World Economic Forum – Deep Shift


A must read on six mega-trends, their tipping points and societal impacts. I recommend this for anyone with interest in where the world is heading, and/or tasked with future thinking in the context of strategy. I commend the World Economic Forum for their efforts here, as education is likely to spur action. The six mega-trends are:

  1. People and the internet
  2. Computing, communications and storage everywhere
  3. The Internet of Things
  4. Artificial intelligence (AI) and big data
  5. The sharing economy and distributed trust
  6. The digitization of matter

Here is a tipping point timeline from the report:

Tipping Points Timeline

Many leaders are struggling with the sheer number of future scenarios and some indication of when the tipping point may arrive. This material provides critical input into the scenario and response analysis process. Enjoy the read.

No Ordinary Disruption


In my last future of business series post, I focused on a recent book titled No Ordinary disruption. That post explored the author’s belief that our intuitions must be reset. In that same book, the authors explore what they call “trend breaks”, or shifts away from the trends of the recent past. This post will look at these breaks and their impact on 21st century organizations – and it starts with value. In the rapidly growing world of ecosystems, the way value is created and captured is changing. But, more fundamentally, even our traditional views of value are being challenged. The authors use GDP as a way to underscore this point. They estimate that digital capital is now the source of roughly one-third of total global GDP growth, with value delivered via intangible assets like Google’s search algorithm or Amazon’s recommendation engine. Even our long standing view of capital itself is shifting, as human creative capital becomes a critical source of value.

Additionally, future value increasingly accrues to consumers. In a recent article titled Why Every Aspect of Your Business is about to Change, the author talks about the destruction of value for incumbents and the creation of value for consumers in the form of consumer surplus. They use a powerful example to make their point: Skype brought in $2 billion in 2013, but McKinsey calculates that at the same time, they transferred $37 billion away from telecom firms to consumers via free or low-cost calls. Even the innovative new company only gets a fraction of the value created (Skype: $2 Billion, Consumers $37 Billion). So back to value and GDP: consumer surplus is not accounted for in the way we measure GDP. This creates two challenges: First, do we need to change the way we measure value? Second, how do companies monetize the newly created consumer surplus?

So what does this mean for the future of business? Let’s start with something right from the aforementioned book: On the first day of classes at Ivy League colleges, it was common for the dean to warn students: “Look to the left, look to the right. One of you won’t be here next year.” That seems very appropriate when looking through the lens of company viability. This real phenomenon unfolds over the next decade, driven in part by several trend breaks as identified by the authors:

Continue reading

Intuition Resets


Will our fundamental beliefs be challenged in the coming decade? In a recent book titled No Ordinary Disruption, the authors talk about the need for an intuition reset, where everything we thought we knew about the world seems to be wrong. They see our world changing radically from the one in which those intuitions that drive our decision making were formed. Skeptics abound, but I for one see the writing on the wall. In the future-of-business series kick-off, I focused on Future Scenarios as a major force in altering the future of business. Let’s continue the series by focusing on other forces.

In the book referenced above, the authors compare the coming transformative period with the Industrial Revolution of the late 18th and early 19th centuries – where one new force changed everything. As I have tried to depict in my future scenario Visual, we are dealing with multiple forces or shifts that are converging. In their analysis, the authors conclude that our world is undergoing an even more dramatic transition due to this convergence. They focus on four forces (urbanization, technological change, aging, and connectivity) and deem that any of them would rank among the greatest changes the global economy has ever seen. Compared with the Industrial Revolution, they estimate that this change is happening ten times faster and at 300 times the scale, or roughly 3,000 times the impact – digest that as you consider whether our fundamental beliefs will change in the coming decade. Here is a quote from the book: “Although we all know that these disruptions are happening, most of us fail to comprehend their full magnitude and the second and third-order effects that will result. Much as waves can amplify one another, these trends are gaining strength, magnitude, and influence as they interact with, coincide with, and feed upon one another. Together, these four fundamental disruptive trends are producing monumental change”

Continue reading

The Future Business Landscape


I expect the conversation regarding the Future of Business to intensify over the coming months. Evidence is mounting that business as usual is a thing of the past. In a recent post by SAP, they present ninety nine ways that digital will change business. As you look at the information presented, and see the number of shifts occurring at the same time, it’s hard to imagine a business landscape that weathers this storm unscathed. Here are examples of these shifts from the SAP post:

