Some other interesting trends include

Experience economy, ie experience is the King or Queen

This occurs when

"...a marketable experience occurs when a company intentionally uses services as the stage, and goods as props, to engage individual consumers  in a way that creates a memorable event. These experiences are in inherently personal, existing only in the mind of an individual who is being engaged on an emotional, physical, intellectual  or even spiritual level..."

Joseph Pine & James Gilmore as quoted by Leo Lewis et al 2018

This is the next step from the service economy which evolved from the industrial economy and the earlier agrarian economy.

Drivers of this trend are younger people including millennials (born between 1981 to 1996), ie

"...more than three in four American millennials would rather spend money on a desirable experience or event than buy a desirable object..."

Eventbrite as quoted by Leo Lewis et al 2018

"...memories are more important than things..."

A Nissan slogan as quoted by Leo Lewis et al 2018

In countries with long working hours, like Japan, time poverty is a critical issue. The leisure market has responded by refining and packaging experience in the most efficient, deliverable way, eg

- cafes where people can sit amongst animals like birds, cats, dogs, etc

- hotel staffed by robots

- some bullet trains fitted with aquariums offering the opportunity to camp overnight surrounded by fish

- picture-taking, like, Instagram, enhances the consumption of the experience, ie people travel somewhere because there is a particular photo they want to take

- people dressing up as one's favourite character like at the annual Tokyo Comic Market (One of the world's biggest cosplay events). There are 3 sides to this experience, ie

"...there is the basic passion for becoming a different character from the one you are in everyday life; there is the participation in the community that shares that; and there is the creativity of making the costume perfect..."

Eric Nakashima as quoted by Leo Lewis et al 2018

There is a preference for novel experience over accumulation of things, ie the desire to collect and accumulate experiences  rather than things (sometimes called connoisseurship).

Spending habits are changing with people expecting a more personalised offering and value from their products while paying less; an emphasis on more ethical and environmentally-friendly consumerism. Some examples
- instead of buying instant coffee, people patronise a cafe that sells organic, fair-trade beans and promotes the story of its coffee growers. The cocoa and chocolate fair trade purchases in Australia increased from A $5.5 m. in 2009 to A $87 m. in 2010 (Fiona MacDonald, 2014)

- shopping holidays may be replaced with more intense experiences like volunteering; 1.6 m. volunteer tourists visit a year, with the worldwide industry worth A $2.6 b. (Fiona MacDonald, 2014)

Worldwide population

- it exceeds 7+ b. & is expected to reach 10 b. by 2050

- people in the developing countries are living and staying active longer, ie 22% of the world's population is expected to be 65 + by 2056. For example, in Australia by 2050, life expectancy at birth is expected to increase to around 90 years. Also, 2.7 people will be working to support every person aged over 65. On the other hand, many Australians, who are 65+, are willing and able to work into their 70s.

Global food production needs to increase by 70% to meet anticipated demand in 2050. This means the world needs to produce 470 m. tonnes extra meat annually (in 2013 we produced around 200 m million tonnes); we currently produce 2.1 b. tonnes for cereals, but would need to increase this production by 3 b. tonnes). On the other hand, we are losing 120,000 square km of farmland to degradation and over-cultivation annually.(Fiona MacDonald, 2014). We need to learn to live on less!!!!!!

Fossil fuels

Based on current global usage: we have 50+ years of oil reserves and 100+ years of coal reserves (Fiona MacDonald, 2014). Yet fossil fuels, like coal and oil, are under threat from nuclear and renewable energy like solar, wind, water, biogas, etc owing to fossil's pollution impact. on the environment

Economic growth

- more than 1b. people in Asia will move out of poverty and into the US$ 6,000 - 30,000 annual salary bracket over the next 10 years

- economies of developing countries in Asia are growing at around 8% annually

- by 2030 the bulk of global GDP will be generated from non-OECD countries

- Chinese growth (GDP) has almost tripled in the past 2 decades; between the early 1990s and 2000s, Chinese percentage of the global foreign exchange and gold reserves increased from 2.7 to 21.9.

- since the early 1990s, global trade marks held by Chinese residents have increased from around 6% to 32%

- in the 1980s, the geographic centre of the world's economy (calculated by measuring GNP across 70 locations) was located over Atlantic Ocean between Europe and the USA; it is predicted that by 2030 that the centre will lies somewhere between China and India. This change in focus will go beyond trade and require a better understanding of this region's peoples, cultures (including languages) and institutions.

"...in a changing world, if you stop moving too long, you'll sink; success lies in knowing which direction to steer..."

Fiona MacDonald, 2014

Flora and fauna

- only 1.5 m. of the Earth's estimated 5 million species have been formally described

- 1/3rd of all species could become extinct if climate change continues as predicted and 80% of all genetic diversity could be lost along with the species

- 70% of the world's plants are currently threatened with extinction

- 210 k. square km of land has been protected around the world since 2002

organisational development change management

In summary,

"...in a slower-paced world, even senior executives spent most of their time managing fairly stable ongoing operations. The personal characteristics that made for success reflected the bureaucratic organisational structures of the time - personal stability and reliability, being highly organized, following rules, supporting existing cultural values, being tough-minded and in a blokey world, often aggressively demanding conformity. Now the prime requirement is the ability to manage ongoing organisational change, incremental at times, but often transformational, and to create a culture that fosters innovation..."

Dexter Dunphy as quoted by Luke Slattery, 2007

Some More Challenges Facing the World

Trust

Since the GFC (starting around 2007), trust in the elites (politicians, bureaucrats, corporate, etc) has declined, and this has led to the rise of popularism.

Yet trust is essential for our political-economic-social system to work effectively.

We need to focus more on the challenges of the future rather than arguing about the past.

"...The political leaders are being captured by powerful vested interests and in place of independent and reasoned policy is the 'three-or-four-word' slogans......trust in all sorts of institutions, governmental and private, has been damaged or destroyed. Our future is often framed as some return to an imaginary glorious past where the issues that now presented have not arisen..."
Kenneth Hayne (Royal Commissioner) as quoted by Patrick Durkin et al 2019

"...the percentage of people who say they trust government has fallen from 42% in 1993 to 26% in 2016..."
Australian National University survey as quoted by Patrick Durkin et al 2019

More recent challenges are around the rise of China as a superpower and decline of Western, especially US, dominance; linked with this is the rise of nationalism and protectionism plus the consequent threat of fragmentation. This has undermined the trust in both the idea of an open-world economy and in the people and institutions that manage it. In developing countries, the causal factors include deglobalisation,

"...de-industrialisation, rising inequality, the slowdown of productivity growth and the shock of unexpected financial crises..."
Martin Wolf 2019

Business needs to earn the trust of the community by

"...first to make sure the basics work - having products and services that are fit for purpose, representing them honestly and clearly, and acting with integrity, asking first what we should do, rather than what we could do..."
Tim Reed 2019

Search For Answers

designed by: bluetinweb

We use cookies to provide you with a better service.
By continuing to use our site, you are agreeing to the use of cookies as set in our policy. I understand