Mega Trends and Implications to Business, Society and Cultures

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Mega Trends and Implications to
Business, Society and Cultures

Executive Summary

2

Definition of a Mega Trend

What is a Mega Trend?


Mega trends are global, sustained and macro economic
forces of development that impact business, economy,
society, cultures and personal lives thereby defining our
future world and its increasing pace of change.




Mega trends have different meanings and impacts for
different industries, companies and individuals. Analysis
of these mega trends and their implications forms an
important component of a company’s future strategy,
development and innovation process, and impacts
product and technology planning.


The following document sets the stage for visionary
thinking by identifying the most important global mega
trends, potential scenarios of specific trends in 2020,
and the implications of these mega trends in
transforming society, markets and cultures. These mega
trends can be used as a base for strategic decision
-
making by understanding their impact on organizational
functions such as marketing, Research and
Development (R&D) budget spending , product planning
and development, human resource management,
technology planning and innovation scouting.

Definition:

Impact of Mega Trends on Key Organizational
Functions

Marketing

R&D Budget
Spending

Product
Planning and
Development

Technology

Planning

Innovation

Scouting

Why Do Mega Trends Matter?

3

Selection of unique mega trends through macro
-
economic analysis, interviewing and
10 brainstorming sessions with 150 analysts globally.

Scenario building of unique factors and implications to society, market, and other
key sectors by a Global Work Team of 15 analysts over a period of 200 man days

Analysis of the impact of the scenario developed in step 2 to the Business Market
(e.g. Personal mobility)

Analysis of opportunities/threats to industry (e.g. automotive) and generate
suggestions for design/development and technology planning *

S


T


A


G


E


S

Research Methodology

This document follows a four stage research process

* Not covered in this document but in separate Frost & Sullivan’s 360 industry studies

S1

S3

S2

S4

4

Summary of Top Megatrends

Urbanization
:

Increasing

pace

of

urbanization

will

lead

to

integration

of

core

city

centre

with

suburbs

and

daughter

cities

resulting

in

expanding

city

limits
.

This

will

have

massive

impact

on

the

future

of

mobility,

working

life

and

societies
.

Three

concepts

of

urbanization

will

emerge
:

megacities,

mega

regions

and

mega

corridors
.


Mega

Cities

:

Integration

of

core

city

with

suburbs

and

housing

over

5

million

people

Mega

Regions
:

Integration

of

two

or

more

cities

or

expansion

of

city

to

join

with

adjoining

daughter

cities

to

form

Mega

Regions

housing

over

15

million

people

Mega

Corridor
:

Urbanization

Corridors

Connecting

Two

or

More

Mega

Cities

or

Mega

Regions

Converging

to

form

Mega

Corridors
.

These

can

be

100

km

plus

n

distance

and

having

population

of

over

25
mn

living

within

the

corridor

Generation

Y
:

Most

educated,

affluent,

assertive

and

IT

literate

generation

in

history,

these

digital

natives

between

15



35

years

will

have

distinct

values,

beliefs,

attitudes,

lifestyle

and

behavioural

patterns

influencing

product,

technology

development

and

marketing

strategies

in

2020
.

Constituting

34
%

of

global

population

in

2020
,

Generation

Y

will

be

the

most

adaptive

to

change,

ready

to

experiment

with

new

technologies

with

high

purchasing

power
.

Particularly

in

emerging

markets,

these

young

people

provide

a

huge

opportunity


‘S”

Governance

‘S’ City
Planning

‘S’
Energy

‘S’
Business

‘S’ ICT

‘S’
Mobility

‘S’
Citizen

‘S’
Buildings

Women

Empowerment

and

Women

CEOs

:

Around

25

of

the

Fortune

Global

500

Companies

will

be

headed

by

women

in

2020
.

