Five global trends for 2007

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In the February issue of Voyeur, the inflight magazine of Virgin Blue, I was interviewed for an article about the major trends of 2007. The article is below – as usual allow for journalistic interpretation in the quotations…

FUTURE FOCUS

Ross Dawson is the founder and chairman of Future Exploration Network – an innovative company that helps multinational organisations understand the future technological and social changes that will affect the way they do business. Here Dawson lets us in on the top five trends that will shape our 2007.

1. Web 2.0 revolution

“What we’ve seen in the past five years is a whole new phase of the internet. One of the most important principles of this is participation – everyone can easily set up blogs, upload videos and create music and podcasts. For the first time we are not just consumers but are enabled to become creators, so we have this doubling of media space leading to a world of infinite content, of infinite entertainment.”

Read more →

Trend map for 2007 and beyond

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Given it’s festive season now, it’s probably time for a bit of fun. Nowandnext.com and Future Exploration Network have collaborated in producing a map of major trends for 2007 and beyond, across ten segments: society & culture, government & politics, work & business, media & communications, science & technology, food & drink, medicine & well-being, financial services, retail & leisure, and transport & automotive. Click on the map below to get the full pdf.

Trend_Blend_2007_map.jpg

Trend Blend 2007+ map

Inspired by the subway map for a well-known city, the map shows some of the major trends in each of these segments, as well as the key intersections between the trends. Have a browse through to see some of the more interesting trends in the landscape. And please don’t take it too seriously…

As with most of our content, this is released on a Attribution-ShareAlike Creative Commons license, so if you disagree with the trends we’ve chosen or think you can improve on the map, please take it and run with it!

Our clients will get a glossy pinup of the map, and if there’s enough demand we’ll release a T-shirt….

Fabulous festive season to all!

[UPDATE:] MindShare Asia’s unofficial blog, The Big Swifch, has called this “The world’s best trend map. Ever.”, and relates it to Edward Tufte‘s work. Thanks James! He also says he’s considering doing something similar for media/ marketing trends in Asia. Look forward to it!

Speaking about corporate innovation and the future of business

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Cameron Reilly of The Podcasting Network fame has just interviewed me for his podcast series G’Day World. The podcast is available here. Some of the things we talked about were:

* How senior executives think – or don’t think – about innovation.

* The balance of innovation across large organizations and start-ups.

* Open innovation approaches for large organizations.

* Where media will look like in 10 years, including the spectrum of media, massive fragmentation, and new funding models for content creation.

* Transcending the mouse and keyboard in user interfaces.

I’ve been under the gun with some intense client deadlines for a few months now, so I have a backlog of at least a dozen blog posts I want to do and have not managed to get done. One of these is a quick debrief from when Cameron and I caught up for coffee in Melbourne recently. Hopefully coming soon…

How capitalism is broken and the shift to real-time reporting

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Just back home from a very intense couple of weeks of work and travel, and finally able to comment on the call to action by the world’s six largest audit firms on corporate reporting, released on 8 November. The starting point for their initiative is the belief, concisely articulated by KPMG Chairman Mike Rake, that “the current [financial reporting] model is broken.” Since a substantial part of my work history is in capital markets, a consistent theme for me as I’ve explored the global knowledge economy over the last decade is how investor reporting needs to shift. It is patently obvious that the current financial reporting system does not adequately serve investors or other corporate stakeholders. Investors are making decisions based on deeply inadequate and substantially historical information. The basis of a capitalist economy is that capital is allocated effectively. Since investors are in essence buying a pig in a poke when they buy shares in public companies, in the absence of effective reporting, the system is intrinsically broken.

The auditors’ report, titled Global Capital Markets and the Global Economy: A Vision from the CEOs of the International Audit Networks, provides a comprehensive yet compact view of the state of financial reporting, and where it needs to go. While the report covers issues such as harmonization, oversight, and liability, the real meat of the report – certainly in terms of the reaction it has received – is in its call for substantial disclosure of non-financial information, and a shift to real-time reporting on some issues. Back in the mid-1990s, when I first started to grapple with these issues, I came to the conclusion that while these shifts were inevitable, it would take well over a decade, and there were others who would be better equipped to drive those changes. A decade has passed, and while there has been much examination of the challenges of non-financial reporting, and some solutions (perhaps best articulated in the book Building Public Trust, by Samuel DiPiazza, CEO of PricewaterhouseCoopers, and Robert Eccles), there has been little change in corporate reporting practices, save at the edges. I have spoken about the potential shift to real-time reporting in a number of my keynotes over the last years to associations of corporate treasurers, CFOs, and investor relations executives, with a muted response. A commentary I made in 2002 on creating the transparent corporation, discussing the role of XBRL in reporting intangibles, is still completely current today.

