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The 2014 Update Global MegatrendsDr Stefan Hajkowicz | Principal Scientist
This presentation contains Microsoft Clipart Images which may be subject to copyright.
The Australian Newspaper18 May 2012 by Florence Chong
The Deal, National circulation
Different Types of Futures
Source: Voros (2003) adapted this diagram from Hancock and Bezold (1994) in the Healthcare Forum Journal
Now Probable
Plausible
Possible
The Future
More Than ForecastingDifference Between Actual and Forecast Oil Prices (US Govt Dept of Energy)
10
20
30
40
50
60
70
80
90
100
Impo
rted
Cru
de O
il Pr
ice
(Nom
inal
U
SD p
er B
arre
l)
Actual Oil Price
Forecast Oil Price
Source: United States Government, Department of Energy
Presentation title | Presenter name | Page 5
More from lessThe opportunities and risks stemming
from resource scarcity and supply-demand imbalances
Going, going, … gone? A window of opportunity to protect habitats, biodiversity and the global
climate
The silk highwayThe growth of emerging economies,
globalisation, urbanisation and human mobility
Forever youngAn ageing population, longer
lifespans, rising healthcare expenditure and retirement
pressures
Digital immersionLife deeper in the information era
with technology, connectivity, data volumes and digital natives
on the rise
Great expectationsThe all important and personalised experience-factor in a world with
limitless choice
Megatrends The 2014 Revision
Why a Venn Diagram?Each area of overlap tells a unique story about the future
Ice Cream
Car TripChildren
Use activity books and
games
Take normal care
Effective strategy not yet identified
by humankind
Use serviettes
Does the strategy perform in most/all areas of overlap?
• Our narrative of the coming twenty years has remained relatively stable since 2012.
• Main change is “virtually here” is now “digital immersion” – two years have taken us much more deeply into the information era (we’re in the rabbit hole; it’s about how deep it goes).
• Urbanisation, globalisation and human mobility receive more attention under the Silk Highway.
• Emphasis on the opportunities for innovators (as well as risks) associated with resource scarcity.
• Governance systems are given greater attention across all megatrends (but not yet introduced as megatrend in own right)
• The innovation imperative – cuts across all megatrends and tells the story of how we beat the technology plateaux.
What’s Changed?From 2012 to 2014
Data source: World Bank and IMF
The Last Ten Years Have Been GreatBut what about the coming decades?
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
-5
-4
-3
-2
-1
0
1
2
3
4
5
OECD members
Australia
GDP
Grow
th R
ate
(%)
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0123456789
OECD members
Australia
Unem
ploy
men
t (%
)
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
10
20
30
40
50
60
70
OECD members Australia
Debt
to G
DP (%
)
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
0
0.2
0.4
0.6
0.8
1
1.2
Exch
ange
Rat
e
Innovation, Productivity and ProsperityWe need new & bigger ideas to refuel the economy
19951997
19992001
20032005
20072009
20112013
80.0
85.0
90.0
95.0
100.0
105.0
Mul
tifac
tor P
rodu
ctivi
ty
We do need to head back in this direction soonish
Data source: Australian Bureau of Statistics, 5204.0 Australian System of National Accounts
Read “The Great Stagnation – How America Ate All the Low-Hanging Fruit of Modern History, Got Sick, and Will (Eventually) Feel Better“ by Tyler Cowen
1. More From Less
It suddenly struck me that that tiny pea, pretty and blue, was the Earth. I put up my thumb and shut one eye, and my thumb blotted out the planet Earth. I didn't feel like a giant. I felt very, very small.
- Neil Armstrong
Data source: United Nations, Food and Agriculture Organization
More From LessFood demand, supply and prices
19901991
19921993
19941995
19961997
19981999
20002001
20022003
20042005
20062007
20082009
20102011
20122013
20140
50
100
150
200
250
FAO
Foo
d Pr
ice
Inde
x
More From LessFood Prices, Food Security and Stability
IMAGE AND DATA SOURCE: Marco Lagi, Karla Z. Bertrand, Yaneer Bar-Yam (2011) The Food Crises and Political Instability in North Africa and the Middle East. Physics and Society.