Constituting

of

over

40
%

of

future

labour

force

in

US,

India

and

China

,

women

will

have

more

decisive

power

over

finance

and

business

development

thereby

gaining

more

prominence

in

the

boardroom

and

at

the

family

front
.

Salaries

of

women

will

be

equal

if

not

higher

than

men

in

most

countries,

signalling

a

definite

break

in

the

glass

ceiling
.

Goods,

services

and

advertisements

will

be

specifically

targeted

to

women
.

Legislation

in

future

will

push

this

trend

.

Power

to

the

Middle

Class

:

With

over

1

billion

coming

from

India

and

China

alone

in

2020
,

the

middle

class

income

group

will

have

the

greatest

impact

on

products

and

services

and

the

biggest

purchasing

power

as

compared

to

other

classes
.

In

countries

like

South

Africa

this

middle

class

is

already

nicknamed

the

“black

diamond”
.


Reverse

Brain

Drain

and

CXO

Positions

in

Developing

Economies

Mostly

evident

in

countries

like

India

and

China,

reverse

brain

drain

as

a

concept

implies

a

massive

reversal

of

highly

educated

and

skilled

workers

back

to

their

homeland
.

This

trend

will

also

see

proliferation

of

non
-
resident

population

filling

up

CXO

jobs

and

salaries

and

benefits

in

these

countries

will

eventually

outstrip

the

Western

World
.

Many

Europeans

and

Americans

will

seek

jobs

in

these

developing

countries

in

the

future
.

SMART

Cities

and

SMART

Infrastructure
:

With

the

advent

of

technology

and

infrastructure

development,

there

will

be

a

shift

from

“GREEN”

to

“SMART”

concept
.

Some

of

the

SMART

initiatives

will

find

its

way

into

elements

of

Energy,

Technology,

Grids,

Cars,

Buildings,

Utilities

and

Infrastructure

.

Energy

efficiency

and

zero

emissions

will

be

the

basic

premise

of

such

initiatives
.


5

Summary of Top Megatrends

Beyond

BRIC
:

The

Next

Game

Changers
:

The

next

big

Game

Changers

will

be

the

future

economic

engines

of

growth



signalling

a

shift

in

economic

power

in

2020

from

BRIC

countries

to

nations

of

Mexico,

Argentina,

Poland,

Egypt,

South

Africa,

Turkey,

Indonesia,

Philippines,

Vietnam

and

possibly

Iran
.


New

Shores
:

Emerging

Outsourcing

Hotspots

:

The

future

outsourcing

markets

in

2020

will

not

be

defined

by

overall

labour

cost

or

productivity

but

by

specialization

in

niche

areas

like

business

analytics,

software

application

development,

product

development

and

software

testing
.

Most

of

these

emerging

hotspots

will

be

located

in

Eastern

and

Central

Asia

and

in

Latin

America
.

Future

Fortune

Global

500
:

Companies

in

developing

economies,

particularly

Asia

will

wield

greater

commercial

progress

in

2020
.

We

will

see

around

30
%

increase

in

the

number

of

Asian

companies

in

the

Global

500

Companies

list

signalling

a

shift

of

economic

growth

from

Europe,

United

States

to

developing

countries
.


SMART

Clouds
:

The

Next

Trend

in

Cloud

Computing
:

The

next

paradigm

shift

in

cloud

computing

will

be

the

advent

of

SMART

Clouds
.

These

flexible

customized

clouds

can

address

a

particular

business

(or

personal)

need

for

a

specific

period

of

time

and

can

be

integrated

with

existing

on
-
premise

IT

infrastructure

base

-

seamlessly

and

securely
.

This

new

cloud

momentum

is

expected

to

throw

open

new

business

models

leading

to

a

confluence

of

new

technological

applications

and

opportunities

for

software

vendors
.


SPACE

JAM
:

Future

of

Satellites
:

With

the

launch

of

GALILEO,

and

around

900

new

satellites

by

2020
,

new

navigation

and

communication

technologies

will

be

enabled,

leading

to

multiple

innovations

in

Machine
-
to
-
Machine

(M
2
M)

communications,

Mobile

Satellite

Services

(MSS),

and

increase

in

broadband

speed
.


