The impact of megatrends on Western governments

Megatrends clearly have an impact on businesses, the environment they operate in, but also the very nature of their operations. But what about governments and public services? Are they prone to these long-term shifts? Should they pro-actively adapt to these changes or can they afford to sit back and watch things coming?

The presentation beneath is a first attempt at mapping the key opportunities and challenges governments face in the light of a selection of megatrends I cover. It's meant as a conversation starter for public institutions -and is by no mean a complete assessment of all the megatrends affecting public services. Consider this an introduction...

The impact of megatrends on western governments

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The impact of technological trends on society, and how companies should adapt

Came across this somewhat old but certainly not outdated speech of technology visionary Peter Hinssen. A brilliant account on where technology advancements are impacting society and how companies should adapt to this changing paradigm. The fundamental change is indeed that we have more and better technology in the home than at work. This is an obvious statement, but its repercussions are very often overseen...

(btw: these are the highlights of a speech given to Dexia personnel -Dexia is a Belgian-French bank, hence the focus on the financial markets ate the end)

Some concrete ideas to ensure sustainable urbanization

Quite a convincing speech by Alex Steffen at TED. His starting point is that urbanization doesn't necessarily have to go hand in hand with energy waste. In fact, the denser a place (in terms of # people per square km), the less emission is would entail. Quite logical come to think of it: the more you find things you need in your immediate environment, the less you have to travel to obtain it.

Strangely enough this would lead to the conclusion that it would help if even existing cities get more people living in it... Sounds weird at first, but Alex provides some nice evidence of how this could be done in a sustainable way (whether it's more socially livable is another question though, not addressed by him):

New migration patterns in the future: brain drain from the West or from the East?

It’s a question that has been intriguing me ever since I started investigating megatrends: how will migration patterns evolve in the next 20 years?

It is quite difficult to have an exact picture of this, since these patterns are influenced by a couple of NEW forces that will be increasingly impactful over the next years:

1. Climatologic migration is likely to increase if global warming continues to cause an increasing number of regions suffer from draught or other consequences of climatologic changes. Water shortage will likely be a major factor, and when looking at the projections of the regions that will suffer from it by 2025, one can conclude that the movements will not only happen from de centre to the outskirts, but also within the Western world (to the East coast in the US, to Scandinavian countries in Europe):
   
   
   
   
2. Economic migration has been known for a long time now, but it is likely to take different forms in the future:

• demand-driven immigration of talents from emerging countries to the West: Western countries will increasingly encourage immigration of specific competencies and skills to fill the gaps caused by the ageing population. As Daniel Altman points out in the interview beneath, this might be a bad thing for the countries of origin of the immigrants, who will have to deal with a brain drain. But as the case of India shows, this is not necessarily so on the long run, more and more Indians are now returning to their home countries packed with skills and knowledge that they could not have obtained in their home countries.
  
  

• a less well documented cause of migration patterns might be the Western generation Y: is it not likely that their spirit of openness and boundary-less will ultimately drag them to ‘where the action is’ (hence, where the economic growth is highest)? As a first sign of this: universities in emerging countries are gaining much popularity worldwide, as they move up in the lists of most qualitative education offerings:
  
  (universities of emerging countries as they appear on quality lists of different sources -with their ranking in order of appearance: )
  
  
  
  
  (universities of emerging countries in the list of most popular universities globally, with their rankings in order of appearance: )

There’s obviously more forces determining migration patterns, but these three are quite new, will be increasingly impactful in the next 10 years, and their full impact is still relatively uncertain. So, to me, these three are the most crucial ones to follow up closely.

Gamification as a tool to maximize the success of crowdsourcing projects...

I’ve been spending some time researching the ‘gamification of business’ trend.  Except for the case of Marriott's (see previous blog) I found it rather hard to find some convincing examples that this is going to be a crucial thing for businesses. The 10 examples provided by Forbes are not all about using a ‘game context’ for business practices, which is perhaps an evidence for the difficulty of finding enough good examples.

The excellent platform gamification.co offers some good insights into the trend, amongst others this interesting video from a panel debate at the first gamification congress earlier this year.  (if the video beneath doesn't show try to go to the ForaTV posting directly):

Apart for some examples and do's and dont's, the video touches one aspect of gamification which I think might be of immediate benefit to businesses: it’s use in crowdsourcing projects. No doubt putting crowdsourcing projects into a game format would attract many more contributors to the table, and if they have fun with it they’re more likely to contribute for free… I’m not saying it would help for all type of crowdsourcing, but at least for the creative projects.

