Future Perspectives

The World in 2020:

The business
challenges of the future
Introduction:
The world landscape
in 2020
The world in 2020 will be very
different from that of 2011, and
certainly from 2000. During the
long globalizing boom since the
1980s, we became accustomed
to navigating by a set of familiar
assumptions: that increasing
globalization was inevitable;
that technology would reduce
costs and increase access
to consumers; that capital
was cheap; and that oil was
inexpensive and would remain
readily available for at least
another generation.
Overlaid on this was a strong set
of policy assumptions, certainly
in the affluent countries of
the North, nationally and
internationally: that open
markets were the best way to
organize trade and production
(and sometimes, regulation),
and that deregulation was good
for everybody.
To a large extent, these
assumptions have been put to
the sword by the financial crisis
of 2008 and its aftermath, and
by the growing awareness of
the ecological deficits which
the world faces. The countries
which have performed best
over the past decade have
been those such as China and
Brazil which have resisted
ideas about open markets.
Latin America, increasingly an
economic powerhouse, has
governments which have taken
steps to reduce inequality. In
the financial sector, countries
which weathered the financial
crisis with least disruption,
such as Canada, are those
which had continued to regulate
their banking sectors more
assertively.
In this respect, the financial
crisis of 2008 represented an
ending, but not a beginning. We
are in a liminal moment, betwixt
and between, an ambiguous
and transitional phase in which
a threshold is being crossed.
There are more questions
than answers, and increasingly
our assumptions about how
the world works are open to
challenge and interrogation.
As societies, we are having
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2011 The Futures Company. Some rights reserved.
2
As societies, we
are having fresh
conversations about the
relationships between
business, governments,
societies and individuals
which are still in their
early stages.
fresh conversations, still in
their early stages, about the
relationships between business,
governments, societies and
individuals. Liminal moments
such as this can last a decade,
or more, before opinion
coalesces around a new set of
operating assumptions about
how the world works.
This report, therefore, is written
as a contribution to those
conversations. It looks forwards
to 2020 and beyond, rather
than back at the last decades. It
seeks to do three things. First,
we examine the big macro-
factors which are shaping the
global landscape, which to
some extent constrain choices
and shape opportunities.
Second, we explore the
implications of this landscape
for business, identifying some
of the dilemmas it frames for
organizations over the next
decade. And third, we look at
the impact of these changes on
the way in which businesses are
managed, and the attitudes and
understanding they will need to
prosper. Welcome to 2020.
The World in 2020
3
The map of how the world is
likely to change over the next
decade can be drawn over eight
contours. Inevitably, these
represent a simplification, as
with any model. In practice,
they overlap and are connected
by complex and unpredictable
feedback mechanisms. In
looking at ways to describe the
world of the coming decade,
we have identified these as the
significant vectors of change.
They are summarized here and
explored in more detail in a set
of short essays in the following
section.

First, the world population is
expected to climb past seven
billion later this year, and then
continue to rise, potentially to
around eight billion in 2030
and nine billion in 2050. Most
of these people will end up in
cities, and most of them in cities
in Asia. (In 2008, for the first
time, more people lived in cities
than rurally.) At the moment,
Asia, Africa and Latin America
are enjoying a youth dividend,
while in Europe and Japan, the
population is already aging.
By 2030, according to some
estimates, only in sub-Saharan
Africa will populations not be
aging.
The second contour is the
economic shift toward Asia,
and, more recently, toward
Latin America. The speed of
this has been remarkablethe
Chinese economy, for example,
has grown ten-fold since 1978,
and the economic growth of
China and India alone has
pulled over 700 million people
out of poverty, even while
inequality has increased. This
shift is perhaps best seen as
a re-balancing of the world
economy, back towards the
regional shares seen before
the industrial revolution, but
in a world where resources are
constrained growth increasingly
becomes a zero-sum game.
This suggests that there will
be economic pressure on the
richer worldeven without the
debt overhang from the 2008
financial crisis.
The third contour is finance
everywhere. This trend has
seen financial flows dwarf the
physical value of trade and
production over the last quarter
of a century, during which time
both the size and the profit
margins of the banking sector
have increased vastly. It also
created the conditions for the
financial crash in 2008. One
result has been a huge increase
in inequality. The debt that has
built up in the United States and
Europe could take a decade to
unravel; there may be another
financial crisis waiting in the
wings; and there has been a
sharp polarization of views
about the role of the finance
sector.
Together, these trends have
combined to increase demand
and consumption, creating a
larger global middle class with
more resource-intensive tastes,
such as driving cars and eating
more meat and dairy products.
The trends have also raised
sharp questions about the
nature of capitalism. But they
find themselves coming up hard
against the limits to growth, in
the shape of more expensive
energy, resource shortages, and
pressures on food and water
supplies.
Energy is the fourth contour.
Our societies, globally, are
hugely dependent on oil, but
production of known supplies
is close to peak (or perhaps
already past it), so supply is
likely to start to fall even as
demand continues to rise.
This creates tight markets,
in which prices spikeand
so far, it seems that when oil
goes through the $100-$120/
barrel level (depending on
whose models you use), it
chokes off demand, creating a
start-stop economy. Coal is a
substitute for some uses of oil,
but it produces climate change
effects, and coal reserves
may be lower than estimates
suggest. The long-run under-
investment in renewable energy
in most markets means that
were likely to see an energy gap
in many countries. On the bright
side, however, the investment
in solar is increasing rapidly as
price/performance ratios fall.
The 2020 global landscape
The debt that has
built up in the United
States and Europe
could take a decade to
unravel.
2011 The Futures Company. Some rights reserved.
4
In the longer term, climate
change will become a significant
issue in its own right. Over
the next decade, however, it is
closely entwined with energy,
since the use of fossil fuels for
energy is the largest contributor
to carbon emissions. Issues
such as carbon pricing, for
example, will largely play
themselves out as elements of
energy costs.
The fifth contour of this
future landscape is resource
shortages. The huge rise
in volume production of
computers and phones has
created demand for minerals
which werent valued a quarter
of a century ago, such as
tantalum. The increasing
complexity of modern
appliances and devices means
that a wider range of more
obscure metalsthe so-called
rare earthsare used in their
production to reduce weight
and increase durability. Many of
these are found largely in China.
Urbanization has also increased
demand for familiar resources,
such as copper, platinum,
and even steel. Over time, its
likely that it will be possible to
make substitutes using nano-
technology, but this is unlikely
to happen at scale in a single
decade. NGOs are increasingly
monitoring resource production
for ethical issues about conflict
minerals, in parts of the world
where production subsidizes
regional or local wars.
Food and water constitute
the sixth contour. Whether
or not we can feed the global
population is an increasingly
disputed question. Food
production is still increasing,
but food production per head
is in decline. Traditional food
producers, such as China, are
increasingly becoming food
importers, even while land in
some markets is being turned
over to producing ethanol for
fuel. Extreme weather events
are disrupting production. At
the same time, the proportion of
high-quality agricultural land is
declining. The food price spikes
of 2008 and 2010/11 have led
to social unrest and the collapse
of governments. And behind
the food issues sits a looming
water crisis. Right across the
equatorial belt there are regions
of water shortage, some more
acute than others, and several
coinciding with areas of rapid
population growth. In many
places, for example Saudi
Arabia, non-refillable aquifers
are being drained down, with
inevitable consequences for
food production. In some places
there is the specter of cities
being abandoned because they
have run out of water.
Together, of course, these
trends act as a brake on
consumption, which may
also be true of overuse of the
biosphere, more generally.
Technology is the
seventh contour. Focusing
on information and
communications technologies,
four interlocking stories are
transforming and disrupting
the landscape. The first is the
shift to portable and mobile
devices, principally through the
global growth of mobile, but
The World in 2020
5
Can nine billion people
be fed? Can we cope
with the demands in
the future on water?
Can we provide enough
energy? Can we do it, all
that, while mitigating
and adapting to climate
change? And can we do
all that in 21 years time?
Thats when these things
are going to start hitting
in a really big way.
(Sir John Beddington,
UK Government Chief
Scientist, speech at
SDUK 09)1
http://www.govnet.co.uk/news/gov-
net/professor-sir-john-beddingtons-
speech-at-sduk-09
also through the more recent
shift towards tablet devices,
which is already cannibalizing
computer sales. The second is
the rise of GPRS and mapping-
related technologies, which
make devices local and place-
based. The third is the spread
of embedded sensorsdata
everywherewhich are able
to respond to and collect data
from mobile devices. And the
fourth is data privacy, which
is increasingly a concern of
governments, regulators and
NGOs.
Mobile, in particular, is
an increasingly global
phenomenon. By the end of
2010, there were an estimated
5.3 billion mobile subscriptions
worldwide. Across Asia-Pacific,
mobile penetration has reached
67%. Even in Africa, which lags
in terms of penetration, there
is some striking innovation,
notably around payments. 55%
of Kenyan adults, for example,
are members of the M-PESA
payments system.
The last of our contours is
identity, an unpredictable
response to globalization. As
markets extend, they extend
the range of industrialization
almost everywhere, disrupting
traditional social structures
and cultures. For this reason,
the question of identities is
the canary in the coalmine of
globalization, reasserting itself
in different ways in the face
of more intrusive markets,
adapting to modern forms and
modern technology as it goes.
In the following section,
we provide some deeper
perspectives on these eight
issues.
2011 The Futures Company. Some rights reserved.
6
Source: The Futures Company
Population and
urbanization: a long boom
The long-term increase in the
worlds population has been
striking. In 1800, it was just
short of a billion, and passed
two billion in the 1920s. It
reached four billion in 1974,
and since then has been
adding another billion every
dozen years or so. In 2011, it
will reach seven billion. The
United Nations population
forecast sees these rates of
growth starting to slow again,
reaching eight billion by 2030,
and then, further out, peaking
(or not) at nine billion around
2050, depending on whose
assumptions you believe.
1
There have long been
predictions that the planet
wont be able to support
population growth, whether by
Malthus at the end of the 18th
century or by Paul Erlich in the
1960s. So far, cheaper energy
and technology innovation have
meant that living standards and
the health of the population
have improved sharply. More
recently, the so-called Green
revolution, which increased
food production faster
than population in the global
South, has been driven by the
same combination. The extent
to which these gains have been
made possible by the long-term
boom in cheap energy is a
subject of controversy.
Urbanization has also played
its part. Typically it improves
educational and literacy levels,
and increases the proportion
of women in the workforce.
Together, these three factors
are the strongest influences on
fertility levels, and it is possible
that the rates of growth in
global population will start
to slow sooner. (Relatively
small changes to the fertility
replacement rate of 2.1 children
per family have large effects).
At the same time, more
controversially, it is argued that
increasing urbanization will also
improve sustainability. Stewart
Brand, for example, writes in
Whole Earth Discipline that In
the developed part of the world,
cities are Green mainly because
they reduce energy use, but
in the developing world, the
primary Greenness of cities lies
in their ability to draw people in
and take the pressure off rural
natural systems.
Others say that such gains are
offset by higher living standards
and higher consumption.
The biggest effect of global
population growth, however,
is a huge building boom. Most
of these new people will live in
South and East Asia; one way of
imagining the scale of the urban
boom is that a city the size of
Los Angeles will be built every
three months for the coming
two decades. One significant
effect is that this absorbs global
iron and steel resourcesiron
Increasing
Population
Energy
Squeeze
Identity
Wars
Resource
Pressure
Food and
Water Scarcity
Increasing
Consumption
Shift to Asia
Financialization
Ubiquitous Technology
The World in 2020
7
ore prices are at long-term
highs. Another is that it
increases demand for energy,
for urbanization, infrastructure,
and transportation projects.
The economic shift to the
South: back to the future
The economic shift to the
South, which has been the
dominant world economic story
of the last 20 years, is in some
ways a return to the past. 180
years ago, before the United
States and Europe enjoyed
their industrial revolutions and
colonial powers stripped out
industry in China and India,
Asia was responsible for 60%
of world GDP. While 60% of
the worlds population is now
in Asia, only 28% of global
income is there. China recently
passed Japan, in terms of GDP,
to become the worlds second-
largest economy. Long-term
economic predictions suggest
that China will catch America
within two decades, and that
Europes nations will slide down
the world GDP league table as
emerging economies rise up.
(Such econometric models of
long-term rates of growth are
based on narrow assumptions
that current trends will
continue; they are also under-
informed by ecological limits.)
Chinas role in the East Asian
economy is sometimes
misunderstood. It is perceived
as a manufactory, whereas, as
Philippe Legrain observes, it is
more of a network, managing
the production of goods whose
parts are made across the
region.
As trade barriers have fallen
and technology has made
easier to co-ordinate supply
chains that stretch across
many different companies
in many different countries,
the way in which many
products are made has been
revolutionized. ... An Apple
iPod assembled in China
is made up of a display
from Japan, a multimedia
processor from Singapore,
a central processor from
Taiwan and memory from
South Korea.
2
A critical implication is
that diplomatic and politic
leadership becomes important:
the interlocking trade
arrangements in the region
would be destroyed by regional
conflicts, which is one of the
reasons that China has invested
heavily in the Shanghai Co-
operation Agreement and other
pan-regional organizations.
More broadly, Chinas directed
economy, which follows the
model used for industrialization
by the earlier Asian Tigers,
has undermined, perhaps
fatally, the market-led models
preferred in Washington.
3

