miércoles, 29 de agosto de 2012

Seven Themes for the Coming Decade

James Lee's picture
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.
Economic center of gravity.png
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.
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

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