Market Context

Megatrends: Socio-Cultural,
Economic and Political
Ascent Look Out begins our horizon scanning process with an analysis of the megatrends that will
advance the opportunities and threats in each of your markets. This section describes each of these
socio-cultural, economic and political waves, commenting on its trajectory and how it might impact
the transformation challenges you're facing.

SOCIO-
CULT
URA
L
Neo-Luddites Contemplating the
Singularity
Generation Z

Growing Global Middle Class EC Primary impact

ON domain for trend
Demographic Evolutions Secondary impact
domain for trend
OM
IC

Growing Global Middle Class

Power of Communities

Liquid Corporations

Secular Stagnation
vs Creative Destruction

Resource Security
POL

Migration Return of the Blocs

ITICA

Global Market Volatility

Uberization
and the Uberization and
Sharing
L

the Sharing Economy Power of Communities

Economy
Addressing Global Resource Security
Climate Change
Migration

Addressing Global
Climate Change

Burning Maturing Emerging

Atos 2016. All rights reserved.

14 #AscentLookOut

Addressing Global Climate Change
Concept
Evidence from the US space agency, NASA,
shows a current warming trend across
our planet: sea levels are rising, surface
temperatures continue to increase despite
solar output decline, oceans are warming,
ice sheets are shrinking, glaciers are
retreating, and extreme weather events are
becoming more common. In fact, all 10 of
our planet's warmest years occurred within
the past 12 years. According to NASA, most
of the current warming trend is very likely
human-induced and proceeding at a rate
that is unprecedented in the past 1,300
years.
Trajectory
Adopted in Kyoto, Japan, on 11 December
1997 and entered into force on 16
February 2005, the Kyoto Protocol is an
international treaty that commits its 192
state parties to reduce the greenhouse
gases emissions that are believed to be
the root of the human-induced climate
change. In December 2012 the 18th United
Nations (UN) climate summit reached an
agreement to extend the Kyoto Protocol,
which was due to expire at the end of
2012, to 2020 with a stated goal of keeping
climate change below two degrees Celsius.
The 2015 United Nations Climate Change
Conference, COP21, negotiated the Paris
Agreement, a global agreement on the
reduction of climate change. Key elements
included: endeavoring to limit global
temperatures to one and a half degrees
Celsius above pre-industrial times; reaching
zero net greenhouse gases emissions
between 2050 and 2100; and revisiting
global goals every five years beginning
2023.
Recent legislation from the European
Commission (EC) has reasserted
environmental issues on the economic
agenda. Its 20-20-20 targets include a 20
percent reduction in European Union (EU)
greenhouse gas emissions; 20 percent of
EU energy consumption from renewables;
and a 20 percent improvement in the EU's
energy efficiency by 2020. Its 2030 climate
and energy framework, meanwhile, targets
40 percent, 27 percent and 27 percent
improvements by 2030. The 2050 targets
are currently being looked into.
Meanwhile, the US National Intelligence
Center (NIC) has highlighted that climate
change will worsen the availability of some
critical natural resources. As the severity of
existing weather patterns intensifies, wet
areas will only get wetter and arid areas will
become drier. Precipitation will decline in
the Middle East and Northern Africa as well
as Western Central Asia, Southern Europe,
Southern Africa and the US Southwest.
Arctic resources may become more
accessible.
Impact
Climate change and public perception
of the causes have raised corporate
responsibility and ethical operations on the
agenda of corporate decision-makers, both
public and private. This should accelerate
sustainability and energy transition
initiatives. Digital initiatives such as smart
cities, smart grids and electric cars will
play a major role in bringing innovative
solutions and processes.
Faced, nevertheless, with the potential for
more extreme weather phenomena across
the globe as a result of climate change,
protecting assets from floods, hurricanes,
blizzards and other disasters becomes
even more critical. Major investment
funds, such as BlackRock, consider climate
change risk to be an investment issue.
Companies will need to ensure they have
disaster recovery plans in place that both
ensure data can be quickly and easily
recovered in the event of a disaster and
ensure members of staff can continue to
operate from alternative locations.
Contemplating the Singularity
Concept
With the pace of technological innovation
accelerating, especially Artificial Intelligence,
many expect that we will one day reach the
Technological Singularity the point where
machines would be more intelligent than
humans. Furthermore, machines would be
capable of recursive self-improvement, self-
evolving their intelligence in an exponential
fashion unlike humans, bounded by slow
biological evolution.
This concept is often associated with
'transhumanism' (or 'Posthumanism'),
a loose set of theories that foresee
technology as a means to profoundly
enhance human intellectual, physical and
psychological capacities well beyond their
natural condition, ultimately leading to
augmented or even post humans.
Trajectory
Linked to the ideas of science and progress
that have emerged since the 19th century,
human augmentation and transformation
through technology is a long-term dream
Megatrends
of futurists who have nurtured 20th century
myths, notably through science fiction and
prospective thinking.
While very prospective and promoted by
a small number of futurist thinkers, these
ideas began to get concrete traction in the
