The COVID-19 crisis has revealed several shortcomings of current economic models that rely on traditional policies to enhance economic productivity. While these policies may be effective in tackling economic growth, they aren’t enough as governments keep shifting their priorities towards issues like climate change and income inequality.
Transformation trends are the way to the future as they will create possibilities and allow countries to leverage advancing technologies. With such changes, countries keep striving to make the transition to carbon economy, focus on sustainability, and incorporate smarter uses of resources.
On that note, let us take a look at the six transformational economic trends for 2020 and beyond, and ways to implement them.
Six Global Transformations All Set to Shape the Future
These six global transformations are unique and provide distinct opportunities for governments, businesses and the society to provide a better quality of life.
The Exabyte economy: hyper connected devices, data and people
Driven by cheaper and efficient computing capacity and storage, the Exabyte economy can not only lead to openings in advance materials and biotechnology, but it can also provide new opportunities in information and communication sector. As more and more people come online, it seems that our future will be driven more by devices rather than humans. In turn, greater data flow by 5G technologies will enable improved machine learning, advanced AI-based systems and software. Giving rise to new business models, the Exabyte economy will optimize process and services across sectors like healthcare and finance. For instance, AI still might be in the early stages, but in some of the healthcare areas such pathology and radiology, it is already created new possibilities. Perceived as one of the two trends that will be leveraged for economic growth, the Exabyte economy promises the most potential in North America and Asia.
The wellbeing economy: redefining health
The COVID-19 pandemic has called for more proactive and preventive approaches to wellness and wellbeing. With wellness tourism on a rapid rise as more people indulge in travel for spiritual, mental and physical well being, the wellbeing economy aims at driving opportunities in healthcare, consumer goods, petrochemicals, and info and communication technologies. Rated third on growth potential, wellbeing economy holds greater promises for Latin America and Caribbean and Middle East and North Africa.
The Net zero economy: scalable low carbon solutions
Identifying the starvation for energy and electricity consumed by the emerging markets, several countries are focusing on significantly reducing the carbon emission. The introduction of new policies and long-term targets by governments is set to increase net-zero opportunities. As the renewable energy market grows globally, the Net zero economy is predicted to drive solutions in energy, oil and gas, chemical, automotive and consumer goods sector. Recent developments such as electric vehicles and hydrogen fuels are driving forces in the transition to low carbon economy, and the results look promising.
The Circular economy
As recycling and up-cycling become mainstream, the circular economy can boost financial services, low carbon investments, energy and fuel sector, and communication technologies. Reduction in waste and better utilization of resources throughout the value chain can be a turning point in a circular economy, but public awareness remains a key factor in this transformation. Technology will also play an important role in proving solutions such as a replacement for plastics, atmospheric water generation and providing more affordable desalination.
The Bio growth economy
Biomaterials, plant science, and synthetic biology have made rapid progress in the previous years. With its wide applications to refine waste into fuel, biodegradable materials are becoming practical. In agriculture, disease and drought-resistant natural crops are no longer a nightmare. Especially in developing countries, the global seed industry is on the boost. People are becoming more adopted towards the local production of food after the COVID crisis. They’re gaining new technologies for the development of new products. Hydroponics and vertical farming are common now. Not only the biotechnology sector but chemicals, automotive, and consumer goods will drive possibilities to form a bio growth economy.
The experience economy
As technology continues to redefine customer integration and personalization of products and services, several sectors are being characterized by customer’s desire for better experience. This shift towards material consumption, mobility, and technologies is driving the emergence of the experience economy. The primary goal of the service is to seek experience first and then go for the product. The global travel market is already growing by experience tourism which includes travel to remote places, sports participation, and culinary or cultural experience. Another instance is virtual reality and haptics that are already making an impact in growing market of gamers and armchair travelers to explore places and situations. Fashion sectors are also now adapting to technologies like interactive changing room mirrors and virtual reality interfaces.
These global trends don’t impact markets in isolation. They’ve emerged from a combination of new technologies, advanced business models, and changes in attitude and vision. With tremendous opportunities in each sector, they hold great promises for nations eyeing economic growth. Here’s a depiction of their related possibilities in 2015.
The countries and economies that aim to leverage opportunities from the above transformational trends need to develop appropriate capacity in various sectors to extract maximum benefit. Governments will need to devise a long term strategy with a shared vision. Countries will also need to adopt innovative policies to promote advanced technology ecosystem for these trends to promote creativity and critical thinking. As technologies and demographics evolve, so will the need for skilled labor. Business leaders and policymakers will have to develop innovative framework to utilize full extent of these trends.