Future agenda Initial Perspectives - complete set

1The world’s leading open foresight programmeInitial Perspectives

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Contents

Ageing Laura Carstensen 6

Cities Harry Rich 14

Company Paige Morrow 20

Connectivity Hossein Moiin 28

Data Stephan Shakespeare 36

Education Sugata Mitra 44

Energy Jeremy Bentham 48

Food Prof. Wayne Bryden 54

Government Cherly Chung 60

Health Dr. Devi Shetty 68

Learning Tim Gifford 74

Loyalty Christopher Evans 80

Payments Mastercard 88

Privacy Stephen Deadman 96

Resources Professor Suzanne Benn 108

Transport Glenn Lyons 114

Travel Richard Hammond 120

Water Daniel Lambert and Michael O’Neill 126

Wealth Prof. Julio J. Prado, PhD. 134

Work Andrew Curry 140

About Future Agenda 148

Introduction 5

Aging

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futureagenda.org

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We live in a world that is facing extraordinary challenges. Population growth, climate change, resource constraints and global epidemics are seldom far from the news headlines. Indeed such are the challenges it seems clear that the major issues facing our planet are of a magnitude that no one institution or organization can address on its own. They require the pooling and sharing of knowledge across disciplines and across continents.

Future Agenda was created to give all organisations, large or small, the opportunity to access insights that will help them decide on future strategy. Its aim is to identify ways in which systems will function, consumers will behave and governments will regulate over the next decade.

This booklet is the beginning of the 2015 discussions offering a series of twenty provocations, written by global experts from industry and academia. These identify the key concerns for the next ten years. Examples include a focus on the future of food, health, data and travel. Each provocation will be debated and challenged around the world over the next six months so that a richer picture of the issue will emerge which will help shape our understanding of the future.

The opinions expressed in this document are not ours but those of independent experts whose views we respect even if we don’t always agree with them. I thank them for their wholehearted support. They have important things to say that should be of interest to anyone who wants to build a better, more sustainable future for us all.

FutureAgenda2.0 is the worlds largest global open foresight programme and is therefore all about engaging with others to create a better understanding of how to address key issues. We encourage you to get involved and welcome your opinion either via online debate or directly through workshop attendance and interviews. The ambition is to use the resulting insights to drive positive change so the results will be published both in print and online and will be available for use by any organisation or individual under a creative commons license.

Tim Jones Programme Director

Introduction

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The Future of Ageing

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Laura Carstensen - Fairleigh S. Dickinson Jr. Professor in Public Policy, Professor of Psychology, Director, Stanford Center on Longevity.


Advances in science and technology coupled with large-scale changes in health practices involving improved sanitation, water purification, and a host of lifestyle changes have led to dramatic increases in longevity in developed nations around the world. On a global scale, life expectancies in developed regions are continuing to rise in the 21st century and, although most people assume that there are biological limits on life span, so far there is little evidence that we are approaching them.1 Because fertility declined across the same years that life expectancies increased, the distribution of age in the global population changed irrevocably. The once-universal pyramid shapes of age distributions of populations in the western world, with many young ones at the bottom narrowing to tiny peaks at the tops, are being rectangularized, reflecting the fact that most

people, not just an exceptional few, are living into old age.

To the extent that the importance of aging societies is recognized at all, anxiety is the typical response. Terms like “grey tsunami” imply that larger numbers of older citizens will become a drain on societies. Concern is warranted. The demographic changes underway are fundamentally altering virtually all aspects of life as we know it. Workforces are becoming older and more age diversified than ever in history. Families are having fewer children, yet four and five generations are alive at the same time. Education has come to predict well-being and even length of life, yet is unevenly distributed, creating heightened disparities across socioeconomic strata accentuating old age outcomes between rich and poor.

Lifespan Limits On a global scale, life expectancies in developed regions are continuing to rise in the 21st century and, although most people assume that there are biological limits on life span, so far there is little evidence that we are approaching them.

Age Diversified Workforces The demographic changes underway are fundamentally altering virtually all aspects of life as we know it. Workforces are becoming older and more age diversified than ever in history.

The Global ChallengeAging

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Options and PossibilitesAging

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Culture Shift The culture that guides people through life today is a culture that evolved around shorter lives. The urgent challenge now is to create cultures that support people through ten and more decades of life.

To date, however, the concern has been largely misplaced, with the emphasis on aging as opposed to an emphasis on the cultures that surrounds very long lives. By culture, we are referring to the crucible that holds science, technology, and large scale behavioral practices and social norms. We maintain that the more serious problems concern antiquated social norms and the

lack of cultural supports for people 50 and older, such as medical treatments for common diseases of old age and technologies and services that allow people to age in place, and social norms that encourage life-long participation in communities, families and workplaces. The culture that guides people through life today is a culture that evolved around shorter lives. The urgent challenge

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now is to create cultures that support people through ten and more decades of life.

Although predictions about the future are always perilous, we can comfortably predict that life will change and can change such that longer lives improve quality of life at all ages. Unfortunately to date we have been decidedly uncreative about ways to use added years of life. These years have been tacitly tacked on to the end of life, with old age the only stage in life that has gotten longer. Rather than move forward by happenstance, we need strategic thinking about how to best use added decades of life. Helping individuals and nations visualize, plan and prepare is essential in order to ensure that longer lives are high quality.

Changing the nature, timing and duration of work will be key. Individuals and societies must effectively finance very long lives and so far we are doing a poor job. Life expectancy at age 65 for the world’s population increased by roughly fifty percent from the 1950s to the present time, while the average age of retirement has remained relatively constant.2 Between now and 2030, the number of people in developed countries over the “conventional” retirement age of 65 will increase by more than thirty percent. At the same time, the size of the conventional working-age population in developed countries is projected to decline by four percent. To the extent that nothing changes, the ratio of the working-age population to retirees will steadily decrease in the foreseeable future. Of course, these projections are based on the assumption that people continue to retire at relatively young ages. One obvious, although surprisingly ignored, way to address the challenges posed by the declining number and share of working-age population is to expand the workforce by increasing the workforce participation of older workers and, in some countries, women.

Increasingly, research findings suggest that this is feasible. A substantial majority of people 60 to 70 years of age report that they are physically able to work. A 2014 paper published in the Journal of Gerontology found that 85% of Americans aged 65-69 report no health-based limitations on paid

work or housework.3 Similar trends are evident in Europe.4 To be sure, the numbers of disabled individuals has, and will continue to, increase in aging societies and it is extremely important to have policies that support people who cannot work. We maintain that the generosity of disability insurance should increase, yet we must recognize that chronological age is a poor predictor of the ability to work. Even at very advanced ages, substantial numbers of people are sufficiently healthy to contribute to workplaces. Societies that find ways to tap older peoples’ contributions will benefit greatly.

Although the idea of longer working lives often meets resistance, evidence for the benefits of work to individuals is growing. Arguably, the most obvious reason to work longer is the financial benefit. For many, retirement at age 65 is economically infeasible. In the words of Stanford economist John Shoven, “the reality is that few workers can fund a 30 year retirement with a 40 year career”.5 Neither can societies. In recent years, it is becoming clear that remaining active and engaged in work is also associated with physical, socioemotional, and cognitive benefits. Studies of healthy aging suggest that older adults who are engaged have lower mortality rates, are less likely to experience various physical and mental illnesses, and are more likely to have a strong sense of identity and well-being.6 Working longer also has protective effects against cognitive decline,7 ostensibly by providing a mentally engaging environment where workers can “use it” so they don’t “lose it.” Research suggests that both paid and unpaid work are associated with enhanced well-being, delayed disability, decreased mortality risk, and onset of fewer diseases and associated functional impairments.8,9,10,11 New models of working longer can relieve some of the pressure to save large sums of money for extended periods of leisure. Importantly, working longer can mean working differently. Many workers would be happy to exchange decades-long retirements in old age for four day work weeks, regular time off for sabbaticals, retraining, and part-time work when children are young as well as at advanced ages as people fade into retirement.

Looking Ahead Rather than move forward by happenstance, we need strategic thinking about how to best use added decades of life. Helping individuals and nations visualize, plan and prepare is essential in order to ensure that longer lives are high quality.

Societal Benefit 85% of Americans aged 65-69 report no health-based limitations on paid work or housework. Similar trends are evident in Europe… Societies that find ways to tap older peoples’ contributions will benefit greatly.

Infeasible Retirement For many, retirement at age 65 is economically infeasible. In the words of Stanford economist John Shoven, “the reality is that few workers can fund a 30 year retirement with a 40 year career”. Neither can societies.


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Proposed Way Forward Aging

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From a societal perspective, there is a pressing need to make use of the human capital represented in older people. General knowledge and expertise increase with age, as do emotional stability and the motivation to invest in important activities. If appropriately utilized, older populations can benefit national and global economies. Yet the clarion call to workers today is about saving for increasingly long retirements, instead of actively planning to work longer. In the US, the responsibility for saving has shifted to the individual, reflecting the move from defined benefit plans to defined contribution plans. Unfortunately, the change has resulted in considerable under-saving for retirements. In a 2014 Retirement Confidence Survey, only 64% of all workers age 25 and older reported that they and their spouse had saved at all for retirement, a decrease from 75% in 2009.12 Overall, 60% of workers report that they have less than $25,000 in total savings and investments, with over one third reporting less than $1,000 in total savings.13 If appropriate steps are not taken, there could be catastrophic economic implications to both individuals and societies, as low retirement savings could lead to major strains on economies.

For those who have inadequate retirement savings, the most obvious solution is to work longer. This approach may hold benefits that extend beyond income to include better physical health and cognitive functioning. One major potential barrier, however, is that employers remain ambivalent about older workers. Currently, most employers’ view older workers as expensive and sometimes less productive than younger workers. Research findings increasingly suggest that the latter reflects stereotypes more than evidence. The productivity of workers tends to increase with age. This is especially true for knowledge workers, yet blue collar workers also can retain (and perhaps increase) productivity.14 One study that measured the performance of more than 400 McDonald’s restaurants across the UK found that restaurants that employed mixed-age workforces, including workers age 60 and above, delivered an

average increase of twenty percent in customer satisfaction levels compared to less age diverse workforces.15 Moreover, there is a net benefit of intergenerational teams on workplace productivity, including a broader range of skills and experience across the workforce, increased mentorship opportunities and skills transfer, a reduction in turnover, and increased staff morale.16,17 Companies that adapt to older workers’ needs using cost-efficient measures such as flexible work arrangements, workplace modifications, and on-the-job training can benefit from age diversity in the workforce.18 BMW’s older worker production line at Dingolfing is an example of how thoughtful design of blue-collar workplaces can support high levels of productivity in older workers. The company collaborated with its older production workers to tailor one of its most labor intensive manufacturing lines to an average worker age of 47. The resultant line reached its production goals with defect rate and worker absenteeism meeting or exceeding the levels achieved by “younger” lines.19 The cost of older workers is a real issue for employers. By leveraging older workers as source of human capital, employers can better manage their talent, facilitate knowledge transfer to younger workers, and help older workers slowly phase into retirement. Offering bridge jobs or flexible work arrangements such as flex hours and part-time work will allow employers to retain the expertise of older workers while reducing costs.20,21


Working Longer For those who have inadequate retirement savings, the most obvious solution is to work longer... One major potential barrier, however, is that employers remain ambivalent about older workers.

Cost of Older Workers The cost of older workers is a real issue for employers. By leveraging older workers as source of human capital, employers can better manage their talent, facilitate knowledge transfer to younger workers, and help older workers slowly phase into retirement. Offering bridge jobs or flexible work arrangements such as flex hours and part-time work will allow employers to retain the expertise of older workers while reducing costs

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Dire predictions that a “Grey Tsunami” will overwhelm economies with unproductive societies harken back to Thomas Malthus’ 1798 “Essay on the Principle of Population”. There, Malthus predicted that growing populations would outrun the food supply, leading to poverty and starvation. The prediction did not foresee the development of agricultural technologies that greatly increased food production. In the case of older populations, predictions about economic disaster change to discussions of economic

growth if people remain productive into advanced ages. Rather than a problem, we may be experiencing one of the greatest opportunities ever in history to dramatically improve quality of life at all ages.

The Bigger Opportunity In the case of older populations, predictions about economic disaster change to discussions of economic growth if people remain productive into advanced ages. Rather than a problem, we may be experiencing one of the greatest opportunities ever in history to dramatically improve quality of life at all ages.

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1 Oeppen, J. and J. W. Vaupel: Broken limits to life expectancy. Science 296, 1029-1031 (2002).

2 “Population Facts”, United Nations Department of Economic and Social Affairs, Population Division, December, 20-13

3 Lowsky, Olshansky, Bhattacharya, Goldman, “Heterogeneity in Healthy Aging”, J Gerontol A Biol Sci Med Sci first published online November 17, 2013 doi:10.1093/gerona/glt162

4 A. Börsch-Supan, Myths, Scientific Evidence and Economic Policy in an Aging World, J. Econ. Ageing, 1–2 (2013), pp. 3–15

5 Ford, John Patrick. 2014. “How to support a 30-year retirement.” San Diego Source. http://www.sddt.com/Commentary/article.cfm?SourceCode=20141106tza&Commentary_ID=12&_t=How+to+support+a+30year+retirement#.VL6ykS6AyjI

6 Rowe, John W. and Robert L. Kahn. 1998. Successful Aging. New York: Pantheon; Cohen, Sheldon. 2004. “Social Relationship and Health.” American Psychologist 59:676-684.

7 Rohwedder, Susann and Robert J. Willis. 2010. “Mental Retirement.” Journal of Economic Perspectives. 24:119-138

8 Rohwedder, Susann, and Robert J. Willis. 2010. “Mental Retirement.” Journal of Economic Perspectives, 24(1): 119-38.

9 Carr DC, Komp K, editors. “Gerontology in the era of the third age: implications and next steps.” New York: Springer Publishers; 2011: 207-224

10 Morrow-Howell N, Hinterlong J, Rozario PA, Tang F. “Effects of volunteering on the well-being of older adults.” J Gerontol B Psychol Sci Soc Sci. 2003; 58B:S137–S145. Doi: 10.1093/geronb/58.3.S137

11 Matz-Costa C, Besen E, James JB, Pitt-Catsouphes M. “Differential impact of multiple levels of productive activity engagement on psychological well-being in middle and later life.” The Gerontologist. 2012. Doi: 10.1093/geront/gns148

12 Employee Benefit Research Institute. 2014. “2014 Retirement Confidence Survey.” http://www.ebri.org/pdf/surveys/rcs/2014/RCS14.FS-6.Prep-Ret.Final.pdf

13 Ibid.

14 Burtless, G.(2013).The Impact of Population Aging and Delayed Retirement on Work-force Productivity. Tech. rep., Center for Retirement Research at Boston College.

15 Department for Work and Pensions (UK). 2011. “Employing Older Worker Case Studies.” https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/142752/employing-older-workers-case-studies.pdf

16 Ilmakunnas et al. “Diversity at the workplace: Whom does it benefit?” Helsinki School of Economics. http://www.eale.nl/conference2009/Programme/PapersC/add102508_wKXraqYSnk.pdf

17 Department for Work and Pensions (UK). 2013. “Employing an Older Workforce, An Employer’s Guide to Today’s Multi-generational Workforce. https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/142751/emplying-older-workers.pdf

18 Brooks. 2014. “Productivity and Age.” Age UK. http://www.50plusworks.com/downloads/Age%20and%20productivity%20briefing%20(March%202014).pdf

19 Loch, C.H, Sting, F.J, Bauer, N, & Mauermann, H. (2010). How BMW Is Defusing the Demographic Time Bomb. Harvard Business Review, 88(3), 99–102. Retrieved from http://hdl.handle.net/1765/20802

20 CIPD. 2012. “Managing a Healthy Ageing Workforce, A National Business Imperative.” http://www.cipd.co.uk/binaries/managing-a-healthy-ageing-workforce-a-national-business-imperative_2012.pdf

21 Backes-Glenner & Veen. 2009. “The Impact of Aging and Age Diversity on Company Performance.” Institute for Strategy and Business Economics, University of Zurich. http://www.zora.uzh.ch/48541/1/Backes Gellner_The_impact_of_aging_and_age_diversity_on_company_performance-V.pdf


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Fairleigh S. Dickinson Jr. Professor in Public Policy, Professor of Psychology, Director, Stanford Center on Longevity. Lead expert on the Future of Ageing

Laura L. Carstensen is Professor of Psychology at Stanford University where she is the Fairleigh S. Dickinson Jr. Professor in Public Policy and founding director of the Stanford Center on Longevity. She is best known for socioemotional selectivity theory, a life-span theory of motivation. For more than twenty years her research has been supported by the National Institute on Aging and she was honored with a MERIT award in 2005. Her most current empirical research focuses on ways in which motivational changes influence cognitive processing. Dr. Carstensen is a fellow in the Association for Psychological Science, the American Psychological Association and the Gerontological Society of America. She has chaired two studies for the National Academy of Sciences, resulting in noted reports The Aging Mind and When I’m 64. She is a member of the MacArthur Foundation’s Research Network on an Aging Society and serves on the National Advisory Council on Aging to NIA.

Carstensen has won numerous awards, including the Kleemeier Award, The Kalish Award for Innovative Research and the Distinguished Mentorship Award from the Gerontological Society of America, as well as the Master Mentor Award from the American Psychological Association. She was selected as a Guggenheim Fellow in 2003. In 2011, she authored A Long Bright Future: Happiness, Health, and Financial Security in an Age of Increased Longevity. Carstensen received her B.S. from the University of Rochester and her Ph.D. in Clinical Psychology from West Virginia University. She holds an honorary doctorate from the Katholieke Universiteit Leuven, Belgium.

Lead Expert – Prof. Laura Carstensen

The Future of Ageing The Future of Ageing

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Senior Research Scholar and Director, Mobility Division Lead expert on the Future of Ageing.

Ken Smith is a Senior Research Scholar and Director of the Mobility Division at the Stanford Center on Longevity. He works closely with faculty colleagues to determine where Stanford expertise can best be used to drive change. Ken brings a broad background of over 20 years of management and engineering experience to his role, including positions in the computing, aerospace, and solar energy industries. He developed a special expertise in working closely with university faculty to develop projects while at Intel, where he was deeply involved in the creation and management of their network of university research labs. He serves on the Advisory Council for AgeTech West. Ken holds a B.S. in Mechanical Engineering from the University of Illinois with an M.S. from the University of Washington.

Lead Expert – Ken Smith

Dominika Jaworski - Social Science Research Assistant Lead expert on the Future of Ageing.

Dominika Jaworski is part of the Stanford Center on Longevity’s Financial Security Team, which connects an array of academics, practitioners, employers, and policy-makers in an interdisciplinary effort to help employees and individuals have more financial security. She supports the translational research and project management needs of the Center. Prior to joining the Center, Dominika was part of a team at the Wharton School that developed a financial wellness and investing organization for Philadelphians. Dominika received an MS in Social Policy from the University of Pennsylvania and a BA in Political Science from McGill University.

Lead Expert – Dominika Jaworski


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In 1800, less than two percent of the global population lived in cities. Today one out of every two people is a city dweller and by 2050 it’s likely that over 70% of people will live in a city. The growth of mega-cities in Africa, Asia and South America, and the rebirth of post-industrial cities in Europe and North America is creating a new wave of urbanisation. Such mass urbanisation requires a rethink about how we plan and design cities. If we want the cities of the future to be sustainable and healthy places for people to live, the city of 2025 will need to look radically different.

Cities are the engines of the global economy: just 600 urban centres generate 80% of global GDP. Today, the economic power of cities is primarily found in the developed world with 20 percent of global GDP contributed by North American cities alone. However, this is changing and the trend is likely to accelerate. By 2025 the centre of growth will move to the emerging economies with cities in China, India and Latin America forming the largest city economies supplanting cities in Europe and North America from the list.

Cities consume 75% of the world’s natural resources, and produce more than 60% of greenhouse gas emissions. As a result, while the economic power of cities continues to grow, they remain vulnerable to the by-products of their success.

Rapid urbanisation is placing strains on the economic, environmental and social fabrics of cities. Challenges caused by a growing population such as traffic congestion, pollution and social tensions as well as diseases such as cancer, obesity and depression represent a growing challenge to policy makers.

Climate change poses a new and worrying challenge for cities. Already 50% of cities are dealing with its effects, and nearly all are at risk. Over 90% of all urban areas are coastal, putting most cities on earth at risk of flooding from rising sea levels and powerful storms.

Our cities are also home to a sizeable and increasing older population. By 2050 there will be two billion people aged over 60 worldwide, a 250% increase on today’s figures. Many of these people will live in cities. In developed countries, 80% of older people are expected to live in cities by 2050, while cities in developing countries will house a quarter of the older population.

Japan has faced this population change earlier than many countries and faces an enormous challenge with extra pressure on public services and appropriate housing. With more than 30% of the Japanese population aged over 60 – far higher than any other country - Japanese architects and planners have taken a major role in adapting urban environments to support healthy ageing

futureagenda.org

The Future of Cities


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Harry Rich - Chief Executive, Royal Institute of British Architects


Mass Urbanisation Today one out of every two people is a city dweller and by 2050 it’s likely that over 70% of people will live in a city. The growth of mega-cities in Africa, Asia and South America, and the rebirth of post-industrial cities in Europe and North America is creating a new wave of urbanisation. Such mass urbanisation requires a rethink about how we plan and design cities.

Consuming Cities Cities consume 75% of the world’s natural resources, and produce more than 60% of greenhouse gas emissions. As a result, while the economic power of cities continues to grow, they remain vulnerable to the by-products of their success.

Floating Cities? Climate change poses a new and worrying challenge for cities. Already 50% of cities are dealing with its effects, and nearly all are at risk. Over 90% of all urban areas are coastal, putting most cities on earth at risk of flooding from rising sea levels and powerful storms.

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of populations. This experience will soon be of global interest - by 2050, there will be another 64 countries where over 60s represent over 30% of the population.

This combination of environmental pressures, changing economic patterns and demographic change means that the cities

of the future will need to be designed to operate differently. These challenges also present with them huge opportunities. With the right focus and resources, cities can become more sustainable - urban planning, design, technological and governance models could all facilitate this.

Creative Hubs Globally, cities have a long history of fostering social and practical innovation. New technology has enabled cities to evolve and reinvent themselves, fostering a better quality of life for their inhabitants in the face of huge social, environmental and technological upheaval.

Living Cities As technology becomes more sophisticated, new approaches can combine to create place-based design that addresses the health and environmental impacts of cities, improving public transport, and by making denser development and more compact spaces more appealing to potential residents… Technology can help plan growth in a more integrated way – addressing societal, environmental and design issues across a range of locations.

Digital Engagement Cities are also starting to use digital platforms to better plan for the future and encourage public engagement in the future of their cities… Using new technology and big data to support strategic planning of a city can help improve public engagement with the process.

Adapting for Ageing Populations In developed countries, 80% of older people are expected to live in cities by 2050, while cities in developing countries will house a quarter of the older population. In Japan, architects and planners have taken a major role in adapting urban environments to support healthy ageing of populations.

Globally, cities have a long history of fostering social and practical innovation. New technology has enabled cities to evolve and reinvent themselves, fostering a better quality of life for their inhabitants in the face of huge social, environmental and technological upheaval.

An understanding of an area’s demographic, problems, capabilities and environmental constraints could play a key role in informing the design and planning of cities to enable as many people as possible to achieve a fulfilling, social and active life.

The planning of cities has already been transformed and can go much further with the right resources in place. Pen and paper has long been supplanted in most cities by a wide range of electronic data devices, geographic information systems, satellite mapping and visualisation software. These offer urban planners and designers a deeper insight into human behaviour as well as a greater understanding of the physical attributes of sites, to inform design and how it is delivered. As the technology becomes more sophisticated, these new approaches can combine to create place-based design approaches that, for example, address the health and environmental impacts of cities by integrating routes which will make it more likely city residents walk and cycle as well improving public transport, making denser development and more compact spaces more appealing to potential residents.

New approaches are also enabling architects and planners to better understand how cities impact their environments. Increasing the use

of natural features helps reduce flooding by improving sustainable drainage, and prevents cities from overheating. Incorporating green infrastructure also helps to support mental wellbeing, thereby, also yielding savings in future health budgets.

Technology can help plan growth in a more integrated way – addressing societal, environmental and design issues across a range of locations. Interesting examples can be seen in cities such as Rio de Janeiro which is pioneering new digital transport and governance systems, through a citywide operation centre that connects all the city’s 30 agencies, from transport to the emergency services. On a day-to-day basis, It helps officials from across the city collaborate on running public services more smoothly and efficiently. In the event of crisis, such as a collapsing building, the operation centre helps roll out a coordinated response. Transport systems can be shut down, emergency services mobilised and gas supplies can be cut off, while citizens can be informed of alternative routes via Twitter.

Cities are also starting to use digital platforms to better plan for the future and encourage public engagement in the future of their cities. In Asia a number of emerging cities are working with partners to develop models for sustainable growth that learn from the current generation of cities.

Developing these models further will be crucial to generate popular support if the city of 2025 is to benefit from new approaches. In the UK RIBA has explored the idea of a digitised planning system, using

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new technology and big data to support strategic planning of a city and help improve public engagement with the process. Public consultation software, online forums and social media are now increasingly used to capture public opinion to test ideas, evolve proposals and disseminate information.

New approaches can also inform the way we design for an ageing population. Urban design can help older people live healthier and more socially active lives by creating more inclusive spaces. Their wellbeing

can be enhanced by designing affordable, accessible, well-connected housing that connects with local amenities more directly.

Understanding this group’s needs will increasingly become more important at the city-scale to help local authorities develop innovative housing that can bring out the most of older people but also impact on younger age groups in a very positive way. Designing inclusively for all generations is the way to create successful integrated communities.

The planners and architects of tomorrow will have a range of tools available to them that their predecessors had likely never dreamed of. Predicting which of thwese developments will be truly transformative is an impossible science and will vary significantly from city to city. But exploring the potential implications and applications of a range of technologies will highlight the range of possibilities ahead of us - leaving us both prepared and in a position to better control the fate of cities.

In order to do so successfully, it will be crucial to retain a focus on utilising technology as a means to anticipate and manage change within urban areas to create and maintain good quality sustainable environments.

We will need measures at the national level to help enable new technology to play a role across boundaries. Globally, a strong cultural shift will be required – moving away from the model of business as usual to an approach that enables the economy to thrive within resource constraints.

2015 will be crucial to the future development trajectory of cities in 2025. In September, the United Nations is expected to agree a new set of Sustainable Development Goals which will define a new set of international development objectives, one area expected to be included is an objective to make cities more sustainable. In December,

the Paris summit will attempt to finalise a new climate change agreement. Although the impact of the two global agreements will be crucial in ensuring future prosperity for cities, national, regional and local governments should seek anyway to develop smart city solutions to ensure cities can be future-proofed effectively.

There will be no one size fits all or quick solutions to the complex interests and failings accumulated over centuries of development. Local governments will therefore be crucial in creating ambitious and proactive area-specific planning policies and programmes that integrate climate change, public health and ageing population priorities into planning policies and development to achieve a long-term approach.

New Models and Measures We will need measures at the national level to help enable new technology to play a role across boundaries. Globally, a strong cultural shift will be required – moving away from the model of business as usual to an approach that enables the economy to thrive within resource constraints.

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People-Powered Planning In an era where the public voice is becoming easier to access and harder to suppress, it will become increasingly hard to generate support for new initiatives without taking public views into account… City leaders, planners and designers will need to incorporate continuous feedback loops that provide information about a range of social, economic and environmental changes into their thinking to maintain public and political support.

Lasting Design [We need] a shift toward a circular economy that is restorative, both naturally and technically. Buildings have to be built to anticipate future change, rather than using design standards based on existing conditions.improve performance.

If a strong global commitment to sustainable development and tackling climate change is set in 2015, and bold leadership and new technology is fostered by national and local governments; the city could start to look completely different by 2025. Cities can become cleaner, greener, healthier and more pleasant places to live, while still driving economic growth and fostering innovation.

This comes with a significant caveat. Creating new places proactively and with future changes in mind will require a culture shift within those who plan, build and design our cities.

In planning, more multi-disciplinary thinking will need to be applied to urban development strategies and design, to ensure a variety of changes can be accounted for and addressed. Greater participation from the public will be required to gain a deeper insight into their needs and preferences. In an era where the public voice is becoming easier to access and harder to suppress, it will become increasingly hard to generate support for new initiatives without taking public views into account. The era when planners, architects and builders could create new cities from a blank canvas without heed to the social or environmental impacts is over. City leaders, planners and designers will need to incorporate continuous feedback loops that provide information about a range of social, economic and environmental changes into their thinking to maintain public and political support.

Modelling and testing various approaches will be important to arrive at the optimal design or policy intervention. This will not only require new technologies to aid this process, but also a willingness among local and central governments to adopt longer-term development approaches, and to increase public participation in design and planning processes.

In construction, this will necessitate a shift to a circular economy that is restorative, both naturally (e.g. one that replenishes fresh drinking water) and technically (e.g. building materials can be reused without polluting the environment). Buildings would also

have to be built to anticipate future change, rather than using design standards based on existing conditions. History has taught us that the cities which fail to react to the changing world face decline. With the tools at their disposal today, cities have never been better equipped to rise to the challenge. Their success in 2025 and beyond will be determined by how well they do so.

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Chief Executive, Royal Institute of British Architects Lead expert on the Future of Cities.

Harry Rich has been Chief Executive of the Royal Institute of British Architects since 2009.

He was previously Chief Executive of Enterprise UK, increasing entrepreneurship in the UK, and Deputy Chief Executive at the Design Council. Harry has lead and developed businesses in industrial distribution, retailing and publishing. He has been a keynote speaker at business conferences around the world and trained as a commercial lawyer.

Harry is a governor of the University for the Creative Arts, a Companion of the Chartered Management Institute, a member of the government’s Creative Industries Council and a Fellow of the Royal Society of Arts. He has been a non-executive director of the Advertising Standards Authority, a member of the international advisory board of the US-based Design Management Institute, served on the Press Complaint Commission’s Charter Compliance Panel and was a Justice of the Peace.

Lead Expert – Harry Rich

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The Global Challenge

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Big business has become disconnected from the broader society within which it operates. A narrow focus on short-term returns has prevented businesses from investing in innovation to foster long-term sustainable growth.

The common understanding of the purpose of publicly listed companies, particularly in Anglo-American markets, is that they exist to maximize shareholder value. Publicly listed companies are under tremendous pressure from activist shareholders, takeover threats, and general market dynamics to generate short-term value by spinning off parts of the company, buying back shares, and laying off staff. External pressure is compounded by executive compensation schemes that are heavily weighted towards stock options. In theory, incentive compensation systems should reduce agency costs so that managers will act in the interests of shareholders. In practice, they create perverse incentives to extract value from the company at the expense of customers, employees, organizational health, the community in which the business operates, and ultimately society as a whole.

A number of unintended consequences result, including:

• The failure of companies to adequately consider and respond to societal challenges, such as environmental damage and climate change, due to the perceived cost;

• Erosion of trust between society and the corporate sector, including the role of corporations in shaping public policy, which in turn leads to a loss of trust in democratic processes; and

• Firm mismanagement through stock manipulation, insider trading and tax evasion, with a number of associated firm-level and macroeconomic risks including treating employees as disposable; undermining investment, research and development; hollowing out whole organisations; turning executives into caricatures of self-interest and greed powered by narrowly focused remuneration schemes; focusing talent in the corporate world on systematically extracting value rather than creating it; stock price manipulation; and fueling market failure and economic crash.

Inequality has greatly increased in the last twenty years, in part due to the failure to translate corporate profits into increased salaries across the firm. Even as worker productivity has continued to rise, real worker wages have essentially flat-lined. At the same time, executive compensation has markedly increased due to the afore-mentioned stock option schemes. Rising inequality within companies has in turn contributed to macro-level inequality that threatens to concentrate economic and political power in the hands of

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Disconnected Business Big business has become disconnected from the broader society within which it operates. A narrow focus on short-term returns has prevented businesses from investing in innovation to foster long-term sustainable growth.

Paige Morrow - Head of Brussels Operations, Frank Bold

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Options and Possibilities

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a privileged few.

The biggest questions we face go to the very core of business: what is the purpose of the corporation, and specifically of the large listed company with dispersed shareholders? Will the current model of large publicly listed companies survive the next decade, and if not, what will it be replaced by?

Another question is about the alternatives to public companies, such as B-corporations, co-operatives, companies controlled by foundations, privately held companies, partnerships and family-owned businesses. Many of these alternatives have shown themselves to be capable substitutes for corporate bodies, but will they pick up momentum and drive the way forward? Will they eventually eclipse publicly listed companies? Research by the CFA Institute shows that global equity listings have declined by 17% between 1998 and the end of 2012, from 56,119 to 46,674. US stock exchanges were hardest hit, losing nearly 50% of their listings from their high of 9,253 in 1997. Europe has also seen a significant decline of 23% of its listed companies, while Asian exchanges have seen the least change with less than 5% lost. Given the sharp decline in number and longevity of public

companies, it is unsurprising that many ask if a model of public limited company will survive the next decade.

Perhaps the most pressing issue today for financial regulators is the question of how to address short-termism in the markets and its significant influence on the strategies of public companies. It is widely acknowledged that an excessive focus on quarterly returns fed into the 2008 crisis but opinions vary widely on the causes of and solutions to short-termism. What is the role of financial markets and investors in promoting responsible capitalism? Can we turn institutional investors into patient capital, willing to invest in innovative research that will yield returns in the long-term? And conversely, is it possible to limit short-term trading, or at least to reduce its impact on the governance of companies?

Stewardship has become a central focus of regulators seeking to push markets to a long-term orientation. What do good stewardship and responsible investment look like in practice? Is it reasonable to expect institutional investors and corporate managers to serve as good stewards and act sustainability?

Listing Companies The biggest questions we face go to the very core of business: what is the purpose of the corporation, and specifically of the large listed company with dispersed shareholders? Will the current model of large publicly listed companies survive the next decade, and if not, what will it be replaced by?

Taking a Longer View Perhaps the most pressing issue today for financial regulators is the question of how to address short-termism in the markets and its significant influence on the strategies of public companies.

Part of the Problem The effects of our failure to make capitalism inclusive will become apparent: we have a generation of young people with uncertain prospects and we face rising inequality with a rising share going to the wealthy even as our wages stagnate. The corporation will be increasingly associated with these problems due to its status as the place where much of the distribution of the benefits of capitalism take place.

There is little that is guaranteed but change is certain. In the words of Lawrence Bloom, the co-founder of B.e Energy (a triple bottom line energy company), we are no longer in an age of change but in a change of age. The world faces three converging crises – economic, environmental and social – that require urgent and visionary action. Behind these crises are the failure of a worldview based on the single-minded pursuit of growth and the failure to work collaboratively to ensure that benefits are shared widely.

In the next decade, we will certainly see the effects of our failure to proactively address challenges such as inequality, the regulation of financial markets and youth

unemployment. The effects of our failure to make capitalism inclusive will become apparent: we have a generation of young people with uncertain prospects and we face rising inequality with a rising share going to the wealthy even as our wages stagnate. The corporation will be increasingly associated with these problems due to its status as the place where much of the distribution of the benefits of capitalism take place.

We have already started to see the effects of climate change and business has started to sit up and take notice. How will we react and will we be able to turn the ship around? The answer to this question largely depends on the readiness of the corporate sector to


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Proposed Way Forward

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support progressive political solutions. It is becoming patently clear that exhausting the planet’s resources is not an option – a growing number of politicians and business leaders recognize we cannot burn our fossil fuel reserves without destroying the world as we know it.

Not all is grim; in the next decade we will witness the continued rise of a new generation of leaders pushing for responsible business, broader recognition of the need for gender and racial diversity in boardrooms and C-suites, and the shift of power from the global north to south and from west to east. Companies from emerging economies will certainly take on a key role in the global economy. They will bring with them different models of governance which might be more able to respond to changing conditions, although they will also introduce new challenges. Finally, the line between public and private will continue to blur. There will be mounting pressure from civil society and the general public for sustainability in business and for corporations to take responsibility for the impacts generated by their value chains and off-shore operations. The reordering of transnational legal and political frameworks will offer us the opportunity to revision the respective roles of the State, the corporation and civil society. Concerted effort is needed to nudge the process in the direction of democracy and

broad-based participation.

On our current path, another crash of the financial markets is highly likely. We have not addressed the root causes of the 2008 crisis and momentum for a significant overhaul of the markets has slowed to a crawl. Will the erosion of trust in business caused by the cyclical boom-and-bust nature of markets have an impact on policy-making? It’s hard to say.

The relative power of stakeholders within companies is similarly uncertain: will employees regain their voice? Will responsible investors play a more important role in influencing companies?

There are several events that could occur at the world stage that would have a profound impact on the global economy: another global energy crisis, the eclipse of Western economies by emerging economies, and the dissolution of the European Union.

The overarching uncertainties are whether we will see a rebalancing of power between different stakeholders, whether big business and key interested parties will lead or resist a rebalancing of influence, and how big a crisis is needed to jar us from our current trajectory. The risk is that entrenched interests that benefit from the current state of play will thwart reforms that threaten to limit their influence.

The backlash against big corporations has already fostered interest in alternative business models that will continue to gain momentum over the next decade. There is not one perfect alternative to publicly listed companies but rather a plurality of legal structures that each have certain benefits and drawbacks, including privately held companies, partnerships, benefit corporations, cooperatives, and worker-owned enterprises.

Major changes are on the way for company boards. Although problematic, the concept

of stewardship has become the go-to response for regulators seeking to address short-termism in the markets, along with increasing shareholder rights. In theory, strengthening ‘shareholder democracy’ by giving shareholders additional powers such as a say-on-pay seems like a good way to encourage institutional investors like pensions and sovereign funds to steer companies in the right direction. In practice, however, it is unclear whether we can expect investors to take on this responsibility.

Responsible Business The line between public and private will continue to blur. There will be mounting pressure from civil society and the general public for sustainability in business and for corporations to take responsibility for the impacts generated by their value chains and off-shore operations.

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Board Diversity It may be that other stakeholders besides shareholders will take on an increasingly important role. Board level employee representation is well established in much of continental Europe and has started to receive some attention at the EU level. Board diversity is also a key topic now and will almost certainly be into the future. We may see reserved seats for women, visible minorities, and other traditionally under-represented groups.

Integrated Reporting Integrated Reporting was devised less than a decade ago but has been picked up by an increasing number of companies who welcome the ability to tell a story about the whole picture of the company, which is often overlooked in quarterly reports.

