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Leadership: Global Trends to Navigate in 2017

Change is a constant. Business leaders cannot rely on a rear-view mirror in a fast changing world. Existing business models are under threat and strategies and tactics needs to be continuously challenged to future fit your business. These 15 trends will shape the global business landscape and help you to navigate in 2017.

1. PLANET UNDER PRESSURE

Human activity is driving negative changes in the global environment resulting in climate change, deforestation, loss of biodiversity, ocean acidification, soil degradation and pollution. We are crossing planetary boundaries and changing fundamental earth systems, which risks triggering abrupt and irreversible damage to the planet. This will have catastrophic consequences for humanity, threatening long-term development opportunities and prosperity.

2. RESOURCES – FROM ABUNDANCE TO LIMITS

The world has entered a period of intensified resource stress. Three planets are needed to meet human consumption by 2050. The essentials for human life – water, food and energy – are under pressure. In 2050, severe water stress will affect 45% of global GDP. The challenge of increasing food production by 70% to meet future demand will be enormous.

3. ENERGY TRANSITION

Changing regulations, dramatic reductions in renewable energy costs and concerns about energy security will impact energy markets. Scarcity and new divestment initiatives will put pressure on fossil fuel-based energy companies. Developing countries will have the opportunity to leapfrog into the renewable age; however the entrenched position of fossil fuels will make the timing of this transition uncertain.

4. FUTURE DEMOGRAPHICS

The population will pass 8 billion by 2030 with most growth in low-income countries. Western countries face stagnant and aging populations and a shrinking pool of workers. Developing regions face youth bulges that pressure education and employment. Environmental stress makes areas uninhabitable and may force up to 1.6 billion people to migrate, destabilising societies and fuelling conflict.

5. THE GROWING WEALTH GAP

The rich are getting richer and income inequality is widening both within and between countries. Today, the richest 1% own more than 50% of the world’s wealth, although absolute poverty is likely to fall and the middle class grow. Wealth is concentrating and extreme inequality poses great risk to global stability, erodes trust in governments and fuels social unrest.

6. EMPLOYMENT UNDER PRESSURE

Automation will continue to reduce labour intensive industries, lowering employment opportunities. The full impact of large scale automation has yet to be felt – income generating work designed to pay for basic needs may cease to bethe norm. Mass unemployment and accumulated wealth in the hands of the few will become one of the defining issues of our age.
Trends to navigate in 2017

7. GENERATION NEXT

The Millennial Generation are digital natives and understand the opportunities inherent in crowd-sourcing and connectivity. Better-educated, empowered and more self-reliant, Generation Next knows the challenges of their time and demand transparency and accountability. Unprecedented access to information and innovation platforms is nurturing new relationships, and drives co-creation of solutions between business and change makers.

8. LOCAL IS KING

Small is beautiful in economies where people matter. Local entrepreneurship is growing to foster more sustainable lifestyles as a backlash to globalization. The global citizen is trying to re-root and reconnect with place and locality. The “think global, act local’ movement will favour urban farmers, local producers and community groups working to transform their communities.

9. FRAGMENTING POWER

Economic power is moving South and East. Power is dispersed and congregating around new countries and entities. A reassertion of nationalism and protectionism will create a less open world, putting global agreements and multilateralism under stress, closing the space for business. New transnational networks can bridge this governance gap by bringing actors together under shared global policy objectives.

10. DETERIORATING SECURITY

Fierce competition for natural resources, crowded urban centres, mass migration,and a widening gap between rich and poor will intensify social pressures and cause violence to erupt. The rise of religious extremism and populist nationalist movements makes states vulnerable and unstable, and fuels terrorism. Business activity is increasingly more difficult and dangerous in vast regions around the world.

11. RISE OF THE CITY

60 percent of the world’s population will be urban by 2030. Affluent cities will be powerhouses with smart technology driving green and resilient environments. By contrast, rapid and unmanaged urbanisation in the developing world leads to overcrowded slums with poor sanitation, polluted air, poverty, unemployment, crime and social tension.

12. HYPER-TRANSPARENCY

Digital technology will continue to revolutionise communications. There will be even greater demand for hyper-transparency in business supply chains, at all levels. Social Media will escalate the pressure on business to disclose and self-regulate. Hyper-transparency is a powerful force as wealth in the information age will be held in ‘intangible’ assets such as brands, patents and customer trust.

13. INTERNET OF THINGS

The Internet of Things will reach a tipping point. By 2020, an estimated 50 billion devices will be connected to the Internet making it possible to autonomously monitor, optimize and control our lives. Threats to security and our privacy will increase, nevertheless the Internet of Things will revolutionise manufacturing, resource use, smart grids and profoundly change personal health care.

14. SUSTAINABLE BUSINESS

Full cost accounting will become the norm and ‘all inclusive’ pricing systems will reflect social and environmental impacts. Accounts will recognise a broader set of ‘capitals’ than merely financial. Traditional business models will be challenged as entrepreneurship flourishes with ‘bottom of the pyramid’ models, crowd-funding, open source tools, the sharing economy (e.g. Airbnb, Cleanweb, Uber) and circular “cradle-to-cradle” thinking.

15. RADICAL INNOVATION UNLEASHED

Transformative breakthroughs ranging from nano- and biotechnology, graphene, bio mineralization, robotics, artificial intelligence, blockchain to 3D printing will revolutionize our world. But technology in the hands of ill-intended groups can do harm. Deliberate large-scale manipulation of the planet like geoengineering, fears of corporate ownership of the genome, cross species genetic fusion gone wrong, create reasons for concern.
Learn more in DNV GL’s report “IMPACT, Transforming Business, Changing the World”. How can business leaders find new opportunities in these trends? Check out the 2017 Global Opportunity Report for inspiration.
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