global futures & foresight david smith global futures and foresight major market trends

Global Futures& Foresight

David SmithGlobal Futures and Foresight

Major Market Trends


The Reset World

• Facing the future• Growth drivers

– Globalisation

– Economies

– Populations

– Markets

– Business Models

– Technology

• Opportunity

• Why standards, why now?


Company Individual Commercial

Strategy

Vision

Implementation

ResourcesVision Foresight

Culture Behaviour Cycles

Values Comms Capability

Copyright © Next Visioning ip Ltd. 2011



Five Mega Trends

1. Globalisation Global business, new economies, local CSR

2. Energy and resourcesTowards sustainable business

3. Climate change and environmental pollution

Finding solutions

4. Changes in the world of work Winning the war for talent

5. New consumption patternsMoral economy, new and informed consumers

http://csr-news.net/main/2008/08/04/megatrends-and-the-future-of-corporate-social-responsibility/


“The size of the world economy will triple over the next four decades as emerging-market economies wield increasing power”

January 4th 2011HSBC Holdings Plc


Changing influence

http://www.gspip.com/_files/download/CH_engl_GS07352_Fly_Next11_24.pdf

Source: Goldman Sachs Global Economic Group


E7 overtakes G7 in 2019Figure 1: E7 could overtake G7 by 2020

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Source: World Bank for 2000-8, PwC projections of actual GDP in 2009-10 and trend GDP thereafter

GD

P a

t P

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s (c

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G7 GDP

E7 GDP

Convergence OvertakingCatch-up

Source: PwC: January 2010 http://www.ukmediacentre.pwc.com/Content/Detail.asp?ReleaseID=3547&NewsAreaID=2

G7 E7USA ChinaJapan IndiaGermany BrazilUK MexicoFrance RussiaItaly IndonesiaCanada Turkey


Consumers (000’s)

Source: UN Population Division http://esa.un.org/unpp/

5 billion consumers

650 million consumers


Consumer outlook - Asia

• Asia, excluding Japan, spends $5,500bn a year on personal consumption. (HSBC)

• $17,600bn in the US and Europe. • China‘s growth is explosive.• Average incomes - lower than Albania.

Frederic Neumann,

Asia economist at HSBC in Hong Kong

• China is capable of boosting consumption by up to 50% by 2025– 36% of GDP – lowest of any major economy

– 50% by 2025. Study by Jonathan Woetzel for McKinsey Global Institute

Source: HSBC, quoted in the FT, http://www.ft.com/cms/s/0/87fb0322-0945-11df-ba88-00144feabdc0.html


Urbanization

1950 - 2030


Fastest growing Cities


$40 trillion infrastructure challenge

Water Power Road and Rail Air/ seaport Total

North America

$3.62 $1.53 $0.94 $0.43 $6.52

Latin/South America

$4.97 $1.44 $1.01 $0.06 $7.48

Europe $4.52 $1.08 $3.12 $0.43 $9.15

Asia / Oceania

$9.04 $4.23 $2.11 $0.51 $15.89

Other (MENA)

$0.46 $0.72 $0.62 $0.16 $1.96

Source: Cohen & Steers Global Infrastructure Fund 2009 http://www.cohenandsteers.com/downloads/14/fundguide.pdf


CHANGING POPULATIONS

Global Futures& Foresightwww.watchblog.com Source: Population Research Bureau www.prb.org

2011 7 billion

The global population is expected to rise from 6.5bn in 2005 to 7.7bn in 2020 and 9.6bn in 2050

Global population growth


Islamic population

• Global population increases by 1.3 bn from 2010 to 2030• Muslim countries will contribute 600m people. (46%). • In 2010 23% by 2030 are 26% of world population.• This could rise to 33% in 2050 and 37% by 2100.• Muslims under15 will rise from 500,000 to 1.8m by 2030.

