alternative A, what are the chances that B, C and D could occur and with what impact? How can we use our capabilities to enable a wider change? These are all questions to ask. By beginning with informed and credible views from across different areas, the Future Agenda programme is designed to act as a catalyst to emphasize new issues at a level deeper than would otherwise be the case. Just as has already happened in a number of areas with organisations from the healthcare and media sectors through to transport and energy, we hope that the insights will be used to highlight a number of major new growth platforms.
- 276. 276 Questions Given the breadthof the insights gained by the Future Agenda programme and summarised in this book, you might have had numerous questions come to mind already. Some of the salient issues that deserve further consideration could include the impact of public debt in the West; the rise of the Asian consumer; concerns over security of supply of key materials and their associated prices; the need to shift to a low-carbon economy; the possible split of the developed world into a two-speed grouping; increasing security; societal shifts around privacy; the interconnectedness of global systems; fragmented organisational structures and new alliances; the impact of new technologies; advances in medicine; the role of the elderly in society; the shift from ownership to access; or the impact of growing unemployment in mega-cities. While each organisation and individual will have a different understanding of the specific impacts and implications of many of the issues discussed, it is clear from this project and many of the subsequent programmes already underway that there are some common questions that many participants are seeking to answer. Some of these can be seen at a government/regulatory level, others at more of a company/organisational level and still more at an individual/personal level. To help start additional conversations and stimulate some thoughts, in the following pages we have outlined ten questions for each of these levels that we hope will be useful. Ten questions for governments 1. Are we really focusing on the right big issues for the next decade? We know about climate change and the energy challenge, but are health, food and water as high as they should be on our agenda? Are we making inaccurate assumptions about citizens’ willingness to share data? 2. Do we share our understanding about the big challenges we all face in an effective way with the right people and organisations? How many of us are being straight with the public on the likely impact of a 4oC rise in temperature, the increasing cost of healthcare for the ageing and those with chronic disease, and how to pay for its all? 3. To what extent can we really use taxation and policy to change behaviour? Can we nudge people to adapt to a new world, eat less meat and use less energy or will we have to ban certain products and, if that doesn’t work, how effective will the tax lever be? 4. Which new areas of the economy should we be investing in for the future? Will our current local strengths be long-term global successes? Should we stop supporting legacy industry and shift to a new world and, if so, where can we have the greatest effect? Questions
- 277. 277 5. What newskills will we need to build or have access to in order to support higher growth? Does our population have the capabilities best suited to the challenges ahead? How quickly can we re-equip our workforces with the right skills? Should we review our migration policies to attract new and able workers? 6. Which regions of the world will we need to cooperate more effectively with? Will our current trading partners be the best ones in 2025? As the centre of power continues to shifts East, should we forge new bilateral agreements or is collaboration a better approach. Should we align according to geography or economics? 7. Which currency should we be saving and trading in? Do we have the right balance of foreign reserves? Are we too dependent on the US dollar? How prepared are we to trade in alternative and digital currencies and change our reserve mix? 8. What is the balance between providing education and providing pensions? Should we invest more in the next generation than we did the last? Can we rely on their income tax to pay for the rising cost of the elderly or should we put money aside to get us through? Should the state take care of everybody? 9. How well are we prepared to deal with inevitable surprises? Do we have the right bio-surveillance in place to protect our nation’s health? Are we over-dependent on the wrong sorts of food? How good is our data security and can we be self-sufficient in energy by 2025? 10. Will we tackle the big challenges in isolation or will we collaborate? How well aligned are we with other countries on the pivotal issues? Will we all agree on the right path and work in unison or are there areas where we will go our own way and, if so, where? Ten questions for organisations 1. How well do we recognise the big issues on the horizon? Are we really challenging ourselves to look beyond the status quo, to understand how changes outside our control will impinge on our sector and to plan for a different future? 2. How well do we understand the full implications of resource constraints? Will we face problems from water shortages? How will we cope with less energy? How will we secure access to the materials that are running out and what options do we have for change? 3. Where can we use our existing capabilities to create new sources of value? As the world changes, what new activities will come to the fore where our skills and experience can be more effectively deployed and how can we best take advantage of the opportunities? 4. To what extent do we expect to have influence over our human resources? If the world is getting smaller and flatter and the best talent is mobile, how can we attract the key people we need for the future to work with us, how can we stimulate them and how will they be rewarded? 5. What will we be required to report to stakeholders in 2025? Will water footprints and carbon footprints become compulsory? What about the multi-capital view? Will intangibles be more important than fixed assets and what levels of risk will be acceptable to the market? 6. Is our understanding of future areas of opportunity better than our peers? Are we paying enough attention to what we don’t know? Do we understand the future any better than others? How vulnerable are we to change from outside and how and where can we best understand this? Conclusion
- 278. 278 7. How wellequipped are we to respond to adjacent sector changes? If new technology developments or changes in customer relationships occur in other areas, how can we best take early advantage of these in our own space and do we know how they could threaten our current activities? 8. How well are we tracking the possible future risks and challenges? Aswellaslookingattheupsideforgrowthopportunities, are we paying enough attention to monitoring threats to both our core and potential new areas of activity? Can we create competitive advantage by spotting new opportunities earlier than others? 9. How will we manage our reputation in the future? Will we be able to communicate with stakeholders in 2025? Will we be in control of our brand or will consumers have more influence? Are we prepared to change the way we act? 10. Are we sufficiently influential in new regulatory change? Where will the new international standards emerge from and how can we be involved? Are we able to match our global and local operations to changing legal frameworks? Ten questions for individuals 1. How can I play a part in changing the status quo? How and where can I, as one person, make the greatest impact? What issue is most relevant to me? Who will I trust to give me accurate information? 2. How can I better live within the means of the planet? Will technology allow me to do everything I want or will I have to use fewer resources? What sacrifices might I need to make? Should I judge wealth in the same way as my parents? 3. Which of my daily choices will have greatest influence over the future? Should I walk to work or buy a bike? Should I learn to drive or not? Should I become a part-time vegetarian? Is living in the city the best option for me and should I have a smaller apartment? 4. Am I prepared to pay the full cost for things in the future? Will I pay $5 a gallon for fuel, €2 a litre for milk or £5 for a loaf of bread? Will I pay my carbon tax and fat tax on each purchase or against my monthly personal allowance? What am I willing to do without? 5. To what extent should I openly share information about myself? How will I make and maintain friendships in the future? Will my virtual networks be as important as the people I meet in the ‘real’ world? Will I only share my personal information with my closest friends but be prepared to give all my health data to the government? 6. Where in the world will I find the greatest opportunities? If I stay here, will there be enough for me to do or will I need to move? Do national boundaries matter? Should I consider moving to another country or continent or just be willing to travel further to work? 7. What professions will exist in 2025? What should I learn? How will I manage and plan for a changing career portfolio? Should I become a bio-informationist, a privacy broker, a reputation enhancer, or an urban farmer? Or am I actually better off as a teacher, a doctor or a lawyer? 8. How can I best plan for retirement? Can I afford to live to be 100? Shall I expect to work beyond 75? How will I keep myself healthy and active? What foods should I eat and where should I live? 9. How should I raise my children to prepare them for their future? What is the best way to educate them? Who should set the standards? How do I ensure they have the right expectations and values? 10. What will I believe in? How will I know what I should believe in? What and who will I trust? Should I consider the opportunities offered by religion? Questions
- 279. 279 Moving forward Our listof questions is not exhaustive and, of course, you may have different issues that resonate with your own future agenda. However, these, or a similar collection of questions, could provide the fuel for further debate. The Future Agenda project was designed to ‘unite some of the best minds from around the globe to address the greatest challenges of the next decade and, in doing so, stimulate discussion, map out the major issues, identify and discuss potential solutions, suggest the best ways forward and, as a consequence, create a platform for collective innovation at a higher level than has been previously been achieved.’ We offer the results presented in this book – and available via our website www.futureagenda.org – to organisations around the world so that they can build on the research we have carried out to date and identify potential areas of innovation. We will continue to keep the insights refreshed and, as we do this, we hope that they prove useful to you in provoking new thoughts and actions. The world is facing some major challenges over the next decade and beyond. Imbalanced population growth and key resource constraints are just two of the ones we are certain about. Add in global pandemics, urbanisation, more travel and less energy and the list is getting pretty full. We hope, however, that the insights we have presented around global connectivity, the rebalancing of the economic centre of gravity, medical innovations, changing business models, new technologies and our increasing ability to manage resources in a more sustainable way gives you not only food for thought but the confidence that we have the tools at our disposal to create a host of new innovations that will enable us all, in our different ways, to make significant and tangible improvements Conclusion
- 281. 281 The Future AgendaTeam Don Abraham Don is EVP with The Futures Company in New York where he leads Trends and Futures Consulting. James Alexander James is Chair of Community Ventures, a leader in community owned renewable energy investment, and a Trustee for GreenThing. Chris Carbone Chris has worked in trend and foresight consulting for over a decade in various capacities, and is currently Vice President with The Futures Company, working in the area of Trend and Futures Consulting. Nicky Chambers Nicky co-founded Best Foot Forward, a sustainability consultancy that pioneered development of carbon and ecological foot-printing. Charlie Curson Charlie is a Founding Partner of Sensemaking and of the Growth Agenda Network. Charlie is an experienced strategist, marketer and innovator with particular focus on developing radical new customer experiences. David Coates David helps organisations make the most of their technology, innovation and strategy activities.
