Twelve themes to ensure crucial decisions this year
James Goodman and David Bent explore 12 themes to ensure decision
makers recognise the clusters of opportunities coming to light. "History
is ... an unending dialogue between the present and the past" - E. H.
Carr.
Just as our view of the past is always changing, so does our view of
the future. New evidence comes to light; public attitudes shift; new
technologies emerge. A key difference is that there is nothing we can do
to change the past, but we can still shape the future. To rethink and
transform the way the world works, we must create 'an unending dialogue'
between the present and the future. We must bring the long view into our
actions today. This means keeping track of long-term trends and signals
of change that might help us identify opportunities to make better
decisions for a sustainable future.
How did the future change in 2014? We look at the implications for
business and trade and crucially, we ask what it means for those
resources on which all industry depends: our societies and ecosystems.
Our research encompasses macro trends that set the landscape for
everyone; developments in the mainstream of industries and countries;
and disruptive activities from the fringes, including new technologies
and new business models.
Increasing pressure for change
The big picture we see is this: a fragile global system placing
increasing pressure on business, and at the same time a genuinely
exciting cluster of solutions that show the way forward to a sustainable
future. Economically, the reverberations from the financial crisis of
2008 are still being felt, and recovery is at risk. We're still reaching
after growth, which is slow; public debt remains high, and the finance
system is essentially unreformed.
It could all happen again. Beneath this umbrella of uncertainty and
insecurity, there's rising recognition of the need for change,
presenting challenges to both business and public bodies.
1. Rising inequality creating tensions
2014 was the year when inequality became big news, exposing concerns
that it is indeed entrenched in our economic system. Thomas Piketty's
Capital in the Twenty-first Century, in which he argues that unequal
distribution of wealth causes social and economic instability, attracted
more attention than most books about economics can ever hope to.
Christine Lagarde, Managing Director of the International Monetary Fund
said, "In the years ahead, it will no longer be enough to look simply at
economic growth ... We will need to ask if this growth is inclusive."
Others, such as author and social activist Naomi Klein, called for a new
paradigm. What will the emerging politics of inequality mean for
business? How can business address the risk that ever-growing inequality
undermines market-based democracy?
2. Expectations of global governance
Global governance has the potential to change the landscape in 2015,
with the climate conference in Paris in December aiming to finally set
the post-Kyoto climate change framework, and a new set of Sustainable
Development Goals expected to replace the Millennium Development Goals
in the same month. Yet there is little optimism that meaningful
agreement can be reached. As we write, the Lima climate conference has
just concluded with an agreement of sorts, but leaving more work than
expected to prepare for the main event in 2015. When we surveyed our
Network about this, fewer than a 20 percent of those answering thought a
binding agreement in Paris was likely.
3. From radical to ultra-transparency
An unprecedented amount of information is now available to the
public, from commercial activities to ecosystem monitoring. New in 2014
was Global Fishing Watch: a collaboration between Google, Oceana and
SkyTruth. It shows where and when fishing is happening, allowing anyone
to spot illegal activity. This sort of initiative gives civil society
the information to
hold powerful institutions to account. Just as some organisations are
caught out by ultra-transparency, others will use it to competitive
advantage.
4. Brands in the firing line
One consequence of greater transparency is being felt by brands,
which are facing better-targeted and more effective campaigns from
non-profit organisations. Oxfam's Behind the Brands created a public
league table which gave them leverage over all the companies involved,
compelling them either to keep up or stay ahead. Campaigns are also
making knight's moves: tackling the culprit from unexpected corners - as
Greenpeace did when it attacked Lego for carrying Shell's logo. The
challenge for brands isn't simply fielding difficult questions. They'll
need to come up with the answers.
5. Volatility in the global economy
Few anticipated such a fall in oil price as at the end of 2014.
Unanticipated extremes of abundance and scarcity are affecting trade
patterns.
One member of our Network reported a widespread impact on
commodities: "From rare earths all the way to the construction sector,
you can't buy certain things on the open market." Will we see more trade
come off commodity markets? These are only useful if the items traded
are indistinguishable and interchangeable - which means hard to control
and hard to trace.
Clusters of solutions
But businesses and governments are becoming more concerned about
security of supply, leading to so-called 'land-grabs' and supply chain
integration, while the drive for transparency makes unknown origins a
no-no for procurers. What does this mean for the future of trade?
This is a crucial time for those interested in action for a
sustainable future. Despite - and perhaps because of - increasing
pressures on business and the precarious global situation, many
solutions are maturing.
6. The circular economy adds value
Closed-loop resource use is now talked about in a way that would have
been unimaginable a couple of years ago.
And there is substance behind the headlines: last year, Novelis put
$500 million into the world's largest aluminium recycling plant in
Germany. But the ideal of a circular economy goes beyond recycling: it
requires a company to rethink its relationships with suppliers and
end-users, accessing new skills and developing new incentives, so that
value is retained and regenerated as materials are recirculated.
7. The sharing economy matures
This is no longer the game of the nice kids on the block, who care
more about sharing than showing off their wares.
It's a multi-billion dollar global industry, with monopolies forming
and backlashes under way - whether it's Barcelona taxi drivers
demonstrating against Uber or New York regulators bemoaning Airbnb's
purported lack of health and safety standards. How can governments
protect users without stifling creativity?
How can incumbents respond positively, and perhaps even find
opportunities to surf this shift?
8. The Internet of Things comes home
Homes don't just house people and pets: now objects with unique
identifiers can communicate over the web, unleashing vast potential for
smarter living.
As new designs and business models emerge, companies that provide
products for the home - from laundry to bathrooms to interior design -
face disruption.
The question remains, what real value will these intelligent devices
bring to our lives? Can they be used to give people greater control over
their well-being? Or will they simply give profiteers a larger handle on
domestic lives?
9. Bio-economy offers solutions
Perceptions of the potential role for the bio-economy have shifted,
as new realms of economic activity have opened up based on the
application of molecular and genetic understanding to industrial
processes. Synthetic biology comes under this heading.
The potential benefits are huge. For example, Pronutria has developed
a process that converts algae to protein for human nutrition. The
company claims it can feed a billion people from an area of land the
size of Rhode Island.
But the domain remains controversial. Should we mess with nature so
profoundly? The challenge is to create common understanding and
structures so we can develop and deploy these technologies well.
- Green Futures |