Research Report: Constellation’s Futurist Framework (PESTEL) – The Societal Outlook Pre @Davos #WEF18

Published on January 18, 2018 by R "Ray" Wang

2018 Davos Focuses On Creating A Shared Future In A Fractured World

The World Economic Forum (WEF) kicks off January 23rd to 26th in Davos-Klosters, Switzerland.  This year’s theme is about “Creating a Shared Future In A Fractured World”.  From the program notes for this year’s event, WEF sees the following:

At the close of the 20th century, the presumption was that greater economic interdependence among countries, buttressed by liberal democratic institutions, would ensure peace and stability well into the new century. The global context today has changed dramatically: geostrategic fissures have re-emerged on multiple fronts with wide-ranging political, economic and social consequences.
Realpolitik is no longer just a relic of the Cold War. Economic prosperity and social cohesion are not one and the same. The global commons cannot protect or heal itself.
Politically, governance is being transformed by new and contending strategic narratives. Such narratives have emerged in response to national, regional and global divides, but many of them are bereft of the innovation, inspiration and idealism essential for transformational change. Economically, policies are being formulated to preserve the singular benefits of global integration while limiting its shared obligations. Yet, such policy prescriptions are fragmented, biased or uninformed when considered in the context of sustainable development, inclusive growth and the Fourth Industrial Revolution.
Socially, citizens yearn for responsive leadership that addresses local and national concerns; yet, a shared identity and collective purpose remain elusive despite living in an age of social networks. All the while, the social contract between states and their citizens continues to erode. Changing the situation on the ground requires more responsive governance, but this cannot absolve governments of their regional and global responsibilities.

PESTEL Approach Powers The MegaTrends In Constellation’s Outlook

Ever three to four years, Constellation publishes its futurist framework based on the PESTEL model of systems thinking.  Constellation approaches 2020 with this systemic point of view.  The full PESTEL report examines the political, economic, societal, environmental, and legislative (PESTEL) macro trends that will affect the business disruption ahead.  This framework serve as the basis for Constellation’s research foundation across seven business themes.  These PESTEL trends can be summarized as:

Success in navigating these trends will require executives to develop a strategy for dominating digital disruption.  Board rooms must be cognizant of such changes in order to make the tough decisions required to thrive in the disruption ahead.  This blog post focuses on the second area Economic Outlook

Societal (S) Shifts Showcase Self-awareness And Mass Personalization

The widening societal shifts that fracture today’s society transcend age. Societal trends and norms reflect a society split across digital proficiency, the union of understanding a technology and use of that technology.  In fact, age is no longer the deciding factor of digital proficiency.  For instance, millennials may not be more tech savvy than individuals of other generations.  However, urbanites may have more of an affinity than rural dwellers.

As technology ever deeply weaves into the fabric of life, these perceptions impact social shifts and drive populist movements fueled by mass personalization and a growing self-awareness movement.  In many cases, emotions have overpowered logic.  Convenience has taken over ethics and norms.  As society seeks simple explanations to complex problems, technology companies can expect to bare the brunt for “all good” and “all evils” of society going forward.

  • Social justice efforts move from inequality to unfairness (2018). The debate intensifies around unfairness versus inequality.  From diminishing worker powers, gig economy workers, short-term stock market incentives, cost of higher education, and mergers and acquisitions, some economic and social processes have exacerbated inequality.  Early efforts to combat this inequality reveal deep structural and societal issues. However, inequality due to lack of opportunity remains differentiated from inequality due to unfairness.  The focus on removing elements of unfairness will drive new social movements that towards a more meritocracy based model than a victimization and shaming approach.

    Constellation’s POV:
    Expect social justice movements to look at structural unfairness and identify how to improve access to opportunities without the bias of race, gender, religion, sexual orientation, and other traditional forms of discrimination and move towards logic vs emotion.

 

  • A movement grows for the right to be disconnected (2018). The frenzied, always-on, connected world has spurned a backlash in behaviors.  Information overload, jittery fingers, panic attacks spawn new psychological disorders.  Internet gaming disorder, electronic screen syndrome, internet addiction have all been considered for updates in the Diagnostic and Statistical Manual of Mental Disorders.  As humanity grapples with the connected world, many seek the right to be disconnected without being judged.  A movement is on to retain the right to pay in cash, not be electronically tracked, and connect when only needed, while  not being seen as a terrorist or social misfit for being disconnected.

    Constellation’s POV:
    Privacy will emerge as the new luxury for the super rich as they spread disinformation, remove records, and hide identity as best as they can.  Expect new services to provide these capabilities to the common person for a price and expect pressure for legislation to enable a new level of privacy – disconnection!

 

  • Super star elite cities exacerbate the digital divide. Cities such as Amsterdam, Austin, Bangalore, Beijing, Berlin, Boston, Dubai, Johannesburg, London, Nairobi, New York, Seoul, Shanghai, Singapore, Sydney, Tel Aviv, and Toronto have emerged as both tech hubs and knowledge hubs.  These Tier 1 superstar cities bring together the talent, the money, and the opportunities in a winner-takes all model at the expense of rural areas.  The result – the most innovative industries, impactful exponential technologies, elite talent, and concentration of wealth will disproportionately impact society.