Thoughtful Policymaking Thoughtful policymaking is needed; indeed, perhaps the best we can do is to try to ‘nudge’ behaviour in the right direction and closely monitor the results, ever ready to react to changes.

A slight variation on this would be to assign different powers to different classes of shares.

It may be that other stakeholders besides shareholders will take on an increasingly important role. Board level employee representation is well established in much of continental Europe and has started to receive some attention at the EU level. Board diversity is also a key topic now and will almost certainly be into the future. We may see reserved seats for women, visible minorities, and other traditionally under-represented groups.

The classic maxim says that what is measured is what matters. The traditional focus of firms on measuring and reporting on almost exclusively financial indicators is changing to look at a broader set of indicators. In the EU, the recently adopted Non-Financial Reporting Directive requires certain large European companies to disclose information about environmental matters, social and employee-related matters, respect for human rights, anti-corruption and bribery matters. Integrated Reporting (<IR>) was devised less than a decade ago but has been picked up by an increasing number of companies who welcome the ability to tell a story about the whole picture of the company, which is often overlooked in quarterly reports. Closely related is the question of how to share information about companies to potential investors and the public. There are several ideas out there for developing benchmarks and labeling standards to identify sustainable companies and financial products, similar to what has been done for Fair Trade products.

There are two main ways to influence behaviour: sticks and carrots. Ideally, we will push companies to be pro-social through a combination of both regulatory policy and economic incentives. For example, there has been a lot of discussion in the context of climate change about introducing taxation of externalities, e.g. carbon taxes, as well as a carbon market. The EU has also considered proposals to impose a transaction tax on financial markets to reduce volatility and

generate revenue, which has been used in other jurisdictions with inconclusive results. We may see requirements imposed to devote a certain percentage of revenue to CSR, as is being implemented in parts of Asia.

The Benefit Corporation and similar models might be supported by governments, either by tax incentives or by preferential treatment in public procurement. Farsighted States may reform their company law to introduce mandatory elements of corporate purpose, such as, for example, the concept of making decisions with an aim to remaining within our planetary boundaries, and adjusting directors’ duties and responsibilities accordingly. These changes have the potential to have high impact because they could shift economic activity to a new model – and for that reason, they are unlikely to be implemented. Other debated regulatory reforms include caps on executive pay and/or pegging executive pay to non-financial returns; changing the rules on the legal liability of multinational enterprises to allow parent companies to be held legally liable for the actions of their foreign subsidiaries; and restrictions on firms’ right to buy back their shares. Each of these reforms is potentially important but it is only when they are taken together that they have a chance to lead to system-wide changes to business conduct.

In terms of incentives, almost any of the regulatory reforms discussed in the previous paragraph could be framed instead as an incentive with a bit of ingenuity. Additional ideas include introducing incentives for boards to change their composition or to balance the short-term financial interests of the company with long-term and/or non-financial interests. Thoughtful policymaking is needed; indeed, perhaps the best we can do is to try to ‘nudge’ behaviour in the right direction and closely monitor the results, ever ready to react to changes.


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Impact and Implications

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Tailored solutions will be needed to respond to the unique characteristics of each region. For example, the continental European, Chinese, Japanese and Anglo-American economics and business models are each very different. Germany is characterized by a small number (less than 700) publicly listed companies with worker representation on company boards, whereas mandatory board-level employee representation would be a controversial proposition in the UK or the US. The EU will be forced to confront and reconcile these types of discrepancies in the corporate governance models of its Member States as it asserts an increasingly active role in company law, which has traditionally been under the purview of national governments.

Outside of the EU, we need to bring Asia, the Middle East and Africa into the discussion of sustainability, workers’ rights and human rights more generally. This will require thoughtful balancing of the local context with international standards. In the context of human rights, the UN Guiding Principles on Business and Human Rights outline the responsibilities of States to enforce the principles of international human rights law and of companies to respect those principles. But more work is needed to translate the framework into context- and industry-specific guidelines. It is in the implementation of general principles and the reconciliation of potentially contradictory rights that compromises will be most needed.

If this process is successful, we may see a gradual reduction in inequality leading to less social unrest and less partisan politics. We may also see an increasingly prominent role for business in developing both soft and hard law in a transparent way, acting individually and in concert through more progressive collaborative initiatives than the current trade and industry associations that dominate policy circles in Brussels, Washington and London.

We need a new vision for the role of business in society. Part of the reason why the focus on maximizing shareholder value and short-term profits has captured business for so long is due to the failure to create consensus around an alternative conception

of the purpose of the corporation. A model of corporate governance narrowly focused on maximizing shareholder value in the short-term is unbalanced and self-destructive. The paradigm that will rise to replace the current one will need to have a more holistic understanding of profit as one indicator of the long-term health of the organization, amongst others. The profit-making motive will sit comfortably alongside a consideration of a broader responsibility to the interests of society.

This new paradigm must be translated into the existing framework of incentives and regulations for corporate governance and accountability. It needs to be reflected in market mechanisms, in particular in the way that financial markets interact and influence companies. The role of shareholders in corporate governance will have to be rethought in order to protect their role in ensuring management accountability, whilst freeing companies from the imperative to maximise the stock price as at all costs.

In order to achieve transparency and accountability, companies will need to provide an accurate accounting of their environmental and social impacts, through required disclosure and through increased pressure for meaningful information from consumers. Boards of directors will also need to revise their decision-making process to consider the effect of the company on the environment and society. Companies should be expected, encouraged and even required to develop long-term plans charting their way towards environmental and economic sustainability. It will be necessary to devise holistic measures for measuring corporate success in the long-term, reflecting their ability to create value in a responsible manner. These metrics should be reflected in incentives for corporate executives as well as for institutional investors. We need to consider whether the current level of public investment in research and development is sufficient and properly allocated to achieve transformative change. Public-private partnerships, while not without flaws, are one path to support and stimulate green growth.

At some point, we will be forced to

Measuring Success It will be necessary to devise holistic measures for measuring corporate success in the long-term, reflecting their ability to create value in a responsible manner. These metrics should be reflected in incentives for corporate executives as well as for institutional investors.

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Acknowledging the Problem At some point, we will be forced to acknowledge that the current approach to governing companies is broken. Perhaps after the next financial crisis, but hopefully sooner. Certainly as we are forced to respond to climate change, which cannot be addressed by governments alone without the support and investment of business.

acknowledge that the current approach to governing companies is broken. Perhaps after the next financial crisis, but hopefully sooner. Certainly as we are forced to respond to climate change, which cannot be addressed by governments alone without the support and investment of business.

Head of Brussels Operations, Frank Bold Lead expert on the Future of the Company.

Paige is the Head of Brussels Operations for the public interest law firm Frank Bold and is responsible for policy and public affairs in the areas of corporate governance, company law, and business and human rights. Previously she was a researcher at the Centre for the Study of Human Rights at the London School of Economics and Political Science examining the international regulation of investment and investment arbitration.

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The Future of Connectivity

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Hossein Moiin - Executive Vice President and Chief Technology Officer, Nokia Networks

Demand will continue to grow exponentially in the next decade: Demand for mobile broadband is closely related to the evolution of device and screen technologies, one of the fastest evolving areas in the Information and Communication Technology (ICT) industry. In 2011, the Retina display of an iPad already had nearly twice as many pixels to fill with content compared to a Full-HD television. New device form factors such as Google’s glasses, another hot topic introduced in

2012, continue to drive this evolution and ultimately only the human eye will set the limits for the amount of digital content that will be consumed by a mobile device. And these devices will not only consume content – ubiquitous integrated cameras with high resolution and frame rate are producing Exabytes of digital content to be distributed via networks.

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Giga Growth By 2025 mobile networks need to support up to 1000 times more capacity, reduce latency to milliseconds, reinvent Telcos for the cloud and flatten the total energy consumption.

Optimal Experience Demand will be driven by hundreds of thousands of data apps sharing the same network, each with its own requirements towards the network. Every user, human as well as machine, will expect the optimal experience from the network for its personalized set of applications.

More Than The Eye Can See Ultimately only the human eye will set the limits for the amount of digital content that will be consumed by a mobile device.

The telecoms industry not only faces a massive increase in data demand, it also needs to boost profitability and personalized experience at the same time. To meet this challenge by 2025 mobile networks need to support up to 1000 times more capacity, reduce latency to milliseconds, reinvent Telcos for the cloud and flatten the total energy consumption.

One gigabyte per day equates to a 60-fold increase, or roughly a doubling of traffic per user every 18 months, compared to the average 500MB per user per month some mobile networks in mature markets are seeing today. This demand will be driven by hundreds of thousands of data apps

sharing the same network, each with its own requirements towards the network. Every user, human as well as machine, will expect the optimal experience from the network for its personalized set of applications.

Why do we believe demand for mobile broadband will grow to these dimensions? What will it mean for operators and their networks? And even more importantly, what are the vital capabilities and technologies we need to explore and develop in the next decade to make this happen?


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Enabled by these powerful new devices, the app ecosystem continues to fuel demand for mobile data by continuously inventing new categories of applications that test the limits of the network. It started with mobile web browsing in 2007 and accounted for more than 50% of video traffic in 2012. And by 2020, people might demand mobile networks that allow them to broadcast live video feeds from their glasses to thousands of other users in real time.

Many of the apps will be cloud based or rely on content stored in the cloud. IDC estimates in their digital universe study that by 2020 30% of all digital information will be stored in the cloud – and thus be accessed through networks.

An even broader range of use cases for networks will develop as communication technologies and applications proliferate into all industries and billions of machines and objects get connected. They will go far beyond the classical examples of the smart grid or home automation. Just imagine the potential – but also the requirements – that remotely controlled unmanned vehicles would bring to mobile broadband networks.

In summary, we believe that device evolution, cloud based application innovation and proliferation of communication technologies into all industries will ensure that the exponential growth in demand for mobile broadband we have seen in the last few years will continue in the next decade.

Everything Connected By 2020, people might demand mobile networks that allow them to broadcast live video feeds from their glasses to thousands of other users in real time.

Testing the Limits We need to find ways to radically push the capacity and data rates of mobile networks into new dimensions to handle this amount of data traffic. live video feeds from their glasses to thousands of other users in real time.

Intelligent Networks Self-aware and intelligent networks will be able to understand their user’s needs and automatically act to deliver the best personalized experience.

Shared Business Models To further reduce costs per GB, we need to share network resources through both within a single operator

Having understood what drives demand we can define the requirements for future mobile networks: As stated earlier, one gigabyte of data traffic per user per day is about 60 times the average data traffic seen in mature mobile operator networks today. On top of this, the growth in mobile broadband penetration and the surge of connected objects will lead to around ten times more endpoints attached to mobile operator networks than today. To prepare for this, we need to find ways to radically push the capacity and data rates of mobile networks into new dimensions to handle this amount of data traffic.

Yet, being able to deal with this traffic growth is just one aspect. An increasing number of real-time apps will test the performance of the networks. To support them with a good user experience we need to find ways to reduce the end-to-end latency imposed by the network to milliseconds. Tactile (touch/response) and machine-to-machine interactions in particular have low latency demands that can be as low as in the single digit milliseconds range.

To ensure mobile broadband remains affordable even while supporting the capacity and real-time requirements described

previously, we also need to radically reduce the network Total Cost of Ownership (TCO) per Gigabyte of traffic. We believe one important lever to address this will be to automate all tasks of network and service operation by teaching networks to be self-aware, self-adapting and intelligent. This will help to reduce CAPEX/IMPEX for network installation as well as OPEX for network and service management. In addition to lower TCO, self-aware and intelligent networks will be able to understand their user’s needs and automatically act to deliver the best personalized experience.

To further reduce costs per GB, we need to share network resources both within a single operator network, as well as between operators. It will include physical infrastructure, software platforms, sites, spectrum assets or even the network as a whole. We must also find ways to increase the energy efficiency. In addition to their environmental impact the energy costs account today for up to 10% (in mature markets) and up to 50% (in emerging markets) of an operator’s network OPEX and they have been growing constantly in the last years.


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5G Although the industry today has not defined what 5G will look like and the discussions about this are just starting, we believe that flexible spectrum usage, more base stations and high spectral efficiency will be key cornerstones.

The most powerful way to deal with industry cost pressures will be to identify new revenue streams. Are end customers and termination fees really the sole revenue source for operators, or will technologies enable new business models that allow operators to better monetize all their assets?

Ultimately we of course need to admit that due to the fast pace of change in the industry it is simply not possible to predict all requirements future networks will face. There will be many use cases that are simply not known today. To cope with this uncertainty, flexibility must be a key requirement as well.

Impacts and Implications

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More spectrum, high spectral efficiency and small cells will provide up to 1000 times more capacity in wireless access. In the world of wireless, Shannon’s law is the one fundamental rule that defines the physical limits for the amount of data that can be transferred across a single wireless link. It says that the capacity is determined by the available bandwidth and the signal to noise ratio – which in a cellular system typically is constrained by the interference.

Therefore the first lever to increase the capacity will be to simply utilize more spectrum for mobile broadband. In total the entire spectrum demanded for mobile broadband amounts to more than 1,100 MHz and a large amount (about 500 MHz) of unlicensed spectrum at 2.4 GHz and 5 GHz can provide additional capacities for mobile data. Of course reaching an agreement on spectrum usage requires significant alignment efforts by the industry and is a rather time consuming process. Therefore it is also necessary to look at complementary approaches such as the Authorized Shared Access (ASA) licensing model, which allows fast and flexible sharing of underutilized spectrum that is currently assigned to other spectrum-holders such as broadcasters, public safety, defence or aeronautical.

A key challenge associated with more spectrum is to enable base stations and devices to utilize this larger and a potentially fragmented spectrum. Here technologies such as intra- and inter-band Carrier Aggregation will be essential to make efficient use of a fragmented spectrum.

The second lever for more capacity will be to address the interference part of Shannon’s equation. This can be achieved for example through beam forming techniques, which concentrate the transmit power into smaller spatial regions. A combination of multiple spatial paths through Coordinated Multipoint Transmissions (CoMP) can further increase the capacities available to individual users. We believe that with the sum of these techniques the spectral efficiency of the system can be increased by up to 10 times compared to HSPA today.

Advanced technologies and more spectrum will help to grow capacity by upgrading existing macro sites for still some time. However, a point will be reached when macro upgrades reach their limits. By 2020 we believe mobile networks will consist of up to 10…100x more cells, forming a heterogeneous network of Macro, Micro, Pico and Femto cells. Part of this will also be non-cellular technologies such as Wi-Fi, which need to be seamlessly integrated with cellular technologies for an optimal user experience.

Although the industry today has not defined what 5G will look like and the discussions about this are just starting, we believe that flexible spectrum usage, more base stations and high spectral efficiency will be key cornerstones.

The capacity demand and multitude of deployment scenarios for heterogeneous radio access networks will make the mobile backhaul key to network evolution in the next decade. The backhaul requirements for future base stations will easily exceed the practical

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limits of copper lines. Therefore from a pure technology perspective, fiber seems to be the solution of choice. It provides virtually unlimited bandwidth and can be used to connect macro cells in rural areas and some of the small cells in urban areas. However the high deployment costs will prevent dedicated fiber deployments just to connect base stations in many cases. Due to the number of deployment scenarios for small cells, from outdoor lamp post type installations to indoor, we believe a wide range of wireless backhaul options will coexist including microwave links and point to multipoint link, millimetre wave backhaul technologies. For many small cell deployment scenarios (e.g. for installations below rooftop level) a non-line-of-sight backhaul will be needed. The main options here are to either utilize wireless technologies in the spectrum below 7 GHz or to establish meshed topologies.

Besides pure network capacity, the user experience for many data applications depends heavily on the end-to-end network latency. For example, users expect a full web page to be loaded in less than 1000ms. As loading web pages typically involves multiple requests to multiple servers, this can translate to network latency requirements lower than 50ms. Real-time voice and video communication requires network latencies below 100ms and advanced apps like cloud gaming, tactile touch/response applications or remotely controlled vehicles can push latency requirements down to even single digit milliseconds.

The majority of mobile networks today show end-to-end latencies in the range of 200ms-500ms , mainly determined by slow and capacity limited radio access networks. Therefore the high bandwidth provided by future radio access technologies and the use of fast data processing and transmission will provide a major contribution to reduce the network latency. Due to the amount of data being transferred the user perceived latency can be much higher than the plain round-trip-time. Thinking of future ultra high resolution (UHD) real time video applications this clearly motivates the need for further technology evolution.

Equally important is the real traffic load along the end-to-end path in the network. A high traffic load leads to queuing of packets, which significantly delays their delivery. When attempting to solve this, it is not efficient to just overprovision bandwidth in all network domains. Instead latency sensitive media traffic might take a different path through the network or receive preferred treatment over plain data transfers. This needs to be supported by continuously managing latency as a network quality parameter to identify and improve the bottlenecks. In return, low latency traffic could be charged at a premium, providing network operators with new monetization opportunities.

One physical constraint for latency remainins: Distance and the speed of light. A user located in Europe accessing a server in the US will face a 50ms round-trip time due simply to the physical distance involved, no matter how fast and efficient the network is. As the speed of light is constant, the only way to improve this will be to reduce the distance between devices and the content and applications they are accessing. Many future applications such as cloud gaming depend on dynamically generated content that cannot be cached. Therefore the processing and storage for time critical services also needs to be moved closer to the edge of the network.

The introduction of additional radio access technologies, multiple cell layers and diverse backhaul options will increase complexity and bears the risk that network OPEX will rise substantially. This is why the Self- Optimizing-Network (SON) is so important. SON not only increases operational efficiency, but also improves the network experience through higher network quality, better coverage, capacity and reliability. Extending the SON principles now to a heterogeneous network environment is a challenge and opportunity at the same time.

Fortunately, big data analytics and artificial intelligence (AI) technologies have matured in recent years, mainly driven by the need to interpret the rapidly growing amount of digital data in the Internet. Applied to communication networks, they are a great foundation for analyzing Terabytes of raw network data

Less Distance, More Speed One physical constraint for latency remains: Distance and the speed of light… As the speed of light is constant, the only way to improve this will be to reduce the distance between devices and the content and applications they are accessing.


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Cognitive Network Ultimately we believe that both, big data analytics and AI technologies will help to evolve SON into what we call a “Cognitive Network”, one that is able to handle complex end-to-end optimization tasks autonomously and in real time.

and to propose meaningful actions. In combination with AI technologies, actionable insights can be derived even in the case of incomplete data; for example machine-learning techniques can find patterns in large and noisy data sets. Knowledge representation schemes provide techniques for describing and storing the network’s knowledge base and reasoning techniques utilize this to propose decisions even with uncertain and incomplete information. Ultimately we believe that both, big data analytics and AI technologies will help to evolve SON into what we call a “Cognitive Network”, one that is able to handle complex end-to-end optimization tasks autonomously and in real time.

Customer Experience Management (CEM) can provide insights that will enable operators to optimize the balance of customer experience, revenues and network utilization. Cognitive Networks will help to increase the automation of CEM enabling network performance metrics to be used to govern the insight/action control loop, as well as experience and business metrics. This again increases the operational efficiency and at the same will be the prerequisite to deliver a truly personalized network experience for every single user.

The big data analytics and AI technologies introduced with the Cognitive Networks will be the foundation for advanced customer experience metrics. The ability to deal with arbitrary amounts of data in real time will allow a much more detailed sensing of network conditions and the resulting user experience in real time.

It also will be the foundation for large-scale correlations with other data sources such as demographics, location data, social network data, weather conditions and more. This will add a completely new dimension to user experience insights.

Cloud technologies and being able to provide computing and storage resource on-demand have transformed the IT industry in the last years. Virtualization of computing and storage resources has enabled the sharing of resources and thus their overall efficiency. Virtual cloud resources can also be scaled up and down almost instantly in response to changing demand. This flexibility has created

completely new business models. Instead of owning infrastructure or applications it is possible to obtain them on-demand from cloud service providers. So far this approach has mainly revolutionized IT datacenters. We believe that similar gains in efficiency and flexibility can be achieved when applying cloud technologies to Telco networks. Virtualization will allow decoupling of traditional vertically integrated network elements into hardware and software, creating network elements that consist just of applications on top of virtualized IT resources. The hardware will be standard IT hardware, hosted in datacentres and either owned by the network operator or sourced on-demand from third party cloud service providers. The network applications will run on top of these datacentres, leveraging the benefits of shared resources and flexible scaling.

Also user plane network elements such as base stations will be subject to this paradigm shift. Over time, the migration of network elements in combination with software defined networking will transform today’s networks into a fully software defined infrastructure that is highly efficient and flexible at the same time.

Efficient radio technologies, high utilization and network modernization will reduce the network energy consumption, another important cost factor for operators. Having the forecasted traffic growth in mind, reducing the network energy consumption must be a major objective. The focal point for improving network energy efficiency will be the radio access, which accounts for around 80% of all mobile network energy consumption. Ultimately the energy efficiency that can be achieved depends on the pace of network modernization. Efficiency gains materialize only when the new technologies are introduced into the live network. Determining the right pace for modernization requires careful balancing of CAPEX and OPEX. We believe that energy efficiency can beat the traffic growth - which makes keeping the network energy consumption at least flat a challenging - but achievable goal.

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Conclusion

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We believe that device evolution and application innovation will continue to drive the exponential growth in demand for personalized mobile broadband in the next decade. This demand and the associated usage profile define the key requirements for future mobile networks in terms of capacity, latency, automation, resource utilization and energy efficiency.

For each of these requirements, we’ve shown an essential set of technologies that needs to be explored and developed in the next decade. This technology evolution leads to our vision of a fully software defined “liquid” network architecture - a network architecture that combines highest efficiency with flexibility and is the foundation to deliver the best experience to every mobile broadband user.

Executive Vice President and Chief Technology Officer, Nokia Networks Lead expert on the Future of Connectivity.

An inventor and technology visionary, Hossein leads long-term technology evolution and drives transformational innovations for the company. Having held several management positions in BT, T-Mobile and Sun Microsystems over the last 25 years and as an active adviser and board member of several technology start-ups, he brings in-depth technology expertise, customer focus and innovation to Networks. Hossein joined NSN in 2010.

Lead Expert – Hossein Moiin


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futureagenda.org

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Stephan Shakespeare - CEO and Co-Founder of YouGov plc

The Future of Data

In the last ten years we have seen an explosion in the amount of structured data we produce through our everyday activities. All on-line activity, such as credit card payments, web searches and mobile phone calls, leaves a data exhaust, little puffs of evidence about our behaviour, what we do and how we think. This can now be stored, shared and analyzed, transforming it from meaningless numbers into life-changing tools.

Like it or not, we live in a world where personal information can be accessed at the click of a key on a massive scale. Although there are myriad benefits (medicine, education and the allocation of resources are obvious areas), there are also significant risks. The threat of cyber warfare is a good example. There is no turning back, so what does this mean for society going ahead? I believe that in order to maximize the benefits and minimize the risks over the next ten years we will have to fundamentally change our behaviours, our structures and our businesses.

Writing today, my real concern is that we haven’t yet got a clear understanding of the risks this new data-fuelled world brings and therefore even less about how to deal with them. That doesn’t mean we should over-react. Indeed the opposite: if we haven’t thought them through, we are more likely to over-react in some areas and under-prepare in others. We are obviously severely under-

prepared against cyber-terrorism, as we see with the recent Sony debacle.

As an example of over-reaction, look at concerns about health data, which, in the main, can be addressed through the judicial use of sandbox technologies and severe penalties for misuse. Surely it is counterintuitive to miss out on the enormous social benefit of sharing health data because we haven’t thought properly about how to deal with potential risks? How do we exploit data knowledge to positive effect and what are the key challenges going forward?

The first big issue is how to keep the opportunities equal. I believe that all levels of society should benefit from the information data crunching can deliver. But just because the capability is there, it is not a guarantee that it will be shared unilaterally. Currently this is an area where new inequalities could grow, as well as existing equalities get worse. Data sharing and the science of getting value from data is obviously much more advanced in the advanced economies. It’s quite possible that these skills will be used to accelerate their own national well being, both commercial and social, leaving less technologically based societies behind. It would be wrong to assume that technology will be a leveler at all times. Yes, it has the potential, but the hope that it will have an equalizing effect is by no means assured.

Data Inequalities I believe that all levels of society should benefit from the information data crunching can deliver. But just because the capability is there, it is not a guarantee that it will be shared unilaterally. Currently this is an area where new inequalities could grow, as well as existing equalities get worse.


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There are obvious tensions between sharing, privacy and freedom. But we must be wary of erecting a virtual net curtain, hiding the voyeur and leaving the public vulnerable. Why shouldn’t youthful misdemeanors be left in the ether? I think they should. After all, we know that silly things sometimes happen – even to ourselves. The trick is for us all is to know and acknowledge what is public, and to act accordingly. Years ago, we lived in small communities. Our doors were unlocked and our neighbours knew our every move. It was considered normal. Our community is now global, but the principal remains the same. Some guidelines do need to be established if we are to maximize the social benefit of data; we must develop an agreement about what privacy really is in reality as well as in the virtual world. This will involve thinking afresh about the relationship between the citizen, governments, and corporations.

Understanding data ownership will become a bigger issue than it already is today. Consumers and end users will want to own and control their personal data, but this seemingly straightforward statement grows more difficult to achieve with each passing day. There isn’t much information that we can easily say belongs to just one person. Consider two people having a chat in a café. The content belongs to both of them; the fact of their meeting belongs to all who observe it. If I have a contagious disease, we don’t consider that information my personal property. When a doctor takes your temperature, does that information belong to you, the doctor or the hospital? Data is useful to everyone, so we must get used to sharing particularly as more and more of our lives becomes digitised and new issues arise. The challenge is to develop our ethical and legal

apparatus for this, establishing a set of agreed principals and regulatory framework that can act as the basis

History is littered with evidence that shows how we consistently fail to identify the next big threat. The Greeks didn’t recognize the Trojan Horse; the Allies in the First World War weren’t initially concerned about aerial warfare. Similarly, I believe we are currently under-playing the potential impact of cyber-attack. As more control systems are connected to the web, more vulnerability will inevitably appear.

Cyber-security, which involves protecting both data and people, is facing multiple threats; cybercrime and online industrial espionage are growing rapidly. Last year, for example, over 800 million records were lost, mainly through cyber attacks. A recent estimate by the think tank, Centre for Strategic and International Studies (CSIS), puts the annual global cost of digital crime and intellectual property theft at $445 billion—a sum roughly equivalent to the GDP of a smallish, rich European country such as Austria.

Although the attacks on Target, eBay and Sony have recently raised the risk profile in boardrooms around the world, law enforcement authorities are only now grappling with the implications of a complex online threat that knows no national boundaries. Protection against hackers remains weak, and security software is continuously behind the curve. Wider concerns have been raised by revelations of mass surveillance by the state; a growing number of countries now see cyber space as a new stage for battle, and are actively recruiting hackers as cyber warriors. How to minimize this threat is key to all of our futures.

Global Village Years ago we lived in small communities, our doors were unlocked and our neighbours knew our every move. It was considered normal. Our community is now global but the principal remains the same.

Shared Information There isn’t much information that we can easily say belongs to just one person. After all if two people have a chat in a café the content belongs to both of them and the fact of their meeting belongs to all who observe it.

Agreed Principles Data is useful to everyone so we must get used to sharing particularly as more and more of our lives becomes digitised and new issues arise. The challenge is to develop our ethical and legal apparatus for this, establishing a set of agreed principles and regulatory framework that can act as the basis.

Data Protection Protection against hackers remains weak with security software continuously behind the curve. Wider concerns have been raised by revelations of mass surveillance by the state and a growing number of countries now see cyber space as a new stage for battle, recruiting hackers as cyber warriors.

The way data will be optimized is changing. It is not enough to know single lines of information. Data must be connected and multi layered to be relevant. It means knowing not one thing or ten things or even

100 things about consumers but tens and hundreds of thousands of things. It is not big data but rather connected data – the confluence of big data and structured data – that matters. Furthermore, with the growth

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in social tools, applications and services, the data in the spider’s web of social networks will release a greater value. In the UK alone, YouGov now knows 120,000 pieces of information about over 190,000 people. This is being augmented every day. The analysis of this allows organisations both public and private to shape their strategy for the years ahead.

We are also growing a huge data-store of over a million people’s opinions and reported behaviours. These are explicitly shared with us by our panelists to use commercially as well as for wider social benefit (indeed we pay our panelists for most of the data shared).

But many companies exploit data that has been collected without genuine permission; it’s used in ways that people do not realize, and might object to if they did. This creates risks and obstacles for optimising the value of all data. Failure to address this will undermine public trust. We all have the right to know what data others have and how they are using it, so effective regulation about transparency and the use of data is needed. Europe is leading the way in this respect.

Governments, however, are the richest sources of data, accounting for the largest proportion of organized human activity (think health, transport, taxation and welfare). Although the principle that publicly-funded data belongs to the public remains true, certainly in the UK, we can expect to see more companies working with, through and around governments. Having the largest coherent public sector datasets gives Britain huge advantages in this new world

It is clear that encouraging business innovation through open data could transform public services and policy making, increasing efficiency and effectiveness. In the recent Shakespeare Review it was found that data has the potential to deliver a £2bn boost to the economy in the short-term, with a further £6-7bn further down the line1. However, the use of public data becomes limited when it involves private companies. To address this in the future, when companies pitch to work with governments,

preference should be given to those that share an open data policy, or at least the relevant parts. Furthermore, where there is a clear public interest in wide access to privately generated data – such as trials of new medicines -- there is a strong argument for even greater transparency.

Aside from governments (whose data provision is by no means perfect) access to large, cheap data sets is difficult. The assumption is that everything is available for crunching and that the crunching will be worth the effort. But the reality is that there are different chunks of big data – scientific, business and consumer – which are collected, stored and managed in multiple ways. Access to relevant information let alone the crunching of it will take some doing. On top of this, much corporate and medical data is still locked away, stuck on legacy systems that will take years to unpick. Many would say the sensible thing is to adopt a policy of standardization, particularly for the medical industry, given the growing number of patients living with complex long-term conditions. And yet, many standards abound. So in addition to regulation around transparency, over the next ten years we can expect to see agreement on standardisation in key areas.

But the potential benefits from this wealth of information is only available if there are the skills to interpret the data. Despite Google’s chief economist, Hal Varian, saying that “the sexy job of the next ten years will be statisticians;” number crunchers are in short supply (or at least not always available in the right locations at the right time). By 2018 there will be a “talent gap” of between 140,000 and 190,000 people, says the Mc¬Kinsey Global Institute. The shortage of analytical and managerial talent is a pressing challenge, one that companies and policy makers must address.

Separately, it is entirely plausible that the infrastructure required for the storage and transmission of data may struggle to keep pace with the increasing amounts of data being made available. Data generation is expanding at an eye-popping pace: IBM estimates that 2.5 quintillion bytes are being created every day and that 90% of the

Connected Data Data must be connected and multi layered to be relevant. It means knowing not one thing or ten things or even 100 things about consumers but tens and hundreds of thousands of things. It is not big data but rather connected data – the confluence of big data and structured data that matters.

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world’s stock of data is less than two years old. A growing share of this is being kept not on desktops but in data centres such as the one in Prineville, Oregon, which houses huge warehouses containing rack after rack of computers for the likes of Facebook, Apple and Google. These buildings require significant amounts of capital investment and even more energy. Locations where electricity generation can be unreliable or

where investment is limited may be unable to effectively process data and convert it to useful, actionable knowledge. Yet, it is the growing populations in these same areas – parts of Asia and Africa, for example – that will accelerate data creation, as more of its inhabitants develop online activities and exhibit all the expected desires of a newly emerging middle class. How should this be managed?

Public Data Economically connected data can clearly play a significant role that will benefit not only private commerce but also national economies and their citizens. For example the judicial analysis of data can provide the public sector with a whole new word of performance potential.

Data Exploitation If it is discovered that companies exploit data that has been collected without genuine permission and use it in ways that have no societal benefit there is a risk that a negative public response will limit opportunities for everyone.

Economically connected data can clearly benefit not only private commerce but also national economies and their citizens. For example, the judicial analysis of data can provide the public sector with a whole new world of performance potential. In a recent report, consultancy firm McKinsey suggested that if US healthcare were to use big data effectively, the sector could create more than $300 billion in value every year, while in the developed economies of Europe, government administrators could save more than €100 billion ($149 billion) in operational efficiency improvements alone.

It is understandable that many citizens around the world regard the collection of personal information with deep suspicion, seeing the data flood as nothing more than a state or commercial intrusion into their privacy. But there is scant evidence that these sorts of concerns are causing a fundamental change in the way data is used and stored.

That said, we must all have a care. As public understanding increases, so will concerns about privacy violation and data ownership. If it is discovered that companies are exploiting data that has been collected without genuine permission and are using it in ways that have no societal benefit, there is a considerable risk of a public backlash that will limit opportunities for everyone. The shelf life of the don’t- know-so-don’t-ask approach to data collection will be short.

Some in the industry believe governments

need to intervene to protect privacy. In Britain, for instance, the Information Commissioner’s Office is working to develop new standards to publicly certify an organisation’s compliance with data-protection laws. But critics think such proposals fall short of the mark—especially in light of revelations of America’s National Security Agency (NSA) ran a surveillance programme, PRISM, which collected information directly from the servers of big technology companies such as Microsoft, Google and Facebook.

From a marketing perspective, detailed awareness of customer habits will enable technology to discriminate in subtle ways. Some online retailers already use “predictive pricing” algorithms that charge different prices to customers based on a myriad of factors, such as where they live, or even whether they use a Mac or a PC.

Transport companies provide another interesting use case for connected data. Instead of simply offering peak and off-peak pricing, they can introduce a far more granular, segmented model. Customers can see the cost of catching a train, and the savings that can be made by waiting half an hour for the next one. They can also see the relative real-time costs of alternative transport to the same destination, and perhaps decide to take a bus rather than a train. They have the ability to make informed, value-based judgments on the form of travel that will best suit their requirements.

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Use Not Collection I believe the best approach to future proof access to big data is to ensure there is agreement around its use, not its collection. Governments should define a core reference dataset designed strategically to identify and combine the data that is most effective in driving social and economic gain.

Such dynamic systems will provide greater visibility of loading and so allow the use of variable pricing to nudge passengers into making alternative choices that can improve the efficiency of the overall network. Benefits all round. That said, although there may be innocuous reasons for price discrimination, there are currently few safeguards to ensure that the technology does not perpetuate unfair approaches.

Open access to data is reaping its own rewards. London’s Datastore makes information available on everything from

crime statistics to tube delays to, as their website states, “encourage the masses of technical talent that we have in London to transform rows of text and numbers into apps, websites or mobile products which people can actually find useful.” Many are taking up the challenge, and are delivering real social benefits. A professor at UCL, for example, has mapped how many people enter and exit Tube stations, and how this has changed over time. This information has now been used by Transport for London to improve the system.

Looking ahead, I believe the best approach to future-proof access to big data is to ensure there is agreement around its use, not its collection. Governments should define a core reference dataset, designed to strategically identify and combine the data that is most effective in driving social and economic gain. This will then become the backbone of public sector information, making it possible for other organisations to discover innovative applications for information that were never considered when it was collected.

This approach has the potential for huge societal benefit. The shorter-term economic advantages of open data clearly outweigh the potential costs. A recent Deloitte analysis quantifies the direct value of public sector information in Britain at around £1.8bn, with wider social and economic benefits taking that up to around £6.8bn. Even though these estimates are undoubtedly conservative, they are quite compelling.

And yet, at the same time individuals need to be protected. There are instances where, for very good reasons, ‘open’ cannot be applied in its widest context. I therefore suggest we acknowledge a spectrum of uses and degrees of openness.

For example, with health data, access even to pseudonymous case level data should be limited to approved, legitimate parties

whose use can be tracked (and against whom penalties for misuse can be applied). Access should also be limited to secure sandbox technologies that give access to researchers in a controlled way, while respecting the privacy of individuals and the confidential nature of data. Under these conditions, we can create access that spans the whole health system, more quickly and to more practitioners, than is currently the case. The result: We gain the benefits of ‘open’ but without a significant increase of risk.

Nor should we consider ‘free’ (that is, at marginal cost) to be the only condition, which maximises the value of public information. There may be some particular cases when greater benefits accrue to the public with an appropriate charge. Finally, as big data unquestionably increases the potential of government power to accrue un-checked, rules and regulations should be put in place to restrict data mining for national security purposes.

We will also have to look to how we focus resources within academia. The massive increase in the volume of data generated, its varied structure and high rate at which it flows, have led to the development of a new branch of science – data science. Many existing businesses will have to engage with big data to survive. But unless we improve our base of high-level skills, few will have


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the capacity to create new approaches and methodologies that are simple orders of magnitude better than what went before. We should invest in developing real-time, scalable machine learning algorithms for the analysis of large data sets, to provide users with the information to understand their behavior and make informed decisions

We should of course strive for an increased shift in capital allocations by governments and companies to support the development of efficient energy supply and robust infrastructure. These investments can prepare us for serving continued growth in world productivity – and help offset the increasing risk for the massive, destructive disruptions in the system that will inevitably, come with our growing dependency on data and data storage.

Innovation in storage capabilities should also be considered. Take legacy innovation, for example. The clever people at CERN use good old-fashioned magnetic tape to store their data, arguing that it has four advantages over hard disks for the long-term preservation of data: Speed (extracting data from tape is about four times as fast as reading from a hard disk). Reliability (when a tape snaps, it can be spliced back together; when a terabyte hard disk fails, all the data is lost). Energy conservation (tapes don’t need power to preserve data held on them). Security (if the 50 petabytes of data in CERN’s data centre was stored on a disk, a hacker could delete it all in minutes; to delete the same amount from the organisation’s tapes would take years).

The key thing to remember is that numbers, even lots of numbers, simply cannot speak for themselves. In order to make proper sense of them we need people who understand them and their impact on the world we live in. To do this we need to massively spread academia vertically and horizontally, engaging globally at all levels, from universities to government to places of work. The current semi-fractured structure of academia is actually an advantage; it will help us ensure plurality of ideas and approaches. Remember, we’re not just playing with numbers; we’re dealing

with fundamental human behaviors. We need philosophers and artists as well as mathematicians, and we must allow them to collectively develop the consensus.

If we get it right, over the next 10 years I would expect to see individuals being more comfortable with living in the metaphorical glass house, allowing their personal information to be widely accessible in return for the understanding that it will enable them to enjoy a richer, more ‘attuned’ life. I would also expect to see a maturing of our individual data usage, a coming of age with regards to appreciating and integrating data and less of a fascination at its very existence. We will also perhaps see a new segment appearing, those who elect to reduce their data noise by avoiding needless posts of photos of their lunch and such.

