global trends 10 key trends to watch for 2013

© Strategy Dynamics Global Limited. All rights reserved. Not to be used without permission. www.globaltrends.com 1

10 Key Trends to Watch for 2013 www.globaltrends.com


10 Trends to Watch for 2013

1. Social everything: New generations and their digital world stepping forward

2. Redefining value: The consumer is winning the fight to own the new consumer

3. Distributed everything: Mobility in production and consumption

4. The next “industrial” revolution: Robots and smart machines reshaping work

5. The new space race: Pushing the frontiers of technology once again?

6. Geopolitical wars: The fight to control the future

7. Resource wars escalating: From a world of abundance to shortage

8. Business stepping up: From profit to purpose

9. Information is power: The security challenge

10. Who needs banks anyway? Reshaping the financial system


1. SOCIAL EVERYTHING: NEW GENERATIONS AND THEIR DIGITAL WORLD STEPPING FORWARD

Social technologies are now a central part of everyday life and work. The social generations are

reshaping firms from the inside, helping companies to build broader, more agile networks to create and deliver value to customers. Mobility

and connectedness will be at the heart of the future business environment: Relationships,

communications and marketing are moving from a focus on one-to-one, to many-to-many

relationships.


Social technologies are moving from being solely consumer interaction platforms towards corporate life

23%

36%

57%

81%

84%

Microblogging***

Wikis**

Blogs

Video sharing*

Social networks

23%

25%

41%

38%

50%

Microblogging***

Wikis**

Blogs

Video sharing*

Social networks

Users Employees

•As of October 2011. ** Classified as directories. *** Includes microblogging sitesTwitter, Tumblr, Weibo, Plurk, and Posterous Spaces. Source: McKinsey Global Insitute - The social economy: Unlocking value and productivity through social technologies , July 2012

ADOPTION OF SOCIAL TECHNOLOGIES CONSUMER VERSUS COMPANY PENETRATION, GLOBAL, 2012

Average 56% Average 35%


As businesses and consumers become more networked, the focus is shifting from one-to-one to many-to-many

relationships


2. REDEFINING VALUE: THE CONSUMER IS WINNING THE FIGHT TO OWN THE NEW CONSUMER

The notion of value is being redefined for the 21st century. Consumers have choice. They want personalization, and to participate in value creation, shifting the mindset to “made with me.” Value will also be about “shared with me,” as the ownerless economy expands, driven particularly by younger generations who value experiences they can share over possessions – ones that also deliver benefits for society.


Individualism, customization and uniqueness are the key

Consumers want personalized, relevant content and experience from brands and information providers

Personalizedoffers

Promotionsbased on

timing

Promotionsbased onlifestyle

Promotionsbased onlocation

60%

17% 10%

14%

59%

18% 16%

8%

Smartphone users

Feature phone users

(Source: Upstream)

CONSUMER ADVERTISING PREFERENCES (U.S. STUDY)

Globally 70% of customers are willing to provide their

bank with more information if this leads to greater personalization or

better service.

(Source: Ernst &Young – Global Consumer Banking Survey 2012


Why buy when you can swap?

A new ownerless economy is emerging

Why own when you can rent and share?

Zipcar, the biggest international car-share scheme, has 700,000 members and more than 9,000 vehicles. Buzzcar, a French company set up by the Zipcar founder, has 605,000 members sharing

9,000 cars. (Source: The Economist – Seeing the back of the car.)

The copyright on this image is owned by author David Hawgood and is licensed for reuse under the Creative Commons Attribution-ShareAlike 2.0 license.


3. DISTRIBUTED EVERYTHING: MOBILITY IN PRODUCTION AND CONSUMPTION

Mobility is entering a new stage, where not only consumption occurs anywhere, anytime but also the tools and resources to create and capture value are more broadly distributed. Work has been becoming

more distributed for years. Smart machines now tap the global brain. Small-scale manufacturing, including 3D

printing, will reshape production. Renewable technologies are distributing energy production, while

mass teaching platforms are revolutionizing education. Ask what can’t be distributed, not what can.


New technologies are bringing “production” power into the hands of the consumer: 3D-printing is taking off…

Just opened: Shapeways - a 25,000-square-foot 3D-printing

“Factory of the Future,” Long Island City • U.S. Customers will be able to create and print out newly

designed products within a matter of days at the facility.

