Some call it the fourth industrial revolution, others call it the quantum leap forward, but however you’d like to label it, we are at a social, economic, and technological crossroad that will disrupt the way business is done forever.
These currents of change are called ‘megatrends’ and if you’re not up to speed, then prepare to be left behind.
What are Megatrends?
While business trends come and go - we all remember the hype around QR Codes - megatrends are global, dynamic forces that power societies from the east to the west, impact our public discourse, and define our future world by accelerating the rate of change.
These can be used as a base for business strategy - whether you’re in the start-up phase or are a Fortune 500.
We have undergone several prominent changes lately to how we function as a society, and with that change comes new opportunities to re-frame our future. The business owners who will be the most successful will be the ones that challenge current industry assumptions, accurately predict how these megatrends will affect their core model, and develop a vision of the future based on those predictions.
We can break megatrends down into five core areas.
People - The Aging Population & Rise of the Millennials
As baby boomers and Gen X begin to retire, they’re making way for the newer generations of workers: Millennials and Gen Z’s. While there is some discrepancy on a few years in each direction, the generations are often broken down into:
Baby Boomers: Born between 1944 and 1964.
Gen X: Born between 1965 and 1979
Millennials: Born between 1980 and 1994.
Gen Z: Born between 1995 and 2015.
With the rise of a newer, younger workforce (who also make up almost half of all customers), business owners need to adjust their thinking when it comes to consumer habits. Gen Z’s especially are reinventing how, why, and where they shop. These are digital natives, and care about a seamless, customer-centric experience. To cater to this, ensure your business has a strong digital presence, as well as a strong social and environmental stance.
From a hiring perspective, you’ll need to invest in training. Again, with an aging workforce and retiring baby boomers, you’ll notice the labour pool will grow more slowly, and could even shrink in some areas. To train and retain talent, you should consider creating a more flexible working conditions. And, if you find yourself short staffed in the interim, look for ways to boost productivity through innovative technologies
Changing Work Environments
Amidst the global spread of COVID-19, we’ve seen businesses stopped in their tracks, flipped 180 degrees as everyone transitioned to working remotely, and then undergo a digital regenesis as owners began to see the value in a remote, technologically-connected workforce.
As mentioned earlier, a flexible work environment is a sure-fire way to retain top talent. This could include flexible work hours, roles, or teams as well as the option to work remotely. This is one of the only megatrends to have drastically accelerated over the last 6 months and it comes with a host of benefits for both businesses and employees.
- It increases your business’ employee value proposition. As your business becomes a more coveted workplace, this will help you cut down costs on constantly acquiring new talent.
- Transportation is no longer an issue. This will widen up your talent pool as you can search further abroad.
- Reduction in economic and environmental footprint. If you no longer require a brick and mortar office, then not only are you discouraging commuting, but you’re saving money and resources on maintaining an office building.
We see this both globally, but on Australian soil too. Ten major Australian businesses made a commitment to flexible, long-term, remote work which they hope will encourage people to leave overcrowded cities to live and work in regional areas.
If your business has not adapted to a digital marketplace, then you are certainly losing out on customers.
Even if you have a website, you could be losing out on customers if it doesn’t automatically adapt for mobile. A whopping 79% of smartphone users have made a purchase online using their phones.
But mobile technology is not the only instrument in this megatrend. Intelligent Assistants like Alexa, Siri, or Google Assistant are now making purchases on behalf of their owners. In fact, the rise of Artificial Intelligence is sweeping every industry from healthcare to manufacturing in a variety of ways.
By 2045, it’s anticipated that 40% of current tasks could be automated.
Not only would this change the nature of how we work, but it would change the nature of who is working. We are seeing an increase of robots used to perform a vast array of business activities. Not only are we seeing humans and robots work symbiotically, but early adopters of this tech are reaping the rewards of productivity, innovation, and cost savings due to the automation of processes.
While this means that some jobs will be replaced by robots, it’s empowering their human counterparts to cast off the burden of time-heavy, or dull tasks and focus on new and emerging opportunities. What can your business do to stay ahead of this technological curve? Here are some tips:
- 1Figure out which areas of your business are primed to be automated. Only by pinpointing the opportunities, can you identify which kind of technology you would need.
- 2Speak transparently to your employees. While it should be common knowledge that one artificial intelligence solution isn’t going to replace a person overnight (or at all!), having honest conversations with your employees will mitigate any unspoken concerns about job security. Plus your employees intimately know your business and can help direct you to pain points in your processes..
- 3Do your research. As more technology becomes available, there will be more things for you to consider to find the right fit for your business.
Just as gold was phased out by oil, so too is oil being phased out by the next mighty world currency: Data.
Probably the most underestimated of all the megatrends is the conversation surrounding cyber safety and security. It is no longer the responsibility of big businesses to store and protect data. Businesses of any size and scope can collect, analyse, and extract meaning from their data.
Pairing this ability with the rise of AI means this analysis can be done in vast amounts in record time. Besides giving you a competitive edge in business, it also creates a liability.
One of the biggest concerns of our collective society is about data privacy rights. As a business owner, it is your moral and legal duty to ensure the data your customers entrust you with is protected from the evolving threat of cyberattacks, disasters, and even targeted misinformation.
According to Gartner analysis, up to 50% of information consumed by 2022 could be fake news.
Your business should continue to collect data - in vast amounts. This is a key driver to growth. By measuring your performance in certain areas through KPI tracking, to defining in minute detail who your buyer personas are in order to personalise and streamline the customer journey, you’ll give yourself an upper hand over your competitors.
Data is the key to success, just make sure you keep yours under lock and key.
Environment & Resource Scarcity
It’s not just the Greta Thunberg’s of the world who are fighting for environmental justice. There is a collective shift towards not just sustainable energies, but decarbonisation.
BP is one of the first mega-companies to promise a carbon-neutral business model, but it’s certainly not the last. Businesses have the opportunity to contribute to clean air or water initiatives through direct investments or by adopting better environmental compliance requirements into existing business models, such as subscription model.
Consumers are looking for climate leaders in the space, and while younger generations have less brand loyalty, they do champion environmental movements and your business will find them a staunch ally. So how does your business change the world?
Some experts point again to Artificial Intelligence to do the job. Certain AI technologies are helping monitor endangered species, track infectious diseases, and record the world’s food stores, yet that’s only the tip of the iceberg. True change will come from both technology and its wielders.
Human lifestyle changes, such as working remotely, will spread across the globe and be a true force for good in the fight against climate change.
Megatrends and Your Business
These five megatrends cannot be boxed into easily adoptable business solutions. Nor are they the only megatrends to take into consideration - we must also think about shifts in economic power, living and urbanisation, health and social changes.
To adapt, your business will have to seriously consider its current offerings, operations, as well as potential for future value based around these shifts.
Megatrends undeniably impact our future.
The long-term shift in behaviour that they bring have a global impact across multiple industries.
Engaging in long-term analysis is critical for any company that wants to seek real and sustainable opportunities. These businesses become resilient and shift from short-term, reactionary moves to disruptive and innovative solutions that better predict the needs of tomorrow’s consumer and reshape how competitors, categories and entire industries perform.
Any business leader that hopes to remain successful for years to come should be incorporating megatrend analysis into their business strategy.
At Exit Advisory Group we can help you strategically plan for the future. Our Strategic Planning services and Advisory Board support are designed to help forward thinking business owners build a strong foundation and prepare for trends impacting your business and industry.
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