The 6th Wave: Understanding the Next 40 Years Morningstar, Vienna, March 14, 2013

Transcription

1 The 6th Wave: Understanding the Next 40 Years Morningstar, Vienna, March 14, 2013 Adj. Prof. Markku Wilenius University of Turku Finland

2 Who am I? Adj. Professor & senior advisor at Finland Futures Research Centre Professor of Futures Studies at Turku School of Economics since January 2004 (as of 1 Jan 2010 University of Turku) until July 2012 Director of Finland Futures Research Centre , Senior advisor/ Allianz SE from Jan 2010 to Jan 2011 Senior Vice President/head of strategic research at Allianz SE / Munich, Germany from Dec 2007 to Nov 2009 President of three foundations Partner of a start-up company Member of the Club of Rome

3 The question: what is happening really?

4 This is our panoramic perspective: Modern economies fluctuate in a cycle of years 1 st Kondratieff Steam engine 2 nd Kondratieff Railway, steel 3 rd Kondratieff Electrification, chemicals 4 th Kondratieff Automobiles, petrochem. 5 th Kondratieff ICT 6 th Kondratieff Intelligent technologies Panic of Long depression Great depression st and 2 nd oil crisis Financial crisis xx Rolling 10-year yield on the S&P 500 since 1814 till March 2009 (in %, p. a.). Source: Datastream, Illustration: Allianz Global Investors Capital Market Analysis

5 The pattern is always the same Old industries are replaced by new ones Typically associated with rising equity markets with an eventual crash Corporate cultures and processes change Extended periods of long-term economic growth 5. New professions emerge

6 The drivers behind 6th Wave ( ) Globalisation: decentralization of the power centers Key megatrends Demographic change implying aging and longevity Key trajectories for social change Key innovation platforms The expansion of resource efficient technologies The rise of the bioeconomy Digitalization and the dominance of second economy Growth of health services The rise of complex societies Maturing environmental concerns Web-based empowerment of the people

7 Sixth cycle: whose benefit? Key trends & innovations Globalisation Demographics Eco-trends Micro structures & technologies Holistic health Beneficiaries Knowledge-intensive services: logistics, IT-services, security services, educational services, mining industry, sharing businesses Healthcare and health maintenance services: pharmaceutical industry, biotechnology, care services (care facilities, financial services for pensioners & healthcare) Markets connected with environment: renewable energy, energy efficiency, water treatment/desalination, recycling technologies, smart grids Nanotechnology, biotechology Wellness markets, organic products & functional food, healthcare consulting, medical technology

8 Why resource productivity is the most important driving force for the next wave?

9 Trend-like surge of prices among raw materials, commodities and energy

10 Evidence from the recent past

11 A complex mixture of developments and trends

12 The end of cheap oil? World Energy Outlook Saudi Arabias are required by 2035 to just maintain current supply! - highly unlikely!! Source: World Energy Outlook 2010, International Energy Agency

13 While some key resources, such as fresh water, are under increasing pressure in the light of warming atmosphere 4 o C Implications 0.5 to -0.5 is normal Palmer Drought Index - 4 is extreme drought - 6 is exceedingly rare Source: Drought Under Global Warming, NCAR, October 2010

14 Dramatic results of a recent report by PIK/World Bank Source: 14

15 The end of the oil era means the end to authoritarian governments and corporate policies, and fundamental shift to lateral power 15

16 In addition, we have a dramatic aging going on in Europe... Source: Prof. Wolfgang Lutz/Global Education Trend scenario, World Population Program, IIASA 2009

17 Thus longevity & aging is becoming the key components of our societies Increasing demand for life quality enhancing services Stronger demand for pensions and investment products New life styles & consumption patterns emerge Increased need in public-private partnerships to fund enhancements in national health systems

18 Because of the paradigm shift, digitalization is getting now on the fly Copyright Allianz SE, Economic Research & Corp. Dev ; page 18

19 See what happens in printing business: Production of the newsprint (tonnes) European Union Northern America South America Asia

20 And you see here the other side of the coin Q2 Q3 Q Q2 Q3 Q Q2 Q3 Q Q2 Q3 Q Q2 Q3 Q Q2 Q3 Q Q2 Q3 Q Q2 Q3 Q E-BOOK SALES source: Association of American Publishers

21 Everything that is produced with nonrenewables will be produced with renewables

22 An example from forest industry LANDSCAPE SOCIO-TECHNICAL REGIME 6th Wave: Socio-economic transformation Old regime: pulp & paper business --> Pressure to renew the forest-valuemodel Destabilisation of the regime A window of opportunity New regime for forest based value creation NICHE New digital forms of business creation Natural fibers to replace oil-based products Wood construction Wood design Bio-fuels (Adapted from Geels 2002)

23 How to use resources smarter? Sharing economy is on its way.

24 Case: Online service that provides a platform for individuals to rent unoccupied living space and other short-term lodging to guests. Strongly embedded in social media. Founded in 2007, initially a very disruptive idea: "I thought the idea was crazy. Are people really going to do this? I would never do this. - Y Combinator cofounder Paul Graham The result: Airbnb has enabled more than 4.5 million bookings on 100,000 active listings in 192 countries, resulting in a reported $500 million in transactions in 2011, on which it charged up to a 15% fee. A disruptive force in the stagnant hotel industry, a major driver behind the sharing economy, and a proof of the value of design in the engineering-centric tech world. 24

25 Please be open, radical and ready for change I think there is a world market for maybe five computers." -- Thomas Watson, chairman of IBM, 1943 "Heavier-than-air flying machines are impossible. -- Lord Kelvin, president, Royal Society, "Who the h_ll wants to hear actors talk?" -- H.M. Warner, Warner Brothers, "Drill for oil? You mean drill into the ground to try and find oil? You're crazy." -- Drillers who Edwin L. Drake tried to enlist to his project to drill for oil in "There is no reason anyone would want a computer in their home." -- Ken Olson, president, chairman and founder of Digital Equipment Corp., 1977

26 You find the whole 6 th wave story here. ulkaisut/e- tutu/documents/ebook_ pdf 26

27 Success!