Embracing Megatrends and their impact on future innovation
Megatrends are defined as sustained macroeconomic forces of development. These trends affect business, economy, society, cultures and personal lives, thereby defining our future world with its increasing pace of change. Megatrends have diverse meanings and impacts for different industries, companies and individuals. These global forces are changing rapidly, bringing new competencies into play at half the lifecycle speed of the past decade. An analysis of Megatrends and their implications are vital to a company’s future investment strategy, development and innovation process due to its influence on product and technology planning (4).
Why do Megatrends matter? Megatrends have different implications for many businesses. For example, the CSIRO identified seven worldwide megatrends including greater demand for resources, threats to the natural environment, impact of Eastern economic trends on the West, expanding new technologies, disruption to the service economy, and our aging population (1).
While some of these trends help us identify what might happen in the future, we are already seeing the impact of multiple tech/service megatrends emerging at varying times in Australia and internationally. An example of this has been seen in the rise of new markets such as Uber, Airbnb and online shopping (1). These changes have seen vast investment and growth over a very short period of time.
Investors should employ forethought whilst identifying the overarching themes that will shape our world in the coming decades. According to Robert Freidland, founder of Ivanhoe Mines, “the trick is to step back from all the noise of everyday existence and think about the big picture- the big, big picture. Longevity and nutrition: the consequences of all of us living longer. Oil: the inalienable fact that it’s running out, and that we will need to get our energy elsewhere. Populism: the fact that countries that once led globalisation now shun it, and those that were once insular now embrace it. Then, you work out the companies that are set to benefit from these themes over time” (2).
Artificial Intelligence & Technology Megatrends
The sheer scale and scope of technologies today make this megatrend impossible to predict from an investment point of view, and, whether there will be benefits or disruption to the workforce leading to a profound effect around the world. Impactful technologies are broad based: from artificial intelligence to cloud and quantum computing, drones and autonomous vehicles, virtual and augmented reality, 3D/4D printing, robotics, connected devices, Apps, and the internet of things (3).
While being both exhilarating and scary, let’s look at Artificial Intelligence (AI). The impact on society is projected to see it used more in assisting or replacing humans in manufacturing, military, space and transportation sectors, to name a few (2). Fully automated factories are now approaching reality. Sophisticated machines and 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 trend will see the entire production line configured with AI allowing direct access and control to different machinery in the manufacturing process (5).
Artificial Intelligence is going to have detrimental effects from employment through to how business is invested. Investing in areas of AI such as robotics and battery companies (Tesla) are becoming a common theme and an area to watch. Elon Musk, the founder of Tesla, recently warned about the coming economic disruptions that automation and artificial intelligence will cause. Musk sounded the alarm about the threat AI could pose to human life on Earth! (6).
“When I say everything, the robots will do everything. Bar nothing,” said Musk. “Something like 12% of jobs are transport. Transport will be one of the first things to go fully autonomous” (6).
Below is an interesting video illustrating what we could expect in the near future with regards to the latest robotic developments.
The speed at which these megatrends are developing will have a major impact on the future of our businesses. This is an important time that sees science and technology at the forefront of all industries in an effort to adapt to changes that could have a detrimental effect if we are not ready for them. We need to invest appropriate plans, money and time into preparing for the future.
- 1. http://www.planning.nsw.gov.au/News/2017/Predicting-the-future-through-megatrends
- 2. http://www.afr.com/markets/equity-markets/megatrends-invest-in-the-future-20170703-gx3nij
- 3. http://sydney.edu.au/business/alumni/magazine/innovation_and_culture/the_big_picture_making_sense_of_megatrends
- 4. http://www.investinbsr.com/ipaforum/wp-content/uploads/Iain-Jawad-IPA-Forum-2014-Presentation.pdf
- 5. http://www.bar-oriyan.com/Portals/0/mega%20trands%20exec%20summary%20v3%20(1).pdf
- 6. https://www.realclearpolitics.com/video/2017/07/21/elon_musk_regulators_should_be_proactive_on_ai_dont_wait_until_robots_are_killing_people_in_the_streets.html
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