Population and development: Virtuous and vicious cycles
When the fertility rates of national populations suddenly fall, it creates a huge economic
opportunity, explains Fred Pearce in his book Peoplequake. It works like this: a baby boom phase
creates significant population growth, and as this generation reaches working age, fertility levels
fall sharply, making a dramatic difference to the balance between the working and the dependent
population. This releases finance for economic investment. As Pearce says, As countries move
from high to low fertility, they experience a period of a couple of decades when demographic
conditions for rapid economic growth are near perfect

Chinas single-child policy created its
economic boom. Asian countries which are currently going through this phase include Thailand
and Vietnam; India could follow, as could several sub-Saharan African states. But demographics
alone dont translate into a boom; countries also need human capital, in the shape of a literate
and numerate population. The best indicator, according to the demographer Wolfgang Lutz, is a
countrys literate life expectancythe average number of years over which people are literate.
Chinas literate life expectancy is now over 50. Indias, at 35, may be too low. Africas is lower,
although they have time to improve it: investment in primary education may be the best growth
strategy. But without the right conditions, the potential energy created by the youth bulge is
often channeled instead into social unrest and political disorder.
2011 The Futures Company. Some rights reserved.
8
But there are constraints
which suggest that the rapid
rates of growth which weve
seen in China and India may
not continue. The first is that
wage costs, certainly of skilled
workers, are rising rapidly
as each country develops its
tradable sector (the exporting
section of the economy). This is
an inevitable part of economic
development, as David Coats
pointed out in a paper for the
Work Foundation. Economic
growth is associated with rising
productivity and rising wages,
so it is entirely reasonable to
anticipate that Chinese and
Indian labor costs will increase
as their economies grow.
The labor cost gap with the
developed world will shrink, just
as it did between developed
countries and the Tiger
economies in East and South
East Asia.
4
One response has
been to move into new, higher
value sectors, learning from
economic partners as it goes.
China is now, for example, the
worlds largest producer of wind
turbines and solar panels.
There are other constraints as
well, ranging from pollution,
water and food production
shortages in China, along
with signs of an asset bubble,
to corruption in India. Both
suffer from profound inequality
(theres a recurring argument
that China needs to generate
around 6% growth to maintain
social equilibrium, and prevent
frequent, under-reported, social
unrest in poorer rural areas).
Similarly in India, inequality is
now a significant social factor.
India may be a middle-income
country, but it still has the
largest concentration of the
worlds poorsome 350 million
people.
Looking forward, one of the
biggest economic questions
is about whether the high
savings rates in much of
Asia will decline, releasing
money for spending and
re-balancing their economies
towards less investment and
more consumption. This is a
question about levels of social
protection; savings rates are
high because people save to
insure themselves against
sickness and unemployed.
There are lessons here from
Latin America, where the more
left-of-centre governments
in the region have reduced
inequality and increased
social protection. Even The
Economist has noticed that
this has been good for the
regions economic stability
and economic development.
This may be necessary if the
world economy is to prosper
in the coming decade, since
the hangover in Europe and
the United States from the
financial crisisif history is
a guidecould have five or
six years still to run. As we
observed in our US MONITOR
report in 2010, economists
China is now, for
example, the worlds
largest producer of
wind turbines and
solar panels.
The World in 2020
9
Carmen Reinhart and Kenneth
Rogoff, in studying hundreds
of financial crises, found that
the period of stagnation after a
crisis was usually as long as the
exuberance which preceded it.
5

Japan may be the best model
for the near-term prospects for
Europe and the USA.
Some are more scathing on the
prospects for the West: Dambisa
Moyo has attracted attention
for her book, How the West Was
Lost, which argues that the West
is in long-term decline, with
too little capital accumulation,
insufficient investment in
skills, infrastructure, and
technical innovation, and little
political will to reverse these.
Without subscribing to her
argument about the need for
strong central governments,
in a more constrained global
economy, growth becomes
more of a zero-sum game.
The Cambridge economist
Robert Rowthorn has recently
suggested that a possible
outcome is significant structural
change in the economies of the
affluent world, with groups of
workers who are exposed to
international competition most
vulnerable.
6
It is possible that
the size of the tradable sector
will shrink because of rising
energy costs. But sitting behind
these structural changes is the
specter of protectionism, trade
wars, and worse.
Finance everywhere, and
the return of political
economy
One of the most striking trends
of the past quarter-century has
been the extent to which the
economies of the rich world
have become dominated by
finance. The trigger has been
a combination of information
technology and deregulation
by governments which believed
that they had tapped into a new
source of competitiveness and
wealth. The speed of transfer,
and its low cost, means that
foreign exchange dealings
outweigh world trade by a factor
of about 60. The flows of the
financial networks represent an
intense form of globalization.
In the UK, Robin Blackburn
has written of this process as
being one of financialization,
in which, following deregulation,
the logic of finance becomes
ubiquitous, feeding on a
commodification of every
aspect of life and the life-
coursestudent loans, baby
bonds, mortgages, home
equity release, credit-card debt,
health insurance, individualized
pension funds.
7
The American economist
Thomas Palley summarizes the
effects of this as follows:
Financialization transforms
the functioning of the
economic system at both
the macro and micro levels.
Its principal impacts are to
(1) elevate the significance
of the financial sector
relative to the real sector,
(2) transfer income from the
real sector to the financial
sector, and (3) contribute to
increased income inequality
and wage stagnation.
8