• When fully up and running the factory will be largest consumer-facing 3D printing manufacturing facility in the world.

• It will house 30 to 50 high definition, industrial-sized 3D printers. Each is capable of producing more than 100 products on a daily basis, and three to five million products on annual basis.

• The factory will support Shapeways’ community of nearly 200,000 users. (Source: Smart Planet )

Photo: Author Kyle Pearce (www.diygenius.com) via Flickr; licensed for reuse under the Creative Commons Attribution-ShareAlike 2.0 license.

http://www.diygenius.com/


…and we are increasingly creating our own healthcare system – personalized, of course

• DIY health checks where you want them: By August 2012 there were over 13,000 iPhone health apps available for consumers, including Skin Scan which monitors the development of moles over time and Lifelens which can diagnose malaria with a drop of blood.

• Being your own doctor by networking: Medical sites

are exploding, linking patients to the best treatments and to other patients with the same conditions, e.g. PatientsLikeMe has almost 154,000 users who post their experiences with medications for more than 1000 conditions.


4. THE NEXT “INDUSTRIAL” REVOLUTION: ROBOTS AND SMART MACHINES RESHAPING WORK

Smart machines and robots will redefine society, by taking on any job that can be reduced to repetitive steps. Robots are now being deployed as receptionists, banking

assistants and even prison guards, while technology allows amateurs to do what professionals once did. The

upside: Addressing issues such as caring for ageing populations. The downside: Huge job losses. Yet the next wave of deployment of smart machines will also create

new kinds of jobs. The challenge will be to ensure a workforce that is ready

and skilled for them.


Perhaps our future job landscape look like this…

INDUSTRY JOBS GOING AWAY (examples) JOBS BEING CREATED (examples)

Power industry All types of power generation/coal plants will begin to close down. Many railroad and transportation workers will no longer be needed. Utility company engineers/Line repairmen

Manufacturing power generation units the size of air conditioning units will go into full production. Installation crews will begin to work around the clock. People for the recycling of the national grid which has been taken down. Micro-grid operations requiring a new breed of engineers, managers, and regulators.

Automobile transportation

Taxi, limo, bus, truck drivers Gas stations, parking lots, traffic cops Fewer doctors and nurses will be needed. Delivery drivers (food, mail, package etc.)

Delivery dispatchers; traffic monitoring systems (require some people); automated traffic designers, architects, and engineers; driverless “ride experience” people; driverless operating system engineers; emergency crews.

Education Teachers, trainers, professors Coaches; course designers; learning camps

3D printers

If we can print our own things: Manufacturers, clothing/shoe retailers will quickly go away. Construction material, e.g. the lumber, rock, drywall, shingle, concrete, and various other construction industries will go away.

3D printer design, engineering, and manufacturing; 3D printer repairmen will be in big demand; product designers, stylists, and engineers for 3D printers, 3D printer ‘Ink’ sellers.

Bots Bots will replace fishermen, miners, farmers, human inspectors. Warrior drones will replace soldiers.

Robot designers, engineers, repairmen, dispatchers. Therapists, trainers, fashion designers.

Source: Thomas Frey, Innovation Editor, The Futurist


However the digital world still needs human creativity, emotional engagement and sophistication of thinking

which, despite huge efforts, artificial brains are unlikely to offer in the near future!


5. THE NEW SPACE RACE: PUSHING THE FRONTIERS OF TECHNOLOGY ONCE AGAIN?

Scientific advances from national space programs have had a significant impact on how we live and work,

from advanced materials to global telecommunications. Now, commercial space travel and exploration is a reality and a new space race is hotting up particularly between the US, China and

Europe. New advances will surely result, as will questions over the ownership of space “assets,” and whether advances will be shared for public benefit.


A new industry – space tourism – is seeing the light of day

Source: Virgin Galactic/Mark Greenberg; licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license

• Virgin Galactic has already signed up well over 500 people willing to pay US$200,000 each to fly into space in 2013 on the SpaceShipTwos suborbital flights.

• XTAR space plane that will take a pilot and one

passenger/co-pilot up nearly 60 km for about half the price of a Virgin Galactic flight.

• The Zero G Corporation offers weightless

experiences on flights while it is possible to take cosmonaut training at Star City near Moscow.

(Source: The Futurist – The New Age of Space Business)


While space offers exciting opportunities, questions include how international treaties on the use and control of space will develop, and whether advances from space research will be shared?