$2.7 trillion today $10 trillion by 2030

http://amirmizroch.com/2011/01/28/pew-world%E2%80%99s-muslim-population-to-increase-35-in-next-20-years/


Urbanisation/Fertility – Muslim countries


Changing Global Influence

Global economic dominance 1850-1950

Global economic dominance from 1950

Global economic dominance in the

future

Global population dominance in the

future


Halal markets• Travel• Tourism• Hospitality• ICT• Portals• Web sites• Media• Banking• Lifa Assurance• Insurance• Investments• Capital Markets

• Property development• Real Estate• Logistics• Warehousing• Industrial Parks• Health• Cosmetics• Fashion• Shopping• Education• Recreation• Food

Defining standards – facilitating growth


Ageing populations

Percentage of Global population over 60


Malaysia Income & Life expectancy


Middle East Population AgeAgeing

•Bahrain 29.4 33.6 40.9•Egypt 24 27.2 36.1 •Iran 24.8 30.8 40.6•Jordan 23 25.8 37•Kuwait 25.9 33.8 40.1•Lebanon 27.8 31.5 40.2•Oman 19 27 37.2•Qatar 31.7 33.9 41.9•Saudi Arabia 21.4 25.7 36•Syria 20.7 25.4 37.1•Turkey 28.1 31 40.7•UAE 28.1 33.5 40.3•Yemen 16.6 18.8 27.7

Country Average Age Average Age Average Age Today 2020 2050


And we’re living longer lives

Human life expectancies have the potential to reach 500, or possibly even 1000.

“The first person to live to 1,000 might be 60 already”

Dr. Aubrey de Grey B.A., M.A. and Ph.D., University of Cambridge, Cambridge, UK. Born 20th April 1963 -


Obesity

By 2015, approximately 2.3 billion adults will be overweight and more than 700 million will be obese. (The World Health Organisation)

By 2050 40% of US population obese.

Global Futures& ForesightCLIMATE CHANGE

SUSTAINABILITY


World food demand doubles to 2050

• 50% from population growth.

– All in developing countries

• 50% from economic growth.

– in low income countries

Dr. Robert Thompson, University of Illinois


Food wastage

“Roughly 40% of the food

currently produced worldwide is wasted before it is consumed.”Brian Halweil of the Worldwatch Institute

“We are seeing a trend toward ethical consumerism,” Jens Lönneker, Cologne

based Rheingold

http://pennalternativefuels.com/content/innovative-local-farming-key-global-hunger-fight-group-says

http://www.greenerpackage.com/green_marketing/interpack%E2%80%99s_eye_sustainability


Food production innovation

• Food prices to triple by 2050. October 2009 - International Food Policy Research

Institute .

• Without climate change prices rise:– 40% for wheat

– 60% for both rice and maize by 2050• As the world population grows.

• With climate change:– Wheat prices to rise 170% to 194%

– Rice prices 113% to 121%

– Maize to go up 148% to 153%.

Source: International Food Policy Research Institute ‘Climate change: Impact on agriculture and costs of adaptation’ November 2009 http://www.ifpri.org/publication/climate-change-impact-agriculture-and-costs-adaptation


People in water stress by 2030 Millions of people

Source: ‘OECD Environmental Outlook to 2030: Key Results’ 2008http://www.oecd.org/document/26/0,3343,en_2649_34305_40243802_1_1_1_1,00.html

OECD countries


Scarce resources

• By 2030 - energy demand up 55%.

• Scramble for resources will be a major cause of conflict.

• The solution is to be more efficient and promote sustainability.

• Sustainability & efficiency reduce cost & raise the company’s value.

http://csr-news.net/main/2008/08/04/megatrends-and-the-future-of-corporate-social-responsibility/

Rising sea levels, increasing droughts and famine, and a decrease in water availability will have dramatic impacts


Increasing scarcity of key materials for many technologies

Figures do not take into account new demand arising from new technologies

Source: LabNol ‘How Long Will Rare Metals Last?’ October 2009http://www.labnol.org/home/how-long-will-metals-last/10648/


New Polar sea route

Ice gone completely in summer within 10 yearsPen Hadow, Arctic Explorer


Market sectors


Islamic Banking to Double…

• Global Islamic banking:– $1 trillion in 2010. – $2 trillion by 2015 - 2017International Islamic Finance Forum Abu Dhabi (Oct 2010).

• Focus on ethical banking values.

“Islamic banks using the foundation of Islam, should lead the way for an ethical banking structure. This will pave the way for a profitable future and be an example to conventional banking industry,” Afaq Khan, chief executive officer, Standard Chartered

http://www.tradearabia.com/news/bank_187194.html


…Or Possibly Quadruple?