We will also see a structural shift in employment, markets and economies as the focus in maturing economies continues to shift away from manufacturing and production and toward a new tier of data-enabled jobs and businesses. As we demand more from our data, we will need to match it with a skilled workforce that can better exploit the information available.

After all the noise perhaps it would be wise to remember that big data, like all research, is not a crystal ball and statisticians are not fortune tellers. More information, and the increasing ability to analyse it, simply allows us to be less wrong. I believe that we will have continued growth in world productivity, probably accelerating over the next ten years, even as the risk for massive destructive disruptions in the system increases. There will be huge challenges and even dangers, but I am confident we will be the better for it. Every time humans have faced a bigger crisis, they have emerged stronger. Although we can’t be sure that this will always be the case, now is the time to be bold and ambitious.

Living in Glass Houses If we get it right, over the next 10 years I would expect to see individuals being more comfortable to metaphorically ‘live in a glass house’, allowing their personal information to be widely accessible in return for the understanding that this enables them to enjoy a richer, more ‘attuned’ life as a result.

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CEO and Co-Founder of YouGov plc Lead expert on the Future of Data.

Stephan Shakespeare is CEO and Co-Founder of YouGov plc. One of the pioneers of Internet research, Stephan has been the driving force behind YouGov’s innovation-led strategy. Stephan is a regular commentator on current affairs and business issues. He writes a weekly column for City A.M. and is regular contributor to Daily Politics. In 2012, Stephan was appointed by the UK Government to chair the Data Strategy Board, a ministerial advisory board. Shortly thereafter, Stephan was asked by the UK Government to lead an independent review into the growth opportunities of, and how to widen access to, the wealth of information held by the public sector; the Shakespeare Review was published in May 2013.

Lead Expert – Stephan Shakespeare


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Sugata Mitra - Professor of Educational Technology at the School of Education, Communication and Language Sciences at Newcastle University


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The education systems in almost all countries are obsolete. They date back from several hundred years ago and are based on a model devised, in the main, by the Victorians running the British Empire. They were created during the pre industrial era where the only way to communicate was to write information down on paper and deliver it on horseback or by boat. In order to run things successfully it was therefore necessary to create the physical equivalent of a global processer, using clerks instead of computers. This was the bureaucratic administrative machine. Schools were designed to produce students to become part of that machine. Good handwriting, the ability to read and excellent mental arithmetic were all skills that enabled the machine to function successfully so these were the key requirements for all students. This is not the case today.

Now that our society and economies have evolved beyond that era, our schools must also be reinvented. These days we have computers to do clerical roles, efficient transport systems and the Internet means there is no longer a need to write beautifully or be able to do long division in your head. Two hundred years ago there was a need to produce administrators who could function in an existing system so early industrial education was focused on producing “identical people” who could easily replace each other in whatever administrative role was required. It was part of a hugely successful process, and helped build and run a great, global bureaucratic machine. Time has moved on and employment opportunities have changed. The world no longer needs such identical people yet we are still educating our children in a system designed to produce them.

Education Systems are Obsolete The education systems in almost all countries are obsolete. They date back from several hundred years ago and are based on a model devised, in the main, by the Victorians running the British Empire.

The Future of Education

We don’t know what the jobs of the future will be but we do know that we will be able to do them anywhere at anytime. It is not difficult to predict that 2024 will be vastly different, but it is difficult to predict exactly how things will be different. We can see that no one will do arithmetic on paper, almost no one will write by hand, hence cursive writing will be obsolete and we know spelling and grammar will be dealt with by machines. Machines may also read to us. Reading, writing and arithmetic,

the three pillars of primary education will therefore become redundant. Knowing will be obsolete because information will be forever at our fingertips. We therefore need to teach our children to think discerningly. This is not easily achievable using the education system we have today. The challenge is to establish a process that fits this r purpose. What should people know? How should they know these things? How should their learning be assessed?


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LearningThe End of the “3 Rs” Machines may also read to us. Reading, writing and arithmetic, the three pillars of primary education will therefore become redundant. Knowing will be obsolete because information will be forever at our fingertips.


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I believe that primary education needs to be changed completely. I also believe that increasing the number of teachers will not solve the problem. We must acknowledge that there will always be areas on the planet where good teachers will not want to go (see, for instance, Hindustan Times, 2007; Thomas, 2003). The best teachers tend to want to be near to urban centres so they often move from remote areas towards the town. The quality of education therefore is inversely related to the remoteness of the school from its nearest urban centre. The Indian Government, as well as governments of many other countries, spends large amounts of their education funds to train teachers, in the hope that this will improve the quality of education. This expectation may have an intrinsic flaw when applied to remote areas. Wherever a teacher wants to migrate away from the school he or she is employed in, teacher training will only enable them to do so more easily.

Given this, we must consider alternative ways to deliver education. In particular we should devise a process that can be made available in the places on earth where, for various reasons, good schools cannot be built and good teachers cannot or do not want to go to. This is a priority because these are the same areas where, in general, trouble comes.

Is there a way to solve the problem by taking the teacher out of the equation? What, for example would happen if you gave computers to children without the support of any human intervention? Can they self-educate? Computers have the advantage of working the same way wherever they are and can do the same for children irrespective of location. This is what the “Hole in the Wall” experiment was designed to uncover. The idea was simple, to adapt the concept of an ATM cash machine for education and place it in areas where there are no teachers or where teachers do not want to go.

We offered internet access via a computer, fixed to the wall in slum areas and positioned at the appropriate height for children to access. The results showed that children in urban slums and remote areas of India, many of which have never seen a computer in their lives, are capable of teaching themselves various things from character mapping to DNA

replication all on their own.

Building on our initial findings we went on to test how much children can learn if given internet access and left to their own devices. One such experiment was to see if some Tamil speaking children in Kalikuppam a South Indian village, could learn the biotechnology of how the DNA molecule reproduces using a street side computer that only “spoke” English. At a Western college this would be considered to be a second year undergraduate question. Despite knowing nothing about the subject at the beginning of the process, or being able to speak English, and without being asked direct questions on DNA molecules, it took students only 2 months to have a broad understanding of the subject. When tested they were able to answer about one in four questions correctly. After another couple of months, with only the encouragement of a friendly local, they were getting every other question right. From this it is clear therefore that if you take away adult restrictions, and provide children with Internet access, they will self organize and learn.

What is implied from the experiment outlined above is that children thrive best when left alone to uncover knowledge, particularly when their imagination is charged with difficult questions and achieve more when they are encouraged and praised for their achievements. This we call the “Grandmother method”.

Unlocking the power of new technologies for self-guided education is one of the 21st century superhighways that must be opened. Profound changes to how children access vast information is yielding new forms of peer-to-peer and individual-guided learning. The cloud is already omnipresent and indestructible, democratizing and ever changing. We should use it to spark the imaginations and build the mental muscles of children worldwide. This is why we have created “SOLEs,” “self organized learning environments,” where children group around Internet-equipped computers to discuss big questions. The teacher offers support rather than direction and merges into the background to observe as learning happens. SOLEs can inspire good teachers, provide a powerful learning tool to poorer teachers and offer basic essential resources and inspiration to pupils where there is no teacher.


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Delivering Education for All We should devise a process that can be made available in the places on earth where, for various reasons, good schools cannot be built and good teachers cannot or do not want to go to. This is a priority because these are the same areas where, in general, trouble comes.

Self-Organised Learning If you take away adult restrictions, and provide children with Internet access, they will self organize and learn.

Learning to Learn Children thrive best when left alone to uncover knowledge, particularly when their imagination is charged with difficult questions and achieve more when they are encouraged and praised for their achievements.

Sparking the Imagination Profound changes to how children access vast information is yielding new forms of peer-to-peer and individual-guided learning. The cloud is already omnipresent and indestructible, democratizing and ever changing. We should use it to spark the imaginations and build the mental muscles of children worldwide.


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School in the Cloud In the networked age, we need schools, not structured like factories, but like clouds.

An Education System for our Time We need to teach children to make the machines of the future. We need a curriculum of big questions, examinations where children can talk, share and use the Internet.

Access to Knowledge The information revolution has enabled a style of learning that wasn’t possible before and education systems need to evolve accordingly. If this happens everything will be different.

Freedom to Learn In the future, teachers will provoke curiosity, suggest avenues of exploration, not answers, and then they will step aside so students can teach themselves and one another. They will create ways for children to discover their passion and in so doing will uncover the next generation of geniuses in the process.

In the networked age, we need schools, not structured like factories, but like clouds. We know the way we will work in the future will change. For example, general purpose doctors will no longer be needed, we will have no factory workers, no clerical jobs and no drivers and most tasks will be delegated to machines. It stands to reason therefore that the way we are educated and learn must change too. We need to teach children to make the machines of the future. We need a curriculum of big questions, examinations where children can talk, share and use the Internet. We need new, peer assessment systems. We need children from a range of economic and geographic backgrounds and an army of visionary educators. We need a pedagogy free from fear and focused on the magic of children’s innate quest for information and understanding.

The information revolution has enabled a style of learning that wasn’t possible before and education systems need to evolve accordingly. If this happens everything will be different. It is difficult to know where this will eventually lead, but if adopted widely enough and used for long enough, I believe self organised learning could eventually inspire a fundamental reassessment of our value system, decentralisation of business and the breakdown of monopolies. After all knowledge isn’t a commodity that’s delivered from teacher to student but something that emerges from the students’ own curiosity-fuelled exploration. In the future, teachers will provoke curiosity, suggest avenues of exploration, not answers, and then they will step aside so students can teach themselves and one another. They will create ways for children to discover their passion and in so doing will uncover the next generation of geniuses in the process.


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Professor of Educational Technology at the School of Education, Communication and Language Sciences at Newcastle University Lead expert on the Future of Education.

Sugata Mitra is Professor of Educational Technology at the School of Education, Communication and Language Sciences at Newcastle University, UK. He was the instigator of the 1999 Hole-in-the-Wall experiment that involved placing a computer connected to the Internet within a wall overlooking a slum area in New Delhi and allowing the local children to have free access and use of this. Hundreds of such self-learning PC-equipped kiosks are now in use throughout India and in Cambodia, six countries in Africa and one at Newcastle University. He was given the $1m TED Prize in 2013 in recognition of his work and to help build a School in the Cloud, a creative online space where children from all over the world can gather to answer ‘big questions’, share knowledge and benefit from help and guidance from online educators.

Lead Expert – Sugata Mitra

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The energy system is at the beginning of an inevitable transition, with increasing contributions from renewable energy, energy efficiency and sustainable development. While global transition will evolve over many decades, this will be built from a series of individual transitions in particular countries and sectors which will occur more rapidly and look different in different parts of the world. Driving the transitions is a range of factors including growing prosperity, changes in resource availability, technology & cost developments, political imperatives, shifting social norms and ever increasing environmental concerns.

The two fundamental and strongest influences behind the energy system transition is an increasingly prosperous and growing population, and concerns about climate change. The world’s population is expected to grow to 9 billion people by 2050, with more people coming out of poverty and having access to commercial energy for the first time. This will be more so in emerging economies such as China and India, where people will want access to basic ‘luxuries’ that many high income countries enjoy such as electricity, a TV set, a fridge. According to The International Energy Agency (IEA), energy demand could double by 2050, from a baseline just a few years ago.

Following publication of a series of reports from the Intergovernmental Panel on Climate Change (IPCC) there is now significant consensus over the scale of the threat of climate change. If greenhouse gas emissions continue to rise, the impacts will be severe, irreversible and will include more extreme weather events such as floods, droughts and storms, along with rising sea levels and acidity. The publications from the IPCC bring a necessary wake-up call warning that ’warming of the climate system is unequivocal and unprecedented, with emissions rising faster than ever before’.

Key questions that need to be asked are how are we going to tackle rising energy demand and global warming? How do we build a sustainable energy future? How do we ensure we act now and swiftly before time runs out? The hard truth is that time is passing and CO2 emissions are accelerating.

There is little doubt that these issues are of great concern to governments, civil society and to the private sector. However the debate is polarized on many fronts, for example between the governments of advanced and emerging economies, each of which insist that the other should shoulder more of the burden than they are willing to agree to. This delays meaningful action at scale, and in the meantime the stresses continue to mount.

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The Future of Energy

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Inevitable Transition The energy system is at the beginning of an inevitable transition, with increasing contributions from renewable energy, energy efficiency and sustainable development.

Population and Climate The two fundamental and strongest influences behind the energy system transition is an increasingly prosperous and growing population, and concerns about climate change.

Transition or Delay? The debate is polarized on many fronts, for example between the governments of advanced and emerging economies, each of which insist that the other should shoulder more of the burden than they are willing to agree to. This delays meaningful action at scale, and in the meantime the stresses continue to mount.

Jeremy Bentham - Vice President Global Business Environment, Shell.



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For some of those who can afford to take it for granted, energy has unjustly become almost a dirty word and is projected in very narrow terms, with images of bleak industrial landscapes and pollution-filled cities. Yet in many under-developed countries, access to energy is the difference between prosperity and poverty, sickness and health, life and death. The benefits of energy cannot be forgotten. It is one of the enablers of our prosperity and wellbeing, and you cannot have a functioning, productive, efficient, modern economy without reliable energy.

The World Bank estimates, for example, that the growth of around ten million small and medium-sized businesses in Africa is hampered by the lack of available energy.

Ben van Beurden, Shell’s Chief Executive Officer, recently shared his strong views that the climate change debate is serious but needs to be broader, focused not solely on reducing CO2 emissions, but on developing a low carbon, high energy future to ensure prosperity for all.

Discussion frequently focusses only on the need to reduce CO2 emissions and centers on policy levers and mechanisms to accelerate the shift from fossil fuels to other energy sources such as renewables. This does not address the urgent need for there to be more energy overall to enable a decent quality of life for the many people currently excluded from having access to energy. Far less discussion is devoted to the related, parallel and central imperative of securing sufficient additional energy not only to maintain current energy affluence for those who have it but also provide it for the 3 billion who live in energy poverty today and the additional billions yet to be born.

Many countries, such as India, and China before it, are entering into the phase of development in which their energy consumption will surge as key infrastructure and the pillars of their modern economies are built. We need to ensure the dialogue about the global energy system is well informed and balanced, with greater understanding of the drivers and possibilities for economies in all different phases of development.

We are missing the necessary long-term global, regional and national policy frameworks – which may look different in different parts of the world- to guide and support building a cleaner, global energy system which is capable of meeting growing energy demand. We need long term solutions, and we need to avoid knee-jerk late responses that create avoidable disruption and destroy value for society. It is unsurprising that thus far international climate policy negotiations have so far failed to deliver significant change.

To bring about a shift and to broaden the frame of discussion, pragmatic collaboration is needed, between government, society and industry at an unprecedented scale. Building a sustainable, low carbon energy system will involve a lot of attention from a lot of people, aimed at realistic and achievable outcomes. Cross-sector groups need to convene, and develop mutual understanding, to move beyond the polarized debate. It will be a difficult task, but it is necessary and urgent. A positive step is that in late 2015 governments will converge at the 21st Conference of the Parties on Climate Change in Paris, to sign what is hoped will be a binding agreement to address climate change and reduce C02 emissions.

The fact is that the world will need oil and gas to help meet rising energy demand well into the second half of this century, and beyond. In terms of practical solutions and for an informed debate we need to understand that not all fossil fuels are the same, and we

should not use fossil fuels as an umbrella term. An extended period of co-evolution and co-existence of renewables and fossil fuels is likely as new energy infrastructures supplement or supplant old.


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Fuelling Prosperity The benefits of energy cannot be forgotten. It is one of the enablers of our prosperity and wellbeing, and you cannot have a functioning, productive, efficient, modern economy without reliable energy.

Less Carbon, More Energy The climate change debate is serious but needs to be broader, focused not solely on reducing CO2 emissions, but on developing a low carbon, high-energy future to ensure prosperity for all.

Collaboration at Scale To bring about a shift and to broaden the frame of discussion, pragmatic collaboration is needed, between government, society and industry at an unprecedented scale.prosperity for all.

Extended Period of Transition An extended period of co-evolution and co-existence of renewables and fossil fuels is likely as new energy infrastructures supplement or supplant old.


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Moderating Expectations We need to moderate our expectations of a wholly renewable energy future in the near term with the understanding that there are significant technological and economic obstacles.

Urbanisation Urbanisation can bring many benefits, but if managed poorly can cause greater environmental degradation and accelerate global warming.

Natural gas emits half the CO2 emissions compared to coal, another fossil fuel, when used to generate power. As gas plants can be switched on and off in response to demand, these can help provide the essential back up, and be the back bone needed to accelerate deployment of intermittent energy sources, such as solar and wind power. As the window on reducing emissions closes, switching out coal and replacing it with natural gas-fired plants is the single fastest way to slow emissions.

The reality is that there are also significant technological and economic obstacles, which need to be accounted for as part of an informed global warming discussion. Historically new energy sources have taken around 30 years to establish even a 1% share of the market. The scale and cost of energy infrastructure is simply too large to have quick turnaround times. Today, wind and solar together constitute less than 1% of global primary energy. Renewables will play increasingly important roles, however currently the IEA estimates that 13% of today’s global energy comes from renewable energy sources, and the bulk of that is from traditional sources like wood, peat and dung as well as hydro-power. But it also estimates that, even by 2040 that number will have increased to only 19%. Shell’s New Lens Scenarios say that figure could be over 25% by 2050, but that still leaves about 70-75% of energy demand needing to be met by traditional sources like oil, gas and nuclear. We need to moderate our expectations of a wholly renewable energy future in the near term with the understanding that there are significant technological and economic obstacles. It will not be possible to underpin a low carbon, high energy future solution to renewables alone, especially in the short term. Growing energy while reducing emissions will also involve shifting the balance from higher emission coal to lower emission gas and deploying technologies such as carbon dioxide capture and storage (CCS).

A recently released report from the Calderon Commission’s New Climate Economy initiative highlights that the economic costs of inaction are substantial, whereas the costs of taking action are relatively modest and delaying

action significantly raises costs. The report identifies the energy sector as significant from the perspective of both the economy and climate change. The study also emphasises that economic growth and action to tackle climate change are not mutually exclusive.

It sets ambitious goals for emissions reductions from renewable energy and energy efficiency measures. For example, it recommends that, by 2030, all new generation capacity in high-income countries comes from renewables or other zero-carbon sources and at least 25% of new power in fast-growing middle-income countries come from non-hydro renewables. However, the report also recognises that fossil fuels will still continue to account for a significant share of the energy system between now and 2030, and beyond. The report identifies reducing coal use and increasing gas use as important ‘seeds of change’ for decarbonizing the energy system. However, the report finds that natural gas is likely to provide net climate benefits only if it is backed by robust climate policy and environmental regulations.

The trend of urbanisation will also play a key role in the future of energy, and the energy transition. More than three quarters of the world’s population in 2050 are expected to be living in cities, and we will be building the equivalent of a new city of over 1.4 million people every week for the coming decades. Urbanisation can bring many benefits, but if managed poorly can cause greater environmental degradation and accelerate global warming. There are many differences between cities - for example Houston will never be the same as Hong Kong. However compact, well planned cities with effective integrated infrastructure and services are significantly more resource- efficient than sprawling metropolises. This is in part due to needing less energy per person in transport because people live closer to where they work, and shop, and public transport infrastructure is easier to implement. While existing urban centres will need to focus on retro-fitting, the many new urban developments in the world can, in principle, be designed to be more resource efficient from the outset.

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Vice President Global Business Environment, Shell. Lead expert on the Future of Energy.

Jeremy is Vice President Global Business Environment at Shell. He has been responsible for Shell’s Global Business Environment team since 2006. His team is best known for developing forward-looking scenarios to support the company’s strategic thinking and direction setting. He joined Shell in 1980 following post-graduate experience at the California Institute of Technology. He had read Physics at Oxford University, UK, and holds a Master’s degree in Management from the Massachusetts Institute of Technology, USA. His previous roles at Shell involved research and technology, manufacturing economics, industry analysis and commercial information technology. He has also coordinated commercial and production activities at a number of refineries.

Lead Expert – Jeremy Bentham

Change will need to happen on many fronts, from the energy supply mix to energy demand management. Serious attention, optimism and swift collaborative action is needed to ensure a sustainable, clean global energy system that is capable of meeting growing energy demand and underpinning prosperity for all.

Serious Change Required Change will need to happen on many fronts, from the energy supply mix to energy demand management. Serious attention, optimism and swift collaborative action is needed to ensure a sustainable, clean global energy system that is capable of meeting growing energy demand and underpinning prosperity for all.


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The Future of Food

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Prof. Wayne Bryden - Foundation Chair in Animal Science at the University of Queensland

The Future of FoodThe massive increase in the human population that has occurred over the last century is precipitating a cascade of environmental, economic, political and cultural changes that have far-reaching implications for the provision of an adequate global food supply.

Increasing Competition for Grains Changes in population and cuisine have led to a tremendous rise in the demand for animal-source protein. The competition between livestock and humans for grains and other high quality plant foods, whether real or perceived, is recognised as a major challenge. This has become more complicated with the diversion of grain to the production of biofuel.

Food is fundamental for human existence and health but many of the world’s inhabitants experience ongoing hunger. For some this is due to drought, others war and for many it is a lack of money to buy food. The United Nations, Food and Agriculture Organization estimates that 850 million people worldwide are hungry and a greater number suffer from nutrient deficiencies. Approximately one billion people have inadequate nutrient intake, others excessive calorie intake. Obesity has become an epidemic in developed countries, while in some developing societies the double burden of nutrient deficiency and obesity is apparent. The challenge of preventing hunger and malnutrition will become even greater as the global population grows from the current 7 billion people to nearly 10 billion by 2050.

Not only is the global population increasing, we are living longer and becoming more affluent. As incomes increase, diets become more energy-dense and meat becomes a larger proportion of the diet. These changes in population and cuisine have led to a tremendous rise in the demand for animal-source protein. The competition between livestock and humans for grains and other

high quality plant foods, whether real or perceived, is recognised as a major challenge. This has become more complicated with the diversion of grain to the production of biofuel.

For many years there has been an ongoing debate about the benefit or otherwise of animal-source foods, especially red meat consumption. In the past, claims of the detrimental effect of animal-sourced foods on human health have been made without rigorous scientific investigation. There is no doubt, however, that animal source foods, including lean meat, fish, poultry, eggs and milk, are an excellent source of protein and micronutrients. Fish can be added to this list but wild fisheries are rapidly being depleted. It should not be forgotten that humans evolved as ‘meat eaters’. It is unlikely that we will lose our appetite for meat but we must curb it. In many instances, the mechanism that allows impoverished families to improve their income and wellbeing is access to livestock or poultry.

Whatever diet we choose in the future our food will need to be produced more efficiently. Increased agricultural productivity must come from a reduced land area and


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More Efficient Production Our food will need to be produced more efficient. Increased agricultural productivity must come from a reduced land area and resource base.

Benefits from Globalisation While globalisation may create opportunities and increase food distribution the benefits predominantly flow to those with a developed and secure food supply.

Second Green Revolution Another “Green Revolution” is required but today’s revolution must be different to overcome existing environmental, financial and societal constraints. It is no longer possible or responsible to use unlimited water and chemical inputs to increase production.

resource base. Arable land continues to be lost due to soil degradation and urbanisation. We will need to be less dependent on resources that are becoming scarce, like arable land and water, or more costly, like energy and petrochemical-based inputs, including fertilizers. Some would argue that it is how we manage the nexus between food, water and energy that is our biggest challenge for global food security.

Conversely, the environmental impact of agriculture should not be forgotten. There is no doubt that agriculture exerts considerable pressure on water supplies, especially when irrigation is used. What form of energy will agriculture use in the future to produce, process and transport our food? The impact of agriculture on plant and animal biodiversity and other ecosystem services also must be addressed. Pollination of crops by bees is an integral component of agricultural production. Any disruption to this ecosystem service could have devastating consequences for food production.

Climate change will accentuate the challenges identified above. Pest and disease problems of plants and animals are likely to increase partly in response to climate change. Consensus exists regarding impacts of agricultural production, processing and distribution of food on global climate change. A significant proportion of anthropogenic emissions of greenhouse gasses come from agriculture and these emissions need to be reduced.

Just as the climate system is global, so is our food system. While globalisation may create opportunities and increase food distribution the benefits predominantly flow to those with a developed and secure food supply. Government subsidies, import restrictions and food safety legislation all mitigate against an equitable distribution and pricing of food. In some situations this will lead to civil unrest.


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In developing countries where many of the population exist as subsistence farmers the food system is relatively straight forward. In contrast to developed economies where the food system or agricultural supply chain includes all aspects of crop and animal production, aquaculture, processing, storage, and distribution of food products through the wholesale and retail systems. More opportunities exist to guard against adversity and to increase productivity when the food system is complex and not reliant on a few food staples.

Food production must increase substantially but over the next decade both systems must cope with more severe climate events (2014 was the hottest year on record) and increased globalisation as more free trade agreements are signed. The increased amount of food required will need to be produced with finite water supplies on existing areas of arable land. There is general agreement that another

“Green Revolution” is required but today’s revolution must be different to overcome existing environmental, financial and societal constraints. It is no longer possible or responsible to use unlimited water and chemical inputs to increase production. Other approaches to food production and processing must be found that use existing and new technologies in conjunction with appropriate social policies that are sustainable. Policies must ensure conservation of global biodiversity and animal welfare. The Commission on Sustainable Agriculture and Climate Change identified seven critical areas for the transition to a sustainable global food system;

1. Integrate food security and sustainable agriculture into global and national policies

2. Significantly raise the level of global investment in sustainable agriculture and food systems in the next decade

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3. Sustainably intensify agricultural production while reducing greenhouse gas emissions and other negative environmental impacts of agriculture

4. Develop specific programs and policies to assist populations and sectors that are most vulnerable to climate changes and food insecurity

5. Reshape food access and consumption patterns to ensure basic nutritional needs are met and to foster healthy and sustainable eating patterns worldwide

6. Reduce loss and waste in food systems, targeting infrastructure, farming practices, processing, distribution and household habits

7. Create comprehensive, shared, integrated information systems that encompass human and ecological dimensions

We must achieve all of these goals. Future food production must have both vastly increased productivity and good environmental practices. Meeting these goals will require the effective use of science. Biotechnology with its evolving “omics” tools (genomics, proteomics, metabolomics), will allow the development of new approaches to counter some of the complex problems we now face. With these approaches it will be possible to fast track current crop plants with agronomic traits such as yield and tolerance to environmental stress using the same or diminished inputs and be able to withstand pathogen attack and potential contamination with mycotoxins. The coming generation of crop plants may have value-added outputs such as improved nutrient and food functionality and be sources for biomass for biofuel production and human therapeutics.

Another important area that will undergo

a major renaissance is microbial ecology with the application of molecular biology techniques . While microbial ecology is not a new concept, it is pivotal to understanding the presence and functioning of microbes in complex and dynamic food environments, both outside and inside the gastrointestinal tract. As we understand more about the complex and dynamic microbial ecology of foods, we will be in a better position to manipulate those biotic and abiotic factors that enhance food quality and human health. Similar improvements will be made to animal health and it is the unique microbial ecology of ruminant livestock (cattle and sheep) that allows them to convert human-inedible plant feeds and by-products into nutritious human foods.

The other platform that should permit a major leap forward is nanotechnology. It holds promise for responding to the need for more precise management of resources such as water and fertilizers, improving crop and livestock production, controlling pests, diseases, and weeds, monitoring plant disease and environmental stresses, improving postharvest technology, including waste management and food safety. It will allow the application of precision agriculture in both developed and developing economies.

However, without consumer acceptance, new technologies will not succeed. This will require education and communication of the benefits that will accrue from their application. This will need to be achieved with a back-drop of increased consumer interest in foods produced locally and organic agriculture. These “feel-good” approaches to agriculture will not overcome the food demands of the future but the more useful aspects of these practices must be part of food production in the future.

Despite daunting challenges, the application of contemporary food production and processing practices along with scientific advances combined with appropriate social

policies can underpin sustainable food production systems. Clearly, the solution to the challenge of meeting future food demands lies in increased agricultural


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productivity everywhere, but particularly among small-holder farmers, of whom there are millions worldwide. Mixed crop and livestock production systems produce about half of the world’s food supply. Targeting these systems should be a priority for policies to sustainably intensify production by carefully managed inputs of fertilizer, water, and feed to minimize waste and environmental impact, supported by improved access to markets, new varieties, and technologies.

The global food system is extremely complex and the gap between developing and developed nations is not only in economics but also in science, governance, and public information. Thus, to tackle these issues, a number of areas must be addressed urgently:

• Science and research; There has been a global decline in agricultural R&D in the past four decades. There is now an urgent need to redouble the agricultural research effort. The new food producing system has to be science-based with low resource input. To ensure this occurs there must be definable career paths to encourage the next generation to enter agriculture and food research.

• Economics and education; Increased economic development is required in developing countries hand-in-hand with education. These improvements will ultimately decrease the birth rate. In many economies, women manage the food cycle and their recognition and education should be a priority. In developed economies, education will be equally important as consumer attitudes will be very important to the eventual acceptance

of new technologies and adoption of different patterns of food consumption. Part of the economic equation must be to pay farmers more for their products.

• Sustainable diet; Part of the solution to feeding the planet is the development of consumption patterns that meet requirements in a safe, nutritious and affordable manner. In developed countries this will mean learning to eat sustainably with less reliance on meat. Through the application of the tools of molecular biotechnology, future nutrition will be personalised to account for individual variation and to improve health and well-being.

• Waste; Postharvest losses of plant foods can be substantial in developing countries and amount to 30 to 50 % of production due to a lack of storage infrastructure. In developed countries we throw away a similar proportion of all food produced. The combined loss would feed about 3 billion people. Reducing wastage will provide breathing space to allow the development and adoption of new food production technologies.

• Governance: Addressing these complex issues will take commitment and collaborative efforts at both an international and national government levels. It must also involve government agencies, private enterprise, and nongovernmental organizations. An atmosphere of collective good will ensure that research investment is appropriate and will enable the development of policy to allow integrated implementation of new food production systems.

Investment in Innovation There has been a global decline in agricultural R&D in the past four decades. There is now an urgent need to redouble the agricultural research effort. The new food producing system has to be science-based with low resource input.

Education and Economics In developed economies, education will be equally important as consumer attitudes will be very important to the eventual acceptance of new technologies and adoption of different patterns of food consumption. Part of the economic equation must be to pay farmers more for their products.

Sustainable Consumption Part of the solution to feeding the planet is the development of consumption patterns that meet requirements in a safe, nutritious and affordable manner. In developed countries this will mean learning to eat sustainably with less reliance on meat.

Reducing Food Waste Postharvest losses of plant foods can be substantial in developing countries and amount to 30 to 50% of production due to a lack of storage infrastructure. In developed countries we throw away a similar proportion of all food

Over the next decade and beyond maintaining global food security will become much more difficult as the population increases. We must double food production in a sustainable manner. Greater quantities of food will need to be produced with reduced inputs of water, energy and nutrients on the

same or reduced area of arable land in a changing environment. To do otherwise will court significant human conflict.

The increasing urbanisation of the global community exacerbates this situation as more and more people become isolated

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Maintaining Global Food Security Over the next decade and beyond maintaining global food security will become much more difficult as the population increases. We must double food production in a sustainable manner. Greater quantities of food will need to be produced with reduced inputs of water, energy and nutrients on the same or reduced area of arable land in a changing environment.

Reinventing Diets Our relationship with food must change. We will need to reinvent our diets to meet our nutritional requirements for optimal health and in so doing consume fewer calories and less meat. To maintain a viable food supply we must be prepared to pay realistic prices and reduce waste throughout the food supply chain.

from the land and farming. Moreover, urban populations are more vulnerable to disruptions in the food supply chain. City folk need to understand where their food comes from. This will require education that is starting to happen with the realisation that nutrition is an important component of human health. The nutrients supplied in our food reflects agricultural practises and food processing.

The link between human health and agriculture is through food; its sources, composition and distribution. Food sources include both plant and animal and the availability and composition of the latter is largely determined by the cost of plant-based feedstuffs. It is not surprising therefore, that any consideration of population demographics demonstrates the importance of agricultural production as a major determinant of public health. This would appear to be a straight forward proposition, embracing the adage ‘we are what we eat’,

especially in developing societies. However, the relationship between agricultural production and human health is complex in a modern, developed society and measuring the impacts is difficult.

Our relationship with food must change. We will need to reinvent our diets to meet our nutritional requirements for optimal health and in so doing consume fewer calories and less meat. To maintain a viable food supply we must be prepared to pay realistic prices and reduce waste throughout the food supply chain. All of the required changes must be underpinned by rigorous research. This will require substantial public and private sector investment.

Visionary public policy, both national and international, must be a major instrument if our food systems are to evolve in a sustainable manner.

Foundation Chair in Animal Science at the University of Queensland. Lead expert on the Future of Food.

Professor Bryden is the Foundation Chair in Animal Science at the University of Queensland. He was Head of the School of Animal Studies at the University of Queensland from 2002 to 2007 and prior to that appointment was Pro-Dean of the Faculty of Veterinary Science at the University of Sydney, where he was also Director of the Poultry Research Foundation. His research interests include nutrition of monogastric animals and nutritional toxicology of all domestic species and he is a registered Animal Nutritionist. He lectures in a range of subjects to both animal science and veterinary science students and has advised some 50 research higher degree students.

In 2003 he was awarded the Centenary Medal for his contributions to science and education, and in 2005 he co-chaired the Gordon Research Conference on Mycotoxins and Phycotoxins. He is currently a member of the WHO Expert Panel on Food Safety, President of the Australasian Equine Science Society and Editor-in-Chief of Animal Production Science.

Lead Expert – Prof. Wayne Bryden

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Cherly Chung - Lead Strategist, Futures Division at Ministry of Transport, Government of Singapore

The Future of Government

In recent years, the debate in contemporary political science has centred around the political institutions that limit or check power, like democratic accountability and the rule of law. However, as Francis Fukuyama has pointed out in his article, “What is Governance”, little attention has been paid to the institution that actually accumulates and uses this power - the state. While there have been repeated claims of the withering of the state over the past decades, few of these have proven accurate. In fact, there has been a need for increased government capacity to deal with the increased demands placed on the state. In many countries, this has been exacerbated by an underinvestment in public sector capacity over the past few decades. We need to go beyond the usual conversation about how the state carries out the business of governance and back to the more fundamental questions of what is the role of the state and why this is important.

To understand the trends that affect the role of the state, we have to consider the context in which the state operates. Governance falls roughly between the fast- and slow-moving components of society, nature and culture on the one hand and infrastructure, commerce and fashion on the other. This presents an interesting challenge for states because the components that change quickly get all the attention, but those that change slowly have all the power. The fast learn, propose, and

absorb shocks; the slow remember, integrate, and constrain. Managing the tension between the fast- and slow-moving components of society is core to the role of the state and how it will evolve. In Singapore, it might mean that while it is relatively quick to change policies with regard to home loan restrictions, cultural norms and values around home ownership can take a longer time to shifts.

In his book, “The End of Power”, Moises Naím suggested that we were “on the verge of a revolutionary wave of positive political and institutional innovations”. Naím described the shift in power through three revolutions, which in turn would impact the role of the state:

The More Revolution: As people became more numerous and were living fuller and longer lives, they became more difficult to regiment and control.

The Mobile Revolution: As people became more mobile with the ease of migration, power lost its captive audience.

The Mentality Revolution: As people became more affluent they had higher expectations of living standards.

Looking at this from the perspective of relative rates of change, one observes that these revolutions have taken place within the timespan of one to two generations,

Meeting Demand With Limited Capacity There has been a need for increased government capacity to deal with the increased demands placed on the state. In many countries, this has been exacerbated by an underinvestment in public sector capacity over the past few decades.


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much more quickly than similar changes that have taken place in the history of societies. This has led to a compression of timescales within which the state operates. The middle-class uprising in countries like Brazil, where there has been a mismatch of expectations around the sustainability of economic growth and improved standards of living, is a manifestation of the tensions that can emerge from these revolutions.

So the key question to answer is can governance keep pace with the changes in the rest of society?

According to David Ronfeldt, new information and communication technologies have enabled dispersed, often small actors to connect, coordinate and act jointly as never before. This favours and strengthens network forms of organisation and represents a structural change in the operating environment for states.

When institutions and markets were the dominant organisational form, there were economies of scale allowing for the efficient management of large units, in many cases by the state. However, in a network, the state is but one of many stakeholders. Without economies of scale through centralisation, common market-based measures of state performance, like efficiency and productivity, also become less useful.

Not all participants in a network are equal, and leadership still matters. In a network structure, the state would have to adapt the way it exercises power and performs its role. Leaders can have a louder voice, but have to build the legitimacy to exercise it. This would increasingly become the challenge for states operating within the network. Ronfeldt therefore suggests that power and influence appear to be migrating to actors who are skilled at developing multi-organisational networks, and at operating in environments where networks are the dominant organisational form. In general, non-state actors are ahead of state actors operating in this environment and this may present a shock to established centres of power, as will be described in the following section.

In a network form, other entities compete with the state for influence within the web, like environmental, human rights, and other activist nongovernmental groups, which operate at many levels of government around the world. This new dynamic changes the role of the state. Non-state actors are starting to have state-like power and capability, ranging from diplomacy to urban planning to provision of public services. For example, Zappos’ founder, Tony Hsieh, invested $350 million to transform the decaying and blighted part of the old Vegas Strip into the most community-focused large city in the world. The Downtown Project has already funded over 60 tech start-ups and 21 small businesses with the ultimate goal being to invest in 100-200 entrepreneurs. This makes Tony Hsieh the de-facto mayor of downtown Las Vegas. This type of activity is not limited to entrepreneurs. According to a CNN report in 2006, “Hezbollah did everything that a government should do, from collecting the garbage to running hospitals and repairing schools”.

Globalisation and the free movement of capital have enabled multi-national corporations to become a network of supranational entities, exporting goods and services as well as culture and ideology to the states in which they operate. For example, Procter & Gamble was the first company to hire women in Saudi Arabia. Although Saudi labour laws have a provision for employing women, many companies have been unwilling to cause cultural controversy. Multinationals also form the basis of connectivity in a transnational network, providing air travel, sea freight and global telecommunications capabilities. What results is that domestically, multinationals have assets and access to resources that can rival some states. They have a disproportionate say on the regulation and public policy agenda when they represent industry lobby for national safety standards as a result of their global supply chain.

