Management of resources—particularly men and materials—will be the key to success of corporates in the coming decade. Therefore, I fully agree that productivity coupled with innovation will play the most important role in the future, not only for the developed economies but also the emerging economies.

I believe that the service industry is fast growing into developing nations. Due to cheaper labour and stabilizing political conditions in these countries, many developed nations are outsourcing the service section of their business to these developing nations. Hence the focus of of these developing nations and the moving trend will be on the customer service area and people management as well.

However, I wonder in the future if cheaper labour is found elsewhere, what will happen to the economy of the countries where the outsource boom is currently taking place? Will they be able to move into other traditional sectors such as manufacturing and agricultural? Do they have the expertise? Has the goverment taken these into their foreseeable plan for the country?

In my opinion, the above Global Forces, akin to a recent PWC report on emerging economies, are based on a ‘going concern’ paradigm in which the world economy and the resource valuation foundation on which it is built will function pretty much the same way it has done in the past.

The Rebalancing Force, for example, should incorporate the medium- to long-term influence that strategic resource shortages (notably water) and climate change effects will have on the world economy as a whole, and more specifically on the two largest ‘emerging’ economies/nations/populations India and China.

Not only can these effects end the perpetual economic growth postulate on a regional basis almost at random, they will also trigger a reprioritization and revaluation to align key resources much more to the basic needs of the Maslov pyramid.

This makes the ‘Pricing the Planet’ Force all the more interesting and its interaction with the Market State crucial. As the recent global financial crisis has shown, free-market forces based on a short-term leadership horizon and a singular shareholder value model desperately need national entities to regulate and stabilize the economy. The prevailing three- to four-year public/private management agenda, measured almost exclusively by the financial goals achieved during that time, leads to a neglect of strategic goals and an undervaluation of non-or tangent financial stakeholders in the economy.

This, combined with the increased global interconnectness and volatility that was described above, pleads for a rethink in the way we value regional, national, and company output towards a much more inclusive, strategic, and above all sustainable stakeholder value model.

This would enable the hard-coded inclusion of a sustainably productive work force, strategic global resource management and, above all, much needed flexibility in our economic approach. It would also allow us to finally move on from a financial valuation–only model that was created in its current form more than 400 years ago.

As discussed in the article, “Greater complexity surely gives rise to new opportunities.” However, merely finding and sustaining that opportunity has become difficult in today’s world driven by competition at every step. The evolving consumer race has become more intelligent and does not hesitate to experiment with new products or services. Therefore, it has become substantially important for organizations to take care of all the five forces rather than a single one to design its business strategy and reach a critical mass.

We may live in different nations and percieve one territory independent of others, but climate, the power of Internet, and demographics exert extraordinary force of interdependence and result in a particular level of global efficiency. It is necessary that we educate every human being to the maximum and make him participate in social, economical, and political dimensions such that our global efficiency improves dramatically. To achieve this we as one global society invest in education maximum all over world in every place and turn every citizen into a learned participant.

What is really new about those trends?
In a way, aren’t all they a bit ubiquitious?

One major challenge facing Western governments, such as in America and Canada, is convincing their electorates and the business sector of the productivity imperative. Canadians, in particular, have their collective head in the sand, failing to understand the global forces at play and the rapid rise of the new “new” emerging economies.

Bang on target. This is exactly the direction that businesses need to take in order to remain competitive. Businesses need to onboard a transformative journey where they need to merge business drivers along with technological innovations which have shrunk the world. They have to use employee sourcing techniques to harness ideas. They have to interface with the customers, direct or indirect, to know what they want and not just rely on the analyst. The global grid has to be leveraged better to remain competitive.

As the global workforce becomes more mobile, governments must find a way to enable those workers to move across borders in order to achieve full potential for workers and business.

Trends are becoming business facts everyday and if we want to surf on this disruptive wave; as leaders we must invest in our people’s generic competence development and in a change management system; unfortunately the IT and business speed is faster than our capacity to execute a plan/do/check/act cycle, therefore we urgently need the support of a change management system and skillful humans whose main attributes are systemic and creative thinking, assertive communications, analytical, self-motivated, and negotiation behavior.