2011 The Futures Company. Some rights reserved.
10
Global economic scenarios
Following the financial crisis, The Futures Company collaborated with the Institute for
Development Studies to produce a set of global economic scenarios, looking out 10 to 15 years.
The purpose of these scenarios is to help understand and to manage uncertainty, and the
process assumes as a starting point that there are multiple possible futures, not a single point
forecast. Scenarios help to identify strategic issues, opportunities, risks, and pressure points. The
project generated four distinctive scenarios, which are summarized in outline here:
South by South East: China and India continue to drive substantial growth in the Asian
economy, while Europe and the United States are trapped in a lost decade of high
indebtedness and low economic growth.
Western (Re)invention: Politicians in the richer countries run with the Green New Deal as a
way to recharge their faltering economies; at the same time Asian economies slow because of
resource and political challenges.
The Odd Couple: The financial imbalances between China and the United States lock them
together, and China uses the leverage it gains from this to increase its influence in international
institutions.
Rollercoaster: The world moves from using the dollar as its reserve currency to the Eurobut
in an unplanned and unpredictable way. The result is two decades of disruption, protectionism,
and skirmishing.
In terms of identifying uncertainties, it is worth noting a few points from the scenarios analysis.
The first is that although the growth of Asia and Latin America is inevitable, certainly over the next
two decades, the rate of growth is not, and that relatively small differences in growth rates have a
significant impact on the balance of global power.
The second is that although it is increasingly fashionable to write off the prospects for the affluent
West, certainly in the face of what may be a decade spent de-leveraging debt, it is still where much
of the worlds industrial and technology base is to be found. Germany remains the worlds largest
exporter of manufactured goodsby rank; the USA is still the largest manufacturer in terms of value
added.
The third is that the embrace between China and the United States described in The Odd Couple
is essentially unstable, and that when it does start to unravel it could trigger any one of the other
three scenarios. Finally, it is easy to write off the Rollercoaster scenarioand generally in futures
work people push away potential futures which seem less familiar. But the trigger for such a
scenario is more likely to be political than economic; the route to it is likely to involve diplomatic
failures and also failures by international institutions.
These processes extend beyond
the affluent world. There have
been two decades in which
the International Monetary
Fund and the World Bank
have prescribed widespread
deregulation and privatization, in
sectors from health to education
to water, as a condition for
poorer countries seeking its
assistance. The effects have
often been counterproductive.
Some of these privatizations
have been reversed in recent
years, having failed to deliver the
claimed benefits.
The results of all of this extend
beyond economics. The
bank sector is now the most
influential lobbyist in American
and British politics. Elizabeth
Warren, former head of the
Congressional Oversight Panel
looking into the US TARP
program, said last year, The
reason that were not changing
things in Washington is that
the banks have lobbyists in
Washington in numbers Ive
never seen. ... Theyve got their
position papers, and they just
keep slamming in the same
direction over and over and
The World in 2020
11
over.
9
In the UK, former Prime
Minister Gordon Brown said
in an interview, We should
have regulated the banks more
but when the crisis broke and
we looked at the question of
regulation, we were so heavily
lobbied that we didnt do it.
If bankers consider that the
time for apologies for the
excessive risk-taking which
led to their crash and multi-
billion bail-out is over, voters
do not seem to agree. The
neologism banksters has
come into the language since
the crisis. Irelands Fianna Fil
government was humiliated
in the February, 2011 general
election as a result of its
agreement to punishing bail-out
terms.

Rolling Stone journalist
Matt Taibbi, who covered
the financial crisis and its
aftermath, seems closer to
the public mood. He described
the investment bank Goldman
Sachs as a vampire squid and
a huge, highly sophisticated
engine for converting the useful,
deployed wealth of society into
the least useful, most wasteful
and insoluble substance on
Earthpure profit for rich
individuals.
10

One of the consequences has
been thatfor two decades
nownew income has accrued
mostly to the top 1%, notably
in the United States, where
middle-class incomes have
remained flat. Another has
been that the behavior of
corporate executives has
become closer to that of their
peers in the banking sector,
and pay differentials within all
organizations have ballooned,
with little evidence of improved
performance or outcomes.
11

There are, however, many signs
of a response to this surge in
inequality and the proximity
of finance to politicians. There
is a new interest in the effects
of inequality on societies
(for example in the work of
Wilkinson and Pickett
12
and of
Danny Dorling
13
). Regulators
have been more willing to
discuss the social impact of
a large finance sector. The
new economics foundation
has calculated the social
value created by the banking
sector, and found it negative.
14

In the United States, there
is public commentary about
the apparent revolving door
between Wall Street and the
White House, and its impact on
decisions. Even McKinsey has
published an article about the
Ponzi economy by science-
fiction writer Kim Stanley
Robinson.
15
At the same time,
there is more visibility of the
large public subsidies which
banking attracts (for example,
in insurance underwritten by
governments), while proposals
for a financial transaction tax
continue to be promoted by
European leaders.
The need for political change
may be more urgent than
we think. The consultancy
Oliver Wyman has published a
scenario about the avoidable
history of the financial crisis
of 2015.
16
Their scenario has
a plausible combination of
Western finance fuelling a
commodities bubble, punctured
There are systemic
reasons for believing
that we may have
another crisis to
come.
2011 The Futures Company. Some rights reserved.
12
The global financial
networks of the
new economy are
inherently unstable.
They produce
random patterns
of informational
turbulence that
may destabilize any
company, as well
as entire regions of
countries, regardless
of their economic
performance. [Email
from Manuel Castells
to Fritjof Capra, 2000]
when the Chinese economy
starts to slow, leading to the
collapse of development
projects across Asia and Latin
America, and huge asset write-
offs.
There are systemic reasons
for believing that we may
have another crisis to come.
The work of Joseph Tainter
suggests that complex systems
experience decline not as a
slow degradation, but instead
as a succession of failures,
punctuated by periods of
relative calm. As Andrew Curry
and Hardin Tibbs have argued,
One can envisage a future in
which shocks to the political
economy of globalization
overlap with shocks to the
expansion of technology
that has underpinned it, and
with shocks to the overall
energy and environmental
system.
17

Energy: a limit to growth
For a generation, since the
OPEC supply squeeze in the
1970s, it has been an article
of faith among oil producers
and governments alike that
oil resources would be stable
and secure until at least the
2030s. A small dissident
group of early-peak oil
advocates, which argued that
oil production would start to
be squeezed much earlier, was
disregarded by policymakers.
But the oil spike of 2007a
factor in the financial crisis and
the recessions which followed
ithas refocused interest
on the timing of peak oil (the
point at which half of all usable
reserves are extracted). This
matters because once this
moment has passed, especially
as demand continues to
grow, oil markets will become
unstable and erratic, showing
large price rises and falls.
Economic models typically
suggest that once the price of
oil reaches $100 to $120 per
barrel, economies are tipped
back into recession.
The most recent analysis
from the International Energy
Agency, historically optimistic
on energy outcomes, shown
in the diagram, is a cause for
concern. The year of peak
production for existing fields in
production has already passed.
Although it looks at first sight
as if energy supply (oil and
gas) will continue to grow, the
light blue triangle to the right
represents unknown (as yet
undiscovered) reserves of oil,
in an exploration environment
where new discoveries of any
size are increasingly rare.
Even with these production
assumptions, this total output
meets projected demand
from China and India only if
demand from OECD countries
starts to fall. It is perhaps not
surprising that the British
Industry Taskforce on Peak
Oil, a coalition of concerned
businesses, has called for
urgent action to address the
issue of energy scarcity, which it
believes will force an oil crunch
within the next five years.
Meanwhile, Shells latest
energy analysis, published as
Source: International Energy Agency, 2010
Unconventional Oil
1990
0
20
40
60
80
100
m
b
/
d
1995 2000 2005 2010 2015 2020 2025 2030 2035
Natural gas liquids
Crude oil: fields yet to
be found
Crude oil: fields yet to
be developed
Crude oil: currently
producing fields
The World in 2020
13
Signals and Signposts, argues
that the world is entering an
era of volatile transitions and
intensified economic cycles,
partly because developing
nations, China and India
included, are entering the most
energy-intensive phase of their
economic growth. Although
there will be some gains from
efficiency and innovation, these
will not be enough. It foresees a
substantial gap between supply
and demand, which can be
bridged by some combination
of extraordinary demand
moderation and extraordinary
production acceleration.
18

That production acceleration
may come from substitution
into coal, which has damaging
climate change effects, or from
investment in renewable energy,
in particular solar power. There
appears to be some scope for
reducing demand through a
shift in investment towards the
so-called Green Economy,
according to a recent UNEP
report.
There are wider issues here.
The economists David Boyle
and Andrew Simms, associated
with the new economics
foundation in London, connect
the long term energy trends
with a fundamental shift in
transportation and mobility
patterns:
The question is no longer
whether aspects of this
massive localization are
going to happen, with the
accompanying reskilling of
local people to deal with the
new local tasks and roles,
butas fossil fuels become
more expensivewhen it will
happen.
19
Beyond that, there are serious
systemic questions. As Thomas
Homer-Dixon argues, when you
look at the demise of the great
civilizations throughout history,
they start to decline when
they start to run out of cheap
energy, measured particularly
by the energy return on energy
invested. Looking at the
increasing complexity involved
in extracting oil, whether from
Canadas Tar Sands or from the
Gulf of Mexico, as a global oil-
dependent society, we are just
starting to hit that moment of
sharp decline.
Resources and raw
materials: the squeeze for
enough
As economic expansion
continues, especially in Asia
and Latin America, there are
increasing pressures on supplies
of raw materials, particularly
(but not only) of those essential
for advanced manufacturing.
Rare-earth metals are vital to
many of the next generation of
energy and auto technologies,
and demand is rising swiftly.
Currently China produces 97%
of the worlds supply and has
already proved willing to restrict
exports, to benefit its domestic
industry and for diplomatic
leverage.
Shell foresees a
substantial gap
between supply and
demand.
2011 The Futures Company. Some rights reserved.
14
Meanwhile there is a scramble
for lithium around Chile and
Argentina as the demands of
electric car production start to
force up prices. Nissan predicts
that a tenth of cars worldwide
might be using lithium batteries
by 2020.
Growing consumer awareness
around sourcing also places
pressures on other materials,
such as tantalum mined in the
Democratic Republic of Congo,
where demand for mobile
electronics helps support
violence and exploitation. In
the US, the Dodd-Frank Act in
2010 now requires due-diligence
reporting on a range of materials.
There are also emerging NGO
campaigns around ethical
sourcing, such as Enough in the
US and Global Witness in the UK.
These pressures are promoting
a range of responses. One
strategy is to design out
scarce materials: Hitachi, for
example, is developing new
ferrite oxide motors to replace
rare-earth metals. Increased
material efficiencies will become
more important in process
design. Smarter re-use of
materials is also increasing,
with products being designed
to enable product components
to be extracted, and products
to be disassembled or repaired.
Meanwhile, there is increasing
interest in materials which have
already been discarded. The
Japanese, in particular, have
been developing the concept
of the urban mine. It is still
expensive to extract materials
from waste, but systems and
processes are improving.
Nutrients from food waste can
alleviate phosphate shortages;
old phonesounce for ounce
contain 100 times as much gold
as gold ore.
Beyond simply responding
to shortage, nanotechnology
innovations are starting to create
new opportunities. The nano-
materials market is predicted,
perhaps optimistically, to be
worth $100 billion by 2020.
In particular carbon nano-
tubes hold great potential
for miniaturizing circuits and
improving electrical efficiency,
and they offer significant benefits
as a structural and building
material. In other sectors,
nanotech innovations will
complement existing materials,
for instance improving the taste
profile of foods, or even the
bodys ability to absorb nutrients.
Plastic electronics pave the
way for the further expansion
and ubiquitous embedding of
consumer gadgets.
20

