1 What s on December 2013 WHAT S ON 2014 KAIROS FUTURE S TREND REPORT FOR THE UPCOMING YEAR Mats Lindgren, CEO Kairos Future, Consultants December for Strategic 2013 Futures
2 What s on 2014 December : START LOOKING FOR THE SIGNS OF SPRING For the fifth year in a row, we ve experienced a period of economic and political winter. In that respect, 2014 will not be different. We re still waiting for a new spring, for optimism and trust in the future and investments in technologies and infrastructure that will be the foundation for a long economic boom, similar to what the West experienced during the 1950s and 1960s. Although not much is visible, below the surface are signs of the new, some promising, others more frightening. And above the surface there are many illustrations of the troublesome struggle between old and new paradigms and structures, and the fumbling search for foothold in a challenging time. Here, we have summarized some of the present trends that will have significant impact on 2014 and beyond.
3 What s on December 2013 TREND 1. BACK TO THE NEW OLD WORLD For decades we ve learnt that the overall megatrend is globalization and increased openness. Not so any more. China s recent declaration of an expanded flight zone south of Japan, and Russia s threatening of Ukraine are two examples on that we re now moving back to a new world order, with increased national chauvinism and tension between aspiring super - powers. DHLs Global Connectedness Index points in the same direction; the world is less globalized today than Trade is regionalized rather than globalized, and we are, at least temporarily, moving towards what the Economist recently called The gated globe. TREND 2. THE RETURN OF CLASS SYSTEM Did you think that the concept of class was dated? Think again; it s coming back in new formats. Firstly, the chasm between north and south is dividing Europe into separate worlds. In the north, most countries have recovered nicely from the financial crisis in , and citizens are fairly satisfied with their governments and personal economic situation and outlook. In the south, France included, the situation is completely different, with political implications of immense proportions. The same division is present on the national level as well, with a growing divide between haves and have-nots, where the latter are the generations expected to be the backbone of the future society. In UK, it s appropriately called the Jinxed generation.
4 What s on 2014 December 2013 TREND 3. THE END OF FREEDOM AND THE RETURN OF BIG BROTHER Ever since the early 1980s, Western democracies have been on the road towards increased freedom of choice. Meddling politics has been on the retreat, and the big brother attitudes from the earlier years laid aside. But times are changing. In Sweden, for instance, where publicly funded market solutions in childcare, schooling and elderly care have flourished, the pendulum is swinging back in favor of publicly organized welfare. The falling standards of Swedish pupils as reported in the latest PISA study, has been explained as a direct result of the free choice of schools. At the same time, Western democracies are becoming increasingly eager to track their citizens doings, as has been apparent in the NSA scandal. And, as in the case of the Guardian, governments do not hesitate to violate the freedom of speech to stop those who publicize information of the activities. With a structural crisis in combination with increased insecurity, big brother will continue to step up its ambitions.
5 What s on December 2013 TREND 4. THE END OF THE FUTURE A month ago, Kairos Future in collaboration with Tieto arranged a series of roundtable discussion with Nordic executives on reallocation and business transformation. One participant, from one of the major banks said, that the problem is not that we lack money to invest; the problem is that we don t know what to invest in. Executives from other industries agreed, and looking at the corporate investment levels in general, it is easy to understand why. Growing profits do not lead to increased investment levels as it used to do, but to higher dividends. Simultaneously, stock markets rise to an all time high, with an increasing amount of the prices based on intangibles and expectations. To defend those, there is a growing need for investments and reallocation, contrary to current practice. Based on that, Ben Inker, an analyst at GMO, a US investment management firm, recently said that the US equity market is overvalued by 70%. So despite social media tech boom, economic optimism in emerging markets and technological optimism across the globe, there are many signs that the future is gone, since companies simply don t seem to know what to bet on.
