Subm 3 the classification of megatrends env and sust megatrends 170228

Sub-module 3

The classification and the description of Megatrends

Module: Environment and Sustainability related Megatrends and Risks

The objectives of this submodule •

To discuss and to analyze the possible classification of megatrends • To describe the key megatrends and their potential impact • To analyze the evidence (examples) of those megatrends

Control questions • Before you start this sub-module, please answer to yourself the following questions: i) Think about the key areas of environment and human activity; what could be the key areas for trend exploration and trend analysis? ii) Can you prioritize those areas? What could be the criteria for prioritization?

The classification of megatrends

Definition of megatrend “an inevitable evolution leading to a change of society, business, economics or environment“ The question – how to find the proper classification of megatrends?

- A) To analyze the key areas of human activities? vs - B) To analyze the “popularity” of various megatrends (desk research exercise)

Megatrends “popularity’’ analysis … neglecting

trends which are too domainspecific, industry-specific or detailed in nature, which would number into the hundreds … the review of the general megatrends was conducted and approximately 12 significant trends were identified • Source of the analysis - Arthur D. Little (2014) The most commonly-cited megatrends

In general, 4 dimensions of megatrends • • • •

Energy and Environment (3 trends) Social and Health (2 trends) Economics and Politics (6 trends) Technologies (1 trend)

Megatrends related to specific dimension 1. Energy and Environment (E&E) Megatrend Description

Examples

1.1 New energy mixes to Changing address growing energy mix demand, dwindling nonrenewables, energy security, higher costs (e.g. shale, nuclear, coal, renewables etc.)

• China, the world’s biggest energy consumer is projected to increase its energy demand by 75% between 2008 and 2035. • • Today it relies on coal for almost 70% of its total energy supply

Megatrends related to specific dimension 1. Energy and Environment (E&E) Megatrend Description

Examples

1.2 Shortage of resources

• Approx 1.2 billion people live in areas of physical water scarcity • 70% increase in food is needed by 2050 to meet population growth demand

Shortages of water, food, rare earths, key commodities, including impact of environmental damage

Megatrends related to specific dimension 1. Energy and Environment (E&E) Megatrend Description

Examples

1.3 Climate change

• Greenland and Antarctica are losing 500 cubic kms of ice annually • Earth has warmed since 1880 with 10 of the warmest years occurring in the past 12 years • By 2030, China’s carbon dioxide emissions could equal the entire world’s CO2 production today, if the country's carbon usage keeps pace with its economic growth

Prevention, adaptation and mitigation to address climate change

Megatrends related to specific dimension 2. Social and health (S&H) Megatrend

Description

2.1 Growth of mega-cities, Urbanization smart-cities, need for and mobility investment in critical infrastructure for safe, fast, ecologically sound mobility

Examples

• World population in cities forecast to grow from 50% in 2010 to 70% in 2050 • The world will add approximately one new city of a million inhabitants every five days until 2050

Megatrends related to specific dimension 2. Social and health (S&H) Megatrend

Description

Examples

2.2 Health and wellness Demands

Growing expectations for health and wellness, increasing risks of pandemics, burden of aging populations

The proportion of the world’s population over 60 years from 2000 will double from about 11% to 22%

Megatrends related to specific dimension 3. Economics and politics (E&P) Megatrend

Description

Examples

3.1 Knowledge and information Society

Prevalence of knowledge as basis for economic value, ubiquitous information, growing personalized education, increasing automation requiring highly skilled workforces

•The United States will need to add 26 million workers to its talent pool by 2030 to sustain its average economic growth of the last twenty years •Western Europe will need 46 million additional employees

Megatrends related to specific dimension 3. Economics and politics (E&P) Megatrend

Description

Examples

3.2 Economic Shifts

Economic power of emerging market economies overtaking developed markets, increasing middle class and growing wealth

• China’s share of the world’s total GDP is expected to grow from 7.1% in 2000 to 20.7% in 2020 • By 2030, the middle class is likely to comprise 4.9 billion people, of which 80% will live in what is now considered the developing world

Megatrends related to specific dimension 3. Economics and politics (E&P) Megatrend

Description

Examples

3.3 increasingly connected 77% of the FTSE top 100 UK Globalization global economy and companies’ income economic integration is derived from outside the UK

Megatrends related to specific dimension 3. Economics and politics (E&P) Megatrend

Description

3.4 Lower interest rates, New normal greater public policy interventions, greater public debt, bigger defense budgets

Examples

The US public debt has risen from approximately 67.7% of national GDP in 2004 to 113.8% in 2014

Megatrends related to specific dimension 3. Economics and politics (E&P) Megatrend

Description

3.5 Population growth, Demographic aging societies Shift

Examples

World's population has almost tripled in 60 years, projected to reach 9.6 billion by 2050

Megatrends related to specific dimension 3. Economics and politics (E&P) Megatrend

Description

Examples

3.6 Multi-Polar

Diffusion of power, rising nationalism, shift to networks and coalitions in a multipolar world.

