Happy New Year all! As we enter the next decade, an expression that is now popular rings true: Change Has Never Been This Fast – It Will Never Be This Slow Again. It is not just the speed of change – which many attribute to Exponential Progression driven in part by the Convergence of Science and Technology – but the sheer number of Dots Connecting in what is a very complex system. As is customary this time of year, there is no shortage of content focused on the year or decade ahead.
Global strategist Haim Israel captured this sentiment very well when he said: “The coming decade is likely to produce greater change than any previous one, because technology is causing trends to unfold at an accelerating pace”. A recent article that captured this quote agrees, concluding that massive change is coming, but Society Might not be Ready. In support of this speed dynamic, Mr. Israel says: “Forget about the short term. Even the long term is not that long term anymore. It’s happening way faster”. He provides an example:
We thought that peak oil would come much later. Now, everybody thinks the point of no return on global warming is around 2030, way earlier than expected. There will be demographic implications—100 million people will fall below the poverty line because of climate change and the change in food security. Also, renewable energy is actually cheaper to produce in some places than fossil fuel. We see a hockey-stick ramp-up in terms of demand and supply. There will be electrification of transportation, which today consumes 50% of global oil demand—cars, ships, airplanes, railroads. By the end of the 2020s, one third of all new cars sold will be electric vehicles. That’s a massive impact on carbon emission
Given this backdrop, my first post of this new year focuses on these two variables: the speed and volume of change. Here are a series of articles curated to drive this message home.
One dimension of any Future Thinking exercise is societal factors. As the Visual I use depicts, these factors give us much to consider. One such consideration involves humanity itself. Is Population Growth something we should worry about? Some estimates have the world at 11.2 billion people by 2100. On the other hand, does the current Fertility Crisis point in the opposite direction – where society dips below the replacement rate. Add to this an aging society and the concern it represents, as described by Mr. Israel:
In the 2020s, we’ll have more grandparents than grandchildren, more people over 65 than people under 5. Japan isn’t the oldest country on the planet. It’s China, because of its one-child policy, which has since been abolished. In this decade, close to 800 million people will join the silver, or over 65, economy. It will pressure pension systems worldwide. In the Western world, life expectancy is rising. The financial system will see massive challenges. Today, the total pension deficit is $24 trillion. For every year that life expectancy goes up, this number goes up by $1 trillion. The job market—services, medical, health care—will have to adjust. Especially in the U.S., the silver economy still holds more than 50% of the spending dollars. However, they only do 10% of spending. Who are the winners? The cruise line industry, experience economy, home renovation, health care, retirement communities, life insurance.
Another societal factor to consider is Inequality. Throughout history, periods of intense inequality have driven societal unrest. This phenomenon is eloquently described in a recent book titled Technology Trap. This decade will determine where Inequality Leads and the ramifications to the global community. Then there are the issues associated with a generational divide. As described in the Fourth Turning, generational change has historically disrupted the social order. Here is a taste of what that might look like from Mr. Israel:
Generation Z – those born after the year 2000 – will be way more destructive than millennials. They’re already around 20% of the world population. They were born into a digital world, with a smartphone in their hands. Millennials were born to an offline world and had to adapt to online. This year, Gen Z is turning 18 and 19 and integrating into the real economy, getting real jobs, moving out of their homes. They’re into sustainability and services rather than goods. There will be a 50% drop in drivers’ licenses in the U.S. They’re the force behind what we call peak cars. They use payments rather than traditional financial services.
Eventually, we will deal with a societal Tipping Point – a place in history where what it means to be human changes. Slowly then suddenly. An early example is What Happens When Computers Learn to Read Our Emotions.
A SHIFT TO PURPOSE
Stakeholder Capitalism is a major theme for this years World Economic Forum. Klaus Schwab, Founder and Executive Chairman of the World Economic Forum describes the need for a better kind of capitalism. This Shift to Purpose will be an often discussed topic this year. It has its skeptics however, as described in this article that provides a perspective on Why it will Fail. Others focus on Corporate Greed and activist Investor pressure to shift to a broader stakeholder focus.
The engine of change will not stand still. This is likely to be the decade of Artificial Intelligence. I expect more dialog regarding the ethics of AI – and the delicate balance required to seize opportunity while mitigating risk. Some in the U.S worry that Proposals to Steer AI could unnecessarily slow development of artificial intelligence at American companies. Technology predictions are all the rage this time of year. Here are a couple of thoughts on technology in the coming decade.
You are likely to hear frequent comparisons to the roaring 20s. History does have a way of Repeating Itself – and there are some scary analogies when we look at what was happening in the earl 1920s and what is happening today. The end of the 1920s was a very dark period in history – the geopolitical landscape is perhaps the most significant variable to consider as we gaze into the future. Let’s hope we’ve learned some Lessons from History. Are we on the brink of a second Great Depression?
Imagine the world of 2030. What do you envision the world to look like 10 years from now? This time of year is the time to ponder such meaningful questions. Space, climate, the genome, and nuclear are just some of the themes of the decade – explored in This Look into the Decade. If flying cars or software-based people are your thing, this Article is for you. A broader look into the future is explored by an article that looks at What will Happen In The Next Decade? If you are looking further out, this recent article explores What the World may Look Like in Thirty Years.
The speed and volume of change sets up an overwhelming number of future scenarios. From Finance to Energy to Farming to Transport to Health, envisioning the future is a complex undertaking. In her annual letter, Amy Webb – Founder and CEO of the Future Institute – provides a year in review and a look forward. The Institute’s work is some of the most comprehensive forward-looking content you will find. As scenarios evolve, business models evolve with them. This decade will see a creative burst in new mechanisms for growth. Imagine Energy Storage as a Service for example.
Like I said – there is a lot going on. As I said in an earlier Post: The world is about to enter a pivotal decade. This decade is likely to be remembered as the launching pad to a very different future. Enjoy the reading.