6 What s on 2014 December 2013 TREND 5. THE CRY FOR THE CROWD So how do you find the promising futures worth investing time, money and attention in? Increasingly, the answer is through the crowd. Get your customers, partners, employees and global crowds engaged. Make them part of the solution. As many as 75% of years olds in 13 countries across the globe say that this is something companies and organizations should do more, according to our Global Youth 2013 study. Getting the crowd involved might also make innovation faster and cheaper, as many companies have witnessed. With new technology, companies could even organize their own consumer SWAT-teams. We did that a few months ago and got 1000 consumers engaged in developing ideas for the dairy producer Arla. One benefit of crowdsourcing (and crowd funding ditto) is that it leverages opportunities. Everyone gets a chance to prove his or her abilities, and that turns the world, in a positive way, into a Britain s got talent show. It s as when the unemployed Susan Boyle responded with I haven t got the chance before, when asked why she hadn t become a professional singer, an Elaine Page. But through Britain s got talent she released an album that became the fourth best selling album at Amazon ever. In a crowdsourcing world, that will happen to many more.
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8 What s on 2014 December 2013 TREND 6. THE RISE OF AUTONOMOUS PALS What will we find when we start looking for the promising futures? From 2014 and beyond, one of the things we ll definitely find is smart pals in the form of algorithms and robots. And they will slowly become more and more autonomous. Electronics producer Foxconn is now introducing 1 million robots in their factories in China. Worth noticing is that the world market of industrial robots in 2012 was units. That s a big step for robotics. IBM supercomputer Watson will soon be accessible for anyone interested in developing apps that benefit from its abilities. Cars are becoming self-driving and consumer electronics producers are starting to invest in humanoid robots, and when the day comes when they start investing fractions in robotics of what car-makers invest in developing new platforms there will certainly be a revolution. And that day is probably not far off. And when it arrives, we will end up in a land filled with Hubots. In September 2013 a couple of Oxford scholars estimated the power of automation, based on a solid investigation of the US labor market. Their conclusion was that 47 % of all US jobs will be possible to automate or computerize within one or two decades, mainly less complex manual and service jobs. But the rise in computing power and artificial intelligence also leads into a third phase of automation, following the automation of manual and standardized service work, namely knowledge work automation. A recent McKinsey study indicates that automation of knowledge work might be the second most important technology, after mobile, in terms of economic impact over the years to So if you look for the future, look for automation.
9 What s on December 2013 TREND 7. ENERGY FOR FREE We ve been used to view energy as a limited and expensive resource. Recently, that perception has begun to change. In the US, energy is no longer a concern since relatively cheap natural gas is entering the market as a result of the implementation of fracking technology. More interesting though, is what happens in the field of solar technology that for years has been promising, but not really taken off, except for niche applications. But now it finally has. Germany is reaching the point where it is cheaper to buy solar panels and produce your own electricity than to buy it from Eon or any other energy company. Imagine what happens if the price continues to fall as it has in the past. Over the last 10 years the price of solar-produced electricity has fallen with around 80 %. Since we re talking electronics, it s reasonable to assume that it will continue to follow the trajectory in the future too, making solar-power extremely cheap in less than a couple of decades. If we add the possibility of transmitting electricity over large distances, we ll never need to worry about energy again. With the recent ABB invention that makes high power DC transmission possible, we might very well be heading for such a scenario. And that would put the world at large in a very different situation.
10 What s on 2014 December 2013 TREND 8. UNAUTHORIZED AUTHORITIES It s not only the authorized authorities that advance, so do the unauthorized. Bitcoin is one example of a much broader trend of unauthorized players that legal entities across the globe need to respond. When Motorola made the decision to put the microphone always on in its latest mobile, named Moto X, they put themselves in the position of an unauthorized authority. And so do most of present days online players collecting data without the users explicit and conscious approval. Dream tailored advertising anyone? As an increasing amount of business models are based on the combination of personal data collection, big data analytics and targeted advertising, the unauthorized authorities will continue to grow. Will startup player Shadow, with the ambition to collect the dreams of millions of citizens across the globe, end up as a provider of information that could be used for dream tailored advertising? And will genomes company 23andMe, started by Google-founder Sergei Brin s wife Anne Wojcicki succeed with the ambition to sell genome-segmented ads? Finally, the majority of unauthorized authorities are certainly each of us. And when more and more individuals start life-logging, documenting their doings with photos and film, the life-loggers freedom of choice will heavily restrict the personal integrity of all others. Welcome to the world of unauthorized authorities.