Food and water: small
differences, big outcomes
As global populations rise,
and as affluence brings
demand for more varied and
richer diets, the pressures on
agricultural production and
Source: The Enough Project, Getting to confict-free (December 2010)
The World in 2020
15
water availability are mounting,
with an expected 30 to 50%
increase in demand for food by
2030. Indeed the UNs World
Food Program has noted the
increasing scarcity of food is
the biggest crisis looming in the
world.
While populations are
increasing, intensive farming
is causing the degradation of
agricultural land and loss of
nutrients.The World Resources
Institute estimates that 40%
of the worlds agricultural land
is now seriously degraded.
Meanwhile in China, arable
land is decreasing, despite
government efforts, and early
2010 saw a dip in agricultural
output following prolonged
drought. WorldWatch notes that
climate change and increasing
drought are set to reduce
crop yields and raise prices,
sharpening the need for better
crop varieties and heightening
interest in genetically modified
foods and crops.
With interconnected markets,
the effects of environmental
shocks can reverberate around
the world, as seen in the 2008
crisis when wheat prices rose
by 50% and food riots spread,
and again in 2011 when spikes
in the price of food fuelled the
uprisings across the Middle
East. Such calculations are
finely balanced. A relatively
small shift to ethanol
production in the USA has had a
disproportionate effect on world
food markets. And if China had
to import just 5% more grain
to make up for a shortfall, it
would suck up the entire worlds
exports of grain. In the face
of such price challenges and
potential for shocks, careful
attention to supply chains is
needed, particularly with the
prospect of protectionism
and bans on crop exports to
protect national populations.
And on top of this, as the new
middle classes of the emerging
economies shift towards eating
more meat and dairy, their
diet becomes more intensive,
consuming a greater share of
agricultural resources.
Similar political forces can
be felt around water. In 2010
the UN passed a resolution
making access to clean water
and sanitation a fundamental
human right, increasing political
awareness of water issues.
The increasing
scarcity of food is the
biggest crisis looming
in the world.
Projected Water Scarcity in 2025
Source: International Water Management Institute
2011 The Futures Company. Some rights reserved.
16
Physical water scarcity
Economic water scarcity
Little or no water scarcity
Not estimated
Indicates countries that will
import more that 10% of their
cereal consumption in 2025.
Note:
Physical water scarcity
Economic water scarcity
Little or no water scarcity
Not estimated
Indicates countries that will
import more that 10% of their
cereal consumption in 2025.
Note:
Water has already caused
political disturbances and
strikes in India and China. In
the latter, over one-third of
water has been contaminated
and is unsuitable for either
agriculture or industry. In
such regions, water is the
leading factor in creating
unsustainable bio-systems.
The Earth Policy Institute says
that, in many parts of the world,
non-renewable underground
aquifers are being drained
to maintain existing food
production levels.
Indeed, the United Nations
Food and Agricultural
Organization predicts that by
2025, two thirds of the worlds
population could be living in
conditions of water stress.
Water is often overlooked as an
issue in the richer world, since
much of the water consumed in
such countries is embedded in
products imported from other
countries. Theres 140 liters
embedded in a cup of coffee,
and 2,700 liters in a cotton
t-shirt, for instance, most of
which has come from an area
of water stress. As this remote
water becomes scarcer, the
politics of embedded water will
move up the social and political
agenda.
Technology: deepening,
not accelerating
It is easy to be overwhelmed by
the sheer volume of data about
technology. There are 5.3 billion
mobile phone subscriptions
worldwide; and more than 16
billion text messages sent every
day. Facebook has 600 million
members and the 10 billionth
Apple app was downloaded
this year. Over 350,000
apps are available via Apple,
over 150,000 via Android.
Cumulatively, it seems that
the digital space is speeding
up. But this is deceptive. In
affluent markets, penetration
of digital devices has reached
maturity (even saturation) and
in Asian and Latin America, it is
getting there quickly. There are,
increasingly, questions about
whether Moores lawthe
prediction, effectively, that the
performance to price ratio of
integrated circuits would double
every two yearswhich has
been a reliable guide to industry
dynamics for four decades, is
beginning to reach its limits
as production reaches the
molecular scale.
Some theory might help.
The Futures Companys
perception is that information
and communications
technologies are deepening,
not accelerating. Our thinking
has been influenced by the
work of the economic historian
Carlota Perez, whos tracked
five long phases, or surges, of
technology innovation, going
back to 1771. Each phase runs
for 50 to 60 years and follows
a common pattern (as can be
seen in the diagram). Theres
an installation phase, in which
the new technology platform
spreads in visibility and usage
(device penetration increases,
underlying infrastructure is
developed). Theres a bubble
and a crash, in which investors
get over-excited about the
prospects. And then theres a
deployment phase, in which
The World in 2020
17
the applications associated
with the technology platform
deepen and broaden, and the
underlying impacts on society
become more profound. The
ICT surge started in 1971,
with the invention of the
microprocessor. Weve finished
the installation phase, weve
had the crash (dot.com, not
global financial crash, though
the two may be linked), and
now were several years into the
deployment phase.
Taking an analogy from the
previous wave, the installation
phase was the period during
which roads were built and
car technology became
cheaper; in the deployment
phase, cars became mass
consumer items, suburbs
and edge-of-town retailing
developed, and demand
encouraged intensification of
the infrastructure (for example
the development of freeways).
In terms of ICT, what we can
expect to see over the next
two decades is continuing
innovation. Says Perez,
Installation periods,
and especially bubbles,
bring the system to
extreme individualism
and callousness; bubble
collapses and the ensuing
Deployment periods tend
to bring back the balance
and put the accent on the
common good.
21
We can see some of this being
played out already. While the
mobile phone is, on the face
of it, the most individual of
technologies, it is also the
most networked. The advent
of GPS puts the emphasis on
place as much as people, and
the development of sensor
technologiesembedded
intelligence everywhere
compounds this, using the
cumulative impact of location-
based phones to create public
data about our environment
even while they are providing
individual services. It is said
that monitoring GPS data
from mobiles travelling in their
owners cars already gives a
more reliable picture of traffic
congestion than the roadside
installations which have been
typically used previously. The
most profound effect of digital
technology over the next
decade may be to rethink the
way we manage our cities. And
cutting across all of this, like
a fault line, there is increasing
concern about privacy, a
triangle of tensions between
individual users, private
commercial interests which
wish to market to them, and
public providers which wish to
aggregate anonymous data for
public purposes.
Identity: the networked
olive tree
In the first of his three books
on globalization, The Lexus
and the Olive Tree, Thomas
Friedman uses the olive tree
as a symbol of identity: it
represents everything that
roots us, anchors us, identifies
us and locates us. Like much
of Friedmans writing, it is
too simple. Issues of identity
have become sharper as a
The Long Phases of Technology Development

Source: Adapted from Carolota Perez, Technological Revolutions and Financial Capital:
The Dynamics of Bubbles and Golden Ages (Edward Elgar Publications, 2003)
2011 The Futures Company. Some rights reserved.
18
result of globalization, but this
has been shaped by changes
in technology as well as
economics.
One of the striking features
of the past 15 years has been
the way in which electronic
networks have reinforced links
of language, history, and culture.
The conventional wisdom
was that the combination of
the internet and globalization
would flatten these, spreading
English universally. The
process of convergence, wrote
Kenichi Ohmae, goes faster
and deeper. It reaches well
beyond taste to much more
fundamental dimensions of
worldview, mindset, and even
thought process. The digital
utopian Nicholas Negroponte,
wrote in a similar vein: Like
a mothball, which goes from
solid to gas directly, I expect
the nation-state to evaporate.
But there are dangers in this
Davos world-view, in which
autobiography is represented as
sociology. The briefest of looks
at Wikipedias many languages
is enough to realize that the
internet has allowed cultures
and languages to reassert
themselves. This had already
started before the invention of
the world wide web, but cultures
can now project themselves and
connect. Financial flows are also
relevant: diasporas in wealthier
areas send money home in vast
quantities: everywhere but sub-
Saharan Africa, these informal
financial flows are greater than
development aid.
So it is worth unraveling this
knot. It is obvious, firstly, that
the increasing scale and form of
industrialization which the most
recent wave of globalization
represents, within societies
and between them, will disrupt
traditional social forms. As John
Gray writes, The imperatives
of flexibility and mobility
imposed by deregulated labor
markets put particular strain
on traditional modes of family
life.
22
Manuel Castells, in the
second volume of his huge
study, The Information Age,
explains it this way: When the
world becomes too large to be
controlled, social actors aim at
shrinking it back to their size
and reach. When networks
dissolve time and space,
people anchor themselves in
places, and recall their historic
memory.
23

