The 2020s will be a decade of transformation … redistributed power, reimagined consumption, enhanced technology
December 23, 2019
The 2020s will be a decade of transformation.
When I start my keynotes saying “there will be more change in the next 10 years than the last 250 years” I can feel shuffling of seats. I understand that it sounds like one of those big cliches, full of hyperbole, irrelevant to our day to day jobs.
Yet when I sat down over recent weeks to bring together a huge amount of data, seeking to map out the trends for the next decade, I started to see real meaning in my own words – the changes in technology, and as a result in business and society, will be rapid, dramatic and profound.
“Megatrends 2020-2030“ will change every business, every community, every life.
The challenges are significant, but so are the opportunities. It’s an incredibly exciting time, harnessing the power of new capabilities and platforms to address the wrongs in our world, and create new rights. As Bloomberg said in exploring the year, and decade, ahead “If all the world’s a stage, then the next decade promises to be an epic multipart drama.”
The emerging themes are about changing societies, driven and accelerated by new technology:
1. Power, redistributed
Rapid urbanisation is redefining our world, the nature of markets and power of nations. PwC calculates that 1.5 million more people live in cities every week. This process is driving a global economic power shift from West to East, and placing ever-greater stress on the natural world.
By 2025, Asia will be home to 33 of the world’s 49 megacities. In fact China expects to have 200 cities with a population of over one million people by 2025. To tackle overcrowding in Beijing, China is building a new city – Xiongan New Area – from scratch 100km southwest of the capital, expected to be of similar size within 5 years.
In India, Dheli despite its chronic air pollution problems is predicted to expand its population by 10 million people over the next decade to 39 million, and displace Tokyo as the world’s largest city. In economic terms, all 10 of the world’s fastest-growing cities by GDP growth are in India, with the Gujarati port city of Surat topping a new ranking by Oxford Economics.
The economic advance of China and India is fuelling the rise of a new global middle class, which by 2020 will grow to 3.2 billion people (from 1.8 billion in 2009), and by the end of the decade will reach 5.3 billion, and become the largest segment of the global population, according to World Data Lab.
2. Consumption, reimagined
Environmental threats are intensifying, questioning the durability of existing business models, with the public and private sectors facing ever greater pressure to act. A new age of increased accountability will challenge the balance of short-term priorities with long-term sustainability.
Individuals and businesses are adopting more resource-efficient behaviours, from eco-friendly transportat to bike-sharing and electric vehicles to water conservation and material recycling. Social and environmental considerations have become critical drivers of decision-making, with 66% of consumers across 60 countries saying they will pay more for environmentally-friendly products, rising to 73% among millennials.
In November F1 motorsport pledged to become carbon-neutral by 2030. The racing group also plans to adopt policies that will make all grand prix fully sustainable by 2025. For a sport that produces 225,000 tonnes of CO2 each season, and transports 10 teams and equipment to 21 races around the globe, this is a huge shift and demonstrates a broader shift in social priorities.
3. Technology, enhanced
The cities of the future will be smarter, exploiting technology to be cleaner and more efficient in their use of resources. Copenhagen, for example, has pledged to become the world’s first carbon-neutral city by 2025. Overall, the global smart cities market is expected to grow to $717 billion by 2023, up from $308 billion in 2018.
The global population is on course to top 8 billion by 2030, mostly in the developing world. Developed countries must adapt to aging populations, and their consequent implications for healthcare costs. Changing work patterns might help: PwC estimates that the OECD could gain more than $3.5 trillion by raising the employment rates of older people to levels found in New Zealand and Iceland (where 56% of those over 65 still work).
Technology will fuse with humanity in new ways. Connective technology means that by 2020 there will be 7 times as many connected devices on the planet as people, according to Cisco. The global smart home tech market will be worth $53 billion by 2025, predicts Zion, as consumers demand smart fridges that advise them when food is expiring, smart mattresses that monitor sleep patterns and smart baths that emit relaxing aromatherapy.
4. Business, redefined
The average age of a company listed on S&P 500 has fallen from almost 60 years in the 1950s to less than 20 years today. Analysis of Fortune 500 companies tells a similar tale; only 60 companies on the list in 1955 appear on the list in 2017, fewer than 12%. The rest have either gone bankrupt, been acquired, or declined. The rate of churn is only expected to increase, propelled by new technology, growing complexity and global entrepreneurship.
A trust deficit in society – declining faith in politicians, institutions and even religion, as illustrated by the latest Edelman Trust Barometer – means that people are turning to businesses to show leadership. Businesses are expected to show a lead in address big issues, and embracing new technologies and desirable brands to innovate in more responsible ways – solving big social problems at the same time as making money. Today’s CEOs are increasingly expected to speak out, to challenge injustices, and to give new direction.
A recent Harvard Business Review report identified the ability to adapt as the most important skill for business employees, more important than technical knowledge, communication skills or customer-focused problem-solving. Adaptability should be in everyone’s job description. The inability of individuals to adapt is magnified in a large organisation, because every person who doesn’t adapt to change is a drag on the overall change efforts, making it less flexible and responsive to competitors.