6/21/2012

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Global Mega Trends and Their Impact

on Business, Cultures and Society

Presented by

Karthik Rajan

Director Consulting:

Public Sector (Asia Pacific)

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#1 Urbanization

6/21/2012

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Three Main Trends in Urbanization: Development of Mega Cities, Mega Regions and Mega Corridors

MEGA CITY

City With A Minimum

Population Of 5 Million

EXAMPLE: Greater London

MEGA REGIONS

Cities Combining With

Suburbs To Form Regions. (Population

over 10 Million)

EXAMPLE: Johannesburg and

Pretoria (forming “Jo-Toria”)

MEGA

CORRIDORS

The Corridors

Connecting Two Major Cities or Mega Regions

EXAMPLE: Hong Kong-

Shenzhen-Guangzhou in China (Population

120 Million)

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1950s Urbanisation

2000s Suburbanisation

2015s Network City

2020s : Branded Cities

Megacity Trend

• City borders will expand out of suburbs to include daughter cities. The Core City will enclose multiple

downtowns.

• Multiple Transportation Models will be used and more than 50% will use public transportation

• Most offices moved to the first belt suburbs except non cost sensitive activities: city centres

becoming shopping areas (small scale deliveries) for expensive goods and living areas for “double

income, no kids” households.

Urban sprawl, first highways and ring road

Creation of the historic centre and districts

Third suburban area and cities along the highways created, ring road overblown by the urban sprawl

Ring Road Motorway,

Living Areas growing outside the ring road as seen in London

By 2020, We Will See Development of Mega City Corridors and Networked, Integrated and Branded Cities

Source: Frost & Sullivan

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Smart Cities – “Green” Replaced by “SMART” Concepts

‘S” Governance

‘S’ City Planning

‘S’ Energy

‘S’ Business

‘S’ ICT

‘S’ Mobility

‘S’ Citizen

‘S’ Buildings

These 3 elements Will define the ‘Smart’ Mobility of the future

Smart Diamond to define Smart citySmart Diamond to define Smart city

City’s InfrastructureLegend: City’s User community City’s Green Ecology

‘S’ Energy � Renewable energy, Smart Grid Infrastructure

‘S‘ City Planning � EV Charging, Smart Grid, Bus Rapid Transit, Parking Infrastructure, Congestion

Charging

‘S’ Information Communication & Technology � Telematics, Navigation, Smart Metering, Internet

Technologies

Smart Cities Smart Cities �������� Energy, City Planning and ICT to define the future of Mobility Energy, City Planning and ICT to define the future of Mobility

Sourc

e: F

rost

& S

ulli

van

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Over 40 Global Cities to be SMART Cities in 2020

Cities built from scratch

Existing eco cities

Existing eco megacities

Treasure Island

Boulder

Arcosanti

Coyote SpringsDestiny

Babcock Ranch

Vancouver

Toronto

San Francisco

PortlandSeattle

Curitiba

Montreal

Bogota

St Davids

Clonburris

Göteborg

Hammarby Sjöstad

London

Barcelona

Reykjavik Oslo

Freiburg

Stockholm

Paris

Copenhagen

Kochi

GIFT

Cape Town

Pune

Dongtan

Tianjin

Changsha

KhajurahoMeixi Lake

Waitakere, N.Z.

Singapore City

Songdo

Moreland, Australia

Amsterdam

Masdar

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“Smart” Market Opportunity : Convergence of Technology Will Lead to Convergence of Competition

IT Players Automation/Building Control Players

Energy/InfrastructurePlayers

Source: Frost & Sullivan.

• IP Networks

• Digital Technology• Analysis Software

• Wireless Communication• Technology Integration

• Network Security• Etc.

• T&D Technology

• Power Electronics• Renewable Energy

• Integrated Distribution Management• Substation Automation

• AMI-Enabled Metering• Etc.

• Building Automation

• Demand-Side Management• Connectivity of devices

• Monitoring and Sensing• Smart Grid Integration

• Etc.

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#2 E-Mobility

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E-Mobility : Over 40 Million Electric 2 Wheelers and 4 Wheelers will be Sold Annually Around the Globe in 2020

XM 3000 Electric MopedSanyo Enacle The GEM Peapod The Smith Newton

Total 30 million – 2 Wheelers

(2020)

Total 10 Million – 4 Wheelers

(2020)

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Electric Vehicle Market Eco-System Provides Opportunity to Enter New Fields

Infrastructure

supplier

Key Responsibility:

Development of Charging

Infrastructure

Key Responsibility:

