The good news is that we are living longer, healthier lives. Average life expectancy rose by some 30 years over the course of the 20th Century, and continues to increase.  According the the United Nations, the number of people over the age of 65 is expected to increase by 188% between 2010 and 2050.  Even more dramatically, the number of people living past 85 is expected to grow by 351%, and those reaching 100 is predicted to increase by 1004% over the same period.

Advances in medical technologies, and in particular the spectacular decline in the cost and time required to map the human genome holds the promise of further dramatic increases in life expectancy, and in particular, the prospect of staying healthier and more active in later life.

While longer, healthier lives are an exciting prospect, this megatrend comes with several challenges for businesses.

First, the demographics of your employees are going to change dramatically, as is the employment relationship itself.  With the prospect of living into the 90s and 100s for today’s younger workers, the traditional life course of being in education until the early 20s, working until the mid 60s and spending the rest of life in retirement is not going to be viable, both from a financial standpoint and from a desirability perspective.  People are going to work longer, perhaps switching careers later in life.  Promotion ladders are potentially going to become clogged.  For those companies facing waves of upcoming retirements, filling those positions is going to be harder, and the employment relationship and expectations on both sides is likely to shift. Who the burden of healthcare falls on is going to become an even more critical challenge. The same is true for retirement preparation, particularly with increasing stresses on government provision of social security. People are moving towards thinking of their careers from a portfolio perspective, resulting in more movement and shorter tenures with organizations, increasing hiring and retention issues. Companies may need to rethink the employment relationship entirely to move towards a more “gig” based employment landscape. In short, the human resource challenges of your organization are going to escalate dramatically.

Second, the demographics of your customers are changing. As the population ages, with proportionally more older people and fewer younger people, demand patterns shift and opportunities arise in new markets.  But at the same time, some industries will suffer or need to undergo dramatic shifts to remain relevant.

Third, as people age and move into retirement or semi-retirement they begin to draw down on prior investments.  This may result in a large shift in available investment capital, and the stability of the shareholder base for many firms, providing challenges for investment capital.

Fourth, how the government and society as a whole deals with this demographic change is also likely to have major implications for business.  Does immigration policy change to allow for easier immigration to balance out the aging population?  What happens to the provision of healthcare and retirement?  Does the burden shift away from companies, or does it shift ever more to being tied to employment relationships?  Tracking the markers of changing public policy and opinion will become ever more important in adjusting to potentially major shifts caused by changing demographics.

In short, there are numerous challenges to businesses, both directly and indirectly flowing from this dramatic, and to a large extent predictable, shift in demographics.

The aging population is rapidly increasing due to declining fertility rates world wide, which in turn reduces the number of available workers. Advances in medical technologies, and in particular the spectacular decline in the cost and time required to map the human genome holds the promise of further dramatic increases in life expectancy, and in particular, the prospect of staying healthier and more active in later life.

The Intergovernmental Panel on Climate Change has stated the the “Scientific evidence for warming of the climate system is unequivocal.” NASA’s tracking of the vital signs of the planet shows rising sea levels, global temperature rise, warming oceans, shrinking ice sheets, declining arctic sea ice, glacial retreat, increasing extreme events, ocean acidification and decreased snow cover.  Despite all the data, how climate change will play out in terms of its impact on our daily lives is subject to intense debate.

Two areas with potentially large impacts on business though are becoming clearer, and more frightening: the increasing incidence of billion-dollar weather and climate disasters, and a growing concern for the sufficiency of water supply, particularly in some large cities.

Data from the National Oceanic and Atmospheric Administration’s National Centers for Environmental Information shows that during the 1980’s there were 27 weather and climate events that did more than $1 billion in damage in the U.S.  During the 1990’s there were 48 such events.  In the 2000’s this rose to 54 events.  Even now, only partly through the decade of the 2010’s, there have been 74 billion-dollar weather and climate disasters through the end of 2016.

According to the United Nations, while today round 700 million people suffer from water scarcity, by 2025, 1.8 billion people will be living in countries or regions with absolute water scarcity, and two-thirds of the world’s population may be living in water stressed conditions.  As an essential need for life, the primacy of water scarcity rises quickly to the top of the agenda for an ever increasing number of countries, regions, and cities.

