Futurescape #2

June 2009

Ten Key Patterns of Change from Designing Your Future 

A number of our readers have asked for an overview of the ten key patterns of change we profiled in our book Designing Your Future – Key Trends, Challenges and Choices Facing Association and Nonprofit Leaders. So this edition of FutureScape is given over to explaining the ten key patterns.

First a little background to the book. Designing your Future was published in August 2008 as the culmination of a six month research programme we undertook for the American Society of Association Executives and the Center for Association Leadership. The research involved a widespread scan of emerging trends and extensive consultation to prioritise the trends and assess their implications for society, business and the association and nonprofit worlds.  

The aim was to cater for those who want to adopt a strategic approach to designing their future and to those who crave immediate action and want to focus on particular trends and emerging issues. In the book we identify 50 key trends and 100 emerging trends which could be of importance to business leaders. These are then synthesised into ten key patterns of change and the resulting critical challenges for leaders. A strategic decision making framework is then presented to help leaders address the patterns of change and map a ‘preferred future’ for their organisation. A range of tools, workshop processes and decision support frameworks are presented to help the reader respond in either a tactical or strategic manner.

Every time one undertakes an environmental scanning exercise, a range of candidate patterns emerge. For this exercise, we felt the ten we chose best reflected the most important patterns facing those in our primary audience – although we have since learnt that frameworks have proved equally popular in the commercial world.  

We welcome your feedback on these patterns and on the critical patterns you see emerging in the world around you 

 

 
 
Demographic Destinies
 
The global population is expected to reach 9.1 billion by 2050, which is in itself a significant event economically, politiclly and environmentally. The actual mechanics and nuances of this growth however will have even greater reach. For example, based on current predictions, the population growth in Asia to 2050 will outstrip the populations of Europe, North America and Latin America combined. Indeed large chunks of Europe aswell as Japan and a few others will actually see their population decline amidst the global boom. Allied to the regional variation is a general pattern of aging; there will be almost 2 billion (22% of overall population) people over 60 by 2050 whereas this cohort currently accounts for 10% of the global population.
Between 2005 and 2050, the working-age population of emerging economies will increase by 1.7 billion, compared with a decline of 9 million in the developed economies. Demographics is thus set to be the driver of economics for the forseeable future.
 
 
Economic Power Shifts
 
China and India contributed 58% of all global growth in 2007 and it is estimated BRIC economies could be delivering 40% of all global growth by 2018. The IMF April 2009 Global Financial Stability Report estimated total losses on loans and securities of up to US2.7 trillion for the USA and around US$4.1 trillion globally. Despite the downturn, there is still a strong expectation that increasing economic power will be exerted by the BRIC economies. Current forecasts from the OECD (Chinese Economic Performance in the Long Run, 2008) suggest that China’s GDP could overtake that of the U.S. as early as 2015.
 
 
Politics Gets Complex
 
The political agenda has become increasingly crowded and complex as increasingly diverse issues, interest groups and challenges compete over governments’ attention. Global finance crisis has led to even further complexity inside nations, between nations, between developing and developed countries. This complexity manifests itself in that 35 countries were on highest risk ‘alert’ status in the 2008 Fund for Peace failed states index – a four year high, with 127 countries in 2008 at Alert or Warning status compared to 76 in 2005
While finance remains a key global topic, other concerns over health, education, security and environment will arise. Against this backdrop is a rising public apathy – according to a GfK poll, only 14% of Europeans trust politicians.
 
 
Expanding Organizational Agenda
 
According to Richard Edelman, chief executive of the Edelman communications consultancy, “Business leaders need to think differently about what it means to be a public company. No longer can their sole objective be to maximise profits.” He argues that a new strategy of “public engagement” is needed to restore the public’s trust in business. Indeed 77% of Americans and 62% globally trust corporations less than they did a year ago.
 