Global energy demand one-third.
Fossil fuel share from 82% to 76%.
Low carbon sources (renewables, nuclear...) are 40% of growth
Over 50% of net-increase in electricity generation from renewables
Growth led by China this decade but shifts to India, Southeast Asia and Middle East post 2020.
Biofuel use triples from 1.3 million barrels/day to 4.1 million barrels/day
More From LessWorld Energy Demand, Headline Statistics Now to 2035
Data source: International Energy Agency, 2013
More From LessDeclining Energy Intensity in Australia, All Industries
2008-09 2009-10 2010-11 2011-122,300
2,350
2,400
2,450
2,500
2,550
Gig
ajou
les p
er $
mill
ions
Indu
stry
Va
lue
Add
More money from less energy due to technology innovation & growth in services.
Data source: Australian Bureau of Statistics, Energy Account
The service sector of the economy needs only one-tenth of the energy used by other sectors to make $1 million.
More From LessDeclining Gold Ore Grade – We’ve dug up all the good stuff
Data Source: United Nations Environment Program 2011, Metal Recycling Report
2010199019701950
1930191018901870
1850
1835
50
40
30
20
10
Go
ld O
re G
rad
e (
g/t
Au
)
More From LessMining above the ground
One tonne of ore body yields 1-5 grams of gold
One tonne of old computer circuits yields
250 grams of gold.
Data Source: CSIRO News, Anna Littleboy, March 28 2014. How to create wealth from waste. Images CSIRO.
More From LessExtent of Mineral Resources in Emerging Economies
Data Source: United States Geological Survey (2012)
More From LessTransition to knowledge exports – Pittsburgh’s story from selling ingots to selling ideas
Source: Cambridge Journal of Regions, Economy and Society; Treado (2009)
Chicago Pittsburgh Detroit Cleveland0
2
4
6
8
10
12
14
16
18
20Share of Steel Making Capacity
Share of Steel Technology Firms
Shar
e of
US
Tota
l in
2003
(per
cent
)
2. Going, Going … Gone?
The fate of biological diversity for the next 10 million years will almost certainly be determined during the next 50–100 years by the activities of a single species.
Paul Ehrlich and Robert Pringle, PNAS 2008.
Going, Going… Gone?
Going, Going … Gone?
Data Source: Global Biodiversity Outlook 3, Secretariat on the Convention on Biological Diversity, 2010
Going, Going … Gone?The Red List
Presentation title | Presenter name | Page 22
Data Source: Global Biodiversity Outlook 3, Secretariat on the Convention on Biological Diversity, 2010
Red List Extinction Risk Index
1 = No concern
0 = Extinct
Going, Going… Gone?Arctic Sea Ice
Data Source: Global Biodiversity Outlook 3, Secretariat on the Convention on Biological Diversity, 2010
Data source: Bureau of Meteorology
Going, Going, … Gone?Rising Temperatures
1910 1930 1950 1970 1990 2010-1.5
-1
-0.5
0
0.5
1
1.5
2
Max
imum
Tem
pera
ture
, Deg
rees
Cel
sius
2030 2050
Difference from average maximum
Coral area is shrinking by 0.5% per year.
Only 50% of original coral area remains today.
Culprits are tropical cyclones (48%), crown of thorns starfish (42%), coral bleaching (10%) plus other factors.
Without these 3 things it would be growing by 2.85% per year.
Image Source: Microsoft Clipart, Data Source: De’ath, G, KE Fabricius, H Sweatman, and M Puotinen, 2012. The 27–year decline of coral cover on the Great Barrier Reef and its causes. Proceedings of the National Academy of Sciences.
