Making sense of the future: how to thrive of the trends that transform the world

MAKING SENSE OF THE FUTURE

Copyright©2021

TOMSOLSTAD

MAKINGSENSEOFTHEFUTURE

HowtoThriveontheTrendsthatTransformtheWorld

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TOMSOLSTAD

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Iamtomorrow,orsomefutureday,whatIestablishtoday.IamtodaywhatIestablishedyesterdayorsomeprevious day.

~JamesJoyce

Amazing

Facts:

About the future that will blow your mind

● Emergingmarketsshareoftheglobalpopulationagedunder30:90percent

● GlobalshareofbabiesborninAfricain2050:40

● ThepopulationofNigeriain1950:38million

● ThepopulationofNigeriain2100:791million

● ThepopulationofItalyin1950:47million

● ThepopulationofItalyin2100:31million

● Peoplemovetocitieseveryweek:1.5million

● Theproportionoftheglobalpopulationlivingincitiestoday:55

● Theproportionoftheglobalpopulationlivingincitiesin2050:69

● ShareofJapaneseabove65yearsin1985:10

● ShareofJapaneseabove65yearsin2060:40

● By2030,thenumberofpeopleenteringthemiddleclassinemergingmarkets:1billion

● Europe’sshareoftheworldeconomyin2016:15

● Europe’sshareoftheworldeconomyin2050:9

● ShareofAmericanswhobelievedigitaltechnologyiswideningtheeducationgap:56

● Shareofunder30swhoexpectlifetobebetter:China78%,France16%

● PercentageofAmericansprojectedtobeobesein2030:50

● Shareofdataintheworldcreatedinthelasttwoyears:90

● ValueofApple:$22trillion

● GDPofRussia:$1.6trillion

● Thenumberoftimesayearafter1998hasbeenthewarmestonrecord:20

What if…?

Ifyoucouldgetaglimpseintothefuture,whatwouldyoudowithit?

Someofyouwouldchoosetoruntothebank,borrowasmuchmoneyasyoulegallycould,andthenbuysharesinthenext AppleorAmazon.Abusinessownerwouldtrytogureoutwheretondherfuturecustomers.Aparentwouldtrytohavea handinwhatkindofeducationorfutureskillstheirkidsshouldbeaccessibleto Apresidentofanationwouldbemore focusedonthetypeofchallengesthecountrycouldbefacedwithunderhisadministration,beitfuturegovernmentdebtor geopoliticalthreats Asacitizen,youwouldbegreatlyinterestedinknowingifyouwouldbereceivingapensioninthefuture Manyyoungreaderswouldliketoknowwhichjobswillbetakenoverbyrobotsanddisruptivetechnologieslikearticial intelligence.

Ifyouhaveeverwishedyoucouldpredictthefuture,youwillneedthisbook

Introduction

There is no such thing as coincidence

Iftherehadbeenacontesttodecidethemostextraordinaryyear,2020wouldbehighuponthelist.Thebeginningofthe brand-newdecadestartedwithaseriesofmassivebushresacrossAustralia Withmorethan15,000resacrossthecountry, thiswastheworstreseasonever

Thedevastatingresburntdownforty-sixmillionacres(72,000squaremiles),aboutSouthDakota’ssize.Duringitsrampage, morethan3billionanimalsdied.

Justweekslater,thecentralgovernmentofChinaimposedalockdowninWuhan.Anovelcoronaviruswasdetected.Millions ofresidentswokeuptothenewsthatocialshadorderedtheircitysealed,itsairportclosed,anditstrainstationsshutdown. BytheendofMarch,morethan100countriesworldwidehadintroducedafullorpartiallockdown.Thelockdowndisrupted theglobaleconomy,pushingmillionsofpeopleintounemployment

As millions lost their jobs, some sectors beneted greatly from the pandemic. The value of big technology companies exploded.Teslacarssawitssharessurge700percentovertheyear,makingitsworthmorethanthecombinedmarketcapofthe ninelargestcarcompaniesglobally.

