Deloitte’s economic drivers of change can be found here. Many of these have direct implication for operations and operations managers.
- Fiscal stress – demographic changes (see previous blog), especially ageing and a potential decline in the proportion of workers in an economy, reduces a government’s income and increases its spending.,
- “Exponential innovation” – digital technologies appear to have no boundaries in terms of their capacity, so that innovation can be built on innovation and grow ever faster.
- “Infrastructure bottlenecks” – a major constraint on economic growth will be nation’s inability to update their ageing infrastructure in the developed world, or build new infrastructure in the emerging economies.
- Water scarcity and climate change – by 2025 two thirds of the world’s population will experience “water stress”. This along with climate change, will drive operators to innovate more and develop new technologies.
- Emerging middle class – although there will be many more middle class consumers, largely in Asia, their individual spending power will be less. Cost will become key order winner in these emerging markets.
- Mega v. Micro firms – big companies will continue to acquire mid-size companies, becoming truly global, leaving only space for small businesses to emerge and compete – often on the basis of innovation.
- “Data as currency and asset” – by 2020 digital data grows forty fold, up to 5,200 gigabytes for every human on the planet. “By 2020, more than 80 percent of consumers collect, track, barter or sell their personal data for savings, convenience and customization, making information a currency in the truest sense”.
- “Circular economy” – a shift from the traditional liner value chain (“take, make and throw away”) to a closed loop value chain, in which asset recovery is the norm (from waste reduction, recycling, and reuse).
- Talent and skills gap – demographic changes will create labour market shortages in developed will for skilled workers, not solely resolvable by improving quality of the national education system.
- Rise in living standards for all – technology will help to reduce the impact of scarce resources, such as food, raw materials, and energy.
- Digital currency becomes mainstream – as the economy shifts to a digital economy, payment using non-traditional currencies, such as Bitcoin, will increase.
- Transparent operations – consumers and other pressure groups will expect organisations to be much more open and transparent with regards to how they do things. This will become the norm.
- Income inequality will increase – wealth will increase for all, but at a much slower rate for the vast majority of the poor, than for the tiny minority of very rich.
- “Innovating to zero” – this is the idea that all operations and systems will be designed to be fail safe – zero defects, zero accidents, zero failures.