What is different is that those
places, and those historic
memories, are both virtual and
physical: one can be connected
globally without becoming
globish. While the nation-state
appears to be weakening, some
of the most effective forms
of identity are associated
with imagined nations and
cultures which never managed
to achieve modern statehood,
such as Catalunya, the Basque
provinces, Qubec, Kurdistan,
or Scotland. Constructed
While the mobile
phone is, on the
face of it, the
most individual of
technologies, it is also
the most networked.
The World in 2020
19
identities tend to be effective
at using networks to build links
with other, similar, communities.
And while the nation-state is
now generally less successful
at promoting identity, at least
outside of sport and tourism,
this may change with recession.
Some of the most toxic forms
of identity combine resistance
identity with national symbols.
One limit is that, as John Urry
argues, most societies are
not nations, let alone nation
states (the huge population
of overseas Chinese is an
example)
24
. And identity is not
either/or. People are more
likely to see their identity
as both/and; Catalan and
Spanish and European; more
than half of those living in
Scotland think of themselves
as Scottish and British. People
are more subtle than elites give
them credit for in constructing
their cultural communities.
From an economic and political
perspective, though, this has
ramifications, largely through
the way that civil society is
constructed. Identity always
takes a social form. In the post-
war period, certainly in Europe
and the US, dominant civil-
society organizations tended to
The limits of globalization
At the height of the enthusiasm for globalization in the 2000s, Thomas Friedman explained
how globalized trade, outsourcing, supply-chaining, and political forces would flatten the
world, changing it permanently, for both better and worse. Friedmans view was common in
the last decade of the 20th century, when many believed that globalizationthe process by
which regional economies, societies and cultures become integrated through global networks of
communication, commerce and transportationwas inevitable.
Lately, however, the argument for an ever-more interconnected world has started to look thinner.
A wide range of thinkers and commentatorsfrom John Ralston Saul and Ha-Joon Chang to Will
Huttonhas begun to question whether the global economy can continue indefinitely to become
more interconnected.
A range of weak signals suggests that globalization may not continue unabated:
Globalization has retreated in the past: by some measures, levels of economic
interconnectedness are lower today than at the outbreak of WW1.
The global financial crisis demonstrated the instability inherent in a complex, networked
global financial system, while recent spikes in the price of various basic food commodities are
reminders that the integration of global markets carries risks as well as opportunities.
The current global era has been fuelled - literally - by abundant sources of energy especially
cheap oil. This made possible cheaper, quicker travel and wider trade than ever before. But as
the cost of energy rises in future, so too will the cost of moving goods and people. Put simply,
being physically connected will become more expensive.
Climate change could also constrain global interconnectedness. The economic impact of
continued climate change on agriculture, our built environment, ecosystems and human
health will be significantand in many cases, the response is a turn towards greater
localization of production and consumption.
The risk of global pandemics is exacerbated by widespread international travel. So far, we
havent had a pandemic that has been destructive, but health professionals regard this as
likely. Restrictions on travel would almost certainly follow.
The future is never a simple extrapolation of the present. Steins Law reminds us that, Things
that cant go on forever, dont. The globalizing boom of the past generation seems likely to come
into this category.
2011 The Futures Company. Some rights reserved.
20
be aligned with economic and
political institutions (political
parties, trades unions). Now
they are not; they are far more
likely to be oppositional, and
also more likely to be connected
internationally.
25

Uncertainties
A trend is a trend is a trend,
until it bends, says the
futurist Ged Davis. His point
is that trends dont continue
unchecked. Eventually, they
create a response, and its in the
interplay between trends that
new markets open up and new
risks emerge.
There are some relative
certainties embedded in the
big trends which will shape the
world over the next decade,
but there are also some
uncertainties, where several of
the trends collide or combine.
As part of the research for this
paper, we used a number of
futures tools to identify the
spaces which appeared to
represent distinctive changes
to the business environment,
and therefore also created
new challenges for business
managers. These are developed
in the next section.
The World in 2020
21
The business challenges
The world which emerges over
the next decade and beyond is
one with some hard constraints
(especially around resources),
some soft opportunities
(for example the changing
shape of consumer markets,
technology), and some factors
which are ambiguous, such
as identity. Often businesses
look at such dilemmas and
trade them off. Indeed, this is a
normal response in corporate
culture, which is often based
around negotiation and internal
compromise between important
internal and external players.

Dilemma theory, developed by
Charles Hampden-Turner and
Fons Trompenaar, originally to
deal with cultural conflict within
organizations, suggests that
rather than either/or trade-
offs, both/and outcomes can
be found which reconcile the
differences and create more
value, opening up new spaces
for innovation. Indeed, such
dilemmas often pit hard edges
against softer dangers: as
Hampden-Turner puts it, the
rocks of Scylla on the one hand
with the whirlpools of Charybdis
on the other.
In this section, therefore, we
explore the business challenges
posed by the trends, and some
of the opportunities that they
represent.
Listening to new
consumers
The changing economic
environment opens up the
prospect of different types
of customers; a new middle
class across much of Asian
and Latin America, and debt
constrained consumers in
Europe and the United States,
who expect to see greater
value in their exchanges with
businesses. Globally, the costs
of basics (such as food and
energy) are far more likely
to rise than fall over the next
decade, so discretionary
income will be squeezed, even
in those markets showing
continuing economic growth.
In the richer countries, the
experience of recessionand
some of the more unscrupulous
pre-recession corporate
behaviorcreates demands
for more social behavior from
businesses. The academic
Michael Porter has written
about shared valuesome
way from his original company-
focused work on the creation of
valueand the challenge this
represents to the financially-
driven perspectives which have
dominated businesses for the
past generation:
How else could companies
overlook the well-being
of their customers, the
depletion of natural
resources vital to their
businesses, the viability
Dilemma Theory
H
a
r
d

C
o
n
s
t
r
a
i
n
t
s
Soft Edges
Trade Off
X
(10,10)
Source: Fons Trompenaar, Riding the waves of culture, Valencia 2008
The future belongs
to the meaning
organization
which sets out to
build authentic
prosperity.
2011 The Futures Company. Some rights reserved.
22
of key suppliers, or the
economic distress of the
communities in which they
produce and sell?
26
From a different background,
the business critic Umair
Haque argues that the future
belongs to the meaning
organization which sets out to
build authentic prosperity. As
he writes in a blog post to mark
the publication of his book, The
New Capitalist Manifesto,
Companies are going to
have to get lethally serious
about having an enduring,
meaningful, resonant,
multiplying, positive,
proliferating set of impacts
of all types, whether social,
human, intellectual, spiritual,
creative, or relational. An
isolated notion of profit
is obsolete: its an arid
industrial-age conception
of a currency-focused
construct thats built to
trivialize everything but what
a firm owes its owners.
27

Some of the questions asked
when businesses develop
products and services for the
worlds poorer consumersif
they have so little, what are
we offering that is worth their
spending on?are relevant
here, too. The dilemma is
about providing more value
without being bankrupted
oneself; resolving it may involve
different types of service
design, different materials, or
different calculations about
the worth of lifetime customer
value. But also expect to see
more innovation from the
South coming into Northern
markets. It is only a matter of
time, for example, before low-
cost products such as the Tata
Nano car, or unlocked versions
of Huaweis $100 Android
Smartphone, find their way into
these markets. Tata, of course,
owns Jaguar and Land Rover in
the UK.
Finding new ways to create
value with your customers may
involve more intelligent use of
data. The trends point toward
a world in which companies
are drowning in data, butlike
Coleridges The Rime of the
Ancient Marinerare unable
to touch any of it because of
regulation or privacy concerns.
But sometimes the most
effective way to utilize a rich
sea of data is not to target an
individual but to understand
the shifting flows and eddies of
the mass. And theres another
resolution to this dilemma
which fits well with the idea of
the meaning organization.
Rather than semi-covertly
collecting data exploiting
consumers carelessness about
opting out, you create a data-
sharing proposition that makes
consumers want to opt in.
Producing for scarcity
A second dilemma is between
the developing energy and
resources constraints and the
need for businesses to be able
to continue producing and
managing goods and services.
Companies have already
started to reduce their energy
consumptionit is, invariably,
The World in 2020
23
one of the early gains of
corporate sustainability
programs. Increasing energy
prices will make businesses
focus harder on this. But in an
environment where power cuts
are likely to be increasingly
common in the affluent
world, resilience will be more
important than energy saving.
Building and managing local
capacity in renewable energy
will be an increasingly important
part of operational planning
and facilities management. This
also represents an opportunity
for businesses to engage more
widely with their communities.
Resource pressures create
similar problems for both
cost base and supply chain,
but with greater scope for
innovation. In the short term,
it is possible to reduce the
amounts required. This is
already happening, for example,
in response to potential and
actual shortages of rare-earth
materials. GE, for example,
has been monitoringresource
issues for a number of years.
Its foresight meant that it
has, over the last three years,
developed ways to capture the
metal grindings previously lost
during manufacture, recapture
rare metals, and develop new
alloys.
28

These are the early wins in
resource management. Beyond
this, there is potential both to
design materials out of use
in products, and to make it
possible to reuse materials
(here design for disassembly
helps). There will be innovation
in new materials, initially
through nanotechnology, and
later (in the 2020s and beyond)
through biotechnology. And
theres also significant scope for
shifting from selling products
to managing services, using
ICT to manage provision and
delivery. This is a model first
developed in Jeremy Rifkins
book The Age of Access, and
most recently popularized by
Lisa Gansky as the mesh. Data
and social networks become
a vehicle to organize access
to something without needing
to own it. Gansky states, The
Mesh has emerged as the
best new creative engine for
getting more of what we want
when we want it, at less cost
to ourselves and the planet.
The car-share scheme, Zipcar,
is one of the most prominent
examples of this trend. In the
services sector, we are also
seeing companies incentivize
their customers to use less by
sharing the gains with them,
a trend sometimes known as
collaborative consumption.
Beyond this, the model of
cradle-to-cradle beckons,
or closed-loop production, in
which producers create an
industrial ecology of linked
producers: any by-products
from a production process
either go back into the land
as a bio-resource, or become
a raw material for one of their
industrial ecology partners.
It is an attractive model, and
far more sustainable, but it
requires a deep reorganization
of industrial and business
systems, focusing much more
intently on material flows.
29

While it may take 25 years or
2011 The Futures Company. Some rights reserved.
24
more to become a mainstream
model, companies which
pioneer this are likely to find
that they have developed a
resistance to shock which
allows them to outpace their
competitors.
We expect interest in these
issues to be accelerated
by the arrival of full-cost
accounting models, which
extend the balance sheet
to include the costs which
businesses currently dump
on their neighbors and their
environment. These accounting
standards already exist, and
we will start to see elements
of them coming into corporate
reporting over the decade,
certainly in some markets.
Indeed, one of the sharpest
trends in the wake of the
financial crisis has been the
widespread emergence of
arguments for new ways of
measuring economic and
business performance.
Capitalism versus capital
A wider question is whether
the interests of business
are promoted by finance.
Capitalism, perhaps, is no
longer well served by capital.
This is part of a broader
question about the idea of
efficient markets, which has
been used as a justification for
continuing deregulation of the
financial sector, and has created
a false dichotomy between
markets and the state. Efficient
markets, notes Joseph Stiglitz,
can still produce socially
unacceptable outcomes.
Governments havent helped
here, placing themselves in
the same ideological trap.
As Porter and Kramer note,
The presumed trade-offs
between economic efficiency
and social progress have been
institutionalized in decades
of policy choices. In practice,
whether a good is produced by
the market or the state is down
to particular circumstances
and particular contexts. For
example, Taiwanese and South
Korean steel mills, government-
owned, were more efficient
than privately-owned US
mills. Good social protection
systems can make it easier
for private businesses, and
their workforces, to adjust to
external change.
30
Diane Coyle
observes that there is no right
place for the boundary between
the public and private sector,
or between markets, firms,
or other kinds of collective
institutions.
31