The biggest challenge for executive management is to be able to translate these global forces into “design parameters”, preconditions and constraining factors that will guide their next Business Model innovation. The quality of their business model will be based on its capabilities to seize oppportunities and mitigate risks related to these global forces.

How do business schools have to change their curriculum to cope with these 5 global trends?

Which sectors apart from the retail sector will grow in a big way in the near future? Replies are welcome.

Thank you. As an American-Irish CFO/Controller with 30 years of experience with global manufacturing and consulting firms in the US and Europe, I would like to provide some micro insights to forces 1 and 2.

1. The work ethic and hunger for learning of the immigrant Chinese and Indian workers that I have seen in the US is significantly better than their western counterparts.

2. It seems to me that manufacturing has by necessity been the engine of most productivity improvements in the past 60 years. I moved to manufacturing after 5 years of professional accounting. I returned to consulting firms from 1992 to 2002. Subsequently, I returned to manufacturing. In the 1980s, manufacturing plant managers were promoting continuous improvement, learning new skills, working at low levels as well as high level skills, and placing more emphasis on application instead of thinkers. The constant cost cutting combined with simplification, automation, and redefining value/eliminating non-value has, in my view, given plant-based manufacturing people a better skill set to navigate this particular force. Their pride doesn’t get in the way of doing seemingly menial tasks. Unfortunately, the US has moved most of this plant activity to China and other emerging countries. In my view, there are too many commentators with no application experience—and application is supposed to be a higher form of learning.

I share the concerns that governments and business must shed light on the trend in globalization, particularly in the United States, as their inability to create and let flourish relationships in the Middle East is leaving US businesses on the sidelines in this region.

Take the eight-gate economical city under construction in Damascus, Syria for instance. Having an office in this economic zone, as EIBO does, is equivalent to being the first to invest in Google, Microsoft, or having an office in Dubai; however, the US government, businesses as well, are non-participants because of sanctions (government not the people).

Yes, for an introductory article to Global Forces, the United States must be willing to take better calculated risks to find and nurture better business relationships in developed countries, particularly in the Middle East and Syria.

There will be political divides on most of these key trends as each one has a political component. In some cases the political divide will be greater then the economic divide. The business implications will be unexpected—so will the political component.

Two things that hit me reading this article:

1. Rebalancing: while emerging markets are in the limelight for future growth, innovation, and resources, don’t forget that the US, Japan, and Western Europe are still the cash cows fuelling this growth.

2. Global grid: I am developing content for the next AdAsia to be hosted in Vietnam in 2013 and our key topic is “Rethink Boundaries”. What we want our participants to walk away from the workshop is how they as SMEs in the media and advertising industry can leverage the “interlinked network that spans geographies, social groups, and economies”. Rethinking boundaries will certainly take us forward to rethink models and organizational structures.

There must be a fundamental shift in thinking, management, and markets, as corporations are focused on short-term gains—not planning for a global economy nor long term growth. This would mean more investment in people, innovation (R&D), and product design because finding new solutions takes time and money and returns don’t hit the bottom line for years. Adding the complexity of understanding the needs of a global consumer makes this a daunting task even for the most sophisticated companies.

Listen, what the article says is correct. I know—I’ve been investigating global trends for a number of years now. The trends fall clearly into 3 catagories:

1. the big surface ones that everyone can see;
2. the small, sub-surface ones that sneak along minding their own business and then - wham!!! - take everyone by surprise;
3. the completely random where people hold their hands up in horror and proclaim they couldn’t be expected to know—but of course are quite wrong.

Our world is changing. The pace of change is increasing. In such a highly dynamic environment it is a business necessity to have visibility of the rewards and pitfalls there rampaging across the horizon. If there isn’t this visibility then we are all just going to fall down the first hole that comes along—with massive cost implications.

Personally (as I work in this area of business), I’m just shocked at the complacence of so many decision makers who functionally behave like ostriches. The world needs better than this. It’s clear what is going to happen. It’s clear what different types of business needs to do in order to go beyond survival and into those heady realms of development and progression.

