One of the important skills in mastering change management is the ability to spot future trends and to be flexible enough to prepare for them. If you are leading an enterprise you will want to ask yourself, “How will I refocus my resources to take advantage of a changed environment.” You will need to decide how you will invest in people, technology, and R&D. You will also need to review your strategies and see if they will address these new trends. Likewise, even if you are not leading an organization, but are focused on your own career advancement, then you will also need to ask yourself, “How will I adapt to future changes in the environment?” You will need to assess your own skills and competencies, and also decide if your current job will allow you to take advantage of future opportunities. So whether you are a leader or an individual performer, here are some macro-trends that you might want to think about for 2011 and beyond:
- Global growth: Economic growth in the foreseeable future will be in international markets, especially emerging markets. Not too long ago some of these international markets were economic backwaters strapped with huge debt. Now in a twist of fate, many of the international markets are outpacing the industrialized nations in GDP growth. Some like China and oil-rich countries have been transformed from debtor to creditor nations. Around the world in places like Brazil, Chile, Turkey, India, Singapore, and South Korea, emerging markets are vibrant and growing. Although there will still be substantial opportunities in developed markets, the growth rates in these formerly second and third tier nations will far out-pace the more industrialized economies of the United States, Europe, and Japan.
- Demographics: The population demographics are clearly weighted so that the modern industrialized nations have aging populations while the emerging markets have far younger populations. This has implications for the demand for new services and products as well as social issues. They younger people will be more inclined to demand new products and services while the aging populations will look to governments for safety nets and retirement programs. These social programs will be difficult to sustain, especially in nations where the population growth rate has stagnated or declined.
- Demand for energy: Although the current economic downturn has lowered the demand for energy, the long term trend is clear: there will be an increasing demand for energy and constraints on supplies. Specifically the emerging markets will cause a spike in demand for energy as consumers will demand more products and a better quality of life. As the demand for energy increases in places like China, India, and Brazil with their huge population bases, it will be difficult for the supply to keep up with demand. This will increase the cost of energy over the long term, and as oil reserves are depleted, the problem will only exacerbate.
- Reliance on technology: There will be a continued reliance on technology and mobile devices. This has both positive and negative implications. On the positive side, technology will continue to advance and improve communication, access to information, and create efficiencies; however, the reliance on technology will have unintended impacts such as increased vulnerabilities to cyber attacks, disruption of markets, and unwanted disclosure of personal or private information.
- Black Swan events: The term “Black Swan” event was coined by Nassim Taleb to describe what are deemed to be unpredictable, but high impact events that have a disruptive effect on the status quo. Whether it is an economic crash, a natural disaster, or unexpected terrorist attack, these types of events can be game changers. In the past, such events were as rare as a black swan is in the wild; however, because of the interconnected nature of the global environment, events that were extremely unlikely are now much more likely. They also will have more significant impacts. In the future, expect more big disruptive events with more frequency and higher impact.
- Education: Education is the foundation upon which any country can grow. Without an educated workforce, the opportunity to sustain a vibrant economy can not exist. Regrettably, the US is in the middle of an education crisis. The percentage of high school graduates is declining while the number of engineers and scientists graduated from American colleges is proportionately smaller than countries like India and China. All Americans should be concerned about the crisis in education in both public and private institutions. Education opportunity has been our hallmark and contributed mightily to our economic leadership and prosperity since the founding of the nation.
- Innovation: Innovation has been the domain of the modern industrialized nations; however, innovation is now spreading throughout the world. Given the use of technology, access to information and education, and the growth of economic opportunity beyond the developed economies, innovation will take pace across a wider spectrum. More widespread innovation will accelerate the rate of change and opportunity worldwide.
- Concentration of means of production and resources: Global institutions, especially business institutions, are concentrating their power and influence internationally. Mega banking and industrial giants are accumulating more assets and control more of the production for manufacturing, food production, and commodities. They can move operations offshore to avoid the reach of government regulation and laws that they believe are restrictive. Although there are still many opportunities for individual entrepreneurs and smaller firms, the concentration of wealth and power across international boundaries is a growing trend.
- Widening wealth gap: There is a widening wealth gap between the rich and poor. In the industrialized nations, the gap between the economically privileged and the working poor is not only growing, but growing at a faster rate. Wages have stagnated for workers while those who benefit from investments have seen their net worth continue to rise. While it is true that emerging economies are seeing strong growth when compared to the wealthiest nations, within the emerging economies there are also growing gaps between rich and poor similar to the more advanced economies. This disparity also exists in the macro sense between the most wealthy nations and the poorest. As this disparity between rich and poor nations grows, it is likely that many poor nations will reach a tipping point from which they will not be able to recover. In these countries, there will likely be political and social strife that will spill over international borders with negative effects.
- Non-state actors: There will be a rise in non-state actors like pirates, drug cartels, criminal gangs, and terrorists. This will cause disruption and have unintended impacts around the world. Efforts to limit nuclear proliferation are critical to thwarting horrendous catastrophes by these criminal actors. Sovereign nations will need to focus more resources on intelligence and police efforts to counter this threat rather than rely primarily on military means and military strategy.
- Sovereign debt: Sovereign debt will continue to be a growing global economic issue. Countries are borrowing and spending more than their tax base sustain can sustain. They will reach a tipping point unless they take action to put their fiscal policies in order. In the past, excessive debt has been a problem for smaller and less developed nations. Their finances could be restructured with the help of international institutions like the IMF and World Bank; however, now even the most advanced economies are potentially subject to sovereign debt problems that will not be so easily fixed.
- Climate changes: Although there are those who will deny the impact of industrial production worldwide on the environment, the trend is clear: degradation of the environment and specifically climate change is a growing trend. Man-made disasters like the Gulf Coast oil spill, huge residues of garbage floating in the Pacific Ocean, and rising sea levels due to melting polar ice are undeniable. Even if someone doubts that these changes are real, they can still benefit by taking appropriate actions to change their own behavior and minimize the impact on the environment.
Some of these trends are more apparent than others. Some are yet emerging and hence subject to change and evolution. Nevertheless, prudent leaders and individuals will carefully consider the future impact of these, and perhaps other trends, on their organizations and personal lives. Denial will not make the trends go away. You can only face reality as you find it and then adapt. The best approach is to consider each of them and assess how likely they will impact you or your organization. Then develop a strategy to deal with them. To paraphrase Charles Darwin: “It is not necessarily the strongest of the species who survive, but those that are most able to adapt.” Take some time to consider each of these trends. Then learn how to adapt and thrive in the future.