InEurope,theUnitedKingdomociallylefttheEuropeanUnionattheendofJanuary.Yearsofpoliticalturmoilandintense discussions over the Brexit divorce deal set the UK to becometherstcountrytoleavetheEU.Expertswarnofsevere economicconsequencesfortheUKandtherestoftheEU.

InJune,theChineseCommunistPartytighteneditsgriponHongKongbyimplementinganewsecuritylaw Thenewlaw wouldgiveChinaextensiveauthorityovertheformerBritishcrowncolony,makingitpossibletosuppressthecity’sprotest movement.

InAmerica,awaveofprotestsandunrestbeganafterpolicekilledanunarmedGeorgeFloydinMinneapolis Acrossthe country,pro-Trumpsupportersclashedwithleft-wingprotesters Acommonplacescenewasarmedcitizensgatheredatstate Capitols.InKenosha,Wisconsin,a17-year-oldkilledtwopeoplewithasemiautomaticrie.Yearsofhateanddivisionpolitics culminatedwhenapro-TrumpmobstormedtheCongressbuildinginJanuary2021.Fromtheoutside,Americalooksmore dividedthanever,anationfracturedalongpolitical,racial,cultural,andeconomiclines.

Theoptimismthatmarkedthebeginningofthenewdecaderstturnedintosurprise,thenpessimism.Dramaticchanges camefromeverywhereandchallengedold-agetruths.Establishedbeliefssuchashumanity’sabilitytohandlebothnatureand disease weakened. The world, and thepeoplelivinginit,appearedmorevulnerable.Thestrengthofdemocracyandthe winningformulaofglobalizationalsotookabeating.Citizens’trustinthedemocraticprocesseswasandstillisunderpressure. Three-quartersofAmericansbelievetrustinthefederalgovernmentisshrinking Asmanyas61percentsaythenewsmedia ignoresimportantstories Eventheauthorityofscientists,oncerespectedasthekeepersofthetruth,isunderattack Ina survey,oneinsixcollege-educatedEuropeansrejectsvaccines,claimingthemtobeunsafe

Adierentworldisforming–aworldwhereestablishedtruthsareunderpressure Theoddityof2020isanindicationthat thefamiliarworldisnomore

Yet,themassiveseriesofapparentlyextraordinaryeventsin2020shouldcomeasnosurprise.Mostoftheeventscouldbe foreseen.

Theeventsof2020describedabovewerenocoincidence.

Whatappearedtobechangescomingfromnowherecameasnosurpriseforthosewhofollowwhatdriveslong-termtrends.

Usingwhatiscalledmegatrends,futuristspredicthowtechnological,social,demographic,andeconomicshiftscanreshapethe wayweliveourlives Takingdevelopmentsinthepastandpresentandprolongingthem,youcanlearntopredictfuture events

Mosteventsarearesultofamoresignicantchange.Movepastthesmallstu,andyouwilldiscoverlong-termpatternsthat shapetheworld Thesepatterns,ormegatrends,willhelpyouunderstandwhatdirectiontheworldistaking Again,thereisnosuchthingascoincidence.Mosteventshappenasapartofapattern.

Ifyouareindoubt,considertheeventsof2020andwhatthedrivingforcesbehindtheseextremitieswere Asyouwillsee, noneofthemhappenedbychance Rather,mostofthemcouldbepredictedinthecontextofmegatrends:

The bushres in Australiawerearesultofamegatrendreferredtoasclimatechange AteamofresearchersattheRoyal NetherlandsMeteorologicalInstituteconcludedthatglobalwarmingboostedtheriskofthehotanddryweatherthatcaused the bushres Climate change has increased Australia’s bushreriskbyatleast30percent,thereportsaid Asthedriest inhabitedcontinentontheplanet,Australiaishighlyatriskofevenrelativelylow-temperaturerises.