The state is relatively good at dealing with the problems that are defined in terms of the Westphalian concept of state, for example, sovereignty and international trade.

Keeping Pace The key question to answer is can governance keep pace with the changes in the rest of society?

Outdated Measures of Success When institutions and markets were the dominant organisational form, there were economies of scale allowing for the efficient management of large units, in many cases by the state. However, in a network, the state is but one of many stakeholders. Without economies of scale through centralisation, common market-based measures of state performance, like efficiency and productivity, also become less useful.

Changing Role of Government Other entities compete with the state for influence within the web, like environmental, human rights, and other activist nongovernmental groups, which operate at many levels of government around the world. This new dynamic changes the role of the state. Non-state actors are starting to have state-like power and capability, ranging from diplomacy to urban planning to provision of public services.

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It typically has established mechanisms to safeguard its interest and power. However, it has become increasingly difficult to establish what the state actually has jurisdiction over and this creates new forms of market failures. While states retain the jurisdiction to manage resources within their physical and geographical boundaries, many resource and public-good problems resist a state-centric approach. For example, governance by norms, spheres of influence and interlocking societal relations rather than comparatively inflexible international law could make the management of trans-boundary problems easier.

In a G-Zero world, where every state is for itself, ineffective mechanisms to deal with the growing trans-boundary nature of problems will lead to more pressure for a distributed, bottom-up model of global governance system. Small states like Singapore have a clear interest in an open, rule-based system as they face heightened risk in a system where there are no longer strong institutional platforms to safeguard their interests. Such states may find themselves shifting from playing price-taker or “pivot” roles to advocating for strong international rule of law and no unilateral actions.

Today, many individuals regard themselves as “city-zens”, that is, their residency in a city is core to their identity regardless of their actual citizenship and voting rights. However, the current governance system is not good at taking into account factors such as the preferences of the non-voter (for example, city-zens), the environment and future generations. What results is not only rising expectations on the part of citizens (voters in the political process), but that the state increasingly also has to look at the interests of non-voters as well.

As technology expands at an ever-increasing rate, society struggles to keep up. This has led to the erosion of Social Mobility: The rise of robotics and automation is wiping out many middle-skill jobs. Coupled with the expansion in higher education opportunities in emerging markets, there will be fierce

competition for such jobs. In addition, the structure of the modern economy is changing. The increased demand for high value services imposes a high barrier to entry. Only a fraction of the workforce is able to participate in value creation that these sectors provide. What results is what Kenichi Ohmae called the “M-shaped society”, where income distribution in Japan is becoming polarised due to the impact of technological change and globalisation. The ability to provide education and middle-skilled high-paying jobs was one of the state’s levers for upward social mobility in the past, but this has eroded over time.

The rise of social media and surveillance technologies has led to changing expectations of the policy making process. On the one hand, individuals are more empowered; on the other, empowered individuals demand more from the state. What results is what John Keane calls “monitory democracy”, where “the powerful consequently come to feel the constant pinch of the powerless”. New technology also presents governance challenges as the state struggles to regulate in an increasingly complex and uncertain environment. For example, stringent IP laws may become obsolete with new production technologies like 3D printing and autonomous vehicles could change the transport landscape, creating new liability issues.

City-zens The current governance system is not good at taking into account factors such as the preferences of the non-voter (for example, city-zens), the environment and future generations.

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What are the Implications on the Role of the State? In response to these trends, we should consider what the implications on the role of the state might be. We will also highlight weak signals that suggest how the role of the state might evolve in Singapore. Broadly, the state faces two challenges to its role, as follows:

The first is the redistribution of wealth through taxation and the provision of public services. Globally, austerity measures have forced states to cut back on their fiscal spending and this has constrained their ability to supply public services. In Singapore, one of the fiscal challenges highlighted in the “Singapore Public Sector Outcomes Review” is how to raise sufficient revenue to invest in the range of capabilities and infrastructure that Singapore needs to survive and succeed in the future. In this constrained environment, the state needs to find other ways to increase the “supply” of the state.

B.1 Building Trust in a Network Structure

Secondly, governance is a competitive

marketplace. There can be both private and public supply of social services and individuals are mostly free to choose which they prefer. For example, in a society where there is a widening gulf between rich and poor, the rich may live increasingly separate lives and provide for their own “public services”. On one hand, this could allow the Government greater focus in providing services for the needy; on the other, the rise of gated communities and privatised social services could signal the beginning of deterioration in the quality of public services as the rich opt out. The state also needs to consider what public services it has a role in supplying vis-à-vis other stakeholders, and how it might partner them to deliver better services. The provision of public services by the state may not necessarily keep pace with the increase in demand; in fact, sometimes the increase in supply of public services also increases the demand. In this case, the role of the state might be to play specific coordination functions, and allow civil society or private sector partners the space to grow as new providers of public services.

Hard Choices In a society where there is a widening gulf between rich and poor, the rich may live increasingly separate lives and provide for their own “public services”.


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Joseph Nye argues that transactional hard power skills, like organisational ability and political acumen, are just as important as transformational soft power skills, like communications, vision and emotional intelligence. The state must develop a kind of “contextual intelligence” to be able to apply the best combination of hard and so power skills in different situations. It bears consideration what new capabilities the state should invest in to be able to ensure “supply” for the future, both in the ability to deliver on its promises and the ability to shape the direction that it is moving in. In retail parlance, “consumer insights” provide a key to what the “supply” should be. Likewise, for the state to undertake this type of sense-making work, it has become important not only to get data from economists and engineers but also insights from sociologists and anthropologists.

As Singapore approaches fifty years of rapid progress, sense-making would also have to take into account the development of its slower-moving components – in terms of its history, culture and heritage. In August 2011, the Government launched the Singapore Memory Project, a nationwide movement that aimed to capture and document precious moments and memories related to Singapore. Intangible assets such as collective memory are important in maintaining the resilience of our country, as Singapore seeks to become more adept at managing its pace of change. As the state seeks to be more responsive to growing public pressure, how can it work with new or existing providers of public services to split the load? What capability gaps have arisen because of the change in the operating environment? What new capabilities should the state invest in to


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Enabling Scale The potential for greater collaboration … creates a specific role for the state in the network to identify successful ideas and scale them, leveraging its resources and existing infrastructures to augment the delivery of public services.

Participatory Government One of the ways that the state can legitimize itself to its constituents might be to facilitate the building of relationships with the people and other sectors to co-provide solutions to problems.

ensure “supply” for the future?

The rise in the network structure and the expanding influence of non-state actors also presents opportunities for states to facilitate networks of responsibility and build inclusive institutions in place of traditionally more extractive ones. What results is greater experimentation and decentralisation, leading to more robust processes and outcomes. There are weak signals of this happening in Singapore. In 2013, local social enterprise SYINC launched a collaborative, community focused project “Under the Hood” to crowdsource innovative solutions to Singapore’s urban poverty challenges. The initiative brought together a range of organisations from the private and people sector, and acted as a lab to prototype

micro-level, local solutions that are scalable, if proven successful. The potential for greater collaboration with such initiatives creates a specific role for the state in the network to identify successful ideas and scale them, leveraging its resources and existing infrastructures to augment the delivery of public services.

Some argue that only looking at increasing the “supply” of the state with limited resources leads to a vicious cycle. One of the reasons for this is that increasing the “supply” of the state can enlarge the issues that come under the purview of the state, thereby creating its own demand. When there is surplus demand for public services, the instinct is for the state to fill the gap. However, this sometimes generates more demand for said services. Therefore, a more sustainable solution might be to find ways to reduce the “demand” on the state that can lead to a more virtuous cycle.

The nature of trust may be different in a networked structure. Even though the quality of public services has improved, there has still been a declining level of trust in governments, institutions and elites. There is a growing sense amongst the middle class that the “system” is rigged in a self-serving way and that it lacks the capacity to deal with emerging challenges.

Trust in a network structure depends on long-

term reciprocity of relationships, where there needs to be fair outcomes for stakeholders in these networks, and a perceived “fair” allocation of costs and benefits. Contribution, participation and reciprocity then lead to trust outcomes over time. In this environment, the appropriate scale of decision-making may

be smaller, which can favour small states like Singapore, although it bears consideration how we might further localize decision-making to build more trust.

Efforts to invite participation from the network have to be designed with care. In 2006, the New Zealand government undertook a review of their Policing Act. One stage was to open up the act on a wiki for two weeks and the public was able to contribute. However, the parliamentary council office came out to express concerns at the format required and

the expertise of the public in being able to meaningfully contribute to drafting legislation. Furthermore, in a low-trust environment, the public may question the role of a preventative government in protecting its citizenry and the potential legality of an infallible prosecutor.

How might the state create more space for network actors to take greater responsibility?

The state often retains the reputational risk and overall accountability for outcomes.

How can the state share responsibility while maintaining the influence over outcomes?

One of the ways that the state can legitimize itself to its constituents might be to facilitate the building of relationships with the people and other sectors to co-provide solutions to problems. There are many well-studied factors that contribute to the demand for the state, for example, the origins of crime, educational failure, indebtedness, family breakdown, psychological trauma, ill health, and others – yet the demand for the state is derivative, that is, people are actually demanding for certain services to be provided, and not necessarily for the state to provide it. This delineation opens up many possibilities for the state to co-opt


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other partners into the picture, with the state retaining an important role in designing the architecture of the networks in the sector, and facilitating access. In Singapore, the mytransport.sg app functions as a gateway for all things to do with transportation by aggregating available data, facilitating greater access to other non-state partners, and enabling the public to find solutions for themselves.

One of the challenges facing the state, especially in the area of public policy innovation, is how to balance equity and autonomy. A centralised system is often viewed to be more equitable at the expense

of autonomy. However, as the governance system gets more complex, there are also hidden forms of inequity in a centralised system, like the difficulty

in navigating the system. Decentralised service provision at the hyper-local level can actually help to reduce this inequity. For example, the emergence of chartered schools is a good example of how this decentralised approach worked in practice because the focus was on outcomes, rather than the process. This represents a shift in the role of the state from ensuring equity in process to equity in outcomes.


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One of the roles of the state is to ensure parity in process, if not outcomes. However, for certain areas, enforcing strict levels of compliance generates a greater demand for state intervention. For example in Singapore, the Workplace Safety and Health Act was amended in 2006 to focus on Workplace Safety & Health systems and outcomes, rather than merely on compliance, to allow for flexibility and robustness in the regulation to keep pace with technology and the nature of work. Setting and monitoring outcomes of individual agencies, while useful, is insufficient. In recognition of this, the Ministry of Finance and other Ministries have therefore worked to jointly establish whole-of-government outcomes along with suitable indicators to track our progress towards achieving them. In addition, when the state is better able to measure outcomes, greater possibilities in funding design, beyond grant funding, open up to states to more effectively measure and manage their resources and increase their impact, for example, with the incorporation of behavioural insights.

The operating environment for the state has changed. Networks dominate institutions as the dominant organisational form. The influence of non-state actors, in particular multinationals has expanded. Jurisdiction

has grown beyond boundaries. Technological change has outpaced society. Consequently, the role of the state has had to evolve and to succeed in this new operating environment, the state needs to both increase the “supply” of the state and reduce the “demand” for the state.

Notes

1 We refer to the state as the functioning of executive branches and their bureaucracies.

2 Mark Joseph Stern, “Can Tony Hsieh turn downtown Las Vegas into a family-friendly startup utopia?”, http://www.slate.

com/articles/technology/the_next_silicon_valley/2013/12/tony_hsieh_las_vegas_can_the_zappos_billionaire_turn_vegas_into_a_tech_utopia.html, last accessed Dec 2013.

3 Henry Schuster, “Hezbollah’s Secret Weapon”, Jul 2006.

4 Procter & Gamble Special Series on “Diversity in Action”, http://news.pg.com/blog/diversity-and-inclusion/special-series- %E2%80%93-diversity-action, last accessed Dec 2013.

5 Ian Bremmer coined the term “G-Zero world” to refer to an emerging vacuum of power in international politics created

Closing the Inequality Gap One of the challenges facing the state, especially in the area of public policy innovation, is how to balance equity and autonomy. A centralised system is often viewed to be more equitable at the expense of autonomy. However, as the governance system gets more complex, there are also hidden forms of inequity in a centralised system, like the difficult In navigating the system.

.A New Operating Environment The influence of non-state actors, in particular multinationals has expanded. Jurisdiction has grown beyond boundaries. Technological change has outpaced society.


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Lead Strategist, Futures Division at Ministry of Transport, Government of Singapore Lead expert on the Future of Government.

Cheryl is a strategic foresight practitioner with the Singapore Government. She is currently Lead Strategist of the Futures Division at the Ministry of Transport, where she leads the Ministry’s work on Autonomous Vehicles. An earlier version of this article was written when she was at the Centre for Strategic Futures, Strategic Policy Office at the Public Service Division of the Prime Minister’s Office.

Lead Expert – Cheryl Chung

by a decline of Western influence and the domestic focus of the governments of developing states.

6 David Skilling, “How Small States Can Navigate a World Without Global Leadership”, May 2012.

7”e Singapore Public Sector Outcomes Review, http://203.211.150.164/cms-mof/spor.aspx, last accessed Feb 2014.


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Dr. Devi Shetty - Founder of Narayana Hrudayalaya Hospitals and Narayana Health.


The healthcare and wellness industry is going to drive the world economy of the 21st century. Globally healthcare is already well over a $6 trillion industry. But, despite its size, it only addresses about 30 per cent of the world population; nearly 70 per cent is nowhere near receiving decent healthcare services. We need a revolution in order to service the entire market.

The major issue is primarily revolving healthcare. The world’s fi rst heart surgery was done in Oslo in 1895 – well over a century ago. A hundred and twenty years later only 10% of the world’s population can afford it. We can and must do better. The future cannot be just an extension of the past. It must embrace new technology, implement innovative approaches and aim higher than people previously thought possible.

The 21st century will see a rapidly growing demand for healthcare, but this demand looks unlikely to be met in the way the past century was. For one thing, to treat the 21st century’s problems with a 20th century approach to healthcare would require an impossible number of doctors. For another, caring for the chronic diseases that are growing in prevalence are not what doctors are best at.

Before we explore the future challenges and options, we should however recognize that over recent years we have already achieved

a good deal. Globally, on average, we have never been so healthy, wealthy and educated. Although there have been long-term improvements in health delivery and care, it is over the past few decades that progress has really started to build momentum. This has happened partly because advances in technology, public health and governance have all aligned, and partly because there has been shared understanding of what the big issues are and how to address them. As the IMF has highlighted, child death rates have fallen by more than 30%, with about three million children’s lives saved each year compared to 2000. Deaths from malaria have fallen by one quarter in the same period.

But, as the WHO points out, we still have major challenges to address:

• The average annual rate of decline of women dying due to complications during pregnancy and childbirth is far below target to reach the Millennium Development Goal

• While HIV infections have declined by 33% globally, sub-Saharan Africa still accounts for 70% of all new infections

• Although the global tuberculosis mortality rate has fallen by 45% since 1990, multi- drug resistance TB continues to pose problems with an estimated 450,000 per year developing it.

Healthcare for AllGlobally healthcare is already well over a $6 trillion industry. But, despite its size, it only addresses about 30 per cent of the world population; nearly 70 per cent is nowhere near receiving decent healthcare services. We need a revolution in order to service the entire market.


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• In 2012 almost half the world’s population were still estimated to be at risk of malaria with Africa bearing 80% of new cases and 90% of associated deaths

• Moreover, as the current e-bola pandemic in West Africa highlights, our ability to prevent such disease epidemics is limited, primarily due to low levels of public health in many key centres of major population.

Increasing access to affordable essential medicines is vitally important but several factors undermine availability in many countries. These include poor medicine supply and distribution, insufficient health facilities and staff, low investment in health and the high cost of many medicines.

Contrasting the world’s most developed healthcare market with that in India we can see many significant issues. US healthcare spend is spiraling upwards above 18% of GDP

while in India, for example, the figure is just over 4% against a global average of 10%. Worldwide health spending is expected to increase by 5% next year. In India, where the government has now promised to introduce universal health insurance, spending is expected to rise by 18%.

While US life expectancy at birth is now around 80, in India we have just reached 67. Over the past thirty years, our infant mortality rates have dropped from 118 to 42 per 100,000 births compared to less than 5 in the US. In the US the prevailing market means that a healthy person can expect to spend $142,000 on out-of-pocket health expenses in the 20 years after turning 65. If they have a chronic disease this figure doubles and if they live until 90, they will need an extra $75,000. In the US there are 2.5 physicians per 10,000 population: in India we have 0.7.

Barriers to Access Increasing access to affordable essential medicines is vitally important but several factors undermine availability in many countries. These include poor medicine supply and distribution, insufficient health facilities and staff, low investment in health and the high cost of many medicines.

Personalised Medicine With most current medicines only working for 1 in 10 patients and many $1bn blockbuster cancer drugs effective with 25% of patients, the potential for bespoke treatments is significant. However, some see that, in the short term, these innovations will be primarily focused on the developed world’s more established healthcare markets and will take time to have global impact.

Many in the ‘developed’ world are focused on the benefits of technology improving the effectiveness and the efficiency of healthcare. With many countries expecting to be spending up to a fifth of GDP on healthcare by 2050, the need for more effective use of resources is clear.

Certainly the potential to use information to drive for more personalised care may well open up access and raise quality while controlling costs. Especially in the pharmaceutical arena, personalized medicine and the prospect of customized therapies based on more sophisticated diagnostics is a major focus for many researchers and the opportunities for genetically orientated pharmacogentics are substantial. With most current medicines only working for 1 in 10 patients and many $1bn blockbuster cancer drugs effective with 25% of patients, the potential for bespoke treatments is significant. However, some see that, in the short term, these innovations will be primarily focused on the developed world’s more established healthcare markets and will

take time to have global impact.

Tele-health, and especially ‘m-health’ has already shown great promise globally. Especially in sub-Saharan Africa and India but also elsewhere in Asia, the opportunity to use mobile as a platform for both curative and preventative healthcare has been attracting much attention from governments, entrepreneurs and the mobile networks alike. With real-time monitoring an increasing norm and the entrance of major global technology companies such as Apple and Google into the area of personal and remote monitoring, the potential is indeed significant. While the business model for preventative healthcare is yet to be fully defined, those such as McKinsey and the GSMA see this as a means of saving of $200bn a year just in treating chronic diseases across the OECD and BRIC countries.

Alongside these significant new platforms shifts there is also the need to improve access to effective treatment of fast rising chronic diseases. According to WHO figures,


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Impact of mHealth Especially in sub-Saharan Africa and India but also elsewhere in Asia, the opportunity to use mobile as a platform for both curative and preventative healthcare has been attracting much attention from governments, entrepreneurs and the mobile networks alike. With real-time monitoring an increasing norm and the entrance of major global technology companies such as Apple and Google into the area of personal and remote monitoring, the potential is indeed significant.

Chronic Diseases If we are going to stem the rising tide of chronic disease and deal with its consequences we need a far more integrated approach to wellness and healthcare that works across all societies and not just a select few. We need to integrate primary, secondary and tertiary prevention and health promotion across sectors and different disciplines.

Need for Process Innovation Today, most healthcare interventions are not accessible to nearly 90% of the world’s population. The way forward is not a new medicine or a new scanner or a new operation - it is a process innovation to bring healthcare to everyone.

by 2020 major chronic diseases are expected to contribute to 73% of all deaths and 60% of the global disease burden. Moreover, 79% of the deaths attributed to these diseases will continue to occur in the developing countries. Addressing this requires both behavioural changes across many areas of society around consumption and exercise as well as structural change in the way healthcare

and sick-care is provided. If we are going to stem the rising tide of chronic disease and deal with its consequences we need a far more integrated approach to wellness and healthcare that works across all societies and not just a select few. We need to integrate primary, secondary and tertiary prevention and health promotion across sectors and different disciplines.

I want to enable every man, woman and child to have access to high-tech healthcare within the next 15 to 20 years, including in the poorest regions of the world. Today, most healthcare interventions are not accessible to nearly 90% of the world’s population. The way forward is not a new medicine or a new scanner or a new operation - it is a process innovation to bring healthcare to everyone.

Most countries suffer from a simple mismatch: the demand for health care is rising faster than the supply of doctors. One approach to making doctors more effective is to focus what they do. This is something that we in India have been dedicated to.

At Narayana Health our focus has been on offering as many operations as possible using the core resource without compromising on quality. Surgeons do the most complex procedures and other medical staff do everything else. In addition, by using the latest technologies such as tablets in the ICU instead of patient charts, simulations to train critical care nurses and telemedicine to access those patients in remote parts of the country, a far higher quality of healthcare is delivered than the global norm.

Alongside our process innovation priority, this means that surgeries in the organisation’s 18 hospitals across 14 Indian cities typically cost between $1600 and $2000 each – less than half that of other Indian hospitals and about one-fiftieth as much as a similar procedure in the US: Two per cent of the cost with outcomes that rival the best in the US.

Equally in other areas of Indian healthcare, similar efficiencies are also being achieved. LifeSpring hospitals have reduced the price of childbirth by augmenting doctors with less expensive midwives: Their costs are about 20% of those in a private clinic. In addition, Aravind Eyecare provides cataract surgery to about 350,000 patients each year for around $50 each: Operating rooms have at least two beds so that surgeons can quickly move from one patient to the next and, for every surgeon, there are six ‘eye-care technicians’ specifically trained by Aravind to perform many of the other tasks in the operating theatre that, in other countries, require a surgeons training.

Japanese companies reinvented the process of making cars. That’s what we are doing in healthcare: What healthcare needs is process innovation, not product innovation. It’s all about numbers. Because we do a large number of operations, our overheads are distributed over a larger number of patients. Equally, because we implant the largest number of heart valves in the world we get heart valves at a lesser price.

Looking ahead, I see that the efficiencies we have achieved through the approaches that we have taken in India can be applied globally. With an aging society and escalating costs, the 20th century model of healthcare still practiced in many countries today is unsustainable and we need to shift the model forward.

In addition, I also see a need to change the world of health insurance. There has to be an alternative way of funding healthcare.

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10 years ago we convinced our local government to launch a health insurance programme and convinced 1.7m farmers to contribute 5 INR (8c) per month and the government became the reinsurer. Today the premium has risen to 18 INR (US$0.27) per month. In 10 years, 450,000 famers have had treatment and 60,000 of them have had a heart operation all because of the power of 5 rupees per month. Today we are covering high technology healthcare for nearly 3 million farmers.

Now we are trying to convince policy makers that micro-health insurance is the best model for the whole of society. In India we have 850 mobile phone subscribers who are spending 150 rupees per month just to speak on the phone. So if we can collect 20 rupees from each mobile phone subscriber, we can cover the healthcare of another 850 million people. The Indian government will soon become a health insurance provider. Not only a healthcare provider.

Healthcare is a unique industry that creates millions of jobs for millions of households, both skilled and unskilled. Unlike manufacturing, healthcare is not dependent on any finite components. It is dependent mostly on human skill. And human skill is replenishable. We can technically reduce the price of any service to any level we want: Surgeons are like technicians - the more surgeries they perform, the better they get at it. But behind every skilled doctor you need to have at least two highly skilled nurses, at least four or five technicians, and good administrators.

By 2022 India needs to have 200,000 specialists, 450,000 doctors and over 1.2m nurses. If every country has an adequate number of surgeons, radiologists, anesthetists and cardiac surgeons, believe me, costs will come down by more than 50%. It is a question of demand and supply.

In global forums everyone talks about reducing the cost of healthcare. But no one knows how much they are spending today. At Narayana Health we have invested in technology. Every day at noon I get an SMS on my cell phone with yesterday’s revenue, expenses and EBIDTA (earnings before interest, depreciation, taxation and amortization) margin. For us looking at a profit and loss account at the end of the month is like reading a post-mortem report. You cannot do anything about it. Whereas, if you monitor it on a daily basis, it works as a diagnostic tool. You can take remedial measures.

The principles that we have developed and refined in India can certainly be applied elsewhere. We have developed what some see as a ‘frugal’ innovation approach to several healthcare challenges and hence have proven design solutions for low-income populations. These solutions can also be applied to higher income economies with even greater efficiency benefits.

As an example of how the Indian approach can provide more efficient high quality healthcare, you can look at Health City in the Cayman Islands that we opened in 2014. Health City is not only a lower cost alternative for patients needing heart, cancer and eye surgery in North and South America, it will make clear how over priced and inefficient hospitals in the US really are. Health City in the Cayman Islands will show that lower costs and better outcomes can be done outside India just as well as in Bangalore. In the US it currently costs approximately $1.25 million per bed to build a hospital. Health City is costing only $250,000 per bed. Furthermore, in the Cayman facility prices are less than half the average US costs for surgical procedures with quality outcomes matching the very best.

Global healthcare affordability will not come from the Unites States or any of the current world leaders, but rather from those nations of the world that have little today and have no choice but to perform at the highest levels possible in the future.

High Quality Support Surgeons are like technicians - the more surgeries they perform, the better they get at it. But behind every skilled doctor you need to have at least two highly skilled nurses, at least four or five technicians, and good administrators.

Wider Impact of Frugal Innovation The principles that we have developed and refined in India can certainly be applied elsewhere. We have developed what some see as a ‘frugal’ innovation approach to several healthcare challenges and hence have proven design solutions for low-income populations. These solutions can also be applied to higher income economies with even greater efficiency benefits.

Sources of Global Solutions Global healthcare affordability will not come from the Unites States or any of the current world leaders, but rather from those nations of the world that have little today and have no choice but to perform at the highest levels possible in the future.

Micro-health Insurance - The Best Model for Society In India we have 850 mobile phone subscribers who are spending 150 rupees per month just to speak on the phone. So if we can collect 20 rupees from each mobile phone subscriber, we can cover the healthcare of another 850 million people.


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Founder of Narayana Hrudayalaya Hospitals and Narayana Health. Lead expert on the Future of Health.

Dr. Devi Prasad Shetty is a renowned cardiac surgeon and an Indian philanthropist, well known for providing pioneering quality medical care at affordable prices. He was recently recognized by CNN-IBN as the Indian of The Year 2012. Dr. Shetty has performed over 15,000 heart operations and is a proud recipient of the Padma Bhushan for Medicine in 2012. The Wall Street Journal has given him the title The Henry Ford of Heart Surgery. Dr. Shetty and his team pioneered the concept of a ‘Health City’, a 2000-5000 bed conglomeration of multiple super- specialty hospitals within a single campus. The economies of scale achieved through this health city enable the Group to provide affordable healthcare to thousands. Dr. Shetty was also involved in coining the term ‘Micro Health Insurance’. He spearheaded the launch of a health insurance for the farmers of Karnataka in association with the State Government. Dr Shetty is Founder of Narayana Hrudayalaya Hospitals and Narayana Health and serves as its Chairman of the Board.

Lead Expert – Dr. Devi Shetty

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The main global challenges pertaining to learning are related to the curation, contextualisation and control of a rapidly increasing amount of data, information and learning content. As the O3B (‘other three billion’) initiatives make continuous efforts to provide internet connectivity to the world’s developing markets, there is going to be a definite shift in the use, makeup and function of the internet as its usership reaches unfathomable numbers. With this considerable expansion in connectivity, as well as the increase in widely available cheap devices at a time when 60% of online traffic is already on mobile, there is a going to be a tidal wave of content that is accessible all of the time, anywhere. As the ability to learn whatever, whenever continues to empower the individual learner, traditional learning content providers and distributors will face the challenge of repositioning themselves within the new ecosystem that is emerging.

For learners, everything they will need to know in order to progress in their chosen discipline will be available online, but it is going to be vital that there is a way of filtering and curating this overwhelming wealth of information in a way that is simple, intuitive and valuable. A learner needs to feel confident that the answers they are getting are accurate, up-to-date and the best input for meeting their needs.

With learning taking place across a vast range of content types and platforms another challenge will be providing an assessment and accreditation framework that is able to reflect the investment and aspirations of learners around the globe. The learning that takes place on a mobile device at the instigation of an inquisitive learner needs to have the same status as courses delivered in the traditional learning environments of schools and universities.

A key question that arises is whether virtual, online learning is able to replicate the powerfully immersive interactions that form the basis of face-to-face exchanges. Learning is grounded in the interplay of conversation, experience and meaning. Are applications and algorithms capable of creating meaningful and relevant learning opportunities that are based on actually understanding the learner and responding to their needs?

Furthermore, is the world in danger of losing the ability to ‘learn’ properly? With every answer to every question being only a touch screen away, does it mean that learners are only going to be threading together an uninterrupted sequence of hastily-consumed information chunks rather than internalising and applying their knowledge in ways that are personal to them? Or, conversely, is a new learning skill being developed as a result of

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Tim Gifford - Co-founder, ELTjam

The Future of Learning

Curated Information For learners, everything they will need to know in order to progress in their chosen discipline will be available online, but it is going to be vital that there is a way of filtering and curating this overwhelming wealth of information in a way that is simple, intuitive and valuable. A learner needs to feel confident that the answers they are getting are accurate, up-to-date and the best input for meeting their needs.

Standards of Learning The learning that takes place on a mobile device at the instigation of an inquisitive learner needs to have the same status as courses delivered in the traditional learning environments of schools and universities.


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the immense amount of information at our disposal? This skill could enable learners to locate, extract and apply precisely what they need, precisely when they need it, without having to wrack their memories for classes they took years previously. The words “I don’t know” would become redundant.

It is certain that learning material will no longer be delivered in discrete packets of content as with the print model. Instead, publishers and content creators will have all of their content available in the cloud for learners to access as and when they need to. Learning content will emulate the model of music streaming; rather than purchasing the music as a product, the listener pays for access. As such, a learner will be able to engage with valuable learning content as and when they need to without needing to subscribe to full courses or a full set of materials.

We would also predict that the flexibility and responsiveness of digital learning platforms and approaches will greatly influence the way that learning is promoted in traditional environments. As adaptive and personalised learning develops thanks to the considerable data that is being captured on the behaviours and abilities of learners, so too will classrooms and other physical learning spaces become less rigid and passive in their arrangement and use. In all levels of education, from reception to university, learning spaces will evolve into configurable, inductive interfaces that empower the learner to create an environment that works best for them. The ancient paradigm of a teacher-led learning approach as represented by rows of identical desks or chairs facing the same single point of reference at the front of the room will be replaced by a more fluid, collaborative pedagogical method.

Furthermore, we predict that there will be a movement away from a top-down, broadcast approach of learning to a hyper-collaborative global network consisting of learners, institutions and content providers. Larger entities will emerge within that network but there will no longer be any oligopolies in the learning sector. Well-established learning institutions

will need to learn how to best position themselves within this new learning ecosystem.

It’s uncertain whether the adaptive learning technologies that are able to leverage the immense amount of data generated by and about each individual learner will be able to provide the same quality of learning that face-to-face instruction has done historically. An adaptive learning engine is able to identify what content a learner needs to cover in order to achieve predetermined objectives, for example, but can it help a learner discover for themselves what it is they need to learn in order to reach their own set of goals? Despite the personalisation that is provided through adaptive learning products there is still the challenge of maintaining the focus on the individual and their desires and ambitions when it comes to their learning.

It’s also uncertain how learning institutions and the hyper-collaborative network paradigm are going to exist in combination. It can be argued that there will remain a place and a use for institutions that implement a more deductive pedagogical approach, but how such institutions will communicate and contribute to the network of connected and highly-motivated learner/users is difficult to anticipate.

Furthermore, it’s not clear what the impact will be of the overwhelming amount of information that is going to going to be available once internet connectivity reaches the O3B markets and as mobile interactions continue to represent the lion’s share of internet traffic. How will learners be able to navigate and filter the overwhelming volume of material at their disposal in order to locate content that is directly going to be of benefit to them?

Replicating Face-time A key question that arises is whether virtual, online learning is able to replicate the powerfully immersive interactions that form the basis of face-to-face exchanges. Learning is grounded in the interplay of conversation, experience and meaning. Are applications and algorithms capable of creating meaningful and relevant learning opportunities that are based on actually understanding the learner and responding to their needs?

Knowing Everything Is a new learning skill being developed as a result of the immense amount of information at our disposal? This skill could enable learners to locate, extract and apply precisely what they need, precisely when they need it, without having to wrack their memories for classes they took years previously. The words “I don’t know” would become redundant.

Streaming Learning Learning content will emulate the model of music streaming; rather than purchasing the music as a product, the listener pays for access. As such, a learner will be able to engage with valuable learning content as and when they need to without needing to subscribe to full courses or a full set of materials.

Paradigm Shifts The ancient paradigm of a teacher-led learning approach as represented by rows of identical desks or chairs facing the same single point of reference at the front of the room will be replaced by a more fluid, collaborative pedagogical method.

Collaborative Networked Learning There will be a movement away from a top-down, broadcast approach of learning to a hyper-collaborative global network consisting of learners, institutions and content providers.


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Personal Learning Networks We would suggest that educators encourage their learners to source information from their own Personal Learning Networks and to also actively contribute themselves to requests from other individuals within their communities.

With the ascension of adaptive learning in combination with increasingly digital learning environments, we would view the ‘rehumanization’ of the learning space as a compelling option for addressing the attendant challenges. This would entail the promotion of productive crowdsourcing learning networks whereby individuals are able to elicit answers or input from a globally dispersed community of learner-users. These communities would be self-organising and self-regulating and capable of providing quick and reliable feedback to an individual learner’s needs. This ecosystem of P2P connections would act as an organic filter for the learner, collaboratively curating the vast amount of information available and providing responses and recommendations based on collective experience.

An adaptive learning layer may be added to this model that would then make recommendations or suggestions based

on the learner’s online history or search behaviour. Rather than making suggestions in the form of content chunks to cover, however, the adaptive learning layer could suggest topics, themes or areas of study that are relevant or related to the material the learner is choosing to interact with. In a sense the adaptive learning element would become a virtual curriculum developer that responded to the preferences of the individual learner.

In addition, the evolution of the Semantic Web by the World Wide Web Consortium (3WC) will potentially provide an in-built solution to navigating the vast amount of data when looking for applicable learning material. The Semantic Web will present online data in terms of relationships and relevance rather than as straightforward text-based search criteria. A learner will be able to engage with online content that understands what they are looking for and how it relates to and impacts other topics.

In the first instance, we would propose the implementation and integration of the ongoing assessment of the use of technology within traditional learning environments. It’s already apparent that technology is becoming embedded in classrooms and lecture theatres so it would seem to be a logical progression of that evolution to start observing how that tech is being used by the learners themselves. Educators could carry out regular review sessions with their students to gain an insight into how the learning tech and online resources is being leveraged in the attainment of identified learning goals. This could then contribute to a new model of adaptive curricula that are realised at the intersection of teacher and technology.

The deliberate observation of technology enabled learning would help to shift the attitudes towards educational technology to a more proactive and engaged one, as opposed to reactive and resistant. This phase

of observation can be global as well as local, especially in the light of the O3B initiatives that are going to dramatically increase the number of people with access to the Internet. How are learners in India using their tablets compared to learners in Mexico, for example? Are learners gravitating towards similar sites or applications? What questions are being asked?

To complement this observation we would suggest that educators encourage their learners to source information from their own Personal Learning Networks (PLNs) and to also actively contribute themselves to requests from other individuals within their communities.

We would also propose a widespread use of adaptive learning technologies in conjunction with teacher-led enquiry. This would provide the learning technologies creators to learn from the application of their

Semantic Web The Semantic Web will present online data in terms of relationships and relevance rather than as straightforward text-based search criteria. A learner will be able to engage with online content that understands what they are looking for and how it relates to and impacts other topics.

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products and to further refine them. The out-of-hand rejection of such technologies will result in the delay of creating more advanced, more intuitive systems that are able to better meet the needs of the learner. In the meantime, it would also capture a enormous amount of quantitative data on how learners are interacting with technology and how they are engaging with their learning materials. This will in turn help to inform how learning content can be created.

Co-founder, ELTjam. Lead expert on the Future of Learning.

Tim Gifford is a co-founder of ELTjam, a digital a consultancy and product development business in the field of English language teaching (ELT). They help clients from within and outside ELT become and stay competitive by offering content development, business development and product design expertise and also develop products in-house and in partnerships with other companies.

Lead Expert – Tim Gifford

Learning From The Crowd The impact of embracing adaptive learning and the encouragement of crowd-sourced learning solutions would help to radically change the culture surrounding learning and promote the shift from a top-down model to one of collaboration and exchange.

The impact of embracing adaptive learning and the encouragement of crowd-sourced learning solutions would help to radically change the culture surrounding learning and promote the shift from a top-down model to one of collaboration and exchange. There needs to be an alignment of learning potential and practice in order to allow the extensive benefits of learning technology

to be realised. This requires the active participation of all parties within the learning space: educators, learners, content creators, publishers and tech developers. We would even go so far as to predict that there will be less and less distinction between those functions across the learning space as connectivity continues to improve.


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Before discussing the challenges facing those of us who work in the ‘loyalty space’ in more depth, it is probably worth providing an overview of what the term means to us.

To us, loyalty is a particular way of thinking about the relationship between brands and consumers. It is about what happens beyond the moment of simple transactions, and the specific products being bought and sold; beyond even the sometimes powerful messages contained in advertising. Instead, loyalty describes the long-term relationship and value-exchanges between brands and their customers, of which those momentary transactions are just a part.

Of course the word ‘loyalty’ covers a range of emotions and behaviours that go far beyond just the commercial space including

our relationships with family and friends, political parties, nation states, religions, football teams etc. In fact, the question “where do your ‘loyalties lie’?” is one which goes a long way toward the formation of our very self identity. And we are well aware that commercial or, dare I say it, brand loyalty lies at one end (perhaps the less invested end) of the human loyalty spectrum. Nevertheless, a person’s consumer loyalty does lie on the spectrum and can still involve similar kinds of emotional attachments and accompanying behaviours. The implication of this being that even when talking solely about the future of consumer loyalty, we should still be bearing in mind the future of loyalty more generally, and the evolving ways in which people will emotionally align themselves with different values, ideas and propositions.

Loyalty in the future will not be like loyalty in the past. This much we know. Where once simple equations ruled (the customer collects points, the customer saves), there is now a chaotic, multi-channel hubbub increasingly driven by fast transactions and instant gratification, and the need for brands to think more deeply about the emotional, less rational,

drivers behind the kinds of loyalty behaviours that might once have been exemplified by your grandmother insisting on her monthly trip to the local department store.

