PREDICTING GLOBAL TRENDS - predicting the future to create advantage today
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DISCUSSION: THE FUTURE OF BUSINESS?
The world is experiencing an increasing level of change. What will this mean for business over the next ten years?
OVERVIEW:
1. Outsourcing will continue to increase.
2. Outsourcing to the developing world will increase and will underpin economic growth in those regions.
3. The great business revolution will be in the arena of information management and business intelligence.
4. This will drive both consumerism and globalisation.
5. There will be a continued rise in high level technology industry including bio-tech.
6. There will be a new wave of hi-tech assisted sustainable mass market alternative energy sources.
7. “Fair Trade” will increase.
8. There will be an increasingly collective and co-operative approach from within Africa.
9. There will be increasing protectionism from the developed world.
10. China will come under significant pressure.
Business will be the key mechanism to deliver the predicted growth in the global economy over the next ten years.
This growth will not be steady. It will remain fragile and exposed to rapid downturns due to, for example, targeted terrorist attacks designed to halt progression. This growth will also not be uniform across the world. It is this latter probability that will arguably lead to the greatest destabilising effect.
Business will be THE sector of change will experience the greatest rise in opportunity. This will be a combination of innovation led opportunity and conscience led opportunity. Some of this will involve technology, most will involve a new business outlook and the willingness to develop this outlook in the face of traditionalist barriers.
It would be a mistake to ignore or underestimate the level of change about to be unleashed. This will be the fuel to increase the global economy, to increase standards of living (SOL) and healthcare.
In the next ten years there will be a continuation in the shift of business and business focus. Traditional heavy industries will continue to follow the economic trail of least cost. Banking and financial services will become increasingly centred in the growing supercities ironically as the world becomes more computerised and information increasingly electronic.
There are specific areas of the world where this consolidation of financial services will take place. It is also important to note how fragile this consolidation is likely to be and at the mercy of a number of factors such as:
- terrorism
- taxation
- availability of skills
- infrastructure
Fuelled by globalisation, consumerism will increase in strength – as will debt. Importantly this wave of consumerism will spread outside the fuzzy boundaries of the developed world as the developing worth enhances its economic management and sustainability.
In the past decade there has been a sustained growth in the outsourcing sector. This is set to increase.
Outsourcing has been popular due to the cost savings and flexibilities it can offer the parent organisations. This has fuelled consumerism as some costs savings have been passed on in the form of lower prices. It has also fuelled higher profitability as well as, on occasion, the ploughing back of finite resources to front line services / markets. The benefits are dependent on the organisation.
However, many organisations that outsource have done so for the wrong reasons or at best for incomplete and unclear reasons. This points to a common failing in outsourcing in general – a lack of strategy. If there is little or no strategy, how can the future be charted and the extensive business benefits gained? If there is no strategy then many of the potential benefits will be used up simply to maintain the process of outsourcing … which is not the object of the exercise.
Within a generation the old form of fairly unproductive outsourcing will become a thing of the past as business matures and reaches for greater benefits. This will take the form of developing realistic outsourcing strategies based on business need. A crucial part of this will be partnership working with outsourcing organisations that have a greater level of control and responsibility as well as mature business models.
These mature business models are a smaller versions of the economic models of countries with developing economies, each reaching for resilience. It is this resilience within business that will create mutual growth and benefit.
Consequently, as this development becomes an even more major economic factor, this will further strengthen the economies of the developing world where significant proportions of outsourcing are dealt with. It will also add to the sustainability of the developed countries through lower prices and higher profits, filtering through the economies.
Neither consequences should be underestimated as major driving forces.
Much of the manufacturing base in the developed world will follow the present trend and gradually shrink, although not disappear all together.
Much of the business led economy of the developed world will be based on innovation, technology and specialist services, with a high degree of customer insight gained through Business Intelligence processes, much of which will be outsourced.
One of the major areas of growth within the developed world, and also increasingly reliant on outsourcing, will be this Business Intelligence.
Business Intelligence, Management and Operational Intelligence, Decision Delivery will be at the core of minimising risk, maximising opportunity and benefit from strategically integrated fact based decision making.