There is no question that there are massive challenges in shifting to real-time reporting, including verification, restatement, and more. Yet in a world driven by information, in the long run a shift to real-time reporting in some form is inevitable. The report ends specifically with a call to lively conversation on the issues raised, and that has certainly been the case. Interesting commentary on the report has included Leon Gettler’s view that the auditors are trying to weasel out of risk, Dennis Howlett’s thoughts on the issues of bringing in intangible reporting, and Gartner’s overview analysis to urge its clients “not to wait for regulators to issue new financial reporting rules before doing something about more frequent financial reporting”. I believe that the issues raised in the report are deeply important, and that the report’s release is the most significant event within the last few years, in terms of accelerating the inevitable shift to a substantially different future for corporate reporting. These issues are now squarely on the agenda, and after progress on these vital issues languishing for years, there is now the potential for some real action.

The greater the uncertainty, the greater the value of scenario planning

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I have been applying scenario planning with clients for the last decade across a variety of industries and environments, including the future of financial services, technology, capital markets, risk management, construction, Internet, Asia, and far more. As I wrote back in 1998 in an article on scenario planning in portfolio and risk management, “The greater the degree of uncertainty and unpredictability, the greater the value of using multiple scenarios rather than forecasts.”

Knowledge@Wharton has just published an interesting discussion on Will a New Theory Help Firms to Manage in a ‘Flat’ World? (registration required), which looks at how executives can make sense of the rapidly changing environment. Paul Kleindorfer, a Wharton professor of operations and information management, made this very interesting comment:

In the past six months, there has been an upsurge in the number of companies coming through INSEAD [the European institute for management education] looking for assistance in scenario planning and scanning, or determining the signposts that suggest which scenario or scenarios should be the focus. Some companies — like Nestle, Unilever and Procter & Gamble — have been doing some scenario planning, but it’s been directed toward competition and technology. So these and other companies were completely blindsided by the recent increase in mineral oils — which was spurred by a law in Germany requiring power plants there to burn 10% bio-fuel by 2010 –and its impact on the vegetable oils and other ingredients they purchase for their products.

These sorts of commodity risks have escaped the scrutiny of many companies. Now they see a single government make a decision and it throws the profitability of an important ingredient out the window. So scenario planning and scanning, together with strategic modeling, intelligence and other issues, are really beginning to take on a much larger significance than before. It used to be about markets, technology and competitors, but now there’s a much richer texture.

Over the last decade I have certainly seen how the cycle of interest in scenario planning from major organizations has tracked the degree of perceived uncertainty in the business environment. The scope of the imponderable now, ranging from geopolitics to consumer behavior, overlaid on the necessity for long-term strategic thinking, means that scenario-based approaches are again on the rise. As suggested by Kleindorfer’s comments, I have seen many traditional consulting firms do scenario planning in such a reductionist manner that the scenarios cover only part of the scope of uncertainty, which entirely defeats the purpose. Today more than ever, there is massive value in engaging in scenario planning for long-term strategy development, in a way that really does uncover assumption and open out thinking across the organization.

IBM drives open business

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This is fantastic. IBM has announced that it will voluntarily publish its patent filings on the Internet. The upside is that it is taking the lead in creating a clearer, less confused, higher quality patent landscape. The (potential) downside is that it exposes its technology directions and strategy to its competitors as they develop rather than once they’re implemented. The great thing about this kind of leadership in creating openness and transparency in business is that it usually is a ratchet – once it becomes more open, it is very hard for it to go back. There are plenty of businesspeople who hate the idea of open business, and fight it in every aspect of how they do business. Too bad for them. We are shifting to a world of open business at a very tidy pace, and I for one think that’s a great thing. Embrace it, or have a tough and miserable time fighting the trend.