Rising power of non-state actors and terrorist groups in the Middle East, North Africa, Asia

Megatrends related to specific dimension 4. Technology (T) Megatrend

Description – Ubiquitous connectivity, Internet 4.1 Disruptive of Things – Materials (e.g. smart, nano, bio Technoloetc.) gy – Customization, personalization, Develop- localization – Data-driven technologies Ments – Information security and data protection – Virtual world – Artificial intelligence and Robotics – Genomics – Personalized medicine

Examples • Global smartphone penetration exploded from 5% of the global population in 2009, to 22% by end 2013. By 2017, more than a third of all people around the globe will be smartphone users • The worldwide market for ‘Internet of Things’ is forecasted to hit $7.1 trillion by 2020, from $1.9 trillion in 2013

Global trends – 2016 (World Economic Forum, Report 2016) 1) Ageing population 2) Changing landscape of international governance 3) Climate change 4) Environmental degradation 5) Growing middle class in emerging economies 6) Increasing national sentiment 7) Increasing polarization of societies 8) Rise of chronic diseases 9) Rise of cyber dependency 10) Rising geographic mobility 11) Rising income and wealth disparity 12) Shifts in power 13) Urbanization

Megatrends classification: checkup Global trends – 2016, (World Economic Forum, Report 2016)

Megatrend

E&E

S&H E&P

1.

Ageing population

2.

Changing landscape of international governance

3.

Climate change

V

4.

Environmental degradation

V

5.

Growing middle class in emerging economies

6.

Increasing national sentiment

V

V

7.

Increasing polarization of societies

V

V

8.

Rise of chronic diseases

V

9.

Rise of cyber dependency

V

10. Rising geographic mobility

V

11. Rising income and wealth disparity

V V

V

V

12. Shifts in power 13. Urbanization

T

V

V V

V

Megatrends and risks

Megatrends and global risks (World Economic Forum, Report 2016)

Source: Global Risks Perception Survey 2015.

Most frightening Environmental risks (World Economic Forum, Report 2013)

1) RISK: Failure to Adapt to Climate Change Experts say: Governments and business fail to enforce or enact effective measures to protect populations and transition businesses impacted by climate change.

2) RISK: Incurable Pollution Experts say: Air, water or land permanently could be so contaminated that it threatens ecosystems, social stability, health outcomes and economic development.

3) RISK: Antibiotic-Resistant Bacteria Experts say: Deadly bacteria is growing resistant to antibiotics.

‌ environmental risks 4) RISK: Land and Waterway Mismanagement Experts say: Deforestation, waterway diversion, mineral extraction and other environment modifying projects are devastating ecosystems and associated industries.

5) RISK: Mismanaged Urbanization Experts say: Poorly planned cities and ballooning city populations contribute to environmental dangers.

6) RISK: Persistent Extreme WeatherExperts say: As more people move to vulnerable areas, there's increased damage to lives and property.

7) RISK: Rising Greenhouse Gas Emissions Experts say: Governments, businesses and consumers fail to reduce greenhouse gas emissions and expand carbon sinks.

‌ environmental risks 8) RISK: Species Exploitation Experts say: Threat of irreversible biodiversity loss through extinction or ecosystem collapse.

9) RISK: Unprecedented Geophysical Destruction Experts say: Existing precautions and preparedness measures fail in the face of geophysical disasters of unparalleled magnitude such as earthquakes, volcanic activity, landslides or tsunamis.

10) RISK: Vulnerability to Geomagnetic Storms Experts say: Colossal solar flares could damage or disable critical communication and navigation systems.

Conclusions • Having the extended list of megatrends some classification helps in identifying the critical ones • As all megatrends and underlying forces are dynamic, so it is important to renew/to update the list of megatrends.

• The examples of the megatrends do not directly lead to the solutions; the next process step is to analyze the

potential impact of the specific megatrend on the specific human or environmental system or on a specific country.

• The result of the impact analysis is directly related to risks

Control questions • After you completed this module, please answer to yourself the following questions: i) Look at all 4 dimensions of megatrends and prioritize dimensions and related megatrends to your country? ii) Discuss your findings with your peers. Do they share the same opinion? I not, find the reason for the differencies in opinions.

Thank you and good luck!

Instructor of the module: Ass. Prof. Gintaras Labutis Military Academy of Lithuania