Virtual

World
:

Digital

networking,

online

communities

and

computer
-
simulated

environments

will

govern

businesses,

healthcare,

education,

mobility

and

even

personal

relationships

in

2020
.

3
D

virtual

environments

and

avatars

will

interact

and

simulate

real
-
life

situations

enabling

users

to

experience

and

interact

in

virtual

reality
.

New

Trade

Zones
:

Governments

are

entering

into

new

trade

agreements

which

will

spur

the

development

of

new

trading

hubs

and

increase

in

trade

volume

in

2020
.

These

trade

agreements

will

also

lead

to

zero

tariff

rates

and

favourable

prices

for

goods

in

2020
,

particularly

for

countries

in

Asia,

Africa

and

Latin

America
.


Geo
-
Socialization
:

The

next

platform

of

social

networking

will

rely

on

geographic

services

and

capabilities

such

as

geocoding

and

geotagging

.

These

collaborative

web

mapping

techniques

will

result

in

new

trends

of

networking,

digital

marketing

and

innovative

ways

of

socializing

furthering

the

evolution

of

interaction

between

individuals

and

organizations
.

6

Summary of Top Megatrends

Future

of

Consumer

Electronics
:

Wearable

Computing,

3
D

HDTV,

Video

Calling,

E
-
Paper,

Mind
-
Control

Video

Gaming

are

some

of

the

future

technologies

which

will

hit

the

mainstream

market

by

2020
.

These

will

change

the

way

people

think,

interact

and

work

resulting

in

greener,

smarter

and

technology
-
savvy

lives

in

the

future
.

Wireless

Intelligence
:

Wireless

technology

enabled

by

advancement

in

cellular

networks,

satellite

networks,

RFID,

Wi
-
FI

and

Wi Max

will

lead

to

IT

infrastructure

and

other

services

to

be

80
%

wireless

on

a

single

integrated

platform

in

2020
.

With

real
-
time

video

surveillance,

virtual

Monitoring

and

secure,

high
-
speed,

wireless

data

networking,

this

intelligence

will

be

managed

by

a

central

server

which

commands

different

emergency

services

to

detect,

react,

prepare,

respond

and

even

predict

events
.


Future

Broadband

Applications
:

Around

50

billion

devices

will

be

connected

by

broadband

in

2020

with

innovative

applications

in

healthcare,

business,

education

and

entertainment

sectors
.

Evolving

Artificial

Intelligence

(AI)

and

broadband

technologies

will

lead

to

sophistication

of

major

applications

resulting

in

virtual

companies,

business

conferences,

defense

simulation,

virtual

classroom

and

even

virtual

space

tours

to

name

a

few
.


Innovative

Technologies

of

the

Future
:

The

next

emerging

technologies

to

watch

out

for

will

be

in

areas

of

nanomaterials
,

flexible

electronics,

lasers,

SMART

materials

and

so

on,

These

technologies

will

drive

multiple

applications

and

present

a

potentially

high

ROI

for

companies

in

2020
.


Future

Global

Power

Generation
:

By

2020
,

nearly

half

of

world

electricity

will

be

produced

in

emerging

regions
.

Shifting

regional

and

fuel

balance

will

see

renewable

and

nuclear

energy

increasing

to

36
%

in

2020

of

the

total

power

generation
.


Innovating

to

Zero!

:


Zero

Concept”

World

with

zero

emissions,

zero

accidents,

zero

fatalities,

zero

defects,

zero

breaches

of

security

can

now

be

a

reality

in

the

future
.

Companies

will

shift

focus

and

develop

products

and

technologies

that

“Innovate

to

Zero”

such

as

zero

emission

technologies

(such

as

wind

power,

Travelling

Wave

Reactor

(TWR),

Solar

PV,

Third

Generation

Bio

Fuels)

.



