Demographics and urbanization are factors that business leaders should monitor closely in the future, according to a new study by Aon.
Global head of strategic growth and development Bryon Ehrhart presented the information during the Aon Insights Series London, which was designed to help business leaders stay current “on the factors that could influence long-term decisions about markets and product offerings.”
Demographics and urbanization topped the list of “10 Trends Set To Reshape Business In The Coming Decades,” followed by technology reliance, intellectual property (IP), digitization, climate change, energy restacking, infrastructure, retirement fund investors, and automated driving.
Although thinking about the future is a challenge in the current COVID crisis, it must not prevent businesses from considering “the factors that could influence long-term decisions about markets and product offerings,” according to a release that accompanied the list.
“The here-and-now opportunities are a common obstacle to recognizing the trends shaping the future,” said Ehrhart. “Creating businesses of lasting value takes the discipline to shift thinking from three days into the future to three years.”
In the simplest terms, understanding demographics and urbanization macrotrends means understanding world population growth and movement — particularly into large cities like Tokyo, Delhi, and Shanghai. But that’s just the beginning. A condensed version of the list appears below. To see the full presentation, click here.
The 10 Macrotrends to Watch
Demographics — The key factor in demographics is not just how the world’s population will grow, but where most of that population will be.
Urbanization — Increased urbanization is another global trend to note. While 55 percent of the world’s population lives in cities in 2020, that figure will reach 67 percent in 2100.
Technology reliance — Technological developments and increases in data and analytical power create unlimited opportunities for business, but also bring risks around cyber security and data privacy.
Intellectual property — Since information technology took off in the 1980s, the value of intangible assets has skyrocketed, says Ehrhart. The current value of U.S. intangible assets is $20 trillion to 25 trillion, or roughly 85 percent of the total value of the S&P 500. This rapid increase in value comes with greater risk. And it also brings new opportunities to leverage this value, such as monetizing IP or accessing IP-based lending alternatives to assist in capital-raising efforts.
Digitization — Increasing digitalization involves the curation of data, faster processing speeds, the rise of artificial intelligence and a host of new opportunities that could bring billions of dollars in revenue and represent trillions of dollars in value.
Climate change — Climate change is causing more frequent and more severe storms, increased threats of flooding in coastal areas and worsening wildfires, among other impacts.
Energy restacking — U.S. energy independence — combined with a growing reliance on sources of renewable energy — has moved this trend up the list, Ehrhart says.
Infrastructure investment— The world’s infrastructure needs an investment of $40 trillion to $60 trillion. It’s a big sum for governments to tackle alone, especially as they’re grappling with the growing scale and demands of today’s emerging crises.
Retirement fund investors — Pension fund investments are reshaping the allocation of capital in every industry around the world.
Automated driving — Automated driving is likely to be highly popular – if it’s safe. The arrival of automated driving is emblematic of the broader trend toward automation as technology, communications and the Internet of Things continue to advance.