- 282. 282 Shailaja D Sharma Shailajais a statistician with a background in development research and tremendous enthusiasm for insightful dialogue. Cornelia Daheim Cornelia Daheim is founder and head of Future Impacts Consulting. Roger Dennis Roger is a specialist in futures thinking and the link via strategy to innovation. Caroline Dewing Caroline led the first Future Agenda programme for Vodafone and is now a communications and strategy consultant. Ali Draycott Ali specialises in developing strategies to address customer, brand and business growth challenges. Rima Gupta Rima is a foresights practitioner and an experienced brand strategist. The Future Agenda Team
- 283. 283 Marlene Han Marlene isan award winning entrepreneur, experienced in brand and strategic communications and developing business solutions. Based in Singapore, and experienced in Asia, her current focus is Myanmar. Patrick Harris Patrick is an expert in digital, innovation and brands and runs thoughtengine helping organisations grow and learn. Frederik Hetsch Frederik is a Hong Kong-based researcher who previously focused on solutions for closing the energy supply gap on a global scale with an affordable, safe and clean technology. Katie Hodgson Katie is a business mentor and coach and a co- founder of Sensemaking, helping organisations make sense of the world so they do the right thing well. Stephen Johnston Stephen is co-founder of Aging2.0 and CEO of Fordcastle. Dr Tim Jones Tim is Programme Director of the Future Agenda global open foresight project.
- 284. 284 Dave McCormick Dave workedfor Shell for over 30 years leading strategy development, developing business scenarios, identifying emerging growth opportunities and supporting the organisation in making pivotal strategic decisions. Lisa McDowell Lisa is Customer Engagement Manager with Ogilvy & Mather in Cape Town helping organisations communicate more effectively. Emilene Parry Emilene is a Dubai-based researcher who has been involved in a diverse range of studies in the quantitative field. Dr Robin Pharoah Robin can be considered one of the early pioneers of the use of anthropological thought and ethnographic research for research and innovation in the UK. Alka Puri Alka is the Founder of Roads Ahead Consulting, an Innovation & Foresights company based in Mumbai. Bhupendra Sharma Bhupendra is the founder of nXtlyf future consulting and works in the field of Strategic Innovation and Generative Leadership, both with large corporations and startups. The Future Agenda Team
- 285. 285 Hamsini Shivakumar Hamsini isan experienced consumer insights researcher, semiotician and brand strategy consultant. Neal Stone Neal founded leapSTONE, which specialises in strategic design management and service design innovation – helping organisations unlock innovation using the power of effective design. Anupam Yog Anupam is passionate about placemaking, experience design and brands. Presently based in Singapore, he has advised and engaged a range of organizations across the public and private sectors in these areas.
- 287.
- 289. 289 The world ischanging very quickly and we recognise the need to keep track of its evolution. Future Agenda 3.0 will take place in 2020 and will endeavour to monitor the changes taking place following the same format as the Future Agenda 1.0 and 2.0. We welcome and are grateful for your support as hosts and participants. So if you would like to be involved please get in touch. Dr Tim Jones Programme Director Future Agenda tim.jones@futureagenda.org Future Agenda 2020
- 291. 291 Further reading For moreinformation on any of the insights in this book, please use these links to access varied videos, reports, books and websites. These will add richness and context to the insight overviews and are regularly updated on the www.futureagenda.org website. Accelerated displacement World migration report 2015 https://issuu.com/unpublications/docs/wmr2015_en Syrian migration to Europe in 7 charts http://www.bbc.com/news/world-europe-34131911 Climate change and migration - UK government office for science https://youtu.be/zt0UJU0aAVg?t=155 The Great Migration: Urban Aspirations – Oxford University http://www.compas.ox.ac.uk/media/ER-2013-Great_Migration_Urban_Aspirations_WB.pdf United Nations Development Programme: Migration and displacement http://www.undp.org/content/undp/en/home/librarypage/poverty-reduction/guidance-note---migration-and- displacement/ UNHCR – forced displacement http://unhcr.org/556725e69.html Access to transport UN Habitat - mobility case studies http://www.teriin.org/div/pro-poor-mobility_policy-guidelines-case-studies.pdf Peak Car: The Future of Travel by David Metz http://www.amazon.co.uk/Peak-Car-Future-David-Metz-ebook/dp/B00I8LM6TG/ref=sr_1_1?s=books&ie=UT F8&qid=1443098125&sr=1-1&keywords=peak+car Peak Car website and blog http://peakcar.org/
- 292. 292 Transport and Poverty:The role of transport in addressing poverty https://www.ucl.ac.uk/transport-institute/pdfs/transport-poverty TEDTalk Enrique Peñalosa: Why Buses represent democracy in action https://www.ted.com/talks/enrique_penalosa_why_buses_represent_democracy_in_action?language=en Affordable healthcare TEDMED talk - Elizabeth Holmes, Lab Testing Reinvented http://www.tedmed.com/talks/show?id=309114 Global Health talk - Hans Rosling, Beyond 2015 https://www.youtube.com/watch?v=8gY5BSFPlME TEDMED talk - Ramanan Laxminarayan, The Coming Crisis in Antibiotics http://www.tedmed.com/talks/show?id=292970 FT.com: Innovation in Healthcare http://www.ft.com/reports/innovation-healthcare World Health Organization - Global Health Observatory http://www.who.int/gho/publications/en/ Redefining the UK’s Health Services - A St George’s House Consultation http://www.stgeorgeshouse.org/consultations/social-and-ethical-consultations/recent-consultations/ redefining-the-uk-s-health-services/ Africa growth The World Bank - Africa Overview http://www.worldbank.org/en/region/afr The Economist - A Glimpse of Africa’s Future http://www.economist.com/news/middle-east-and-africa/21657384-wild-ancient-and-oil-rich-turkana-shows- how-fast-continent-changing TED talk - Guy Lundy, Africa’s Bright Future http://tedxtalks.ted.com/video/Africa%E2%80%99s-bright-future-%7C-Guy-L Gatesnotes - the blog of Bill Gates - Fortifying Africa’s Future https://www.gatesnotes.com/Development/Fortifying-the-Future-Africas-Table-Day-Two World Economic Forum - WEF Africa 2015: Closing the Economic Equality Gap Session https://www.youtube.com/watch?v=qu3iL8t2FPA McKinsey Global Insight - The growth opportunity in Africa http://www.mckinsey.com/insights/growth/the_growth_opportunity_in_africa Further reading
- 293. 293 Agelessness TED talk -Prof. Laura Carstensen, Stanford Center on Longevity: Older people are happier https://www.youtube.com/watch?v=7gkdzkVbuVA TED talk - Prof. Sarah Harper, University of Oxford: Longevity https://www.youtube.com/watch?v=gxitGpd8UJc TED talk - Dr. Bill Thomas, Changing Aging.org: Elderhood rising https://www.youtube.com/watch?v=ijbgcX3vIWs SilverGroup.Asia Blog http://www.silvergroup.asia/blog/ UK Foresight ‘Future of an ageing population’ project https://www.gov.uk/government/collections/future-of-ageing WHO World Report on Ageing and Health http://apps.who.int/iris/bitstream/10665/186463/1/9789240694811_eng.pdf?ua=1 Air quality World Air Quality Index – Real time map http://waqi.info/ The Economist: Breathe uneasy – The air that Indians breathe is dangerously toxic http://www.economist.com/news/asia/21642224-air-indians-breathe-dangerously-toxic-breathe-uneasy The Economist: A dust-up over dust - Does the United Arab Emirates really have the dirtiest air in the world? http://www.economist.com/news/middle-east-and-africa/21657805-does-united-arab-emirates-really-have- dirtiest-air-world-dust-up The Guardian: Inside Beijing’s airpocalypse – a city made ‘almost uninhabitable’ by pollution http://www.theguardian.com/cities/2014/dec/16/beijing-airpocalypse-city-almost-uninhabitable-pollution-china World Health Organisation - Ambient (outdoor) air quality and health http://www.who.int/mediacentre/factsheets/fs313/en/ National Georgraphic – Air pollution comes from many sources http://environment.nationalgeographic.com/environment/global-warming/pollution-overview/ Clearer Skies Over China: Reconciling Air Quality, Climate, and Economic Goals http://www.amazon.co.uk/Clearer-Skies-Over-China-Reconciling/dp/0262019884