For brands that aspire to create customer loyalty in this new disorderly world, there is a fundamental question: quite simply, what will ‘loyalty’ in the future be? Already

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Loyalty Experiences For brands that aspire to creating customer loyalty in this disorderly world, there is a fundamental question that needs to be addressed. Quite simply, what will ‘loyalty’ be? Already the conversation has long since moved on from the traditional points and prizes models, through ideas of personalised loyalty experiences for individual loyal customers, and on to the challenge of customer and context-led customisation of loyalty experiences.

Introduction: Defining loyalty

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Christopher Evans - Director, Global Marketing, Collinson Group

The Future of Loyalty


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Beyond Loyalty Brands may have been mistaken in assuming that ‘loyalty’ behaviour was ever more than ephemeral, dependent on loyalty schemes with a specific shelf-life; but that does not mean that brands cannot seek to redefine loyalty experiences and find new ways to drive loyal behaviours. The challenge lies in understanding the consumer of the future, and their redefined needs and expectations.

The Personal Data Dilemma Lurking ominously in the background there is also the question of to what extent consumers will allow us to collect and use their personal information, and what they will expect in return.

the conversation has long since moved on from the traditional points and prizes models, through ideas of personalised loyalty experiences for individual loyal customers, and on to the challenge of customer and context -led customisation of loyalty experiences. But where will this conversation lead us? And where, in terms of a customer’s emotional relationship with a brand, will ‘loyalty’ begin and indeed, end?

The key drivers behind the evolutionary changes to the loyalty model have been technological of course, both in terms of our ability to collect and store more customer data, and in terms of communications platforms that allow consumers to talk to each other in the same spaces (social media and mobile platforms in particular) that also allow for real-time, in-context marketing and brand-consumer interactions. These new technologies have brought new possibilities, and theoretically at least, brands now have a dizzying array of tools with which to create new kinds of long and short term, emotional connections with their customers. But those same tools have also presaged a new kind of consumer, with new and distinct expectations, some of which look determinedly dis-loyal.

However, reports of the ‘death of loyalty’, evidenced by increasingly brand-fickle consumer behaviours, perhaps driven by consumers now being empowered by access to different choices and information, may be exaggerated. It is always worth remembering the two sides of the loyalty coin: on the one, those customer behaviours that look, for all intents and purposes, like loyalty; and on the other, the brand-created, customer experiences that are designed to drive those behaviours. Brands may have been mistaken in assuming that ‘loyalty’ behaviour was ever more than ephemeral, dependent on loyalty schemes with a specific shelf-life; but that does not mean that brands cannot seek to redefine loyalty experiences and find new ways to drive loyal behaviours. The challenge lies in understanding the consumer of the future, and their redefined needs and expectations.

Loyalty has actually always been about creating an exchange of value between brands and consumers and especially about the

value brands can provide beyond the specific features of a product being bought and sold, creating an emotive loyalty. This is unlikely to change. But understanding what kinds of value are likely to be exchanged in the future is a challenge. We need to answer the question fast, since, in this age of digital engagement and interaction, in which one-way advertising messages are now only part of the picture, the consumer is empowered to quickly seek, find and even demand, gratification of his or her own personal needs. Brands will need to respond to this, or find that their once ‘loyal’ customers are enticed elsewhere. In particular they will need to start seriously addressing the ‘harder to quantify’ aspects of the value exchange, and reconcile the rational value exchange with the less rational emotional value exchange.

Let’s get down to the nitty gritty.

One of the tools that brands increasingly have at their disposal is data (or ‘big data’ to use the fashionable term). We can now know a lot more about consumer behaviour at both the individual and group level. But we need to learn how to harness it, to make sense out of it, and to create beauty out of it. This challenge brings a number of attendant questions such as: how can we build data collection into business models? How can we know what the best or most relevant kinds of data are to collect? And of course, how can we use this data to create new kinds of loyalty experiences and value exchanges? Lurking ominously in the background there is also the question of to what extent consumers will allow us to collect and use their personal information, and what they will expect in return. The backlash is already beginning in some quarters, although the questions of whether there are generational differences in the value placed on personal information is an interesting one. Either way, it looks like, for brands, providing genuine value in new ways and making commitments to being honest and transparent look like inevitable first steps.

Assuming we answer some of these questions, we then face another immediate challenge: the ‘fat wallet’ problem. Given that data collection and storage is becoming ubiquitous, and the ability to contact and interact with


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As I have already hinted, there are a number of possibilities for the future of loyalty. Change is certain, but little else is. That said, there are some fundamentals upon which we can rely. Consumers will still shop, spend and

almost certainly continue to look for value propositions beyond just the features offered by specific products. In other words, there is still likely to be a space for loyalty. The idea of ‘knowing your customer’ is also

customers is too, so there are more and more opportunities for brands to move in to the loyalty space and offer their own, unique, loyalty experiences. Banks, airlines and hotels are the traditional players in the space, but already we have seen multiple other entrants, not least of course, the likes of Google and Facebook, the very architects of many of the changes we are seeing in customer behaviour.

Consumers will increasingly face the literal and metaphorical problem of having a wallet (or purse) fat with loyalty cards. In this scenario, the value of loyalty may become diluted, the consumer may become overloaded, eventually disengaging from loyalty altogether, and brands will face an increasingly uphill struggle to remain ‘front of mind’, even when the value they offer is particularly relevant. One solution to this may be to start thinking away from ‘pro-active’ loyalty, in which the consumer must actively and consciously take part in a loyalty scheme (too many of these and wallets become fat), and on to more ‘passive loyalty’ models that demand less of the consumer. On the other hand, consumers may be happy to put up with fat wallets, in order to ‘smarten up’ their consumption patterns, using loyalty schemes strategically.

Behind these more broadly conceived challenges lie the questions and uncertainties surrounding the physical (or digital) mechanisms and infrastructure that will underpin loyalty experiences themselves. As already noted, technology has driven many of the changes we have already seen, and it is likely to in the future. We might for example see a proliferation of payment systems, or indeed a convergence. Loyalty currencies (points, air-miles etc.) might become instantly convertible and flexible enough to be used

across contexts, and/or borders (a question which raises others around creating loyalty experiences that are relevant in different cultural contexts – are loyalty behaviours in China driven by the same set of value propositions?). The mobile wallet is a both a certainty and an uncertainty for those of us thinking about the future of loyalty. It may have little impact beyond changing the mechanism of payments, or the effects could be more profound.

Similarly, the channels for brand-consumer communication and interaction are likely to increase. Mobile is a certainty, but what about the so-called ‘internet of things’ or wearable technologies? Which inventions and innovations are the most likely to be adopted, and which will prove the most effective channels for the types of relationship-building that drive loyalty?

Associated with all this, comes the question of the impact of real-time, in-context feedback, interaction and marketing. Will the ability to make prices dynamic, rewards instant, and responses to consumer demands individually relevant, all mean that traditional, long-term, loyalty models become meaningless or (to use an excruciating pun) pointless? More likely perhaps is that short-term transactional consumer behaviours, and longer-term loyalty driven value exchanges are likely to co-exist, and it will be more a question of which consumers are looking for which type, and which sectors and brands can generate the different types of services to deliver to those different needs: providing mechanisms that address the relative simply needs of the instant transaction as well as addressing the more complex and diverse variables that go into shaping what makes a consumer loyal.

Diluted Value of Loyalty Consumers will increasingly face the literal and metaphorical problem of having a wallet (or purse) fat with loyalty cards. In this scenario, the value of loyalty may become diluted, the consumer may become overloaded, eventually disengaging from loyalty altogether, and brands will face an increasingly uphill struggle to remain ‘front of mind’, even when the value they offer is particularly relevant.

Pointless Points Will the ability to make prices dynamic, rewards instant, and responses to consumer demands individually relevant, all mean that traditional loyalty models become meaningless or (to use an excruciating pun) pointless?

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Brand Alliances Strategic brand alliances, designed to deliver sophisticated choice and content, to complex consumer needs, are likely to emerge.

Consumer Power The consumer is likely to gain the upper hand in terms of the power dynamic and principles such as ‘great customer service’ will no longer be a negotiable.

going to remain, albeit transformed into a new challenge defined by the tensions between the ubiquity (and inevitability) of having access to ever more customer data, the right to collect that data, how and where you can store or share it and the puzzle of what to do with it once you have it. Alongside this, the death of the traditional media model (if it is even still alive) will finally sink in; what are now considered novel channels of communication will become the norm.

These certainties are more than likely to lead to an enhanced role for high-quality data managers and analysts (or data management and analysis systems). They will lead to a period of re-definition, evolution and innovation in terms of the kinds of value exchanges and exchange mechanisms that define loyalty offers. They will lead to a different set of consumer expectations, perhaps to the point that brands will no longer be able to deliver to them on their own. Strategic brand alliances, designed to deliver sophisticated choice and content, to complex consumer needs, are likely to emerge.

Less certain are the changes that new technologies will bring; especially in terms of payment mechanisms, mobile wallets and communications technologies. We know that consumers will face choices in all of these areas, but which ones they will adopt en masse remains uncertain. Will consumers opt to keep personal information private, while expecting to be able to enjoy the benefits of dynamic prices and rewards from multiple brands in multiple contexts? Or will the increasing demand from consumers for relevancy and personalised content tip the balance in favour of greater sharing? Ultimately can brands manage to create sufficiently tempting, relevant offers and experiences utilising the tools at their disposal (by, for example, gamification, curating, understanding etc.) to hold the consumer’s attention and make them more willing to engage and invest? The only certainty here is that the consumer is likely to gain the upper-hand in terms of the power dynamic and principles such as ‘great customer service’ will no longer be a negotiable.

In practical terms, there are a number of ways forward. There is an immediate need to understand the changes that are being wrought on consumer needs and expectations. Significant investment in consumer research and data management and analysis seems to be a no-brainer. These kinds of research will themselves have to be mindful of what we know is coming, and specifically aimed at solving the problems outlined already such as the question of how to understand ‘big data’ and make it useful; and how to analyse and explore the impacts of new technologies on attitudes and behaviour so as to feed directly into reformulations of truly customer-led value propositions.

In tandem with this, and utilising a method that has been made much easier by the very same technologies we have been discussing,

is the need for brands to be unafraid of testing. We don’t know what will succeed in the future and what is in the market today that will fail, so brands face a dilemma: Continue to innovate and test a wide variety of solutions and technologies and see what works (which brings the risk of spreading your focus and investment too thin and failing with all); or pick your winning horse or horses, focus there, be successful, but be exposed when consumers grow tired of that platform and switch to something new.

As the pace of uptake of new solutions is increasing exponentially, especially in younger generations; it is ever harder to decide on the right strategy. The savvy business will be prepared to fail in this environment, but also prepared to learn from that failure, just as much as they must be prepared to respond to successes quickly.

Proposed way forward

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The implications of everything I have discussed are broad.

Consumers’ ideas of utility value and similarly expectations of loyalty are likely to move from a recognition of the value in standard and ‘always available’ loyalty propositions to dynamic, exciting, changing and variable experiences that are ‘here today’ and ‘gone tomorrow’. This will mean an increase in customer-driven engagement in order to see what is or isn’t available at any given moment, rather than the annual ‘collect, save, spend’ patterns. However, we must address exactly what kinds of emotional connections can be created between brands and consumers, and explore the levers that might brands might be able to pull to create them, that are not simply reliant on the rational economic levers of points, rewards and monetary value. In doing so, of course, we may discover that the irrational emotional connections are even more valuable than the rational economic ones that have so far dominated.

Finally, lying behind all of these discussions, and the fact of brands and consumers beginning to interact more frequently and directly, with more customer information sought, collected and utilised, we are also likely to see increases in external

(governmental) intervention and the possibility of regional or national ‘balkanisation’ in terms of the different ways in which brand-consumer relationships are regulated. This could happen even as companies attempt to move against such trends by, for example, initiating cross platform integrations of customer management in which every brand touchpoint is connected (without recognition of borders) and actively collecting customer data.

In economic terms, the need for brands to have access to the resources (especially the technical resources) to take part in this new world of customer engagement may begin to crowd out smaller players, at least in the short term. And competition for loyalty is likely to mean squeezed margins even for the bigger players. In the coming years, brands will need to be disruptive in their thinking about loyalty, seeking new kinds of value proposition, exploring different models and redefining the very ways in which loyalty is conceived.

In terms of actively innovating, brands will need to explore different possibilities and be open to new models. Innovation might be encouraged through strategic alliances with unlikely bedfellows for example, perhaps from different sectors, or from clever acquisition, or investment in or promotion of (lean) start-ups or suppliers.

Above all though, brands must place the customer at the heart of business models. This is likely to involve creating new business models and organisational structures that allow for customer engagement and management to become a core function that cuts across traditional silos, and helps to

focus entire businesses on the contextual needs and value opportunities for different audiences at different stages of a customer journey or experience.

Dynamic Experiences Consumers ideas of utility value and similarly expectations of loyalty are likely to move from a recognition of the value in standard and ‘always available’ loyalty propositions to dynamic, exciting, changing and variable experiences that are ‘here today’ and ‘gone tomorrow’. for different audiences at different stages of a customer journey or experience.

New Value, Different Models In the coming years, brands will need to be disruptive in their thinking about loyalty, seeking new kinds of value proposition, exploring different models and redefining the very ways in which loyalty is conceived.

Extreme Customer Centricity Brands must place the customer at the heart of their business models. This is likely to involve creating new business models and organisational structures that allow for customer engagement and management to become a core function that cuts across traditional silos, and helps to focus entire businesses on the contextual needs and value opportunities for different audiences at different stages of a customer journey or experience.


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Director, Global Marketing, Collinson Group. Lead expert on the Future of Loyalty.

Christopher Evans joined Collinson Group in 2103 as a Director, Global Marketing from Coty, a $4.6bn fragrance and cosmetics company with brands such as Calvin Klein, Davidoff, adidas and Rimmel. His career there spanned 17 years and included both Marketing and Managing Director responsibility within teams based in London, Dubai and New York. Christopher is responsible for uniting the complementary skills and experience we have across Collinson Group so that our clients can benefit from accessing this unique wealth of knowledge and capability. Christopher is also responsible for Collinson Latitude, which combines advanced earning, redemption and ancillary revenue platforms with global content and e-commerce expertise to drive engagement and revenue for our clients.

Lead Expert – Christopher Evans


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The Future of PaymentsHow payments are helping to shape the future of commerce


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Commerce has always been defined as the interchange of goods and services for money. It still is, but the way commerce is conducted is in the middle of sweeping change. Merchants that anticipate these changes and prepare for them will win; others will struggle to survive.

Cash was invented in the 7th century and since then, broadly speaking, it has been the most common way to pay for the transfer of goods and services. Market places and shops have always been useful as central points to find products we need. Shopkeepers have always played an important part in choosing

the right transaction, providing valuable information about products and services and facilitating choice. Over the last decade however these transaction stalwarts are being challenged because the retail payment process is undergoing a transformation. As electronic payments get easier, is there a need for coins and notes? As the Internet gives the corner shop a global footprint, how will retailers respond to and support their new customers? And, logistics and supply chain issues aside, which payment options will ensure secure and efficient transactions?

Starting with the cash debate. It’s true that developed countries are becoming ever less dependent on cash, as debit and credit cards, “virtual wallets” and other substitutes grow in popularity. In developing countries cash and bartering has been the prominent method of exchange particularly as the vast majority of people are unbanked. This however is changing; in Kenya, for example, over 80% of adults have a mobile money account1. Although electronic and mobile money systems are generally safe and

effective methods of payment it is not all straight forward. Success of these systems depends on creating incremental value for consumers and merchants and changing behaviour. This is the reason that while there has been significant progress, 85% of global payment transactions are still made with cash1. So what is the future of cash? What electronic payment forms are likely to be successful in the future? If we really are heading for a cashless world then what would this mean for retailers?

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It’s no surprise that, given the avalanche of technological innovation, retailers have had to extend the ways they accept payments, thinking of different ways to meet customer demand. There are myriad ways in which customers can now pay for their goods like e-shopping with a smartphone, laptop, tablet and even in store. “Omnichannel” is the current buzz word and is a multichannel approach to sales. A key element of it is a consistent and integrated shopping experience across different channels such as a desktop or mobile device, by telephone or in a bricks and mortar store. Many brick-and-mortar retailers around the world including the likes of Walmart, Tesco, Target, and Best Buy have built an ecommerce presence to adapt to the new environment but perhaps more interestingly, even ecommerce giants like Amazon are now planning physical stores. So is omnichannel just a buzz word? How important is the consistent shopping experience across channels? What is the future of physical stores? Can bricks keep pace with clicks or is it in fact the other way around?

These omni-channel options mean that retailers have to work hard to complete a sale. Online or off line the challenge is the same, to provide a personal service but on a global scale; as the economist puts it despite a global market place retailers have to provide each customer with “a single salesman with an unfailing memory and an uncanny intuition about their preferences”. Few would argue that the judicial use of big data will help but although there is a lot of talk about its efficacy most of the opportunities big data can offer have yet to be fully exploited. The reality is that there are different chunks of data that are collected, stored and managed in multiple ways. On top of this much is still locked away, stuck on legacy systems that will take years to unpick. Access to relevant information let along the crunching of it will take some doing. Big retailers like Walmart, Tesco, Target, and Best Buy are better positioned to leverage big data to tap the omnichannel trend. But what can smaller bricks and mortar stores do?

The point of interaction (POI), the moment

where customers and merchants interact to complete the transaction has undergone significant change over the last decade and indications are that this will continue. There are multiple ways to pay and we can expect the “can’t find my wallet” excuse to be a thing of the past as we increasingly grow used to mobile payments. Global standards such as EMV have added additional security, and many now think nothing of buying their coffee’s with a mobile phone thanks to innovations in Near Field Communication (NFC). Recently Apple Pay is looking to redefine the process again using biometrics and card tokenization. Holding a phone however is likely to remain just one of several widely accepted ways to pay but how the multiple options will combine to ensure a safe and convenient transaction method at the POI is a question that both merchants and customers are grappling with.

For retailers an age-old concern continues to niggle. How can they offer value-add to their customers? In a world of unprecedented information access customers are now better equipped to dictate what they want, what price they want to pay, when they want it, where they want it and from whom they want it. The buying process is no longer linear but ducks and dives from tablets to in-store to mobile via friends’ recommendations to the opinions of strangers then back to the computer again. Retailers, striving to maintain an ongoing relationship with their customers, are faced with multiple ways to communicate and engage and can gather data from many sources. Those who manage to connect to their customers can build a more detailed picture of who they are selling to than ever before. The challenge for retailers is, in a world where social media drives commerce, how to build and retain loyalty and trust with their customers.

All the evidence suggests that the use of cash is in decline across the globe. The World Bank reports that there were 83 cash dispensers for every 100,000 adults in the US in 2008 but by 2012 there were only 68. The Federal Reserve Bank of San Francisco has also published a report showing that in America, the share of transactions using cash has fallen; between 1993 to 2013,

Big Data Opportunities Few would argue that the judicial use of big data will help but although there is a lot of talk about its efficacy most of the opportunities big data can offer have yet to be fully exploited. The reality is that there are different chunks of data that are collected, stored and managed in multiple ways.

Bricks and Clicks Is omnichannel just a buzz word? How important is the consistent shopping experience across channels? What is the future of physical stores? Can bricks keep pace with clicks or is it in fact the other way around?

The End of Cash? All the evidence suggests that the use of cash is in decline across the globe… Cash takes time to get at, is riskier to carry, and by most estimates, cash costs society as much as 1.5% of GDP.


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Enabling Financial Inclusion With governments, international development agencies, academics and the private sector, making financial inclusion a priority on the agenda, it is likely we will see a significant portion of the 2.5 billion currently unbanked adults armed with electronic payments products in the future.

although the American economy grew in real (inflation-adjusted) terms by 65%, notes of $50 or lower grew by just 19%. In comparison to this share of debit and credit card payments increased by 20% in US in the 5 years starting 2006 based on analysis by MasterCard analysis. There are several reasons for this. First, Cash takes time to get at, is riskier to carry, and by most estimates, cash costs society as much as 1.5% of GDP1. Second, merchants make fewer profits using cash. In fact when benefits of electronic payments such as driving greater customer satisfaction and loyalty for merchants over cash are considered, MasterCard’s research shows merchants can make $40K more in profits for $1MM in sales.

Third, Cash by comparison can be a hindrance to financial inclusion. Indeed in a recent study MasterCard found that electronic payments are an effective entry point for financial inclusion. With governments, international development agencies, academics and the private sector, making financial inclusion a priority on the agenda, it is likely we will see a significant portion of the 2.5 billion currently unbanked adults armed with electronic payments products in the future. Over the next decade cash quite possibly will lose out to technology. And electronic payments are not confined to the developed world; in Kenya over 80% of adults—use a mobile-phone payment service called M-PESA that can also cater to business customers too.

Turning to the real world of bricks and mortar retail. Retailers are finding it tough

to keep up with their more nimble online counterparts. First they have to contend with the costs of floor space but they also have to acknowledge that their customers have more choices and are more informed that they have ever been before.

How to manage cross border commerce is a big challenge. Our research shows that since 2009, international visitor arrivals and spending have grown faster than real global GDP. It also forecasts that cross-border visitors to the 10 leading destination cities will spend $136 billion during 2014. Even a 1 percent share of a leading market such as New York or London is near $200 million in annual revenue. Despite its size and strong growth, cross-border commerce is a challenging area. When international travellers arrive, merchants sometimes have difficulty recognizing them, anticipating their needs and catering to them. Even worse, most merchants neither recognize the size of the cross-border opportunity nor understand their current share. Cross border spending is not a trivial issue and the challenge for the next decade is to build wider understanding of the opportunity and create ways in which retailers can better understand customers from abroad.

It is clear that omnichannel commerce is here to stay. MasterCard’s SpendingPulse report is showing that U.S. ecommerce is growing at double digits year-over-year as compared to total retail sales (ex-auto), which are growing in single digits. While stores may be becoming less important, they are not dead and are an integral part of the purchasing process; close to 20 billion

people visited US malls in Nov and Dec in 20132. Providing a consistent experience across channels will be critical; our research shows that spend by omnichannel customers, those who shops across more than one channel and value a consistent experience, is significantly higher than single-channel customers, those who shop via one channel across all verticals (Figure 1).

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Of course e-commerce is continually evolving but the biggest change may well happen in store. First stores will likely become smarter. Retailers currently don’t know who walks in the door so its difficult for them to provide a customized experience and individual offers. Beacon technology can solve this issue for stores. With a larger range than NFC this technology has enormous potential for customers and retailers alike. Widespread adoption of Beacon technology by stores and customers will make it quicker and easier for customers to access the information and products they are looking for, and for retailers to provide special offers or discounts to loyal shoppers. It may also provide retailers with invaluable insights about their customers’ shopping habits allowing them to make improvements to the store layout by identifying store flow, maintaining service standards and operations that will benefit everyone.

In ten years you may be able to expect to walk past a shop and your mobile will receive meaningful and personal notifications on discounts or deals that you are likely to buy based on your shopping preferences. If you go inside you may be able to use your phone to pay with offers automatically applied. There may be other improvements. For example, checkout lines will likely become things of the past. By using mobile technology instead of a fixed till, customers will likely enjoy a much more personal

experience. Pioneers in this include Apple, J C Penny and Nordstrom in the US but it will likely become a common phenomenon. Similarly, “order ahead” capabilities that allow customers to order and pay from their mobile phones before they even enter the store and generally speed up the sales process will likely become widespread. Expect the food service industry to lead the way.

The second area of change will likely be in the way customers choose and buy goods. It will likely be all about choice. You may be able to order online and pick up at the store, order at store and deliver online, get similar offers across channels and yet have the same payment options. The transformation between the virtual and the actual has already begun; in South Korea, Tesco has built virtual grocery stores on subway platforms that have a similar layout to actual stores. Customers can now do their grocery shopping during their daily commute using their mobile phones, pay online and have them delivered when they get home. Of course there are big variances in this depending on internet access and payments solutions like PayPal and Apple Pay are trying to provide a similar payment experience in other markets.

Looking at POI, Uber, which is in 40 countries, is a great example that is revolutionizing the way we think by actually embedding payments in the process and focusing on the customer experience. Another good example

Personalised Shopping In ten years you can expect to walk past a shop and your mobile will receive meaningful and personal notifications on discounts or deals in store that you are likely to buy based on your shopping preferences.

Omnichannel Access You may be able to order online and pick up at the store, order at store and arrange delivery online, get similar offers across channels and yet have the same payment options.


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Growth of Mobile Point of Sale In the next ten years there will be a global acceptance of electronic payment products. We are nearly there; Square and iZettle’s mobile point-of-sale (mPos) solutions are demonstrating this by giving the small merchants who are the main drivers of cash transactions the ability to accept electronic payments at affordable rates. Such is their success it is expected that by 2019 46% of POS terminals will be mPOS.

Multi-factor Authentication In the future we expect multi-factor authentication will become the norm for most online and offline transactions…. authentication itself will become more secure as biometric technology from hand geometry, via face recognition and fingerprints to iris recognition become more mainstream.

is PayByPhone that is revolutionizing paying for parking by focusing on the whole customer experience. No more grappling for coins or making trips to replenish the meter. PayByPhone lets you pay remotely from your mobile phone – even when you have left the car park and are on the train. Look out for additional value added services like Bill pay and remittances that not only enhance the customer experience but also drive incremental revenue for retailers. The key for retailers is to consider ways that digital payments can be used to enhance customer experience. We expect many more digital payments applications in areas where cash currently dominates. Vending machines are another example.

All of this is of course driven by the supposition that in the next ten years there will likely be a global acceptance of electronic payment products. We are nearly there; Square and iZettle’s mobile point-of-sale (mPos) solutions are demonstrating this by giving the small merchants who are the main driver of cash transactions the ability to accept electronic payments at affordable rates. Such is their success in fact, it is expected that by 2019 46% of POS terminals will be mPOS3. For the payment providers innovative ways of determining merchant credit risk, for example by using alternative data sources such as cell phone usage and bill payment receipts, are critical to open the way for unbanked merchants, particularly those in developing economies where the majority may not have access to traditional banking facilities.

Security and trust are fundamental to the success of e-payments, the one supporting the other. Given this we expect to see changes in two specific areas; customer authentication and the underlying infrastructure support for transactions. In the future we expect multi-factor authentication will become the norm for most online and offline transactions. This has already begun in the physical world think of EMV with chip and PIN which is now becoming a global payment standard. The online transaction community is likely to follow particularly in Europe where the European commission is keen to add some

regulatory pressure. In addition it seems clear that authentication itself will likely become more secure as biometric technology from hand geometry, via face recognition and fingerprints to iris recognition become more mainstream. It sounds a bit Hollywood but in ten years time it will likely be old hat. On top of this, although unsexy and unheralded, the all-important underlying infrastructure that supports transactions is expected to also become more secure. Consider the replacement of magnetic stripes with chips and use of card number tokenization for NFC transactions as illustrations of this shift.

Pay attention to two scenarios that demonstrate the dominance of social commerce. First, imagine Isabel, a 35-year-old professional. She opens her tablet. First stop is her homepage, from which she administers her universe. She has her favorite brands, her product wish list with the prices she’s prepared to pay (information she has shared with those same favorite brands) and an easy-to-manage dashboard defining what the outside world sees about her. Certain brands she trusts enough to share quite a lot about herself. These favorites, of course, know the most about Isabel, so that she can get exactly what she wants from them. Others aren’t as fortunate. They know only what Isabel wants to share with them — which isn’t much. If a brand is not on her list it won’t ever find out more, because she’s perfectly able and willing to control her digital information. In her digital life, she will “switch on” areas of interest and consider relevant offers. She will also block out the untargeted, low-value offers and emails she receives all the time. Isabel, you see, values control and monetizes her personal data by the way she manages it. Isabel is a segment of one.

The second scenario takes the power shift to the customer a step further. This builds on the notion of the “Internet-of-things”, a scenario where household objects, fashion accessories and other objects can transmit data about themselves. For example, the water filter of your refrigerator may send a signal to your preferred suppliers when it its time to replace it with the supplier that satisfies the price point subsequently


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fulfilling the request. While it is too early to say which areas will be affected by this change, it is very likely that “things” in the home will be connected and be able to send and receive information in order to other “things”

Optimizing the intersection of digital payments and big data is critical for merchants to serve the new powerful customer. Data has become multichannel, multi sector, multifaceted and for retailers being able to understand the behaviour of their customers not to mention their fragmented media existence will likely provide a whole new level of understanding and opportunity. Take for example the recent experience of a retailer interested in reaching last-minute holiday shoppers in (for argument’s sake) the luxury sector. By analyzing aggregated purchasing behaviour, with last-minute holiday spending, the company was able to conduct a better, more targeted campaign as a result. The reward was a 31.7% lift over the performance of a control group.1

Cross-border commerce is growing faster than domestic commerce and so will likely become increasingly important and influential. In fact, based on McKinsey’s research, cross-border flow of goods, services and finance could increase three folds from $26 trillion in 2012 to $85 trillion in 2025 representing a 10% average growth rate. Innovations in digital payments and technology such as payment cards, eBay, and AliPay will fuel this by simplifying cross-border commerce. Small businesses (SME’s) are likely to benefit significantly. Consider that 90% of commercial sellers on eBay are SMEs who export to other countries vs. less than 25% of traditional SMEs4.

Emerging economies are and will likely continue to be the main beneficiaries. China and India are the main drivers especially through trade with other emerging markets. Between 1990 and 2012 the share of trade of global goods between emerging markets quadrupled whereas between developed markets almost halved4. Similarly, share of trade of global goods between emerging and developed markets increased 40% during the same period4.

Payment for transit by overseas travellers is one area of opportunity. Solutions like the one rolled out by London Underground that enables travelers to use their existing contactless bank cards (e.g., supporting MasterCard PayPass) without having to buy the local Oyster card are expected to continue to gain traction.

Merchants are also expected to become smarter about engaging cross-border customers using transactional data. As an example, many types of merchants – including airlines, hotel chains and luxury fashion brands – have established relationships with travelers through loyalty programmes. Analyzing the spending patterns of frequently traveling members of the program can help identify the merchant types with which members engage most often. This may uncover new partnership and ancillary revenue opportunities.

There will likely be several types of digital payments like payment cards, mobile money or digital wallets for different markets and applications. One area in payments that is likely to see significant transformation is low value payments (LVPs), everyday, high-frequency purchases for which cash is used (typically sub $10 transactions) and make-up the bulk of cash transactions today. Digitizing these will most likely require new payment solutions. It’s not simple. Any payment solution must create equitable value for all parties to a transaction. And value is a confluence of factors such as faster checkout, sales increase, information, safety, not just a function of pricing. Existing payment solutions are successful because they arbitrate a wide range of stakeholders to ensure equitable distribution of value. Digitizing low-value payments will likely require the same approach to create new payment constructs/business models.

Cross-Border Commerce Cross-border commerce is growing faster than domestic commerce and so will become increasingly important and influential. In fact, based on McKinsey’s research, cross-border flow of goods, services and finance could increase threefold from $26 trillion in 2012 to $85 trillion in 2025 representing a 10% average growth rate.


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Low Value Payments One area in payments that is likely to see significant transformation is low value payments - everyday, high-frequency purchases for which cash is used (typically sub $10 transactions) and make-up the bulk of cash.

Merchants should invest in key capabilities to position for the future. The first is big data. They need to start developing a big data strategy and develop a roadmap for the next 10 years. Big data will give merchants the opportunity to serve the increasingly powerful customer and enhance the retail store experience in order to create a truly omnichannel experience. The good news is that merchants don’t need to depend on in-house capabilities; there are third parties that can help making big data a reality for merchants big or small.

The second is POI and digital payments. Merchants need to assess the current usage of cash and develop a plan to reduce it. Perhaps the best way is to think about the end-to-end customer experience and assess what digital payments make business sense and how they may be integrated. There are more digital payments choices than ever before and they are only increasing, merchants are likely to find a solution that fits their needs.

Third, think about global expansion. In this digital world of AliBaba and eBay and digital payments like payments cards and AliPay, becoming global is much easier for all merchants big or small.

Online will be critical so invest in related capabilities. But go a step further, by thinking about it in the overall context of the omnichannel customer by focusing on a seamless experience across all channels.

We will see significantly less cash over the next ten years. Use of technology and big data will be more prevalent and will not be limited to large merchants or some industries. Merchants will have to become more nimble and agile and continuously adapt their business as the environment has not been more dynamic before. Finally, new innovative players will continue to emerge across a range of functions including commerce, digital payments, big data and marketing; these will create both opportunities and threats for incumbent players.

Sources1 MasterCard Advisors Analysis, 20142 Wall Street Journal, 20143 Finextra,20144 McKinsey, 2014


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futureagenda.org

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Stephen Deadman - Group Privacy Officer and Head of Legal – Privacy, Security & Content Standards at Vodafone Group


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The right to privacy finds its expression in all the major international human rights instruments. They were all, without exception, drafted and agreed in different times to those we find ourselves in today. Even as we contemplate the years ahead, there is almost universal acknowledgement of the continuing value and relevance of these instruments and the rights enshrined. Yet, the subject of privacy has never been more in flux, facing a seemingly endless barrage of pressures. Privacy is becoming one of the most vexing public issues of our time, and will remain so in 2025.

Contemporary concerns and debates about privacy are essentially debates about technology and the role and impact of technology on our lives and societies. Practically every mega-trend in the world of technology is creating tensions for privacy, personal freedom and autonomy - ubiquitous connectivity, big data, the cloud, wearable tech, artificial intelligence, the internet of everything, connected health, drones – the list goes on.

It’s no longer just a case of leaving digital footprints from our movements around a digital landscape. As the size of computing continues to shrink to nanotech levels, and the cost continues to fall, technology will become embedded in both the physical world and our physical bodies. We will be living in a world where we are ‘surrounded by computational intelligence’1.

Technology is becoming invisible. And its unobtrusiveness will aid its pervasiveness – there are already estimated to be 16 billion connected objects today and this is predicted to reach 40 billion by 20202. And this pervasive connected technology will create ever more data. IDC estimates that by 2020 people and connected objects will generate 40 trillion gigabytes of data that will have an impact on daily life in one way or another3 . This data will make known about us things that were previously unknown or unknowable (including to ourselves). And in doing that, it will enable actions and decisions to be taken about us that will have profound consequences far beyond the display of adverts on our variously sized screens, or personalised pricing based on profiles of our income and propensity to pay .

Evgeny Morozov, the author5 and researcher, gave an example of this recently in his talk at the Observer Ideas festival 2014 in London6. In the Philippines, sensors have been placed in public toilets which emit an alarm if someone uses one of the stalls and then tries to leave without using the soap dispenser. You can only turn off the alarm by using the soap dispenser. The sensor thereby has a deliberately regulating effect on the behaviour of users, in this case encouraging hand washing. This is just a logical extension of the seat belt alarms fitted to most new cars built today or the use of speed cameras, the purpose in both cases being to use

Knowing The Unknown By 2020 people and connected objects will generate 40 trillion gigabytes of data that will have an impact on daily life in one way or another. This data will make known about us things that were previously unknown or unknowable (including to ourselves).

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technology to regulate our behaviour and thereby reduce injury and the cost to health services of car accidents.

Let’s stick with cars for a moment. The installation of a wide range of new sensors in vehicles is already transforming other aspects of motoring, such as insurance. Usage based insurance schemes utilise sensors that collect data on location, speed, braking and acceleration to determine the risk profile of the driver, and consequently their insurance premium. The other touted benefit is that such technology acts to discourage risky driving behaviours. In return, we subject ourselves to a degree of surveillance. It is not long before we can see the same technology being used for other ostensibly worthy purposes, e.g. perhaps identifying if you are too tired to drive and automatically disabling the engine.

Of course, it might be argued that none of this compels us to allow sensors into our cars, homes and other parts of our lives, and the collection of data about us - we are not compelled to use usage based insurance or drive “intelligent” cars, and so we have a choice. But if refusing to allow the collection of data by sensors begins to become a costly decision (e.g. increased car, home or health insurance7 premiums), it’s a choice that is easier to make for those who can afford it. And, of course, once sensors and data-generating technologies become embedded in products as standard, there will come a point when there are few realistic alternatives.

This rise of technology that not only observes, but intervenes (I’ll term it “bossy tech”), is a consequence of placing sensing technology in more and more places where these ‘interventions’ can be automated, based upon the exponential increase in data sources that can be analysed in real time with intelligent computing. And as bossy tech gets a lot smarter it will no doubt get bossier, as public authorities acquiesce in the notion that technology can regulate our behaviour far more efficiently than traditional enforcement methods – why waste money on policing public spaces if cameras and audio sensors can detect potentially unsociable

behaviours, use facial and voice recognition to identify the individuals involved, and then order them to stop or else face the consequences?

The value of digital identity, i.e. the sum of all digitally available information about an individual, has been estimated to be worth €1 trillion to the European economy by 20208. The internet of things is predicted to generate a value-add of $1.9 trillion globally by 20209. Much of that value is not likely to be from the ‘things’, but from data derived about those things that promise to transform every sector, bringing efficiencies and cost savings, but also entirely new service possibilities10. Whatever the figures, there is undoubtedly a huge economic incentive to generate and collect data from whatever sources it becomes available. As more data from more things becomes available, we can expect to see a data “land grab” by organisations.

The control of data provides organisations with valuable insights and enables influence over purchasing decisions and other behaviours. Increasingly, therefore, data is power, economic or otherwise. But there is already undoubtedly an asymmetry in power between organisations and individuals today, as organisations have an abundance of information about consumers and analytics tools to interrogate it, while consumers suffer information scarcity and possess few tools to make any sense of their own data11. And this appears to be getting worse, according to Sir Tim Berners-Lee12. In the 2014 – 15 Web Index, an annual report measuring the Web’s contribution to social, economic and political progress published by the World Wide Web Foundation, it is revealed that the web is becoming less free and more unequal.

In the absence of any countervailing forces, the current technology mega-trends look set to create further asymmetries in power resulting in less privacy for individuals in 2020.

Value of Data There is undoubtedly a huge economic incentive to generate and collect data from whatever sources it becomes available. As more data from more things becomes available, we can expect to see a data “land grab” by organisations.


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There are plenty of predictions about technology – from the utopian visions of a bright new hyper-efficient world where robots free humanity from drudgery, to doom-laden predictions of pervasive surveillance and the demise of personal autonomy at the hands of governments and corporations. But there are a number of counter-trends emerging that present their own narrative about how the future will play out.

Privacy is a public issue: The public’s perception of the threats to privacy, personal freedom and autonomy – whether from corporations or governments - is growing. Privacy has already emerged beyond a niche, specialist concern to being a mainstream public issue. It seems that almost weekly new research is released revealing increasing public concern about privacy and declining levels of trust in organisations’ handling of peoples’ personal data13.

