Session: Global Business

Megatrends
Monday, 9 May 2016 | 10:00
Presenter: Uschi Schreiber I EY

201659 | 10:00
Uschi Schreiber | EY

:
2016 5 9 10:00
: Uschi Schreiber | EY
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Megatrends 2016
How big is your iceberg?
An expanded understanding of disruption

Technology Business models

Value networks

Business innovation Business models

Value networks

Macroeconomic trends Regulatory frameworks

Demographic shifts Public policy regimes
Globalization Social compacts
Public policy Forms of government
Roles of citizens

The disruptors The disrupted

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Disruption 1. Industry redefined 2. The future of smart
From primary forces to megatrends Is every industry now your What intelligence will we need
to create a smart future?
industry?

Technology
Industrial revolution Information
Mainframes PCs Online (Web)
Social Mobile Smart IoT
Virtual reality AI Robotics
technology 3. The future of work 4. Behavioral revolution
When machines become How will individual behavior
workers, what is the human impact our collective futurer
role?

Globalization 5. Empowered customer 6. Urban world

Age of discovery Colonialism
Bretton Woods trade liberalization How will you change buyers In a fast changing world, can
East Asian NICs China/India/Brazil into stakeholders? cities be built with long-term
Latin America/Africa perspective?

Demographics 7. Health reimagined

With growing health needs, is
8. Resourceful planet
Can innovation make the
Post-WWII baby boom
Demographics is destiny digital the best medicine? planet resource rich instead
China One Child Policy Millennial of resource scarce?
workforce Urbanization Aging West
Global Migration Young India/Africa

3
9. Future Megatrend 10. Future Megatrend

Three primary forces are driving multiple megatrends

Long-term, multiple waves Cohesive narratives with significant interplay
Independent variables Driven by interaction between the next waves of
Interact and catalyze each other technology, globalization and demographics

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Industry redefined
Is every industry your industry?

Googles driverless cars 5 Indian telecom Drug store chain CVS

log 1015,000 miles companies licensed to reinventing itself with
per week launch payment banks 1,150 health clinics

Automotive industry? Banking industry? Pharmacy industry?

Or mobility industry? Or payments industry? Or wellness industry?

Why is this happening? Better questions

Disruption blurs industry boundaries when:
Digital lowers entry barriers
Empowered customers become
co-creators, catalyze change
Large, collective-action challenges
(chronic disease, climate change) attract
nontraditional entrants
Do you understand who your competitors
are and would your customers agree?
What will you do alone and what will
you do as part of an ecosystem?
Will tomorrows economies still be
comprised of industries?

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The future of smart
What intelligence will we need to create a smart future?

Smart meters raise data Autonomous vehicles Smart cities will have
points per household from could free up 7.5 billion
4 to 35,000 50 billion hours connected things by
per year for US drivers per year 2020

Could smart optimize Could smart free human Could smart make
electric grids? labor for higher use? urbanization sustainable?

Why is this happening? Better questions

Governments and organizations need more When AI controls decisions, who will control
sustainable solutions: your company?
Globalization and demographics How does smart make you more efficient
(urbanization, aging) are increasing and more productive?
resource pressures
Technology: the next wave of digital
disruption (artificial intelligence,
robotics, internet of things) is creating smart
solutions

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The future of work
When machines become workers, what is the human role?

Net loss of
40% of US workers Fears about
5.1 million jobs independent contractors artificial intelligence
by 2020 by 2020 on the rise
(WEF, 15 major economies)

Could we free people for Will gig workers get How will AI reshape the
higher pursuits? employee benefits? fabric of society?

Why is this happening? Better questions

Next waves of globalization and
technology (AI, robotics, IoT, sharing
economy, etc.) will drive unprecedented
labor displacement
White collar and creative work are
not immune
The gig economy will be followed by the
machine economy
Automation replaces and supplements
labor; work unbundled into tasks
With massive labor displacement ahead,
how will we address income inequality?
How will workers and citizens be motivated
in the machine economy?
How will governments need to adapt to
remain relevant for the future of work?

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Behavioral revolution
How will individual behavior impact our collective future?

