Understanding long-term trends is an important tool in
identifying opportunities and risks. STEEP analysis looks at the world
through five different perspectives – Social, Technological, Economic,
Ecological, and Political.
The following are the major themes that are presently shaping the future...
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1) Go East!
The economic center of the map is shifting once again – this time toward the East.
A report by the McKinsey Global Institute says that in 1,000 A.D.,
the economic center of the map was in central Asia, just west of China.
At the turn of the last century, it shifted to northern Europe, due to
the influence of the industrial revolution. By 1950, it had reached
its westernmost point. This was a reflection of America’s dominance in
manufacturing and agriculture.
In the past decade, the world’s economic center has shifted to
northern Russia. By 2025, it may return to central Asia – just north of
where it was a thousand years ago.
From
Urban World: Cities and the Rise of the Consuming Class. (Calculated by weighting national GDP by each nation’s geographic center of gravity.)
Implications: The fastest-growing sources
of demand for consumer products are now outside of the U.S. Look for
opportunities in both the Asian and Latin American markets. Similarly,
as these countries increase in relative affluence, changing dietary
preferences and energy needs may put inflationary pressures on commodity
prices.
2) Urbanize
Every week throughout the world, 1.3 million people are leaving
subsistence farming to become urban dwellers. China’s rate of
urbanization is occurring ten times more quickly than it did in the U.K.
a century ago. The country is now creating megacities (pop. 10
million+) at of rate of one per year.
Urbanization is an important trend for sustainability because it
partially defuses the population bomb. For agricultural societies,
there is plenty of room, and children are helpful assets – this is
simply not the case for urban areas. The birthrate of new urban
dwellers quickly drops to replacement levels (2.1 children per
household) and sometimes continues to decline. Higher levels of
urbanization typically result in improved levels of education and
literacy – also a major factor in reducing family size.
There is a significant inverse relationship between population
density and transportation-related resource consumption. This mitigates
some of the pressures of global resource consumption and may offset
some of the demands of rising affluence.
Population models suggest that the global population will level off
at 8.1 billion by 2040. By mid-century, 80% of the world’s population
will be urban, mostly in the developing world.
Implications: In the near-term
there are significant demands for infrastructure-building materials
(copper, cement, steel). As the urbanization trend matures, look for a
demand shift toward consumer goods, education, and other services.
3) Good to the Last Drop
Over the coming decade, there may be increased scarcity of basic
commodities resulting from resource depletion and increasingly volatile
weather patterns. Growing affluent populations in emerging countries
will add further pricing pressure on commodity prices.
Forty countries currently face food shortages. The UN estimates that
more than 30% of fish stocks have collapsed entirely. Corn prices have
surged based on drought conditions throughout the U.S. and political
turmoil in the Middle East has caused episodic spikes in cotton prices.
While 41% of the global population is experience some form of water
stress (i.e., lack of clean water and adequate sanitation), population
growth forecasts estimate that another three billion people will need
water access by 2050.
It appears that worldwide oil production has plateaued. Since 2004,
prices have more than doubled, yet global production has only increased
by 4%. Oil production has already peaked in 54 out of the 65 largest
oil-producing countries, including the United States. The world is not
running out of oil, just
cheap oil.
Implications: While productivity during
the industrial era aimed at producing more goods with less labor, the
future of productivity will focus on total output per unit of physical
resources. One result of this may be an increase in systems and
lifecycle design thinking.
4) Digitize Me
We are seeing a shift away from mass consumption towards mass
communication. Whatever can become digital will become digitized. The
contents of entire rooms (libraries, offices, etc.) have been condensed
into a footprint the size of a single laptop.
Expect major changes in the consumption patterns of today’s youth –
particularly in America and Europe. Younger generations are becoming
less interested in accumulating debt for the purchase of cars and
housing. Renting and sharing are becoming more common arrangements for
large physical assets. Economics is becoming less about
ownership and more about
access.
Implications: A growing portion of product value will come from informational content (design) rather than material content.
One possible outcome of this trend may be a more mobile, dynamic, and
flexible culture. Digitization also makes it possible to sustain
economic growth within the context of increasingly limited physical
resources.
5) Smarter, Faster, Stronger
The rate of technological development is accelerating throughout the
world. Humanity, as a whole, is more connected, educated, and healthier
than ever – and this will lead to sustained innovation.
Several technologies worth watching:
- 3D Printing: Additive manufacturing, rapid prototyping, 3D scanning and design software will create a new industrial revolution.
Look for some basic types of manufacturing to came back to the
U.S. Supply chains for physical goods will become shortened and factory
production will become democratized. We experience a renaissance in
product design as a result.
- Graphene: The discoverers of this carbon-based wonder material received the 2010 Nobel Prize in Physics. By volume, graphene
is six times lighter, two times harder, and ten times stronger than
steel. Graphene is also super-conducive, self-cooling, anti-bacterial,
anti-corrosive. While costs are currently quite high, this material
may revolutionize multiple industries -- including surface coatings,
electronics, transportation, healthcare, and energy.
- Robotics: Robotics will continue to displace human
works in manufacturing and agriculture. The recent acquisition of Kiva
Systems by Amazon has brought robotics into the logistics business.
Drones are now deployed by all three major branches of the U.S.
military. While robotics have been used as an alternative sources of
physical labor, artificial intelligence agents will gradually replace
white-collar professionals in areas such as customer service. We may
also see fully autonomous vehicles in mass-production by 2025.