Promotion of EV use

UtilitiesIntegrator

(e.g Better Place)OEMs

System/Battery

ManufacturersGovernment

Charging

Station

Manufacturers

Integrators to create partnerships with Utilities, OEMs and Government

Supplies infrastructure to distribute their

energy

Cooperation to simultaneously promote EV use and electricity as a fuel

Development of performing batteries

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Electric Vehicles Will Usher New Mobility Business Model : Future Leasing Models To Sell 75% Of Vehicles; The Rest 25% Sold Traditionally

Business Model 1 Business Model 2 Business Model 3 Business Model 4

TYPE Energy Package Maintenance Package Part Subsidy Full Subsidy

COVER Partial battery lease + Electricity

Energy Package+ Insurance+ Maintenance

Maintenance Package+ Discount

Maintenance Package+ 100% Discount

ENERGY Monthly Bill Flat: Max 2000km/month Flat: 25,000km/year Flat: 30,000km/year

CONTRACT NA NA 4 years 7 years

SUBSIDY NA NA 50% car price Free car

MONTHLY LEASE

Up to €150 Up to €350 €500- €800 ~ €900- €1500

Flexible Mileage Unlimited Miles Max number of miles Pay as you go

Flexible Contract The customer opts for the number of years and flexible mileage- customized lease

Other Possible Leasing models

Source: Better Place, Frost & Sullivan

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Source: Frost & Sullivan

• Charge Payment

Program / Subscription based

services

• Manufacturing &

Sales

• Load Management

• Extended E-

mobility solution e.g. vehicle sharing

• Energy

Subscription Packages

Po

ssib

le R

ev

en

ue

Str

eam

s

Charging Stations

Batteries E-Mobility Vehicles ElectricityTelematics & other value

added services

Serv

ices

Example of Products/Services Portfolio That Can be Offered by an Integrator in the E-Mobility Market

• Installation &

Maintenance

• Revenues from

value added services

• Premium revenues

via Renewable Energy Vs Non

Renewable Energy

• Premium revenues

via Peak Power Vs Off Peak Charging

• Level 1 Vs Level 2

Vs Level 3 Charging

• Battery Leasing

Model

• Refurbishing

• Recycling

• Battery 2nd life

• Battery

Swapping

• Extend to other

E-mobility solutions

• Battery

Integration

• Offering After-

Sales services –

• Market green

solutions such as Solar panels to E-Mobility client base

• investment in

renewable energy such as wind farms

and gain carbon credits

• Recycling and

Refurbishing

• Premium revenues

via Peak Power Vs Off Peak Charging

• Premium revenues

via Renewable Energy Vs Non

Renewable Energy

• Subscription

based Energy service Scheme

• Data Aggregator (

working with other partners)

• Battery

management services

• Advanced booking

of charging stations

• V2V and V2G

Communication

• Added value

service (POIs, Diagnostics, etc)

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#3 Social Trends

14

0.360.44

0.14 0.07 0.13

0.33

0.22

0.37

0.63

0.22 0.13 0.26

0.44

0.51

0.33

0.19

0.21

0.11

0.23

0.47 0.57

0.07

0.47

0.12

0.07

0.22

0.09

0.16

0

0.2

0.4

0.6

0.8

1

1.2

1.4

1.6

1.8

2

Africa Rest of AsiaLatin America, Caribbean and OceaniaNorth America Europe India China

Po

pu

lati

on

in

Bil

lio

n

65 Years and Above 35-64 15-34 0-14

1.69

2.56

2.1

1.2

World Population in 2020: Out of 2.56 Billion Gen Y Population -Around 61% from Asia Alone

Source: US Census Bureau, 2010 and Department of Economic and Social Affairs of the United NationsNote: Gen Y : Population between 15 – 34 Years

2010 2020World Population: Breakdown by Region (Global), 2020

6.83 Billion

7.55 BillionAround 37% of Gen Y Population Will Live in India and China Alone

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Social Networking – most popular activity online

6/21/2012

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Generation Y: Goods and Services Catered to Values, Beliefs, Interest and Lifestyle

Personalization

and Individualization

Techno Savvy

and Connected 24 X 7

Civic and

Environmentally Friendly

Demanding and

Impatient – “Fast and the Furious”

Personalized Search and News

Social Networking Profiles

Personalized Products

Gaming Gizmos

Smart Phones

Facebook-on-the Move

Microblogs

Eco- Transport

Bag-For-Life (Paper Bags Instead of Plastic)

Paperless Banking

Instant Text Messaging

Instant Chat

Speed Oriented Gaming (Car Racing)

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#4 Technology

6/21/2012

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New Satellites Launched By 2020: Over 900 Satellites to Be Launched Globally This Decade Creating Multiple Innovative Applications

GNSS Enabled Applications:

•Navigation (Civil, Military)