1990s. At that time pioneering thinkers,
such as Ray Kurzweil (now CTO of Google),
predicted that the technological singularity
would be reached around 2045.
These ideas have spread in recent
years, with concrete advances in
nanotechnologies, cognitive computing,
gene therapy, robotics and life science for
military (augmented soldier), healthcare
(prolonged life and cure of genetic
diseases) and business applications.
Beyond 2020, exascale, and later quantum
technologies, should begin to surpass
the power of a human brain, opening
up potentially revolutionary applications.
Pioneering companies, including Google
and multiple start-ups, have already begun
to heavily invest in disruptive technologies
with the long term goal of solving death
though this ambition far exceeds current
scientific capabilities.
Meanwhile, a growing number of scientists
and industry leaders most notably Bill
Gates, Stephen Hawking and Tesla Motors
CEO and co-founder of PayPal Elon Musk
are raising concerns around the technical
singularity. Concerned about machines
being able to think for themselves and
potentially becoming more powerful than
humans, they are amongst the thousands
of people who have signed an open letter
proposing proper safeguards be put
in place to research and develop such
intelligence without humans losing control.
Impact
Singularity and Transhumanism are at this
point purely prospective thinking, even if
the technology community is supporting
active research on disruptive artificial
intelligence and life sciences by some
corporations and think tanks such as the
Singularity University.
If real progresses are to be made, this may
lead to extreme opportunities. Research
may also lead to the new social, medical
and security risks highlighted by decades
of apocalyptic Sci-Fi culture. Many tech
leaders express concerns about the rapid
rise of the artificial intelligence that may
solve all our problems or, equally, threaten
us within the coming decades.
Ascent Look Out 15
Market Context
Corporations should follow these research
trends since they may profoundly
transform our world in the coming
decades. They must also show caution
around the business, legal, social and
ethical implications and risks.
Demographic Evolutions
Concept
The world is in the midst of four key
demographic trends: a rapidly growing
population; an aging population in the West
and increasingly in developing countries; a
shrinking number of young societies and
states; and growing urbanization.
Trajectory
The worlds population continues to
grow rapidly: the UN anticipates a global
population of 8.5 billion by 2030 and 9.7
billion by 2050, up from 7.3 billion as of
mid-2015. Overall, the UN expects Africas
population to be the fastest-growing, up
from 1.2 billion in 2015 to 1.7 billion in 2030
and 2.5 billion in 2050. But it sees European
populations declining from 738 million in
2015 to 734 million in 2030 and 707 million
in 2050.
According to NIC, 95 percent of recent
increases have been in developing
countries, nearly all in rapidly expanding
urban areas. The UN anticipates the
proportion of people living in cities will
grow, from 54 percent today to around
66 percent in 2050, with the number of
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megacities growing in parallel.
Ultimately, growth may slow down even in
emerging countries, leading to stabilization
and then, potentially, a demographic winter
with the global population plateauing
somewhere above 10 billion people, but this
is still subject to estimation. Sustainability at
this level of population remains a concern
for some prospectivists.
In 2015, the number of people aged 60 and
over was 901 million around 12 percent
of the worlds population. This number is
expected to grow to 1.4 billion by 2030 and
2.1 billion by 2050. Currently, Europe has
the greatest percentage of its population
aged 60 or over (24 percent) but all major
areas of the world, except Africa, are
projected to have nearly a quarter or more
of their populations aged 60 or over by
2050.
In 2015, the median age of the worlds
population was just under 30, but the
UN projects this to increase to around 36
by 2050 and 42 by 2100. Median age is
lowest in regions with low fertility: it was
42 in Europe in 2015, where it's expect to
reach 46 in 2050 and 47 in 2100. In less
developed region, median age was 20 in
2015 and projected to reach 26 by 2050
and 36 years by 2100.
Impact
Services must be aligned with aging
populations in developed countries.
Meanwhile, new business models will be
crucial to driving inclusive growth initiatives
in emergent economies such as in Africa,
the Middle-East and India where the
population explosion may create social
unrest if resources and employment don't
catch up.
Social welfare and health systems, on the
other hand, are becoming increasingly
strained as the relative size of the working
population reduces. Today's third digital
revolution, with its rise of automation
and robotics, will help ensure services in
diverse domains such as smart healthcare
and smart cities remain sustainable as the
population transforms.
Generation Z
Concept
Generation Z, generally acknowledged to
be those born after 1995, will come of age
in the 2020s. Also called "echo boomers", as
they echo the silent generation who were
born just before the Second World War,
Generation Z was raised during the recent
economic downturn.
Emotive, yet lucid, and in search of
stability alongside flexibility, they were
brought into a fast-changing, uncertain
and economically depressed world. As
teenagers, they saw their parents worry
about keeping their jobs, making ends
meet and keeping a roof over their heads.
Their focus is inherently global, with mass