The financial crisis has
re-opened these questions,
and resources pressures
add another twist. In times
of shortages, politicians and
regulators are more likely to
impose restrictions on markets.
This is often seen as a simplistic
alternative, but there are many
ways in which markets can be
restricted without requiring
public control.
Historically, markets are
complex affairs which balance
the interests of competing
claims, and allow economic
and social uses to be balanced.
Land is a case in point. Barbara
Heinzen makes a valuable
distinction between column
rights and mosaic rights
in land ownership. Column
rights are those framed by
economic rights, where an
owner has access to all the
rights associated with a piece
of land (including the air above
and the minerals below), and
can dispose of the property
as they choose. Mosaic rights,
instead, give different groups
overlapping rights of use and
access to the land.
32
Such
issues are already live business
issues. For example Coca-
Cola states thatafter some
operational difficulties in the
pastin countries experiencing
water shortage it designs its
water use in such a way that it
doesnt compromise water use
by local communities.
Beyond markets
Whether regulators choose to
constrain markets or not, they
are likely to be increasingly
contested as mechanisms for
sharing scarce resources. One
of the strongest themes which
emerged from our analysis of
the drivers was justice with
everything, which appeared
repeatedly in response to
resources and security. This is,
essentially, an issue about the
Whether a good
is produced by the
market or the state
is down to particular
circumstances and
particular contexts.
The World in 2020
25
fairness of market outcomes
between different members of
society, and between societies.
Sustainability brings a third
type of outcome into sharp
focus: the balance of outcomes
between present and future
generations.
The first two issues can
be resolved, generally, by
combinations of limits on
markets, rights and regulation.
In contrast, mechanisms for
representing the interests of
future generations, are almost
completely absent from
business or political processes.
And conventional cost-benefit
analysis is very poor at
representing such interests
in financial modeling; modest
discount rates obliterate the
value of investing in the interests
of the future.
But the economics of
sustainability suggest that this
will change quickly. As Diane
Coyle writes in The Economics
of Enough, The question is
how, as a matter of morality, we
should include people in future
generations when we make
decisions about consuming
environmental resources now.
Hungaryso far uniquely
already has a Parliamentary
Commissioner for Future
Generations. Businesses will
increasingly need to be able to
show that their decision-making
processes have allowed for the
very long term, and legislative
and accountancy codes
will start to be designed to
represent it in todays decisions.
In other words, then, how
do businesses ensure that
stakeholders who are presently
invisible to themthey may not
even be bornare represented
in todays business decisions?
It is a long way from the current
environment, at least in the US
and the UK, where shareholders
whose interest is short-term and
speculative can have a decisive
influence on a takeover battle.
Accounting-based models will
not be enough. But governance
which takes account of such
long-term value asks questions
of a business which should
make it far more resilient.
The return of land and
labor, and the old
economics
Finally, one way of thinking
about this new business
landscape is to go back to
some of the early ideas about
economics, namely that an
enterprise was obliged to
combine resources of land,
labor, and capital to produce
their goods. By the middle of
the 19th century, land was less
important, and labor more so.
(The publication of Marxs Das
Kapital was one sign of this
shift.) By the last quarter of the
20th century, a combination
of globalizing economies
and increasingly widespread
communications technology
had all but eliminated the
significance of labor to the
enterprise. Capital became the
only factor of production worth
worrying about, and the corridor
between the CEOs and the
CFOs offices was the only place
worth being seen.
But in the last decade and
the next one, land and labor
are re-emerging as important
factors of production. In the
case of land, it is increasingly
represented by the raw and
processed materials that are
harder, and more expensive,
to extract from itfossil fuels,
water, minerals and so onas
well as biosphere resources and
eco-system services.
In the case of labor, the
pressures have been slower to
develop, but they can be seen
in a number of different ways.
These include: the changing
attitudes of Millennials to work
as a source of status (it is a less
important part of their identities
than for earlier generations);
the increasing wages being
commanded by workers in
former low-wage economies,
which is an inevitable part of
economic development; and
the increasing understanding by
businesses of the role of people
in the increasingly difficult task
of creating value from complex
and ambiguous knowledge.
Suddenly the Operations
Director and the Human
Resources Director have to join
the conversation, along with
recent C-suite additions such
as the Chief Talent Officer and
the Chief Knowledge Officer.
Following close behind, perhaps,
will be the CXO - the Chief Ethics
Officer.
Land and labor
are re-emerging as
important factors of
production.
2011 The Futures Company. Some rights reserved.
26
The business of 2020
We know, because weve
been told often by academics
and business consultants
over the past two decades,
the characteristics of the
businesses of the future. They
will, we read, be responsive,
adaptive, flexible, agile; all words
which are rarely associated
with the large production-
driven corporations of the 20th
century.
These may be necessary
characteristics, but the
argument of this section is that
they are not enough in the face
of the world of 2020. Some are
only symptoms of a deeper
change. It is worth developing
this point. Many of the changes
urged on businesses have come
from people who are over-
influenced by the twin drivers
of economic globalization and
technology, and are largely
blind both to external resource
issues and to how organizations
acquire, develop, encode and
retain knowledge, and to how
businesses interrogate their
external environment for signs
of change.
Responding to the changing
global landscape described in
this report will require different
characteristics and different
perspectives. Organizations
are more than temporary
associations of individuals. The
economic rationalefor which
Ronald Coase won a Nobel
Prize in Economicsis that
they reduce the transactional
costs of doing business;
individuals can share ideas
and set up projects without
having to go through the
time-consuming processes of
reaching agreements on how
to do business together. But
this is a narrow instrumental
perspective. They are much
more than this. In his fine
book The Origin of Wealth, Eric
Beinhocker reminds us that
organizations are complex
social systems. They have goals;
they maintain boundaries;
they are purposeful social
constructions.
33
So if they
are to survive in the face of
increasing turbulence, they
need characteristics which
are designed to maintain the
integrity of the organization
while being open to external
change.
The three characteristics of the
organization that will thrive in
2020 are explored below: that
it has struck a balance between
efficiency on the one hand and
organizational sustainability
on the other; that it is able to
match changes in the external
environment with changes
in its ability to interpret that
environment; and that it is able
to maintain its organizational
boundaries while being open
to new sources and resources.
These three tasks are laid
out in the schematic, and are
summarized here under the
headings of:
Managing for resilience
Managing for variety
Managing porousness
The World in 2020
27
(a) Managing for
resilience
One of the biggest lessons from
the financial crisis in the US
and the UK was that tightly-
coupled complex systems are
likely to fail. There are too many
dependencies and too little time
to make corrections when one
element starts to malfunction.
Many modern supply chains
are similarly tightly-coupled;
it is almost a requirement
of the just-in-time supply
chains favored by modern
corporations for reasons
of cost-management and
customer-responsiveness. Such
systems prioritize efficiency
over resilience. This has worked
because resources have been
plentiful, and because they have
been able to exercise significant
control over their operating
environments. But in pushing
for more efficiencies, they
have reduced resilience and
increased brittleness. During
the banking crisis, for example,
the banks simply snapped
when the external conditions
changed. Many would have
been out of business as quickly
as Lehman Brothers had it
not been for billions of dollars
of federal bailouts. But it is
not just true for the banking
sector. During the volcanic
crisis in early 2010, gaps started
to appear in food systems.
Indeed, Andrew Simms of the
new economic foundation has
written an essay arguing that
the food system is so vulnerable
that we are, in his words, nine
meals from anarchy.
34