THE U.S RUSSIA

CHINA EUROPE INDIA

ADVENTURE CAPITALISTS

COMMERCIAL CAPITALISTS


6. GEOPOLITICAL WARS: THE FIGHT TO CONTROL THE FUTURE

The BRICS and Beyond (other rapidly growing economies) will be where the fight to control future economic growth and social development will take place. It’s a multipolar market landscape, based on dramatically different economic, social and political systems. Politicians, along with companies, are still

trying to find and control their place in the new world order, even as trust in governments falls, nationalism rises, and power shifts towards the

people. The potential for radical political shifts at home and between nations is rising.


Economic power is shifting from West and North to South and East

0%

5%

10%

15%

20%

25%

30%

35%

1980 2010 2011 2012 2013 2014 2015 2016 2017

European Union

Developing Asia, including China and India

United States

SHARE OF GLOBAL GDP (MEASURED BY EACH COUNTRY’S GDP, ADJUSTED FOR PURCHASING POWER)

Source: IMF

To reach a financial deal in 2010, the IMF was forced to

increase the emerging economies’ voting share by

around 6%, with Europe losing around 4%.

Now emerging markets are demanding an even greater

share of power.

EMERGING MARKET POWER


At the same time, global is giving way to local, as protectionism increases and countries seek to boost flagging economies

“I'm calling on those businesses that haven't brought jobs back to take this opportunity to get the American people back to work.“

President Obama, 2012

Rank Ranked by # of (almost certainly) discriminatory measures imposed

1 EU27 (302)

2 Russian Federation (169)

3 Argentina (141)

4 India (74)

5 UK (67)

6 Germany (64)

7 France (61)

8 China (60)

9 Italy (56)

10 Brazil (54)

WHICH COUNTRIES HAVE INFLICTED MOST HARM SINCE NOVEMBER 2008?

Source: Débâcle: The 11th GTA Report on Protectionism Notes: There is no single metric to evaluate harm. Different policy measures affect different numbers of products, economic sectors, and trading partners. GTA reports four measures of harm. * The results for Germany aggregate the (many) measures taken by the central government in Berlin and the (fewer) measures taken by the European Commission on behalf of all of the EU member states. This approach was applied consistently to each EU member state. At the request of some users, Table 1.1 reports information on both individual EU member states and the total amount of measures taken by all the member states plus the European Commission (listed as EU27).


7. RESOURCE WARS ESCALATING: FROM A WORLD OF ABUNDANCE TO SHORTAGE

As the world’s population moves towards 9 billion by 2050, resources are under pressure,

exacerbated by climate change. By 2030 we will demand twice as many resources as the planet

can supply – risking social unrest and conflicts as people and nations compete for ever scarcer resources. Scarcity is already driving resource price volatility, and cross-border investments.

New technologies and rethinking consumption will be critical in future – with businesses rather than governments likely to be leading the way.


Natural resources are under pressure

MORE WATER IS NEEDED IS THE POPULATION ON EARTH

MORE ENERGY IS NEEDED

MORE FOOD IS NEEDED


Addressing the challenges: Do we fight over what is left, reduce consumption, or invent new resources?

IN THE NEWS NOVEMBER 7, 2012

“Scientists believe they are getting closer to creating an artificial meat product, it may not be a steak initially, hamburger or ground beef are more likely as they are easier to create. The development of 3D printing technologies is aiding development efforts. Much like a laser printer mixes the primary colors to create a multitude of colors; different cell types can be loaded and “printed” to create an end product more closely resembling the taste and texture of real meat.” Source: Innovation Management)


8. BUSINESS STEPPING UP: FROM PROFIT TO PURPOSE

Many businesses are stepping up to a new role, often with partners, to tackle societal and

economic challenges. In many areas, corporations are seeking to build legitimacy – and the license to

operate – in the eyes of demanding consumers, employees and stakeholders who care about the impact and motivations of companies with whom

they associate. But it’s also good business as companies realize mutual benefits with society.

Look for more businesses redefining their corporate purpose as they step up to this new role.


Increasingly businesses do not only want to be the best in the world but also to do what is best for the world

There is a growing community of more than 600 Certified B Corps

from 15 countries and 60 industries working together towards the goal of redefining success in business.

Patagonia, Etsy, and Ben & Jerry’s (now owned by Unilever), have all

obtained B Corp certification.