•Broadband Internet and Wireless Network

•GNSS based medical monitoring and drug delivery system

•Automated guidance of machines, real-time structure monitoring, logistics and site

management

GNSS Enabled Applications:

•Navigation (Civil, Military)

•Broadband Internet and Wireless Network

•GNSS based medical monitoring and drug delivery system

•Automated guidance of machines, real-time structure monitoring, logistics and site

management

By 2020, there will be approximately927 Satellites (Communication – 405; Earth Observation – 151; Navigation – 85; Reconnaissance – 212 and R&D

75)

By 2020, there will be approximately927 Satellites (Communication – 405; Earth Observation – 151; Navigation – 85; Reconnaissance – 212 and R&D

75)

Used for Military Communication Applications, air-

traffic control, automated aircraft

landing, etc

Used for Military Communication Applications, air-

traffic control, automated aircraft

landing, etc

Automobile Navigation and Intelligent Traffic Control System Applications

Automobile Navigation and Intelligent Traffic Control System Applications

Galileo - intended to provide more precise

measurements than GPS or GLONASS

China developing Beidou

Galileo - intended to provide more precise

measurements than GPS or GLONASS

China developing Beidou

Commercial market will be driven by

broadcast; Mobile Satellite Services

(MSS); voice and data applications, bundling

IPTV

Commercial market will be driven by

broadcast; Mobile Satellite Services

(MSS); voice and data applications, bundling

IPTV

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Characteristics Service Types Deployment Models

Software as a Service

Platform as a Service

Infrastructure as a Service

A pool of compute, memory and i/o resources, applications or operating environments with

seemingly infinite scalability, delivered as a service over a network, be it private or public

Cloud Computing

Enterprise

Enterprise

Public

Cloud

Private

Cloud

PUBLIC

PRIVATE

EnterprisePrivate

Cloud

HYBRID

Public

Cloud

COMMUNITY

Enterprise2

Enterprise3

Enterprise1

Community

Cloud

On Demand, Self-

Service

Pay As You

Use, Metered

Consumption

Rapid Elasticity, Scale

Up/Down

Shared

Pools, Illusion of

Infinite Resources

Broad Network

Access using Standard Internet

Protocols

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World War 3: With Advancement in Technology, Information Warfare to be the Next Domain of Conflict

Space

Photographic Satellites, GPS, Communications, Ballistic Missile Defence, Signals, Astronauts

Air

ISR Platforms, Combat Aircraft, Transport, Helicopters, Maritime Surveillance, Communications, Airmen

Naval

Combat Platforms, Communications, ISR, Transport, Sailors

Land

Combat Vehicles, Transport, Communications, Soldiers

Information Environment

Physical, Cognitive, Informational Dimensions

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Future RoboSlave: Pervasive Robotic Technology in 2020 That Will “Act as a Slave” in Everyday Life

Robots To Help

With Strategic Planning and

Business

Robots for

Companionship

Robots as Pets Robots for

Household Chores

Robots to Wait

on Hand and Foot

Robots as

Waiters

Robots as

Nannies

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Virtual World 2020: 3D Simulated Environment for Interaction and Experience Impacting Personal Mobility

Virtual Shopping Allowing Customers to Try Virtual Shopping Allowing Customers to Try Products without leaving their homesProducts without leaving their homes

Virtual Classes and Virtual Classes and Laboratories and Daily 3D Laboratories and Daily 3D

Field Trips Field Trips to Different Countries and to Different Countries and

PlanetsPlanets

Virtual Surgeries Virtual Surgeries and and Medical Training Medical Training Virtual Business ConferencesVirtual Business Conferences

Social Networking: 3D Avatars Social Networking: 3D Avatars Enabling People to Lead Enabling People to Lead

Multiple LivesMultiple Lives

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#5 Innovating to Zero!

6/21/2012

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Possible Zero Emission Technologies in Power Generation -Innovating Toward Reducing CO2 Emissions in 2020

Solar PV Cells

Wind Energy

Travelling Wave Reactor (TWR)Third Generation Bio Fuels (Algae and

Exotic Bio Fuels)

Geothermal Energy

Ocean Energy

To Account for 1,900,000 MW of

electricity production in 2020

Capacity of Solar Power to Increase from 21,540 MW in 2020 to 630,000

MW in 2040

Wide deployment of TWRs could enable projected global stockpiles of depleted uranium to sustain 80% of the world’s population at U.S. per capita energy usages for over a

millennium

Share of Geothermal Electricity in total

electricity produced in 2020 is 1.5%

“INNOVATING

TO

ZERO!”

By 2022, algae biofuels will be the largest biofuel category

overall, accounting for 40 billion of the estimated 109 billion gallons of biofuels

produced.