Data warehousing has been around for a while. Business Intelligence has been around for a while. Evidence based decision making has been discussed for a while. To drive business benefit and gain commercial advantage, they will be bound together in a single business concept that will revolutionise the 21st century business world. This will never replace intuition or experience. What it will do is take out the risks closely associated with guesswork. It will allow business to understand in detail the intricate and dynamic world around them such as:
- detailed understanding of existing customers / markets
- greater understanding of developing markets / opportunities
- new services / products
- efficiency / effectiveness
- higher revenue
- control of costs
- greater customer retention
This is about understanding the world around from a business perspective and how the world is developing. This is all about having a clear view of what is taking place … and using this to gain advantage. This is all about looking forward.
“A different world cannot be created by indifferent people.”
What if everyone wanted just average? What if no one wanted to achieve? What if no one wanted exceptional service?
The world isn’t like that. People want more than average. People want to achieve and to be better. People do want exceptional service. How will it be given? How can people feel valued? How can expectations be lived up to? Do organisations know what their customers will want in two years?
People want more than average. People want to achieve. People want exceptional service. These are people who are customers. These are people who will be customers. They need services specific to their requirements.
Why would any organisation want to limit their ability?
The world is changing. This dynamic and increasingly commercial world demands a greater degree of understanding in order to harness the benefits.
To maintain – and increase – relevance within a changing world, the change has to be managed. The management of this change requires information. Data derived fact based information. This will be a major business revolution.
Regardless of the services or goods any organisation produces, sells, buys, takes part in, information is the lifeblood of that organisation. Information is the fuel to power the engine. The fuel has to be right for each unique engine and that engine has to be tuned to make the best possible use of this fuel. Anything else is a waste.
As the commercial world increases in commerciality, there will be little room for waste or wasted opportunity. Organisations will learn to minimize mistakes.
In a highly dynamic world with incredible uncertainty and increasing competitiveness, faced with a choice between a gambled future based on guesswork and a future base on analysis and refinement, what do you really think the successful organisations of the future will choose?
Thinking has to be challenged. Data has to be challenged. Assumptions have to be challenged. In a dynamic world with incredible uncertainty and increasing competitiveness the emphasis is on analysed improvement. Organisations will be unable to afford to ignore this development.
Power comes through understanding. Sustainable success comes through understanding power.
Increasing amounts of money will be ploughed into the essential R&D for high level technology of all forms. This will invariably include the mechanisms to prevent the piracy of the IP.
Within ten years there will be a significant rise in the prominence of bio-tech companies producing a range of services such as genetic engineering to combat disease or to increase crop yield, among other things. These companies, with forged and established links to both the political and the academic worlds, will massively promote a new version of the world. This new version will have advantages and disadvantages. The disadvantages will be largely hidden from sight – but will continue until uncovered.
As oil supply peaks – and the demand for energy grows, as well as the demand for non polluting sources of energy – there will be a significant growth in the market for hi-tech led energy sources and energy delivery. It has been said in the past that much of the R&D required for this type of approach has been suppressed by some oil companies eager to ensure the world continues to use oil for as long as possible. Whether truthful or not, even they with their vast resources will be unable to halt this new innovation led direction. And once this new direction has been unleashed into the world it will slowly but surely take over as the dominant source of energy. This may not happen until after the next ten years, but the initial direction will appear within the next three to five years – and will excite large parts of the global economy as it is further refined.
This will be a major development.
In parallel with this there will be a massive expansion of the use of new generation solar energy within ten years in areas such as Africa that have a high incidence of direct solar radiation. As the oil supply peaks and prices slowly but surely increase, the economic pinch will be felt first in the developing world. By offsetting a part of their energy needs through solar power, some countries will gain a measure of energy independence. This will go a long way to help them power their own development. Due to this partial (if not complete) energy independence, there will be some areas of the developing world that will overtake some areas of the developed world. This will make such developing areas an attractive proposition for industry and commerce – and will further strip the capabilities of the developed world, giving more of an equal spread of revenue generating capability throughout the world.
Further to this there will be an obvious upturn in the level of conscience buying and an increase in “fair trade”, in spite of the continuing barriers to effective and equal trade across the world. Within the developed world there will be a definite increase in retailers in particular differentiating themselves by way of ethical and organic products, promoting greater choice and diversity.
Where as “fair trade” will provide pockets of growth and development, the major catalyst for wide spread regional growth will come through a greater co-operative approach to markets and product delivery, within areas such as Africa. This will grow from the already established farmers co-operatives who are promoting fair trade products. It will increase in intensity as the political will catches up with the popular need to produce a confederation of co-operatives with greater financial say over their products. This has obvious advantages. The obvious disadvantages are the potentials for increasing the levels of profiteering “middlemen” and / or corruption the initial co-operatives were designed to negate.