Looking at the benefits of gamification as listed by research company Gartner, I can only conclude that these would highly benefit crowdsourcing projects as well:

1. Accelerated feedback cycles. In the real world, feedback loops are slow (e.g., annual performance appraisals) with long periods between milestones. Gamification increases the velocity of feedback loops to maintain engagement.
2. Clear goals and rules of play. In the real world, where goals are fuzzy and rules selectively applied, gamification provides clear goals and well-defined rules of play to ensure players feel empowered to achieve goals.
3. A compelling narrative. While real-world activities are rarely compelling, gamification builds a narrative that engages players to participate and achieve the goals of the activity.
4. Tasks that are challenging but achievable. While there is no shortage of challenges in the real world, they tend to be large and long-term. Gamification provides many short-term, achievable goals to maintain engagement.

How social media is changing journalism

Undoubtedly the job of journalism has known some profound changes with the global grid and (as part of this) social media. How are journalists now using Facebook, Twitter and LinkedIn in their profession, and how will this influence their job in the future? The interview beneath with Nic Newman sheds some interesting light on the matter...

Interestingly, he doesn't speak too much about the threat of social media as making journalists irrelevant (well, does it?), but rather sees it as mean to bring better stories. In a way, both can reinforce each other. Interesting:

Is Facebook too big to fail? Not in the 'new normal'...

If the collapse of social media platform MySpace has led to anything, it's the avalange of good advice taken and lesson's learned from its failure.

My personal favorite comes from PCWorld's Jarred Newman:

• don't ignore spam (pretty down to earth advice, you'd think, but apparently Myspace omitted it);
• redesigns won't save you (that's a good lesson, sound like panic football if you do);
• discovery is automatic now (in other words: use the networking element for discovery, building a platform for discovery is passé);
• you can't rely on kids (perhaps the most noteworthy advice)

The real question with this, however, is whether social media platforms, however big, can make errors so big that they vanish into oblivion. In other words, is Facebook, with its 600 million users, to big to fail? Is it imaginable that we'll all move (or loose) our shared pictures and thought to go to the 'next big thing'?

In the 'new normal', yes, it is a completely realistic scenario. In my own opinion, social media itself (being a result of a megatrend, rather than a trend in itself) will ultimately prove to be a momentary impulse, soon to be replaced by something else. Giant like Facebook, if they prove to be unadaptable to changing conditions, will fail as well...

Consumerization of IT is quickly gaining adoption, increasing productivity

Interesting report by IDC (commissionned by Unisys) about the pace with which 'consumerization of IT' is getting adopted. Consumerization refers to the fact that more and more employees choose to use their personal technological devices in their professional environment. This poses some concerns to the IT departments of companies -and, in a way, questions their relevance as well. But, according to many studies, it is getting inevitable (as GenY will simply demand it) and according to this one from IDC, it is making employees more productive as well... Interesting read.

The report is freely available (click here).

Major conclusions:

• Consumer technologies are already being used extensively in the enterprise, and are growing in importance;
• Demand for mobility is accelerating and amplifying all of this -smartphones, tablets and laptops continue to grow at the expense of traditional desktop PCs and as secondary and tertiary devices to work-issued PCs;
• It’s not just about devices: there’s growing business use of a diverse range of social media applications with consumer roots;
• The flow is two-way: work is flowing into personal time as well, which makes workers more productive.

Most interesting charts:

Introductary interview with IDC:

 In the recording beneath, Frank Gens, Senior Vice President and Chief Analyst of IDC, discusses the results of the report on the "consumerization gap" and what it means for the enterprise.

The future of the corporate marketing function: 'we're all marketers'

Interesting study from McKinsey on the future -well, the immediate future- of the corporate marketing role. Unsurprisingly the importance of social media is prevalent in the changes impacting the marketing function, and the study quite rightfully stresses the importance of the marketing function to be embedded with other corporate function.

In their eyes, while marketing should be at the center of all communication functions (including customer service and sales), it also entails that marketing skills should be introduced in these other teams. Quite a complex structure emerges with dotted and straight line reporting between responsibilities and skills -evolving in a typical McKinsey matrix structure, topped by some councils. It does make sense, however, and the interviews with corporate CMO's (2 out the 3 are embedded below) show that there is a concrete need for it in the current business context.

