TREND TRAJECTORIESBASED ON:

“WHAT WE KNOW WITH CERTAINTY” !

MEGATRENDFRAMEWORK

BIRK Consulting, 2014

TECHNOLOGYOn the brink of a new industrial revolutionEvidence• Technological change happens exponentially. Moore’s law: 3 digital accelerators: Computer

processing power, storage and bandwidth.• Broad range of exponentially growing technologies, from nano technology, digital medicine to

robotics and artificial intelligence• Mobile connectivity is near omnipresent, allowing emerging markets to leapfrog old economy

infrastructure - they catch up faster. Develop new business models using mobile computing to address unmet needs.

• Continuously falling cost of technology

Impact• 25 years from now, computers will be infinite in size, unbelievably fast and cost nothing. • Business models: Sharing economy, crowd-sourcing/finance, increased service-business based on product

intelligence using MEMS/networks. DIY-movement, open-source.• Innovation: in products, processes and management/business models. Increasingly disruptive -> Cost and

time of innovation cycles shortens. • Mass markets reached faster -> digitalisation, dematerialisation. communication, Internet of Things• Manufacturing: 3D-manufacturing, augmented reality, intelligent self-organising manufacturing will

revolutionise manufacturing and industrial applications• Industries: New industries are emerging: robotics, nanotechnology, life science, etc.

1. INFINITE COMPUTING 5. SYNTHETIC BIOLOGY2. SENSORS & NETWORK 6. DIGITAL MEDICINE3. ROBOTICS 7. NANO MATERIALS4. 3D PRINTING 8. ARTIFICIAL INTELLIGENCE

EXPONENTIAL GROWTH FIELDS

0

2000

WORLD CHINA INDIA E.U. U.S.

2002 2004 2006 2008 2010 2012

2004006008001,0002,0004,0006,000

MOBILE SUBSCRIBERS

10-101

101010201030104010501060

MOORE´S LAW

CALC

ULAT

ION

S PE

R S

ECO

ND

PER

$1,

000

YEAR

ALL HUMAN BRAINS

ONE HUMAN BRAINONE INSECT BRAIN

1900 1940 1980 2020 2060 21001920 1960 2000 2040 2080

DEMOGRAPHICSReshaping demand and consumptionEvidence• The world population will grow from 7.1 bn. to 10.1 bn. before peaking in 45 years from now.• Urban population will grow by 1.2 Bn. within the next 20 years. Nearly all in emerging markets• The middle class consumers will grow by nearly 2 Bn. in the next 20 years.• Primarily in the emerging markets.• Ageing. In 2020 advanced countries will have more people over 65 than under 5. Advanced countries,

except the US, are ageing fast. But, also a few emerging countries such as China

Impact• The next 40-50 years will be a unique but challenging growth opportunity period in human history• Ageing in advanced markets will stagnate economic growth. Economic growth will be feasible, only through

Productivity gains, which will come knowledge and technology innovation. Robotics and other exponential growing technologies will play a key role.

• Stress on resources: Environmental degradation, stress on arable land and fresh water reserves and exponential growth in energy consumption will require solutions based on technological advancement, creating big growth in solar, nano- and sensor technology

10

WORLD POPULATION DEVELOPMENTSource: United Nations

YEAR

BILL

ION

0 500 1000 1500 2100

8

6

4

2

0

WORLD CONSUMPTIONSource: MGI – McKinsey Global Institute Research – 2012

20

40

60

80

02010

26 3412

38

6430

2025

EMERGING MARKETS DEVELOPED MARKETS

TRIL

LION

US$

GLOBALISATIONEmerging markets are accelerating globalisationEvidence• Emerging markets are driving global growth and consumption.• Production/value chains and R&D is increasingly taking place in emerging markets.• 19 of the 30 largest economies will be emerging economies within 20 years.• Global competition is increasing; In 2005, 9% of the world’s largest corporations were from

emerging economies, by 2011 it was 30%. • Growth in global trade is increasingly among emerging markets.• Labor market dynamics are changing rapidly. New low cost sourcing markets are emerging

Impact• Consumption: in emerging markets, requires „SMART products“ developed in emerging for emerging

markets. Demand for local R&D, talent and human resource management. • Industry: mass customisation and standardisation will co-exist, being global and local at the same time.• Manufacturing will increasingly implement customisation and niche production.• The new middle class has different needs, preferences and legacy, demanding rethinking products,

services and business models.

-10

-5

0

5

10

15

20

2007 2008 2009 2010 2011 2012 2013 2014 2015

% growth Real GDP growth rates Brazil

China

India

Russia

Emerging economies

Advanced economies (G7)

World

ENVIRONMENTALISMThe cleanest energy is the one not consumedEvidence• Energy consumption continues to grow: By 2030 world energy consumption will grow by 40%, 96%

of that growth is in emerging markets. • Resource scarcity due to urbanization and consumption, such as; lost arable land for food

production, lack of fresh water, rare earth materials. • The “Cleantech” industry is driven by investments in renewable energy. • Energy intensify is expected to fall significantly by 2030. The industrial sector accounts for approx.

1/3 of total energy consumption worldwide. • CO2 emissions and earth temperature continue to rise.

Impact• Conflict points: resource (food, land and water) scarcity can increase tension and conflict points.

Intelligent solutions: Rising cost of energy and falling cost of technology, will inevitably increase focus on lean energy consumption. Product intelligence, using low-cost MEMS, will increase efficiency in product performance and manufacturing processes.

• New materials: New super (nano) materials such as graphene will provide bio degradable super-batteries. Bio-degradable materials are already available for PET bottles and within few years for car dashboards.

• Waste/recycling: intensified focus to solve resource scarcity.

GLOBAL ENERGY USE SINCE EARLY TIMESSoruce: P. Marsh 2012

100

200

300

400

500

600

01

MILLIONBCE

100,000BCE

3000BCE

1400 1900 1970 2010

0.05 MILLION

POPULATION

THOU

SAND

PIC

AJOU

LES

(PJ)

GLOBAL YEARLY INVESTMENTS IN RENEWABLE ENERGYSource: Bloomberg 2012

0

50

100

150

200

250

300

2004 2005 2006 2007 2008 2009 2010 2011

BILL

ION

US$

ENERGY INTENSITY (TOE PER THOUSAND US$2010 GDP)Source: BP Energy outlook 2030

0

0.1

0.2

0.3

0.4

1970 1990 2010 2030

WORLD

INDIAUS

CHINA