Climate change has the potential to be the most devastating of the megatrends as it may profoundly impact the ability to sustain life itself in some areas.  Even without such a drastic outcome, we are already seeing tremendous impacts of climate change in the dramatic increase  in billion-dollar weather events and increasing water scarcity in major cities such as Beijing.  Water scarcity has the potential to disrupt supply chains in many industries, requiring adaptation of business processes, a reassessment of the value chain and increased risk in the supply chain.  Severe weather events also have the potential for severe short-term disruptions not only to businesses located in the affected areas, but also to supply chains and transportation and logistics systems.

Preparing for the unpredictability of severe weather events is particularly challenging for businesses, but the increasing incidence of these events means that businesses must develop emergency plans for events that severely impact their business, employees, customers and suppliers.

Climate Change has a great impact on the eco-environment, which potentially affect people’s life and industrial behaviors. It is dependent on the choice of future economic and social development pathways. To be more specific, social development can be a strong determinant of vulnerability to climate change and vice versa. Most impacts of climate change cannot be avoided over the next few decades. The following indicators remind governments and companies the hidden danger of geographic change and production.

Global climate is changing and this change is apparent across a wide range of observations. The global warming of the past 50 years is primarily due to human activities. Global climate is projected to continue to change over this century and beyond. The magnitude of climate change beyond the next few decades depends primarily on the amount of heat-trapping gases emitted globally, and how sensitive the Earth’s climate is to those emissions. Meanwhile, billion dollar events resulted in the deaths of 188 people in 2020 so far and had significant economic effects on the areas impacted.

Wold Bank data shows a steady rise in the proportion of the world’s population that live in urban centers, rising from 36.5% in 1970, to 41.1% in 1985, to 46.5% in 2000, to 53.8% in 2015.  By 2030, this is likely to be more than two-thirds of the world’s population. In the United States, while this growth flat-lined in from 1970 to 1990 as many cities experienced social problems and economic flight, urbanization has resumed its march such that by 2015, 81.6% of the population lived in urban areas.

The rapid urbanization and urban regeneration that is happening poses both challenges and opportunities.  Contrary to the expectations of many, urban living can be much more efficient from a sustainability perspective, reducing per capita carbon emissions and lessening the impact on the environment.  At the same time, dense populations can pose a challenge to infrastructure, particularly in older cities that were not designed for the volume of people living in them.

A higher proportion of people living in urban centers also attracts resources, stimulates innovation, and facilitates the development ofpeer-to-peer platforms.  At the same time, this begets the potential to increase The Great Divides of Wealth, Health, and Technology, particularly increasing the divisions between rural and urban populations.  Even within cities we are seeing the effect of an increasing wealth divide where cities essentially become accessible only to the wealthy to actually live in, with service providers having to live outside the city and commute in as the ratio of real estate cost to average wage escalates to seemingly unsustainable levels.

This urban regeneration provides opportunities to business, with dense markets, and increased flow of resources into cities, and opportunities to create innovation centers.  At the same time, with increased abilities to communicate, and the easy access driven by close proximity, the development of peer-to-peer platforms allows the sharing economy to flourish and potentially disrupt more and more.

“The world is urbanizing at an unprecedented rate, and more than half the world’s population live in cities” (World Bank 2018). This Societal Shift explores the pace by which large numbers of people concentrate in relatively small areas. It is expected that by 2050, two-thirds of the world will live in urban areas (UN 2015). Indeed, rapid urbanization is happening and thus, it is imperative to learn where is this growth occurring and what key indicators help us foresee the cities of the future.

More than half of the world’s population lives in urban areas. Due to the ongoing urbanisation and growth of the world’s population, there will be about 2.5 billion more people added to the urban population by 2050, mainly in Africa and Asia. The world’s urban areas are highly varied, but many cities and towns are facing problems such as a lack of jobs, homelessness and expanding squatter settlements, inadequate services and infrastructure, poor health and educational services and high levels of pollution.

Electricity is the blood coursing through the veins of modern society. One of the major security threats to nations today, particularly the U.S., is the vulnerability of the power grid, particularly given the aging and fragile infrastructure on which it rests. Any major, prolonged outage has the potential to bring down the communications infrastructure on which society and commerce depends.