The study doesn't mention crowdsourcing or open innovation as an enhancer of the marketing function, which is a bit of a pity. But still it's a highly recommended read:

Click here for the main article explaining in detail how the new marketing chellenges impacts the marketing organization.
The 2 videos beneath are taken from the interview section.

Video: John Hayes on the future of marketing

The CMO of American Express reveals how marketers are losing control over what’s said about their products, while still being held accountable for their success or failure.

Video: Duncan Watts on the future of marketing

The principal research scientist at Yahoo! Research discusses the limits of intuition, and how conventional wisdom keeps being overturned as marketers apply science to data.

The house of the future

...admittedly, this video is a bit old (Jan 2010), but since most of the promises contained in it are still to be materialized, I guess it's still valid as a future perspective (the price of the gadgets in the house might have dropped somewhat, however).

It's still an interesting prospect anyhow, one can see how house technology might ultimately help us be more efficient energy consumers while maximizing living comfort:

The future of money: Facebook credits everywhere?

Some interesting viewpoints from futurists Gerd Leonhard and Ross Dawson about the future of money. 7 minutes well spent, although I'm still sceptic about some points (how are conversion rates with real value going to be determined?), it's sure that most of the thoughts are at least possible outcomes...

Key points (taken from Ross's website)

• The world of money is opening out in a big way today;
• Facebook credits are becoming an important alternative currency;
• Cash will phase out for digital payments;
• The rise of Bitcoin is important in shifting transactions out of the purvey of governments;
• In many developing countries mobile phones are becoming the predominant banking platform
• Micro-payments for content could work through social media and dominant platforms such as China’s QQ
• These could flow into crowdfunding for creative endeavors;
• Behaviorally we are some way from micro-payments working well;
• Money will inevitably shift to the cloud

Building our social media with our DNA

Well, this is an interesting thought... what if we could use our DNA in our social media activities? We'd certainly be able to find friends that have more in common with us (if we'd really want to do that). But more importantly it entails some more efficient ways of health care provisioning and, in term (I think it's implied in the video beneath, though not expressed as such) peer-to-peer health care. This deserves some further investigation...

Also interesting from a business perspective: the enormous growth of the amount of data (due to DNA sequencing according to this video, but besides this also due to the Internet of Things) means that the Google business model will rule in the coming decade (collect,digest and transform data into profitable services).

China's investments in Europe rising, good or bad?

Undoubtedly this is a development to watch closely. Chinese investments in Europe, while still relatively marginal, is definitely going to dominate the next decade. As the examples of Volvo shows, this is not at all a bad thing.

China's businesses have a remarkable way to deal with different systems within their corporate culture. In the example of Volvo, they left most of the Scandinavian management untouched, only changing the CEO, for which they chose an American. What a remarkable difference with the way Japanese businesses were buying into the Western world back in the 80's...

Furthermore, Chinese money seems more then welcome for Western businesses starving for further expansion, for European government debt as well as for employment growth -a study from Ernst & Young showed that Chinese investment accounted for 7% of the job creation in Europe -beyond the US and Germany, but well ahead of France and Switzerland.The video from The Economist beneath offers a good overview of the current size and spread of these Chinese investments in Europe

Sure, there are backslashes as well, though it's difficult to see how they would counterweight the advantages... 

(PS: the thought expressed in this blog post is about the Chinese investments into Western businesses, not about how the Chinese buy their way into natural resources in, for instance, Africa, which shows a completely different mindset).

What's the real value of virtual currencies?

It's about time I understand a bit more about where virtual currencies would bring us in the future. To be frank, the idea still seems very abstract to me. As an economist, I understand the feasibility of it, maybe even the dynamics, but I still have difficulties in understanding the 'why': what would be the need for it?

This interview with James Currier, founder of -amongst other ventures- Medpedia , offers a pretty clear and understandable introduction to this topic... something to reflect on during my holiday ;-)

Out of 100 biggest global entities, 44 are companies... another drive for 'shared value'

In a recent video post about 'shared value', tech company Hewlett Packard claimed that out of 100 largest economies, 51 were companies. I got intrigued by the fact and did some cross-check, based on the latest Forbes Top 500 list and IMF data:

So in fact there's only 44 companies in the list, but HP's point is still very valid: most companies have become so big (or: economically important) that they simply cannot turn their back on their social responsibilities. It's one more drive for the trend towards Market States, where businesses will increasingly take over responsibilities from the public sector (a second one would be for their own benefit, as I mentioned in a previous blog post).