Theplanet’sannualtemperaturehasincreasedatanaveragerateof007°C(013°F)perdecadesince1880 Temperatureshave risenbymorethantwicethatrate(+018°C/+032°F)since1981 Mostofthewarminghappenedinthepast35years,and nineofthetenwarmestyearstookplaceafter2005 AreportbyNASAlinkedwarmingtohumanactivity:

Thecurrentwarmingtrendisofparticularsignificancebecausemostofitisextremelylikely(greaterthan95percentprobability) to betheresultofhumanactivitysincethemid-20thcenturyandproceedingataratethatisunprecedentedoverdecadesto millennia

TheextremeresaectedmorecountriesthanAustralia.ScienceisconnectingwildresinnorthernCaliforniaandSiberiato climatechange ThenewsfromSiberiainRussiawasparticularlyalarming InJune,Russia’smeteorologicalservicereporteda newtemperaturerecordof38°C(1004°F)intheSiberiantownofVerkhoyansk Russianandinternationalscientistsclaimed theSiberianheatwavewasmade“600timesmorelikely”byclimatechange Anaerialviewshowednever-endingresreaching farabovetheArcticcircle.

Thesamescientistswholinkedglobalwarmingtothebushreswarnedofmoretroubleahead Ariseinglobaltemperatures by2°Cwouldcausesimilarrestooccuratleastfourtimesmoreoften “Astheworldwarms,theseeventswillbecomemore likelyandmorecommon Andit’snotsomethingthatwearereadyfor,”warnedGeertJanvanOldenborghoftheRoyal NetherlandsMeteorologicalInstitute.

TheAustralianbushreswerenocoincidence Thereswereaconsequenceofunderlyingtrendsseenovertheyears

Thecoronaviruspandemictookmuchoftheworldbysurprise,butitdidn’tcomeasashockertomanyscientists.Foryears, expertshadwarnedthatitwasnotamatterofiftherewasanotheroutbreak,butwhen.Expertsonuanddiseasesand governmentocialshavebeenwarningofapandemicforyears InaTEDTalkfrom2015,BillGateswarnedthattheworld wasnotpreparedforanepidemic,pandemic Hediscussedthethreatinfectiousdiseasesposedandwarnedthattheworldwas unpreparedforanepidemic,pandemic,oroutbreak Gateshopedthathumanitycouldbereadyforthenextoutbreakby learningfrompreviousviruses,suchasSARSandEbola.

InNorway,theDirectorateforCivilProtectionandEmergencyPlanningDSBcitedapandemicasthemostimminentthreat. Theirreportcameoutlessthanayearbeforethecoronavirushittheworld,andtheoutcomewasacombinationofprobability andconsequences DespitetheclearwarningfromDSB,theNorwegianauthoritiesandbusinessesfailedtoprepareforwhat thedirectoratecalledthemostseriousincidentthatcouldhappen

Trendresearchershavelongbeenconcernedaboutaglobalpandemicdrivenbyman-mademegatrends.

Inaworldoffastpopulationgrowthandurbanization,andwheretheanimals’naturalhabitatisdisappearing,thelikelihood of a pandemicincreases.Deforestationisahugeproblem.Wildmammalsstruggletoadaptwhentheylosetheirhabitat. Deforestation forces animals to live closer to humans,creatingperfectconditionsforspreadingdiseasesfromanimalsto humans

Modernmedicinehasmadeglobalizationpossible.Formost,theideaofapandemicseemedremote.Andforyears,medicine keptvirusoutbreakslocal.Whatisnewnowisthespeedofdevelopment.Throughurbanizationandglobalization,andnot leastduetotravel,pandemicscanspreadataratepreviouslyunimaginable.In1950,25milliontravelerslandedattheworld’s airports Overthe12monthsaheadofthepandemic,thenumberwasover14billion EarlierpandemicslikeSARSwere successfullymanagedandlimited Thankstoadvancedmedicine,governmentssawtheprobabilityofaglobalinfectionaslow Butthelowprobabilityofaglobalpandemicisnotthesameasnoprobability.Thatexperiencebecamepainfullycleartothe worldin2020.

Thecoronaviruspandemicwasnocoincidence.Thepandemicwasaconsequenceofunderlyingtrendsseenovertheyears.