media bringing growing global issues
(including unemployment, climate change,
terrorism and humanitarian) to their regular
attention.
Full digital natives, they have been
surrounded by social media, mobile
applications, personalized online services
and Cloud Computing since childhood.
To them, virtual reality, nanocomputing,
3D printing, driverless cars and other
innovations are simply the next step
forward.
Trajectory
According to various models including the
Strauss-Howe theory, generations evolved
through the recent modern history in four-
phase cycles. The first phase of the current
cycle is characterized by the baby boomer
generation (1945-1960) "prophets" who
were moved by freedom and individualism,
initiating the protest movements of
the 1960s. These are followed by the
pragmatic, adventurous and sometimes
cynical Generation X (1961-1981) "nomads",
characterized by the financiarization of
the 1980s, which saw financial institutions
and markets increase in size and influence.
And then the more disengaged Generation
Y (born 1982-1995) "heroes" who were
raised during the early phase of the
digital revolution and the beginning of the
economic crises in the Western world.
Over-protected as children, Generation
Z "artists" tend to be risk-averse. They
distinguish themselves from the preceding
Generation Y by their increased desire for
security and stability in a fast-changing
world where social and professional
positions are progressively less stable. As
such, they tend to be conformists, since
conformism provides a more secure path
to success.
However, their search for security
is combined with a strong need for
personal fulfilment and independence.
In an economy marked by the rise of
freelancers, its not surprising that they
value their careers, seeking security,
contentment and passion. They might
have multiple employments, sometimes
in multiple countries, to ensure they won't
find themselves in a risky position in an
economic bust.
When it comes to digital, it's not just
Generation Z whose lives are influenced
by todays increasingly connected
and monitored world. With emerging
technologies allowing us to permanently
quantify our individual performance our
health, our fitness, our finances and more
a clearer picture of our digital selves is
emerging, based on our consumption of
digital services.
Impact
Each generation tends to mark its epoch
in opposition to the previous one, as
consumers, entrepreneurs and employees.
As consumers, Generation Z are marked
by a "what I want, when I want" culture, in
an epoch focusing on access rather than
property, services rather than products and
where alternatives are just a swipe away.
Meanwhile, employers looking to retain
Generation Z talents should offer this lucid
generation, whose blind fidelity is not a
given, flexibility and fulfillment. Meeting
high expectations and understanding how
to leverage empathy to build trust will be
key. As consumers, they're less susceptible
to manipulation. Organizations that fall
below their standards will simply find their
potential Generation Z customers look
elsewhere.
Global Market Volatility
Concept
Market volatility refers to the swings from
boom to bust. Globalization, securitization
(the process of transforming illiquid
assets into a security), private and public
debt along with the rise of supporting
digital technologies have all contributed
significantly to the fast financial growth of
these last decades. This, in turn, contributed
to economic growth, but also increased
market volatility risks.
Over recent years we have seen massive
swings in the stock markets, going up and
down in magnitudes that seemed hardly
thinkable before. These risks has been
increased by the rise of High-Frequency
Trading, massive quantitative easing
policies from central banks and the rise of
shadow banking equivalent to global gross
domestic product (GDP).
Trajectory
Investment banks, mortgage companies,
hedge funds and other non-bank financial
intermediaries saw their finance activities
that were not subject to regulation
"shadow banking" grow dramatically post
2000, playing a significant role in the 2008
financial crisis. Despite regulations being
enforced across the banking sector post
crisis, shadow banking is estimated by
the Financial Stability Board (a regulatory
Megatrends
task force of top 20 economies) to have
continued to grow from $25 trillion in 2008
to $75 trillion in 2013. This equates to 25
percent of worldwide financial assets, half
of the traditional banking system and is
equivalent to the global gross domestic
product (GDP), raising concerns about
possible systemic effects of a next crisis.
Volatility has also increased with the
rise of High-Frequency Trading (HFT),
which developed after the US Securities
and Exchange Commission authorized
electronic exchanges in 1998. Automated,
algorithm-driven and enabled by
technology, HFT is executed in milli-, or
even micro-, seconds. Consultancy Tabb
Group estimated HFT to make up 56
percent of equity trades by value in the US
and 38 percent in Europe in 2010.
At that time, potential volatility due to HFT
orders had already been experienced on
several occasions with some equities losing
most of their value in a few minutes as a
side effect of the concurrent algorithmic
chain reaction. Even if it was corrected
afterwards by human operators, this
showed its potential to create or increase
market panic. Today, HFT is estimated to
account for 75 percent of all equity order
volumes in the US, 40 percent in Europe
and 10 percent in Asia, with potential for
rapid growth.