- 294. 294 Autonomous transport Going fora Ride in Tesla Model S https://www.youtube.com/watch?v=M4BGlQoASyo The Economist: Upsetting the Apple car http://www.economist.com/news/business/21644149-established-carmakers-not-tech-firms-will-win-race- build-vehicles Tech Crunch: The Myth of Autonomous Vehicles’ New Craze: Ethical Algorithms http://techcrunch.com/2015/11/23/the-myth-of-autonomous-vehicles-new-craze-ethical-algorithms/ WiReD: DeepMind: inside Google’s super-brain http://www.wired.co.uk/magazine/archive/2015/07/features/deepmind/viewall The European Truck Platooning Challenge 2016 http://www.eutruckplatooning.com/home/default.aspx TED talk - Chris Urmson: How a driverless car sees the road https://www.youtube.com/watch?v=tiwVMrTLUWg Basic sanitation UN Web TV - The Sustainable Development Goals Explained: Clean Water and Sanitation http://webtv.un.org/The/watch/watch/the-sustainable-development-goals-explained-clean-water-and- sanitation/4492902009001 Bill and Melinda Gates Foundation - Reinvent the Toilet Challenge http://www.gatesfoundation.org/What-We-Do/Global-Development/Reinvent-the-Toilet-Challenge WaterAid - Sanitation News and Blogs http://www.wateraid.org/policy-practice-and-advocacy/sanitation/news-and-blogs The Economist - Sanitation in India: The final frontier http://www.economist.com/news/asia/21607837-fixing-dreadful-sanitation-india-requires-not-just-building- lavatories-also-changing TEDx Talk - Nikki Shaw, How building toilets is key to better lives https://www.youtube.com/watch?v=ULbsEeC-1UA Built-in flexibility TED talk - David Sedlak, 4 ways we can avoid a catastrophic drought http://www.ted.com/talks/david_sedlak_4_ways_we_can_avoid_a_catastrophic_drought?utm_ source=newsletter_daily&utm_campaign=daily&utm_medium=email&utm_content=button__2016-01-07 Further reading
- 295. 295 Henrik Lund -Renewable Energy Systems: A Smart Energy Systems Approach to the Choice and Modelling of 100% Renewable Solutions. http://www.amazon.co.uk/Renewable-Energy-Systems-Approach-Choice-Modeling-Solutions/ dp/0124104231 Ofgem (UK), Making the electricity system more flexible and delivering the benefits for consumers https://www.ofgem.gov.uk/sites/default/files/docs/2015/09/flexibility_position_paper_final_0.pdf The Global Change Institute ‘Living Building’ http://www.gci.uq.edu.au/building Claude ‘Bud’ Lewis Carlsbad Desalination Plant http://carlsbaddesal.com/ The Water Company and ‘Water Forever’ http://www.watercorporation.com.au/water-supply-and-services/solutions-to-perths-water-supply Capitalism challenged Jeremy Rifkin, The Zero Marginal Cost Society http://www.thezeromarginalcostsociety.com/ Thomas Piketty - Capital in the Twenty-First Century http://www.amazon.co.uk/Capital-Twenty-First-Century-Thomas-Piketty/dp/067443000X TED talk - Richard Wilkinson, How economic inequality harms societies https://www.ted.com/talks/richard_wilkinson?language=en Kate Pickett and Richard Wilkinson The Spirit Level: Why Equality is Better for Everyone http://www.amazon.co.uk/The-Spirit-Level-Equality-Everyone/dp/0241954290 TED talk - Jeremy Heimans: What new power looks like https://www.ted.com/talks/jeremy_heimans_what_new_power_looks_like Care in the community TED talk - Samuel Cohen: Alzheimer’s is not normal aging – and we can cure it https://www.ted.com/talks/samuel_cohen_alzheimer_s_is_not_normal_aging_and_we_can_cure_it Economist Intelligence Unit, Extending Healthy Life Years http://digitalresearch.eiu.com/extending-healthy-life-years/report Stanford Center on Longevity http://longevity3.stanford.edu/publications/ TED talk - Judy MacDonald Johnston: Prepare for a good end of life https://www.ted.com/talks/judy_macdonald_johnston_prepare_for_a_good_end_of_life
- 296. 296 Aging2.0 - globalinnovation platform for aging and senior care http://www.aging2.com/about/ The King’s Fund - Making our health and care systems fit for an ageing population http://www.kingsfund.org.uk/sites/files/kf/field/field_publication_file/making-health-care-systems-fit-ageing- population-oliver-foot-humphries-mar14.pdf Caring for those left behind Women of China – Left Behind Children http://www.womenofchina.cn/womenofchina/html1/news/china/1602/655-1.htm The Economist - China’s left-behind http://www.economist.com/news/briefing/21674712-children-bear-disproportionate-share-hidden-cost- chinas-growth-little-match-children UNICEF Annual Report http://www.unicef.org.uk/Latest/Publications/trustees-report-2014/ World Vision Report: Rapid Urbanisation, Economic Growth and the Well-being of Children http://www.wvi.org/sites/default/files/Rapid%20Urb%20Ec%20Growth%20%26%20CWB%20Low%20 Res%20Final%20010414.pdf Oxfam: Poverty in India https://oxfamblogs.org/fp2p/why-ending-poverty-in-india-means-tackling-rural-poverty-and-power/ International Road Assessment Programme http://www.irap.org/en/ Cities as products WTED talk - Eduardo Paes, The 4 commandments of cities https://www.ted.com/talks/eduardo_paes_the_4_commandments_of_cities?language=en Peter Hall - Good Cities, Better Lives: How Europe Discovered the Lost Art of Urbanism http://www.amazon.co.uk/Good-Cities-Better-Lives-Environment/dp/0415840228 Charles Montgomery - Happy City: Transforming Our Lives Through Urban Design http://www.amazon.co.uk/Happy-City-Transforming-Through-Design/dp/0141047542 TED talk - Geoffrey West, The surprising math of cities and corporations, July 2011 https://www.ted.com/talks/geoffrey_west_the_surprising_math_of_cities_and_corporations?language=en TED talk - Playlist - How to revive a city Ways to reinvigorate and strengthen the metropolises we love https://www.ted.com/playlists/326/how_to_revive_a_city Further reading
- 297. 297 The Atlantic’s CityLab http://www.citylab.com Companieswith purpose Michael Porter – Creating Shared Value http://hbr.org/2011/01/the-big-idea-creating-shared-value/ar/1 Niall Fitzgerald and Mandy Cormack – The Role of Business in Society http://www.hks.harvard.edu/m-rcbg/CSRI/publications/report_12_CGI%20Role%20of%20Business%20 in%20Society%20Report%20FINAL%2010-03-06.pdf UN Millennium Development Goals http://www.un.org/millenniumgoals/ IIRC Integrated Reporting http://www.theiirc.org B-Corporations http://www.bcorporation.net TED video: Profits Not Always the Point, Harish Manwani http://www.ted.com/talks/harish_manwani_profit_s_not_always_the_point TED video: The case for letting business solve social problems, Michael Porter http://www.ted.com/talks/michael_porter_why_business_can_be_good_at_solving_social_problems Creative economy An introduction to the creative economy http://www.creativeeconomy.com/thebasics.htm What Is The Creative Economy? https://www.scrumalliance.org/community/spotlight/steve-denning/november-2014/what-is-the-creative- economy The Creative Economy: How People Make Money from Ideas http://www.amazon.co.uk/The-Creative-Economy-People-Money/dp/0141977035 The Creative Economy: An Introductory Guide by John Newbigin The British Council http://creativeconomy.britishcouncil.org/blog/10/03/08/creative-economy-introductory-guide/ TED video: Reimagining creative thinking, Luc de Brabandere http://www.ted.com/watch/ted-institute/ted-bcg/luc-de-brabandere-reimagining-creative-thinking
- 298. 298 Currencies of meaning FT.com- How to build a positive online reputation http://www.ft.com/cms/s/2/b72317ce-f4d2-11e4-8a42-00144feab7de.html Global Brands http://www.ft.com/cms/s/0/4ef11c38-cc78-11e3-bd33-00144feabdc0.html - axzz3l2rRnpOF The reputation economy - How to Optimize Your Digital Footprint in a World Where Your Reputation Is Your Most Valuable Asset http://www.amazon.com/Reputation-Economy-Optimize-Footprint-Valuable/dp/0385347596 Trust Me, PR is dead – Robert Phillips http://www.amazon.co.uk/Trust-Me-PR-Is-Dead/dp/1783520833 The Bitcoin Big Bang – how alternative currencies are about to change the world http://www.amazon.com/Bitcoin-Big-Bang-Alternative-Currencies/dp/1118963660 TED talk - Rachel Botsman – The currency of the new economy is trust http://www.ted.com/talks/rachel_botsman_the_currency_of_the_new_economy_is_trust?language=en TED Talk - Paul Robertson: Meet the future of branded currency http://www.ted.com/talks/paul_kemp_robertson_bitcoin_sweat_tide_meet_the_future_of_branded_currency Data ownership Who Owns The Future? http://www.amazon.co.uk/Who-Owns-Future-Jaron-Lanier/dp/0241957214 Patient Will See You Now http://www.amazon.co.uk/Patient-Will-See-You-Now/dp/0465054749 Data and Goliath http://www.amazon.co.uk/Data-Goliath-Bruce-Schneier/dp/0393244814 The Economist - Who owns your data when you’re dead? http://www.economist.com/blogs/economist-explains/2013/07/economist-explains-12 TED video: Big Data is better data, Kenneth Cukier http://www.ted.com/talks/kenneth_cukier_big_data_is_better_data TED Video: The small and surprisingly dangerous detail the police track about you http://www.ted.com/talks/catherine_crump_the_small_and_surprisingly_dangerous_detail_the_police_track_ about_you Declining government influence Economist Intelligence Unit - Democracy Index 2014, Democracy and its discontents https://www.eiu.com/public/topical_report.aspx?campaignid=Democracy0115 Further reading
