Megatrends
Megatrends, the dawn of a new era?
What would our societies look like if we had never invented writing, agriculture, or navigation, for example? If we had never managed to “tame” electricity? Human history has been marked by major disruptions and innovation that have opened the door to new cycles. Humanity will certainly experience others that will shape the world we live in today. What about our future? What will it look like?
Published on 05 September 2024
A megatrend is a major, large-scale shift that may or may not be driven by an innovation or a human or planetary necessity, a shift that is likely to bring about in-depth changes to our societal models, our economies or our environment and to become the norm for coming decades. The advent of the Internet, for example, has transformed information technology and the business and entertainment world, and revolutionised communications media. This, in turn, has led to many other innovations, some of which are just now getting off the ground.
Megatrends also create crucial challenges that must be met. Indeed, our future depends on doing so. This is especially the case of environmental and demographic challenges. While these challenges raise fears of less prosperous times ahead, they can also be opportunities and the source of positive change. To grasp those opportunities and build tomorrow’s world, a collective push, combined with public and private financing, is necessary.
Related environmental challenges
Environmental changes are among the most urgent of our time and come with many corollaries. The loss of biodiversity, for example, is having a deep impact on our ecosystems. Since the 1970s, an estimated average 68% of the world’s wild animal species populations has vanished, and 30% of living species are now threatened with extinction1. Depletion of biodiversity has been exacerbated by other worrisome factors, such as destruction of habitats, overexploitation of resources, climate change with extreme weather phenomena, water scarcity, pollution and invasive species.
Such dangers have emerged in many economic sectors, such as agriculture, healthcare, the textile industry, construction and insurance, just to name a few. Climate change is also requiring an energy transition towards renewable, low-carbon energy generation. Governments the world over are collectively targeting 7.3 TW in renewable energy capacities by 2030, up from 3.4 TW in 2022, but this won’t be enough to cap global warming at 1.5°C. Indeed, the International Renewable Energy Agency (IRENA), the International Energy Agency (IEA) and the presidency of COP all believe that it is essential to triple capacity by 20302.
Economic changes caused by the climate crisis
The climate crisis is a key global concern and calls for profound changes to how we produce and consume. Companies can no longer afford not to adopt sustainable practices and reduce their carbon footprints. International and national regulations are working along these lines.
- Transport: this sector is key and legislation is pushing towards change. At the European level, “Fit for 55”, for example, has enacted a ban on new internal combustion vehicles by 2035 and aims to drastically reduce CO2 emissions by at least 55% by 2030, in comparison with 1990 levels3. These measures are part of the European Union’s goal of achieving carbon neutrality by 2050.
- Construction: in this sector, environmental standards must also be made more stringent, and international certifications such as LEED4 or BREEAM5 are gaining in importance.
- Agriculture: the agriculture sector is being transformed by the need to reduce pesticide use and to adopt agro-ecological practices. Developments are being made in precision agriculture and in the selection of climate change-resistant crops.
- Industrie: the need to diminish carbon footprints is pushing manufacturers to adopt cleaner technologies and to recycle materials to a greater degree. The circular economy is the essential model for reducing waste and greenhouse gas emissions. Energy-intensive industries such as steelmaking, aluminium, chemicals and cement must find solutions for reducing their CO2 emissions.
Technological disruptions
From digitalisation to the Internet of things (IoT), to robotisation, 3D printing, drones and autonomous vehicles, technological progress can make radical transformations to entire swaths of industry. Along these lines, artificial intelligence (AI) is without a doubt the technological disruption that has most marked recent years, and it is still hard to judge the extent of “creative destruction” that it will entail, or its effects on how we live and work. One study has found that AI could boost global GDP by 26% and add 13,000 billion dollars of value to the world economy by 2030. Moreover, at least 70% of companies are expected to integrate AI into their processes in the coming years6. While still at a less advanced stage, the exponentially greater power of quantum computing also offers many opportunities in finance7, healthcare, chemicals, cryptography, and other areas.
These technological disruptions are already having profound impacts on our societies, with the emergence of new ecosystems. AI, information technologies, IoT and 5G have given rise to smart cities and new forms of social and economic interaction, connecting individuals and infrastructures in unprecedented fashion8.
Technological innovations are creating new opportunities but also come with ethical and regulatory issues. Not all of these innovations have the potential of triggering radical changes, as their adoption by companies and society at large depends on many factors (relating mainly to human and market forces9). Targeting the most promising thematics is therefore essential.
Significant demographic and social shifts
The world’s population continues to grow, albeit at a slower pace. It crossed the 8 billion mark in November 2022 and is projected to hit 10.4 billion around 208010. Meanwhile, the ageing of the population in much of the world is having serious impacts, especially in healthcare, pensions and social welfare services. Between 2015 and 2050, the percentage of persons aged 60 and older will have risen from 12% to 22% of the global population, according to the WHO11. Meanwhile, OECD countries are experiencing a worrisome drop in birth rates12, alongside a demographic decline in these regions. Meanwhile, migrations, driven by conflicts, economic opportunities and worsening climate change are redefining demographic dynamics.
On the societal level, expectations are changing rapidly, driven by social and cultural shifts. Issues of equality, diversity and inclusion are playing a key role in public debates and business strategies. Consumers and workers are demanding greater transparency, ethical awareness and social responsibility. In response, organisations are revising their practices and adopting values that are more aligned with modern society.
These intertwined challenges constitute opportunities to be exploited right now in shaping a more sustainable and equitable future. Global awareness and concerted action by public and private actors are essential in promoting these transformations and making the world more resilient to the challenges of the 21st century.
2. https://ember-climate.org
3. https://www.consilium.europa.eu
4. https://www.usgbc.org
5.https://breeam.com
6.https://www.researchgate.net
7. https://www.weforum.org
8. https://www.mckinsey.com
9. https://www.oecd-ilibrary.org
10. https://www.un.org
11. https://www.who.int
12. https://www.oecd.org