Together globalization and financiarization
where financial institutions and markets
increase in size and influence mean
we now live in an uncertain world where
volatility risks are high. The US National
Intelligence Council (NIC) believes the
international economy will continue to
be characterized by various regional and
national economies moving at significantly
different speeds, exacerbating global
imbalances and straining governments and
the international system. The key question
in their mind is whether the divergences
and increased volatility will result in a global
breakdown and collapse or whether the
development of multiple growth centers
will lead to resiliency.
Impact
Geopolitical tensions, potential social crises
in high-demographic emerging countries,
private or sovereign debt crises, along
with the impact of disruptive technology
advances, could lead to new financial black
swans. Governments and corporations
alike must therefore leverage prospects for
growth, but be prepared for an uncertain
and volatile world. They will need to be
Ascent Look Out 17
Market Context
reinventing their business models, building
ones that are better able to resist that
volatility.
At the same time real-time stock market
analysis will help them become more agile
in todays fast-moving world. Enabled by
advanced analytics and high performance
computing, this analysis will help them
identify and react to stock market
fluctuations more swiftly.
Growing Global Middle Class
Concept
The World Bank hopes to see an "end
to poverty" by around 2030. This shift
encompasses two strong trends: a
significant rise of the middle class in
emerging markets accompanied by a
significant drop in poverty, which has
fallen to around 10 percent of the world
population. The Organization for Economic
Co-operation and Development (OECD)
defines middle class as those making
between $10 and $100 a day, adjusted for
the purchasing power of each currency,
while the World Bank defines the threshold
under which an individual is considered to
be living in poverty as $1.90 or less a day,
taking into account country-level data on
living standards.
Counteracting this is the corresponding
relative loss of purchasing power of the
middle class in Western countries, as a
consequence of global rebalancing. This is
leading to social unrest in the West, made
worse by the widening gap between rich
and poor.
This widening gap has been confirmed by
Credit Suisse Global, estimating that half
of global wealth amounting to $250.1
trillion is now held by just one percent of
18 #AscentLookOut
the population. Despite only accounting
for less than one percent of the population,
millionaires own around 45 percent of
global wealth. The geographical imbalance
is particularly evident in North America and
Europe, which together contain 18 percent
of the global adult population, but account
for 67 percent of total household wealth.
At the other end of the scale, in Africa and
India the population share exceeds the
wealth share by a factor of more than ten.
Trajectory
OECD estimates that the worlds middle
class will swell from two billion to almost
five billion by 2030, with growth coming
from developing countries while the middle
class is squeezed in developed countries.
With increased wealth comes increased
spending power. Today, people in
developing countries make up a greater
percent of the worlds consumer spending
than ever before, with that trend set to
continue to rise. Spending by middle-class
Asian consumers, for example, could
rise nine percent a year through 2030,
according to the Asian Development Bank.
Conversely, the spending power of the
shrinking and struggling Western middle
classes has plateaued, expected to only
rise slightly over the next couple of
decades. This is due to a complexity of
factors, including aging populations and
an increase in single-parent households
alongside automation, offshoring, and
competition from workers of low-cost
countries.
Credit Suisse Global expects wealth growth
to pick up by the end of the decade,
reaching $345 trillion by mid-2020, 38
percent higher than in 2015. It projects
the number of millionaires to grow to
49.3 million adults. In 2020, emerging
markets will likely account for 9.1 percent
of millionaire wealth, one percent above
current levels.
Impact
Reduction of extreme poverty opens new
opportunities for low-cost products and
services in emerging economies. Targeting
new mass markets (such as the unbanked)
could prove very profitable. The billions of
newly affluent middle-class households,
with their increased spending power, are
also reshaping global markets, offering
renewed opportunity for growth in Asia,
Middle-East, Africa and Latin America.
Enhanced efficiency and improved
productivity will be critical to offering the
products and services they require at a
relevant price.
However, the shrinking Western middle
class means the share of adults living in
both upper- and lower-income households
is rising in developed countries. This
requires suppliers to change their classical
product segmentation to focus on upper
and low-cost segments, at the expense
of mid-range solutions a phenomenon
known as the "consumer hourglass
economy". This also opens opportunities
for reinventing business with new models,
such as "as a service" or the "sharing
economy", targeting this changing balance
of wealth.
Liquid Corporations
Concept
Liquid corporations take the concept of
"boundaryless" organizations popularized in
the 1990s to a new level. In a volatile world
were billions of connected customers,
things, partner, competitors and regulation