Cumulative global cost Cumulative global cost of US retirement

of climate change: chronic disease: savings gap:
US$44 trillion US$47 trillion US$14 trillion
by 2060 20102030

Why dont we respond to Why dont we eat healthy Why dont we save enough
this existential threat? and exercise? for tomorrow?

Why is this happening? Better questions

Increasingly urgent behavioral challenges
(chronic disease, climate change, savings
gap) exacerbated by demographics
and globalization
Digital revolution catalyzing deployment of
behavioral economics:
IoT: real-time interventions
Social media: gamification
Online: rapid A/B testing
How will societies improve collective
behaviors without restricting
individual freedoms?
How can organizations be motivated to
focus on the long term?
How will we nudge people to adopt better
behaviors for the rest of their lives?

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Empowered customer
How will you change buyers into stakeholders?

GE uses virtual reality to Levis and Mercedes-Benz Invention and

demonstrate deep sea use social media to crowdfunding platforms
drilling equipment to engage with young are democratizing
B2B customers influencers innovation

How are you using the How are you engaging How are you co-creating
power of experience? millennials in new ways? with customers?

Why is this happening? Better questions

Digital is empowering customers:
They expect to be engaged in their
full complexity
They are becoming co-creators
They trust each other more than
corporate marketing
Companies are using new platforms and
approaches to engage using customization
and experiences
Power has shifted to customers; what will
they do with it next?
When experiences trump things, how will
you delight your customers?
What can you offer the customer that has
it all?
When you can go over-the-top to your
customers, how will it change your
value chain?

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Urban world
In a fast changing world, can cities be built with long-term perspective?

By 2050, two-thirds of Number of megacities Cities such as London,

global population will worldwide: Singapore, Medellin taking
be urban 41 by 2030 holistic and inclusive
(1950: 33%; 2008: 50%) (23 today; 2 in 1970) approaches to urban
planning

Will we become citizens of How will megacities grow How can cities learn from
cities, not nations? sustainably? each other?

Why is this happening? Better questions

Demographic pressures, climate change,
etc. creating demand for sustainable,
resilient urban growth
Smart technologies enabling sustainable
approaches
Growing urban inequality driving inclusive
urbanization paradigms
Cities growing as powerful as nations on
global challenges (climate change)
Amid rising income inequality, how can
urban growth be more inclusive?
How can cities be made resilient to future
known and unknown stressors?
New cities are built with brains; how will
they develop hearts and souls?
How will the public and private sector co-
author this centurys urban story?

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Health reimagined
With growing health needs, is digital the best medicine?

Cumulative global cost of Size of global health data Number of mobile health
chronic disease: 2.3 trillion billion apps doubled
US$47 trillion GB in 2015 to
20102030 by 2020 (48% CAGR) 165,000

How do we motivate healthy How will you use big data to How do we get to
behaviors? improve outcomes? mainstream adoption?

Why is this happening? Better questions

The search for economic sustainability is
being exacerbated by demographics
and globalization
Digital health (apps, wearables, social
media, big data, analytics) is enabling cost-
effective solutions
The next waves of digital (AI, sensors,
real-world analytics, sharing economy) will
be even more game changing
When algorithms prescribe and diagnose,
how will providers adapt?
In a world of fragmented health data, how
do we see the big picture?
How do we incentivize the long-term
behavioral changes needed to tackle
chronic disease?

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Resourceful planet
Can innovation make the planet resource rich instead of resource scarce?

Unchecked climate By 2035, coal provides IoT and AI are bringing

change will cause a less than 25% of primary the Fourth Industrial
23% reduction in global energylowest since the Revolution to resources
incomes by 2100 First Industrial Revolution

How can we spur the right Which resource industry will How will new technologies
market responses? be disrupted next? drive resource efficiency?

Why is this happening? Better questions

Demographics and globalization are
pressuring resources as never before
Growing political will (e.g., COP 21)
Renewables are the fastest growing energy
source; natural gas the only fossil fuel
gaining share
Global utility market reforms
Corporates adopt renewables and IoT
New business models create resource
efficient, low carbon value streams
How will we link prosperity and
sustainability?
Can business disruption also address
climate disruption?
How is climate purpose reflected in your
corporate purpose?
Who is your Chief Resources Officer?

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EY | Assurance | Tax | Transactions | Advisory

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