The UK in Fragility, Hyper-Connectivity and Me. Michael Brennan Executive Director

Transcription

1 The UK in 2015 Fragility, Hyper-Connectivity and Me Michael Brennan Executive Director

2 Understanding the Consumer 2015 INDIVIDUALISM AND COMMUNITY

3 National, Regional and Global 2015 ECONOMIC CONTEXT

4 UK Motoring Ahead? 2.0% 1.0% Total GDP, quarterly change after pre-recession peak 0.0% -1.0% -2.0% -3.0% -4.0% -5.0% -6.0% -7.0% -8.0% -9.0% 80s recession 90s recession Great Depression Current downturn Source: ONS/Trajectory

5 Shop-floor workers left behind as UK motor industry speeds ahead FT 16 Feb 2014 UK Motoring Ahead?

6 The Eurozone Existential Questions What is happening? States in the Eurozone continue to push through austerity measures with the aim of reducing sovereign debt Economic growth is limited, (youth) unemployment high, polarisation growing, along with social tensions around immigration & diversity Greek election has potential to fundamentally change the terms of reference Prospects for 2015? ECB has now launched QE Scepticism & hope surrounding TTIP Deflation a serious threat No return to real growth in 2015 Further populist political progress Keep an eye on France. Syriza are presented as far left, while those they replace are presumably moderates. It is a fascinating insight into what the western media regard as moderation: plunging over half of young people into unemployment, almost doubling child poverty, stripping away basic social protections. The politics of despair peddled by elites mean you are supposed to regard such injustices as inevitable, irresistible, impossible to overcome. Owen Jones, The Guardian, 26 th Jan 2015

7 IMF Austerity A Global Tragedy IMF advocacy of fiscal consolidation proved to be premature for major advanced economies, as growth projections turned out to be optimistic. Moreover, the policy mix of fiscal consolidation coupled with monetary expansion that the IMF advocated for advanced economies since 2010 appears to be at odds with longstanding assessments of the relative effectiveness of these policies in the conditions prevailing after a financial crisis characterized by private debt overhang.

8 IMF Outlook 2015 GDP Growth Forecasts (%) 20 Brazil China France Germany India Russia UK United States EU Source: IMF

9 Divided Societies In the UK 22% of workers earnings are below the formal poverty line UK Families disproportionately impacted by austerity measures Across the EU there are 18 million people unemployed Across the globe 300m young people are outside education or work

10 WEF, Banking Reform, Debt GLOBAL OUTLOOK 2015

11 Economics and Environment 1. Rising Income Inequality 2. Persistent Jobless Growth 3. Lack of Leadership 4. Rising geostrategic competition 5. Weakening of representative democracy 6. Rising pollution in the developing world 7. Increasing severe weather events 8. Intensifying nationalism 9. Increasing water stress 10. Growing importance of health Source: WEF Global Outlook 2015

12 Global Banking Reform 200bn "Bank employees are not more dishonest than others," said Ernst Fehr of the University of Zurich, author of the study published Wednesday by the journal Nature. But he said when reminded of their job they become more dishonest, so something about the culture of banking "seems to make them more dishonest."

13 Global Finance Debt to GDP 174% 2008 Global Debt Six years on from the financial crash that brought the world to its knees, red warning lights are once again flashing on the dashboard of the global economy David Cameron (G20) 17 th Nov In some ways, China today resembles Japan in the early to mid 1990s or the USA in 2007 to 2008 on the eve of their respective financial crises, both triggered by overvalued property FT 18 th Nov % 2014 Global Debt Source: 16 th Geneva Report on the World Economy

14 Income, Age, Austerity and Employment THE UK IN 2015

15 UK - weekly household spending

16 Wages will not recover fully until 2017 (at the earliest) 130% Average wages (2007=100) 120% 110% 100% 90% 80% 70% 60% Source: Oxford Economics 2014

17 Public sector austerity to continue until 2020 Spending cuts are forecast to continue into the next parliament (after 2015 general election) and will have a major impact on public sector employment even as the private sector continues to grow 4.0 Employment in public/private sector, y/y % change Public sector Private sector Source: Oxford Economics

