Megatrends, according to Frost & Sullivan analysts, “are transformative, global forces that define the future world with their far reaching impacts on businesses, societies, economies, cultures, and personal lives.”[1] They identify twelve areas in which such megatrends can be found: Urbanization, smart technologies, society, connectivity, retail, climate change, energy, economics, infrastructure, healthcare, mobility, and new business models. In Part One of this two-part article, I discussed the first six megatrends: Urbanization, smart technologies, society, connectivity, retail, and climate change. This article discusses the remaining six areas: Energy, economics, infrastructure, healthcare, mobility, and new business models.
Energy. In 2020, for the first time in twenty years, there were fewer renewable energy resources added to the energy supply than during the previous year.[2] The slowdown in construction was primarily attributed to the pandemic. Most analysts believe the future looks bright for renewable energy sources. Scott Birch, editor of Energy Digital, notes there are a number of efforts underway to develop “various processes that turn electricity into heat, hydrogen or synthetic fuels. This means that ever-more of our energy system can become less reliant on traditional sources such as coal, oil, and natural gas, thereby reducing greenhouse gases in the atmosphere.”[3] As noted in Part One of this article, climate change is the megatrend with the greatest impact on the globe; so efforts to reduce greenhouse gases are welcomed. Another trend noted by Birch is the use of “distributed energy resources (DERs) [that] enable the generation of electricity or heat at the place of its consumption. The absence of a network eliminates the loss and cost of energy transmission.” Other energy trends include improvements in storage capacity to provide around-the-clock energy from renewable sources and advances in smart grid technology. Ariel Cohen (@Dr_Ariel_Cohen), a Senior Fellow at the Atlantic Council and the Founding Principal of International Market Analysis, predicts, “This energy transformation will see an explosion of growth in Artificial Intelligence (AI) utilization in the sector — up 50% between 2020 and 2024 — to allow smart, 21st century grids to become the gold standard, gradually replacing the ‘dumb’ grids laid down in the late 19th [and] early 20th century in Europe, North America, Japan, China and beyond.”[4]
Economics. In many ways, the economy is now driven by data. The World Economic Forum has declared data a resource like gold or oil. Not only are there new resources driving the economy, there are new players. Frost & Sullivan predicts, “China and India [will] lead the global economy in the near future.” The other two so-called BRIC countries (Brazil and Russia) are faltering. As a result, Frost & Sullivan analysts say it’s time to look beyond the BRICs for economic growth. They suggest looking at Mexico, Poland, Turkey, Nigeria, Egypt, South Africa, Thailand, Vietnam, Indonesia, and the Philippines. United Nations’ analysts believe one economic trend that needs addressing is economic inequality. They explain, “Despite the global rise in income and the rapid fall in extreme poverty, sharp disparities remain. … High and growing inequality hampers economic growth and slows poverty reduction. It has weakened workers’ representation and social dialogue in the workplace. This, in turn, has negatively affected wages and working conditions.”[5] They fear growing economic inequality will lead to widespread social unrest.
Infrastructure. There are many types of infrastructure supporting all sorts of economic and civic functions. Many analysts believe the pandemic will spark a new round of IT infrastructure projects that support remote work and “anywhere operations.” On the transportation and supply chain front, one trend in the U.S. that must be reversed is failure to address crumbling infrastructure. Michael McGarry, chairman and CEO of PPG, reports, “Data from the National Association of Manufacturers (NAM) reveals that underinvestment in U.S. infrastructure worsens by the year, and infrastructure investment before the pandemic was only one-third of what it was in 1960.”[6] He adds, “With unemployment rates in the U.S. at historic levels due to the economic impact of the COVID-19 pandemic, it is more important than ever to invest in areas that help get more people back to work. Today, lawmakers should prioritize the passage and implementation of a comprehensive infrastructure program, as part of a future round of stimulus funding that would immediately provide employment opportunities for many Americans. Even before we started feeling the economic impacts of COVID-19, our country was in dire need of these upgrades.” Frost & Sullivan analysts suggest new investments in infrastructure should include investments in technologies that make infrastructure smarter.
Healthcare. As a result of the pandemic, one of the biggest trends in 2020 was a shift to online healthcare for routine matters. By and large, the forced experiment in telehealth was an overwhelming success. In addition to virtual care and remote medicine, futurist Bernard Marr (@BernardMarr) believes the pandemic will have far-reaching effects beyond the healthcare industry. He explains, “In 2021, every company will learn to become a healthcare company, too, as safeguarding employees and customers becomes a core requirement of doing business.”[7] Marr also believes advancements in genomics and gene editing technologies will make breakthroughs in how we treat diseases.
Mobility. One of the most important aspects of modern society is our ability to get around. Even though the pandemic dampened some people’s enthusiasm for traveling, mobility remains an important issue for any advanced economy. In recent years, we have seen a rise in sharing schemes (e.g., bikes, scooters, and cars). That trend is likely to continue. Another important trend is the increase in the number of all-electric vehicles. Large urban areas are known for their lack of air quality and electric vehicles can help address the problem. Another trend, touching on both the sharing and electric vehicle trends, is the development of electric, autonomous vehicles. Olha Zhydik, a Content Marketing Manager at ELEKS, reports, “Currently, there are around 1,500 self-driving cars on the road in the US but, with big automakers including Toyota, Honda, BMW and Renault ploughing investment into driverless functionality, the market is set to boom. German automotive behemoth, Audi, has plans to invest around $16 billion in its autonomous vehicles by 2030.”[8]
New business models. We live in the Digital Age and digital enterprises have made a huge impact on the world. Frost & Sullivan analysts suggest new business models are developing in five different areas. In the business-to-consumer (B2C) space, they see new co-created business models (like Quirky.com), pay-as-you-go business models (such as, insurance), and value-for-many models that address the needs of the world’s poorest consumers. In the business-to-business (B2B) space, they see the creation of more online platforms, more sharing services, and more alliance-based models. In the people-to-people (P2P/C2C) space they see peer-to-peer lending models and more P2P retail sites. In the government-to-business (G2B) space they see more online bidding business models and more public/private partnerships (PPP) — business models like Build-Operate-Transfer (BOT) and Build-Own-Operate (BOO). In the government-to-government (G2G) space, they see new e-records and e-consultancy models as well as information-sharing services models.
Although the pandemic seemed to make the world stop, obviously that is not the case. Nevertheless, for the first half of 2021, the COVID-19 pandemic will be the megatrend affecting most governments, businesses, and people. With a light at the end of the pandemic tunnel in sight, understanding what other megatrends are affecting the global landscape is important. Over the coming weeks, I will delve deeper into trends affecting different parts of the business landscape.
Footnotes
[1] “World’s Top Global Mega Trends To 2025 and Implications to Business, Society and Cultures,” Frost & Sullivan, 2020.
[2] Scott Birch, “Top 10 energy trends,” Energy Digital, 15 October 2020.
[3] Ibid.
[4] Ariel Cohen, “Artificial Intelligence Will Revolutionize Energy, Earning Billions For Investors,” Forbes, 30 November 2020.
[5] “Shaping the Trends of Our Time,” United Nations, September 2020.
[6] Michael McGarry, “Crumbling Infrastructure Is Hurting America’s Competitive Edge,” IndustryWeek, 8 May 2020.
[7] Bernard Marr, “The 5 Biggest Healthcare Trends In 2021 Everyone Should Be Ready For Today,” Forbes, 23 November 2020.
[8] Olha Zhydik, “The Future of Urban Mobility: Five Key Trends to Watch in 2021 and Beyond,” ELEKS Blog, 4 November 2020.