Going, Going, … Gone?The Great Barrier Reef
Going, Going ... Gone? Staying Put
Data Source: Global Biodiversity Outlook 3, Secretariat on the Convention on Biological Diversity, 2010
3. The Silk Highway
The Silk HighwayA Shifting World Economy
Source: Quah, 2011; Global Policy
The Silk HighwayA Recent Phenomenon - The Population Explosion
Presentation title | Presenter name | Page 29
-10000 -9000 -8000 -7000 -6000 -5000 -4000 -3000 -2000 -1000 0 1000 20000
2000
4000
6000
8000
10000
12000
Date from -10,000 (BC) to 2100 (AD)Hu
man
Pop
ulati
on (B
illio
ns)
The year 2100
Today
The year 1900
20002010
20202030
20402050
20602070
20802090
21006.06.57.07.58.08.59.09.5
10.0
Billi
ons o
f Peo
ple
This Century ...
The vast bulk of new arrivals are in Africa, Asia and Latin America. Europe shrinks after 2050.
US Govtcensus.gov
Source: World Bank Indicators
-
2,000
4,000
6,000
8,000
10,000
12,000
Ave
rage
Inco
me,
Wor
ld (U
S D
olla
rs P
er C
apita
, Cur
rent
Pric
es)
Income GrowthIt’s not just more people, it’s more people with greater buying power
The Silk HighwayMaking Cities in 20 Years What Took Europe 400 Years
Presentation title | Presenter name | Page 31Image source: (c) The Chinese UPLA urban planning network, http://www.upla.cn
Statistic derived from analysis of the United Nations, World Urbanization Prospects, The 2007 Revision Population Database
Change in ChinaFrom the early 1990s to the late 2000s China changed it’s share of the world’s ...
Champagne imports from 0.1% to 0.3%
Gross Domestic Product from 3.5% to 11.4%
Steel production from 12.4% to 38.8%
Poor people living on less than US$1.25 per day from 37.6% to 15.1%
Trademarks (held by residents) from 5.9% to 31.7%
Source: Organisation for Economic Cooperation and Development
The Silk HighwayAn Economy in Transition
Source: The Reserve Bank of Australia
The Silk HighwayExpenditure on Research and Development in China
Source: OECD
1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 20090
20
40
60
80
100
120
140
160
USD
Bill
ions
The Silk HighwayWill India pick up the slack?
2000-2005
2005-2010
2010-2015
2015-2020
2020-2025
2025-2030
2030-2035
2035-2040
2040-2045
2045-2050
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
IndiaChina
Urb
an A
nnua
l Gro
wth
Rat
e (%
)
Source: United Nations Urbanisation Prospects
The Silk HighwayRegional Activity - Global Jet Travel
North America China Europe Europe – North America
Southeast Asia South America0
200
400
600
800
1000
1200
1400
1600
1800
2012 2032
Reve
nue
Pass
enge
r Ki
lom
etre
s (B
illio
ns)
Data Source: Boeing Current Market Outlook
The silk HighwayThe Offshoring Trend
Data Source: BCG, OECD, NASSCOM
The silk HighwayThe Offshoring Trend
In Australia they cost $10,000 to $20,000 per month
Data source: United Nations Food and Agriculture Organisation
The Silk HighwayEmerging Food Markets, can’t sell garlic to China but can sell fish, tropical fruit ...
19801982
19841986
19881990
19921994
19961998
20002002
20042006
20082010
-80,000
-60,000
-40,000
-20,000
0
20,000
40,000
60,000
80,000
100,000
120,000
Export Value
Import Value
Trade Balance (exports less imports)
US
Dol
lars
, Mill
ions
4. Forever YoungAs you grow older, you will discover that you have two hands, one for helping yourself, the other for helping others.