By no means will the above produce an equaling of the global economy. This will be apparent as some areas of the developed world will hold on to and strengthen some trade barriers. The question will rightly be asked: why pay farmers and producers from the developed world massive subsidies to increase the price of, for example, food to the consumer, then also pay the developing world massive amounts of aid? For the tax payer in the developed world this is equivalent to paying tax twice – then paying again when buying food.
This process will be shown to be for the purpose of maintaining agriculture in the developed world at any cost while systematically destroying agriculture in the developing world and falsely holding the developing world down to such a level that it is continually reliant on aid and products from the developed world.
While the pressure to increase fair trade and ethical buying will increase, the opposite pressures of subsidizing internal developed world agriculture will increase even more. The result of this is that there will be opportunity for the developing world to increase its SOL, if the political leaders grasp this opportunity, but this increase of SOL will be below the increases experienced in much of the developed world.
Change will only come through a greater co-operation within Africa, which will have patchy results due to the management of these co-operative approaches.
The financial strength of China will increase. The measure of this increase will not be as great as some observers believe. The increase will be marred by a growing internal strife and demands for greater democracy, fuelled by the rise of the consumer society and the ultra-rich, as seen from the view of the vast majority of the ultra-poor.
There will also be a growing external pressure on China – and the demand to boycott Chinese production – due to the vastly polluting effect of Chinese industry. As the world reaches for a greater control of global warming, and indeed, as the world begins to feel the first wave of global warming induced catastrophes, China will be singled out as the worst polluter with its vast use of coal fired power stations. This will be viewed else where in the world as almost an overtly criminal action. It will be viewed in China by some as inevitable and by others as terrible as they combat pollution induced conditions.
It would be fundamentally wrong to assume global warming will affect only limited areas of the world. The effects are likely to be widespread. The initial effects are likely to be changing weather patterns causing floods in some areas and drought in others. China, with its vast land mass and long, storm prone coast will not be immune.
It will be ironic – but unwelcome – that as the emerging largest national contributor to global warming as a side effect to fueling the Chinese economy, some of the earliest global warming effects will be felt in China. These will include drought and storms, laying waste to large areas of land, further depressing the ability of the Chinese economy and giving rise to greater internal calls for change.
Consumerism in the world will have been fueled partially by Chinese production. Chinese production will have been fueled partially by coal fired power stations. As the world evolves, there will be a call for a greater “ethical” consumerism – consumer products from ethical sources. Advocates of this approach will point to global pollution from China and the drastic effect of pollution on Chinese workers.
Thus, as the world evolves, there will be a rise in the production of ethical consumer products in other areas of the world. China will continue to be a major commercial force – yet its rise will inevitably begin to slow sometime around 2012.
The next ten years will display massive and significant change for the world of business. Because of this, it will display massive and significant change for everyone. Some organisations will disappear. Some organisations will develop and grow. This will be an era of unrivalled opportunity. Importantly, this opportunity will be global. It will be global because of the reach of business and technology. It will also be global because of the predicted mass migrations and the mobility of whole sections of a population attempting to emerge out of poverty by relocating to the perceived wealthier areas of the world. This will have distinct advantages and disadvantages for both the developed and the developing world.
This will be a force for change that should not be underestimated.
For sure, the world has a long and undistinguished history of lurching from crisis to crisis, expending an untold number of lives, squandering resources and money. We are now emerging into an era of defined opportunity. Those organisations – both political and commercial – that continue to be reactive in the face of change, that continue to rely on the traditionalist approach to squandering opportunity and resources, will most definitely be overtaken by those organisations who create and maintain a pro-active strategic view of the future in order to determine opportunities and threats coming over the horizon.
This will be the key.
Advice? Stop re-inventing the wheel. Stop making the same mistakes. Stop squandering resources. Have a view of what is happening in two years, five years, ten years – and work towards where you want to be.
If you don’t do this, your competitors will and you will no longer be relevant. We live in a dynamic world. The world is changing. The pace of change is increasing. If you can’t see what is about to happen, it will happen to you anyway and will be beyond your control.
Written by: JAMES STUART http://www.linkedin.com/in/jamesstuart - new direction and development through innovation