E
-
Mobility
:

:

Over

40

million

electric

2

wheelers

and

4

wheelers

will

be

sold

annually

around

the

globe

in

2020
.

E
-
Mobility,

from

electric

cars

to

electric

aircrafts,

will

usher

in

a

new

set

of

players

with

new

business

models

offering

innovative

and

customized

set

of

infrastructure

and

technology

solutions
.



RoboSlaves
:

Robotic

technology

combined

with

Artificial

Intelligence

will

assist

humans

in

manufacturing,

space,

military,

ci vil

security

and

transportation

sectors
.

Additionally,

robotics

will

soon

enter

into

the

realm

of

personal

relationships

acting

as

a

slave,

companion

and

even

a

decision

maker

in

2020
.


7

Summary of Top Megatrends

Infrastructure

Development
:

Power,

Water

and

Transport
:

With

around

$
41
,
000

billion

expected

tp

be

pumped

globally

for

infrastructure

projects

(
2005
-
2030
),

there

will

be

a

tremendous

improvement

in

the

quality

and

operational

efficiency

of

sectors

such

as

transport,

power

and

water
.

Emerging

transportation

corridors

(
eg
.

Trans

Siberian

Rail,

High

Speed

Rail

Corridors

n

the

United

States)

will

lead

to

mushrooming

of

economic

and

technology

clusters

along

these

corridors
.

These

integrated

hubs

will

be

the

future

centres

of

innovation,

R&D

and

technical

excellence

attracting

massive

investment

and

government

support
.


New

Business

Models
:

Next

Generation

Business

models

will

redefine

future

business

propositions

and

influence

future

technology

and

product

development

.

These

business

models

will

not

only

reshape

the

landscape

of

business

environment

and

but

also

influence

industry

dynamics
.

Some

of

these

evolving

models

are

Personalization,

Car

Sharing,

“Pay

by

the

Hour”
.

Factory

of

the

Future
:

SMART

and

GREEN
:

Fully

automated

factories

are

now

approaching

reality
.

Sophisticated

machines,

intelligent

robots

infused

with

future

technologies

will

soon

allow

a

plethora

of

machinery

to

rapidly

manufacture

and

fabricate

products

on
-
demand,

without

any

human

intervention
.

The

entire

production

line

will

be

configured

with

artificial

intelligence

allowing

direct

access

and

control

to

different

machinery

in

the

manufacturing

process
.


From

Fat

to

Fit
:

Health,

Wellness

and

Well

Being

(HWW)
:

Health

and

Well

being

are

increasingly

being

viewed

as

an

integral

part

of

improving

quality

of

life
.

As

HWW

is

increasingly

gaining

more

priority

in

personal

life,

companies

are

now

considering

this

factor

whilst

strengthening

their

brand

value

and

repositioning

their

products

in

the

market
.

Many

future

strategic

innovations

and

technological

development

will

be

built

on

this

premise
.

(
Eg
.

2007

Toyota

RiN
)

8

Summary of Industry
-
Specific Trends

Healthcare
:

With

Smarter

Drugs,

Virtual

Hospitals,

Cyber

Docs



the

healthcare

industry

is

poised

for

a

radical

change

with

IT

taking

the

forefront

in

R&D,

diagnostics

and

monitoring
.

Healthcare

spending

will

account

for

20
-
30
%

of

GDP

in

some

economies

by

2050

with

a

marked

shift

in

spending

toward

predicting,

diagnosing

and

monitoring



away

from

traditional

treatment
.

In

future,

diagnostics

will

become

less

invasive,

preventative,

and

image

based

and

medicines

will

be

marketed

as

molecular

and

personalized

drug

cocktails
.