The prospect of efficient, scalable, and affordable energy storage would be a game-changer.  The ability to disaggregate the storage of energy, which would also facilitate the disaggregation of production of energy would both reduce the vulnerability of society to the prospect of the power grid going down, and allow for scaleable micro-generation of power in the face of ever increasing energy demand.  Scaleable, efficient storage would also unleash the potential for the growth of renewable energy, enabling the balancing of supply and demand from erratic energy sources such as wind and solar.

More efficient energy storage also opens up new possibilities in mobile applications, from increasing the practicality of electric cars and other transportation systems, to facilitating mobile businesses.

While breakthroughs in energy generation and storage will have obvious, but huge, disruptive impacts on the traditional energy businesses, and ripple effects on other sectors such as automotive, the promise of disruptive change in energy generation and storage provides opportunities for many other sectors that are otherwise constrained by the portability of power.

Ever increasing environmental demands are being placed on energy generation, which is leading to diversification of energy sources towards building a low carbon economy. This is driving interest in battery technology and alternative energy sources, such as wind and solar, as well as increasing demands on improving traditional powers sources such as coal and nuclear.

Petroleum is the main source of energy in the United States. The liquid is predominantly utilized as a fuel in the transportation sector, which is also the second-largest consumer of energy in the US,  with a proportion of over 28 percent of the country’s total energy consumption. Investment in the transportation sector also increases given the growing consumption. South Korea, China, US and Germany are the four countries that have the highest level of energy storage method deployed.

The statistics on how fast we are generating and accumulating data are staggering and only accelerating.  In 2010, Eric Schmidt, Executive Chairman of Google noted that “From the dawn of cizilization until 2003, humankind generated five exabytes of data (5 billion gigabytes).  Now we produce five exabytes every two days…and the pace is accelerating.” In fact it is accelerating so fast that by 2015, Forbes estimated that the amount of data we have will rise from 4.4 zettabytes in 2015 to 44 zetabytes, or 44 trillion gigabytes by 2020.  However, despite this astounding rise in the accumulation of data, what is more compelling is that less that 0.5% of all data is ever analyzed and used.

While most people and businesses have been aware of the rise of big data for quite some time, what will drive the profound impact of this megatrend is not only the increasing ability to analyze this data, but to do so in real time. As the tools to gather and analyze data in real time become more widespread, the business applications, in everything from marketing to supply chain, from finance to manufacturing, fast data will profoundly change the way business is done, and how competitive advantage is generated and sustained.

The challenges for businesses around big data and fast data are numerous.  In most industries we will see a divergence between companies that are able to collect and analyze data effectively and those that can’t.  The effective use of data will become one of the fundamental generators – and destroyers – of competitive advantage. Ownership and access to data will become critical.  This could give advantages to industry incumbents who have access to data; otherwise these firms could be disrupted by new firms, or firms outside the industry who able to access and analyze data finding new sources of competitive advantage and undermining established patterns of behavior.

While the rise of big data and fast data will create myriad opportunities for companies that can take advantage of using data effectively, the big challenge that comes with this critical data is security.  Cyber security is going to be more and more critical as businesses rely more and more on the use of data as a source of competitive advantage.  We are already seeing the catastrophic impacts of large data breeches, but even these major events that are made public are only the tip of the iceberg.  The rise of ransomware hacks and other malicious attacks on a company’s critical data infrastructure is perhaps one of the most critical challenges facing many companies today and will only continue to become more important.

Big Data is defined as “a field that treats ways to analyze, systematically extract information from, or otherwise deal with data sets that are too large or complex to be dealt with by traditional data-processing application software” in Wikipedia. It is one of most popular new technology in the Society.

The most well-known Blockchain application currently is the virtual currency Bitcoin. While the terminologies and concepts behind how Bitcoins are created, or “mined,” the anonymous nature of the creator(s) of the platform, the volatility of the exchange rate between Bitcoins and established national currencies, make many people distrustful and suspicious of the value of the Bitcoin currency.  However, the underlying technology on which Bitcoin is built, the Blockchain, has vast potential to disrupt the way transactions happen and how we verify information, and accordingly, how we trust that what individuals and organizations claim is true is verified as being true.