And, in these times of great change, it isn’t the strongest and the biggest that will survive and develop—it will be those with the greatest capability and responsiveness to change. Look around at the organisations you are familiar with. Be honest. Are they already on the verge of being overtaken?

As the world continues to shrink with globalization and the resulting increased mobility of people, language and culture will have a heavy impact on interpersonal relationships, corporate culture, and the way companies do business across the globe.

How will small markets benefit from these new global forces? How will the drug war and Islamic growth in the world influence these forces? How will the emerging super powers influence the market? Will they have a different approach? These are facts that instead of diminishing will increase.

These trends call for the invention of new models of cooperation between government and business.

The new world order is here. And its real. The ever growing affluent middle class in countries like India are a fodder to such an expansive and ambitious shift in the way growth is looked at. Developing economies have learnt that by being sensitive to the explosive power of the middle class, it’s indeed defining its path to global domination. The future business models would have to tread the path of productivity growth, innovation, and consumer focus. While the western world would be busy catering to the needs of social security (pension, long term care) developing countries usher into an era that promises prosperity, inclusivity, and development.

The greatest global force will be the demographic shift cause by the aging of populations. As countries develop they grow older (you noted this occurring even in China) and the new twist on Malthus is that the new lives that are created (new consumers and workers) are created through the additional “healthy and productive” years that are being added to life spans rather than new births. New “encore” economies will be the new emerging economies. Those that don’t adjust won’t survive.

It is very true that future challenges to companies are going to be very stringent in terms of continuously depleting resources (globally) and ever-increasing regulations imposed by environmental considerations. Survival of the fastest and the fittest should be the only mantra for companies. Under these conditions, only those who leverage creativity and innovation, best of tools, technologies, and people can expect to tide over such challenges.

This is an excellent summary of these great forces. To paraphrase Donald Rumsfeld and the indomitable and incomparable Sir Humphrey played by the late Nigel Hawthorne on Yes (Prime) Minister... which are “unknowns” that we know are knowable rather than the unknowns we don’t know we don’t know?

What I am surprised by is the completely missing totally known total unknown. Terrorism. Unless the world wakes up to solve hot spots of injustice in several parts of the world, the increasing likelihood of ever-escalating scope of mass terror attacks will throw all these ideas and plans aside.

I am surprised that McKinsey doesn’t see the enormous social changes that will occur with the rise in temperatures due in the first half of this century as a major force for change in themselves. The social force is not just one of attitude shift about the need for a better, cleaner world. The force lies in the behavioral change that will occur as a result of new realities of survival. The implications of rising sea level on coastal cities and on whole island populations, the transfer to renewable energy, impacts of the adjustments due to workforce displacement, the major move to public transport that must occur, food shortages, etcetera, all have global social impacts way beyond the topic of ‘pricing the planet’. I am very concerned that senior business management researched for this survey still live in denial of the impacts of rising temperature.

This introduction is a great launching pad to begin understanding the fracturing of the business power structure, requiring more cross-cultural intelligence to successfully navigate it. If we do not prepare our future leaders for it at the primary and secondary level, Americans will be at a distinct disadvantage. Now is the time to embrace a way to better prepare our future global leaders.

It’s clear tomorrow’s corporate business needs a level of internal and external collaboration, and speed and fluidity of business models. Are the corporate organisations of today really geared up to face these challenges when globalisation, mergers, consolidations, size, and complexity of communication in corporate structures seem to hamstring these very behaviours?

It’s a thought provoking story. I would only add ‘technology’ as a separate item because it affects all of the five forces you identify. For example, the mobile phone has had a bigger impact on developing countries and the poor people in them than all the aid that has been showered upon them. This phone has been in my judgment the underlying driver of the ‘rebalancing’. And it is very difficult to see what new technologies lay ahead other than that are coming fast and in bigger volumes and nearly everyone has access to them.