- 299. 299 C40 – Networkof megacities committed to addressing climate change http://www.c40.org/about TED talk - Bill and Melinda Gates: Why giving away our wealth has been the most satisfying thing we’ve done https://www.youtube.com/watch?v=aSL-iIskEFU Gov.UK - Power shifts, economic change and the decline of the west? https://www.gov.uk/government/publications/power-shifts-economic-change-and-the-decline-of-the-west/ power-shifts-economic-change-and-the-decline-of-the-west TED talk - Dan Pallotta: The way we think about charity is dead wrong https://www.ted.com/talks/dan_pallotta_the_way_we_think_about_charity_is_dead_wrong?language=en Deeper collaboration The SunShot Initiative http://energy.gov/eere/sunshot/about-sunshot-initiative TED talk - Clay Shirky: How the Internet will (one day) transform government https://www.ted.com/talks/clay_shirky_how_the_internet_will_one_day_transform_government PPP Knowledge Lab https://pppknowledgelab.org/ TED talk - Wael Ghonim - Let’s design social media that drives real change https://www.ted.com/talks/wael_ghonim_let_s_design_social_media_that_drives_real_change Digital money Deloitte – 5 megatrends that will change financial services http://www2.deloitte.com/content/dam/Deloitte/global/Documents/Financial-Services/gx-fsi-cleared-for- takeoff.pdf BBC.com – The Truth about the Death of Cash http://www.bbc.com/future/story/20150724-the-truth-about-the-death-of-cash Juan Benitz, The Future of Digital Money, MIT Technology Review http://events.technologyreview.com/emtech/digital/15/video/watch/juan-benitez-braintree/ Virtual Currency @ Digital Money Forum CES 2016 https://www.youtube.com/watch?v=H8g9NRv4TF8 Digital Gold: Bitcoin and the Inside Story of the Misfits and Millionaires Trying to Reinvent Money http://www.amazon.com/Digital-Gold-Bitcoin-Millionaires-Reinvent/dp/0062362496/
- 300. 300 The Digital MoneyGame: Competing in the multi-trillion dollar payments industry http://www.amazon.com/Digital-Money-Game-Competing-multi-trillion-ebook/dp/B00LZ3T66K/ref=sr_1_1?s =books&ie=UTF8&qid=1443448220&sr=1-1&keywords=digital+money Dynamic pricing HBR: The risks of changing your prices too often https://hbr.org/2015/07/the-risks-of-changing-your-prices-too-often Washington Post - How uber surge pricing really works https://www.washingtonpost.com/news/wonk/wp/2015/04/17/how-uber-surge-pricing-really-works/ The strategy and tactics of pricing http://www.amazon.com/The-Strategy-Tactics-Pricing-Profitably/dp/0136106811/ Why dynamic pricing is a must for ecommerce retailers https://econsultancy.com/blog/65327-why-dynamic-pricing-is-a-must-for-ecommerce-retailers/ Forbes.com - Which Customers are worth the most? http://www.forbes.com/sites/gregpetro/2015/04/17/dynamic-pricing-which-customers-are-worth-the-most- amazon-delta-airlines-and-staples-weigh-in/#b4fb986b516e Uber, Dynamic Pricing 101 https://www.youtube.com/watch?v=76q7PDnxWuE Eco civilization Yale Environmental Performance Index http://epi.yale.edu/reports/2016-report The Climate Group - Eco-Civilization: China’s Blueprint for a New Era http://www.theclimategroup.org/_assets/files/china-ecocivilisation.pdf Chinadialogue - Interpreting ecological civilization https://www.chinadialogue.net/article/show/single/en/8018-Ecological-civilisation-vision-for-a-greener-China-part-one- Dialogue - China to build eco civilization https://www.youtube.com/watch?v=1071K2J3gU0 CNTV - China to build eco-civilization http://english.cntv.cn/2015/05/08/VIDE1431030602563315.shtml Education revolution TED talk - Sugata Mitra: Build a School in the Cloud https://www.ted.com/talks/sugata_mitra_build_a_school_in_the_cloud?language=en Further reading
- 301. 301 TED talk -Linda Liukas: A delightful way to teach kids about computers https://www.ted.com/talks/linda_liukas_a_delightful_way_to_teach_kids_about_computers UNESCO Institute for Statistics Global Teacher Shortage Threatens Education 2030 http://www.uis.unesco.org/Education/Pages/world-teachers-day-2015.aspx Khan Academy - personalized learning resource for all ages https://www.khanacademy.org/about TED Talk - Salman Khan: Let’s use video to reinvent education https://www.ted.com/talks/salman_khan_let_s_use_video_to_reinvent_education TED Talk - Alison Gopnik: What do babies think? https://www.ted.com/talks/alison_gopnik_what_do_babies_think?language=en Energy storage TED talk - Elon Musk: The mind behind Tesla, SpaceX, SolarCity https://www.ted.com/talks/elon_musk_the_mind_behind_tesla_spacex_solarcity WEF - Smart Grids Explained https://www.youtube.com/watch?v=N8jqbKd8hVg Berkeley Labs - Adoption patterns of microgrid technologies https://building-microgrid.lbl.gov/ SolarCity http://www.solarcity.com/residential/backup-power-supply Tesla Gigafactory https://www.teslamotors.com/en_GB/gigafactory Aquion Energy http://www.aquionenergy.com/ Green Tech Media https://www.greentechmedia.com/about IEC White Paper - Electrical Energy Storage http://www.iec.ch/whitepaper/pdf/iecWP-energystorage-LR-en.pdf US Department of Energy - Smart Grid Portal and Initiatives https://www.smartgrid.gov/data_guard.html TED Talk - David MacKay: A Reality Check on Renewables https://www.ted.com/talks/david_mackay_a_reality_check_on_renewables?language=en
- 302. 302 Enhanced performance Report bythe Academy of Medical Sciences, the British Academy, the Royal Academy of Engineering and the Royal Society https://www.acmedsci.ac.uk/viewFile/publicationDownloads/135228646747.pdf DARPA Tests Battery - Powered Exoskeletons on Real Soldiers http://spectrum.ieee.org/video/robotics/military-robots/darpa-tests-batterypowered-exoskeletons-on-real- soldiers WSJ - The Future of Brain Implants http://www.wsj.com/articles/SB10001424052702304914904579435592981780528 Braingate – turning thought into action http://braingate2.org/index.asp TED talk - Auke Ijspeert: A robot that runs and swims like a salamander https://www.ted.com/talks/auke_ijspeert_a_robot_that_runs_and_swims_like_a_salamander TEDMED talk - Cole Galloway – A movement for mobility http://www.tedmed.com/talks/show?id=292991 Ethical machines Google DeepMind http://deepmind.com/publications.html Google’s Demis Hassabis’ First Broadcast Interview https://www.youtube.com/watch?v=ivR_CavaLmY AI at WIRED2014: The next big frontier is the mind and brain, with Demis Hassabis https://www.youtube.com/watch?v=CUhflgWvvoo Ethical Machines - a series of conversations about Humans, Machines & Ethics http://ethicalmachines.com/ Roboethics info DataBase http://www.amoon.ca/Roboethics/ Robot Ethics: The Ethical and Social Implications of Robotics by Patrick Lin, Keith Abney, George A. Bekey http://www.amazon.co.uk/Robot-Ethics-Implications-Intelligent-Autonomous/dp/026252600X The Economist, Morals and the machine http://www.economist.com/node/21556234 Further reading