The concept of the Blockchain is a peer-to-peer decentralized database that stores an encrypted registry of assets and transactions, creating the potential for an ultra-secure, highly versatile way of verifying ownership, transactions and other information that requires independent verification.  The possible applications of Blockchain are numerous and may fundamentally alter how a large portion of business transactions occur. This would, for example, enable consumers to verify supply chains of components used in the production of the goods they purchase, in turn enabling companies to verifiably demonstrate ethical supply chains and business practices to their customers.  It would enable food producers to show fair-trade or organic ingredients and enable consumers to know the origin of their food.  Beyond supply chain applications, it can enable distributed cloud storage, decentralized exchanges that facilitate transactions without an intermediary institution, the managing of digital identity, which reduces the possibility of fraud and identity theft as well as enabling applications such as digital voting, smart contracts that self-execute under predetermined conditions, and many other applications. In short, the development of the Blockchain will revolutionize transactions, enabling even the smallest transactions – like the purchasing of a song on a digital music service, to be easily recorded and verified.

While the Blockchain may give greater security for transactions – reducing one of the biggest threats to business today – the flip side to the verifiability of every transaction and data about transaction is that, consumers will demand greater transparency from companies as to their supply chains and hold them to higher standards of ethical practices within supply chains that they may not directly control. 

As the transition to Blockchain occurs, there is the real possibility that consumers will adopt this technology for transactions faster than many incumbent businesses will.  If this is the case then transactions may shift away from such businesses at a rapid pace, causing shifts in the market dynamics of many industries.

Blockchain has been utilized in many different forms. It has been used as the foundation of clearing and settlement systems that are resistant to tampering and fraud. The technology is used for smart contracts, and found use in speeding up digital transactions as well. The wide array of apps and the rapid diversification of blockchain also heralds an opportunity for developers. With more firms gearing up to take advantage of blockchain, the demand for developers will start growing exponentially.

While we have already seen the impact of Uber, Airbnb, UpWork, and others, we are only at the tip of the iceberg in terms of the potential for peer to peer platforms to disrupt industries, particularly in the consumer-facing space.  The rise of the internet, social media, smart-phones and app stores have created the ability for consumers to procure the goods and services they need and want from other consumers rather than from established companies.  But the real behavioral shift that has occurred is a complete change in the basis of trust which facilitates these transactions.  In previous generations, trust was institutionalized – we trusted institutions, both because of the consistency of institutions and the ability for recourse should things not turn out as promised.  Now however, we are trusting individuals that we have no direct past history with.  While we grew up with the notion of not getting into cars with strangers, if we request that car through an app, and it shows up with a “U” sticker on it, we happily get in. We previously relied on reviews from trusted sources before making major purchases.  Now we rely on the views of strangers.  At the same time as the rise in our trust of other individuals through electronic ratings, our trust in institutions has declined. A glance at the Gallup polls across various types of institutions over recent decades shows a dramatic fall in the public’s trust in institutions such as Congress and the Presidency, banks, big business, newspapers, television news, public schools, and the church.  This dramatic fall in the public trust in institutions that were the pillars of society, and the shift to trust in individuals through peer to peer exchanges represents a remarkable shift which has huge implications in most consumer-facing industries.

The rise of peer to peer platforms, and the shift in trust that has developed along side it has prompted a range of differing responses from incumbent companies in those industries.  Some have tried to resist through direct action, such as striking taxi drivers in cities such as London and Paris in response to the disruption of Uber.  Some have sought to influence changes in laws to protect their turf, such as hotel industry lobbying to restrict the scope of airbnb.  Still others have sought to embrace the sharing economy notions of peer-to-peer platforms by introducing or acquiring sharing platforms and infrastructure, such as BMW’s ReachNow car-sharing initiative, or car-rental company Avis’s acquisition of Zipcar.  With the force and momentum of megatrends, while some companies may be effective at prolonging their decline through various resistance tactics, generally the exploration and embracing of business strategies that align with the direction of the megatrend are more likely to be successful over the long term.  But how, to what extent, and at what speed you make this transition are key factors in future success.

The number of people online, on mobile and on social has increased year-on-year. For companies who are optimizing their digital experiences across multiple channels, such as social media and e-commerce, are establishing a strong competitive advantage. Moreover, companies looking to move into social commerce should look at ways to build trust and create an online experience that demonstrates a clear value in browsing and buying online.