bodies evolve in real time, massive use
of outsourcing, crowdsourcing and open
innovation strategies enable organizations
to dynamically adapt to new market
realities.
Trajectory
The increased pace of innovation and
chaotic markets changes are putting
immense pressure on corporation
strategies: 45 percent of Fortune 1000
companies were replaced between 1983
and 1993, rising to 70 percent between
2003 and 2013.
While creative destruction is accelerating,
monolithic organizations inherited from
the past are increasingly evolving toward
complex, open ecosystems. Enabled
by digital, they take best practices from
start-ups, the technology giants and open
communities.
Focused on customer requirements,
procurement, operations and delivery
are dynamically executed across an
open network of suppliers and partners,
blurring traditional silos between providers,
operations and customers. The rise of
fabless corporations, outsourcing, BPO, the
gig economy and crowdsourcing is a clear
sign of this happening. Some estimate that,
by 2020, 40 percent of US employees may
be freelancers, for instance.
Impact
Ultimately, a liquid organization is not
a stable, fixed structure; it federates an
ecosystem that can adapt to market
changes in near real time. Organizations
should take advantage of these trends
toward a networked economy to gain
agility and flexibility.
A dynamic ecosystem of providers
spawned across suppliers and continents
may function at the expense of
accountability. This increases the risk
of compliance issues, business failures
and loss of customer trust as such,
organizations wanting to implement liquid
corporation principles will need to set up
strong governance processes.
Migration: Sedentary versus Nomadic
Concept
Economic and demographic inequalities
between low- and high-income countries
have driven migration patterns around
the globe for many years. People from
Asia, Africa and Latin America have been
moving to Europe, Northern America and
Oceania for almost half a century, fleeing
conflict or seeking better education and
opportunities.
Growth prospects in the US and in Europe,
where workforce levels are declining, will
depend on these immigration flows, but
immigration may also lead to multi-cultural
tensions.
Trajectory
According to the UN, between 1950 and
2015, the major areas of Europe, Northern
America and Oceania have been overall net
receivers of international migrants, while
Africa, Asia and Latin and the Caribbean
have been net senders.
From 2000 to 2015, high-income countries
received an average of 4.1 million net
migrants annually from lower- and
middle-income countries. But migration is
accelerating, particularly towards Europe
with conflicts in the Middle East and very
strong growth in Africa driving people out
of their homelands. Furthermore, some
prospects foresee unpredictable spikes in
migration driven by climate change-related
events.
The UN expects high-income countries
to receive 91 million immigrants between
2020 and 2050, while total births in these
countries may exceed deaths by 20 million.
Thus, net migration may account for 82
per cent of population growth in the high-
income countries.
As aging high-income countries struggle
with fewer people of working age, the
vacuum may be filled by immigrants from
low-income countries. These opportunities
are balanced by risks that call for
accelerated inclusive growth and education
initiatives.
Impact
Transnational migration flows shape
societies character. Households in the West
are increasingly multi-ethnic. However,
co-existence of ethnically different
populations might lead to nationalistic
and communalistic (where people see
themselves as part of their ethnic, cultural
or religious group rather than part of the
wider community) tendencies. Countries
must decide how they should react to
increasing migration. Tighter regulation and
border controls may be needed.
With large migrations comes the need
for strong social and education initiatives.
Technology can also pay a key part.
Megatrends
Efficient and effective processes are vital for
eliminating uncertainty and ensuring new
arrivals are quickly settled into their new
home.
Neo-Luddites
Concept
The rise of technology creates expectations
and fears. In the 19th century, a social
movement of British artisans, the Luddites,
violently opposed technological advances
in the textile industry. Considering their
skills as property to be protected, they
argued that machines undermined the
labor skills that were a crucial part of the
economy.
Similar new technophobic groups are
emerging today. These "neo-luddites"
believe modern large corporations with
their modern technologies threaten their
way of life and their livelihoods. As such,
they have developed radical resistance to
technology.
Their "neo-luddism" is mostly founded on
loose, radical anti-system movements.
It covers a wide variety of beliefs: from
groups preaching economic decrease and
return to the soil to technophobic groups
(including anti-nuclear, anti-GM and anti-
nanotechnologies).
Trajectory
Neo-luddites are currently a very small
minority. However, the coming hyper-
connected world that may lead to threats
on privacy and the rise of automation and
robotics that may pose a significant threat
to employment may drive an increase
in their numbers. Some estimate that as
many as 60 percent of current jobs may
be automated by 2022, with extreme
scenarios pointing to a risk of 90 percent
unemployment by 2030.
In the previous industrial revolutions,
Schumpeters "gale of creative destruction"
has always succeeded in replacing
extinguished jobs with new ones. The 19th
century Luddite artisan movement, for
instance, progressively vanished with the
rise of the new industrial economy and its
employment opportunities.
However, the speed and scale of the
current transition is complicated to project.
Nevertheless, it creates the risk of revolt
again the high rises in unemployment and
radical inequalities of wealth that are usual
in massive destructive creation eras such
as the one we are experiencing today with
the third digital revolution.
Ascent Look Out 19
Market Context
Impact
The economic impact of today's third
digital revolution creates both opportunities
and social risks that must be carefully
managed at international, state and even