If too much efficiency can
spell disaster, too much
resilience means stagnation. An
interesting paper by Bernard
Lietaer and others argues
that human systems such as
businesses need to learn from
the way in which ecological
systems balance efficiency and
resilience. They keep the two in
balance, but prioritize resilience
over efficiency: resilience is
roughly twice as important than
efficiency at the optimum. The
window of viability is strikingly
small.
At the moment, however, even
if businesses are starting to
move towards more sustainable
business models, finance
and governance, certainly in
the Anglo-Saxon business
cultures, are still pulling
towards efficiency. Short-
termism is one symptom of the
imbalance towards efficiency
over resilience, and in turn
it worsens the balance. As
McKinseys Global Managing
Director Dominic Barton wrote
in Harvard Business Review
recently, If the vast majority of
most firms value depends on
results more than three years
from now, but management
is preoccupied with whats
reportable three months from
now, then capitalism has a
problem.
35
This is not the
case everywhere, for one of the
strengths of Asian businesses
so much so that it represents a
competitive advantageis their
willingness to take a longer view.
(b) Managing for variety
The second feature of the
thriving business of the 2020s
is its ability to understand
the level of variety in its
external environment, and
how to monitor it, manage it,
and respond to it. It is worth
backing up here for a moment,
since variety is a technical
term drawn from cybernetics,
popularized in the business
literature by Stafford Beer.
Sustainability
100%
Diversity & Interconnectivity
Window of Viability
Optimal Balance
Greater
Efficiency
(streamlining)
Greater
Resilience
Towards
brittleness
Towards
stagnation
Real-life
ecosystems
Source: Lietaer et al, Is Our Monetary Structure a Systemic Cause for Financial Instabil-
ity? Evidence and Remedies from Nature. Journal of Futures Studies, March 2010
One of the strengths
of Asian businesses
is their willingness to
take a longer view.
2011 The Futures Company. Some rights reserved.
28
The notion of variety comes
from the systems work of
Ross Ashby in the 1950s,
who observed in his Law of
Requisite Variety that only
variety can absorb variety.
In other words, organizations
need to match internally the
variety they encounter in their
external environment. This is
not something that happens
automatically. Instead, it is
done through a combination
of an organization first
attenuating or reducing
signals from the environment
to simplify, thus reducing the
level of variety which needs
to be understood, and then
amplifying or increasing its
signals back into the external
environment, thereby boosting
its own variety.In practice, most
management processes, in both
the commercial and the public
sectors, can be understood as
being about strategies which
are designed to manage variety,
whether simplifying the external
environment (thus reducing
variety) so that it can be better
understood and acted upon,
or increasing responsiveness
(thereby increasing variety).
Segmentation, for example,
reduces the external variety of
millions of customers to a much
smaller number of customer
types. Channel management,
similarly, reduces the ways
in which a business hears its
customers so it can process
their requests more effectively.
Innovation is usually designed
to increase variety (for example
through product extensions),
and business strategies such
as mass customization
effectively enabling the
customer to personalize their
experience, but from a limited
range of choicesare a classic
example of managing variety.
Looking at the drivers, external
variety seems certain to
increase sharply. Businesses
which are not able to absorb
and process this increased
external variety will suffer.
Organizations need to think
of this as a whole cycle, an
overall system of exchanging
information between the
external environment and
the organization. This creates
proper focus on the whole
chain of the activities involved
in processing whats going on
in the external environment,
understanding it, and
responding, learning as you go.
Sometimes, in response to
external changes, organizations
will change the way they
manage variety by increasing
their ability to manage
complexity. For example,
recent innovations in service-
design models have moved
away from having front-line
staff handle calls according to
strict time-based and process-
based parameters, to letting
them resolve the whole issue.
This increases variety initially,
and takes more time, but
reduces time and cost later on,
as the work of John Seddon
demonstrates.
36
The one option that is not
viable is ignoring changes in
the complexity of the external
One option that
is not viable is
ignoring changes
in the complexity
of the external
environment.
Organization
Information
Amplify
Attenuate
External
Environment
Source: Adapted from Stafford Beer, Doagnosing the
System for Organizations, Wiley, 2003
The World in 2020
29
environment. As Stafford Beer
once wrote, The lethal variety
attenuator is ignorance. In
other words, what you dont
know can kill you.
(c) Managing porousness
Organizations, as noted above,
have boundaries. They have
edges which delimit where they
end and their environment
begins, even if that edge
sometimes becomes blurred.
Without edges, they would
no longer be organizations,
but open networks. And there
are constant flows across
those boundaries, a constant
exchange of money, goods,
services and information,
between the organization
and its customers, suppliers,
regulators, legislators and
neighbors.
The edges, therefore, already
have doors. But when the
external environment is
changing rapidly, they need to
exchange more, in particular,
knowledge about methods,
processes, ideas, behaviors,
worldviews, systems and
business models. The concept
of porousness, adapted
deliberately from natural
sciences, deals with how this
happens.
The pervasive metaphor of
business has been about
organizations as machines.
But this is unhelpful, for
organizations are also living
systems, Academic Karl Weick
says organisations are in the
business of producing meaning,
and in such a way that these
meanings continue beyond
the life of their founders.
37
In
Hidden Connections, Fritjof
Capra observes that while a
machine can be controlled, a
system can only be disturbed.
38

Porousness is about helping to
create disturbances.
When environments change
and organizations dont,
they become meaningless.
Porousness creates the
opportunity to engage with
new meanings, to explore
them, to develop them, to
provoke, without destroying
the reasons why organizations
exist in the first place. In
practice, organizations arent
good at this. Art Kleiners rich
counter-cultural business
history, The Age of Heretics, is
a history of people disturbing
their organizations with new
practices and ideas.
39
His
metaphor of the heretic is not
a careless one. In the corporate
environments of the second half
of the 20th century, few of them
turned out well, even where the
protagonists could show that
their approach produced better
outcomes for the organization.
(And most of their ideas have
now reached the business
mainstream).
The notion of open knowledge
has started to create some
porousness in terms of ideas.
A number of companies
from Procter and Gamble
and beyondhave developed
approaches to innovation based
on sharing information and
ideas with people outside of
their businesses. Silicon Valley
prospered, while Route 128 did
not, because of the informal
exchanges between engineers
from different companies who
socialized away from work. (The
Explaining requisite variety
Stafford Beer used examples from the world of police and crime to explain the idea of requisite
variety. To use a simple, if extreme, example, a police force could reduce the level of crimeand
the level of variety in its external environmentif a citizen was always accompanied by a police
officer, although the police force would be very large and the society very poor. But in practice,
this is not how policing is managed. Instead they reduce external variety by grading crimes
by their level of seriousness, while increasing their own internal variety by deploying cars and
helicopters, employing community officers (without the full range of responsibilities of police
officers) and using surveillance technology such as CCTV cameras.
A machine can be
controlled, but a
system can only be
disturbed.
2011 The Futures Company. Some rights reserved.
30
east coast Route 128 computer
companies were more
corporate and more closed).
40

There is evidence that open,
commons-based, knowledge
approaches tend to produce
greater commercial and social
value than closed ones, even if
the music and film industries,
or politicians, dont appear to
understand this yet. But then,
we also know that innovation
is more likely to happen at
the edge of the organization,
away from the corporate
centre, where the pressures of
acculturation are less keenly
felt.
41

There is a consequence here for
human resources. Organizations
tend to discriminate against
individuals whose resumes
are full of change. As Mary
Catherine Bateson points out,
such people show resilience,
and creativity, the strength
to produce new learning.
She adds, Quite a common
question in job interviews is,
What do you want to be doing
in five years time?. Something I
cannot now imagine is not yet a
winning answer.
42
Porousness is partly about
welcoming the strange and
different, and finding ways
to do this so you can absorb
difference, rather than reject it.
But there are some easy wins:
validate staff who network
outside of the business;
welcome those who seek
career breaks; and encourage
returners whose work or travels
elsewhere can let them, as they
return, see your place as if for
the first time.
In practice, however, large
complex systems such as
organizations tend to respond
to threats and changes in
completely the opposite way, by
increasing their span of control.
As Thomas Homer-Dixon writes,
When we try to manage
serious threats to our well-
being, we usually create new
organizations, institutions,
and procedures rather than
reforming those that already
exist. ... Too often, though, this
strategy simply adds another
layer of complexity on top of
an already cumbersome and
dysfunctional management
system. So, over time, our
mechanisms for dealing with
a more volatile world become
more rigid and susceptible
to catastrophic failure when
exposed to severe stress.
43
In effect, we deal with increased
complexity by creating systems
which are more complex,
more rigid, and more tightly
connected, even though this
is setting up the conditions for
a later disaster. Instead, we
should be increasing simplicity,
building buffers, and soft
boundaries so we can absorb
change slowly instead of being
overwhelmed by it.
The World in 2020
31
The hard truth about the next
10 years, and probably beyond,
is that it will be harder for
businesses to make money than
it was in the last two decades.
This conclusion is inescapable,
looking at the big global trends
and their consequences.
The scope for continuing
growth is limited, first, because
of the constraints that
increasing population growth
places on resource use, whether
of energy, food or materials. We
are already in deep ecological
debt. These constraints mean
that, to an increasing extent, the
economic gains made by Asian
and Latin American countries
come partly at the expense
of the richer economies of
Europe, Japan, and North
America. Indeed, Goldman
Sachs predicted as much in one
of their several reports on the
growth of the BRICs.
Market logic, then, suggests
that businesses should increase
the scale of their operations in
Asia and the South, and many
are doing this. Butwith lower
per capita income levelstheir
consumption will rise more
slowly, and of course these
are not empty markets. As the
recent BrandZ report on the
top Chinese brands observed,
the Chinese economylike
other emerging economiesis
already well-populated with
large indigenous brands which
are effective at selling goods
and services in their home
markets.
44


Of course, economic theory
claims there is a way through
this conundrum. It points to
the role that innovation can
play, especially technological
innovation, in breaking this
downward spiral. As the price
of raw materials are bid up by
shortages, this sparks invention
in substitutes. But there are
several problems with this
model of how the world works.
In the first place, there are long
lags between price signals,
investment in innovation, and
innovation coming into the
market, and the delay becomes
longer if prices rise erratically,
rather than trending upwards.
Secondly, existing technologies
tend to be managed by
large companies with close
relationships to governments,
which have clear and familiar
stories to tell. New technologies
are, in contrast, promoted by
smaller businesses, or by less
influential divisions in larger
ones, and are often fragmented.
The wind-turbine industry has
a different story to tell from the
solar photovoltaic business,
for example. The subsidies
and tax breaks which underpin
established industries are far
larger than subsidies to new
It will be harder for
businesses to make
money than it was in
the last two decades.
The next 10 years
2011 The Futures Company. Some rights reserved.
32
industries. This is also true in
the US. As Senator John McCain
said, Bushs first energy bill left
no lobbyist behind.
45
Third, in terms of organizational
knowledge, businesses find
it easier to maximize existing
production methods than
to invest in new ones. The
knowledge, skills, relationships
and business models involved
in doing this are already familiar
to them.
And finally, efficiencies are
as likely to lead to increased
consumption as to resource
savings. This is the so-called
Jevons Paradox, formulated in
the 19th century and repeatedly
found to be true as energy
efficiencies have increased
over the past generation.
Depressingly, perhaps,
when The Limits to Growth
authors run their WorldModel,
technology gains merely delay
the moment when the global
economy reaches the point of
overshoot and collapse. It
never averts it.
46


The new technologies will
come, but too slowly to enable
a smooth transition from
one industrial model to the
next. The result will involve
significant disruptions to
business as usual, certainly in
richer markets, and probably
in middle-income countries as
well, over the next 10 years and
beyond.

From a narrow commercial
perspective, one way for
businesses to maintain margins
and growth in constrained
markets is to put pressure on
suppliers and their workforce
to reduce costs. Looking at
income statistics, this has
been happening for some time
already in the US, and is a trend
in other countries, especially
since the financial crisis. In his
recent book on the precariat,
Guy Standing writes of the
increasing numbers of insecure
and poorly-paid workers whose
experience is of temporary
contracts, short-term work, and
few benefits.
47
But this process
cant continue without raising
questions about equity, fairness,
and social justice. It is not even
particularly good economics.
If the prospects for growth are
more limited, the risks of not
preparing for disruption are
huge. This is the biggest issue
facing business today, yet this is
also the issue most businesses
are slower to face.
The combination of cheap
energy, digital networks, and
a benign global economy
has created an expectation,
certainly in affluent markets,
that everything can be
everywhere. But this is
the result of a particular
combination of circumstances
which is unraveling quickly. The
business risks of the less benign
world opening up in front of
us are high. If gaps appear on
the shelves before companies
have had an adult conversation
with their customers about the
limits of markets, the outcome
could be destructive for them.
Business reputations recover
only slowly (or not at all) from
large-scale failures, as BPs
experience with the Deepwater
Horizon blow-out reminds us.
This is a conversation not just
about business models, but
about social models, too.

