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.

Business Challenges

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.
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Resources

MIT: Future of Energy Storage

Union of Concerned Scientists: How energy storage works

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.
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Business Challenges

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.
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Resources

NASA Global Climate Change: http://climate.nasa.gov/evidence/

NOAA National Centers for Environmental Information (NCEI) U.S. Billion-dollar Weather and Climate Disasters (2017). https://www.ncdc.noaa.gov/billions/

UN Water scarcity: http://www.un.org/waterforlifedecade/scarcity.shtml

World Resources Institute: https://www.wri.org/resources/data_sets

Our World in Data: https://ourworldindata.org/natural-disasters#all-charts-preview

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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.
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Business Challenges

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.
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Resources

World Bank: http://data.worldbank.org/indicator/SP.URB.TOTL.IN.ZS

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.
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Business Challenges

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.
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Resources

United Nations, World Population Prospects: The 2010 Revision. http://esa.un.org/unpd/wpp

University of Oxford Institute of Population Ageing: http://www.ageing.ox.ac.uk

University of Oxford GOTO: http://www.sbs.ox.ac.uk/gotodemographic