Against this backdrop the business landscape is dramaticaly evolving. Increased numbers of women owned business, of social ventures and of entrepreneurship generally are accompanied by CSR concepts becomming embedded within organizations. In a survey of 7200 privately held businesses in 36 countries (Grant Thornton, 2008) 65 percent of the respondents cited that recruitment and retention of staff was the most important factor for doing CSR. Saving the planet came fifth.
 
 
Science and Technology Go Mainstream
 
Nations and businesses alike are now recognising and seeking to compete on the ‘innovation advantage’ that comes from leadership and investment in science and technology. Several national recovery packages feature heavy R&D spending – in Germany EUR 965m, France EUR 731M and large portions of China’s 10Tn Yuan are also dedictaed to R&D. This increase in spending accompanies a rapidly evolving technological ecosystem that Gartner predicts will lead to mashups creating 80% of new enterprise applications by 2011. Not only will science and technology be used as a way of doing things but rather as an adjunct. For example 55% of internet experts in the U.S belive that by 2020 many lives will be touched by the use of augmented reality or be spent interacting in artificial spaces.
 
 
Generational Crossroads
 
Each major group (baby boomers, gen x, gen y) brings widely differing attitudes to working practices, communications preferences, as well as attitudes towards the role of technology and work-life balance. The challenge for employers will be to create an environment where each group can feel valued and be effective. Indeed a Randstad USA survey found that 51% of baby boomers and 66% of the generatio that preceeded them reported having little to no interaction with colleagues from Generation Y.  
The European Commission’s April  2009 Ageing Report warns the economic downturn ‘could make the challeges creating by ageing more acute,’ and lead to intergenerational conflict. With house prices lower and thus individuals net worth reduced, retirement is becoming less of an option for some baby boomers, further increasing generational tension associated with the workplace.
 
 
Rethinking Talent, Education and Training
 
The so-called ‘demographic time-bomb’, describing the pending retirement wave of aging workers, is creating an impending skills crisis for employers (31% worldwide in 2009 according to Manpower). At the same time, the constantly evolving nature of the business environment, the work undertaken and the technologies used are driving the demand to update our existing skills and learn new ones. Rising life expectancy also implies that our working lives will increase and add further impetus to the need for lifelong learning
 
 
Global Internet Expansion
 
The internet is increasingly becoming a core tool for business and the individual in Western societies, with the developing world catching up fast. Social web tools such as blogs, wikis, social networks, virtual worlds and portable computing devices are becoming mainstream – evolving into essential tools for marketing, communications and engagement. Global internet usage grew 265.6% from 2000 to 2007. Some sectors such as Mobile internet still have significant capacity – Nokia forecasts extraordinary growth in mobile data traffic – rising 300-fold by 2015. Increases in cyber crime, cyber war, media spending and a major rise in user generated content are also forecast.
 
 
A Society In Transition
 

Edelman’s 2009 study found trust down in most types of news outlet and spokesperson from 2008 – Corporate or product advertising is least trusted – down from 20% to 13% in 2009. In the US trust in information from a company’s top leader is at a six-year low at 17%. Outside experts at 59% remain the most trusted purveyors of information about a company. Only 29% and 27% view information as credible when coming from a CEO or government official, respectively, declining from 36% and 32% in 2008.  Juxtaposed aginat declining trust is a seeming rise in expectations. Greater corporate social responsibility (CSR), more transparency, and higher standards in public life are being demanded. These are being driven by growing public awareness of the scale of social challenges, environmental pressures, changing consumer values and a rise in ‘ethical consumption’, and will rise in prominencethrough the communications accelerator effect provided by social media and more widespread adoption of reporting and accountability standards

 
Natural Resource Challenges
 
For the last two decades, there have been many voices warning about unsustainable natural resource demands and unsustainable pressures on the natural environment. Forecasts suggest these voices will increase –  achieving emissions targets could cost over $11Tn by 2030 whilst energy demand is forecast to increase by 50%+ by 2030.  

 

From a  business perspective, being more transparent and issuing CSR reports no longer helps you to stand out – it’s expected.

 

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