The surge of big technology companies tookinvestorsbysurprise BigTechreportedmassivegrowthinturnoverand prots Protmarginsrose,andstockpriceswentthroughtheroof BigTechemergedfromthepandemicstrongerthanever astheworld’spopulationgotmoredependentondigitaltechnology Thepandemicacceleratedthedigitaltransformation morethananymarketingcampaigncouldeverdo.Ifanyonehaddoubtsaboutthenecessityofadigitaltransformation,the pandemicputaneectiveendtothat.

Tesla,anAmericanelectricvehicleandcleanenergycompanybasedinPaloAlto,sawitssharepriceexplodednotjustbecause ofitsuniquetechnology.Unlikeanyothercarmanufacturer,Teslawouldalsobenetfromagrowingfocusonzero-emission vehicles.Theglobalriseinenvironmentalconcernisamegatrendthatwillforcecompaniestoreorganizehowtheymake things.Tighteremissionsregulationsfromgovernmentsandnewcustomerdemandswillacceleratetheworld’stransitionto sustainableenergy.

Whileothercarmanufacturershadtocloseplantsin2020,investorscouldnotgetenoughTeslashares.Itssharepricerose700 percent,makingittheworld’smostvaluablecarmaker.Tesla’smarketcapincreasedbymorethan$500billionin2020andis now worth as much as the combined market cap of the nine largest carcompaniesglobally.Thoseautomakersinclude Volkswagen,Toyota,Nissan,Hyundai,GeneralMotors,Ford,Honda,FiatChrysler,andPeugeot

To most, the valuation of Tesla came as a surprise. It should not. Tesla has since itwasfoundedthoughtofitselfasa technologycompany.Itwantedtorevolutionizethewaycarsaremanufactured.Itselectronicarchitectureismoreinnovative thananyoneelse’s.Theirvehiclescomewithanoperatingsystemandlotsofsoftware.Theirbatterytechnologywassuperior tothatofothers Thecompanydidnotevencallitselfacarcompany,butatechnologycompany Yet,themostconsiderable

potential of Teslaliesinitsfutureambitions.Thecompanyiswayaheadofothersinself-drivingtechnologyandenergy storage Futureautonomoustaxiserviceisplanned

Tesla’s lead in making environmentally friendly carsshouldnotsurpriseanyone.Theirvisionistoacceleratetheworld’s transitiontosustainableenergy.Coincidentally,therisingfocusofemissionsregulationshasgainedenvironmentallyfriendly companies.AftertheParisgoalswereset,itbecameevidentthatcarbondioxideemissionsmustgodown.IntheUnitedStates, greenhousegasemissionsfromtransportationaccountedforaboutone-thirdoftotalemissions Iftotalemissionsaretogo down,itwouldbeimpossibletoleavecarsrunningonfossilfuel

Achangewasboundtohappen.Yet,thecarindustryhasbeenslowtoembraceelectriccars.Formorethanadecade,the establishedcarmanufacturersdidnotwanttoinvestinno-emissioncars Itwasallaboutprotectingtheexistingbusiness model:sellingconventionalcarsthatranonfossilfuel Creatingelectricvehicleswouldbringdownthecost,makingthem competitiveagainsttraditionalvehicles

Itisonlynow,in2021,thattheautomobileindustryisstartingtotakeelectriccarsseriously.Formany,itwillbetoolate. Tesla’spositionasanenvironmentalandsustainabilityleadercouldprovehardtoreverse

ThesuccessofTeslawasnocoincidence.Tesla’ssharepricewastheconsequenceofunderlyingtrendsseenovertheyears.

TheHongKongsecuritylawgaveChinathepowertocurtailprotestsandfreedomofspeechinHongKong WhenHong KongwashandedoverfromtheBritishin1997,theChinesepromisedtoguaranteeHongKongsemiautonomousrule The termsthatweretolastfor50yearsendedin2020.ManyfearedthatHongKong’sjudicialindependencewouldbeeroded.In turn,thiscouldenditsattractivenessasaleadingglobalbusinesshubandeconomicpowerhouse.