- 303. 303 Everything connected Information isBeautiful – Infographic - The Internet of Things http://www.informationisbeautiful.net/visualizations/the-internet-of-things-a-primer/ McKinsey Global Institute - Internet of things applications could have $11 trillion impact http://www.mckinsey.com/insights/mgi/in_the_news/by_2025_internet_of_things_applications_could_ have_11_trillion_impact Tech Crunch - Solving the Persistent Security Threats for the Internet Of Things http://techcrunch.com/2015/11/28/solving-the-persistent-security-threats-for-the-internet-of-things/ 50 Sensor Applications for a Smarter World http://www.libelium.com/top_50_iot_sensor_applications_ranking/ Ericsson – Mobility Report 2015 http://www.ericsson.com/res/docs/2015/ericsson-mobility-report-june-2015.pdf Female choice dilemma TED talk - Elizabeth Nyamayaro: An invitation to men who want a better world for women https://www.ted.com/talks/elizabeth_nyamayaro_an_invitation_to_men_who_want_a_better_world_for_women TED talk - Jimmy Carter: Why I believe the mistreatment of women is the number one human rights abuse https://www.ted.com/talks/jimmy_carter_why_i_believe_the_mistreatment_of_women_is_the_number_ one_human_rights_abuse TED talk - Billie Jean King: Paving the way for women in sports https://www.ted.com/talks/billie_jean_king_this_tennis_icon_paved_the_way_for_women_in_sports McKinsey Global Institute - How advancing women’s equality can add $12 trillion to global growth http://www.mckinsey.com/insights/growth/how_advancing_womens_equality_can_add_12_trillion_to_global_growth WEF - Ten Years of the Global Gender Gap http://reports.weforum.org/global-gender-gap-report-2015/report-highlights/ International Center for Research on Women - Innovation to Empower Women http://www.icrw.org/what-we-do/emerging-issues/innovation-transform-womens-lives Prowess – Women in Business - Useful facts and statistics http://www.prowess.org.uk/facts
- 304. 304 Flooded cities World EconomicForum: This is what major cities will look like under water http://www.weforum.org/agenda/2015/11/major-cities-under-water Adventures in the Anthropocene: A Journey to the Heart of the Planet we Made, Gaia Vince http://www.amazon.co.uk/Adventures-Anthropocene-Journey-Heart-Planet/dp/0099572494 University of Oxford – Flooded Cities http://www.economics.ox.ac.uk/Department-of-Economics-Discussion-Paper-Series/flooded-cities World Economic Forum: How can cities improve their climate resilience http://www.weforum.org/agenda/2016/02/how-can-cities-improve-their-climate-resilience-f6fb69b3-2680- 473f-9239-4f6b98b0ed78 National Geographic – Earth Under Water: Flooded Cities http://channel.nationalgeographic.com/videos/flooded-cities/ LSE: Centre of Economic Performance – Flooded Cities http://cep.lse.ac.uk/pubs/download/dp1398.pdf New Yorker – The Siege of Miami http://www.newyorker.com/magazine/2015/12/21/the-siege-of-miami Food waste TED talk - Tristram Stuart: The global food waste scandal https://www.ted.com/talks/tristram_stuart_the_global_food_waste_scandal Waste Not UK https://wastenotuk.com/ Tristram Stuart - Waste: Uncovering the Global Food Scandal http://www.amazon.co.uk/Waste-Uncovering-Global-Food-Scandal/dp/0141036346/ref=sr_1_1?s=books&ie =UTF8&qid=1454709615&sr=1-1&keywords=waste FT.com - Future of the Food Industry http://www.ft.com/cms/s/2/09d28fda-98e4-11e5-9228-87e603d47bdc.html#axzz3zEukjeex Social Experiment - Food Waste in America https://www.youtube.com/watch?v=MsqtYmbDMYY Today’s Zaman - Inefficient agro production leaves millions hungry in Turkey http://www.todayszaman.com/anasayfa_inefficient-agro-production-leaves-millions-hungry-in-turkey_402379.html WWF - Change the Way You Think About Food https://www.youtube.com/watch?v=s_JLmxhnpNY Further reading
- 305. 305 Full cost The NaturalCapital Coalition http://www.naturalcapitalcoalition.org/ The International Integrated Reporting Council http://integratedreporting.org/the-iirc-2/ TED talk - Pavan Sukhdev: Put a value on nature! https://www.ted.com/talks/pavan_sukhdev_what_s_the_price_of_nature Intergovernmental Platform on Biodiversity and Ecosystem Services – IPBES http://www.ipbes.net/index.php TED talk - Ameenah Gurib-Fakim: Humble plants that hide surprising secrets https://www.ted.com/talks/ameenah_gurib_fakim_humble_plants_that_hide_surprising_secrets Human touch Steve Hilton, Jason Bade and Scott Bade - More Human: Designing a World Where People Come First http://www.amazon.co.uk/More-Human-Designing-World-People/dp/0753556782/ref=sr_1_1?s=books&ie=U TF8&qid=1454842327&sr=1-1&keywords=more+human+business TED talk - Ken Goldberg: 4 lessons from robots about being human https://www.ted.com/talks/ken_goldberg_4_lessons_from_robots_about_being_human Bryan Kramer - Shareology: Using the Study of Sharing to Power Human Business http://www.amazon.co.uk/Shareology-Using-Study-Sharing-Business/dp/1630473847/ref=la_ B00MABVEAM_1_1?s=books&ie=UTF8&qid=1454843453&sr=1-1 Dial a Human – a user compiled website of ways to avoid automated CRMs http://www.dialahuman.com/ Siri vs. Cortana vs. Google Now: The Future of Mobile http://www.forbes.com/sites/jaymcgregor/2015/07/06/siri-cortana-google-now-are-the-future-of-mobile/ Your customer is the star http://www.amazon.com/Your-Customer-Star-Millennials-Everyone-ebook/dp/B00QRJ9MPM HBR - The best digital strategists don’t think in terms of either or https://hbr.org/2015/06/the-best-digital-strategists-dont-think-in-terms-of-eitheror
- 306. 306 Imbalanced population growth UNWorld Population Trends http://esa.un.org/unpd/wpp/publications/files/key_findings_wpp_2015.pdf Global Migration Trends: An Overview http://missingmigrants.iom.int/sites/default/files/documents/Global_Migration_Trends_PDF_FinalVH_with%20 References.pdf CIA World Factbook https://www.cia.gov/library/publications/the-world-factbook/rankorder/2127rank.html UN Population Data http://data.un.org/Default.aspx WHO life expectancy data http://www.who.int/gho/mortality_burden_disease/life_tables/situation_trends_text/en/ Hans Rosling TED Talk: Religion and babies https://www.ted.com/talks/hans_rosling_religions_and_babies Gapminder.org http://www.gapminder.org Infrastructure deficit World Economic Forum: Infrastructure Investment Policy Blueprint http://www3.weforum.org/docs/WEF_II_InfrastructureInvestmentPolicyBlueprint_Report_2014.pdf World Economic Forum: Strategic Infrastructure Steps to Operate and Maintain Infrastructure Efficiently and Effectively http://www3.weforum.org/docs/WEF_IU_StrategicInfrastructureSteps_Report_2014.pdf World Economic Forum: Accelerating Infrastructure Delivery New Evidence from International Financial Institutions http://www3.weforum.org/docs/WEF_AcceleratingInfrastructureDelivery_2014.pdf BCG: Africa Strategic Infrastructure Initiative A Principled Approach to Infrastructure Project Preparation Facilities https://www.bcgperspectives.com/content/articles/engineered-products-infrastructure-public-sector-africa- strategic-infrastructure-initiative/ BCG: The Infrastructure Needs of the Digital Economy https://www.bcgperspectives.com/content/articles/telecommunications_public_sector_infrastructure_needs_ digital_economy/ Further reading
- 307. 307 Move: Putting America’sInfrastructure Back in the Lead - http://www.amazon.com/Move-Putting-Americas-Infrastructure-Back/dp/0393246809 Reliability and Risk: The Challenge of Managing Interconnected Infrastructures (High Reliability and Crisis Management) http://www.amazon.com/Reliability-Risk-Interconnected-Infrastructures-Management/dp/080479393X McKinsey – Rethinking Infrastructure http://www.mckinsey.com/insights/engineering_construction/rethinking_infrastructure Intra city collaboration World Economic Forum - The Competitiveness of Cities http://www3.weforum.org/docs/GAC/2014/WEF_GAC_CompetitivenessOfCities_Report_2014.pdf Edward Glaeser and Abha Joshi Ghani - The Urban Imperative: Toward Competitive Cities http://www.amazon.co.uk/Urban-Imperative-Towards-Competitive-Cities/dp/0199457778 Edward Glaeser - Triumph of the City http://www.amazon.co.uk/Triumph-City-Edward-Glaeser/dp/0330458078 Smithsonian.com - City Governments Are Collaborating With Startups, and Acting Like Ones Themselves http://www.smithsonianmag.com/innovation/citie-governments-are-collaborating-startups-and-acting-ones- themselves-180955483/?no-ist Future Cities Catapult – Centre of Excellence for Urban Innovation https://futurecities.catapult.org.uk/ Economist Intelligence Unit - Benchmarking global city competitiveness http://www.economistinsights.com/sites/default/files/downloads/Hot%20Spots.pdf C40 – Network of megacities committed to addressing climate change http://www.c40.org/about Inhabitat - How the Cheonggyecheon River Urban Design Restored the Green Heart of Seoul http://inhabitat.com/how-the-cheonggyecheon-river-urban-design-restored-the-green-heart-of-seoul/