• By 2020 Islamic banks will handle 40% to 50% of all savings of the Muslim population. Dr. Nasser Saidi, Chief Economist of the Dubai International

Financial Centre - December 1st 2010 that in

• Islamic financial services would total $4 trillion by 2020.

http://www.al-shorfa.com/cocoon/meii/xhtml/en_GB/features/meii/features/business/2010/12/04/feature-02


Expansion of Takaful Insurance

• Islamic household savings will reach $24bn a year by 2020. Accenture, the global management consultancy, forecasts

• Global Takaful to pass $8.8bn in contributions last year.

• Ernst & Young’s World Takaful Report 2010: Managing performance in a recovery, unveiled at the 5th Annual World Takaful Conference of 2010,

http://www.thenational.ae/business/banking/islamic-insurance-on-the-risehttp://www.ey.com/EM/en/Newsroom/News-releases/2010-news--Global-takaful-market-forecast-to-surpass


Halal food

• Global demand rising.

• Expected to grow at 20% by 2025 Hamid Badawi, Deputy Chief Executive of UAE Al Islami Foods.

• Halal food accounts for 16% of the world food trade - just less than proportionate to the Muslim population. IHIA statistics.

http://gulfnews.com/business/general/halal-food-numbers-look-tasty-1.679007


Islamic Travel & Tourism

• As a concept, Islamic tourism has three main components.1. The revival of Islamic cultures and

the spread of Islamic values.

2. Economic benefit for Islamic societies.

3. Deepening Islamic self-confidence, identity and beliefs.

http://www.staff.uni-mainz.de/alhamarn/Islamic%20Tourism%20-%20paper%20for%20BRISMES%202004.htm


Middle East Air Traffic to Double by 2017

http://www.airbus.com/fileadmin/media_gallery/files/brochures_publications/Global_Market_Forecast/Airbus_Global_Market_Forecast_-_2010-2029.pdf


Islamic Tourism• Almulla Hospitality is to open

150 Halal hotels by 2015,

– In Middle East, Europe and N. America.

• Jawhara hotels aiming for 25% Sharia-compliant hotels in Dubai.

• Spending 2.5% of net profit as Zakah.

• Interest is spreading beyond companies in Muslim countries.

http://wardheernews.com/News_10/July/07_halal_tourism_goes_mainstream.html


Islamic Tourism• Kempinski, Zurich-based, is

building 30 hotels with Islamic company Guidance Financial Group by 2015.

– Opening in N. Africa, gulf region and Europe.

• Best Western, offers Halal hotels in Malaysia, Bahrain and Oman.

• Rezidor Hotel Group, Brussels-based, predicts Sharia-compliant hospitality to grow 20% per year over this decade.

http://wardheernews.com/News_10/July/07_halal_tourism_goes_mainstream.html


Education

• Not-for-profit organization created and sustained by Salman Khan.– The world's first free, world-class

virtual school. – A high quality education to anyone,

anywhere– Tens of thousands of videos in pretty

much every subject

• YouTube-hosted tutorials:– 35,000 views per day – Dec. 2009– 70,000 – Aug. 2010

http://en.wikipedia.org/wiki/Khan_Academyhttp://money.cnn.com/2010/08/23/technology/sal_khan_academy.fortune/index.htm


Science and R&D

• Organisation of the Islamic Conference (OIC) to make universities more science-oriented. Higher education and science and technology ministers

from member countries of the Jeddah-based

• ‘A research-centric education is the only way out of economic problems. (Jan 2011) OIC Secretary General Ekmeleddin Ihsanoglu

• The OIC's target is to spend 1% of GDP on R&D.

http://www.universityworldnews.com/article.php?story=20110114221820749

Global Futures& ForesightCONSUMERS


Drivers of the consumer shift

1. Better educated (more savvy).2. Buying in accordance with values.3. Transparency – internet facilitated.4. Social media penetration.5. Smart technology6. Demand for personalized products.7. Lower barriers to entry in many

industries increases competition..8. Trust in business. (or lack of)9. The rise of Green.10.Service differentiation

Global Futures& ForesightPorter’s 5 Forces

Change Dynamics


Muslim Consumer power

• US Muslims buying power is $200bn - $25,000 per person.

• 1.6bn Muslims worldwide, generate a current Muslim lifestyle market value of $2 trillion

• At 25% of US spending, global Muslim spend could reach $10 trillion a year.

http://halalrc.blogspot.com/2010/11/usa-10-facts-about-muslim-consumer.html

(2) http://www.bne.eu/story2453/Turkey_fashions_a_slice_of_international_Muslim_lifestyle_market


Global consumer consciousness

• Consumers Want a product with an "added social benefit."