The social values discussed
above are also likely to constrain
the ability of large players to
grow by acquisition. Market
concentration in most sectors
is already at levels which would
be considered oligopolistic, with
small numbers of players who
are already too big to fail. The
size of the banks and the public
and social costs associated
with their previous failures, have
renewed interest in anti-trust
legislation in several markets, as
also happened during the Great
Depression of the 1930s.
Increasingly, business critics
and academics are discussing
the relationships between
markets and moral values. In
her recent book The Economics
of Enough, Diane Coyle writes
about the increasing need for
both stewardshipensuring
that the interests of future
generations have as much
weight in a decision as those
of the current generationand
what she calls revalorization,
or the acknowledgement that
The new
technologies will
come, but too late
to enable a smooth
transition from one
industrial model to
the next.
The World in 2020
33
a market economy operates
within a framework of values.
48

The long shadow of Adam
Smiths hidden hand has
tended, in recent years, to
obscure his theory of moral
sentiments.
If businesses combine
structures, tasks and people in
order to produce outputs which
are economically and socially
valuable, and in the future are
also environmentally benign,
then the design of all three will
have to change to compete in
the world of 2020. One critical
element will be the way we
think about flows, which are the
dominant feature of the more
inter-connected world of the
information age. In his book
In the Bubble, John Thackara
uses a musical composition,
Canto Ostinato, as a metaphor
for designing for a complex
world. The piece is played on
four grand pianos by teams of
pianists, in a railway station. The
score, says the composer, is a
route for the performers to take,
but important elements remain
undetermined.
These interactions are difficult
to describe to someone not
present, writes Thackara, and
they would be impossible to
orchestrate remotely. Neither
the pianists nor the audience
know exactly what will happen
next, so no complete score
or blueprint is possible. But
they do not fly blind. They
understand the principles of the
system and they work with it.
49


Businesses are social
constructions. They exist in
their current form largely
because, in the 19th century,
the British government created
a form of share ownership,
along with limited liability, which
allowed individuals to invest in
ventures without putting their
entire estates at risk; the result
proved to be greater wealth
for the country as a whole. In
a world in which ecological
resources and social equity are
in increasingly short supply,
businesses will have to start
to prove their value over again
if they are to have permission
to operate. It is as tough a
challenge as they have faced in
the past 150 years.
Businesses will
have to start to prove
their value over
again if they are to
have permission to
operate.
2011 The Futures Company. Some rights reserved.
34
Endnotes
1 World Population Prospects: The 2008
Revision Population Database, http://esa.
un.org/UNPP/
2 Philippe Legrain, Aftershock. Little,
Brown, 2010
3 Ha-Joon Chang, 23 Things They Dont
Tell You About Capitalism, Bloomsbury
Press, 2011
4 David Coats, Ideopolis: Knowledge
Cities. Working Paper 1, The Work
Foundation, 2005
5 Carmen Reinhart and Kenneth Rogoff,
The Time Is Different, Princeton University
Press; 1st Edition, 2009
6 Bob Rowthorn, The renaissance of
China and India and its implications
for advanced economies, IPPR,
January 2011. http://www.ippr.org/
neweraeconomics/thinking_post.
asp?id=4314
7 Robin Blackburn, THE SUBPRIME
CRISIS, New Left Review 50, March-
April 2008 (http://www.newleftreview.
org/?view=2715)
8 Thomas Palley, Financialization:
What It Is and Why It Matters, paper
provided by Political Economy Research
Institute, University of Massachusetts at
Amherst in its series Working Papers with
number wp153. (This draft November
6, 2007 - http://www.peri.umass.edu/
fileadmin/pdf/working_papers/working_
papers_151-200/WP153.pdf)
9 http://mandelman.ml-implode.
com/2010/02/tarp-chief-elizabeth-
warren-%E2%80%9Cit%E2%80%99s-
the-bank-lobbyists-vs-american-
families%E2%80%9D/
10 http://www.rollingstone.com/politics/
news/the-great-american-bubble-
machine-20100405
11 The best account of this is in Gideon
Haigh, Bad Company, Aurum, 2004
12 Richard Wilkinson and Kate Pickett,
The Spirit Level: Why More Equal
Societies Almost Always Do Better, Allen
Lane, 2009
13 Danny Dorling, Injustice: Why Social
Inequality Persists, Policy Press, 2010
14 New Economics Forum, A bit rich,
(2009) http://www.neweconomics.org/
publications/bit-rich
15 Kim Stanley Robinson, Time to end
the multigenerational Ponzi scheme.
http://whatmatters.mckinseydigital.
com/climate_change/time-to-end-the-
multigenerational-ponzi-scheme
16 Oliver Wyman recently launched
the 14th annual State of the Financial
Services Industry report, titled The
Financial Crisis of 2015: An Avoidable
History in Davos, Switzerland during
the 2011 Annual Meeting of the World
Economic Forum
17 Andrew Curry and Hardin Tibbs, What
Kind of Crisis Is It?. Journal of Futures
Studies, March 2010, 14(3)
18 http://www.shell.com/home/content/
media/news_and_media_releases/2011/
scenarios_signals_signposts_14022011.html
19 David Boyle and Andrew Simms, The
New Economics. Earthscan, 2009.
20 Foresight Horizon Scanning Centre,
Technology and Innovation Futures,
Technology Annex, http://www.bis.
gov.uk/assets/bispartners/foresight/
docs/general-publications/10-1252an-
technology-and-innovation-futures-
annex.pdf
21 Carlota Perez, After crisis:
creative construction. http://www.
opendemocracy.net/article/economics/
email/how-to-make-economic-crisis-
creative, 5 March 2009
22 John Gray, What globalization is not,
in Grays Anatomy, Penguin, 2010
23 Manuel Castells, The Power of Identity.
Blackwell, 1997.
24 John Urry, Global complexity, Polity, 2003
25 For more on the future of civil society,
see our reports for Carnegie UKs
Commission of Inquiry.
26 Michael Porter and Mark Kramer,
Creating Shared Value, Harvard
Business Review, January-February, 2011
27 http://blogs.hbr.org/haque/2011/01/
the_shape_of_the_meaning_organ.html
28 Jeremy Lemer, Companies look to
cut use of rare earths. Financial Times,
February 24, 2011.
29 Hardin Tibbs, Industrial Ecology An
Environmental Agenda for Industry
(Arthur D. Little, Inc., 1991, republished
with permission by Global Business
Network, 1993). http://www.hardintibbs.
com/index.php/writing/industrial-
ecology-2/. Bill McDonough and Michael
Braungart, Cradle to Cradle.
30 Ha-Joon Chang, 23 Things They Dont
tell You About Capitalism, Allen Lane,
2010
31 Diane Coyle, The Economics of Enough,
Princeton, 2011
32 Barbara Heinzen, Feeling for Stones,
Heinzen, 2004
33 Eric Beinhocker, The Origins of Wealth,
Random House Business Books, 2007
34 Andrew Simms, Nine meals from
anarchy. New Economics Foundation,
2008
35 Dominic Barton, Capitalism for the
Long Term. Harvard Business Review,
March 2010. http://hbr.org/2011/03/
capitalism-for-the-long-term/ar/1
36 John Seddon, Freedom from
Command and Control: A Better Way
to Make the Work Work, Vanguard
Consulting Ltd, 2003
37 Karl Weick, Sensemaking in
Organizations, Sage, 1995
38 Fritjof Capra, The Hidden
Connections: Integrating The Biological,
Cognitive, And Social Dimensions Of
Life Into A Science Of Sustainability,
Doubleday, 2002
39 Art Kleiner, The Age of Heretics (2nd
edition), Jossey-Bass, 2008
40 Anne Lee Saxenian, Regional
Advantage, Harvard University Press,
1994
41 Alex Wright, The role of scenarios
as prospective sensemaking devices,
Management Decision, Vol. 43 (1) pp.86
101 (2005)
42 Mary Catherine Bateson, quoted
in Karl Weick, Making Sense of the
Organisation, Blackwell, 2001
43 Thomas Homer-Dixon, The Upside of
Down, Souvenir Press, 2007.
44 Oliver Wright, Chinas top brands
http://blog.thefuturesco mpany.
com/2011/01/28/chinas-top-brands/.
BrandZ Top 50 Chinese Brands, http://
www.millwardbrown.com/Sites/
mbOptimor/Ideas/BrandZ_Rankings/
BrandZ_Top50_Chinese_Brands.aspx
45 Joseph Stiglitz, Freefall, Penguin, 2010
46 Dennis Meadows, Economics and
Limits to Growth: Whats Sustainable?
http://www.theoildrum.com/node/6094
47 Guy Standing, The Precariat: The New
Dangerous Class, Bloomsbury Academic,
2011.
48 Diane Coyle, The Economics of
Enough, Princeton, 2011
49 John Thackara, In The Bubble, MIT
Press, 2005.
The World in 2020
35
The Futures Company is an award-winning, global strategic
insight and innovation consultancy. Unparalleled global
expertise in foresight and futures enables us to unlock new
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was formed through the integration of The Henley Centre,
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The Futures Company is a Kantar company within WPP, with
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About The Futures Company
Will Galgey, Global CEO
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The World in 2020 was written by Andrew Curry and published by The Futures Company in 2011
under a Creative Commons Licence.
Research was by Pendragon Stuart and Oliver Wright with additional material by Joe Ballantyne.
Design was by Sean Kernick and Tom Warren. Editing, production, management and publicity were
by Jennifer Childs, Tomi Isaacs, Simon Kaplan, Karen Kidson, and Emily Parenti.