corporation social responsibility level.
Governments and corporations alike
should concentrate on inclusive growth
initiatives to increase jobs and social care,
helping build the trust amongst the general
population that is crucial to mitigating any
risk. At the same time, they must protect
the privacy of individuals data while
increasing transparency and inclusivity, for
instance.
Technology, on the other hand, provides
many opportunities to not only promote
an inclusive society, but also enable
sustainable growth that is good for the
environment. Some technologies ensure
physically disadvantages individuals have
access to information and services, for
instance; others optimize our use of natural
resources.
Power of Communities
Concept
Increased personal and social mobility
decreases the likelihood of multiple
generations of the same family living in
the same geographical area. It also leads
to a rise in single person households, with
young professionals, in particular, more
likely to move around and live alone,
away from their traditional (family) and
geographical networks.
As a consequence of this, and possibly
as a backlash against the trend towards
individualization, new ways of community
building are emerging. Much of this
activity occurs on the internet. This
digital connectivity is leading to a rise in
"communalism" (where people seems
themselves as part of their ethnic, religious
or cultural group rather than the wider
community) and social activism driven by
the power of communities.
Trajectory
In the industrialized nations, the apparent
loss of physical communities is seen as a
key cause of social disintegration and of the
emergence of antisocial behavior. In our
virtual worlds, communities are growing.
Worldwide, there are over 1.49 billion
monthly active Facebook users.
Focus is shifting away from the individual
toward the community and common
welfare. People are making use of their
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collective intelligence, building networks
and organizing their community activities
by themselves. There's increased
awareness around and participation
in charities and non-governmental
organizations (NGOs) thanks to social
networks.
Co-operation is also an important behavior
trend for the more digitally-connected
generations Y and Z, as are connections
and relationships (community), social or
personal justice and authenticity. These
groups tend to be more socially aware than
their predecessors.
Impact
Public and private sector organizations
must put the power of communities at
the heart of their digital strategies to build
trust with the people they serve. It could
be through the facilitation of peer-to-peer
and social exchanges through or around
their services or products. It could also
be through open innovation serving as a
platform to let communities form and grow,
ultimately extending solutions and services
thanks to social and third party dynamics.
Either way, they must not only listen, but
also react and contribute, leveraging the
voice of the community to steer them in a
constructive direction.
Resource Security (Energy, Water, Food)
Concept
The worlds resources are under ever-
increasing strain owing to an increase in
the global population and the consumption
patterns of an expanding middle class. This
strain is only being exacerbated by climate
change and environmental changes due to
that population growth, urbanization and
human related activities.
Trajectory
The US National Intelligence Center (NIC)
projects that demand for food, water and
energy will grow by approximately 35, 40,
and 50 percent respectively by 2030.
The energy sector, in particular, is shifting to
a low-carbon path that supports economic
growth and energy access. In line with the
Paris Agreement drafted at the 2015 United
Nations Climate Change Conference, COP
21, the International Energy Agency has
underlined a number of measures that
could lead to a peak in global energy-
related greenhouse gas emissions while
supporting economic growth and providing
energy to more people. These measures
include: increasing energy efficiency
in the industry, buildings and transport
sectors; progressively reducing the use
of the least-efficient coal-fired power
plants and banning their construction;
increasing investment in renewable energy
technologies in the power sector from
$270 billion in 2014 to $400 billion in 2030;
gradual phasing out of fossil-fuel subsidies
to end-users by 2030; reducing methane
emissions in oil and gas production.
Impact
Proactive efforts will be required by
policymakers in combination with private
sector partners to avoid a future dominated
by natural resource scarcity. Strong
technology innovation will also play a vital
role in optimizing resources in the next
15 to 20 years. This will not only include
genetically modified crops, precision
agriculture, water irrigation techniques,
solar energy, advanced bio-based fuels and
enhanced oil and natural gas extraction via
fracturing; but also the smart technologies
that will help optimize resource (oil, gas
and water) usage through simulation and
analytics.
Furthermore, simulation and analytics
will also be core to improving resource
(oil and gas) exploration and developing
the next generation of sustainable
technologies that include genetic
engineering, nanotechnologies, nuclear
fusion and others. In addition, new services
will not only give the consumer a better
understanding of how they're using
resources, but companies can also leverage
them to encourage good consumer
behaviors aimed at reducing the strain on
those resources.
Return of the Blocs
Concept
Throughout history, wars and economic
depressions (or recessions) have led to
increases in protectionism, while peace
and prosperity have tended to encourage
free trade. Current economic geopolitical
tensions may mark a return of trade blocs:
trade alliances across countries that have
common ambitions. Furthermore, the
current currency war taking place amongst
the central banks is significantly increasing
risks for cross-border trade and investment.
Trajectory
The passage of GATT (General Agreement
on Tariffs and Trade), from the post Second
World War era until the early 1990s, saw
many protectionist trade barriers fall. The
fall of the Soviet Union in the early 1990s

