After I took on the role of chief innovation officer at Klipfolio, I wrote about how important it is for companies to build an internal culture of innovation, an article that appeared in OBJ last summer.
As I explained, innovation is not about a mad scientist yelling “Eureka!” in a dingy lab; instead, it is the result of a deliberate, company-wide process involving collective and collaborative thought, planning and effort.
Now I want to expand on that notion and show how awareness of megatrends can jumpstart the innovation process in a company of any size.
What's a megatrend?
Megatrends are deep-rooted trends that a) are most often irreversible; and b) shift the paradigm in some aspect of life.
For example, the invention and spread of the printing press catalyzed a megatrend of the 15th century. It changed the way information was distributed, and that change was permanent. There was no way to put the printed book genie back into the bottle. The paradigm had shifted.
The printing press changed all sorts of things. It created jobs for printers, papermakers and booksellers – and put the monks who transcribed texts out of work. It stimulated the development of vernacular languages, broke the power of elites to control information and was an important cause of the Protestant Reformation.
There are seven megatrends evident in the world today, and each has the power to shake things up as profoundly as the invention of the printing press did six centuries ago.
By shaking up the established order, each megatrend creates opportunities. For example, the invention of the printing press created work for printers, authors and booksellers. The trick is to identify opportunities on the horizon and act on them.
Megatrends help you do that. Megatrends are paradigm shifts. They can point to the coming destruction of whole industries and tip you to where the opportunities are for growth.
The seven megatrends and what they mean
There are right now seven megatrends I see as having a huge impact on the future. I’ve come to these seven by listening to talks about the future, such as annual addresses by Deloitte and the Business Development Bank of Canada, by reading reports on the most important trends, such as those by Ernst & Young and the World Bank, and of course by talking with neighbours, friends and colleagues about where the world is headed.
Climate change is already being felt around the world, and its effects will be felt even more strongly if carbon emissions are not lowered. There is going to be a massive amount of money invested in this area in the coming decades, and this is a huge opportunity for innovation in everything from dam-building to agriculture. Every company should be doing a SWOT analysis (strengths, weaknesses, opportunities and threats) of what climate change means for them.
China and India are the new superpowers
It’s no secret that China’s economy – and its clout – have been growing, and many experts expect China’s economy to overtake the U.S. economy in terms of GDP within a few years. India’s economy is also growing at a staggering pace, and it’s likely to be the world’s third-biggest economy in short order.
Think of the impact this will have on things like the demand for electricity, the amount of garbage each country generates and how industry will satisfy growing demand for consumer goods. What about language? Will Chinese become a dominant world language? What about the balance of trade or a shift in competitive threats?
The point is, we have to look beyond our own country and our own culture when looking to the future. It doesn’t pay to be myopic. Things happening on the other side of the globe can create opportunities for us here.
Extreme poverty is declining in every region of the globe. This is wonderful for all concerned, and it also means that people are no longer working just to subsist. As people’s incomes rise, so does their ability to contribute to the economy.
This means a surge of new micro and small businesses.
What will all these small businesses grow up to be as individuals become empowered to build their own economic future? What does it mean for things such as life expectancy, the demand for education or buying power? What technologies will further enable and protect this group, which counts in the tens of millions?
An aging, urban population
Experts now believe the world population will top out and then begin to decline. Just when that will happen is a matter of conjecture. In their book Empty Planet, authors Darrell Bricker and John Ibbitson think the decline will start by mid-century. A recent article in The Atlantic talks about it happening a few decades later.
Either way, the shift will be profound. A declining population is an aging population.
A report funded by the U.S. National Institutes of Health shows, among many other things, that the global population of people aged 80 and older is expected to more than triple between 2015 and 2050, growing from 126.5 million to 446.6 million. At the same time, more and more people will live in urban areas.
What does all that mean? We’re already starting to see labour shortages, and the Business Development Bank of Canada expects that trend to continue.
This is likely one of the most easily understood and impactful trends. If there is less available labour, innovation will prevail – and it’s already beginning in automation and artificial intelligence.
Food, water and energy security
As the climate changes, as poverty declines, as cities grow, as whole countries get richer, the demand for food, water and energy will grow.
These resources are not unlimited and have to be husbanded. The consequences here are unimaginable.
This is a massive area of opportunity. And it’s not optional: We have to solve this!
Data is the new oil
Data isn’t just the new oil; it will be the new water, the new international currency, the lifeblood of everything our society will want and need.
Data collection, management and especially security offer huge opportunities for innovation. Data is a wonderful, almost unlimited, resource, useful for business and for life in our increasingly connected world.
But as we are already seeing, it can be used for evil as easily as it can be used for good. It is therefore crucial for us to figure out how to protect it.
Governments and private companies are taking an increasing interest in this area. Cybersecurity is the latest darling benefiting from huge VC cheques – an evergreen market that will continue to grow in a fight against evil.
As recently as 20 or 25 years ago, just about everybody got their information from trusted, verifiable sources.
If you wanted to find the population of England, you consulted an encyclopedia or went to a public library to look it up. If you wanted to know what was going on in the world around you, you bought a newspaper or watched the news on TV.
Information was not at everyone’s fingertips. Instead, we had to rely on gatekeepers – journalists, librarians and other professionals – to find information and present it to us. Those gatekeepers played a crucial role in separating the wheat from the chaff. If we read something in a newspaper or an encyclopedia, we could be fairly certain the information had been verified and was true.
There are no gatekeepers anymore. Anyone can put anything out on the internet, no verification needed. And soon with advances in audio and video spoofing, your own voice and even recorded video can be hijacked. It’s a free-for-all out there, and it’s increasingly difficult to tell fact from fiction.
This breakdown of authority is happening on a global scale, and is likely one of the things fuelling the growth of protectionism, populism and anti-globalization movements. No one knows who to trust anymore.
Are there other megatrends out there? Probably. You may find one that affects your company directly.
So my advice: Take in the big picture. Keep an ear to the ground and an eye on the future if you want to grow and thrive.
Allan Wille is co-founder and chief innovation officer of Klipfolio.