B Corp certification is to sustainable business what LEED certification is to green building or Fair Trade certification is

to coffee (Source: Urban Times).


Trust, values and collaboration are at the heart of moving from profit to purpose

Where: South Africa Who: Insurance company Direct Dial What: A road maintenance initiative that has repaired over 50,000 potholes in and around Johannesburg, as drivers reported them.

What: In 2012 an undercover video taped at a slaughterhouse in California showed horrible treatment of cows. Action taken: McDonald’s (and other companies) severed ties with the meat producer. Why: McDonald’s has worked with CI for years to develop environmentally and socially responsible food-sourcing guidelines.

“The Pothole Brigade”

(Sources: JWT Anxiety Index and ABC News)

Cutting ties with meat producer


9. INFORMATION IS POWER: THE SECURITY CHALLENGE

Cyberspace is the new frontline for security. Knowledge and information is a source of

competitive advantage, for organizations, nations and individuals. But it’s a growing challenge to retain

control as mobility and the democratization of everything (commerce, politics, societies) increases –

along with cybercrime and cyber war. Look for a rising tide of litigation, policies and regulation.

Digital freedom or a “big brother” society?


Are we prepared at all for the new reality in cyber space? Global experts…

Source: Security and defense think-tank SDA - Cyber-security: The vexed question of global rules

36%

43%

45%

57%

Believe cyber-security is more important thanmissile defense

Identify damage or disruption to criticalinfrastructure as the greatest single threat posed

by cyber-attacks with wide economicconsequences

Believe that cyber-security is as important asborder security

Believe that an arms race is taking place in cyberspace


Will proliferation of cyber laws, meant to protect people, stifle free expression and speech?

According to Freedom House recent revisions to the United Arab Emirates’ cyber crime law will not only restrict internet freedom but are in violation of citizens’ rights to freedom of expression.

In the Philippines a controversial cyber crime law has been suspended after a public outcry. It was initially put in place to protect against Internet crimes like hacking, identity theft, spamming, and online child pornography.

In January 2012 a public outcry swept the Internet and shook the power structure of Washington, D.C. aiming to stop PIPA (Protect IP Act) and SOPA (Stop Online Piracy Act).

(Sources: Global Post and Freedom House).


10. WHO NEEDS BANKS ANYWAY? RESHAPING THE FINANCIAL SYSTEM

The financial system is broken. Regulators want change, businesses want new means of financing and consumers want alternatives. The “banks” of the future will include state-owned entities, and

firms that simply don’t use cash: Think bartering and community currencies. Digital wallets and mobile

banking are opening the door for telcos and software players, while trust is the entry point for

retailers and crowdfunding communities. In an increasingly crowded and cashless financial system,

banks may no longer be key players.


Bartering is seeing new life as a medium of exchange

More than 400,000 companies worldwide used bartering to earn an estimated US$12 billion on unwanted or underused assets in 2011.

Source: International Reciprocal Trade Association


Crowdfunding is a growing industry controlled by the masses with the potential to disrupt established financial systems

Though not having the advantage of being “too big to fail” it comes with a set of challenges that policy makers cannot afford to ignore.


How will these trends impact your organization?

Are you ready?


www.globaltrends.com This presentation is adapted from the GT Briefing 10 Key Trends to Watch in 2013 and The

Global Trends Report 2013: Towards a Distributed Future by Tracey Keys and Thomas Malnight. For an additional brief summary you can also see The Economist. Electronic copies of the briefing and The Global Trends Report 2013 are available on www.globaltrends.com, and printed copies of The Global Trends Report 2013 can be found on Amazon.com and Amazon’s European sites. Don’t forget to register at www.globaltrends.com now to make sure you don’t miss our next monthly briefing (they are free)! About the Authors

Tracey Keys is Director of Strategy Dynamics Global Limited. Thomas Malnight is a professor of strategy and general management at the International Institute for Management Development (IMD), in Lausanne, Switzerland.

http://www.globaltrends.com/monthly-briefings/176-gt-briefing-december-2012-10-key-trends-to-watch-in-2013

http://www.globaltrends.com/reports/gt-2013

http://www.globaltrends.com/reports/gt-2013

http://www.economist.com/blogs/theworldin2013/2012/11/global-trends-2013

http://www.globaltrends.com/

http://www.globaltrends.com/

global trends 10 key trends to watch for 2013

News & Politics