In addition, a lesson the public has learnt thanks to the revelations from Edward Snowden is that data controlled by organisations will always be susceptible to access by governments using extensive legal powers of disclosure and surveillance. This is becoming a liability for communications and technology companies, under pressure from their users, who are beginning to take measures to put some control back into the hands of their users14.

This growing consumer and citizen awareness and distrust looks set to accelerate and will increasingly become a factor in decision making for ordinary people – decisions about the products we use or abandon, the brands we associate with, the political leaders we elect. And as data insights become increasingly actioned by bossy tech, this will exacerbate the trend - behavioural observations, and the interventions that result, will increasingly be seen as unwarranted intrusions and restrictions on personal freedom and autonomy.

Digital activism will expand the digital commons: Consumers are taking matters into their own hands. A 2013 study from the Pew Research Internet project found that “86% of internet users have taken steps online to remove or mask their digital footprints—ranging from clearing cookies to encrypting

their email, from avoiding using their name to using virtual networks that mask their internet protocol (IP) address”15.

The plummeting cost and complexity, and increased ‘consumerisation’, of computing, processing and storage means that activists are now able to harness technology for themselves, without the aid of corporations and governments. The ‘digital commons’16 will continue to grow, empowering more and more citizens and consumers to take matters into their own hands, such as deploying end-to-end encryption, anonymizers17, and by “watching the watchers”18.

Business model disruption is inevitable: The default internet business model – advertising – is showing some signs of strain, and even the biggest players such as Google are openly exploring new models19. Yet the value in personal data is so great, and the levels of public mistrust in organisations’ handling and use of personal data is so high, that it is inconceivable to me that entrepreneurs will not make a serious effort to exploit this disparity. What we are already witnessing is the emergence of new business models that threaten to disrupt not just the default internet business model, but more broadly the assumption that the organisation is the natural and legitimate point of control and ownership of personal data. Instead, new disruptive providers are seeking to put the individual in control of their personal data20. In the process, they are seeking to disintermediate data-intensive businesses from their existing sources of data.

Regulation will get tougher: Policy makers will act to toughen laws, even though they move at geological speeds compared to the rate of technology development.

New laws and regulations are being promulgated around the world, many following the European model21. And Europe is on a journey to update and toughen its data protection laws22. The EU proposals will increase fines, place tougher requirements on organisations for obtaining consent, and create a new ‘data protection by design’ obligation. The fines alone will focus attention, forcing organisations to devote more time and resources to compliance.

Privacy is a Public Issue The public’s perception of the threats to privacy, personal freedom and autonomy – whether from corporations or governments - is growing. Privacy has already emerged beyond a niche, specialist concern to being a mainstream public issue.

Growing Distrust Growing consumer and citizen awareness and distrust looks set to accelerate and will increasingly become a factor in decision making for ordinary people – decisions about the products we use or abandon, the brands we associate with, the political leaders we elect.

Digital Commons The ‘digital commons’ will continue to grow, empowering more and more citizens and consumers to take matters into their own hands, such as deploying end-to-end encryption, anonymizers, and by “watching the watchers”.

Individual Control New disruptive providers are seeking to put the individual in control of their personal data. In the process, they are seeking to disintermediate data-intensive businesses from their existing sources of data.

Stronger Regulation Policy makers will act to toughen laws, even though they move at geological speeds compared to the rate of technology development.

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That the technology mega-trends predicted for 2020 and beyond will continue on their march seems to me to be inevitable; we’re just left debating the timeframe. But it’s the counter-trends that I believe will determine whether privacy is a winner or a loser.

Business models that put the individual in control: Today, data about people is almost exclusively controlled by organisations, whether public or private sector. People have very little control over their own personal data. If data is power, then the scales are tipped heavily in favour of corporations and governments against the individual.

But the cost and complexity of processing, storing, transferring, computing and analysing data are such that it is perfectly feasible for individuals to control their own data – in fact, billions of people now do this daily in a rudimentary form, as they manage profiles on social media, and use smartphones to capture, manipulate and share data. There is no longer any reason why the organisation should be the default point of control of personal data.

What’s more, where organisations function as the default data controllers, the economic potential for personal data is limited, because data remains locked up in corporate silos (even silos as big as those controlled by Google are still silos). The utility of much of this data cannot be unleashed because it cannot easily, legitimately or lawfully be connected with other data from other sources. This data only becomes really valuable when it can be combined with relevant data coming across all services that relate to a person’s life - online, retail, financial, governmental and the myriad other sources available.

New entrepreneurs recognise this and are developing solutions that put the individual back in control. By making the individual “the single point of control and integration of data about their lives”23, they are able to aggregate data about an individual from all sources and services. In doing so, they are creating an entirely new, and enormously valuable, asset class24 that is currently diminished by being spread across the myriad data silos owned

by the many hundreds of corporations and government agencies we interact with. And there is good evidence that this will enable entirely new services, and significant new economic growth and value25.

Aside from enabling economic growth, these new models also happen to offer a market-driven solution to many of the privacy problems we are facing with the onward march of data-generating technology where the organisation is the default controller of that data. Shifting the balance of power back towards the individual must produce a positive outcome for privacy. And because it also offers the possibility of enabling innovation and economic growth, privacy is no longer trapped in one–sided conflict with forces it cannot hope to defeat. It does not require a balance, or a trade-off, between privacy and growth – it enables both.

A typical example of the sort of new service provider that is beginning to emerge is the personal data vault or bank26. A personal data bank provides the single point of integration for personal data under the control of the individual, and provides related services (much like a normal bank does with your money) that enables the individual to get value from their data - from eliminating repetitive form filling (providing address, delivery and payment data to online merchants), to monetising one’s own data through purchase preference and ‘intent-casting’, to enabling new, complex ‘decision support’ services27. In this model, the individual becomes the curator of their own personal data, able to volunteer more, or more relevant, data and manage that data to ensure it is relevant, accurate and as comprehensive as they want it to be.

Once consumers have realistic alternatives, we can expect to see an end to the ‘privacy paradox’, i.e. individuals’ actual behaviours defying their expressed attitudes, as it becomes possible, without disproportionate consequences, to act upon those attitudes by making meaningful choices.

While the emergence of personal data banks and similar business models do not in and of themselves prevent organizations


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from collecting and exercising control over personal data regardless, they have the potential to disrupt this simply by being inherently more valuable. Because the value of personal data is closely connected to its relevance and currency – think of personal data as having a ‘half-life’ 28- ‘personally curated’ sources of data will have higher value simply due to the fact that they will represent the actual wishes and desires of an individual, rather than the presumed wishes and desires based on derived data. Plus, our personal data changes all the time (think of musical tastes, favourite bars or hangouts, travel interests, and, for many people, even where they live, or the job they are doing). Maintaining personal data at the level of accuracy and currency needed for many applications to be optimally effective is an impossible task for an organization without the individual’s direct involvement. Conversely, for the individual it is practically impossible to manage and keep up-to-date and accurate their own personal data when it is spread across hundreds of organisations, each with their own interfaces and approaches29.

Technology development that supports social norms and values; It’s a cliché that technology is disruptive. And too often we hear that we should accept disruption to our sense of privacy because technology has made it an outdated and redundant concept, and we can’t turn back the clock. Not infrequently the people who express these views are the very people who helped to create the technology that has brought these things to pass in the first place. This is simply a form of technological determinism.

But technology should and can develop in a way that reflects and supports social norms and values. Since technology is created by people, we are perfectly capable of creating it in ways that take account of privacy and other values. Urban architects have learnt to do this with our physical environment – concerning themselves not just about function and aesthetics, but also with broader environmental impacts, the need for building communal living spaces and creating a sense of community30.

More significantly, technology is largely the product of private enterprise. To understand why technology has developed the way it has, or how it will develop in future, we need to understand the economic motivations and drivers of those who create it, and the business models that justify investment.

Early applications for data processing technology were focused on efficiency – replacing manual processes with automated processes. Automated data processing requires data as input, but once used, remained surplus to requirements. Personal data was relatively scarce, and even though it was recognised that data needed to flow across borders, it was not seen as a valuable asset in and of itself. But it was recognised that automated data processing had the potential to cause harm to people’s privacy, and so new codes and regulations31 were created that essentially treated personal data like ‘toxic waste’, to be contained and made safe. Now, today, rather than being a mere by-product of digitisation, data is a resource defined by superabundance, and has become perhaps the most important driver of economic growth in the digital economy. This will become even more so as we move towards 2020. Organisations are therefore incentivised to create and capture personal data and exercise control over it.

In short, technology continuously causes friction with privacy because commercial organisations haven’t really tried to address the problem. While “Privacy Enhancing Technologies” have a reasonably long history, particularly within academia, they have failed to be adopted commercially or at sufficient scale32. For instance, cryptographic tools have not been adopted by the general user due to a lack of commercial investment in embedding them seamlessly into products that consumers want33. This is because, beyond mere legal compliance, privacy hasn’t featured as a strategic priority, and correspondingly there has been insufficient investment by organisations in developing the broader range of skills and expertise needed to create and deploy privacy-enhancing products or services, such as in product marketing, engineering or user

Personally Curated Data ‘Personally curated’ sources of data will have higher value simply due to the fact that they will represent the actual wishes and desires of an individual, rather than the presumed wishes and desires based on derived data.


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experience. There simply hasn’t been a sufficient incentive to do so. And now there is precisely the opposite incentive – to generate and use data as a revenue driver in and of itself.

However, if the individual begins to become the point of control, businesses that want to leverage the vast pool of personal data assets available will need to compete with each other to provide the most attractive destination for people’s data. And if businesses are competing to provide individuals with the best ‘personal data banks’ and other tools that enable them to gain control of their own data, and ‘invest’ it on their own terms, then it will become a business imperative to find innovative and attractive approaches to issues such as individual control and permission, transparency and usability, data portability and ownership, as well as data protection, anonymisation and other counter-surveillance measures. There will be an economic incentive to encourage technology development where personal data control and privacy are functional necessities, not regulatory pipe dreams.

This in turn will create a demand by organisations for new skills from technologists and service designers that enable them to create products that embed respect for privacy- related values from the outset. Universities and colleges will seek to meet this demand by providing courses and modules on the fundamentals of what privacy is and why it’s important, but also qualifications in new fields like privacy engineering and privacy design.

The contrast in this respect between privacy and security couldn’t be greater. On the one hand, the security industry has been estimated to be worth $350 Billion in the US alone34; security is a sophisticated and maturing market. The ‘privacy industry’ by contrast is hardly recognizable at all. The reason is simple - in an organisation-centric world, where data is valuable and where corporations control data, it is in their self-interest to secure that data. Hence, supply meets demand. But in the privacy arena, there has simply been insufficient demand to

stimulate a supply.

But this is changing. Something approximating a privacy marketplace is now becoming a reality35, consisting of tools that prevent tracking36 and other counter-surveillance services on the one hand37, and personal data vaults and banks that enable the curation and management of one’s own data on the other38. Major players in the internet and communications space have also already begun to lay down their markers39. As this market develops, consumers will benefit from the greater control over their personal data that results.

Second generation regulation: Nevertheless, we must be wary of substituting technological utopianism with economic utopianism. These competitive forces can be harnessed, but are unlikely to create change for the good all by themselves. Regulation has an important role to play. But we need a different type of regulation to the existing data protection and privacy regulation we have today.

Existing data protection regulation emerged in the 1970s and 1980s in response to computing and data processing developments beginning in the 1960s. The underlying assumption was that data processing would always be a complex and resource intensive activity, and hence would always be the preserve of large, well-resourced organizations. Individuals needed the protection of regulation against the impacts of automated data processing and the decisions it enabled. The regulatory frameworks were generally “command and control” style frameworks that provided rules that regulated the behaviour of large, static organization (the ‘data controller’), and were designed to protect the individual who lacked any means to exercise control themselves (the ‘data subject’).

This assumption that the organization is the natural point of control for personal data no longer holds. Yet our current data protection frameworks are built upon this assumption. Even the latest EU proposals are still essentially based on this model40. But with the real possibility for personal control over personal data, and business models

Privacy Visibility The security industry has been estimated to be worth $350 Billion in the US alone; security is a sophisticated and maturing market. The ‘privacy industry’ by contrast is hardly recognizable at all.


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emerging to support this, policy makers need to focus on helping this nascent market develop, rather than trying to stem the tide of technology with rules and guidelines.

What’s more, policy makers have struggled to find ways to effectively regulate technology in a way that produces commercially deployed technologies that reflect or support privacy norms and values, rather than disturbing them. While there are regulatory restrictions surrounding the use of personal data, this has predominantly resulted in legalistic methods of compliance. I would contend that these haven’t had any significant impact on the design of technologies themselves, how they generate data, or how they make that data available.

Issuing decisions and guidelines after technology has already been commercially adopted and has started to negatively impact privacy is like closing the stable door after the horse has bolted41. And yet while concepts like data protection or privacy ‘by design’ are constructive ideas, they are unlikely to translate into better technology design on a large scale simply because they happen to appear in a regulatory instrument42. What is so often needed on many aspects of privacy is creativity and innovation, and you cannot command an organization to innovate.

But you can incentivize it to innovate. If a market is encouraged to develop where individuals are placed in a controlling position at the centre of a personal data market and ecosystem, there will be economic incentives to look for better solutions to issues people care about. The role of regulation should then become less about issuing detailed rules and requirements (e.g. telling companies what to include in their privacy statements, or specifically how they should capture consent, or whether they need to seek regulatory approval to use data for certain purposes), and more about ensuring that fair and open competition develops and operates to produce beneficial privacy outcomes for individuals, while also allowing innovation and growth with data. This type of regulation has been called “second generation”

regulation, a term coined by Professor Dennis Hirsch in the context of evolving environmental regulation43. Hirsh describes the evolution from the not-so-effective early post-war environmental “command and control” regulation to the more sophisticated and effective frameworks we see today that embrace a broad understanding of how economic incentives can stimulate innovation. Hirsch sees a parallel between regulating information privacy and environmental degradation – both require innovation if they are to achieve satisfactory and effective outcomes without stifling economic growth.

However, one very important principle that has emerged within Europe’s attempt to modernize its data protection regime is “data portability”44. This principle will require organisations to allow personal data to be exported to another entity at an individual’s request. While the mechanisms for achieving this are by no means trivial (look at how long it took the mobile industry to implement mobile number portability, which is a far simpler undertaking), this is the sort of measure that will facilitate a personal data market to develop and grow. It is both a typical “second generation” form of regulation, and an essential component of an individual taking control of their personal data.


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Threats to privacy from new trends and developments in technology look set to continue in 2020 and beyond. But the impact of the counter-trends and the effect they may have in constraining or shaping technology has received less attention – perhaps with the exception of law and regulation. As someone who has spent most of their professional life helping large organisations comply with law and regulation, I am often surprised at the level of faith in the law or regulation alone in delivering acceptable outcomes to complex problems like the impact of technology on our privacy.

Law and regulation is very effective at creating momentum and movement. By creating fear in board rooms, it can galvanise organisations to focus on compliance. But this does not guarantee that the things organisations do as a result will be pleasing to all concerned, even if they appear to meet the requirements of the law, and organisations can claim to be fully compliant. This is the problem we have faced to date with technology and privacy – there is no lack of law, legal opinion and guidance; yet there is continuing dissatisfaction with how things are, i.e. the outcomes we are left with.

This is because very often policy makers do not know what those outcomes should be and it would be a mistake for the law to try to determine them. While we are capable of identifying what we don’t like, it’s much harder to say what we do like - or more to the point, how we would like the future to actually look.

It’s therefore a case of sticks and carrots. Hit the donkey with a stick and the donkey will move. But it’s unlikely to go in the direction we want it to. Dangle a carrot under its nose in the direction we do want it to go, and it will generally follow the carrot. Law and regulation is good at creating impetus and momentum, but it won’t guarantee that we get to a desirable destination. To do that, we need incentives. Fortunately, the green shoots of these incentives can be found among the other counter-trends.

The possibility that individuals can now begin to take control of their own personal data is upending long established norms

about the control of personal data - the assumption that the organisation is the default point of control. This is heralding the emergence of new entrepreneurs that see an opportunity to strike a new deal with consumers, offering them control. But not control simply for its own sake (worthy though that may be); rather control as a way to exercise greater autonomy over many aspects of their lives that today are made too complex and too difficult by data being controlled elsewhere. And in doing so, there is the potential to unlock enormous economic value from personal data.

This potential for economic disruption to come to the aid of privacy (if not its complete rescue) by shifting power over data from the organisation to the individual is one of the most significant trends emerging as we look to 2020. It needs to be harnessed if we want to shape the development of technology to preserve the rights enshrined in all the major human rights instruments.

The 19th August 2014 was the 25th anniversary of the Web. This year, 2015, is the 800th anniversary of one of the most important legal developments in history – the Magna Carta. The Magna Carta was all about a shift in power – from the English King to the nobles, but in defining the principles for how power is distributed and constrained, it laid down the foundations of England’s legal system, and has influenced legal systems across the world. In celebration of the 25th anniversary of the web and the 800th anniversary of the Magna Carta, Sir Tim Berners-Lee has called for the creation of a ‘Magna Carta for the Web’ in 201546, and has declared that we need to “hardwire the rights to privacy, freedom of expression, affordable access and net neutrality into the rules of the game”47.

This is a fitting aspiration. But just as the Magna Carta was a response to the shift of power from King to nobles, hardwiring the web in order to protect privacy will require a shift of power over personal data from the organisation to the individual.

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Shifting Power To The Individual This potential for economic disruption to come to the aid of privacy if not its complete rescue) by shifting power over data from the organisation to the individual is one of the most significant trends emerging.


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1 Brian David Johnson, Intel, Wired UK retail talk, available at: http://www.wired.co.uk/news/archive/2014-11/24/brian-david-johnson-intel (accessed 10/12/2014)

2 ABI Research, “The Internet of Things Will Drive Wireless Connected Devices to 40.9 Billion in 2020”, available at: https://www.abiresearch.com/press/the-internet-of-things-will-drive-wireless-connect (accessed 10/12/2014)

3 ICD white paper, “The Digital Universe of Opportunities: Rich Data and the Increasing Value of the Internet of Things”, April 2014, available at: http://idcdocserv.com/1678 (accessed 10/12/2014)

4 Blogger Alistair Croll declares that “Personalization” is another word for discrimination” in his post titled “Big data is our generations civil righjts issue”, available at: http://solveforinteresting.com/big-data-is-our-generations-civil-rights-issue-and-we-dont-know-it/ (accessed 23/11/2014)

5 Evgeny Morozov homepage, available at: http://www.evgenymorozov.com/ (accessed 01/12/2014)

6 Observer Ideas - A Festival for the Mind, 12 October 2014. For an introduction: http://www.theguardian.com/reader-events/2014/jul/18/observer-ideas-2014-an-intoduction (accessed 17/12/2014)

7 Barclay Ballad, “Now you can get financial reward for your personal fitness data”, 9 December 2014, available at: http://www.itproportal.com/2014/12/09/health-insurance-firm-offering-240-year-personal-data/ (accessed 17/12/2014)

8 Liberty Global, “The Value of Our Digital Identity”, available at: http://www.libertyglobal.com/PDF/public-policy/The-Value-of-Our-Digital-Identity.pdf (accessed 10/12/2014)

9 Gartner, Inc. newsroom, “Gartner Says the Internet of Things Installed Base Will Grow to 26 Billion Units By 2020”, available at: http://www.gartner.com/newsroom/id/2636073 (accessed 09/12/2014)

10 Harbour Research, “Where Will Value Be Created In The Internet Of Things & People?”, available at: http://harborresearch.com/where-will-value-be-created-in-the-internet-of-things-people/ (09/12/2014)

11 Mark Little, Ovum, “Personal Data and the Big Trust Opportunity”, available at: http://www.ovum.com/big-trust-is-big-datas-missing-dna/ (accessed 10/11/2014)

12 World Wide Web Foundation, “Recognise the Internet as a human right, says Sir Tim Berners-Lee as he launches annual Web Index”, available at: http://webfoundation.org/2014/12/recognise-the-internet-as-a-human-right-says-sir-tim-berners-lee-as-he-launches-annual-web-index/ (accessed 17/12/2014)

13 The Royal Statistical Society, “New research finds data trust deficit with lessons for policymakers”, available at: https://www.ipsos-mori.com/researchpublications/researcharchive/3422/New-research-finds-data-trust-deficit-with-lessons-for-policymakers.aspx (accessed 10/12/2014)

14 Apple, Inc, “A message from Tim Cook about Apple’s commitment to you privacy”, available at: https://www.apple.com/uk/privacy/ (accessed 10/12/2014)

15 Pew Internet Research, “Anonymity, Privacy and Security Online”, 5th September 2013, available at: http://www.pewinternet.org/2013/09/05/anonymity-privacy-and-security-online/ (accessed 12/12/2014)

16 In her 2012 book, “Consent of the Networked”, Rebecca Mackinnon describes how activist individuals play a key role in influencing the shape of technologies and the balance of power in her chapter on the Rise of the Digital Commons. Summary available at: http://consentofthenetworked.com/about/

17 For example, The Onion Router (TOR). See the Wikipedia entry available at: http://en.wikipedia.org/wiki/Tor_%28anonymity_network%29

18 An example is the TrackMap project, whose aim is to show where data travels when people visit their favourite news websites through visualization, available at: https://github.com/vecna/trackmap (accessed 15/12/2014)

19 CITEworld, “Google for business: Now 100 percent ad-free”, 16th May 2014, available at: http://www.citeworld.com/article/2156043/cloud-computing/gmail-ad-free.html (accessed 10/12/2014)

20 Ctrl-Shift, “New market for ‘empowering’ personal data services will transform relationships between customers and brands”, 20th March 2014, available at: https://www.ctrl-shift.co.uk/news/2014/03/20/new-market-for-empowering-personal-data-services-will-transform-relationships-between-customers-and-brands/ (accessed 10/12/2014)

21 For example, in South Africa the Protection of Personal Information Act 4 of 2013 (http://www.saflii.org/za/journals/DEREBUS/2014/84.html), in Ghana the Data Protection Act 2012 (http://mobile.ghanaweb.com/GhanaHomePage/NewsArchive/artikel.php?ID=229717) and in India proposals in the form of a Privacy Bill (http://www.dataguidance.com/dataguidance_privacy_this_week.asp?id=2233)

22 European Commission Data Protection newsroom, available at: http://ec.europa.eu/justice/newsroom/data-protection/news/120125_en.htm

23 Alan Mitchell, Strategy Director, Ctrl-Shift, speaking on “The Business and Economic Case” at Personal Information Economy 2014, available at: https://www.youtube.com/watch?v=xbQh0DNzAlA&feature=youtu.be&t=5m2s (accessed 17/11/2014)

24 World Economic Forum, “Personal Data: The emergence of a new asset class”, available at: http://www3.weforum.org/docs/WEF_ITTC_PersonalDataNewAsset_Report_2011.pdf (accessed 10/12/2014)

25 Ctrl Shift, “Personal Information Management Services: An analysis of an emerging market”, available at: https://www.ctrl-shift.co.uk/research/product/90 (accessed 12/12/2014)

26 Some examples are You Technology (http://you.tc/), Personal.com (https://www.personal.com/) and QIY (https://www.qiy.nl/)

27 An example of a complex decision support service would, for instance, enable a household to recalibrate its domestic energy consumption needs. For more information, see “Personal Information Management Services: An analysis of an emerging market”, supra note 27.

28 Martin Doyle, “The Half Life of Data”, available at: http://www.business2community.com/infographics/half-life-data-infographic-0971429 (accessed 10/12/2014)

29 Online contact books, like Plaxo (http://www.plaxo.com/), and social networking services like Facebook (https://www.facebook.com/) and LinkedIn (https://www.linkedin.com/home) are good examples of how there has already been a shift of control to the individual. In these cases, the process of giving out contact information (e.g. via business cards) and allowing others to manage one’s contact data is replaced with the individual managing their own contact information and creating stable connections online with people they want to stay in touch with.

30 Somewhat ironically, urban architecture is also concerned with other social issues, such as how to reduce crime in urban planning and design through ‘natural surveillance’.

31 The 1980 OCED Guidelines on the Protection of Privacy and Transborder Flows of Personal Data (http://www.oecd.org/internet/ieconomy/


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Group Privacy Officer and Head of Legal – Privacy, Security & Content Standards at Vodafone Group Lead expert on the Future of Privacy.

Stephen Deadman is a lawyer and privacy expert. Until recently, he was the Group Privacy Officer and Head of Legal – Privacy, Security & Content Standards at Vodafone Group where he worked on many of the emerging issues for the mobile and telecoms industry including geo-location services, the mobile app economy, Big Data and analytics, identity management, law enforcement and human rights.

Stephen has also played an active role in the protection of human rights in the ICT sector since 2005, working closely with civil society organisations, academics and ethical investors. Stephen was the European Chair of the Public Policy Expert Group of the Liberty Alliance from 2005-6. He played an active

role in the formation of the Global Network Initiative in 2008 and in 2009 he helped found and co-lead the Mobile Privacy Initiative, a global industry collaboration managed by the GSMA, designed to create a framework to advance privacy in the evolving mobile internet eco-system. More recently Stephen helped found the Telecoms Industry Dialogue on Freedom of Expression and Privacy, which was launched February 2013.

Lead Expert – Stephen Deadman

32 As this recent academic paper illustrates, solutions are available to many of the privacy problems highlighted with pervasive technologies - “A Roadmap for IoT/Cloud/Distributed Sensor Net Privacy Mechanisms”, available at: http://internet-science.eu/publication/1141 (accessed 15/12/2014)

33 Justin Troutman, “People Want Safe Communications, Not Usable Cryptography”, MIT Technology Review, available at: http://www.technologyreview.com/view/533456/people-want-safe-communications-not-usable-cryptography/ (accessed 12/12/2014)

34 ASIS International, “Groundbreaking Study Finds US Security Industry to be Worth $350 Billion Market”, available at: https://www.asisonline.org/News/Press-Room/Press-Releases/2013/Pages/Groundbreaking-Study-Finds-U.S.-Security-Industry-to-be-$350-Billion-Market.aspx (accessed 17/12/2014)

35 Mark Little, Ovum, “Personal Data and the Big Trust Opportunity”, available at: http://www.ovum.com/big-trust-is-big-datas-missing-dna/ (accessed 10/12/2014)

36 For example, Ghostery, Inc. Website available at: https://www.ghostery.com/en-GB/

37 For example, devices like the Blackphone are designed to ensure highly secure and encrypted mobile communications. Website available at: https://www.blackphone.ch/

38 Supra note 27

39 CNET, “Google to encrypt data on new version of Android by default”, available at: http://www.cnet.com/uk/news/google-to-encrypt-data-by-default-on-new-version-of-android/ (accessed 17/12/2014); and see supra note 14.

40 The current draft of the EU Data Protection Regulation is available at: http://ec.europa.eu/justice/data-protection/

document/review2012/com_2012_11_en.pdf (accessed 17/12/2014)

41 The controversy over the European Court of Justice decision in the so-called ‘right-to-be-forgotten’ case against Google is illustrative of this, where traditional data protection rules are applied to a technology, i.e. search engines, that was never designed to ‘forget’, to ‘age’ search results, or otherwise address the privacy issues with indexing against individuals’ names. The European Commission’s Factsheet on the case is available at: http://ec.europa.eu/justice/data-protection/files/factsheets/factsheet_data_protection_en.pdf (accessed 12/12/2014)

42 Article 23 (Data Protection by Design and Default) in the Draft Data Protection Regulation, available at: http://ec.europa.eu/justice/data-protection/document/review2012/com_2012_11_en.pdf (accessed 17/12/2014)

43 Dennis D. Hirsch, “Protecting the Inner Environment: what Privacy Regulation can Learn from Environmental Law”, available at: http://users.law.capital.edu/dhirsch/articles/hirschprivacyarticle.pdf (accessed 01/12/2104)

44 Article 18 (Right to Data Portability), available at: http://ec.europa.eu/justice/data-protection/document/review2012/com_2012_11_en.pdf (accessed 17/12/2014)

45 For a general description of mobile number portability - http://en.wikipedia.org/wiki/Mobile_number_portability (accessed 15/12/2014)

46 “Tim Berners-Lee calls for internet bill of rights to ensure greater privacy”, The Guardian, available at: http://www.theguardian.com/technology/2014/sep/28/tim-berners-lee-internet-bill-of-rights-greater-privacy (accessed 17/12/2014)

47 Supra note 12


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Professor Suzanne Benn - Professor of Sustainable Enterprise, UTS Business School, Sydney

The Future of Resources

Put simply the global challenge for the future of resources is to find a way in which we can establish a commercially, socially and environmentally sustainable society where there is a balance between human consumption and the availability of natural resources. We are living through a time when there is an increasing number of people consuming more and we are using more natural resources than the planet can replenish. We should all be concerned about the increasing demand / supply imbalance.

Growing populations and rising consumer demand related to both higher standards of living across all societies and pressures of consumer capitalism are increasing consumption of resources. As we head towards a global population of around 9 billion, we can also see many economies expanding which means consumption per capita of many key resources is increasing steadily: China, for example, has used more cement in the last three years than the US used in the entire 20th century, and yet there are still around 150 million Chinese people living below the poverty line.

The evidence of an unsustainable trajectory is clear despite the fact that there has been a decline in global trade growth since 2010, it is still growing and the WTO expects global GDP to continue to rise at well above 3% per annum in the years to come. Oil prices have recently been declining but we can see

rising commodity prices across many areas from wheat and rubber to nickel and steel. Production of most commodities has risen sharply over the past decade. The world’s output of iron ore, for example, has roughly tripled since 2000. With nickel and copper production both now rising at more than 10 per cent over the past couple of years, we are also faced with declining grades of ore which in turn require greater energy input to extract the target resource. Demand is increasing but production efficiency in some areas is declining.

At the same time we can see growing volumes of waste especially in cities, particularly food waste – 30% of which is now thrown away every day in Europe. While energy use per capita generally improves as people move into urban environments, rising urban populations means that net energy use continues to increase in most nations. Furthermore with limits to cheap energy increasingly apparent, as we reach resource thresholds such as peak oil we are forced to exploit secondary sources such as tar sands and shale oil, which are more costly to extract and have significantly larger ecological footprints than the original oil reservoirs. This is true for the majority of minerals we need for modern society and while fracking is providing a short-term fix in some countries, it is not a long-term solution.

Reaching the Limits We are living through a time when there is an increasing number of people consuming more and we are using more natural resources than the planet can replenish. We should all be concerned about the increasing demand / supply imbalance.

More Demand: Less Efficient Production The world’s output of iron ore, for example, has roughly tripled since 2000. With nickel and copper production both now rising at more than 10 per cent over the past couple of years, we are also faced with declining grades of ore which in turn require greater energy input to extract the target resource. Demand is increasing but production efficiency in some areas is declining.

More, Not Less Waste We can see growing volumes of waste especially in cities, particularly food waste – 30% of which is now thrown away every day in Europe.


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With increasing global focus on trying to (finally) make greater progress at UN climate talks, key questions are being asked for the future. Most significantly more are questioning when the perpetual economic growth model can be substituted - whether we can achieve ‘prosperity without growth’ and what role decoupling of these two can play. With an ever-increasing gap between rich and poor in most regions of the world, others are asking what roles will social and economic instability and unrest play?

More are recognising that better leadership from government, business and civil society is required to ensure adequate access to resources for today and tomorrow’s population without depleting or devaluing them. As our individual and collective footprints become more tangible and better communicated, bold moves to shift the dial are needed across the board. New management approaches and business models are needed that can bring

together advances in IT, industrial ecology and biotechnology for more sustainable production.

More specifically, as the principle of the circular economy gains wider traction and we see industrial and societal resources conversations shifting from ‘cradle to grave’ to the more holistic ‘cradle to cradle’, we need to better understand what changes are needed to bring this into the mainstream. We have to work out how best to see and use waste as a resource. What changes are required to industrial processes and how can we best establish an improved global accounting system that considers human wellbeing, resource use and pollution alongside GDP are two pivotal questions to address. And, at the same time, we have to fully recognize the limits to the circular economy if we are to continue with the forecasted dependency on fossil fuels as a major energy supply for the rest of the century.

We know that over the next decade, as there is a further rise on consumer capitalism across the developing world, we will continue to see rising consumption but that in China demand for some key resources such as copper, steel and coal will finally peak. With the dual challenges of rising costs and poorer quality resources we also know that there will be improvements made in resource productivity – both in extraction and use. We also know that greater digital connectivity and innovation will have an impact in enabling us to both reduce the need for some human mobility and provide greater transparency on how we use our resources and with what environmental, social and financial impact. AibBnB and Uber are just two of the most newsworthy digital platforms that provide the connectivity for a more collaborative economy with better use of material capital.

What we don’t know is whether there will be fundamental macro shifts that help or hinder progress. With economists debating whether or not several major regions are entering, or

will enter, recession and predict stagflation over the next decade, it is possible we will see another global, or multi-regional, financial crisis. Although there were some positive signs of movement at the Lima UN Climate Change talks in December 2014, we are unclear as to whether we will see significant global response to climate change in the next decade or if we will need to wait longer before we reach a tipping point for globally agreed collective action. At the same time, there may well be a significant bottom-up groundswell of opinion in society outside government and industry that creates a socio-political shift that recognizes the resource limits problem will occur before the ecological limits are reached.

Recognising that stemming the tide of rising consumerism across large tranches of global society may take some time to reset, potential solutions on the table already include improved design of products and services: This is about moving beyond transitional design for disassembly and reducing waste production to more fully embracing the principles of cradle

Decoupling More are questioning when the perpetual economic growth model can be substituted - whether we can achieve ‘prosperity without growth’ and what role decoupling of these two can play.

Digital Transparency We also know that greater digital connectivity and innovation will have an impact in enabling us to both reduce the need for some human mobility and provide greater transparency on how we use our resources and with what environmental, social and financial impact.

Societal Action There may well be a significant bottom-up groundswell of opinion in society outside government and industry that creates a socio-political shift that recognizes the resource limits problem will occur before the ecological limits are reached.


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Net Positive Impact This is about moving beyond transitional design for disassembly and reducing waste production to more fully embracing the principles of cradle to cradle and the circular economy. It is about net positive impact and not just being carbon, water or energy neutral.

Global and Regional Agreements While bilateral trading relationships are more probable, the opportunity for global and regional agreements has to be pursued.

Active Divestment Another potential change on the horizon is the influence of the divestment movement focused on taking action against the influence of the fossil fuel industry and calling on financial and other investment institutions to divest from associated companies.

to cradle and the circular economy. It is about net positive impact and not just being carbon, water or energy neutral.

In addition, there are many initiatives underway focused on resources agreements both globally and regionally: In December 2015, we will have the Paris summit where 196 countries will meet to hopefully sign a new climate change agreement while the EC’s Europe 2020 strategy includes the target of a more resource efficient Europe: (to help decouple economic growth from the use of resources, by decarbonising the economy, increasing the use of renewable sources, modernising the transport sector and promoting greater energy efficiency). Although nothing about such agreements

and targets is certain, they do at least show intent. While bilateral trading relationships are more probable, the opportunity for global and regional agreements has to be pursued.

Another potential change on the horizon is the influence of the divestment movement focused on taking action against the influence of the fossil fuel industry and calling on financial and other investment institutions to divest from associated companies. If this movement is successful and reduces the reliance on fossil fuels it could put in place the commitment socially and politically to keep existing fossil fuels in the ground. This will be accompanied by support for alternate energy systems and, with momentum may well be extended to encompass other resources.


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LearningSitting here in Sydney, my primary hope for the next decade is that Australia seeks to follow the lead of countries such as Germany and to become more resource efficient. In addition, my home-country could also consider the competitive advantage to be gained in leading on the creation of a Circular Economy and developing a transition pathway to pursue it: Such a shifts will require collaboration and coordination of an integrated approach across education, industry, regulation innovation and financing. We need to shorten and simplify supply chains. Taking a lesson from the past, we can maybe learn from the Australian Landcare movement, which achieved success in remediating the deterioration of Australian farmlands through bottom up collective action.

At a global level, I would advocate that we focus on changing fundamental attitudes and behaviours through encouraging education systems to work across traditional boundaries so students are encouraged to think creatively to address real world problems. Changing industrial and business models also requires current employees to develop new skills to generate change. As such, the enabling education systems

also have to operate across organizational development frameworks and programmes. We know what to do, the challenge is to do it at scale: aligning virgin material supply chains with waste and secondary use supply chains already occurs in some parts of the construction industry; some retailers have started to advocate precompetitive collaboration through the value chain to bring about systemic change; and there are numerous examples of the rise of community-based and cooperative businesses that are providing goods and services with shorter supply chains and greater provenance.

At a fundamental level some see that we need to ensure a re-evaluation of value away from traditional economic value to an integrated view of value and well-being. The ultimate aim is to re-align the money, the economy and the financial system with human and natural realities and the rest will follow. In Europe, energy company E-on has just split in two to enable it to divest of higher risk business models. Similar changes will need to occur across not just the energy sector but the wider resource supply chains.

The Future of Resources The Future of Resources

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LearningIf we can achieve a shift in attitudes and behaviours supported and cemented by mandatory agreements, then we will see changes at multiple levels. If exports from minerals decline further in Australia we will need a new base upon which to grow national wealth going forward.

Globally the primary opportunities (across all themes) include the acceleration of current approaches and undertaking more research into renewable energy sources, products and services to replace fossil fuels. Supporting this will be a drive for changes in consumption patterns and changes in accumulation of material status symbols but, with the current desire for greater personal wealth evidently in full force, this may take longer than the next decade to course-correct. More immediately we may see increased IT enabled transparency in traditional industrial processes and greater

collaboration between firms across different sectors and between firms within sectors all focused on tangible but significant shifts in priorities and activities.

As the Stockholm Resilience Institute has highlighted, there are nine so called planetary boundaries – areas where we are in danger of exceeding the Earth’s natural thresholds. Ideally these should not be overstepped if mankind is to continue to live on earth in a viable manner. However we have already lept over three of these boundaries - climate change, biodiversity and the nitrogen cycle. Without fundamental and significant global shifts now, and not tomorrow, we stand little chance of regaining the balance. A more informed, better understood, clearly communicated and socially embedded view of how we use and reuse our resources is imperative.

Shifting The Dial We may see increased IT enabled transparency in traditional industrial processes and greater collaboration between firms across different sectors and between firms within sectors all focused on tangible but significant shifts in priorities and activities.