Need to build alternative scenarios using the forces comingled. Give them different weights and use probable scenarios where dramatic shifts may occur. Although good managers will have to take risks on an uncertain future, alternative scenarios will give them an extra toll to make strategic decisions.

The rebalancing act of the 21st century, however, will remin unfulfilled as long as emerging economies spawn innovation at a faster pace than the developed world. Yes the BRIC countries do present a great market, and that will be the case for a long time to come, but steady development of intellectual property is something they will have to ponder. As of now, the developing world is one generation behind the developed—which will be a major constraint and a determining factor for the kind of equity that these nations will command. That requires a major change in the behavioral pattern of these countries, primarily from a consumer-centric to a producer-centric (not factory) one. For rebalancing to truly occur in the the right sense, emerging economies should march towards innovation—the sooner the better!

I found myself reading this and the linked articles with a kind of fascinated dread. I haven’t decided if this article is essentially hopeful or an omen. What I can say definitively is that I felt stirred inside, reading it, and a little bit like I’ve spent a long time getting ready for the prom and made it just in time for the last dance. This article makes me want to do ...something. I’m not sure what though. I don’t want America to become marginalized as a nation because we haven’t, as a country, anticipated and made provision for these global trends on the horizon. I want to be a part of the think tank that can tap into what’s coming.

The article is not immediately optimistic. How do we create this knowledge base that we need? I think it’s one thing to recruit global talent, but it’s another thing to expect them to come accept the opportunity and share the same values, goals, and loyalties (they may, but to expect it is naive). There is always the “enemy at the gate” danger lurking, in my opinion. So it’s not enough for me to buy talent, we have to create it. And I am much more interested in figuring out how to do that locally and nationally. How do we create knowledge models (outside of the limited structure of the public school system which seems to be failing us more than helping us) that will put us closer to having the internal talent pool we need to survive? To me, it’s like the old adage, “Give a man a fish and he’ll eat for a day, teach him to fish and he’ll eat for a lifetime.” Mine goes like this, “Hire an outsider to think for your company and you’ll profit for a season, teach your employees how to think for your company and you’ll profit indefinitely.”

I would like to know just what it is that America COULD produce and sell and gain (maintain) a significant market share of. What do we have that others need, but don’t have? And if the answer is ‘nothing,’ then what could we have in the next ten or fifteen years that could be useful, necessary, beneficial to 6 billion people and counting?

As a term and concept, “globalization” is well over two decades old. However, neither capital nor labor have been “globalized”, both still remain essentially country-centric. One wonders how many more years (decades?) one would have to wait for this to happen in the true sense of the term. Alternatively will this ever happen?

From the survey it feels that “Pricing the planet” is not being given the importance it deserves.

I feel this too will have a significant impact as countries like India and China with giant appetites for energy and resources keep growing at their current pace.

I see them directly competing with the developed world for resources and while the developed world might move to using cleaner fuels, these countries—in order to keep their large energy demands satiated and also lowering costs (hence keeping competitive edge)—will prefer older resources.

In the end will consumers care enough about the carbon footprint of the product they are consuming? I would love to see a pollution information box on the things I buy just like I am able to see a nutrition information box on food items.

This article was insightful, especially the “rebalancing” component. I recently completed a multi-year assignment to India and found the professional capabilities and associated buying power of the ever-growing Indian middle-class to be substantial, and growing with influence every day.

OK, so any article that includes the following phrase is going to lose me quickly because obviously its authors haven’t done enough homework: “Business history is littered with examples of companies that missed important trends; think digitization and the music industry.”

The music industry did not miss the trend. They saw the trend but could not reframe it meaningfully in order to take advantage of it.

A little work would have found this statement in Wired, on 27th November 2007 by Doug Morris, one of the biggest names in the music business and Chairman and CEO of Universal Music Group:
• “We didn’t know who to hire. I wouldn’t be able to recognize a good technology person—anyone with a good BS story would have gotten past me.”
• On Steve Jobs – “We were just grateful that someone was selling online. The problem is, he became the gatekeeper.”

None of this suggests that they missed the trend - rather that they didn’t know how to react.