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#6 Infrastructure Development

6/21/2012

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27DRAFT VERSION

Moscow

Nizhny Novgorod

St. Petersburg

Yekaterinburg

Novosibirsk Krasnoyarsk

Irkutsk

Khabarovsk

Vladivostok

Integration of the Trans Siberian Rail into Eurasian Rail Network Will Result in Industrial and Business Hubs Along the Railroad

Yekaterinburg

Severka

Development of Trans-Siberian railroad will have significant socio economic and business impact to Russia

● Astrakhan

Kiev

●

Kaliningrad

Minsk

● Helsinki

●

●

ITC North South

Trans-Siberian Railway

Pan European N 2

Pan European N 9

Baikal-Amur Mainline

(Warsaw, Berlin)

(Bucharest, Aleksandr

upolis)

Sredneuralsk

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High Speed Rail to Come to US : Overview of Future High Speed Rail Projects in US

Obama’s Government

High Speed Rail Plan: $8 billion in the American Recovery and Reinvestment Act and $1 billion a year for five years in the federal budget

Federal Railroad

Administration Strategic Plan:

Identifying and Developing Ten Designated High Speed Corridors:• Southeast Corridor• California Corridor• Pacific Northwest

Corridor • South Central

Corridor• Gulf Coast Corridor• Chicago Hub Network• Florida Corridor• Keystone Corridor• Empire Corridor• Northern New

England Corridor

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#7 Healthcare

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� In almost all countries worldwide, per capita healthcare spending is rising faster than per capita income.

� No country can spend an ever-rising share of its output on health care, indefinitely. Spending growth must

eventually fall in line with growth in per capita income.

If Current Trends Hold, By 2050 Health Care Spending Will Almost Double Claiming 20% – 30% Of GDP For Some Economies

$2,884

$3,647

$2,493 $2,665$2,451

$2,693$2,337 $2,527

$2,110$2,614

$1,927

$2,469 $2,371$1,938 $1,927 $1,829

$1,609

$3,517

$717

$1,684$854

$914$680

$989 $760

$1,018$494

$1,165$449

$352

$593 $431 $514$646

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

$0

$1,000

$2,000

$3,000

$4,000

$5,000

$6,000

$7,000

Private Per Capita Spending (2007) Public Per Capita Spending (2007)

Spending as % of GDP (2007) Estimated Spending as % of GDP in 2050

UnsustainableUnsustainable

Levels!!!Levels!!!

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Health Economics Dictate a Shift in Spending – Away From Treating and Towards Predicting, Diagnosing and Monitoring

Healthcare Spending by Type of Activity

Predict, 5% Predict, 9%

Predict, 22%Diagnose, 15%

Diagnose, 19%

Diagnose, 27%

Treat, 70%Treat, 60%

Treat, 35%

Monitor, 10% Monitor, 12% Monitor, 16%

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2007 2012 2025

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#8 New Business Models

1.Pay as you go – Utilitarian, On Demand

2.Co-creation of value;

3.N=1, R=G

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#9 Connected Devices : 80 bn + by 2020

The Home Network Mobility on steroids Internet of things

• 8-10 Devices per home

• Universal Remote

6 bn

• 5-6 Devices per individual

• Touch as the default input

mechanism

30 bn

• 500 per sq km

• Smart cities

44 bn

‘S’ City

Planning

‘S’

Energy

‘S’ Business

‘S’ Mobility

‘S’ Citizen

‘S’ Buildings

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#10 Span of Influence increasing rapidly

500 Million+ Facebook users

2 Billion+ photos on Facebook per month

1 Billion+ tweets on Twitter

100 Million+ videos on Youtube

200 Million+ blogs

13 Million+ Wikipedia articles

Time to reach an audience of 50 million

Radio : 38 yearsTV : 13 yearsInternet : 4 yearsiPod : 3 yearsFacebook: 2 years

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Key Strategic Conclusions

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Key Strategic Conclusions

1. Mega trends are connected and inter-wined which suggests “synergetic” opportunities between them

2. It is important to understand the eco-system of the mega-trend and the elements of the value chain which have most profitability

3. All these trends are global and have global ramifications thereby offering scalable opportunities

4. These forces are changing rapidly and bringing new competencies into play at half the life-cycle speed of the past decade

5. Organisations’ need “Mega Trend” champions and teams within their organisation structure to best exploit the opportunity

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How To Take Mega Trends from Information to Strategy Implementation?

Identify and Select Top Mega Trends through Macro-Economic Analysis, Interviewing and Brainstorming

Sessions

Build Scenario of these Unique Mega Trends

Analyse the Impact of the Scenario Developed in Step 2 on Industry (e.g. Personal Mobility then

Automotive)

Analyse Impact on Product and Technology Planning and Generate Suggestions for Design and

Development

S1

S3

S2

S4