Trends are not simply about predicting the future, it would be scary if everyone had different predictions, says David Silverstein, global CEO of BMGi (an innovation and strategy consultancy).
Silverstein, who’s written books on innovation and business leadership and spoken to groups like TEDx and NASA identified seven trends across the world “people don’t normally think about” for businesses to take advantage of future opportunities.
1. Geopolitical complexity and risk
With the unpredictable state of economies, Silverstein advises businesses do extensive scenario planning, looking at a “portfolio of possible futures” to prepare for different and multiple possible outcomes. “The economic system of the world is out of control. And out of control means we can’t look to the past to give us insight about the future,” he says. Geopolitical reactions are very much driven by economics. “We live in this era now of great complexity and risk. Where every country affects another country, where politics and economics are totally intertwined.”
2. Economic surprises and stability
Economic surprises are small events or “black swans” that upset the apple cart, explains Silverstein. “Who would’ve thought that Iceland could’ve set off the global financial crisis back in 2008?” Our ability to make predictions of the future based on observations of the past has been diminished given the abnormal operation of financial systems. Today, children from countries like US and Japan and European countries can’t be taught the value of saving because interest rates in those countries are 0. “The basic functioning of the economy has been broken down … everything we know about economics has vanished in the last seven years,” he says.
3. Cyber security spotlight
The past year’s hack attacks on companies like Sony have brought to light concerns about theft of money, identity and intellectual property. Silverstein says there’s been a surge in cyber-crime because like any successful business model, cyber-crime is a business. New criminals create new criminal gangs that are experts in cyber-crime. “Success breeds success and invites new market entrants.” Additionally the world has a young population that “grew up on the internet”, so the skill level of people engaging in cyber-crime has increased. “Fifteen years ago, we had a small subset of a population that had those expertise, now we have a whole generation.” The tough economic times has also driven more people to crime, he says.
Businesses will take steps to protect themselves and cyber-security companies are likely to spring up. “[Cyber-security] It’s one of the fastest growing industries there is today.” There are also new kinds of protection technology. Double authentication processes and one-time use passwords are becoming popular. One-time use passwords, Silverstein explains is like using tokens. So for an individual to be vulnerable to cyber-crime, a hacker would need access to the individual’s account number, username and password and token. Hacking sometimes isn’t always sophisticated, he says. For example, the Sony hack took place when an employee’s badge was stolen. “They went through the front door. Kind of like someone stealing the key to your house,” he says. “Double authentication would’ve stopped them,” he remarks.
4. New dimensions of digitization and connectivity
The “internet of things” or the phenomenon of having computing devices embedded with internet infrastructure will transform the way business is conducted as more devices, home appliances and cars become integrated with internet systems. Silverstein says South Africa is only as far behind the rest of the world as the speed it takes to connect. Certain aspects of its businesses, especially in the financial sector, are very modern and sophisticated. Countries like Singapore are at the forefront of digitization and connectivity.
Silverstein argues there are things you can accomplish in Singapore that you can’t in South Africa because our problems are different. “It really doesn’t matter if we improve the internet infrastructure if we don’t have the power to turn our computers on”, he says. Currently solving the energy problem in South Africa should be a priority.
5. Increasing focus on health and wellness
As new information comes to light about healthcare, we still need to come to terms with having the ability to provide for everybody. Like the food crisis, Silverstein explains although we have the ability to grow enough food, the problem comes in with having adequate business and distribution systems to get the food to people who need it. As for the healthcare system in South Africa, it should be as prioritised as much as feeding people. South Africa is heading in a direction where people feel they have a right to decent healthcare, prompting politicians to promise better healthcare. However the problem is that South Africa’s economy can’t afford it.
6. Generational changing of the guard
As more of the baby-boom generation reaches retirement age, higher executive turn-over and the adoption of a growth mind-set in business, a younger generation of CEOs are taking the stage. Given the impact of changing technology and changing consumer culture, a more youthful perspective is required to manage businesses. Silverstein says there’s hardly a skills gap to be concerned about. “We’ve got in Silicon valley 28 year olds running billion dollar companies … This idea that you need 20 years of experience to run a business is absurd.”
7. Challenges to democratic systems
The “assault” on democratic principles is coming from a lot of different directions, says Silverstein. Countries like Afghanistan, Iraq and Libya are just some examples of failed states that had democracy forced on them. “Maybe not all societies are ready for democracy. I believe it’s right for all societies, but not all are ready for it.” Giving Russia as an example, Silverstein says in the 90s when the wall came down and the Soviet Union broke, Russia almost “imploded” in the face of “a little too much democracy, a little too fast”. “Russia is a lot less democratic today. We can all be a little critical of that, but maybe it’s all it can handle.”
As for China, Silverstein says the Chinese constitution calls for a democratic state, however the Chinese are following a 50-year plan and not a regular 5-year plan in order to have a controlled transition.
In South Africa, Silverstein the smooth transition of power after each democratic election shows that democracy has been a success. But he asks: “Does that mean it’s the best system for improving the economy? That’s what some others may question.” Whether South Africa’s democracy will still be considered a success in 100 years depends on whether the economy will be healthier.
Silverstein says the trend most applicable to South Africa would be the economy, it has to improve. “There’s got to be a better focus on the economy because all the other problems South Africa faces are driven by the economy … All of the questions, all the political challenges are driven by economic dissatisfaction.”
*This article was featured in Finweek magazine.