- 308. 308 Keeping the faith PewResearch Center - The Future of World Religions: Population Growth Projections, 2010-2050 http://www.pewforum.org/2015/04/02/religious-projections-2010-2050/ Yearbook of International Religious Demography 2015 http://booksandjournals.brillonline.com/content/books/9789004297395;jsessionid=23ewj1uraigvq.x-brill- live-03 TED talk - Jonathan Haidt: Religion, evolution, and the ecstasy of self-transcendence https://www.ted.com/talks/jonathan_haidt_humanity_s_stairway_to_self_transcendence TED talk - Alain de Botton: Atheism 2.0 https://www.ted.com/talks/alain_de_botton_atheism_2_0 TED talk - Lesley Hazleton: The doubt essential to faith https://www.ted.com/talks/lesley_hazleton_the_doubt_essential_to_faith U.S. Commission on International Religious Freedom http://www.uscirf.gov/about-uscirf Mass engagement Trust Me, PR is dead, Robert Phillips http://www.amazon.co.uk/Trust-Me-PR-Is-Dead/dp/1783520833 Controlling the Message: New Media in American Political Campaigns http://www.amazon.com/ Controlling-Message-American-Political-Campaigns/dp/1479867594/ Disrupting Digital Business - Create an Authentic Experience in the Peer-to-Peer Economy, R Way Wang http://www.amazon.com/Disrupting-Digital-Business-Peer---Peer/dp/1422142019 TED Talk - Clay Shirkey – How the internet will (one day) change government http://www.ted.com/talks/clay_shirky_how_the_internet_will_one_day_transform_government TED Talk - Rachel Botsman – The currency of the new economy is trust https://www.ted.com/talks/rachel_botsman_the_currency_of_the_new_economy_is_ trust?language=en TED Talk – Beth Noveck – Demand a more open source government http://www.ted.com/talks/beth_ noveck_demand_a_more_open_source_government TED Talk – Benadetta Berti – The surprising way groups like ISIS stay in power http://www.ted.com/talks/benedetta_berti_the_surprising_way_groups_like_isis_stay_in_power Further reading
- 309. 309 Nature’s capital The Economicsof Ecosystems and Biodiversity http://www.teebweb.org/ UN Sustainable Development – environment dialogue https://sustainabledevelopment.un.org/content/ documents/8156Interactive Dialogue 4 -Climate Change Environment.pdf Millenium Assessment http://www.millenniumassessment.org/en/index.html Natural Capital Forum http://naturalcapitalforum.com Natural Capital – valuing the planet http://www.amazon.com/Natural-Capital-Valuing-Dieter-Helm/dp/0300210981 The Sixth Extinction – an unnatural history http://www.amazon.com/Sixth-Extinction-Unnatural-History/dp/1250062187 TED Talk - Pavan Sukhdev – Put a value on nature https://www.ted.com/talks/pavan_sukhdev_what_s_the_price_of_nature Off grid US Energy Off the Grid http://www.ft.com/cms/s/0/b411852e-9b05-11e4-882d-00144feabdc0.html Inequality is a choice http://www.nytimes.com/2015/05/03/opinion/sunday/nicholas-kristof-inequality-is-a-choice.html?_r=0 The Economist - Amazons of the dark net http://www.economist.com/news/international/21629417- business-thriving-anonymous-internet-despite-efforts-law-enforcers Wired - The dark web as you know it is a myth http://www.wired.com/2015/06/dark-web-know-myth/ The Spirit Level http://www.amazon.co.uk/The-Spirit-Level-Equality-Everyone/dp/0241954290 Josepth Stiglitz – The Great Divide http://www.amazon.com/The-Great-Divide-Unequal-Societies/dp/0393248577 Living off the Grid http://www.amazon.com/Living-Off-Grid-Box-Set-ebook/dp/B0121MEY4M TED Talk - Jamie Bartlett – How the mysterious dark net is going mainstream http://www.ted.com/talks/jamie_bartlett_how_the_mysterious_dark_net_is_going_mainstream
- 310. 310 Open supply webs Amazon’sGlobal Fulfilment Center Network http://www.mwpvl.com/html/amazon_com.html Jeremy Rifkin, The Zero Marginal Cost Society http://www.thezeromarginalcostsociety.com/ The University of Warwick - Global Supply Chain Debate http://www2.warwick.ac.uk/fac/sci/wmg/research/scip/gscd/ Donald Waters and Stephen Rinsler - Global Logistics: New Directions in Supply Chain Management http://www.amazon.co.uk/dp/0749471336/ref=rdr_ext_tmb Optimised last mile Amazon Flex Programme https://flex.amazon.com/ Google - Introducing Project Wing https://www.youtube.com/watch?v=cRTNvWcx9Oo Flexport Blog - The Economics of Drone Delivery https://www.flexport.com/blog/drone-delivery-economics/ TED talk - Danit Peleg: Forget shopping. Soon you’ll download your new clothes https://www.ted.com/talks/danit_peleg_forget_shopping_soon_you_ll_download_your_new_clothes Barclays - The Last Mile Report https://www.home.barclays/content/dam/barclayspublic/docs/BarclaysNews/2014/September/the-last-mile- report.pdf Organisation 3.0 HBR – Creating the best workplace on earth https://hbr.org/2013/05/creating-the-best-workplace-on-earth HBR – What makes an organization networked https://hbr.org/2015/06/what-makes-an-organization-networked? Fast Company – What kind of leadership is required in flat hierarchies http://www.fastcompany.com/3046371/the-new-rules-of-work/what-kind-of-leadership-is-needed-in- flat-hierarchies McKinsey – Six Building Blocks for Creating a High Performing Digital Enterprise http://www.mckinsey.com/insights/organization/six_building_blocks_for_creating_a_high_performing_digital_ enterprise Further reading
- 311. 311 Organization 3.0 -The Evolution of Leadership and Organizational Theories Toward an Open System for the 21st Century http://www.amazon.com/Organization-3-0-Evolution-Leadership-Organizational-ebook/dp/B00D5UIY3M/ TED Talk - Ricardo Semler – How to run a company with (almost) no rules http://www.ted.com/talks/ricardo_semler_radical_wisdom_for_a_company_a_school_a_life TED Talk - Clay Shirky: Institutions vs Collaboration http://www.ted.com/talks/clay_shirky_on_institutions_versus_collaboration Plastic oceans TED talk - Melati and Isabel Wijsen: Our campaign to ban plastic bags in Bali https://www.ted.com/talks/melati_and_isabel_wijsen_our_campaign_to_ban_plastic_bags_in_bali National Geographic - The Great Pacific Garbage Patch aka The Pacific Trash Vortex http://education.nationalgeographic.org/encyclopedia/great-pacific-garbage-patch/ TED talk - Damian Palin: Mining minerals from seawater https://www.ted.com/talks/damian_palin_mining_minerals_from_seawater The Plastic Pollution Coalition http://www.plasticpollutioncoalition.org/ National Geographic - Pristine Seas http://shop.nationalgeographic.com/ngs/browse/productDetail.jsp?npd&npd&productId=6201611 &code=MRB21283 Plastics Europe - Publications http://www.plasticseurope.org/information-centre/publications.aspx Privacy regulation IAPP https://iapp.org Cross border privacy rules system http://www.cbprs.org/ Hogan Lovells - Future Proofing privacy http://www.hoganlovells.com/files/Publication/cee0104e-9625-4a3c-9d57-dc7c810da2fe/Presentation/ PublicationAttachment/7f46bf34-5f15-4aeb-9ec6-e79f28981d95/100273_CM3_Data%20Privacy_BRO_E_ link.pdf World Economic Forum – Can you have both security and privacy in the internet age http://www.weforum.org/agenda/2015/07/can-you-have-both-security-and-privacy-in-the-internet-age
- 312. 312 New York Times– Congress starts to get serious about online privacy http://www.nytimes.com/2016/02/07/opinion/congress-starts-to-get-serious-about-online-privacy. html?ref=topics&_r=0 Privacy in the Age of Big Data: Recognizing Threats, Defending Your Rights, and Protecting Your Family http://www.amazon.com/Privacy-Age-Big-Data-Recognizing/dp/1442242574 Data and Goliath: The Hidden Battles to Collect Your Data and Control Your World http://www.amazon.com/Data-Goliath-Battles-Collect-Control/dp/0393244814 TED video - Glenn Greenwald – Why privacy matters https://www.ted.com/talks/glenn_greenwald_why_privacy_matters?language=en TED Video: Richard ledgett – The NSA responds to Edward Snowden’s TED talk https://www.ted.com/talks/richard_ledgett_the_nsa_responds_to_edward_snowden_s_ted_talk DLA Piper - Data protection laws of the world http://dlapiperdataprotection.com/#handbook/world-map-section Resource constraints Chatham House - Resources Futures: The New Political Economy of Resources http://resourcesfutures.org/#!/introduction TED talk - Navi Radjou: Creative problem-solving in the face of extreme limits https://www.ted.com/talks/navi_radjou_creative_problem_solving_in_the_face_of_extreme_limits WSJ - Matt Ridley - The World’s Resources Aren’t Running Out http://www.wsj.com/articles/SB10001424052702304279904579517862612287156 World Economic Forum - The Future Availability of Natural Resources: A New Paradigm for Global Resource Availability http://www3.weforum.org/docs/WEF_FutureAvailabilityNaturalResources_Report_2014.pdf Shell Scenarios http://www.shell.com/energy-and-innovation/the-energy-future/shell-scenarios.html Rise of NIMBY New York Times - Denmark’s New Front in Debate Over Immigrants: Children’s Lunches http://www.nytimes.com/2016/01/21/world/europe/randers-denmark-pork.html?_r=0 Pew Research - Americans: Disengaged, feeling less respected, but still see U.S. as world’s military superpower http://www.pewresearch.org/fact-tank/2014/04/01/americans-disengaged-feeling-less-respected-but-still- see-u-s-as-worlds-military-superpower/ Further reading
