"A computer cannot be fixed at a typewriter repair shop, just as 21st-century problems cannot be governed by 20th century institutions"
Risk Management has the potential to be the biggest innovators – when you know problems are around the corner, you are able to steer the ship away from the storm. We talk about trends but to be honest trends are pretty much on the opposite side of the scale. Think about how nerds have become the coolest people on the planet due to their understanding of technology or how the most powerful law firms in the world were given the arduous jobs of doing mergers and acquisitions in the early 1950’s but by the 80’s mergers and acquisitions had become the biggest move by businesses. Risks and trends are all about timing and the understanding how these can be best utilised to make sense and bring relevance to your life and business.
Four Mega trends (Risks) that will shape the world economy
Trend 1 - The global population is getting older.
Several factors contribute to the aging population. First, fertility rates have declined, which has increased the proportion of older people. People now have better access to contraception, and women are pursuing education and employment opportunities as they become increasingly available. Second, mortality has declined because healthcare has improved and global poverty has dropped. And lastly, the Baby Boomers are growing old. The Baby Boomer generation was a "fertility spike," and now those numbers are translating to an "elderly spike.” In 1950, the global population of people over the age of 60 was 200 million. By 2050, that number is expected to get to two billion.
This is surely a massive risks for pension funds etc. But what an unbelievable opportunity to get involved in modernised old-age homes or to find services that will benefit this new age group. Because they are still functioning, healthy, experienced and energetic enough to start new ventures.
Trend 2 - Emerging economies will drive global economic growth.
By 2030, the world economy is expected to double. And by 2050, it is expected to double again, according to the OECD. This economic expansion will not be driven by population growth. Because the world is becoming increasingly globalised, emerging-market economies are seeing sustained and widespread increases in incomes and living standards. These changes will be the driving forces behind economic growth. India will have 25% more workers than China by 2060. Plus, India will have more middle-class people (1.19 billion) versus China (1.12 billion) by 2030. But China is projected to continue having a greater GDP per capita - R210,000 versus R130,000.
This is a great risk for the western world who have enjoyed the luxury of that safe middle class life style, but this can also be translated to an amazing opportunity for us to look for new ways to do business with these up and coming countries and who can we best service this fast growing middle class? How about travel packages or online training courses for this market – even 2% of that size will make any company extremely profitable.
Trend 3 - Next-generation technology will enter the global marketplace.
Nanotechnology, genetic advances, and 3D printing are all completely new technologies that have yet to have a broad impact in society. And they could revolutionize the global marketplace. Right now the 3-D printing market is about R20 billion, but analysts believe that by 2021, this market will grow up to R125 000 billion world-wide. 3D printing is already used by niche speciality markets like dental, medical, and jewellery for commercial use. The technology allows products to be easily (aka cheaply) customisable to specifications. And on top of that, 3D printed and customised organs are projected to be a big seller as well. And the intent of things is set to becoming a $1 trillion dollar industry in the next 10 years.
This is a very dangerous space for manufacturers as they are literally having to re-adjust their business models to allow people to print their goods at home. The next generation of ‘torrenting' will definitely be blue prints for pens by BIC or watch straps by Rolex etc. But on the other hand, this is extremely exciting for companies with a vision to understand this next phase and how they need to become future fit. If you own a manufacturing plant – get busy importing 3D printers with all the materials required to fill the machines and sell the blueprint designs online asap. Risk or trend? You choice.
Trend 4 – staff are as hyper informed as your customers
As we grow in our expectancy of what business should be doing for us, we are also expecting a whole lot more from our employers. Culture inside businesses is more important now than the pay cheque. Culture determines what talent you attract, what staff you retain, how productive you are and how innovative.
It’s extremely risky to have a bad culture or no culture at all,, but it’s also a huge opportunity to create something magical by following the easy steps of the Culture STARS program – firstly make the story of your business relevant and clear to all staff members. It needs to be easy to understand and easy to believe. Secondly, you need to help change the behaviours of your staff by ritualising your story into daily, weekly and monthly rituals. This needs to be followed by making sure that your office or area represents your story – if you say you’re all about fun, make sure the office represent that. Follow this up by giving your staff the rights tools to enable then to work as efficiently or effectively as they can and finally, develop a heroic figure that epitomises the ideal staff member as a reference point for staff members to look up to.
By following these guides, risk managers could possibly be the trend managers of the future with cultures to match.
John Sanei – Founding Partner, Future Collective