I believe that the first four forces in the article—namely, the great rebalancing, the productivity imperative, the global grid, and pricing the planet—are effects and not causes. Affluent nations have indulged in very high consumption of resources, beyond the levels necessary for sustainment. This is the cause.

The global grid is the result of the need for nations to source resources for production of goods and services demanded by economies and societies. Global sourcing has naturally led to new and more efficient centers of supply leading to the rebalancing as stated in the article. And these new centers are bound to prosper economically as a result of increased economic activity. West and affluent nations would need to be more productive to be competitive in the market and sustain current or higher levels of economic prosperity in future. The adverse impact on the environment is a result of a mix of several factors, but lifestyles leading to high consumption, and production of goods and services by use of less efficient technologies, are major factors contributing to environmental concerns. Therefore, there is an imperative need for clean technology and efficient use of resources.

The fifth force, The market state, is a response to the impact of the above mentioned four forces on the economy and society.

It would be useful if the article in its future version could also examine the cause/s in greater details based on the past developments, such as industrialization, technology, and other factors. Such an analysis would help understand what mistakes were made, if they could be so characterized, and what mistakes are best avoided in providing a response and finding solutions by governments and societies to the other forces.

In the years to come, organizations will adopt the strategy of solutions for “bottom of the pyramid”, energy efficiency, and effective human capital management. This will help organizations to develop sustainable solutions for its stakeholders. Also, there will be greater participation of the stakeholders in solution development.

I think that this covers the issues of larger global companies but it doesn’t address the issues faced by smaller, national companies that don’t have a global capacity or the means to create one.

This is the greatest challenge, how do smaller companies position themselves within this environment? Greater complexity generally brings less adaptiveness to change—as many companies use mechanistic controls to rein in cost they also restrict their ability to adapt. Perhaps this is one area where smaller companies have the opportunity to take niche market segments and create global opportunities without necessarily having an international office?

I was very interested to see the split of the survey results. To me this indicates that the surveyed executives feel unable to direct their firm to take advantage of these trends. Less than 50% of all surveyed feel that the effects on profits will be positive. How can this be? These forces are going to provide enormous disruptive change over the next decade and accompanying these changes will be opportunity. The apparently negative view of the outcomes misses a chance to grasp and shape these forces to advantage. A very interesting insight into the mind set of those surveyed.

On this day, when my birth country, New Zealand, launches its Emissions Trading Scheme, I find it fascinating to see that 52% of executives in your survey don’t think that Pricing the Planet is important for business. It is this awareness and belief that will most probably make Pricing the Planet absolutely critical for business. I would assert that most of the executives surveyed would believe that negative environmental impacts in the world, such as with climate change, will continue to play out in a gradual lineal fashion. However, the science is pointing to much more of an acceleration and large tipping points—and we are certainly now seeing the impact of sudden events such as BP’s disaster in the Gulf of Mexico.

If business is truly going to be prepared for the future, it must understand these probable accelerating and tipping-point patterns and recognise that we are likely to see some serious price shocks. They need to be prepared for dramatic, rather than gradual market change and the longer we delay implementing measures to prepare our businesses and recondition our markets now, such as with a price on carbon, the harder the shocks will be when they do come.

I am very interested in reading about this kind of research and what ‘others’ believe is going to happen. We create our own reality in many ways. I tend to look at the 5 issues you describe in a somewhat broader view as I see these ‘global forces’ on business as being interconnected and impossible to differentiate from the issues facing our society as a whole. ‘Business’ cannot exist in a vacuum. I would like to hear more about how ethics and equality impact the ‘global forces’ you have posited as the most important ones in the near term.

For nearly sixty years, the nation-state as the primary unit of business, trade, and economics (not to mention politics and security) has been challenged by the other four global forces and the time may well be nigh that regional blocs are supplanting nations, especially as large nations such as China, India, and Brazil accelerate their growth. And it may only be in large aggregations than the nation-state that the competing demands on national governments can gain any efficiencies of scale, generate sufficient revenues to pay for services and improve infrastructure, and compete on a global basis.