18 Changes in Employment UK: Total Employment Employees Self-employed Q1 Q2 Q3 Q Q1 Q2 Q3 Q Q1 Q2 Q3 Q Q1 Q2 Q3 Q Q1 Q2 Q3 Q Q1 Q2 Q3 Q Q1 Q2 Q3 Source: ONS

19 Divided society? CULTURAL CLIMATE

20 The New Morality Self-Preservation Society C-Suite Scrutiny Brands: Citizen to Personal financial crisis, recession, austerity, stagnation, debt, youth, income, employment Value Hunting Discretionary Thrift Mercurial Consumption Decline of Deference Anxiety Society Hyper-Connectivity The Compromised Consumer

21 Anxiety Society

22 Fragmentation, disillusion, populism and devolution UK GENERAL ELECTION 2015

23 No Longer Two Tribes Labour & Conservative combined share of national vote at selected General Elections 120 Two Party Share of UK GE Vote (%) Turn Out

24 Towards a new UK? Regional Growth Fund Report September 2012 City Growth Commission Final report October 2014 On 27 November 2014 the Smith Commission published its report on the devolution of further powers to the Scottish Parliament.

25 Connectivity today UK CONSUMERS 2015

26 The Connected Consumer UK in a Global Context in 10 adults across 20 markets are now Connected Consumers Connected Consumer Connected Consumer (FTE) Source: Global Foresight Base: 19920

27 The UK Connected Consumer 900 Average time spent using media and communications Ofcom UK CMR 2014 by age band (minutes per day) All adults Including simulataneous Excluding simultaneous

28 Mobile Everything

29 On Demand Economy

30 Alternative Finance

31 Start Up Britain UK entrepreneurs created a record number of new businesses in 2014, Research from the national enterprise campaign, run by the Centre for Entrepreneurs, shows 581,173 businesses were registered with Companies House, beating the previous record of 526,446 businesses recorded in 2013, and 484,224 in

32 Datafication and disquiet

33 Internet of Things (Everything) From the Internet of Things (IoT), where we are today, we are just beginning to enter a new realm: the Internet of Everything (IoE), where things will gain context awareness, increased processing power, and greater sensing abilities. Add people and information into the mix and you get a network of networks where billions or even trillions of connections create unprecedented opportunities and give things that were silent a voice. Cisco defines IoE as bringing together people, process, data, and things to make networked connections more relevant and valuable than ever before turning information into actions that create new capabilities, richer experiences, and unprecedented economic opportunity for businesses, individuals, and countries.

34 Family, authenticity, localism, crowd.. UK CONSUMERS 2015

35 Family Matters 48% of UK children aged up to 11 years old have never travelled on public transport

36 Demand for Authenticity, Meaning (and Simplicity) Top 10 Most Authentic Brands in the UK Marks and Spencer Tesco* John Lewis Sainsbury s Asda Waitrose Virgin The Co-Operative Amazon Morrison s Top 10 Meaningful brands in the UK Clarks Marks and Spencer Google ASDA Sainsbury s John Lewis Argos IKEA Morrisons Youtube Source: HAVAS Media; Cohn & Wolfe, Authenticity Report 2014 *Study was conducted before the scandal around Tesco s profits emerged

37 Rise of Localism Demand for Artisan produce from farmer markets to craft beer Emphasis on localism, natural produce, quality and bold flavours More craft beers and microbreweries found in the UK than in the previous 70 years Sales of local beers grew by 7.9% in 2013 to 1.55 million barrels

38 Community, Serendipity, Hybrid Experiences

39 Disrupting the energy market

40 The New Normal Discretionary Thrift Value Hunters Mercurial Consumption Connoisseurship Mind and Body Management The New Normal Experiential Connected Localism Sustainable Lifestyles Authenticity

41 Thank you Trajectory Ltd Enterprise House 1-2 Hatfields London SE1 9PG T #TrajectoryTweet Michael Brennan Executive Director michaelb@trajectorypartnership.com