The Real Trends to Follow in 2016 Back »

Every year experts make predictions about the new trends to watch in the future. This year is no exception, but I came across an interesting article by James Manyika, Director of McKinsey Global Institute that really hit some trends that I think are worth noting.

Manyika cites four powerful forces disrupting the global economy and throwing many of our old assumptions into question. Each one is big on its own, but they are happening together and amplifying each other. The changes they produce will force all of us, but especially leaders, to discard old ways of thinking about the world.

Shifting Economic Activity

The first great disruption is the shift of economic activity to emerging market areas. In 2000, 95% of the Fortune Global 500 was headquartered in developed economies. By 2025, nearly half of the Fortune Global 500 companies will be based in emerging economies, with China home to more of them than the United States or Europe. Cities that are barely known today will become economic leaders in the near future.

Fast-Paced Technological Change

Not surprisingly, the second great disruption is the acceleration of technological change. Digital and mobile technologies are being adopted at an unprecedented rate. It took more than 50 years after the telephone was invented for half of American homes to have one, but only 20 years for cell phones to spread from less than 3% of the world’s population to more than two-thirds. Facebook had six million users in 2006; today, it has 1.4 billion. Mobile connectivity offers new businesses greater chances to compete, but carries risks of security and possible job loss to those without high-tech skills.

Changing Demographics

The third disruption is demographic. For the first time in centuries, we may not see population increases in the world. Instead, we will deal more and more with population aging. As the elderly outnumber working-age people, pressure is put on the labor force and tax revenues needed to fund government.

Increasing Interconnection

The final disruption is the world’s increasing interconnection, with goods, capital, people, and information flowing ever more easily across borders. The resulting challenges – global competitors and the disappearance of local jobs – are already overwhelming workers and companies. Remaining agile, flexible and responsive will enable businesses to thrive, but they must be willing to look at new opportunities within the market. That goes for small and large businesses alike.

Manyika believes there is plenty of room for optimism. Business and government leaders, though, must be ready and willing to make the changes needed to transform in order to work through these global disruptions.

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