Chemicals

and

Materials
:

Nanomaterials
,

Smart

Materials

and

Organic

Electronics

are

just

some

of

the

materials

of

the

future

that

will

impact

new

product

development,

applications

and

technologies
.

These

materials

will

possess

revolutionary

features

(including

tailored

responses

to

external

stimuli

such

as

stress,

temperature,

moisture

and

pH)

and

will

impact

on

future

innovations

in

all

avenues

of

life,

such

as

green

building

materials,

fuel

efficient

vehicles

and

next
-
generation

personal

care

products

such

as

nutraceuticals
.

However,

the

biggest

change

will

be

the

shift

to

genuinely

sustainable

feedstocks

that

will

impact

plastics,

[bio]fuels

and

cosmetic

ingredients
.

Energy

and

Power
:

Global

Electricity

generation

is

slated

to

reach

26
,
620

TWh

in

2020
:

with

renewable

energy,

and

nuclear

power

accounting

for

more

than

a

third

of

power

generation

by

2020
.

Rapidly

accelerating

need

for

cleaner,

sustainable

power

will

lead

to

resurgence

of

nuclear

power,

rampant

clean

coal

commercialization

and

improved

power

storage

solutions
.

Smart

grids

will

be

at

the

forefront

of

efficiency

and

management

of

energy,

both

for

users

of

power

as

well

as

the

utilities

integrating

the

multitude

of

new

supply

points

onto

the

grid
.

Environment

and

Water
:

Increasing

water

stress

and

concerns

on

water

management

cycles

will

lead

to

sustainable

water

&

wastewater

treatment

solutions

in

2020
.

The

value

chain

of

the

water

industry

will

soon

witness

a

strong

integration

between

engineering

procurement

and

construction

companies,

water

&

wastewater

treatment

system

assemblers

and

original

equipment

manufacturers

thereby

leading

to

innovations

in

chemical

free

water

&

wastewater

treatment

solutions,

bio
-
gas

generation

from

wastewater

treatment

and

recovery

of

material

resources
.

Additionally

trends

such

as

Smart

Water

Grids

and

Water

Trading

are

set

to

capitalise

on

the

overall

sustainable

drive

and

become

the

mainstream

by

2020
.

Automotive
:

With

the

increasing

urbanisation

and

formation

of

mega

cities

across

the

globe,

there

is

a

growing

need

for

de
-
congestion

and

consequently,

green

personal

mobility

solutions

(Hybrids,

EVs

and

Alternate

fuels)

are

expected

to

account

for

around

30
%

of

global

vehicle

sales

by

2020
.

With

consumers

being

offered

new

options

such

as

car
-
sharing

and

vehicle

manufacturers

offering

integrated,

door

to

door

mobility,

the

shifting

dynamics

in

the

automotive

industry

will

lead

to

emergence

of

new

players

called

“mobility

integrators”
.

The

automotive

industry

will

soon

witness

a

paradigm

shift

in

product

differentiation

(new

features

such

as

Health,

Wellness

and

Well

Being)

with

non
-
automotive

suppliers

entering

the

market

with

new

competencies,

value

propositions

and

business

models
.

Automotive

App

Store

type

concepts

will

grow

9

Aerospace

and

Defence
:

The

Aerospace

&

Defence

industry

is

characterized

by

early

adoption

of

innovative

technologies

and

globalisation
.

Technological

advancements

in

SATCOM

and

wireless

technologies

will

enable

the

development

of

capabilities

such

as

Network

centric

operations

in

defence

and

improved

in
-
flight

communication

in

commercial

aviation
.

Information

management,

particularly

the

ability

to

collect,

analyse

and

disseminate

information

will

also

see

unprecedented

growth

thereby

driving

innovations

in

the

field

of

information

security
.

The

A&D

industry

will

see

increased

need

for

integrating

and

managing

information

more

effectively

to

improve

capabilities

and

reduce

costs
.