- Audrey Hepburn
Forever YoungThe Ageing Population – Australia
Data Source: Australian Bureau of Statistics
Today we’re some 14% over 65 yrs old
It will be 25% by 2050
Forever YoungThe Ageing Population in Japan
By 2050 Japan’s population will be 40% over 70 years old
Forever YoungRetirement Savings Gap – Tapered Retirement
Source: Rice Warner
Forever YoungThe Rise of Chronic Illness
In 2002 59% of deaths worldwide were from non-communicable illness.
It will be 69% in 2030.
Source: Mathers and Loncar, 2006.
Source: Organisation for Economic Cooperation and Development
Forever YoungDiabetes and Overweight Projections
1970 1980 1990 2000 2010 202020%
30%
40%
50%
60%
70%
80%
Prop
ortio
n of
tota
l pop
ulati
on
over
wei
ght
USA England
Spain
Austria
France
Australia
Canada
Korea
Italy
Data Source: World Masters Association
Forever YoungWanting to Stay Active and Engaged
1981 1985 1989 1993 1997 2001 2005 2009 20130
5,000
10,000
15,000
20,000
25,000
30,000
35,000
Toronto, Canada
Aalborg, Aarhus & Herning Denmark
Brisbane, Australia
Portland, Oregon, USA
Melbourne, Australia
Edmonton, Canada
Sydney, Australia
Num
ber
of C
ompe
titor
s
Forever YoungRising Healthcare Expenditure
Source: CSIRO DPAS Flagship
Today we spend 20 percent of all
government taxes in Australia on
healthcare.
By the year 2043 it will be 40 percent.
Forever YoungRising Healthcare Expenditure
Cardiovascular Mental Neurological Cancer Diabetes0
5
10
15
20
25
9.3
5.2 4.73.5
1.6
22.6
12.1
21.5
10.1
8.6
2002–03 2032–33
Expe
nditu
re P
er Y
ear (
A$ B
illio
ns)
Source: ACE–Prevention: Deakin University and University of Queensland.
Forever YoungLonger LifespansAverage today is currently 79.9 years for a boy and 84.3 years for a girl. Will exceed 100 years later this century at current linear trend.
Regenerative MedicineGenetic DiagnosticsOrgan Printing
Diabetes Type II
Source: Australian Bureau of Statistics
5. Digital Immersion
The number of transistors that can be placed on an integrated circuit, at the same
cost, doubles every 1.5 years.
Data source: Moore’s Law, Moore (1965) Electronica, Vol 38Image source: Microsoft clipart
Digital ImmersionMoore’s Law
Digital ImmersionThe falling cost of sequencing a human genome
2001 2003 2005 2007 2009 2011 2013$0
$20,000,000
$40,000,000
$60,000,000
$80,000,000
$100,000,000
$120,000,000
2001 2003 2005 2007 2009 2011 201302468
101214161820
Log
Scal
e - U
SD M
illio
ms
Moore’s Law
Data Source: National Human Genome Research Institute, Sequencing Costs
Digital ImmersionRay Kurzweil and The Second Half of the Chessboard
Creative Commons Photo by Michael Lutch. - Photo by Michael Lutch. Courtesy of Kurzweil Technologies, Incorporated.
Digital ImmersionArtificial Intelligence & Machine Learning The Story of IBM’s Computer Watson on Jeopardy
Source: D.A. Ferrucci - IBM Journal of Research and Development
Clue (category explorers): On hearing of the discovery of George Mallory’s body, he told reporters he still thinks he was first.
Answer: Who is “Sir Edmund Hillary”
Digital ImmersionWatson on Jeopardy
Source: D.A. Ferrucci - IBM Journal of Research and Development
Ken Jennings: “I for one welcome our new computer overlords”
Presentation title | Presenter name | Page 56
Automation Outside the Factory
Image Source: Wikipedia Commons
500,000 kms accident freeLaws in Nevada, Florida, California, and Michigan
Digital ImmersionEmergent Properties of Networks
Source: Wikipedia Commons (Opte Project) and Evans, D., The Internet of Things: How the Next Evolution of the Internet is Changing Everything, 2011, CISCO.