Tomost,PresidentXiJinping’ssignatureforthelawthatwouldoverhaulthecity’slibertiescameasasurprise Long-term trends,however,wouldindicateotherwise AmoreassertiveChina,andarelativelyweakerHongKong,madeChinesecontrol oftheformercolonyinevitable.WhenBeijingagreedtograntHongKongspecialrights,itmadesoinamuchweakerposition. Inplainlanguage,Chinawasnotstrongenoughtoincorporatethecitythewayitwanted.TheywerealsodependentonHong Kong,muchmorethantoday.HongKongservedasastableinternationalnancialcenter.Itwasagatewayforglobalcapital owingintomainlandChina Thatdependencyhaschangedsince1997

SinceHongKongrevertedtoChineserule,Chinahasrisentobecometheworld’ssecond-largesteconomy.ThesizeofHong Kong’seconomywas18.4percentofmainlandChinain1997.Today,thatgureisonly2.7percent.Onthestart-upscene, unicornsarepoppingupinChinaallthetime,whileHongKongisyettoproduceone.Onthetop10listofprivatelyowned start-upsvaluedat$1billion,yound6AmericanrmsandfourmainlandChinese

ThreedecadesofstrongeconomicgrowthhavemadeChinastrongerandmoreself-condent.Thecountryhasbuiltupa strongmilitaryandhasmadealliancesacrosstheworld.Thenationisleadingthetechnologiesofthefuture,suchasArticial Intelligence IntheSouthChinaSea,Chinaismakingadvances,anddomesticallytherulersareintensifyingeortstopreserve stability

“NoforcecanstopChina’sprogress,”saidXiinaNationalDayspeech.Heisright.Chinaisback,andtherearenoforcesthat canstopthenationfromclaimingitsrighteousplaceinthesun.

TheHongKongsecuritylawwasnocoincidence.Itwastheconsequenceofunderlyingtrendsseenovertheyears.

In America, protests followed the death of George Floyd. Millions went to the streets, but what started as peaceful demonstrations would soon erupt into looting, arson, and nally, murder InPortland,far-rightprotestersclashedwith left-wingcounter-protesters Theprotestersappearedtobedrivenmorebyhatredoftheothersidethandevotiontoone’s own Thesummerof2020demonstratedhowdeepthecountry’scleavageswere,withlevelsofsocialunrestnotseensincethe 1960s.AnuglyanddivisiveelectionendedinaviolentmobloyaltoPresidentDonaldTrumpstormingtheU.S.Capitol.

For outsiders, America, the world’s leading democratic powerhouse, appeared unrecognizable Partisanship, however, is nothingnewinAmericanpolitics Thepoliticalpolarizationshouldthereforecomeasnosurprise Foryears,partisanshiphas turned Americans against one another, creating a nation fractured along political and ideological lines The Atlantic explainedthepolarizationofAmericainthefollowingway:

ThecausesofAmerica’sresurgenttribalismaremany Theyincludeseismicdemographicchange,whichhasledtopredictionsthat whiteswilllosetheirmajoritystatuswithinafewdecades;decliningsocialmobilityandagrowingclassdivide;andmediathat rewardexpressionofoutrage.AllofthishascontributedtoaclimateinwhicheverygroupinAmerica–minoritiesandwhites; conservativesandliberals;theworkingclassandelites–feelsunderattack,pittedagainsttheothersnotjustforjobsandspoils,but fortherighttodefinethenation’sidentity.Intheseconditions,democracydevolvesintoazero-sumcompetition,oneinwhich partiessucceedbystokingvoters’fearsandappealingtotheirugliestus-versus-theminstincts.

ThedrivingfactorsofadividedAmerica,thedemographicchange,thedecliningsocialmobility,andthesocialmediaareall known.Thetrendshavebeenclearforyears,andtheresultisapopulationmoredividedthanever.Theresultsaremoreand angrierprotests,aswellasapoliticalstalemate.MostofbothDemocrats,at54percent,andRepublicans,at52percent,said theopposingpartywassomisguidedastobedangerous

Theprotests(andpoliticalfragmentation)inAmericaarenotacoincidence.America’sfragmentationistheconsequenceof underlyingtrendsseenovertheyears.