• Consumers want companies to:– Meet their needs and simultaneously– Have a positive impact on society.

• Opportunities for brands with real depth in their stories to step forward and take extra share.

Source: Fast Company, September 2010 http://www.fastcompany.com/1689263/leadership-philanthropy-is-the-gateway-to-power

Source: PSB Research, March 2010 http://www.psbresearch.com/PSbBlog/post/2010/03/29/CSR-Branding-Survey-2010-Presentation.aspx

http://www.brandweek.com/bw/content_display/news-and-features/direct/e3icc3fec8640be4714853d38671ecf3f29

PURPOSE

Global Futures& ForesightBusiness Models


Premise underlying re-invention

• Reconfigured relationships.• Mash-up business models.• Consumer increasingly powerful.• Innovation is a key differentiator.• Convenience & Quality expected.

http://media.economist.com/images/20050402/1405LD1.jpg


Technology driven innovation• 70’s and 80

– technology-led innovation.

• 80’s and 00’s

– marketing-led innovation.

• Social computing leads us to Social Innovation. Forrester.

• Driven by empowered people.

Source: Forrester, http://blogs.forrester.com/cio/2010/02/the-new-era-of-social-innovation.html


• Global relationships• Learning• Sourcing ideas• Co-creation• Recruitment• Building relationships• Community engagement• Networked business models

Social networks

Over 1.5 billion people in top 40 Social Networks

Source: The GFF Pulse expert panel survey

Doing business networks


Value creation shifting from workers to outside the enterprise

• Organisations are increasingly outnumbered by the resources provided by their network.

• Real business value coming from the social world as we learn to engage.

• Significant trends such as:– Crowd-sourcing– Open and social supply chains– Open innovation– Social media marketing– Social CRM

http://www.dachisgroup.com/2010/08/six-social-business-trends-to-watch/

http://www.sugarcube.in/social/smarter-social-business-person-7-tips/


Technology


Disruptive technologies• Internet II• Nano• 3D• Social media• Mobile broadband• Virtual real worlds• Electronic media• Large Glass displays• Interactive displays• Jamming• The Grid• Holograms• Humanoid robots• Genetic Engineering


Rate of adoption of new technologies

Years until used by 25% of US population

1860 1880 1900 1920 1940 1960 1980 2000

4

8

12

24

60

ElectricityRadio

TelephoneTelevision

PC

Mobile Phone

Internet

Source: Kurzweil Institute


Internet of ‘things’


New era of mass communication

• Today's Internet - 1.73 bn users. Internet World Stats.

• World population - 6.9 bn people.

• 2020 Internet to have 5 bn users National Science Foundation in the U.S

• 2012 the internet will be:

– 75 times its size in 2000.

– 400 times traffic due to online video.

• 2020 most access internet via mobile

• http://www.mediapost.com/publications/?fa=Articles.showArticle&art_aid=96642

• http://networks.silicon.com/webwatch/0,39024667,39193696,00.htm

• http://www.siliconrepublic.com/news/article/11665/comms/telecoms-industry-sees-opportunity-in-tough-times


• The Singularity• The Semantic Web• Virtual Worlds• Augmented Reality• Personalized Marketing• Evolving Personal

Technological Ecosystem

Communications Technologies

http://www.uwplatt.edu/web/presentations/PennState/ar/pix/augmented-reality-hud.jpg


Artificial Intelligence

• Artificial Intelligence’s - we will interact with it just like humans.

• There are fewer human interactions but they take a more strategic focus.

• Face recognition that identifies emotional changes.

• Mood Analytics.

Source: http://www.supplymanagement.co.uk/EDIT/Featured_articles_item.asp?id=16394

10

24 hours a day, 7 days a week online and available


New communication channels

Acroid 1 Shakira 2

Clooney 1


What’s changing?

• Economies• Populations• People• Planet• Markets• Education• Work• Business models• Technology

Everything and everybody

Fix the foundations and get set for growth


“If everything seems under control, you’re just not going fast enough.”

Mario Andretti


Imagine itIf you want to get ahead – you need to look ahead

[email protected]

+44 7932 408901

Thank you

www.linkedin.com/in/dasmith

www.thegff.com

davidsmithgff

global futures & foresight david smith global futures and foresight major market trends

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