Professor of Sustainable Enterprise, UTS Business School, Sydney Lead expert on the Future of Resources.

Professor Suzanne Benn is Professor of Sustainable Enterprise in School of Management, UTS Business School. In this position she provides leadership within the Business School and across UTS, working with other disciplinary areas and external stakeholders to promote sustainability. She was previously Professor of Education for Sustainability, Director of ARIES and Head of the Graduate School of the Environment at Macquarie University, Sydney. Professor Benn has modified and taught curriculum on sustainable business at the University of Shanghai, and led the introduction of these programs into the undergraduate and postgraduate curriculum at UTS and at Macquarie. She has a strong interest in interdisciplinary curriculum development and holistic approaches to learning for sustainability.

Lead Expert – Professor Suzanne Benn


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Glenn Lyons - Professor of Transport and Society, UWE Bristol

The Future of Transport

Transport is the glue that binds the many elements of society together. It transcends distance to enable us as individuals and organisations to connect with people, goods, services and opportunities. As the world’s population grows and pursuit of economic and social prosperity continues, the amount of glue that is needed increases. In an effort to enable prosperity, transport infrastructure has grown and significantly shaped and defined our built environments. Use of that infrastructure, as well as securing benefits, imposes significant social, environmental and economic costs on society.

The scope of transport is vast covering road, rail and air with movement at local, regional, national and international levels. Different parts of the world are at different stages in the evolution of their transport systems. Some countries face ageing and heavily used infrastructure. Others are seeking major expansion with the prospect of unlocking prosperity. Movement of people and goods has now been joined by movement of information as society connects through the possibilities brought about by the digital age. It is estimated that nearly two fifths of the world’s population are now internet users and almost one quarter were smartphone users by 2014. This compares to the latest World Bank estimate (2011) putting the number of passenger cars per 1000 population globally at 123.

There are several major global challenges facing transport. If transport is key to economic prosperity then it is essential to accommodate demand for transport within the capacity of the infrastructure. In this context the challenge is to ensure relative ease of movement through improvements to the efficiency of operation of the transport system or by expanding its capacity. The transport system and its use lead to adverse environmental and social impacts including greenhouse gas emissions, damage to the natural environment, noise and poor air quality, social exclusion and intrusion into the built environments of our communities. There is therefore a challenge to look to technological advances and fiscal and regulatory measures to address adverse impacts of the transport system and its use. Investment in new infrastructure is expensive for example an estimate for the UK indicates an average cost for a km of new motorway at around £18 million or $29 million. As the infrastructure is expanded and as it ages, the cost of maintaining that infrastructure (and the services using it) also increases. In austere financial times there is a significant challenge for governments being able to fund the transport system.

Perhaps the greatest challenge of all is for decision makers responsible for transport systems to come to terms with the relationship between transport and society.

The Funding Challenge As the infrastructure is expanded and as it ages, the cost of maintaining that infrastructure (and the services using it) also increases. In austere financial times there is a significant challenge for governments being able to fund the transport system.


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A transport system’s development is not merely a response to societal need. Changing the transport system changes society – in terms of land use development, locational decisions, social and business practices and the behaviours of individuals and organisations. The challenge for transport is to contribute to supporting and improving society rather than only serving it and risking unintended, unanticipated and unwelcome consequences. This is far from easy when addressing a complex system involving multiple actors and when faced with short-term political and shareholder imperatives.

There is a need to understand why, in a number of countries with developed transport systems, the long run trend of growth in car use has come to a (temporary) halt (with population growth offsetting decline in average car travel per person) For example in New Zealand the amount of vehicle kilometres travelled per person (regardless of vehicle type) in 2013 was four percent lower than in 2003.There are several possible contributory factors beyond economic conditions including trends in urbanisation, the reduced propensity of young people to learn to drive and the increasing role of virtual mobility in society.

There is considerable uncertainty about the future of what has been a car-centric transport system and wider society. Professional opinion is divided. A case can be made for this ‘automobilty regime’ enduring and evolving with efforts principally targeted at reducing its adverse effects. Meanwhile, a case exists that society is undergoing a regime transition – driven by a number of factors including the digital age. This holds that economic and social connectivity is increasingly being realised by proximity (brought about by urbanisation) and virtual mobility (brought about by rapidly growing consumption of information and communications technologies (ICTs)); and that the car is moving to become a background functional technology in society.

In the face of demographic, technological, environmental, social and economic change, there are two questions that reflect critical uncertainties for the future (especially in the longer term):

(i) What will society want to do in terms of how it configures and connects?;

(ii) What will society be able to (afford to) do in terms of how it configures and connects?

Immediate imperatives are seen to relate to economic recovery for many countries. In this regard transport infrastructure investment has strong appeal – the investment itself creates employment and economic flows and the historic association between transport and the economy holds the promise of infrastructure enabling more movement and in turn more economic activity. European Union financing for transport connections has tripled for the period 2014-2020 compared to the preceding six year period. A key question is whether and how such investment should be made in order to support an appropriate society in the longer term.

In terms of road transport, for the decade ahead, we are set to see much attention

being given to innovation in transport technology as a supposed key to cleaner, more efficient (and safer) transport. This concerns, in particular, the prospect for a growth in electric and hybrid-fuel vehicles as a share of the fleet alongside the introduction of self-driving vehicles. Meanwhile for countries with less advanced transport systems, motor manufacturers are likely to focus upon growth in sales of vehicles based on established technologies.

Whether or not they receive as much attention as those above, other important considerations concern how notions of vehicle ownership and transport service provision may be changing as well as the role of movement of information as an alternative

Transport and Society The challenge for transport is to contribute to supporting and improving society rather than only serving it and risking unintended, unanticipated and unwelcome consequences.

Increased Proximity Economic and social connectivity is increasingly being realised by proximity (brought about by urbanisation) and virtual mobility (brought about by rapidly growing consumption of information and communications technologies: and that the car is moving to become a background functional technology in society.

Driving Economic Growth Transport infrastructure investment has strong appeal – the investment itself creates employment and economic flows.


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to movement of people as we continue further into the digital age. Sharing and hiring of vehicles may progressively replace conventional ownership of vehicles. New models of ridesharing services are emerging with prospects for hybridization of what we have previously known as public and private transport. For example, Uber, a ridesharing service that uses smartphones to connect passengers to drivers, was launched in 2010 and is now reportedly available in some 200 cities worldwide with the company valued at around $18 billion. As e-commerce grows globally, there are consequences emanating from developments in the retail sector for demand for shopping trips as well as the movement of goods from seller to buyer.

Fundamentally, society has two options. The first is to accommodate current and perceived future demand. The second is to shape the demand for travel by particular means through both push and pull measures that encourage behaviour change towards travel by different modes, at different times and between different locations; and which may also encourage less travel and greater reliance on proximity and digital connectivity. The first option has proved to be more politically palatable but tends to be more exposed to

feedback effects arising from supply affecting rather than only accommodating demand. The two options can be seen respectively as ‘predict and provide’ (responding to presumed need) and ‘decide and provide’ (taking the opportunity to shape change in the face of uncertain (future) need).

Solutions that the establishment is likely to give most attention to over the next ten years will be driven by lock-in effects and vested interests of the incumbents within the current regime. They will tend to be seen as transport solutions for transport problems. Meanwhile, digital connectivity is giving much more possibility to ‘bottom-up’ innovation with a plethora of new ideas and fledgling products, services and practices in support of physical and virtual mobility. Not all such ideas will gain traction and see diffusion and widespread adoption. However, the scale of collective possibility and the greater agility of development may see some startling developments over the next ten years with new trends in behaviour emerging. Consider that ten years ago Facebook and Twitter did not exist and Skype had only just been founded.

We now recognise that the provision of new transport capacity on the supply side does not simply better accommodate demand. It can generate additional demand (indeed it has also been shown that when transport supply is reduced so too does demand reduce – traffic can ‘disappear’). Predicting the demand for new travel and providing for it can amount to a self-fulfilling prophecy, i.e. the predicted demand arises through the very act of providing the capacity. This underlines that while it may be politically sensitive to suggest ‘social engineering’, we have a tremendous opportunity to shape the future rather than reactively respond to it in terms of transport.

Data from different parts of the world has revealed a change in the correlation between economic activity (measured by Gross Domestic Product) and transport activity (measured by road traffic). Against a previous trend of ‘traffic intensity’ of economic activity increasing (i.e. more traffic needed per unit of economic output), in more recent years this has reversed: the traffic intensity of the economy is reducing. While this is not fully understood, it may relate to the changing makeup of the economies of the countries concerned (decline in manufacturing and growth in services), urban agglomeration effects and the growth in digital connectivity following the advent of the internet and world wide web; growth in domestic aviation

Different Pathways In terms of road transport, for the decade ahead, we are set to see much attention being given to innovation in transport technology as a supposed key to cleaner, more efficient (and safer) transport. This concerns, in particular, the prospect for a growth in electric and hybrid-fuel vehicles as a share of the fleet alongside the introduction of self-driving vehicles. Meanwhile for countries with less advanced transport systems, motor manufacturers are likely to focus upon growth in sales of vehicles based on established technologies.

Future Options Fundamentally, society has two options. The first is to accommodate current and perceived future demand. The second is to shape the demand for travel by particular means through both push and pull measures that encourage behaviour change towards travel by different modes, at different times and between different locations.

New Behaviours The scale of collective possibility and the greater agility of development may see some startling developments over the next ten years with new trends in behaviour emerging.

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may also be a factor. This suggests that it may be possible increasingly to realise economic prosperity through effective land use planning and urban development alongside investment digital infrastructure and services as an alternative to or complement to the role of the transport system.

Change can sometimes be dramatic. The closure of European air space in 2010 as a result of a volcanic ash cloud from Iceland is an example; the 2011 earthquake and tsunami in Japan, is another. However, change is often much more of a process than an event and one that is gradual yet powerfully cumulative over the passage of time. The world wide web is 25 years old this year. A growing proportion of the world’s population has been absorbing the succession of developments in ICTs over its lifetime to date into their lifestyles and behaviours. When we look back over time we can observe how such change can become transformative. The move into the motor age was, over a period of decades, transformative for society and for transport. Further transformation is all but inevitable.

Given such lessons from the past, we need to consider developments in transport that are aligned to shaping the type of future society that is desired (by current and also for future generations). It is important to give more attention to anticipating the indirect and longer-term effects of policy and investment decisions, recognising that effects can take some time to emerge as individuals and organisations adapt their behaviours to evolving conditions. Fundamentally, we should not be addressing the future of transport but the future of access. In turn we should focus strongly on the importance of what might be termed a triple-access system of transport, physical proximity and digital connectivity. We do not know what future society will want to do or be able to (afford to) do in relation to access though we do know people can adapt. We should therefore focus upon developing a balanced triple-access system and, accordingly, a balance of investment and policy support across this system that may transcend the traditional remits of government departments.

Transformation Ahead The move into the motor age was, over a period of decades, transformative for society and for transport. Further transformation is all but inevitable.

Triple-Access Solutions We should therefore focus upon developing a balanced triple-access system and, accordingly, a balance of investment and policy support across this system that may transcend the traditional remits of government departments.

There is arguably an unprecedented level of uncertainty facing the future of transport with the prospect that the glue that binds society’s elements together may be mutating. In the face of such uncertainty and associated change there is a need for flexibility. This is especially true of infrastructure development both in terms of the transport system itself but also in terms of the associated land uses that give rise to demand placed upon the transport system. There are many examples of stranded assets, underutilised or abandoned facilities as well as legacy infrastructure that obstruct adaptive development. For example the limitations or legacy of a railway system’s design (its bridge heights, track gauge, station lengths, stability of carriages etc.) might mean that there are limits on being able to increase how many people or how much goods can be carried

by trains, without building an entirely new infrastructure. Greater attention therefore needs to be given to how infrastructure can be ‘future proofed’ and made ready to accommodate the needs of a changing society. This is particularly pertinent to our cities and to the connections between cities. We need to be able to reallocate transport system capacity for different uses. This may include use by different modes or transfer of transport system capacity for use by new building stock or for recreational ‘dwell’ spaces that enhance interaction in urban environments. Major examples of pedestrianisation of formerly congested roadspace include Times Square in New York and Trafalgar Square in London.

In practice the implications of the issues raised in this article are that a number of different future outlooks for transport are

Future Proofing Greater attention therefore needs to be given to how infrastructure can be ‘future proofed’ and made ready to accommodate the needs of a changing society.


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Professor of Transport and Society, UWE Bristol Lead expert on the Future of Transport.

Glenn Lyons was the founding Director of the Centre for Transport & Society at the University of the West of England, Bristol where he is now Associate Dean for research in his Faculty. His research career has focused upon improving and promoting understanding of the inherent links between lifestyles, behaviour and personal travel in the context of continuing social and technological change. He has held secondment positions with the UK Department for Transport and the New Zealand Ministry of Transport and been involved in a number of high profile exercises examining the future of transport. Glenn has led major research studies addressing traveller information, internet use, flexible working, travel time use, public and business attitudes to transport, public perceptions of road pricing, user innovation, travel demand and futures.

Lead Expert – Professor Glenn Lyons

likely to come into conflict as options for the way forward are examined and pursued:

(i) predicted – an extrapolated outlook for the future (typically of growth in transport demand) giving a (misguided) sense of confidence;

(ii) plausible – an outlook for a future who’s potential emergence cannot be denied based on current knowledge (e.g. the demise of the motor age);

(iii) presumed – an outlook for the future on the basis of probability and instinct but

without proof (e.g. the emergence of electric and self-driving cars);

(iv) preferred – an outlook for a future that is desirable (so therefore value laden – e.g. growth in aviation to support global business or growth in cycling and walking to support healthy urban environments); and

(v) practical – an outlook for the future that aligns best with immediate interests and imperatives (e.g. the need for expanded transport infrastructure to support economic recovery).

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The travel and tourism industry is often described as the largest industry in the world. It accounts for 9% of world GDP, $1.3tn in exports and 6% of world trade across multiple sectors, including transport (aviation, rail, road and sea), accommodation, activities, food and drink. It is estiwmated that it creates about 120 million direct and 125 million indirect jobs and is closely linked to other sectors in domestic and international markets, such as the manufacturing industry, agriculture and the service sector. In turn, these create broad multiplier effects for local and national economies.

In 2012, for the first time in history, the number of tourists crossing international borders in a single year reached over one billion. While just over 50% of these arrivals were from Europe, much of the demand is being fuelled by rising household incomes in emerging economies – not only the Brics (Brazil, Russia, India and China) but increasingly across the rest of south-east Asia and Latin America. In addition another five to six billion people travel in their own country every year. Technological innovations are fuelling this growth, and include developments in low cost air travel and the widespread use of increasingly sophisticated applications that aid online researching and booking travel.

Mass tourism was one of the great game-

changers of the 20th century. Thomson Holidays ‘Sustainable Holiday Futures’ report explains: “Cheap flights meant travel was no longer the preserve of a wealthy elite, enabling millions of people to travel beyond their border and dramatically widening the horizons, tastes and expectations of an entire generation in the developed world.” Today I see the mobilisation of the middle classes in the Indian Subcontinent, Asia and South America as the game-changer for the early part of the 21st Century.

In general people like traveling and which is probably why the industry has remained resilient, adapting in the face of a range of challenges such as armed conflict (particularly the Gulf Wars) and disease (Sars, H1N1, Foot and Mouth, and more recently Ebola), earthquakes and other natural disasters. Looking ahead the future looks positive; for example international tourist arrivals worldwide are expected to increase by c. 3.3% a year to reach 1.8 billion by 2030 with the majority of market share tipping toward the emerging economies over this period.

Despite the positive trajectory the Thomson Future Holidays report warns that the challenges for the industry are formidable: “The dream of affordable travel for all is being obscured by climate change, future long-term projections of rising fuel prices and a growing awareness among consumers

futureagenda.org

Doubling of International Tourism In 2012, for the first time in history, the number of tourists crossing international borders in a single year reached over one billion. While just over 50% of these arrivals were from Europe, much of the demand is being fuelled by rising household incomes in emerging economies…International tourist arrivals worldwide are expected to reach 1.8 billion by 2030.

Growing Consumer Awareness The dream of affordable travel for all is being obscured by climate change, future long-term projections of rising fuel prices and a growing awareness among consumers that sustainability and responsible travel are set to have an impact on how we understand, embrace and manage our holiday plans.

Two Main Challenges There are broadly two main challenges ahead for the development of a robust travel and tourism industry: how to continue to grow further to deliver jobs, exports, economic growth and development, and in doing so, how to manage this sustainably.


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Richard Hammond - Founder of Greentraveller.

The Future of Travel


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that sustainability and responsible travel are set to have an impact on how we understand, embrace and manage our holiday plans.” Given this, I see that there are broadly two main challenges ahead for the development

of a robust travel and tourism industry: how to continue to grow further to deliver jobs, exports, economic growth and development, and in doing so, how to manage this sustainably.

Security vs. Convenience The balance between convenience and security with border controls coming under increasing strain as they deal with huge volumes of people travelling internationally at a time when fears around global security are high.

Considering growth, perhaps the first issue to be addressed should be the balance between convenience and security with border controls coming under increasing strain as they deal with huge volumes of people travelling internationally at a time when fears around global security are high.

The World Economic Forum’s Global Agenda Council believes that “the bureaucratic hurdles that often accompany visa procurement such as long wait times, absence of local consular offices and excessive documentation requirements discourage travel, constraining visitor spending and the jobs and growth it generates”, and that “The largest delays are caused by antiquated visa processes and can be easily reduced through utilization of commonplace modern technology”. Improved visa facilitation in G20 countries, it says, could create between 940,000 - 5.1 million jobs and generate US$149 -206 billion in international tourist receipts by 2015. It says that shifting away from in-person interviews and consulate-based application system to online applications, video interviews and application processing software can reduce staffing costs and produce immediate returns en route to widespread adoption of e-Visas and a coordinated global travel facilitation system. It’s paper ‘Smart Travel: Unlocking Economic Growth and Development through Travel Facilitation’ proposes “a smart travel model and blueprint that could revolutionize the travel and tourism sector, much the way smartphones have transformed the telecommunications and media industries”.

Clearly the challenge is to make travel safer but at the same time more efficient. Innovations in travel facilitation is essential for growth so look out for different forms

of frictionless travel - streamlining visa processes with the introduction of e-visas for example: “As the world becomes hyper-connected, circular and citizen-centric, the right legislative framework, innovative financing and partnership models are crucial to facilitate travel. This includes smart visas, smart infrastructure (i.e. smart airports) and skills.1”

The notion of technology driven travel is not confined to border controls. Smart cards similar to those used for localized, multi-modal urban transport (such as the Oyster card in London and Tisséo smart card in Toulouse) will increasingly be used not just for local transport solutions and for booking accommodation, activities, food and drink, but also at the level of predicting personal choices in hotel rooms, such as smart showers that predict the temperature we prefer, and smart meters that optimise our use of energy, temperature control, and so on.

Beyond this, smart technology has revolutionized how we choose to travel. We are no longer dependent on the wisdom of our high street travel agent and prefer instead to make decisions based on the experience of online crowds from the likes of Trip Advisor. Browsers and indeed our browsing habits are becoming increasingly sophisticated allowing us to choose our journeys by cross-referencing and sharing ideas as well as influencing the buying choices of others. Looking ahead expect searches to be even more refined, with users having greater control over whose opinion they seek. Combine this with the increasing use of smart devices and it is clear that ensuring they stay ahead of technological innovation will be key to survival for many (from SMEs to the large corporates) across all


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sectors of the industry.

Regulation will continue to have a huge influence over the aviation and transport industry. The key regulatory challenges are likely to be Air Passenger Duty increases, compliance with the EU Emissions Trading Scheme (ETS) and volatile fuel prices. The effects of the deregulation of the European railways in 2010 that allowed open access (i.e. all railway operators can now compete on international routes, and private companies can now pick up passengers outside their home country and operate cross-border trains) have yet to be realised. It is hoped that it will lead to competitive pricing for tickets, more seats on more trains and increased variety of rail products and services. Perhaps the most significant improvement (and one that looks set to grow in the future) is the multi-modal approach to air and rail. Many large German airports, for instance, such as Frankfurt, Cologne and Dusseldorf, now have modern rail stations that allow air passengers to continue seamlessly by rail to many destinations. The Chinese have also already significantly invested in mass transit by rail. As fuel costs make conventional air travel more expensive, in some regions, rail travel may replace domestic and even intercontinental flights.

Given that the travel and tourism industry is a huge employer, the development of and tighter controls on employment rights are likely to be a significant factor in the future. It is worth noting in this regard that there are few NGOs lobbying the industry on human rights; the UK-based charity Tourism Concern is a small but vociferous organisation that campaigns for a variety of human rights issues, such as the right to water for local communities, displacement and land rights of indigenous people, and porter protection, while Survival International campaigns for the rights of tribal people worldwide. As the travel and tourism industry boom continues, it is likely there will be many more issues to contend with in this regard, particularly regarding the expansion of urban landscape into traditional land areas in Africa and the expansion of oil production and timber felling in the tropical rainforests of Southeast Asia and South America.

Tourism is an under utilized tool for socio-economic development. In general it has had a positive impact on local community empowerment, especially for women. There are other intangible assets, such as encouraging greater global connectivity and cultural understanding. Awareness of this is increasing and community based tourism is on the rise with a growing number of holiday makers eschewing the crowded beaches and all inclusive packages to enjoy a more authentic experience living in the culture rather than observing it from the outside. The demand for localized, personal experience will grow over the next decade. As a result the travel and tourism industry is becoming increasingly aware of its social responsibility so look out for increasingly sustainable travel options. Over the next decade travellers will base their buying decisions not only around comfortable beds, leisure facilities or the proximity to cultural attractions, they will also be able to choose to stay in places where they know the staff are being treated well and the local economy is not being exploited.

Some in the industry are already changing their ways of working. Thomson Holidays (part of the TUI Group) reports that companies will increasingly be held to account over their commitment to issues of a more sustainable tourism industry. Jane Ashton, head of sustainable development at TUI Travel, said: “Our research shows that our customers want us to take care of sustainability issues for them. So our challenge is to influence destinations and hotels to supply an infrastructure that allows our customers to be more sustainable.”

Thomson Holidays also predict that during the next twenty years, UK travellers will agree to pay for their water on holiday; take ‘Tradecations’ - cooperating with radical plans by hotels and resorts to slash their carbon footprint in return for carbon reward points that can be traded for visits to local sites of interest, spa treatments or dinner and drinks; discover holiday super-hubs and aerovilles as a new integrated global rail and sail network replaces domestic and regional air travel. With regard to carbon quotas, it warns there is a “potential double-whammy for the

Multi-Modal Hubs Perhaps the most significant improvement (and one that looks set to grow in the future) is the multi-modal approach to air and rail. Many large German airports, for instance, such as Frankfurt, Cologne and Dusseldorf, now have modern rail stations that allow air passengers to continue seamlessly by rail to many destinations.

Better Employers Given that the travel and tourism industry is a huge employer, the development of and tighter controls on employment rights are likely to be a significant factor in the future.

Community-based Tourism Community-based tourism is on the rise with a growing number of holidaymakers eschewing the crowded beaches and all-inclusive packages to enjoy a more authentic experience living in the culture rather than observing it from the outside.

Positive Local Impact Over the next decade travellers will base their buying decisions not only around comfortable beds, leisure facilities or the proximity to cultural attractions, they will also be able to choose to stay in places where they know the staff are being treated well and the local economy is not being exploited.

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Responsible and Inclusive Over the next ten years look out for continuous growth in travel focused on learning about, experiencing or positively affecting ecological conservation, economic development and local community improvements, cultural respect or human rights.

travel industry with governments worldwide predicted to impose personal carbon quotas”. The British government’s plan to reduce carbon emissions by 80% by 2050 “would give UK citizens an annual carbon quota of just 3.1 tonnes per person”, so the report concludes: “Such low quotas will encourage families to carbon-comparison shop.”

When practiced responsibly, tourism can also be a tool for biodiversity conservation - many national parks and other protected areas would no longer be able to survive financially without large number of visitors, and there are an increasing number of examples where ecotourism has helped save individual species, such as the mountain gorilla in Rwanda and Orang Utan in Borneo. A census announced this week in India reports that tigers numbers are up 30% over the last four years, which is in part due to tourism’s influence on the understanding of the economic value of tigers; that they are worth more alive than dead.

Increased awareness of environmental issues (and the rise of the ‘green consumer’) has inevitably led to a growth in the interest in environmental travel. As far back as 2010, around 50% of Americans that traveled abroad were engaged in nature, culture or heritage tourism and research commissioned by Trip Advisor suggested that 71% of its members intended to make eco-friendly travel choices in the future. So, over the next ten years look out for continuous growth in travel focused on learning about, experiencing or positively affecting ecological conservation, economic development and local community improvements, cultural respect or human rights.

However, if poorly managed, tourism can be a double-edged sword, having a negative impact on local populations and their natural environment (including degradation of local environmental quality, water consumption and waste management) as well contributing to greenhouse gas emissions. Unchecked and unregulated, the continued growth of the industry will also have implications for areas of significant cultural and natural importance. Of the 1007 properties listed on UNESCO’s World Heritage List, 46 are identified as ‘in

danger’, such as the Everglades in Florida, the Selous Game Reserve in Tanzania, the Rainforests of the Atsinanana in Madagascar and the Virunga National Park in the Democratic Republic of Congo. UNESCO includes “unchecked tourist development” on its list of challenges that it says pose threats to World Heritage Sites; the others are: armed conflict and war, earthquakes and other natural disasters, pollution, poaching, and uncontrolled urbanization. Regulators and law enforcement officers must address this.

Beyond everything climate change will undoubtedly affect the travel and tourism industry, both in terms of the regulation of greenhouse gas emissions and the effect on the tourist industry of destinations adapting to climate change, especially those regions that already are exposed to extreme weather, such as at the equator and the poles, as well as vulnerable island states, such as the Maldives and many Pacific Islands, and low-lying coastal areas of industrialised nations that are vulnerable to sea water rises. Tourism bears some responsibility for this currently accounting for 5% of global greenhouse gas emissions – approximately 4% from transportation (40% of those from air travel and 32% from car travel) and almost 1% from the accommodation sector. As demand for air travel is forecast to double by 2050, and carbon emissions from flights departing the UK alone are forecast to increase from 33.3 MtCO2 in 2011 to 47 MtCO2 by 2050 expect innovations in transport infrastructure to begin to mitigate the damage being done.

One of the other options for tackling aviation’s contribution to greenhouse gas emissions is the EU Emissions Trading Scheme - a market-based “cap and trade” mechanism whereby emissions are capped at a set overall limit but are tradeable. Another solution is to address the source of the emissions produced by aviation through use of future aircraft technology, better operational flying techniques and the development of sustainable fuels. ‘Sustainable Aviation’, an alliance of the UK’s airlines, airports, aerospace manufacturers and air navigation service providers, has


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produced a ‘CO2 Roadmap’, which it says could reduce the UK’s aviation emissions by up to 24% by 2050. It says the UK could have between 5 and 12 operational plants producing sustainable fuels by 2030, which

could generate a Gross Value Added of up to £265 million in 2030 and support up to 3,400 direct jobs, and a further 1,000 jobs. 1 World Economic Forum

Smart visas, indeed, smart ticketing in general for mass transit provides a tangible way forward in addressing some of the barriers to the seamless growth of cross border visitor numbers.

Given unpredictable fuel costs in a climate-challenged world, the future for the aviation industry must surely lie with greater efficiencies in the short term and with alternative fuels used in the future, even if a global emissions trading mechanism is put in place. The railways are likely to be the mid- to long-term solution for mass domestic transit, particularly linking to intercontinental airport hubs for leisure, work and shopping, especially in those countries with modern railway networks, such as China, Japan and the Middle East, but also across the high-speed networks of Europe.

Regarding World Heritage Sites already at

risk from the sheer numbers of visitors, it has been suggested that charging a tourist levy for entry is one solution to limit the numbers, though critics have said this is elitist.


It is uncertain how far climate change will impact destinations over the next 20 years, but it is highly likely that we will start to see the effects of a warming world in this time frame, especially in those destinations that already experience extreme weather, such as at the equator and the poles (as well as the Caribbean, the Mediterranean and Australia), where particularly water scarcity will impact on the tourism industry.

Companies will increasingly be accountable for their environmental and social impact, and demonstrate how close they come to providing a ‘net positive impact’ in the destination.

Founder of Greentraveller. Lead expert on the Future of Travel.

Richard is the founder and chief executive of Greentraveller Limited, the digital media agency for sustainable transport and tourism, which also runs the award-winning green holidays website greentraveller.co.uk. He is the co-author of the award-winning travel guide book ‘Great Escapes’, published by Rough Guides. Greentraveller was shortlisted as Best Online Consumer Publication in the 2013 British Travel Press Awards.

Lead Expert – Richard Hammond

Seamless Cross Border Travel Smart visas, indeed, smart ticketing in general for mass transit provides a tangible way forward in addressing some of the barriers to the seamless growth of cross border visitor numbers.

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Climate change, population growth and increased urbanization pose great challenges to the provision of water for human use. Since 1950 cities have increased their water usage fivefold, not only through population growth, but considerably through increased per capita demand. Currently half of the world’s cities with more than 100,000 in habitants are situated in areas experiencing water scarcity1. To date neither governments nor businesses have done enough to prepare for this. Collectively we did not recognize the macro trends soon enough and so opportunities to counter water scarcity have been lost, infrastructure investments have been inadequate, and climate change adaption measures too local and often only reactive.

At the same time as access to water

decreases, world energy consumption is projected to grow by 56% between 2010 and 2040. This matters because approximately 90% of global power generation is water intensive so a country’s energy mix has fundamental implications for its water industry. Water security has therefore become one of the most tangible and fastest growing social and economic challenges faced today.

So, how can we meet the water needs of the future? Will it be possible to provide equitable access to water and sanitation services when by 2030 the world will face a 40% global shortfall between forecast demand and available supply?2 Can we make the water cycle respond to the challenges of climate change and energy need? How can we do more with less water?

futureagenda.org

Ready for Water Scarcity Currently half of the world’s cities with more than 100,000 in habitants are situated in areas experiencing water scarcity. To date neither governments nor businesses have done enough to prepare for this.

The Supply / Demand Challenge Will it be possible to provide equitable access to water and sanitation services when by 2030 the world will face a 40% global shortfall between forecast demand and available supply?

Daniel Lambert - Australasia Water Leader, ArupMichael O’Neill - Certified Environmental Practitioner, Arup

The Future of Water

The UN has sagely noted that “water is the primary medium through which climate change impacts will be felt by humans, society and the environment” and accordingly climate change will necessitate improvements in water resilience systems in cities across the globe. Increasingly they will have to focus on local water sourcing, reuse and recycling in order to sustain their ever-expanding population. There are multiple

ways in which efficiency can be improved not least through significant investments in green infrastructure, the adaption of smart technology and widespread public education which will help to manage water demand through a broader understanding about its natural process. Water is a key contributor to life. We need to be constantly reminding ourselves of this and take action.

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Desalination Essential About 96% of the earth’s total water supply is found in oceans and there is broad agreement that extensive use of desalination will be required to meet the needs of growing world population.

Data Analytics Data analytics can help build understanding on how to use the water cycle to respond to the challenges of climate change. It can also lead to increased scrutiny of water utilities and a better understanding of cost.

Many countries are currently working to maintain and improve the quality of their sources. About 96% of the earth’s total water supply is found in oceans and there is broad agreement that extensive use of desalination will be required to meet the needs of growing world population. Worldwide desalination plants are producing over 323 million cubic metres of fresh water per day, however energy costs are currently the principal barrier to its greater use. The State of Singapore has innovative water technology, aiming, despite its size and population density, to become fully self-sufficient by 2061. Plans include tripling its desalinated water supply by 2030, the large-scale collection of rainwater, and the collection of recycled water which, as well as the standard procedures, uses micro filtration processes, reverse osmosis and UV treatment to deliver potable water to its citizens. In short they are converting their city into a catchment and focusing on source diversity.

Elsewhere efficiencies will be improved by the use of intelligent robots, which will play a greater role in the inspection of infrastructure. New materials, such as graphene, that are lighter, stronger, smarter and greener will also become more popular replacing traditional materials such as stainless steel pipes.

Growing concern for the environment and for public health means that water companies will be held to greater account for their environmental impact and water quality. A stronger emphasis on green infrastructure will support a trend for companies to transform from providing base utilities to creating a system of amenities that support the water cycle. An example of this can be found at the Illinois Institute of Technology. Rain gardens have been reutilized as communal meeting spaces, through-ways turned in to permeable walkways and three acres of new native plant communities with underground cisterns collect rainwater for future non potable reuse. Once all the changes are implemented the IIT predicts a 70 – 80% reduction of run-off into Chicago’s sewer system while making the collected non-potable water available for irrigation. Expect this repurposing of public spaces for

multi-functionality for both amenity and wider sustainability purposes to be widely adopted.4

Alongside making improvements to the infrastructure, there is a pressing need to do more with less water. Smart technology and big data will help. Changing public behavior is a huge challenge however. Although there is widespread understanding that rising consumption of raw materials is both intensifying resource scarcity and increasing competition, most people, certainly in the developed world, live materialistic lifestyles resulting in high levels of waste. In Australia for example, on average around 20 million tonnes of waste per year is thrown away at a value of AUD10.5bn. Digital lifestyles can increasingly link consumer behavior to consumption and growing connectivity, utilizing the Internet of Things, will mean that it will be possible to monitor the consumption and cost of water in real time allowing consumers to understand their impacts and take action.

Data analytics can help build understanding on how to use the water cycle to respond to the challenges of climate change. It can also lead to increased scrutiny of water utilities and a better understanding of cost. Companies will therefore be able to integrate the true cost of water into their decision-making. In addition the availability of data provides an opportunity to educate customers about consumption. Publicity campaigns and a growing sense of urgency will nudge consumers to reduce consumption and should be used in partnership with economic levers that recognize the true value of water.

Growing populations and changes in diet mean that we need to produce more food. Water is a fundamental part of this process. In Australia, for example, the agricultural sector accounts for around 65% of total water consumption. This could be greatly reduced if we could change consumer behaviour. It is estimated that Australians throw away AUD5.3bn of food waste every year. This is simultaneously wastewater. There is a real need to change this approach and developments in this sector will continue to

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Real Cost of Water Users are likely to have to pay for the real cost of infrastructure. One short-term option is the financial recycling of assets and capital where old assets are sold or leased to fund the new. However, in the longer-term we will have to pay the

have tangible knock on effects for the water supply industry and the natural environment from which this water is sourced.

Science will also have a key role in reducing the amount of water we use. Nano and biotechnology is a potential game-changer for the water industry, and can enable breakthrough products and technologies to tackle pressing global challenges such as reducing environmental footprints, using less and cleaner energy and decreasing water usage and waste generation. For example microorganisms are now being used to treat water that has been contaminated by hazardous materials. The global market for nanostructured product used in water treatment was worth an estimated USD1.4bn in 2010 and is expected to rise to USD2.1bn in 2015.3 Initial success in this area has also raised the possibility of the utility as a self-healing ecosystem.

Greater efficiency is the driving force for manufacturing companies where energy and water can be as much as 50% of the total manufacturing cost. In the future expect more green manufacturing and increased co-operation when companies forge alliances across traditional boundaries, for example to share common costs. In the water industry this will manifest itself in knowledge sharing and contributions to joint research and development across catchment boundaries. Through using resources more efficiently countries could also become more active trading partners; this would allow for more equal water redistribution amongst users. This could include a water balance concept similar to carbon emissions reduction strategies where water saved in one country offsets additional water use in another.

Looking ahead, users are likely to have to pay for the real cost of infrastructure. One short-term option is the financial recycling of assets and capital where old assets are sold or leased to fund the new. However, in the longer-term we will have to pay the true value for key resources. This shift could also lead to the greater application of the circular economy, which will help stretch resources through end of life recycling and reuse. More awareness will lead to increased scrutiny

of water utilities and pricing of services as the widespread availability of data provides the opportunity to educate customers about consumption and managing resource use. Looking through an international lens, water trading would allow for the efficient redistribution of water amongst users, so countries could become active trading partners. As the amount of water used in agriculture in arid regions is two to three times higher than in rain fed regions water trade could help save water on a global scale.

Once efficiencies and improvements are made, consideration should be given to the most cost effective way to provide access to basic services. The fixed nature of water supply infrastructure and its history as an essential government supplied service gives rise to natural monopolies within supply areas. Governments need to ensure the pricing policy is appropriate to balance the essential need for water, the impacts on consumers (particularly those on lower incomes) and the requirements of the suppliers to remain financially viable. To do this there should be better integration between urban water planning and urban development planning with considerations on limitation to green-field development.

Recognizing innovation opportunities for the future more and more companies are tapping into the public’s intellectual capital by crowdsourcing product ideas and solutions. In exchange they are giving creative consumers a direct say in what gets developed, designed or manufactured. Crowd-funding added at around 270,000 jobs and injected more than US$65bn into the global economy by the end of 2014 with an expected industry growth of 92%.

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Moving Water Over the next ten years our waterways and other water sources will continue to suffer from over-extraction. This will continue to compromise the quality of the environment and the organisms it supports. In particular mining and other activities will continue to move into our water supply catchments affecting water quality and altering inflows. This will mean that we may be obliged to move water long distances in times of drought to services existing cities.

Doing More with Less The focus should extend to solutions that do more with less: irrigation efficiency, automated farming techniques and demand management in our cities. Smart infrastructure will help responding intelligently to changes in its environment to improve performance.

The Funding Challenge Water treatment can come at a high price. The OECD has estimated that around USD50 trillion would be needed worldwide in the period to 2030 to satisfy the global demand for infrastructure. However, accessing funding is an ever-present challenge.

Over the next ten years our waterways and other water sources will continue to suffer from over-extraction. This will continue to compromise the quality of the environment and the organisms it supports. In particular mining and other activities will continue to move into our water supply catchments affecting water quality and altering inflows. This will mean that we may be obliged to move water long distances in times of drought to services existing cities. In turn this could lead to increased GHG emissions at the very time when we are trying to reduce these.

We need to change this trajectory. In doing so it is important that we reconnect ourselves with water in its pure elemental form. We should all be able to enjoy access to clean water, not just for drinking, but also for recreation and connection to nature. Putting water at the centre of the urban design process and re designing our cities and towns to respond positively to water is fundamental to ensuring a better understanding of the water cycle. We need to develop better Green infrastructures - the networks of green and blue spaces such as parks, agriculture, woods, rivers and ponds in and around cities systems - that replicate nature and enable communities to connect with water. The benefits include the reduction of flood risk, improved health and well being as well as providing a habitat for wildlife. Extensive green networks can be formed over time to create encompassing city ecosystems that can support the sustainable movement of people, rebuild biodiversity and provide substantial climate change adaption and resilience.