led to hope for the return of free trade.
In 1995, such trade protection was
formalized with the creation of the World
Trade Organization (WTO). Since then,
numerous free exchanges zones have been
created or are being negotiated. Examples
include the North American Free Trade
Agreement (NAFTA), a trilateral rules-based
trade bloc in North America involving
Canada, the United States and Mexico;
the Trans-Pacific Partnership (TPP) that
makes it easier for American companies
to sell Made-In-America products across 11
other countries; and the Transatlantic Free
Trade Area (TAFTA) proposal for creating
a transatlantic free trade area covering
Europe and North America.
The return of conflicts and geopolitical
tensions with Russia, China, Latin America
and Islamic countries over recent years
has seen numerous import and export
restrictions put in place. These restrictions
work by means of tariffs, subsidies, import
quotas or handicaps placed on imports.
They can also include tariffs being imposed
on products not produced in a sustainable
fashion, or as stimulus packages for the
development of clean technologies.
Impact
The return to the blocs may touch IT in
particular since IT is seen as an increasingly
strategic sector, touching all verticals. In this
domain, there's a rising will from several
large countries and unions (including
China, Europe and Brazil) to develop
their own industries, especially in high-
performance computing, cloud, software
and security. The PRISM case has notably
driven many countries to grow regulations
to protect technologies and data better
through local trusted suppliers and local
data management.
Secular Stagnation (versus Creative
Destruction)
Concept
Global economic activity remained
subdued in 2015, according to the
International Monetary Fund (IMF). Growth
in emerging markets and developing
economies declined for the fifth
consecutive year, while a modest recovery
continued in advanced economies. While
some believe this stagnation is simply a
conjectural hangover effect of the 2001
and 2008 crises, others warn economies
risk becoming trapped in an extended
and structural period of slow growth in
productivity, income and job creation.
Prospects of accelerated innovation,
however, may sustain the alternative
scenario of a new era of growth, similar to
that which followed the invention of steam
and electricity. The rise of the Internet of
Things (IoT) and Industry 4.0, along with
nanotechnologies, biotechnologies and
cognitive sciences, may bring the boost
economies need to avoid the pessimistic
scenario.
Trajectory
The economic stagnation of the past
decades is attributed by economists to
various factors. They notably include
demographics (aging population in
developed countries) and macro-economic
issues (including an excess of savings over
investment, debt overhang and supply-side
headwinds). A slowdown in technology
innovation is also mentioned among the
key factors, with recent years immaterial
innovation creating less nominal growth
and productivity improvement than in
previous decades.
Megatrends
However, based on long-term economic
cycles, economists inspired by Kondratieff
and Schumpeter theories also recognize
recent deflation, bankruptcies, banking
crisis, credit crisis and more as the "winter"
season of the 1970-2010 economic cycle
powered by the first generations of
information technologies.
Ongoing innovations created by the
third digital revolution, combining digital
with nanotechnologies, biotechnologies
and cognitive sciences, may provide a
significant contribution to solving this
issue, possibly leading to a new growth
era culminating around 2030. In the short
term, the next wave of IT/OT convergence,
along with Industry 4.0, smart cities and
other technology-enabled transformations,
could rapidly bring a whole new boost to
productivity and the economy. Together
they could help answer two major
opportunities on the horizon: the silver
economy in the West and the growing
demand for low-cost solutions and services
from emerging countries' popular and
middle classes.
Impact
Whatever the causes, low growth prospects
will create concerns in the short term.
More than ever, corporations must prepare
for a sluggish and competitive world.
Leveraging innovation driven by new
digital opportunities is not only a matter
of competitive survival; its critical for any
company wanting to position itself at the
core of future growth opportunities.
With digital automation and robotics
decoupling productivity growth with
jobs and income, the possible social
impact of automation must, however, be
carefully watched for by policy makers and
corporations alike. After all, the success
Ascent Look Out 21
Market Context