- Energy Storage: Improvements in electric batteries
and fuel cells will make energy storage devices more powerful and
portable. Localized generation of power using natural gas will also
minimize the distance that electricity needs to travel through the grid
– resulting in reduced power losses during transmission. By combining
these advances with improvements in superconductive materials and the
proliferation of smart-grids, we will get even better at energy
distribution and efficiency.
- Polymer Electronics: Cheap, ubiquitous, printable
devices will increase in number and become more communicative,
effectively creating an internet of things. OLEDs (organic
light-emitting diodes) will be a key technology – first for electronics
requiring energy-efficient displays (cell phones, laptops), and
eventually making their way towards larger applications (interior
lighting, television, smart walls).
6) Stuck in Neutral
Persistently high levels of government debt will result in low levels
of real economic growth, for at least the next five years. The U.S.
has recently exceeded a 100% debt-to-GDP level, suggesting that we may
eventually face some difficult policy choices.
There are two potential paths – austerity and inflation. One
involves sharply lowering government spending and raising taxes. This
increases the risk of creating a domino-reaction of defaults. The other
alternative devalues the debt and while debasing the currency.
Our government’s short-term response has been to keep interest rates
artificially low and add to the existing debt burden. In essence, it
gives us time to consider the options.
Implications: Political gridlock has kept
the difficult questions from being asked. A lack of clarity regarding
future government policies has created an environment of economic
uncertainty and doubt. The looming risk of collapse in some
industrialized nations may open the doors for radical elements. One
potential response to this threat would be the pre-emptive increase in
government authority.
7) Gray Boom
The Institute on Aging reports that there are 17 million American
between the ages of seventy-five and eighty-five. That figure is
expected to double by 2050. Half of all Americans born today will
eventually celebrate their 100th birthday.
The industrialized northern countries will continue to grow slowly
with mature, aging populations. Meanwhile, the southern hemisphere will
remain comparatively youthful and experience rapid economic growth.
Implications: In the U.S. and Europe,
people are extending every phase of their life cycle. Young men are
spending more time in adolescence and are now waiting until their late
20’s and early 30’s before getting married and starting families.
Children are living at home longer before moving out, and adults are
delaying retirement.
We expect a rise in second careers and a shift toward part-time
employment and small business. The “career ladder” has been replaced by
a
“patchwork quilt” of work opportunities.
TREND BLENDING
Here we examine how some of these trends interact to create
secondary trends. These tend to be slightly more specific, yet
speculative in nature.
Digitize Me + Good to the Last Drop + Stuck in Neutral = Glocalism
The information economy becomes increasingly global while the physical economy becomes more local.
Digitize Me + Good to the Last Drop + Urbanize = Less is More
Look for a scaling back of consumption patterns, including slightly
smaller homes. Cities will grow in popularity, as they allow for a
greater interaction between people and opportunities.
Digitize Me + Stuck in Neutral = Electronic Schoolhouses
Government budget cuts and rising education costs will make online education an imperative.
Digitize Me + Less is More = Sharing Economy
Less ownership, more access.
Gray Boom + Stuck in Neutral = Retooling
Slow economic growth combined with great longevity suggests that
people will be working for far longer than originally anticipated.
Gray Boom + Go East = Medical Tourism
Sharply rising medical costs in the U.S. will trigger a boom in
medical tourism, in particular for anti-ageing treatments and elective
surgery.
Gray Boom + Era of Uncertainty + Go East! + Digitize Me = Telemedicine
Although doctor office visits will never disappear, telemedicine may
become increasingly common over the next few decades. Also, there may
be a sharp rise in home-heal monitoring as a temporary alternative to
assisted living communities.
Gray Boom + Smarter, Faster, Stronger = A Better You
Innovations in medicine will not only offer cures for some diseases
but also reverse some of the signs of aging. An improved understanding
of epigenetics will allow for pre-emptive healthcare interventions. When
all else fails, bio-printing of replacement organs from the patient’s
own cells will solve compatibility issues for transplants (but not until
the 2020’s at the earliest).
Era of Uncertainty + Digitize Me = Homeland Insecurity
“Big Data” projects are rapidly being deployed by the government to
monitor civilian activities. Knowledge is power, and power means
control. Predictive analytics will lead to the ability to not only
anticipate terrorist and criminal activity, but also identify protestors
and dissenters.
Stuck in Neutral + Good to Last Drop = Homesteading
In some parts of the U.S., look for the American dream to shift away
from the concept of affluence to resilience and self-sufficiency
Smarter, Faster, Stronger + Homesteading = Prosumers
Prosumers are productive consumers – endlessly creating, modifying,
and building new products. This occurs from both economic necessity and
intellectual curiosity.
Smarter, Faster, Stronger + Urbanization + Sharing Economy = Transportation on Demand
Self-driving vehicles will enter into public usage sometime around
the mid 2020’s, extending the usefulness of the existing highway
infrastructure. It will also allow greater worker productivity and
mobility for young people.
Smarter, Faster, Stronger + Good to the Last Drop = Smart Grids
We are going to be monitoring energy consumption and delivery far
more closely, leading to higher levels of efficiency and
distribution./strong/strong
This week the Bluetooth Special Interest Group (SIG), which is responsible for developing technical standards for the short-range wireless technology and evangelizing its adoption, announced the finalized standards for Bluetooth Smart sensors that measure speed and cadence for running and cycling. The standards are for devices that use the Bluetooth 4.0 low energy standard branded as Bluetooth Smart.
Tel Aviv-based 
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