  • At the current turnover rate, 75% of the companies in the S&P 500 in 2027, will be new (companies not currently in index today)
  • By 2019, approximately one quarter of the entire U.S. workforce will be independent workers (self-employed, independent contractor, freelancer, temp contractor, etc.)
  • By 2030, 10% of the largest companies in the U.S. will be virtual corporations (less than 10% of their workers will be in an office at any point in time)
  • 50% of the U.S. Jobs lost in the 2008 recession were middle-skilled jobs, but only 2% of the jobs gained since then have been middle-skilled
  • By 2025, there will be 10 global virtual currencies that will be considered mainstream. Their combined market value will exceed $5 Trillion, and Bitcoin will still be the largest.
  • Private and commercial robot use will grow 2,000% from 2015 to 2030, creating a $190 billion market
  • By 2030, 2 billion jobs will disappear – roughly 50% of all the jobs on the planet – as a result of technology advances
  • 3D Printing usage will grow 2000% between 2015 and 2030
  • Purpose-driven and value-oriented organizations outperform their competition 15 to 1
  • By 2030, sensor use will grow 700,000%, solving nearly every human need such as cancer-killing chips
  • By 2020, information will reinvent, digitize, or eliminate 80% of business processes and products
  • Although 90% of companies view advanced and predictive analytics as important, less than 30% have currently deployed them, and only 30% have plans to do so
  • There will be more words written on Twitter in the next two years than contained in all books ever printed
  • By 2025, the total worth of IoT-enabled technology is expected to reach $6.2 trillion – most of that in healthcare (2.5 Trillion) and Manufacturing (2.3 Trillion)
  • Within the next five years, more than 90% of all data from IoT will be hosted in the Cloud, reducing the complexity of supporting IoT “Data Blending

Just a small sample (more via the link above) supporting the notion that the future of business could look considerably different than its past. I’ll pursue the future business landscape in up-coming posts.

Business Networks and the Digital Economy


I have had the ongoing pleasure of participating in SAP’s Coffee Break with Game Changers radio program, the most recent one on August 26th. I was joined by Dennis DeGregor, Worldwide Group Executive for customer experience services at HP, and Drew Hofler Sr. Director, Solutions Marketing, Ariba network and Financial Solutions. The show was titled “Business Networks and the Digital Economy: Ready for Digital Humanism?” and was expertly moderated by Bonnie D. Graham.

The episode description: What does it really mean for you to have a connected business? Analysts estimate that by 2020, social networks will connect 2.5 billion people, the number of connected devices will total 75 billion, and the volume of global business trade between connected businesses will reach $65 trillion. As we move to an era of true hyper-connectivity in our digital economy, how can your company turn these challenges and your business networks into sustainable profitable opportunities?

Bonnie kicks off each show by analyzing a quote provided by each panelist. The following are our quotes and their relevance to the topic: 

Continue reading

Empowerment Economy


On a recent Radio Program focused on the future of business, Gray Scott introduced another future scenario. He called it the empowerment economy, and he described it this way:

He sees the past in three stages: 1) companies were in the business of providing supplies and core objects 2) we moved away from that to a convenience economy where we make it convenient for you to get what you need 3) now we are moving to the empowerment economy. It’s no longer about providing an object or convenience; it’s about giving them the power to supply themselves. Gray does not believe corporations understand this. Google and Uber get this circular idea of empowering people, which he believes is the future of business. The companies that embrace this empowerment economy are the companies that are going to succeed.

Those are his words direct from the radio program referenced above. So we add empowerment economy to the growing list of future scenarios. Thanks Gray.

emerging-future

Emerging Paradigms and the Future of Business


I had the pleasure of joining SAP’s Coffee Break with Game Changers Radio Show on August 5th.  This was my third appearance on the show, and I was joined by Futurist Gray Scott and SAP Global Innovation Evangelist Timo Elliott. The show titled “Emerging Paradigms and the Future of Business” was part two of a series that was expertly moderated by Bonnie D. Graham. Part one of the series was a discussion on Decentralization.

The show abstract: The pace and scale of change is hitting unprecedented levels. This presents unique challenges for the future of business. We’re seeing new and emerging paradigms, exciting innovations in energy, challenges due to resource scarcity, big implications for the climate and environment, an increasing blurring of physical and digital boundaries, growing business decentralization, exponential progression, and many more global drivers – all contributing to an uncertain future. Futurists worldwide, including our panellists, are examining these factors and assessing their potential business impact. Some of the critical questions to address:

  • What factors will shape our future?
  • What new leadership skills will be needed?
  • How will leaders deal with challenges and implications outside of their base of experience?

Continue reading