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12 What s on 2014 December 2013 TREND 9. DE-SOCIAL In one sense we are more social than ever. In fact, we re so social and on the grid, that 25 % of global youths are willing to trade their best friend for the possibility to stay on the grid for two more years. On average, 43 % of young people are online five or more hours a day, 13 % claim they are online more than 8 hours. What if that time could be spent on their studies? The question that Nicholas Carr asked a couple of years ago, is now becoming a truism. Google, or at least Internet as a phenomenon, is making us stupid. And Facebook is making us lonely and depressed. To be too much into the selfie thing is not making us happier either. There are studies showing that in order to be happy you should think less on yourself and start focusing on others. In the future, to be happy, we probably need to endure being alone in silence. Because, in one respect the information hunting and social networking could be viewed as nothing less than a giant escape from the existential angst that shows up as soon as you stop twittering. The rising interest in concepts such as living off the grid and mindfulness are examples showing that the coming years will be less about communication and more about concentration. And without mindfulness and lowered levels of internal noise, it is impossible to concentrate. Concentration is the only way we can stay ahead of the ever-smarter computers a few years more. We are moving towards the age of concentration.
13 What s on December 2013 TREND 10. THE RETURN OF DISCIPLINE For several years now, discipline has been the new black. If you re young, smart and successful you need to look after your body, workout frequently and push yourself to the limits. Going for an Ironman seems to be the ultimate goal. At least you should do a Marathon every now and then. And that takes discipline. But discipline is now turning. In a mind-scattered world, the ability to focus and stay focused becomes a core asset. Memory masters are at the top of the pyramid in terms of focusing abilities. Nothing is more demanding than to concentrate long enough to memorize 200 random abstract figures. Having a perfect memory is also the super-power people long for most, according to a recent Swedish study. And it s possible to increase the capacity of memorizing large amounts of information, strengthen the attention abilities or even improving the IQ by simple thought and mind training. LearningRX is an American company offering 90 lessons 18 weeks courses that significantly improve the abilities in more than a handful of dimensions. Moving into a thought-based economy, the ability to stay at top mentally is the key individual asset. Therefore for certain, LearningRX and apps like Lumosity is just the very beginning of what will come.
14 What s on 2014 December 2013 START LOOKING FOR THE SIGNS OF SPRING 2014 will be yet another year where we long for the spring, waiting for the future to unfold. But instead of simply waiting, it s time to start looking more actively for and nourish the signs of spring, and at the same time fight the tendencies that risk turning a normal winter into a true Fimbul winter. As individuals, we need to prepare ourselves for the automation revolution, equip ourselves with improved concentration and thinking abilities and consider how and what we share online and how we spend our time and attention. For companies and organizations, it s time to start exploring the technologies transforming societies and industries, some mentioned above, others not. It is also time to evaluate investments, innovations and re-allocation strategies and procedures and think ahead, since that is the only way to be prepared and ready to take action when opportunities occur. Finally, it s important to start exploring the opportunities with the various formats of crowdsourcing and co-creation available. Governments are challenged on several levels. On a long-term strategic level, the challenge is to transform society into a thought-based sustainable economy. That will, for sure, require heavy investments in everything from reformation of the education system to green infrastructure. On the short and mid-term level, the challenge is to manage a growing social unrest, and fight a threatening deflation and tendencies of increasing protectionism and regional chauvinism.
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16 What s on 2014 December 2013 ABOUT KAIROS FUTURE Kairos Future is an international consulting and research company that helps companies and business leaders to understand and shape their futures. We work as consultants for strategic futures, providing our clients with trend analysis and scenario planning, strategy and innovation, strategic change and capability development. Our aim is to make complexity actionable. The company was founded in 1993, has its head office in Stockholm and representatives in Beijing, New York, Barcelona and Copenhagen as well as partners around the globe. For more information, visit our website or contact us at: Kairos Future Box 804 (Street address: Vasagatan 40) Stockholm, Sweden Tel: +46 (0) Fax: +46 (0)
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