“Foresight 2020”, a new research report written by the Economist Intelligence Unit and sponsored by Cisco Systems, assesses likely changes to the global economy, to eight major industries and to corporate structures over the next 15 years.
More than 1,650 senior executives, analysts and policymakers from across the globe took part in a survey and a series of in-depth interviews conducted especially for the report. The report also showcases the Economist Intelligence Unit’s new long-term growth forecasts.
Among the principal findings from the research are the following:
It’s too early to talk of Asia’s century, but there will be a redistribution of economic power. Emerging markets, and China and India in particular, will take a greater slice of the world economy. Non-OECD markets will account for a higher share of revenue growth between now and 2020 than OECD economies. Labour-intensive production processes will continue to shift to lower-cost economies, which will still enjoy a massive wage advantage over developed markets. The pace of globalisation will be arguably the critical determinant of the rate of world economic growth.
Population shifts will have a significant impact on economies, companies and customers. The favourable demographic profile of the US will help to spur growth; ageing populations in Europe will inhibit it. Industries will target more products and services at ageing populations, from investment advice to low-cost, functional cars. Workforces in more mature markets will become older and more female.
Globalisation and networking technologies will enable firms to use the world as
their supply base for talent and materials. Processes, firms, customers and supply chains will fragment as companies expand overseas, as work flows to where it is best done and as information digitises. As a result, effective collaboration will become more important. The boundaries between different functions, organisations and even industries will blur. Data formats and technologies will standardise.
Price and quality will matter as much as ever, but customers in developed and developing markets will place more emphasis on personalisation. Products and services will be customisable, leading firms to design products in a modular fashion and, in the case of manufacturers, assemble them in response to specific customer orders. Customers and suppliers will be treated in different ways, depending on their personal preferences and their importance to the business.
Running an efficient organisation is no easy task but it is unlikely on its own to offer lasting competitive advantage. Products are too easily commoditised; automation of simple processes is increasingly widespread. Instead, the focus of management attention will be on the areas of the business, from innovation to customer service, where personal chemistry or creative insight matter more than rules and processes. Improving the productivity of knowledge workers through technology, training and organisational change will be the major boardroom challenge of the next 15 years.
- Economist Intelligence Unit – Foresight 2020: Economic, industry and corporate trends
- Download the report (PDF file)