Will this trend amplify in the future? Well, you could argue that from the top 10 biggest companies, 5 are petroleum companies. What will happen to them when we reach 'peak oil' somewhere in the next 20 years? The same could be said about countries like Norway or Qatar, where oil contributes for a big part to the GDP...

The interlock between government, business and non-profit: social entrepreneurs

Just been through the 2011 list of winners of the Schwab Foundation for Social Entrepreneurship. It's a good measure of the social challenges the world copes with, or rather: the geographical differences of these challenges, since the winners have quite some different activities dependent on their location. For instance, 2 out of the 4 European winners are building businesses around helping out poorer or less educated people to find a job. This obviously is a reflection of a tough structural unemployment problem in most of the European countries.

Doing some further research on social entrepreneurship, this chart (found on the blog http://venturepragmatist.com/tag/social-entrepreneurship/ ) made me think for a while. In a previous blog post I shared the reasons for businesses to move into social entrepreneurship, but the one beneath has the merit of bringing the Public Sector into the equation, and to map the interests and relations between the 3 parties.

All these interlocks point to important trends: private companies will increasingly perform public tasks (pushing the drive to Market States), governments will be under pressure to be more (cost-) efficient and 'shared value' will become a crucial core value for business. Interestingly, the author puts social entrepreneurship in the middle of all these influences...

Mass customization and Create Your Own (CYO) in the fashion industry

(thanks again to the excellent www.mass-customization.info for spotting this)

Mass customization is definitely a megatrend, and one that will be applied on many more sectors than is currently the case, simply because it is in many case what clients and customers want, and hence it has an tremendous capability to create competitive advantage. Most examples are pretty well known (Lego, Dell, Nike, ...). The video beneath -where mass-customization in the fashion industry is discussed- shouldn't come  as too much a surprise. Clothes have from the start (thousand of years ago) been customized, haven't they?

Interestingly, contrary to what I would have thought, mass customization of clothes doesn't have to be unsustainable by nature. I would have thought so since the complex production process would naturally create inefficiencies and -hence- wastes. The video proves however that mass customization can lead to more efficient processes.

I should try to map which other (unsuspected) industries could be affected by (or benefit from) this trends...


Create Your Own - Mass Customisation from Sue J-J on Vimeo.

How apps are changing our world... a keynote of futurist Gerd Leonhard

Both interesting and entertaining keynote speech from futurist Gerd Leonhard about the impact of the 'app-culture' on society and business. I'm not a heavy app user myself, but I do recognize the wave of apps will ultimately 'modify human lives profoundly' (hate to sound dramatic). If you're not convinced, Gerd's speech will certainly help you forward.

There's a lot of tpics treated here, 'all content in the Cloud', convergence of media and apps as payment methods, ... Some concepts that stroke me most were the 'nowness' and 'hereness', which in my eyes would deserve some study about the psychological and even philosophical consequences of; and the idea about selling direct through apps, a very powerful concept which would have deserved some further thought in this speech (well, perfect, I have something to investigate further ;-).

Anyhow, 45 minutes well spent for anyone working with future trends:

What would a virtual company look like? #2: the buildingless office

The virtual company is invariably associated with the ‘location-less’ company. No need for buildings or office spaces, every contact with colleagues is ‘virtual’. Needless to say that collaboration tools play a crucial role in such working environments.

In my case, this means spending hours per day on Webex (calls and IM’s) and –eventually- Telepresence.
This works fine, but it’s far from giving any feeling of close collaboration. If I need to speak to someone urgently, I can check whether he’s online or not, and –if so- whether he’s on the phone. I wouldn’t know with who, or what exactly he’s busy with. There must be better ways…

Well, check this demo out of a tool called Sococo. Surely this comes a giant step closer to a colleagual feeling with collaboration tools?

(the intro is a bit lengthy before he actually starts showing the tool, but it’s well worth it)

The future of innovation management: the next 10 years

Interesting report from Arthur D. Little based on a survey of 100 CTO's and looking at the forces driving innovation in the near future. From this survey, AdL concludes that there are 5 new models for inovation management in the future:

Interesting as well, the respondents to the survey indicated that an increasing portion of the innovation process will come from other parts of the world, mostly as a result of the trend towards decentralized R&D centers:

Well worth the read for anyone dealing with innovation (well, who isn't).