Thesixdramaticeventsdescribedabovedidnotcomeoutofnowhere Tofuturistsandthosewhostudylong-termtrends,the spectacularsituationsof2020cameasnosurprise.Theeventswouldbedescribedasanaturalconsequenceofunderlying trends seen over the years. By following signicant, slow-moving currents, predicting disruptions, problems, and opportunities,beforetheyoccur,ispossible.

Usingwhatiscalledmegatrends,futuristspredicthowtechnological,social,demographic,andeconomicshiftscanreshapethe wayweliveourlives.Takingdevelopmentsinthepastandpresentandprolongingthem,youcananticipatemanyfuture events.Megatrendswillexplaininwhichdirectiontheworldisgoing.Theywillhelpusunderstandwhyjobsarelostand wherenewjobspopup.Theyhelpusexplainwhytaxesgoupordown,andevenifcountriesgotowar.Theycantellyouwhy somecountriesareprosperousandothersarenot Ifyouknowthem,youwillunderstandthevaluesweshare,whatwestudy, ifwegetricherorpoorer,ifwehavekidsandhowmany,andultimately,howweliveourlives

Megatrendsaresignicanttrendstakingplaceslowlybutsurely.Thechangeswilllastforalongtime,atleasttenyears,and they will aect how wespendmoneyinthefutureandhowweliveourlives.Thescopeislarge,usuallyglobal.Oncea

megatrendhassetin,itisdiculttoreverse.Theytendtoinuenceabroadersetofactionsandbeliefs.Everyoneisaected: individuals,communities,businesses,andgovernments

Inaworldthatseemstobemorechaoticorturbulent,megatrendswillhelpyoustandbackandlookatthebiggerpicture. Knowing the major patterns shaping the world will provide you with a helicopter view of the world. With a broader perspective,turbulenceandchangewillmakemoresenseastheyresultfromagreaterpattern.Asmentionedearlier,heat waves,oods,anddroughtsresultfromglobalheating,amegatrend,andnoteventsthatshouldtakeusbysurprise

Doesthismeanthatyoucanpredictanything?No.Megatrendsarelong-lastingpatterns.Theygiveyouahelicopterviewand abroaderperspectiveonchangesinsociety.Theyprovideyouwithguidelinesthataresafeinwhatappearstobeaworldon re Understandingmegatrendswillhelpyouseparatethewheatfromthechaandfocusonwhatisessentialinthelongrun Thatwillhelpyouseeuntoldopportunitiesandactonthembeforeeveryoneelse

Today’spaceofchangemakesitmoreimportantthanevertoknowwhattrendsareevolving.Theonlywayyoucancomeon topofthefutureistoprepare.Forthat,youneedtwothings:knowledge,andanopenmindforchange.

Thisbookwillhelpwithboth.Youwilllearnhowsomeofthemostinuentialmegatrendsareshapingtheworldandits future. The megatrends presented aretheinputfromleadingfuturists,consultingrms,andorganizationsspecializedin futuretrends.Thebookgroups38megatrendsintofourthemes:

● Demographic

● Globalization

● Environmental

● Technology

Youwilldiscoverwhattheyareandwhattheirimplicationsentail.Asyouwillsee,feweventsreachingthefrontpagesofthe mediahappenbycoincidence.

Ifanythingisinevitable,itisthatchangeiscoming Currentwavesoftrendswillchangetheworldasweknowit Therewillbe winners.Therewillbelosers.Somestateswillrise.Otherswillfall.Famousbrandswilldisappear,andunknownoneswilltake over.

This book aims to show you how you can prepare for a disruptive future dened by constant change

and massive opportunity. It will do so by looking at the major socio-economic, demographic, and technological trends occurring worldwidetohelpguideus.

Inaworldonre,youcanmakesenseoftheinevitable:thefuture

Westartourjourneytowardsndingoutthetrendsthatwillshapethefuturewithdemographics.Whoweareandwherewe livearesomeofthemostcertainpatternsweknow

OurjourneyoftrendsaectingthefuturestartsintheAichiregionintheindustrialheartofJapan.Morethananyplaceon theplanet,Japangivesyouapeekatthefuture.Youmaynotlikewhatyousee.