The power of megatrends for strategists and decision makers: Why all organisations need to consider megatrends

What are the megatrends to watch?

Though the current list of forces shaping the future of the world can feel exhaustive (and ever expanding), you may have come across the term ‘megatrend’ to categorise and help define the biggest issues facing society. ‘Megatrends’ are defined as long-term (>10 years) global changes in individual, social, and technological structures that are expected to have a significant impact in the future. Megatrends are known in the present day, but their future path may be unknown. They differ from trends, which are unlikely to last as long, and disruptors, which are a singular occurrence causing radical change on a global scale.

Megatrends have the power to shape businesses, transform industry and completely alter economies. Because the future of megatrends is always uncertain, organisations must carefully consider and prioritise megatrends as a decision-making tool, for informing future strategies and stress testing existing ones. Within and between the megatrends lie many big decisions, which are becoming increasingly urgent, and challenges that we will need to confront as we look to the future – and we may need to make difficult trade-offs.

At Deloitte, we’re applying megatrends thinking to client work and already seeing results. We were recently commissioned by the Secretariat for the New Zealand Climate Change Chief Executives Board to carry out a high-level study of global megatrends as part of its work on climate change. As some of this information could have broader interest for business, wider public sector and communities in Aotearoa New Zealand, the Secretariat has provided Deloitte permission for select findings to be made publicly available. A targeted literature review and interviews with global and local experts have identified eight key global megatrends that demand the attention of New Zealand's leaders and decision makers. The insights from this work helped inform our views in the recently released Deloitte State of the State report, where we put forward six global trends, alongside how they could shape New Zealand’s future and the implications for decision makers.

To add to our findings in State of the State, we have uncovered and explored additional megatrends and the ways in which organisations can harness the power of megatrends insights.
 

Which global megatrends should we be aware of?

There are six key megatrends: Geopolitical tensions, climate change and nature, persistent inequity, polarised perspectives, an ageing and changing population, and the accelerating technology landscape. Although these six are top of mind, the list is not exhaustive. The following three megatrends will also be top of mind for strategists and decision makers:

Scarcity: Global population growth and a rising middle class increases the demand for resources (water, food, energy, metals, minerals etc.) As economies decarbonise, the demand for resources that enable consumption and continued economic growth using lower energy or lower emissions (such as renewable energy and electric vehicles), will continue to increase.

Hyperconnectivity: The rise in ICT technologies have continued to proliferate and the world is increasingly hyperconnected. We use connective technologies to learn, work, socialise, play and transact. As the world becomes more reliant on connectivity, vulnerable communities or remote communities without adequate infrastructure are negatively impacted. Hyperconnectivity will influence public discourse on a number of social issues.

Systems thinking: Decision making has begun to permeate traditional silos. Considering stakeholders from the wider ecosystem and the influence of externalities is becoming the norm. Organisations are increasingly expected to consider not just the investor and shareholder – consideration of environmental, social and governance (ESG) factors is expected in business decision making and legislation to standardise and enforce this is rapidly expanding globally. Policy making is also becoming blended across multiple issues with policy requiring co-benefits and wider perspective on outcomes.

These megatrends represent significant challenges for both New Zealand, and the world. We are at a point in our history where social, technological, political, and economic megatrends create new opportunities that we may miss if we don’t educate ourselves and act. We now find ourselves in a shifting reality, characterised by complexity, uncertainty, and disruption as we transition from one normal to the next. Faced with these megatrends, our issues, risks and opportunities are playing out in the current day, but the complexity of them requires us to take a much longer-term view.
 

The next article in our series explores perspectives on harnessing the power of megatrends insights. Read it here.