    Constellation’s POV:
    These super star elite cities will create a spiraling stagnation and job loss of other economic regions if society fails to intervene.  In order to address the digital divide, decentralization and federated models will be required to share in the progress.  Expect technologies such as autonomous vehicles and market forces such as high real estate costs to create some opportunities.

 

  • The new suburbs emerge with autonomous vehicles. Lower density, higher quality living gain favor with autonomous vehicles adoption. Autonomous vehicles will shift forecasts for real estate demand and population density to Tier 3 and Tier 4 centers. The ability to afford lower cost real estate, enjoy lower population density, and improve commuting productivity, will create a new mass migration to the lower density, rural living.  These hubs will be easily connected to the super star elite cities as commuting options improve.  Moreover, autonomous delivery will reduce the time for shopping and procurement of goods as well, freeing up time and leading to a higher quality of life.

    Constellation’s POV
    :  Humans like to be near other humans as much as they like to have their own space.  Autonomous vehicles enable the quest for personal space and less density with access to super star elite cities.  This new movement to the suburbs will spawn new societal trends over the next 10 to 15 years such as the anywhere workplace, all day dining, and binge partying.

 

  • The self-quantification movement shifts to health and self-preservation.  Growing self-awareness and new technologies enable a greater level of self-improvement.  In fact, the quest for self-preservation has grown with the ability to measure and quantify the human condition.  Beyond fitness trackers, this movement has led to new fads such as wellness cocktails, fitness vacations (fitcations), and VIP c-suite physicals.  As new genetic techniques such as CRISPR arrive to do live, gene-editing, more human augmentation will occur.

    Constellation’s POV:
    Greater average human life expectancy from 81 years to 150 years of age will spawn a new set of societal trends. Self-quantification will increase self-awareness and test the limits of humanity as humanity augments itself.

 

  • Block chain and cryptocurrencies will change banking forever. The prospects of efficient peer-to-peer payments sans government and financial institution meddling have led to an exploration of new models of value exchange.  From currency to credits to bartering, the ability to exchange value among individuals creates new business models.  For example, in China the ability to handle peer to peer payments with ease for the common person and wide spread internet access has created a paid content model that has yet to emerge in other countries as citizens are cash rich, time poor.  Cryptocurrencies will improve efficiencies in emerging markets where the overhead of financial institutions and over regulation cannot serve the average citizen

    Constellation’s POV:
    Cryptocurrencies and block chain test the usefulness of centralized monetary policy. The first credible country to boldly issue a cryptocurrency will topple the centralized banking, and reserve currency, Ponzi schemes of today’s governments.  Expect individuals to shift their holdings to a model that is more efficient and vastly more private.

 

  • Resentment and backlash emerge toward Silicon Valley for disruptive technologies and business models (since 2014).  Societies now realize the good, the bad and the ugly with how disruptive technologies can affect business models.  Expect a growing backlash against Silicon Valley, the venture capital firms, technocrats and tech geeks who decimate high paying jobs and against businesses using technology as a weapon without considering the human toll.  In addition, the growing gap in wealth and an increase in power allow Silicon Valley to reshape the world to its needs. Similar to the Occupy movements against Wall Street, these movements represent the tip of the iceberg in social unrest and populist action.

    Constellation’s POV:
    The technology companies will expand their tech for good programs in their fight to change public perception.  Most have an ethos to address inequality, yet expect the media to take an aggressive stance in serving a check and balance role as a growing backlash erupts.

 

  • Access trumps ownership in a sharing economy (since 2014).   From car sharing in the late 1990s, to vacation rentals to collaborative financing, the sharing economy has been inching its way into the forefront of the consumer’s mind.  Since, thought leaders such as Rachel Botsman, Lisa Gansky and Anne-Sophie Novel, have been chronicling the forces, underlying trends and players behind the movement.  Key success factors in this new business model require the identification of underutilized assets, optimization of value through time slicing of access, trading on the goodwill and generosity of others and building a reputation economy

    Constellation’s POV
    : A sharing economy model is not for every industry, yet this trend may affect how products and services companies shift their offerings and business models.  Expect brand promise and authenticity to power future sharing economy models.

 

  • Sacrificing privacy for convenience, loyalty, status, and security, in a post-NSA/Snowden world (since 2014).  The proliferation of digital exhaust – the plume of signals and artifacts left behind in our digital world – begs the questions of data ownership and privacy.  As organizations move toward data-driven business models, consumers and enterprises must find a balance between individual privacy rights and the desire to deliver prediction and mass personalization at scale. Moreover, the concepts of trust and transparency become paramount, as authenticity remains the Holy Grail of corporate and personal brands..

    Constellation’s POV:
    There is a battle for Personally Identifiable Information (PII) at the heart of many digital business models; consumer awareness of how their PII fuels business will lead to agitation for transparency and a better deal.  One will expect to see new privacy compacts emerge.

Your POV.

Have you taken account a futurist framework in your 2018 to 2020 planning?  Afraid of a business extinction event like Kodak?  Would you like to join a network of other early adopters?  Are you ready to begin your digital transformation journey?   See you at Davos! Learn how non-digital organizations can disrupt digital businesses in the best-selling Harvard Business Review Press book Disrupting Digital. 

Join like minded folks at the Constellation Executive Network. 

Add your comments to the blog or reach me via email: R (at) ConstellationR (dot) com or R (at) SoftwareInsider (dot) org.

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