Digital Transformation

Megatrends: Risks or Opportunities?

Are you aware of the Megatrends that will change your life?

According to the definition published by Frost & Sullivan consulting, a megatrend is a global and sustained development force impacting society, culture, economy and business; therefore, it will significantly impact what our future world will look like. Analyzing megatrends and tying them to your future strategy is critical if you want to keep being competitive by addressing evolving market needs.

Let’s review the top 3 Megatrends: Changing Demographics, Rapid Urbanization and Technology Acceleration and highlight a few promising areas of business transformation.

Changing Demographics

World population will reach 9,7 Billion by 2050

If you live in Europe you may not be conscious that the population continues to grow rapidly over the planet. Still the projection is to reach more than 9Billion of people by 2050 due to high birth rates in Africa and some Asian countries and, overall improved health conditions.

One immediate consequence will be a shift in economic power towards Asia. North America and European Union with 840 million of people today will keep being important markets but the one not to miss will be the Asian market.

Source: Ipsos

In addition, the global population is getting older and a longer life expectancy opens door to new customer needs. The silver economy is keeping many companies busy. The domains of transport, food, leisure, health, insurance have to pay attention to this new segment.

  • How to address customers with high purchasing power who are 70 years and older, and may have different expectations than people of 25 years old?
  • How to develop products and services ensuring that old people can stay at home longer, safer and at minimum cost for the society?

These are just few examples of topics that matter.

On the other spectrum of the population, the new Z generation (born between 1995 and 1999) is the first digital native group of people with unique approach to new technologies. Instantaneity is a key mantra, convenience and easy accessibility are the norm.

One consequence is that this generation has high expectations in terms of what matters in life. Big corporations are paying attention to what they are interested in, launch social media campaigns to increase their e-reputation and invest into new Offices of The Future with new equipment and buildings promoting creativity, collaboration and well-being.

Rapid Urbanization

Expecting 68% of population living in urban area by 2050

Another important megatrend is urbanization; in 2030 there will be 43 cities of more than 10 million of inhabitants according to the 2018 World Urbanization Prospects of the United Nations.

In 1950 only 30% of the world population lived in cities, it is planned to go up to 68% by 2050. North America and Europe have already an urban landscape, but the new phenomenon is gaining in Asia and partially Africa. India, China and Nigeria will count for 35% of the urban growth.

Photo: N. Espenel

It is not a surprise that urbanism projects are vital to cope with this expansion. How to produce enough energy for these cities, how to organize transport to allow people to go to work, how to build housing to lodge everybody? It even goes beyond basic needs, the need is around a sustainable development covering economic, social and environmental aspects.

I remember my first visit to China and the number of peasants coming from rural area waiting at night outside of the train station in Beijing, looking for work, home and food. Twenty years after, our goal and duty are to develop proper infrastructure ensuring the well living together.

It will not be an easy journey and simple projects like reducing drastically number of cars in cities by enforcing pedestrian area, cutting parking lots, deploying tolls at cities’ entrance require already change management from everyone. We will all have to live differently and accept it.

Accelerated Technology

Will technology solve our future challenges?

Still, I do not believe that human beings will be ready to live again as they were living 50 years ago. On top, is it fair to ask middle class people in Africa or Asia to stop dreaming about owning cars, going shopping, traveling abroad because people in North America or Europe did it too much and it is time to stop to save the planet?

Educating people on sustainability and circular economy is important but we also need the best of our research and development to find green alternatives to provide energy and transport to our future population of 9 billion people.

And we are on the right path with the acceleration of digitization to transform industry, gain efficiency, rethink our operating models.

Infographic: N.Espenel

Computers and Internet triggered the first digital revolution in the 20th century connecting people and providing wide access to information.

Distributed architecture, cloud computing and high capacity storage allowed to increase computing power and be able to collaborate on complex projects with multi-location teams working around the clock.

The Internet of Things (IoT), although not fully deployed yet will change our interactions with day to day activities  such as home control, self-driving car, SMART cities…The expected multi-billion inter connected sensors will need energy but will also allow to save energy and optimize current usage.

This will come with exponential data to capture and manage – so called big data, that will only be processed with artificial intelligence (AI) and machine learning. Digital assistants to order grocery shopping can benefit from new algorithms, but AI is a true opportunity to ‘augment’ human capabilities and find solutions to life critical issues bringing more safety in an uncertain world.

 

About the author

Nathalie Espenel