Thinking usefully about the future

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The latest issue of Business 2.0 has an interesting piece on how the Institute for the Future (IFTF), one of the oldest future-watching organizations, is creating “artifacts from the future” – physical manifestations of things that may come to pass – to help its clients understand the convergence of current trends and their impact. The article says that IFTF’s clients don’t have the time or mindspace to trawl through the annual 10 year forecasts that are its trademark, thus the creation of more tangible outputs. Alex Soojung-Kim Pang of IFTF believes its clients’ supposed lack of inclination to read reports is overblown, but there is no question that some of the IFTF’s outputs are pretty cognitively dense, and we can all see the attention span of senior executives whittling away year by year. Future Exploration Network will be applying a wide variety of ways of engaging our clients with new ideas. Richard and I, in a project last year helping a major bank develop long-term strategies, used newspapers mocked up with possible headlines for 5-10 years hence to stimulate discussions and new ideas. If we’d had the budget, we would have created one or more “bank branches of the future” that executives could experience for themselves. There is no question that rigor is needed in exploring fundamental trends and how they might play out, but time-impoverished executives often need a more direct approach to provoke them out of their everyday pressures.

Global innovation and networks

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IBM has recently released its second Global Innovation Outlook report. I referred to a related initiative – IBM’s Global Technology Outlook – in the second edition of Developing Knowledge-Based Client Relationships as an example both of collaborative innovation, and how IBM provides customized and highly relevant insights to its clients. IBM brought together 250 thought leaders in five locations around the planet to think about innovation and the future. The insights are available in a publicly-available report, and also in customized interactive presentations for large clients. The report is excellent, not least because it hits on most of the themes of this blog :-) It points to innovation today being: Global, Multidisciplinary, and Collaborative and open. This ties in totally with the story I often tell, of how increasing depth of knowledge and specialization requires collaboration between disciplines, which must be global in scope, and requires new models to draw together disparate strands. In its examination of the Future of the Enterprise, the report focuses on networks, also touching on other key themes of strong interest to me, including “reputation capital” and how value is aggregated. Well worth a look.

Monitoring the future

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Last week I caught up with Michael Hopkins of Monitor Group. Chris Meyer, author of books such as It’s Alive, and previously Director of the Ernst & Young Center for Business Innovation (CBI), came to the Monitor Group after Cap Gemini closed down the CBI, to establish Monitor Networks. Its very interesting business model includes acting as a talent broker, a rather unusual activity for a top-tier strategy consulting firm. Monitor Networks has recently set up FutureMonitor, which is an online community that brings together many people’s insights to gain perspectives on the future. There are a lot of directions this could go, including providing decision-relevant prediction markets for clients. Certainly FutureMonitor is well worth a look to gain some of the distilled perspectives from its participants – very interesting stuff.

10 Trends for 2006+

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My colleague Richard Watson, who among other claims to fame runs the fabulous NowandNext site, has just come out with what will be an annual report. 2006+ 10 Trends: Predictions & Provocations is through Richard’s generosity available here as a free download (usually £35), and Richard is allowing any use of his material with acknowledgement. The ten trends Richard explores in the report are:

1. Anxiety

2. Connectedness

3. Speeding-up

4. Mobility

5. Convergence

6. Privacy

7. Nostalgia

8. Localisation

9. Authenticity

10. Happiness

He then goes on to explore specific sector trends, including society & culture, government & politics, media & communications, money & finance, healthcare & well-being, travel & tourism, and far more.

Just a tiny smattering of the juicy tidbits from the 64-page report:

* In the UK the Royal Society for the Protection of Birds (RSPB) now has more members than the three main political parties combined.

* Reason magazine recently sent out 40,000 personalized copies of its magazine, each with a circled aerial photograph of the subscriber’s house on the cover, and detailed information about that subsciber’s neighbors.

* 42% of the US workforce is unmarried.

* More young people voted on American Pop Idol than in the last US Federal election. But politicians in Lithuania gave away drinks at polling stations, to help increase voting from 23% to 65%.

* At Harvard University, 75% of students support the armed forces, compared to 20% in 1975.

* 36% of high-school students believe the US government should approve news stories prior to publication.

* In 1900 Americans slept 9.0 hours per night, today they sleep 6.9 hours a night.

* It took 30 years for Japan to build to 17 million outbound trips a year, but only 5 years for China. There are 800 million internal trips in China each year, similar to the number on the rest of the planet combined.

* The MTV Starzine magazine, produced by MTV and Nokia, consists entirely of text and photo submission by mobile phones from readers.

Stacks more insights, trends, predictions, and observations in the report.