- 313. 313 TED talk -Aziz Abu Sarah: For more tolerance, we need more ... tourism? https://www.ted.com/talks/aziz_abu_sarah_for_more_tolerance_we_need_more_tourism Rand Corporation - Intolerance in Western Europe http://www.rand.org/pubs/research_reports/RR334.html TED Talks on refugee resilience http://innovation.unhcr.org/15-ted-talks-on-refugee-resilience/ New Mayor of Venice cracks down on tourists http://www.citymetric.com/business/luigi-brugnaro-new-mayor-venice-wants-crack-down-tourists-1254 Peter Schrag - Not Fit for Our Society: Immigration and Nativism in America http://www.amazon.co.uk/Not-Fit-Our-Society-Immigration/dp/0520269918 Rise of the cult of china The Climate Group - China Energy Report http://www.theclimategroup.org/_assets/files/RE100-China-analysis.pdf McKinsey - Why China’s consumers will continue to surprise the world http://www.mckinsey.com/business-functions/strategy-and-corporate-finance/our-insights/why-chinas- consumers-will-continue-to-surprise-the-world China Business Review - Understanding Chinese Consumers http://www.chinabusinessreview.com/understanding-chinese-consumers/ Millward Brown – Top 100 Chinese Brands https://www.millwardbrown.com/docs/default-source/global-brandz-downloads/china/BrandZ_2015_China_ Top100_Report_EN.pdf HBR - Why China Can’t Innovate https://hbr.org/2014/03/why-china-cant-innovate Martin Jacques - When China Rules the World http://www.martinjacques.com/books/when-china-rules-the-world/ Rising youth unemployment ILO – Working with Youth – Addressing the Youth Employment Challenge http://www.ilo.org/wcmsp5/groups/public/---ed_emp/---ed_emp_msu/documents/publication/ wcms_181907.pdf WEF Outlook on the Global Agenda 2014 http://www3.weforum.org/docs/WEF_GAC_GlobalAgendaOutlook_2014.pdf
- 314. 314 International Youth Foundation http://www.iyfnet.org/ UNWorld Youth Report http://www.unworldyouthreport.org TEDxUNPlaza - Mona Mourshed: Solving global youth unemployment https://www.youtube.com/watch?v=wDjD8iAgnR4 TEDxLausanne - Peter Vogel: Empowering tomorrow’s leaders to re-invent the labor market https://www.youtube.com/watch?v=C6TRnLoYdtA Shifting power and influence Power Shifts, Economic Change and the Decline of the West? - Michael Cox www.lse.ac.uk/IDEAS/pdf/COX-Waltz.pdf McKinsey Global Institute - Urban world http://www.mckinsey.com/insights/urbanization/urban_world_cities_and_the_rise_of_the_consuming_class CIA Factbook https://www.cia.gov/library/publications/the-world-factbook/ Robert Kaplan: The Geopolitics of the World https://www.youtube.com/watch?v=yME6vWgVhQM Peter Zeihan – A US Perspective https://www.youtube.com/watch?v=MIdUSqsz0Io Shrinking middle The Rise of the Robots – Martin Ford http://www.amazon.co.uk/Rise-Robots-Technology-Threat-Jobless/dp/1480574775 The Rise of a Global Middle Class – Rand Corporation http://www.rand.org/content/dam/rand/pubs/research_reports/RR900/RR920z6/RAND_RR920z6.pdf IMF – The Shrinking Middle http://www.imf.org/external/pubs/ft/fandd/2015/03/ernst.htm The Atlantic - The Disintegration of the World http://www.theatlantic.com/magazine/archive/2015/05/the-disintegration-of-the-world/389534/ NY Times - The Shrinking American Middle Class http://www.nytimes.com/interactive/2015/01/25/upshot/shrinking-middle-class.html Further reading
- 315. 315 Population Reference Bureau- The Demography of Inequality in the US http://www.prb.org/pdf14/united-states-inequality.pdf Skills concentrations UKCES Employer Skills Survey https://www.gov.uk/government/collections/ukces-employer-skills-survey-2013 Driving the skills agenda http://www.economistinsights.com/analysis/driving-skills-agenda Indirect Learning: How Emerging-Market Firms Grow in Developed Markets https://www.researchgate.net/publication/273193031_Indirect_Learning_How_Emerging-Market_Firms_ Grow_in_Developed_Markets KPMG – Ageing Workforce Challenge https://www.kpmg.com/US/en/IssuesAndInsights/ArticlesPublications/Documents/turn-silver-grey-into-gold.pdf Are robots taking our jobs? You bet they are http://fusion.net/video/59087/are-robots-taking-our-jobs-you-betcha/ Andrew McAfee: Nothing Has Changed Humanity Like Technological Progress https://www.youtube.com/watch?v=rxReMAe3Da8&list=PLJQMRV5D9yC-vqSJl6h7VTO70B5cZT LBc&index=6 Sometimes nomads TED talk - Joshua Fields Millburn & Ryan Nicodemus - A rich life with less stuff, The Minimalists https://www.youtube.com/watch?v=GgBpyNsS-jU&list=LLkbFiBwMYMXAqifXF4xo5Uw The Modern Nomad http://www.themodernnomad.com/about/ Pew Research – Social and Demographic Trends http://www.pewsocialtrends.org/ Open Doors - The Institute of International Education http://www.iie.org/Research-and-Publications/Open-Doors Global Citizenship (Oxfam) http://www.oxfam.org.uk/education/global-citizenship US Census Bureau http://factfinder.census.gov
- 316. 316 Global Identity Project http://www.global-identity.org Diasporas- Mapping Migration – The Economist http://www.economist.com/blogs/dailychart/2011/11/diasporas Speed to Scale Forbes - The Most Valuable Employees http://www.forbes.com/sites/liyanchen/2015/08/11/the-most-valuable-employees-snapchat-doubles- facebook/#76229418f754 Fortune – The Unicorn List http://fortune.com/unicorns/ Fortune – Global 500 http://fortune.com/global500/ Reliance Jio – 100m Customers http://www.thehindubusinessline.com/info-tech/reliance-jio-sets-a-target-of-100-million-users-in-first-year/ article8037571.ece Statista – Statistics Portal (Facebook) http://www.statista.com/statistics/264810/number-of-monthly-active-facebook-users-worldwide/ Internet Live Stats http://www.internetlivestats.com/internet-users/ Standards driving trade World Bank India Reports http://www.worldbank.org/en/country/india World Trade Organisation https://www.wto.org/index.htm Trans-Pacific Partnership https://ustr.gov/tpp/ Trans-Atlantic Trade and Investment Partnership http://ec.europa.eu/trade/policy/in-focus/ttip/index_en.htm Industrial Internet Consortium http://www.iiconsortium.org Global Trade 2020 http://docplayer.net/3305636-Global-trade-2020-achieving-the-vision-of-interconnected-customs.html Further reading
- 317. 317 Still being stupid WorldEconomic Forum, Global Risks Report, 2015 http://reports.weforum.org/global-risks-2015/#read Bulletin of the Atomic Scientists http://thebulletin.org/ The Rolling Stone - Bill McKibbon: Global Warming’s Terrifying New Math http://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719 Oxfam report ‘An Economy for the 1%’ http://policy-practice.oxfam.org.uk/publications/an-economy-for-the-1-how-privilege-and-power-in-the- economy-drive-extreme-inequ-592643 The changing nature of privacy Privacy International https://privacyinternational.org/node/5 Center for Digital Democracy https://www.democraticmedia.org/blog PBS NewsHour - What’s the future of privacy in a big data world? - Interview with Jules Polonetsky and Adam Thierer https://www.youtube.com/watch?v=t8q3XjoPzdo W3C - World Wide Web Consortium https://www.w3.org/ TED talk - Keren Elazari - Hackers: the Internet’s immune system https://www.ted.com/talks/keren_elazari_hackers_the_internet_s_immune_system?language=en TED talk - Tim Berners-Lee: A Magna Carta for the web https://www.ted.com/talks/tim_berners_lee_a_magna_carta_for_the_web Tim Berner’s-Lee on Twitter https://twitter.com/timberners_lee The increasing value of data Forbes - Drilling into the value of data http://www.forbes.com/sites/howardbaldwin/2015/03/23/drilling-into-the-value-of-data/#731dc1bf2872 TechCrunch - What’s the value of your data http://techcrunch.com/2015/10/13/whats-the-value-of-your-data/