Information

and

Communication

Technologies

:

The

next

step

of

technology

evolution

will

see

the

high

speed

interaction

between

the

physical

and

the

online

world

through

interconnection

between

mobile

devices,

sensors,

probes

and

machines

and

objects

digitally

connected

to

the

network
.

This

will

led

to

various

sub
-
trends

such

as
:

convergence

of

virtual

and

physical

payments,

convergence

of

on
-
line

and

mobile

applications,

convergence

between

the

various

levels

of

realities,

virtual,

augmented,

and

physical,

networked

cities

and

intelligent

spaces
.


Other

interesting

futuristic

trends

in

the

ICT

space

that

will

have

multiple

cross
-
sectoral

impacts

are
:

wearable

computing,

widget

based

User

Interfaces

(UIs),

3
D

Video

on

Demand

(
VoD
),

and

cloud

portability
.


Summary of Industry Specific Trends

Electronics

and

Security
:

Improvements

to

broadband

infrastructure

coupled

with


advancement

in

wireless

technology

will

lead

to

seamless

integration

and

real
-
time

interaction

of

disparate

security

systems

enabling

state
-
of
-
the
-
art

security

solutions

with

real
-
time

video

surveillance,

virtual

monitoring,

and

secure,

high
-
speed,

wireless

data

networking

and

wireless

video

servers
.

Furthermore,

with

the

evolution

of

smart

technology

in

buildings,

grids,

and

cities,

enterprise

security

solutions

will

soon

be

based

on

IP
-
based

technology
.


This

seamless

convergence

of

IT

and

physical

security

will

lead

to

truly

“intelligent”

and

interoperable

systems

by

2020

which

will

be

developed

on

an

open
-
IT

platform
.


Measurement

and

Instrumentation

:

Self
-
powered”

wireless

sensor

technology

supporting

energy

harvesting

are

expected

to

spur

innovations

in

occupancy

sensors,

window

sensors,

key

card

switches,

CCD

sensors,

gas

and

humidity

sensors

and

temperature

sensors

by

2020
.

As

complexity

and

speed

of

chips,

buses

and

systems

increases

in

the

electronics

industry,

Test

and

Measurement

(T&M)

vendors

will

increasingly

shift

from

traditional

to

embedded

instrumentation
.

Additionally,

innovations

in

material

technologies

will

lead

to

development

of

light

substitute

materials

such

as

composites,

smart

materials,

etc
.

and

impact

sectors

such

as

aerospace,

space

tourism,

electronics,

healthcare,

military

applications,

information

technology,

This

is

expected

to

give

rise

to

a

myriad

of

innovations

in

the

fields

of

material

testing,

inspection

and

monitoring,

to

ensure

quality

and

reliability

of

components

used

in

such

safety

critical

applications
.

,


Building

Technologies
:

Future

advances

in

building

automation

systems

will

lead

to

integration

of

data,

voice

and

video

with

security,

HVAC,

lighting

and

other

controls

on

a

single

IP
-
network

platform
.

These

developments

combined

with

“green”

and

“eco
-
friendly”

elements

will

lead

to

the

growth

of

“SMART,

Green

and

Intelligent”

Buildings

by

2020
.

Additionally,

open

architecture

and

integrated

hardware

and

software

tools

will

soon

enable

the

whole

city

to

attain

a

new

level

of

inter
-
connectivity
.


10

Key Strategic Conclusions


All these Mega Trends are inter
-
related. This document will help
understand the inter
-
relations and implications of these mega
trends on you business and industry.

Understand
Connectivity


These Mega Trends will help identify and evaluate opportunities
in the entire value chain.

Understand
Profitability in Value
Chain


Companies
need to play globally to garner a significant pie in
future markets. These mega trends will help you identify global
pertinent forces that influence business in the future.

Exploit Global
Opportunities


Tomorrow’s world will thrive on innovative applications. Do you
have a Innovation Council or Growth Team track these
innovation?

Innovate to Improve
Business Results