In part 4 of our series, we tackle ecological and social trends that will affect how we live and work in 2015 and beyond:
Ecological Trends:
Global Water Shortage
Rapid population growth (in some parts of the world), high levels of poverty and constrained water supplies, have caused a severe shortage of water in countries such as Nigeria, Indonesia, Bangladesh and India. [i] Throughout Asia, there is a lack of resources, and through Africa, no money to access water that is more plentiful. The shortage of supply is five times worse in the Middle East and Africa than it is in North America. As 70% of the world’s water is used in agriculture, there will be a move towards identifying technologies that drive conservation.
While recent rains have offered some relief in the Southwestern U.S., extreme drought still plagues 8% of the nation. 60% of the U.S. fruit and nut crop value comes from California, (half of California’s crop). California’s Central Coast and San Joaquin Valley, prime growing regions for fruits and vegetables are still experiencing severe drought. Food prices could be higher in 2015.
Pollution in the Industrialized World
The World Economic Forum ranks the rise of pollution in industrialized nations as the sixth most important global problem (in Asia it is third). [ii]. In 2010 in China alone, it is estimated that 1.2 million people died prematurely, a loss of 25 million years of human life. China remains the largest greenhouse emitter, with the U.S. second.
Leaders from around the world are focused on regulating high-polluting industries, promoting clean energy and looking for new sources of renewable power generation.
In particular, the heat will be on the Chinese to solve their significant air quality problems. China’s solar capacity is projected to increase from 2010 to 2014; a factor of 42 times.
Tesla takes over the battery business
Tesla CEO Elon Musk recently announced that Nevada has been selected as the site for the company’s “gigafactory”[iii]. Further, Tesla announced that the factory would be “net zero energy” and would produce a whopping 50GWh in annual battery production (by 2020), enough for 500,000 Teslas. Musk has clearly announced his intention to the world to fuel battery cells in cars into the next decade and drive down the cost of electric-powered and hybrid vehicles.
Less U.S. Drilling
The administration has shelved several high profile drilling and pipeline projects such as Keystone and lower prices will curtail production. In Texas, the number of rigs drilling at the Eagle Ford shale has been cut by 16 (to 190).[iv] ConocoPhillips, the largest exploration and producing company, announced it will cut capital spending year by 20% and pull back on drilling in North America.
Organic Foods go Mainstream
Walmart, perceived as the heavy by supporters of sustainability, recently announced its unique partnership with Wild Oats. Walmart’s effort to reinvigorate a dying brand will be a bounty for organic foods consumers who will have access to everything from ready-to-prepare skillet meals to canned vegetables and prices 25% of national organic brands.
Conclusion
In our travels working with dozens of companies, we have observed an interesting tendency. Before the great recession, there was significant movement towards sustainability. In the throes of the recession, many companies (and even budget conscious consumers) reverted back to old behaviors.
Clearly, there is a return to sustainability initiatives on the part of many major U.S. companies. Their suppliers should be aware of the importance of reducing our carbon footprint, and that corporate partners have a heightened awareness of environmental impacts in their businesses.
Social Trends
Shifting Demographics
While much is written about the baby-boomers entering retirement, we should be attentive to another meaningful 21st century demographic trend: Millennials are forging a distinctive path into adulthood[v]. Those between 18-33 are seemingly uninterested in organized religion and politics. They are influenced by their friends, social media and preserving the planet.
As their disposable income rises, they will garner more attention on the part of marketers. Millennials are hard to market to when companies try to use their traditional playbook. They are unlike any demographic group before them, staying single longer, active on social media and are politically independent.
Wage Inequality
Our recovery from the Great Recession has been somewhat one-sided. There has been an expansion of the wealth gap between middle-class and upper-income families reaching an all time high. The median upper-income family earns $639K, vs. $97K for middle-income families[vi].
The inability for the middle class to create wealth will create strain on governments as baby boomers retire, and their health care costs rise. It is also creating strain on the future generations through high student loan balances and the like.
Emotional Consumption
The shift to emotional consumption has huge implications for employers and marketers. Consumers and employers are searching for an answer to the question – “How can people get more out of life?”[vii] In a time when we are blitzed with thousands of messages daily on multiple devices, people have a hunger for an emotional connection. Watch for shifts in marketing messaging to greater emphasis on empathy and community.
Bring Your Own Device and Individualism
Less than half of companies have a “bring your own device” policy, but adoption is on the rise. [viii] Employees are viewing the choosing of their device as a right and expect their employers to adapt to them. Dynamic web programming and other similar technologies enable utilizing common tools and cloud technologies.
Communication Tools that Never Sleep
A recent poll showed that 82% of people prefer to access their voice mail via text message, an indicator that voice mail as a technology may be on the way out. [ix] People are using new collaboration tools (such as Asana) to connect, with each other, their employers and other organizations such as governments and churches.
Series Conclusion
In the formation of strategy, it is critical that organizations consider the implications of external factors; economic, technological, ecological, social and technological. Within this series, we aim to provoke thought so that organizations can make a deeper impact on their customers, their employees, our economy, and our society at large.
[i] Increasing water stress -The World Economic Forum
[ii] Rising pollution in the developing world-The World Economic Forum
[iii] Nevada selected as official site for Tesla battery gigafactory – Tesla
[iv] US shale industry faces endurance test after Opec rejects cuts by Ed Crooks on http://www.ft.com
[v] Millennials in Adulthood – Pew Research
[vi] America’s wealth gap between middle income and upper income families-Pew Research Center
[vii] Macro Trends 2015+ by Anne Lise Kjaer
[viii] Business Communications Never Sleep by Evie Goldstein-Ring Central Connect
[ix] Business Communications Never Sleep by Evie Goldstein-Ring Central Connect