- 318. 318 Creating Value withBig Data Analytics: Making Smarter Marketing Decisions http://www.amazon.com/Creating-Value-Big-Data-Analytics-ebook/dp/B01ABXLAMM The rise of big data marketplaces http://www.computerworld.com/article/2997079/e-commerce/the-rise-of-big-data-marketplaces.html HBR – the value of the big data isn’t the data https://hbr.org/2013/05/the-value-of-big-data-isnt-the The smart city data marketplace http://www.metratech.com/blog/the-smart-city-data-marketplace/ Public data marketplaces and initiatives https://datafloq.com/public-data/ The Internet in Real Time http://www.webpagefx.com/internet-real-time/ The real sharing economy The NEF Blog - The sharing economy: the good, the bad, and the real http://www.neweconomics.org/blog/entry/the-sharing-economy-the-good-the-bad-and-the-real TED talk - Rachel Botsman: The currency of the new economy is trust https://www.ted.com/talks/rachel_botsman_the_currency_of_the_new_economy_is_trust Collaborative Consumption - online resource for collaborative consumption http://www.collaborativeconsumption.com/ European Sharing Economy Coalition http://www.euro-freelancers.eu/european-sharing-economy-coalition/ The Atlantic - Uber Is Not the Future of Work http://www.theatlantic.com/business/archive/2015/11/uber-is-not-the-future-of-work/415905/ Ouishare Global Community http://ouishare.net/en Great Transition Initiative – Online Forum Debating the Sharing Economy by Juliet Schor http://www.greattransition.org/publication/debating-the-sharing-economy Further reading
- 319. 319 Truth and illusion BCG- How Millennials Are Changing the Face of Marketing Forever https://www.bcgperspectives.com/content/articles/marketing_center_consumer_customer_insight_how_ millennials_changing_marketing_forever/?chapter=3 Havas - Prosumer Report http://prosumer.havasworldwide.com/trust-dynamism 2016 Edelman Trust Baraometer http://www.edelman.com/insights/intellectual-property/2016-edelman-trust-barometer/ The Economist - It’s the real thing http://www.economist.com/news/business/21678216-authenticity-being-peddled-cure-drooping-brands-its- real-thing Catalina Research Studies http://www.catalinamarketing.com/insights/studies/ Bain & Company - China Business Climate Survey Report 2016 http://www.bain.com/publications/articles/china-business-climate-survey-report-2016.aspx Urban obesity World Obesity http://www.worldobesity.org CDC - Division of Nutrition, Physical Activity, and Obesity http://www.cdc.gov/obesity/data/index.html The Kings Fund – Obesity http://www.kingsfund.org.uk/time-to-think-differently/trends/healthy-behaviours/obesity McKinsey Global Institute - The global obesity threat http://www.mckinsey.com/insights/mgi/in_the_news/the_global_obesity_threat?p=1 Colorado School of Public Health -Urban Sprawl and Obesity https://www.youtube.com/watch?v=EOJXIyBd31o Obesity and Severe Obesity Forecasts http://www.medpagetoday.com/upload/2012/5/7/AMEPRE_33853-stamped2.pdf BMJ - The future burden of obesity-related diseases http://bmjopen.bmj.com/content/4/7/e004787.full
- 320. 320 Working longer Office onthe Economic Status of Women - Older Women and Work http://www.oesw.leg.mn/wmnpuboff/OlderWomenWorkRoundtablesFinal.pdf UK Government DWP - Fuller Working Lives https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/319948/fuller-working-lives- background-evidence.pdf Being Mortal - Atul Gawande http://atulgawande.com/book/being-mortal/ McKinsey Global Institute - The productivity challenge of an aging global workforce http://www.mckinsey.com/insights/mgi/in_the_news/the_productivity_challenge_of_an_aging_global_ workforce Investment in Older Workers Turns a Big Profit https://www.youtube.com/watch?v=NujnD1tykkY Dr Ros Altmann - A New Vision for Older Workers – Report to UK government https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/411420/a-new-vision-for- older-workers.pdf Further reading
- 322.
- 323. 323 Copyright and CreativeCommons This is a free publication and was not written to make money. Rather it is shared to stimulate new thinking and action. The Future Agenda programme is run by a global network keen to collaborate and engage with informed people on the key shifts for the next ten years then share the associated insights. Everything in this book is available to access without charge on the Future Agenda website – www.futureagenda.org Although the text is written by the Future Agenda team, and is therefore our copyright, we do share this via the Creative Commons licence. Specifically it is shared via the Creative Commons Non-Commercial licence 3.0 https://creativecommons.org/licenses/by-nc/3.0/ You are therefore free to: Share — copy and redistribute the material in any medium or format Adapt — remix, transform, and build upon the material But under the following terms: Attribution — You must give appropriate credit, provide a link to the licence, and indicate if changes were made. You may do so in any reasonable manner, but not in any way that suggests the licensor endorses you or your use. Non Commercial — You may not use the material for commercial purposes. In this way we hope that as many people can make use of the insights within this book, but without taking commercial advantage of the time and knowledge given by thousands of people around the world who make this programme possible. For more information please see http://www.futureagenda.org/info/creative-commons
- 328. 328 The Future Agendaprogramme is the world’s largest global open foresight programme and is based on the idea that by engaging with others from different cultures, disciplines and industries we can collectively create a more informed understanding of the world in which we live. This makes it easier to shape a strategy that will help to address the major challenges we face. Our aim is to identify ways in which systems could function, consumers behave and governments regulate over the next decade and give all organisations, large or small, access to insights that we hope, will help them to develop their future strategy. The first Future Agenda programme ran in 2010 and brought together views on the future from multiple organisations. Building on expert perspectives that addressed everything from the future of health to the future of money, over 1500 organizations debated the big issues and emerging challenges for the next decade. Sponsored globally by Vodafone Group, the programme looked out ten years to the world in 2020 and connected CEOs and mayors with academics and students across 25 countries. Additional online interaction connected over 50,000 people from more than 145 countries who added their views to the mix. The results from the first programme, published both onlineandinprint,havebeenwidelysharedandhavebeen used around the world by individuals and organizations looking to be more informed. TV programmes, talks, workshops and additional discussions have followed as people have explored the potential implications and opportunities in their sector or market. The second programme, Future Agenda 2.0, ran throughout 2015 looking at key changes in the world by 2025. Following a broadly similar approach, it added extra features, such as providing more workshops in more countries to gain an even wider input and enable regional differences to be explored. All in all 25 topics were explored in 120 workshops hosted by 50 different organisations across 45 locations. There was a specific focus on the next generation, including collaborating with schools, universities and other educational organizations. There was also a more refined use of social networks to share insights and earlier link-ups with global media organizations to ensure wider engagement on the pivotal topics. In addition, rather than having a single global sponsor, this time multiple hosts supported workshops on specific topics either globally or in their regions of interest. The insights in this pdf are taken from the future agenda website that outlines the key findings we gained from all the conversations. It is published under the Creative Commons Attribution-Non Commercial license: You may therefore share, copy and redistribute the material in any medium or format, but you may not use the material for any commercial purposes without written approval from Future Agenda. To get in touch with Future Agenda please contact us by email, twitter or post: info@futureagenda.org @futureagenda 84 Brook Street, London W1K 5EH 2554277809939 ISBN 9780993255427