The focus should extend to solutions that do more with less: irrigation efficiency, automated farming techniques and demand management in our cities. Smart infrastructure will help responding intelligently to changes in its environment to improve performance. Smart water networks could save the industry USD12.5bn a year. In Israel, data analytic company TaKaDu takes information supplied by sensors and meters dotted around a water company’s supply network to build a sophisticated picture of how the network is performing. It can spot anomalies in its behaviour from a small leak to a burst water main.

We should also start to re-think our traditional approach to drainage. Working with natural site conditions for example, water, wastewater and storm water could be combined into one cycle. The AJ Lewis Centre for Environmental Studies ecologically treats and recycles wastewater within its buildings, integrating processes of wetland ecosystems with conventional procedures and in so doing recycling wastewater into reusable grey water. While conventionally supplied water is used for drinking and hand washing, the recycled non-potable water is used in the Centre’s toilets and for landscape irrigation and recharging the wetland pond. Others should and are following suit.

A multitude of new tools are available to help us. Alongside smart technology there are new biodegradable materials made from natural fibres that can provide greater resilience at less energy and lower cost. Beyond this, innovations will transform wastewater into a resource for energy generation and humidity into a source of drinking water. We can see the beginnings of this already; consider, for example, the Israeli company, Water Gen, which has developed a device for extracting drinking water from air. Other advances including fog catchers, thick mesh nets that collect the water contained in fog, will soon be more widely adopted.

We need increased investment in basic water and sanitation services both in new and the renewal of existing services. Water treatment can come at a high price. The OECD has estimated that around USD50 trillion would be needed worldwide in the period to 2030 to satisfy the global demand for infrastructure5. However, accessing funding is an ever-present challenge. In the US alone, if current trends continue, the investment needed by 2040 will amount to USD195bn and the funding gap will be USD144bn6. While most infrastructure investments are local, the sources of finance are increasingly global.

Beyond everything we must improve public understanding about the value of water and the services it provides. Globally public opinion still varies on the issue of climate change. Better engagement with customers including education and information

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will have a large effect on calls to action around water. Education is fundamental to help the public to accept the need to reduce overall water use and to increase the use of wastewater for potable purposes. In particular city dwellers must learn to

conserve more or utilize different sources of water such as storm water to provide for their needs, allowing potable water to be freed up to feed a growing population. Small adaptions by multiple individuals will make a difference.

Taking Hard Decisions We know that there is a growing urban population; we know that the impact climate change is now taking effect and that the volatility in water supply can only be partially mitigated by improved efficiency. We have yet to collectively decide how to address the problem.

Starting the Conversation Water is inter-twined with everything we do; energy, food, health and wellbeing, manufacturing are all dependent on its availability. At the very least we need to start a public conversation about its real role in our lives.

In the future it is clear urban water utility companies must prepare to operate in a world which is expected to be utterly different from the one that we are experiencing today. It is necessary to acknowledge and prepare for this.

We know that there is a growing urban population; we know that the impact climate change is now taking effect and that the volatility in water supply can only be partially mitigated by improved efficiency. We have yet to collectively decide how to address the problem.

Water is inter-twined with everything we do; energy, food, health and wellbeing, manufacturing are all dependent on its availability. At the very least we need to start a public conversation about its real role in

our lives. We need to understand how people currently value water and then work with them so they understand its true value and all the services it provides.

Providing access to water is one of the greatest challenges we face and one of the defining moral and cultural issues facing the planet. To address it governments must develop national water strategies, businesses must consider the impact of water in their products, and individuals must change their behavior. There should be investment in large scale recycling schemes, green infrastructure should have priority when planning new developments and renovating old: All this at a time of population growth and climate change. No one says it will be easy, but it is most certainly possible.

1 Brian D. Richter, David Abell, Emily Bacha, Kate Brauman, Stavros Calos, Alex Cohn, Carlos Disla, Sarah Friedlander O’Brien, David Hodges, Scott Kaiser, Maria Loughran, Christina Mestre, Melissa Reardon, Emma Siegfried. Tapped out: how can cities secure their water future? Water Policy. 2013;(15):335–63

2 World Economic Forum 2014

3 Nanotechnology Now. Nanotechnology in Water Treatment. 2012; Available from: http://www.nanotech-now.com/news.cgi?story_id=45894

4 National Geographic. Fog Catchers Bring Water to Parched Villages. 2009; Available from: http://news.nationalgeographic.com/news/2009/07/090709-fog-catchers-peru-water-missions.html

5 OECD. Infrastructure to 2030: Telecom, Land Transport, Water and Electricity. 2006; Available from: http://www.keepeek.com/Digital-AssetManagement/oecd/economics/infrastructure-to-2030_9789264023994-en#page4

6 American Society of Civil Engineers. Failure to act: the economic impact of current investment trends in water and wastewater treatment infrastructure. 2011; Available from: http://www.asce.org/uploadedfiles/infrastructure/failure_to_act/asce%20water%20report%20final.pdf

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Certified Environmental Practitioner, Arup Lead expert on the Future of Water.

Michael is a Certified Environmental Practitioner in Arup’s Melbourne office with significant experience in the water and environment sectors working with both the public and private sectors. He has a key passion in ensuring we are fully leveraging the variety of benefits available from well planned and implemented integrated water cycle management projects. Michael has presented at a variety of forums on the importance of a water first approach to urban design and how this approach can fundamentally change the way or urban environments function and feel for the benefit of all.

Lead Expert – Michael O’Neill

Australasia Water Leader, Arup Lead expert on the Future of Water.

Daniel is Arup’s Australasia Water Business Leader based in Sydney. Over his career he has worked on major pipeline, water treatment, wastewater treatment and reuse projects from feasibility stage through to detailed design. Daniel is a strong advocate for taking a holistic approach to urban water management that enables our cities to respond positively to the challenges of climate change and population growth.

Lead Expert – Daniel Lambert

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Prof. Julio J. Prado, PhD. - Head of the Economics Department, IDE Business School, Ecuador

The Future of Wealth

The main challenge related to the future of Wealth is how to maintain a high level of growth at global level, while simultaneously tackling the issue of higher wealth inequality. Before the Great Recession, wealth inequality was a topic of discussion and concern mainly in developing countries where inequality was historically high. Nevertheless, in the post-recession era, there is an increasing concern on topics related to wealth inequality in Developed countries, most notably in the USA and the Euro Zone. According to an article by The Economist, 56% of people living in rich countries, believe the most pressing problem of the economy is inequality.

Another challenge is the need to reanalyse and review the role of capitalism in wealth creation and wealth distribution. Capitalism has been the engine behind wealth growth in the large majority of countries in the world since the industrial revolution. But, the model is currently under attack and an increasing proportion of the global population –even in OECD countries- believes capitalism has contributed to the global crisis without contributing to the search for a long-term solution. As a result, trust in capitalist societies (The Economist) as problem solvers, is at an historically low level. Even if the large majority of global leaders would agree that there is no better alternative to the creation and distribution of wealth, there is an increasing pressure to move to a new form of capitalism, one with a more human side to it; one that could probably be more connected to

the roots of capitalism as proposed by Adam Smith himself, but not in his most celebrated book “The Wealth of Nations” but rather the view that he presented in his first book, “The Theory of Moral Sentiments”.

Finally, another major trend that needs to be considered is the rapid growth in wealth which is taking place in developing countries, especially China and India. The increasing proportion of citizens from those massively populated countries who now have access to higher levels of wealth, will have important consequences in terms of global supply chains, global prices, environmental issues, as well as the geopolitical implications, that have already began to become evident. It is clear, for example, that the position of geopolitical importance of China before and after the Great Recession has completely shifted in favour of the Asian giant. But as the importance of China is growing in a large number of global value chains, both as a main producer and consumer, there is increasing concern about how a potential downturn in that economy will affect the rest of world, still feeling the pinch from the last recession.

So, some key questions to consider include: How will the countries equate the need to grow at a higher rate with the increasing inequality that is observed in many countries?

Is there a real trade-off between higher growth and less inequality? Are there any ways in which economies can have both? Is that solution sustainable in the long term?

Inequality On The Agenda In the post-recession era, there is an increasing concern on topics related to wealth inequality in Developed countries, most notably in the USA and the Euro Zone. 56% of people living in rich countries, believe the most pressing problem of the economy is inequality.

Human Capitalism There is an increasing pressure to move to a new form of capitalism, one with a more human side to it; one that could probably be more connected to the roots of capitalism.

Influence of China As the importance of China is growing in a large number of global value chains, both as a main producer and consumer, there is increasing concern about how a potential downturn in that economy will affect the rest of world, still feeling the pinch from the last recession.


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Looking head its worth considering if Capitalist societies, can revert the pessimist outlook given by Thomas Piketty in his book “Capital in the twenty-first century”? He argues that as population growth slows, economic growth will stagnate with it, leading to increasing inequality. This, in turn, allows the wealthy to exact more control of democracy through monetary contributions.

We know that the concentration of wealth has increased in the last decades, specially in the years following the Great Recession (wealth from the top 0.01% of the population represented roughly 3% of total wealth in the 70’s, in 2014 it represented roughly 11% - with a highly positive slope). But is that level of concentration really affecting overall wealth? Is wealth concentration an inevitable result of wealth creation? And, more importantly, how is this concentration in top 0.01%, 0.1% and 1%, affecting the wealth creation in the bottom 1%-10%? The answers to this sort of question are highly important if we are to transform the economic models of the future.

If wealth concentration is reducing the opportunities of the bottom percentile, then something must be done to improve wealth distribution. On the other hand, if concentration on the top is not affecting –cannibalizing- the wealth of the bottom percentile then policy makers and economist

should focus more on the acceleration of wealth creation and not on its distribution.

In the near future, that is during the next 5 to 10 years, it will be very difficult to revert the trend of stagnant growth and high inequality that is seen in many of the richest economies. This will create increasing political tensions inside the economies where the problem of inequality is seen as an important issue.

Increased wealth, resulting in greater consumption, from the biggest countries in the world, namely China and India, will increase the cost of commodities. Depending on the duration of these increases, there will be an economic setback in some the most important commodity importers in the world (Europe and USA). Greater wealth, especially in China also means that there will be more national savings and thus more options to invest large amounts of money in strategic, state-owned projects all over the world. This process has already began with the rate of infrastructure investment accelerating rapidly since 2008. China is investing heavily in strategic resources in Latin America and Africa (Energy, Mining, Steel, Public Infrastructure, Crude Oil and refinement, etc.). This will create new challenges in the international relationships, considering that the recent crisis has reduced the level of the same type of investments from European and North American companies.

Increasing Tensions During the next 5 to 10 years it will be very difficult to revert the trend of stagnant growth and high inequality that is seen in many of the richest economies. This will create increasing political tensions inside the economies where the problem of inequality is seen as an important issue.

Overseas Ownership Greater wealth, especially in China also means that there will be more national savings and thus more options to invest large amounts of money in strategic, state-owned projects all over the world.

Proposed way Forward

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We need a thorough historical analysis of wealth creation and distribution since the industrial revolution to establish which are their determinants in different periods. Prof. Piketty’s recent book offers a great starting point for this review, since he has compiled one of the most comprehensive datasets on this topic.

We also need to consider the effects of the industrial revolution of wealth, to understand how technological progress combined with a specific set of policies (trade openness, relatively low intervention of the government in the markets, etc.) can influence growth.

The results from the former analysis could then be compared to global wealth creation in the period between 1950 and 2000, which is characterized by a transition from manufacturing to services in more developed countries but also, in the emergence of new global player in Southeast Asia and Latin America that have not followed the same process of wealth creation as the richer countries. It is also important to take into account the different model of wealth creation that was followed by the Scandinavian countries (Finland, Norway, Sweden, and Denmark) that has lead to a surge in the overall levels of wealth creation but also holds


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A Systematic View Policy makers from around the world will have to look at the problems of wealth creation and wealth inequality in a more systemic way, with the use, for example, of a complexity framework.

the world’s lowest levels of income inequality.

If any lesson from the last recession can be obtained it is that the world is highly unpredictable. The amount of complex linkages at global level makes it very difficult to predict with certainty any scenario. At best, we can analyse the trends and understand how a specific problem in one part of the global network can create a cascading effect in other remote part of the network.

I believe that the policy makers from around the world will have to look at the problems of wealth creation and wealth inequality in a more systemic way, with the use, for example, of a complexity framework. Currently, wealth creation has been frequently analysed only on a case-by-case basis, with the objective of creating more sound policies for each specific country or, at best, for a cross-national region (like the Euro Zone). Nevertheless, we know that wealth in a specific country can be affected by global events that are complex in their nature, for example, the global financial crisis that started in a specific country but then quickly disseminated to other countries and other industries that were not even directly linked to finance. In a globalized and complex world, policies cannot be country-specific. Policies need to be coordinated, and

policy makers need to embrace the concept of complexity and act accordingly.

In the context of the rise of inequality in the world, a potential solution is the one proposed by Michael Porter in his Shared Value concept. According to his view, capitalism needs to rethink the way it approaches its role in society. It is not enough to produce with high efficiency and then redistribute some of the leftovers via corporate social responsibility programmes that usually means charitable or philanthropic giving. The Shared Value idea is to integrate the societal improvement into the economic value itself. Some analysts have dubbed this strategy ‘the next stage of capitalism’.

I believe that the option of looking at wealth creation under a complexity framework is an area that could have a larger impact in the long term.However, as this implies that policy makers need to adopt a new paradigm, I believe that in the next 5 to 10 years the most plausible and realistic approach to deal with the issue of global inequality will be the one of Shared Value. I think this allows us to address some of the critiques of capitalism and avoid the costly experiments that are not based on the market system (that are starting to arise as a result of the discontent with traditional capitalism).

Seeing the Bigger Picture Policy makers need to start looking at the issues of wealth creation not in isolation, looking at specific solutions for each country but to think of solutions to come as part of a system that is interconnected and complex.

Top-down, Bottom-up If we assume that the wealth problem is complex in nature, then centralised top-down solutions will not work. It will be necessary to adopt both a top-down and bottom-up approach depending on the context and the intended solutions. This means that society as a whole and especially private business, needs to be involved in the process of creating wealth and reducing inequality.


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The implementation of the most pragmatic solutions will require a commitment from all different levels of society. As it was argued above, first of all, policy makers need to start looking at the issues of wealth creation not in isolation, looking at specific solutions for each country but to think of solutions to come as part of a system that is interconnected and complex. In that sense, the sources and determinants of global wealth under a complex framework need to be analysed. This is a challenge that requires a commitment from top academics in the world to produce new pieces of research that focus on wealth complexity. This type of research will then inform the policy makers, who then have the

important task to decentralise the decision making process.

If we assume that the wealth problem is complex in nature, then centralised top-down solutions will not work. It will be necessary to adopt both a top-down and bottom-up approach depending on the context and the intended solutions. This means that society as a whole and especially private business, needs to be involved in the process of creating wealth and reducing inequality.

The complex nature of wealth creation and distribution means that governments, business, academics and institutions need to work together in a more stable, long-term

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and institutionalised way. This is why, new institutions for collaboration that offer an holistic and systemic approach to the problem of global wealth will need to be created. Old institutions may not have the capabilities to embrace the complex nature of the problem at hand, and may resist change of paradigm.

Maybe it is more appropriate to consider what will be the consequences if we don’t adopt a new paradigm. The main consequence of not dealing in a systemic way with the issues of wealth creation and wealth distribution that have been described above, is an increasingly social struggle inside some countries. This may

create political pressure that, depending on the context and the history of the country, may result in political instability and even regime change. Not addressing the issues could result in new political experiments that could reject capitalism and reintroduce authoritarian regimes based on a tight and centralized control of the market. As we know from history, these types of regime are not the solution to the problems of wealth and they are certainly not an alternative to capitalism. On the other hand, it is also clear that the way capitalist economies have been handling wealth inequality, often ignoring it, is not sustainable and need to be revisited.

Head of the Economics Department, IDE Business School, Ecuador Lead expert on the Future of Wealth.

Julio Prado is Professor of National Competitiveness & Managerial Economics, Research Director and Head of the Economics Department at the IDE Business School in Ecuador. He is also a teaching fellow and member of the “Microeconomics of Competitiveness” network at Harvard Business School. He gained his PhD

in Management and Economics from Lancaster University Management School and, beyond IDE, is also a consultant to the Ecuadorian Government on projects related to competitiveness and industry analysis. He was recognized by “America Economía” magazine as one of the best lecturers in Latin-American business schools in 2012.

Lead Expert – Prof. Julio J. Prado, PhD.

Conclusion

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We need to create an international task force that tackles the issues of wealth creation and wealth distribution under different approaches, embracing new and old paradigms to find the best global solutions for the problems that have become evident in recent years. This task force will be financed over a minimum time of 5 years by governments or multilateral institutions and will produce academic reports on the most pressing issues of global wealth. It will not be dominated by mainstream economists, nor by economist from OECD countries. It is important to incorporate the views from researchers from other parts of the world. It is also important to focus the research of this

task force in pragmatic solutions and not only on theoretical ones. The diversity of the team will be also important; economists should not dominate it, since a true holistic approach to wealth needs to be interdisciplinary.

Finally, the debate over the future of wealth in the world would not be complete without taking into account the effects of the two biggest global crises on wealth creation and distribution. The causes and the effects of the Great Depression and the Great Recession need to be reassessed in the light of their effect on wealth. It will be especially important to analyse how different policy responses to those crises, also affected wealth creation and distribution.

Reassessment of Causes and Effects The causes and the effects of the Great Depression and the Great Recession need to be reassessed in the light of their effect on wealth. It will be especially important to analyse how different policy responses to those crises, also affected wealth creation and distribution.

Avoiding Unrest The main consequence of not dealing in a systemic way with the issues of wealth creation and wealth distribution is an increasingly social struggle inside some countries. This may create political pressure that, depending on the context and the history of the country, may result in political instability and even regime change.


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LearningThe global challenge of work is two-fold. First, will automation, in its various forms, destroy jobs? And second, even if not, will workers be paid enough to sustain the global economic system? This is why the former US Treasury Secretary Larry Summers has said the problem of “good jobs” is the central problem of the richer economies.

The combination of economic stagnation, global competition and digital technology has created something of a social and public panic about work. We are losing “the race against the machine,” or reaching “the end of labor”. But there are two diverging stories about the future of work, one dystopian, one utopian, as Flipchart Rick has observed. On the one hand: it “will revolutionise the workplace … and enable us to have more fulfilled working lives.” And on the other: a future “of factories without people, of vanishing jobs, of a hollowed out labour market and … vast profits with few employees.”

Our present model of work is, broadly, a creature of the industrial revolution, dominated by the division of labour, the supervision of labour, and payment of workers for their time or their tasks. This includes so-called “new economy” models such as Uber, whose casualisation of its workforce would be recognised by any 19th or 20th century dock-worker. Some of the

big shifts shaping work reinforce this model. Others are starting to reshape it, potentially marking the start of a transition beyond it.

To understand how this is likely to change over the next decade and beyond, we need to understand the global landscape of work. These are a shift towards services, the globalisation of supply chains, the growth of ubiquitous technology, an increased squeeze on resources, and a shift in social values towards well-being. These pull in different directions.

Globalisation and digitisation take you towards rawer forms of capitalism, whereas resources and values take you towards more inclusive versions. The way you deliver services depends on which model of these two that you prefer. The version of the story about the future of work you subscribe to tends to depend on your assumptions about how these drivers will play out.

The shift to services: The deep shift in the global economy is in the long-term rise of services to “become the dominant economic activity” (UNIDO, 2009). The economists Timmer and Akkus (2008) describe this as a “powerful historical pathway of structural transformation,” which every country follows.

One of the reasons for the long boom in living standards in the 20th century was because of the long boom in manufacturing,

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The Global Challenge The global challenge of work is two-fold. First, will automation, in its various forms, destroy jobs? And second, even if not, will workers be paid enough to sustain the global economic system?

Manufacturing vs. Services One of the reasons for the long boom in living standards in the 20th century was because of the long boom in manufacturing, the dominant economic trend for much of the century. Productivity growth and economic growth tends to fall as services become dominant.


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Andrew Curry - Director, Global Knowledge Lead – Global Resources, The Futures Company.

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the dominant economic trend for much of the century. Productivity growth and economic growth tends to fall as services become dominant, and the influence of trades unions, which are effective in maintaining the value of wages, tends to decline.

The globalisation of the supply chain: Manufacturing is also tradable, meaning that it is open to export competition. The growth of the Asian economies, in particular China, has been extensively driven by manufacturing. Taking a long view, Asia’s share of world production almost doubled between 1970 to 2008, from 15.5% to 28.5%, at the expense of Europe and North America. (Unido, 2009). This growth was driven largely by the development of containerisation, not digital technology, because it transformed shipping costs.

But globalisation is reaching its limits. Wages in export sectors in both China and India are now relatively high (a pattern seen in other emerging economies in the past) and companies are moving their production closer to their markets, both anticipating rising transport costs and wanting to be able to respond more flexibly to demand.

The other effect of globalisation, of course, is an increase in migration: more than 500 million people globally now live in a country they weren’t born in. Economists generally agree that immigration is good for economies. Migrants tend to be younger, more enterprising, and economically active, and their effect on wages, economic growth and tax contributions is almost completely positive. However, in weak labour markets migration also tends to push down unskilled wages by increasing competition for such jobs; such competition is gamed by unscrupulous employers.

The growth of ubiquitous technology: There is a widespread fear that the rise of robots - or more exactly, a combination of computing power, algorithms and robotics - will destroy the labour market, even, possibly, the very idea of labour value. A widely publicised study by Oxford University academics Carl Benedikt Frey and Michael Osborne argued that for the United States jobs are at high risk of being automated in 47% of the

conventional occupational classifications (Frey and Osborne, 2013). In The Second Machine Age, Erik Brynjolfsson and Andy McAfee suggest a reason: that computing power is capable of exponential growth in performance over time, and that we’re just at the start of that progression. If robotics did for blue-collar work, then artificial intelligence will do for white collar work.

This argument, however, tends to miss the fact that technological innovation, historically, has created new jobs, typically after a period of turbulent transition. In his analysis of the labour market, David Autor (2014) finds that between 1999 and 2007 “routine task-intensive” jobs were indeed largely removed by computerisation, while knowledge jobs (“abstract task-intensive”) tended to survive or increase where human knowledge was complemented by computers. “Manual task-intensive” jobs, at the less-skilled end of the market, were much less affected by computerisation, and demand for them seemed to be rising. Yet their wages fell. His explanation: labour supply for these jobs increased because of the collapse in demand for “routine task-intensive” jobs.

The squeeze on resources: Population and consumption pressures mean that we are breaching many of the natural planetary boundaries. For capitalism this is a new game: traditionally it has been able to use resources without worrying much about the consequences. And after a century of cheap energy, the long-run trend is up, despite the current downward blip in the oil price. In our recent Futures Company report The 21st Century Business, Jules Peck and I argue that this resource shift is changing the way that companies behave; we are moving to post-sustainability (socially, economically, and environmentally). An important element is a shift from consumers to citizens, among both customers and employees, where the overall impact of a business matters. An example: it’s argued that one of the reasons why McDonald’s sales are slumping among Millennials is that eating there is depressing, because of “the feeling that the people behind the counter, flipping burgers and taking orders, have dead-end jobs where they’re treated poorly.”

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Peak Globalisation Globalisation is reaching its limits. Wages in export sectors in both China and India are now relatively high (a pattern seen in other emerging economies in the past) and companies are moving their production closer to their markets, both anticipating rising transport costs and wanting to be able to respond more flexibly to demand.

Positive Immigration More than 500 million people globally now live in a country they weren’t born in. Economists generally agree that immigration is good for economies. Migrants tend to be younger, more enterprising, and economically active, and their effect on wages, economic growth and tax contributions is almost completely positive

Technology Takeover There is a widespread fear that the rise of robots - or more exactly, a combination of computing power, algorithms and robotics - will destroy the labour market, even, possibly, the very idea of labour value.

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The shift to wellbeing: One of the long trends is a trend towards wellbeing, physical and psychological, individual and social. This complements one of the strong workplace trends: that significant competitive performance is typically produced only by empowered and engaged employees, who are intrinsically motivated to work for the business. This is true of lower-wage environments as well as higher-wage businesses.

Striking research by Zeynep Ton (2014) has found that companies such as Costco in the United States and Mercadona in Spain out-perform their sectors – by some margin - through a combination of better wages, significant investment in training, and appropriate technological investment to support staff. With such a “good jobs” strategy, increases in wages translate directly into far larger sales increases. High value work benefits individuals, businesses, as well as society as a whole.

Good Jobs Companies such as Costco in the United States and Mercadona in Spain out-perform their sectors – by some margin - through a combination of better wages, significant investment in training, and appropriate technological investment to support staff. With such a “good jobs” strategy, increases in wages translate directly into far larger sales increases. High value work benefits individuals, businesses, as well as society as a whole.

External Drivers Much of “the labor market woes” of the past decade are not down to computerisation, but to the financial crisis and reduced investment (starting with the dot.com collapse) and the impact of globalisation on labour markets… Many middle-skill jobs will prove more resistant to unbundling than advertised.

The current discussion about the future of work seems to be monopolised by the version of the future in which technology destroys jobs. It has gained an air of inevitability, as if it is the only possible future. NESTA’s open minded report suggested that the “robots hypothesis” resonated because it connected “two powerful themes in popular culture: the rapid advance of IT, and the startling growth in inequality.” But there is a problem: it hasn’t happened before.

Indeed, the idea that investment in more productive technologies leads to unemployment is dismissed by economists as “the lump of labour fallacy.” In the past, investment in the new technologies has created new capacity and new wealth, which was re-invested to create more, higher value jobs. If this time is different, we need to understand why this is so.

There are candidates. Brynjolfsson and McAfee’s claim that digital technologies are different because they create exponential growth is one. Another is that companies can no longer draw on plentiful resources or cheap energy to drive new investment platforms. A third is that previous waves were driven by manufacturing, which generated new value through productivity gains and created the social conditions for trades unions.

However, it is also the case that this fear typically recurs after a crisis. It is not

coincidence that Keynes wrote his famous essay on the challenge of technological unemployment just after the 1929 crash.

So it is also worth considering reasons why it might just be a phase. The economic historian Carlota Perez has a model of technological development that describes five long waves, or surges, since the Industrial Revolution. Each is around 50-60 years and follows an S-curve pattern; the last quarter of each is marked by saturated markets, diminishing investment opportunities and declining returns. The first part of the 20th century was dominated by the oil and auto surge; the latter part by ICT. The ICT wave is now reaching the turning point at which returns start to fall.

On this model, finance is looking for new opportunities, and although it is too early to say what the next platform will be, and we’re still 10-15 years away from it, it is possible to imagine that the next technological surge might be built around, say, a material such as graphene.

David Autor concludes that much of “the labor market woes” of the past decade are not down to computerisation, but to the financial crisis and reduced investment (starting with the dot.com collapse) and the impact of globalisation on labour markets. And he suggests that many middle-skill jobs will prove more resistant to unbundling than advertised; while computers can do specific

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tasks, turning collections of tasks into self-contained jobs, and then automating them, requires substantial investment. In the long run, people are both more flexible and cheaper.

One implication is that the question of the future of work may actually be about power in the labour market. This leads to broadly political interpretations of the future of working conditions, ranging from Guy Standing’s formulation of the fragile “precariat”, facing intermittent, insecure work,

David Weil’s description of the “fissured workplace”, in which many functions are sub-contracted, and the rise of campaigns for the Living Wage. Perhaps the dividing line is best-expressed in Alex Payne’s widely circulated open letter to the tech venture capitalist Marc Andreesen: “You seem to think everyone’s worried about robots. But what everyone’s worried about is you, Marc. Not just you, but people like you. Robots aren’t at the levers of financial and political influence today, but folks like you sure are.”


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The way forward depends on how you prefer to read this bifurcation between the technologists and the sceptics. We don’t know which group is right: there are no future facts. But there are some observations that can help shape our perspectives on this.

The first is that these widely divergent views are a feature of this point in the technology cycle. The most the most excitable projections of the future of the car were seen at just this point on the oil and auto curve in the 1950s. The technology S-curve in Figure 1, based on the work of Carlota

Figure 1

Source: Carlota Perez/ additional analysis by The Futures Company

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Perez, helps us to understand why. At this point, when the S-curve is at or approaching its second inflection point, people have been experiencing rapid technological change for the best part of two generations. The notion that “the only constant is change” has become a breathless platitude in the public discourse. So, the technologists’ perspective (point ’t’ in Figure 1) is a projection of this steep ramp. The sceptics note instead sign of falling returns and declining customer utility - and see a flattening of the line (point ’s). The gap is large, and one’s perspective on it is a matter of worldview, not evidence.

Second, almost all business innovation and new business value is driven by the application of knowledge, and the way it is embedded in individuals, teams, and systems. The Futures Company has explored this in recent research with the Association of Finnish Work on the idea of ‘high value work.’ The important point here is that this is true of a whole range of knowledge, including knowledge of service and customers, and knowledge of culture and place, as well as technological knowledge. The most successful businesses use technology to complement and enhance this knowledge, not to replace it.

Third, the trend towards is a deep and powerful one. If Millennials express a desire for meaningful work, this is also true more broadly. We are on the cusp of a transition to a world where, as Hardin Tibbs (2011) has argued, half of the populations of Europe and the United States subscribe to post-modern values (drawing on Inglehart) of autonomy and diversity. The workplace will not escape this trend. One way in which this is expressed is in a transition from consumer or employee to citizen. Increasingly, anyone with any degree of choice in the labour market is choosing employees who recognise them as a whole person, not just as a unit of labour. The evidence suggests that the engagement that the employer gets in return (even, say, in retail) is a powerful driver of performance and profitability.

Fourth, the bargain that businesses struck in the 1980s and 1990s, as they enforced flexibility and “downsized” headcount, may

turn out to be a Faustian pact. Shedding jobs and exerting tight control of labour markets increased short-run profits. But at the same time that same control squeezed out their sources of growth. And as both the OECD (Cingano, 2014) and the IMF (Ostry et al, 2014) have noted recently, wage inequality has been a further drag on economic growth. To regain growth, they are likely to have to increase wages and give back some control and power to their workforces.

My own best guess is that we are not headed for long-run technological unemployment. I have changed my mind about this over the past year as I have spent more time with the evidence.

The explanation that seems best to fit present state of work and labour markets is that it has been through a “perfect storm” of a globalised workforce, the deskilling of routine work (which was highly vulnerable to automation) and the shift of these workers into manual or service work, and aggressive deregulation of labour markets driven by a neoliberal political agenda.

The discourse around technological unemployment is not persuasive to me. The “abstract” jobs (using David Autor’s analysis above) will be complemented by technology, and so, in a different way, will be the manual jobs. Meanwhile, the projected gains from Artificial Intelligence and analytics are going to be harder to achieve than currently anticipated. As an example, big data gets less useful as the data sets get larger, and the driverless car, the poster child for the tech future, is a far tougher proposition than Google lets on. Meanwhile, these tech scenarios never seem to include the new jobs that will emerge as we understand better the potential of the technologies, other, sometimes, than as a panic about the possible speed of change.

But, and it is a big but, we’re only part of the way through the dislocation to work and to labour markets caused by this perfect storm. Things will not get better quickly.


Post Modern Workplaces We are on the cusp of a transition to a world where, half of the populations of Europe and the United States subscribe to post-modern values of autonomy and diversity. The workplace will not escape this trend.

Perfect Storm The explanation that seems best to fit present state of work and labour markets is that it has been through a “perfect storm” of a globalised workforce, the deskilling of routine work (which was highly vulnerable to automation) and the shift of these workers into manual or service work, and aggressive deregulation of labour markets driven by a neoliberal political agenda.


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Impact and implications

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Looking at the shorter-term impacts, then, it’s possible to see a range of approaches to this turbulence in the world of work. Government have options, largely about whether to intervene in labour markets to influence work outcomes, or not. But employers are also moving to new strategies not out of goodwill but through self-interest.

These options, highly simplified, are shown in the matrix (Figure 2), which contrasts laisser-faire approaches with interventionist approaches.

The race to the bottom: This laisser-faire option operates on the principle that labour market flexibility is the secret to increased employment in a globalised labour market. In practice, nearly all countries have increased flexibility and permitted more casualised work over the past decade - even somewhere with a strong tradition of labour protection such as Germany. The evidence increasingly suggests, however, that the pursuit of low value jobs leads to a vicious cycle of low productivity, low investment, low growth, and low tax and social contribution from business.

This policy approach also involves government subsidy to employers, as low-paid workers are supported by state payments. In the United States, a study showed that the fast food sector was effectively subsidised to

the tune of $6 billion because its low paid workers were dependent on food stamps and subsidised housing. Increasingly this looks like a political choice that is no longer supported by economic evidence.

Enlightened self interest: It appears that employers who pay better and create better working environments do better financially. Walmart is a relevant case. Over the last decade, its share price has been broadly stagnant, while Costco has outperformed it “by a considerable margin”, in terms of sales, earnings or stock market returns. One reason: according to HBR, far lower staff turnover means knowledge is kept in the company - and drives customer engagement. Such employers also invest in technology to enhance the performance of their staff, using each to complement the other. The Spanish retailer Mercadona similarly invests heavily both in training and stock management systems.

Wages and labour performance are also becoming part of businesses’ reputational capital. See, for example, the increasing success of the UK Living Wage campaign in signing up large companies as “living wage employers”. The public sector can encourage this, for example by giving tax breaks or other forms of support to companies who deliver such commitments, and sharing evidence of business benefits.

Figure 2

Source: Andrew Curry/The Futures Company

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Keeping the market honest: Turning to more interventionist approaches, the state can take the view that it wants to drive unscrupulous low-wage employers out of the market as a way of driving up standards and investment (because low-wage, employers are unlikely to commit to training, and have little incentive to invest in capital equipment, which reduces productivity.) This leads to approaches such as enforcing (and increasing) minimum wages, both through regulation and legal frameworks, and also through public procurement rules.

Such a policy complements the “enlightened self-interest” approach by removing free-riders from the market. Although conventional wisdom has argued in the past that minimum wage legislation costs jobs, this seems to be a weaker effect than claimed.

Re-imagining work: Much of our intervention in the labour market is driven by a view that it creates social goods, both from an economic perspective and also from a social perspective (over a long period studies have shown that worklessness produces adverse psychological and physical effects). But it is possible that such findings are linked to a set of “modernist” social values that are rapidly giving way to “post-materialist” values. Certainly, people with some income and a degree of social capital who do not have to work find worthwhile things to do, including volunteering. This is part of the argument for the Basic Income: that as we move to the “post-industrial” world envisioned by Daniel Bell, in which skills are more embodied in personal knowledge, that

encouraging traditional work is no longer the only, or the best, way to get the social benefits from productive engagement.

The rise of the basic income: Until very recently, the idea of a basic income, a minimum sum paid to all people regardless of their work status, was right of the fringe of political discourse. But it has been moving rapidly towards the mainstream. The idea has deep roots: George Bernard Shaw promoted it as “a vagabond’s wage” a century ago.

The analysis in this provocation helps to explain why. It is a policy idea that helps to improve outcomes whether the technologists or the sceptics turn out to be right. And in the meantime it helps to shore up economies, and individuals, that are struggling in the slow readjustment of labour markets.

If the “robots” hypothesis is right, we’ll need a basic income to make the economy work (markets need people who can afford to buy products). If the market power argument is right, then basic income keeps employers honest, by ensuring they have to pay good enough wages, in good enough conditions, to attract and keep their workers. One interesting side effect is that it would mean that our fundamental notions of the value of paid work could be about to shift, for the first time since the Industrial Revolution. A recurring feature of the ICT era has been that questions of power and politics have frequently been diagnosed as issues of technology. The future of work is just the same.

Director, Global Knowledge Lead – Global Resources, The Futures Company. Lead expert on the Future of Work.

Andrew Curry is a Director at The Futures Company where he leads the public sector team, and specializes in futures and scenarios projects. His career began as a financial journalist, working for the BBC and Channel 4 News. From there he migrated into new media where among other activities, Andrew launched Britain’s first interactive television channel in the 1990s. His interest in futures

partly developed from arguing with some of the more fanciful forecasters in the

Lead Expert – Andrew Curry

Minimum Wage Until very recently, the idea of a basic income, a minimum sum paid to all people regardless of their work status, was right of the fringe of political discourse. But it has been moving rapidly towards the mainstream.


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In an increasingly interconnected, complex and uncertain world, many organisations are looking for a better understanding of how the future may unfold. To do this successfully, many companies, institutions and governments are working to improve their use of strategic foresight in order to anticipate emerging issues and prepare for new opportunities.

Experience shows that change often occurs at the intersection of different disciplines, industries or challenges. This means that views of the future that focus on one sector alone have limited relevance in today’s world. In order to have real value, foresight needs to bring together multiple informed and

credible views of emerging change to form a coherent picture of the world ahead. The Future Agenda programme aims to do this by providing a global platform for collective thought and innovation discussions.

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The Future Agenda is the world’s largest open foresight initiative. It was created in 2009 to bring together views on the future from many leading organizations. Building on expert perspectives that addressed everything from the future of health to the future of money, over 1500 organizations debated the big issues and emerging challenges for the next decade. Sponsored globally by Vodafone Group, this groundbreaking programme looked out ten years to the world in 2020 and connected CEOs and mayors with academics and students across 25 countries. Additional online interaction connected over 50,000 people from more than 145 countries who added their views to the mix. All output from these discussions was shared via the futureagenda.org website.

The success of the first Future Agenda Programme stimulated several organizations to ask that it should be repeated. Therefore this second programme is running throughout 2015 looking at key changes in the world by 2025. Following a similar approach to the first project, Future Agenda 2.0 builds on the initial success and adds extra features, such as providing more workshops in more countries to gain an even wider input and enable regional differences to be explored. There is also a specific focus on the next generation including collaborating with educational organizations to engage future leaders. There is a more refined use of social networks to share insights and earlier link-ups with global media organizations to ensure wider engagement on the pivotal topics. In addition, rather than having a single global sponsor, this time multiple hosts are owning specific topics wither globally or in their regions of interest. Run as a not for profit project, Future Agenda 2.0 is a major collaboration involving many leading, forward-thinking organisations around the world.

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