The Internet of Things is a Mega Trend for the next Decade (courtesy of Take Me To Your Leader)
If we can gaze into the crystal ball, what would the future behold? How would the next 10 years be like in terms of business, society and culture?
Thanks to an invitation from the Pacific Asia Travel Association (PATA), I discovered these answers in a talk given by Manoj Menon, Managing Director APAC of Frost & Sullivan at the recent PATA Hub City Forum 2012.
Looking back at the last 10 years, Manoj shared that there were 5 Mega Trends that took place, namely:
2) Rise of Internet/Online Businesses;
3) New Business Models (Low Cost, Outsourcing);
4) Rise of Emerging Markets (particularly Brazil, Russia, India and China or BRIC);
5) Convergence of industries (eg music and internet).
Riding on these trends, companies like GE, Huawei, Samsung, TATA, Apple and Singapore (OK, we're a country!) succeeded, while others like Borders, General Motors, Polaroid, McGraw Hill, and Tower Records failed to take advantage of these new realities.
For the road ahead, Manoj postulated the following 10 Mega Trends:
1) Urbanisation - With 3.2 billion people in cities and a massive migration of about 600 million folks from rural to urban communities (particularly in China and India), the world will see more and more mega cities, mega regions, mega corridors and mega slums. Richard Florida alluded heavily to these trends in his book "Who's Your City".
2) Rise of the Asian Gen Y - By 2020, about 2.56 billion of the global population will be 15-34 years of age. Out of this number, 61% will hail from Asia alone, with India, China and Indonesia accounting for 1 billion Gen Ys and Millenials.
These youngsters have a different set of values, beliefs, interests and lifestyles from their predecessors. They value personalisation and individualisation, are highly techno-savvy and connected 24/7, and have a greater civic and environmental consciousness.
3) New Economic Powerhouses - Other than the BRIC nations, emerging growth areas include economies like Thailand, Vietnam, Poland, South Africa, and many of the younger states around the world. This change in the balance of power will also shift consumption patterns.
4) Smart is the New Green - Increasingly, smart technology, infrastructure, energy, mobility, buildings, materials, and meters would change our lives. Through embedding nano-chips and the deployment of artificial intelligent systems, everything could be automated and made more environmentally friendly/resource efficient. Over 40 global cities are positioning themselves to be smart and sustainable cities with the majority in Europe, North America, China and India.
5) Ubiquitous Connectivity and Convergence - Through the omnipresence of the "Internet of things", there could be some 80 billion connected devices in 2020 compared to the 5 to 6 billion around today. Every household would have 10 connected devices - mobiles, laptops, tablets, watches, athletic shoes, television sets, you name it. In fact, there could be a staggering 500 devices with unique digital IDs for every square kilometre!
6) "Zero Concept" World in 2020 - With every process becoming more productive, environmentally efficient and sustainable due to technology, the world could optimistically trend towards zero wastages, zero security issues, zero starvation (hopefully), and zero strife/war. Personally, I'm a little sceptical about this, but I guess its always good to be utopian in outlook.
7) New Business Models: Value for Money - As the Internet and technology reduces the cost of transaction, new business models tailored towards the preferences and needs of the future consumer emerge. Here, concepts may include the following:
- Pay as you go products/services which are utilitarian and on demand. An example is a tire manufacturer which allows customers to pay for tires as they use them on a per mile basis, using technology to improve their resilience and quality.
- Co-creation of value where customers help to jointly develop and produce products or services. Facebook, blogs and Youtube channels are examples of these in the online world, while sites such as www.makeyourownjeans.com allows people to customise their clothing.
- N = 1, R = G, where N means the business could serve a customer of 1 and where the revenue (R) or Resource (R) can be found globally (G).
8) Growth of Holistic Health (Body, Mind and Soul) - With the heightened stresses of an ever-connected world, people will veer towards activities that contribute to their health, wellness and well being. These will enhance their moods, reduce stress levels, improve mental health, boost optimism and heighten security.
9) High Speed Rail - The world's current supply of about 15,000 km of high speed rail would increase to 50,000 km in the next 8 years. Happening predominantly in Asia, this trend may connect continents and not just cities. (I just hope that these networks would be resilient to breakdowns!)
10) Rapidly Increasing Span of Influence - Finally, the time needed to reach an audience of 50 million has dropped precipitously through the advent of broadcast technologies from the radio to television to instantaneously "viral" platforms like Facebook and Twitter. This democratisation of influence makes it easier than ever for consumers to make their voice known, bringing down companies and even countries!
Against this backdrop, what can companies do? According to Manoj, they should first identify and select the mega-trends through macro economic analysis, build scenarios of what these mega-trends are likely to be, analyse their impacts on the industry, and finally analyse the impact on the company as well as its products and services. Through such analyses, strategic maneuvers could then take place.
Finally, for the tourism and travel trade, it was predicted that trends such as sustainability, niche tourism (medical tourism, eco tourism, sustainable tourism), "smart" hospitality, seamless and multi-modal travel, and social media networks would impact how people travel. New business models (eg create-your-own-itinerary) and alternate travel hubs (secondary cities with airports) would also result in the growth of nascent destinations that are off-the-beaten-track.
Labels: business strategy, consumer trends, frost and sullivan, Future forecasting, mega trends, PATA, tourism, trends