Catalysts
Global catalysts are technological and socioeconomic forces that change the shape of the global economy, compelling companies and public entities to adapt. How can organizations parse through the flood of information to identify the non-core developments with the potential for system-wide effect?
Change Is Not Linear
Markets change in steps. Incremental improvements occur over time, eventually culminating in a transformation to a new paradigm. The time between paradigm shifts is shorter in some industries than others. Media has transformed from radio to TV to internet in a shorter time frame than naval locomotion transformed from sail, to coal, to oil — but in both cases these transformations changed the world.
Identifying the catalysts that ignite these transformations is an existential task for large organizations, as most will fail or be severely diminished during these periods. This is a challenge in the current environment of information overload and media hysteria – and because many of these catalysts arise from fields outside an organization’s core focus.
Leverage the catalyst framework that we have created to identify these transformational developments and how they spill over to affect strategy and decision-making in other industries and regions.
Strategic Context
World populations are increasingly moving to urban centers, dramatically increasing population densities in cities worldwide. The result of these pressures is more large cities and mega-cities worldwide, which creates a new set of transportation, sanitation, and infrastructure requirements for cities, and changes market dynamics for companies. New technologies, processes, products, and engineering solutions will be created to address the unique issues resulting from the unprecedented rate and scale of urbanization that is happening now.
The continued development and eventual widespread adoption of 3D printing will change the shape of global trade. A significant portion of global shipping is predicated on the low-end manufacturing model, where simple items (door hinges) and subcomponents for more complex products (iPhones) are produced wherever in the world they can be made most cheaply, then shipped to an assembly facility or directly to consumer markets. Additive manufacturing will decrease the cost variance between manufacturing items locally and in developing markets, incentivizing more localized or regionalized manufacturing.
Renewable energy is nearing an inflection point where it will be cheaper in many use cases than traditional power. This is not a result of politics, wishful thinking, or government subsidies – it is the result of the billions of dollars that are being poured into battery technology innovation by Tesla and others who are developing electric vehicles. Effective grid storage batteries fundamentally change the cost dynamics of power generation. When unsubsidized solar and wind power becomes cheaper than traditional coal, gas, and nuclear power, the calculus for a variety of economic and policy decisions will shift significantly, with global effects.
Declining birth rates in developed economies are leading to aging and shrinking populations on a sustained basis for the first time since the Black Death in the 14th century. This impacts consumption patterns and service requirements, and skews social systems based on having many workers available to support each retiree. Machine learning and AI technologies are nearing an inflection point, which allows software and robotics to replace workers in more advanced roles than ever before. The convergence of these factors will impact all developed-world citizens, companies who employ people and sell goods, and governments at all levels.
There are several important technologies that are maturing after decades of development which we anticipate will have broad, system-wide impacts. While many interesting technologies are introduced each year, we are focused on those that affect basic human needs and interaction protocols. Among these technologies are genomics, biotechnology, machine learning, augmented reality, blockchain, and robotics.