The number of devices connected to the Internet exceeded the number of people on Earth in 2010.
By 2020, this ratio is predicted to increase to almost 7:1.
From 6 to 3 Degrees of SeparationThe New World of Connectivity
A 1967 experiment by Stanley Milgram known as the “Small World Problem” found 4.4 – 5.7 links; leading to six degrees of separation.
Later the title of a 1990 play by John Guare and a 1993 movie adaptation directed by Fred Schepisi.
In 2012 researchers from Facebook and the University of Degli Studi di Milano in Italy tested the concept on the entire Facebook network which at the time had 721 million users and 69 billion friendship links [121].
The average distance found in this study was 3.74 intermediaries (degrees of separation).
Image source: IMDb and Metro-Goldwyn-Mayer Studios
Presentation title | Presenter name | Page 59
Every day 2.5 quintillion bytes of data are created; 90% of the data available today was created in the last two years (IBM).
Presentation title | Presenter name | Page 60
Mobile Phones in Kerala, India between 1997 - 2001Robert Jensen, Quarterly Journal of Economics
Reduction in price dispersion Elimination of waste Consumer and producer welfare improved
The Changing Job MarketInsights from the United States of America
1960 1970 1980 1990 2000 2006 200935
40
45
50
55
60
65
70Routine manualNonroutine manualRoutine cognitiveNonroutine analyticNonroutine interpersonal
Mea
n ta
sk in
put (
inde
x)
Source: Organisation for Economic Cooperation and Development
Percentile of the 1960s level
6. Great ExpectationsNow, I return to this young fellow. And the communication I have got to make is, that he has great expectations.
- Charles Dickens
Great ExpectationsMaslow’s Hierarchy
Esteem – confidence, achievement, respect of others, respect by others
Love and belonging – Friendships, family, partnering
Safety – Shelter, personal security, productive employment, health, property
Physiological Needs – Eating, Sleeping, Breathing, Drinking
Self
Actualization -
Morality, creativity, spontaneity, problem
solving, lack of prejudice, acceptance of facts
Great Expectations The rise (and continued rise) of the experience economy
Source: Pine, BJ and Gilmore, JH (1998) Welcome to the experience economy. Harvard Business Review
Great ExpectationsRelative Decoupling
Data Source: Organisation for Economic Cooperation and Development
Ratio of materials to GDP
Published studies showing materialism is detrimental to well being:1985 - Journal of Consumer Research
1992 - Journal of Consumer Research
1993 - Journal of Consumer Satisfaction, Dissatisfaction, and Complaining Behavior
1993 - Journal of Personality and Social Psychology
2003 - Journal of Personality and Social Psychology
2007 - Family and Consumer Sciences Research Journal
2007 - Journal of Social and Clinical Psychology
2009 - The Journal of Positive Psychology
Published studies showing buying life-experiences improves well being2010 - Journal of Personality and Social Psychology
2009 - The Journal of Positive Psychology
2009 - Journal of Research in Personality
2003 – Journal of Personality and Social Psychology
Great ExpectationsThe Jury is out - Experiences make us happier
Great ExpectationsUtility - A non-linear relationship
Beers (schooners)
Happiness (utility)
1 2 3 4 5 6 7 8 9 10
K
Not likely
More likely
Great ExpectationsIncreasing Importance of the “Whole Package”
Source: Fair Trade Australia and New Zealand
Fair Trade Logo Sales Revenue – The Moral Dimension
Basic Expectations
24% < US$1.25/day (47% in 1990)
33% of people in urban slums
15.5 percent of the world’s population (1 billion) hungry
United Nations, 2012
Superannuation ClusterA$9 million research program between CSIRO and four universities is finding solutions for superannuation sector...
Thank youDr Stefan HajkowiczPrincipal Scientistt +61 7 3833 5540e [email protected] www.csiro.au
CSIRO DIGITAL PRODUCTIVITY AND SERVICES FLAGSHIP | DIGITAL ECONOMY
