Over the past few years, there seems to be fewer articles making predictions and more articles discussing trends. This development may be because making predictions is often a fool’s errand. Historian Amanda Rees explains, “Humans have long tried to determine the shape of what’s to come. But even the most advanced technology can’t solve the fundamental issues with predictions. … Rulers from Mesopotamia to Manhattan have sought knowledge of the future in order to obtain strategic advantages — but time and again, they have failed to interpret it correctly, or they have failed to grasp either the political motives or the speculative limitations of those who proffer it.”[1] It’s a much easier task to identify current trends and let readers decide for themselves what those trends mean for the future. The challenge, in a short article like this one, is to decide which megatrends should be discussed. In selecting the trends for this article, I asked myself this question: What trends will have the greatest impact across all economic sectors?
2023 Megatrends
Trend 1. Recession. Most nations around the globe are wrestling with the companion challenges of inflation and recession. Futurist Bernard Marr explains, “The economic outlook for most of the world doesn’t look great in 2023. We are told by experts to expect ongoing inflation and subdued economic growth.”[2] Journalist Tom Standage predicts, “Major economies will go into recession as central banks raise interest rates to stifle inflation, an after-effect of the pandemic since inflamed by high energy prices. America’s recession should be relatively mild; Europe’s will be more brutal. The pain will be global as the strong dollar hurts poor countries already hit by soaring food prices.”[3]
Trend 2. Climate Change. Concerns about climate change will continue to rise as its negative effects become more evident. Lack of past action, coupled with lukewarm current actions, means the globe will continue to warm with catastrophic results. As a result, sustainability has risen to the top of many organizations’ priority list. Analysts at Batterman Consulting call this trend “neo-ecology.” They explain, “Neo-ecology describes the shift toward a new value system in our economic system and our everyday lives. The motto higher, faster, further is complemented by trends such as GreenTec, Sustainability and ESG (Environmental Social Governance). By focusing on sustainability, topics such as conscious consumption, resource conservation and GreenTech are moving into the focus of companies. Consumers are buying more consciously, and companies that align their products, services and marketing accordingly can benefit. At the same time, there is a danger of falling into a greenwashing mentality, which can have the opposite effect.”[4]
Trend 3. Global Economics. Inflation and recession are likely to be temporary challenges. However, there are greater, long-lasting concerns about the global economy. Russia’s unprovoked invasion of Ukraine sparked a round of unprecedented sanctions against Vladimir Putin and his regime. Andrea Kendall-Taylor, Senior Fellow and Director of the Transatlantic Security Program at the Center for New American Security, and David O. Shullman, Senior Director of the Global China Hub at the Atlantic Council, observe, “Russia is even more ostracized from Europe and the United States than it was in 2014, and its future economic prospects in the West are even more dire given the far more robust Western response to Russian actions in Ukraine. In other words, Russia now has no options other than China, and so it will be all in and willing to accept whatever support it can get from Beijing.”[5] They add, “Make no mistake, China and Russia are fundamentally aligned — Moscow and Beijing share a view of the United States as their most important security challenge, and together they seek to erode U.S. power and influence.” There are growing concerns that these efforts will lead to an economic break with the West. Foreign affairs journalist James Palmer observes, “Supposedly unthinkable breaks with the rest of the world can happen very fast when geopolitics comes into play. And it becomes even more likely when domestic politics reward fervent nationalism instead of long-term thinking.”[6] Analysts from PwC note, “China [is] rebalancing its economic growth model from reliance on exports and capital investment towards domestic consumption and services.”[7]
Trend 4. Demographics. The world population just surpassed the 8 billion mark. PwC analysts note, “The pace of change will vary substantially across different regions. Africa’s population — the fastest growing — is set to double by 2050. Europe’s is projected to shrink. Fertility in Latin America will remain higher than mortality. The average age in Japan in 2050 will be 53 — in Nigeria it will be 23. These developments have profound implications both locally and globally. All countries will need to implement bold policies to cope with these demographic changes.” Standage adds, “Some time in April [2023] China’s population will be overtaken by India’s, at around 1.43bn. With China’s population in decline, and its economy facing headwinds, expect much discussion of whether China has peaked.”
Trend 5. Urbanization. Although some cities lost population during the pandemic, the trend towards urbanization will once again pick up speed. PwC analysts note, “Our future is set to be urban. Today, more than half of the population live in urban areas and 1.5 million people are added to the global urban population every week. A staggering 90% of this urban population growth will take place in African and Asian countries with rapid urbanization placing huge demands on infrastructure, services, job creation, climate and environment. But this global urban transition presents significant opportunities too, with vast potential for emerging cities to act as powerful and inclusive development tools.” Urbanization should bring new emphasis to the smart cities movement. Advanced technologies, like artificial intelligence, the Internet of Things, fifth-generation (5G) telecommunications, and electric vehicles, can make urban environments safer, cleaner, and more efficient.
Trend 6. Advanced Agriculture. Almost every trend mentioned above increases the importance of the global agriculture sector. Growing conditions are changing. There are more people to feed. And, there are fewer people living in rural agricultural communities supporting the agricultural sector. In order to feed the world, more attention needs to be paid to food security. Tom Adams, CEO of Pairwise, writes, “Each day we hear grim reports of food supplies disrupted by war and weather, of famine stalking people across Africa and the Middle East, of families struggling to keep pace with skyrocketing grocery prices. What we don’t hear are the inspirational accounts of the many efforts under way to ensure sufficient, nourishing food for the world’s eight billion citizens — even in the face of climate change — without destroying the planet that sustains us. Those stories, and a recognition of the major role that innovation and technology will play in building sustainable food systems, feed my optimism. Government institutions, academia, philanthropists, NGOs and private companies like mine are working independently and collaboratively to achieve a common goal: getting food to the 811 million people who regularly go to bed hungry, and improving the poor diets linked to suffering and premature death.”[8]
Concluding Thoughts
Your list of megatrends may differ from mine. After all, trends affect economic sectors in different ways and to various degrees. Rees concludes, “It would perhaps be more helpful to think in terms of diagnosis, rather than prediction, when it comes to imagining — or improving — future human histories.” The analysts at Batterman Consultants agree. They conclude, “Megatrends accompany us in the long term and change our society in the long term. … Only those who deal with the megatrends in good time will not miss the boat.” Over the coming weeks I will take a deeper dive into some of the other trends of which business executives should be aware.
Footnotes
[1] Amanda Rees, “The History of Predicting the Future,” Wired, 27 December 2021.
[2] Bernard Marr, “The 5 Biggest Business Trends In 2023 Everyone Must Get Ready For Now,” Forbes, 3 October 2022.
[3] Tom Standage, “Ten trends to watch in the coming year,” The Economist, 14 November 2022.
[4] Staff, “The 4 most important megatrends for companies in 2023,” Batterman Consulting, 2022.
[5] Andrea Kendall-Taylor and David O. Shullman, “Best and Bosom Friends: Why China-Russia Ties Will Deepen after Russia’s War on Ukraine,” Center for Strategic & International Studies, 9 March 2022.
[6] James Palmer, “Russia’s Isolation Spurs Rethink in China,” Foreign Policy, 9 March 2022.
[7] Staff, “Megatrends,” PwC, 2022.
[8] Tom Adams, “Science, innovation and incentives will transform global diets and food systems,” Agri-Pulse, 14 October 2022.