of an economy depends as much on competitive way of living, leaving many

demand as it does on supply. Building
social trust through inclusive growth and
work reinvention, in a digital world where
40 percent of jobs could be automated by
2020 and where humans will have to work
side by side with robots, will be one of the
major challenges for the years to come.
Uberization and the Sharing Economy
Concept
Amongst the many new business models
created by the digital revolution, the
sharing economy has become the symbol
of disruption. It's sometimes evoked
through the name of one of its major
players, Uber, to signify the rise in adoption
of the business model embraced by that
company hence uberization.
Also referred to as the "collaborative", "peer-
to-peer" or "access" economy, the sharing
economy model sees privately owned
or managed goods or services shared or
rented out via peer-to-peer marketplaces. It
enables anyone to easily become their own
entrepreneur, monetizing their assets and
their labor.
sellers making less than the minimum
wage.
Impact
The sharing economy model has been
praised for its capacity to create a good
user experience and reduce costs though
digital disintermediation, with its dynamic
supply and pricing lowering the high fixed
and marginal cost of traditional businesses.
Uber, in particular, is a wake-up call to all
industries on the importance of customer
centricity and platform model thinking in
their digital transformation strategy.
Being "uberized" is now among the core
risks perceived by many organizations with
the rise of digital. Nevertheless, the sharing
economy is just one of the numerous
business models enabled by digital. While
it has impressed minds by its capacity to
completely transform and reinvent whole
ecosystems of buyers and sellers and
by the social, economic and regulatory
implications of these changes corporates
would be wise to also evaluate other novel
possibilities.

Trajectory However, the systems future cannot

In just five years, Uber has grown from be anticipated until it's structured and
a small start-up to a company large governed. In the meantime, companies
enough to threaten the whole taxi and should identify the relevant aspects of their
transport industry in more than 300 corporate strategy especially risk hedging.
large cities across the globe. Over that
period, its valuation has also grown to an
astounding value of $50 billion.

The economic downturn led to customers

seeking the best price while becoming
eager to leverage their own goods and
services for additional revenue. Well
beyond Uber, this kind of model is also
being developed across diverse sectors,
by for-profit, non-profit, barter and co-
operative structures, where corporations,
governments and individuals all actively
participate as buyers, sellers, lenders or
borrowers. Examples can be found in
hospitality (Airbnb), finance (Kickstarter),
logistics (Cargomatic) and many other
markets.

The sharing economy model has been

criticized for its disruptive social effect on
whole industries and for the high share
(20 to 30 percent commission) that
marketplaces take from the revenue. While
the sharing economy tends to attract
not only amateurs but also professional
operators, it's also reputed to create
an unpredictable, unsecure and very

22 #AscentLookOut
 Megatrends

Megatrends: Socio-Cultural, Economic and Political

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Addressing Global
Climate Change Neo-Luddites

Demographic Evolutions Power of Communities

Generation Z Resource Security

Global Market Volatility Return of the Blocs

Growing Global Middle Secular Stagnation vs

Class Creative Destruction

Contemplating the
Liquid Corporations
singularity

Uberization and the

Migration
Sharing Economy

Ascent Look Out 23