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Foresight 2020 – likely changes to the global economy in the next 15 years

2020 report.pngForesight 2020 – a new research study from the Economist Intelligence Unit (download pdf here) looks at the likely changes in the global economy over the next 15 years (via Accelerating Innovation).

While reminding us that 15 years ago the Soviet Union still existed and that China was still largely a planned economy – making a 15 year global economic outlook look like hubris to some – the Economist lists 5 trends that will bring massive changes to the global economy between now and 2020. They include:

  • Globalization – there will be a redistribution of economic power – with China and India taking a much larger slice of the world economy, and with labor-intensive production processes continuing to shift to lower cost economies.
  • Demographics – populations shifts will impact economies significantly. Some economies with favorable demographics will enjoy continued growth, while others with ageing populations will see their growth stunned.
  • Atomization – with increased globalization and continued improvements in networking technologies, firms will be able to use the world as their supply base for talent and materials. The boundaries between different functions, organizations and even industries will be increasingly blurred – finally delivering the atomic enterprise that some have been predicting for awhile.
  • Personalization – while price and quality will continue to matter, personalization will increasingly play a role in how people buy products and services.
  • Knowledge Management – focus of management attention will shift to innovation and customer service, where personal chemistry or creative insight matter more than rules and processes. Improving the productivity of knowledge workers through technology, training and organizational change will be top of mind in most boardrooms during the next 15 years

Of the 1,650 executives that were interviewed, 45% think that knowledge management will offer the greatest potential for productivity gains in the next 15 years. 35% believe that customer service and support will offer the greatest potential, while 29% think that strategy and business development will be the key. And 28% think that marketing and sales activity will offer that potential. A majority of the respondents think that “knowledge workers will be their most valuable source of competitive advantage!”

Another promising foresight is that “executives expect organizations to become flatter and employees to have more autonomy to make substantive decisions.” That should make for a much happier workforce! The report has a whole chapter dedicated to the future of the company over the next 15 years.

Besides providing overall global economic predictions and the outlook for companies, the report also takes a closer look at specific changes that might occur in eight specific industries.

Surprisingly the study does not deal with the radicalization of religion (i.e., the religious right standing in the way of stem cell research in the US, or the radicalization of Islam – and its impact on innovation), nor does it really deal with education as a major driver of future economic activity (i.e., the impact of the number of graduating science PhD’s on those economies).

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