Global Forces & Trends
Week 5 Day 2
Inevitable Strategies
• Author makes bold predictions about possible futures.
– Not a prediction that all of them will
happen; but some of them probably will.
• Introduction of the concept of:
– First order effects
– Second order effects
Review of the Reading:
Inevitable Strategies
• Our world will change significantly when computers are developed with the processing power of the human brain.
Review of the Reading:
Inevitable Strategies
• Machines will begin to design and build their own machines, outpace the
human ability to understand their
purpose or processes and direct the course of progress ever after.
• What do you think?
– Will it happen?
– Would it be a good or a bad thing?
Review of the Reading:
Inevitable Strategies
• The economic potential to lift billions out of poverty will be within our grasp.
• A new kind of political order.
• Climate change of an abrupt nature.
Review of the Reading:
Inevitable Strategies
• Reasons for great transformations:
– Dramatically increased lifespan and its effect on human identity, capability and community.
– New patterns of human migration will
either fragment or unite humanity in new ways.
– Economic opportunity for people around the world.
Review of the Reading:
Inevitable Strategies
• Reasons for great transformations:
– A dominant global military.
– A consortium of nations bound together not just by their intentions but by their common need for lawful collaboration.
– A set of disorderly nations with the
capacity to unleash terror, disease and disruption on the rest of the world.
Review of the Reading:
Inevitable Strategies
• Reasons for great transformations:
– Technological capabilities that include
new materials and machines, which could expand the power of computers by orders of magnitude, and permit people to
reprogram reality.
– Pollution-free inexpensive energy sources that release humanity from its addiction to fossil fuels.
Review of the Reading:
Inevitable Strategies
• Reasons for great transformations:
– A restoration of nature under human stewardship, alongside extreme and
unavoidable danger from a new plague and global climate crisis.
Review of the Reading:
Inevitable Strategies
• Any of the changes listed would be significant; but the greater impact
comes from the ways in which these changes will interact together.
– And the second order effects associated with these changes.
Review of the Reading:
Inevitable Strategies
• The more extreme the first order
effects become, the more explosive the second order effects will be.
• The author indicates that the next
transition may take place over the next 30 years. (More rapid then the past
change)
Review of the Reading:
Inevitable Strategies
• The relative “stability that we feel today is rapidly going to disappear”.
Review of the Reading:
Inevitable Strategies
• The Author goes on to contradict this statement when he says, “that the
world will be about 1.5 times richer
than it is today” which will be driven by
“new productivity, new globalization and new infrastructure”
Review of the Reading:
Inevitable Strategies
• “If there is political will, to ensure that this wealth is distributed more
broadly, then we might see an ever- widening circle of prosperity”
Review of the Reading:
Inevitable Strategies
• Which do you think it will be?
• Will the world be more like China, in which one party state creates
stability and prosperity that go hand and hand?
Review of the Reading:
Inevitable Strategies
• Will it be more like India in which a disorderly democracy has produced a mixed record of economic
progress?
• Or – Will other models for effective political economy evolve?
Teams of two or three.
Does not need to be your project team.
(You will report your findings.)
In Class Exercise
Review of the Reading:
Inevitable Strategies
• Preparing for the future:
– Observe & interpret the interaction of forces that might effect you.
– Have a sense of timing: When you see en event approaching, assess how fast it is approaching.
– Identify in advance the kinds of “early warning indicators” that signal a
change.
Review of the Reading:
Inevitable Strategies
• Preparing for the future:
– As an organization, you should plan and practice how the organization would react.
– Avoid denial (seems like common sense; but it is a common mistake)
Review of the Reading:
Inevitable Strategies
• Preparing for the future:
– Understand that markets have cycles (ups & downs). Don’t spend all of your money during the ups as you will need it for the downs.
– Work within your knowledge base.
Review of the Reading:
Inevitable Strategies
• Preparing for the future:
– Keep learning and seeking information about the market, new discoveries and global trends.
– Value sustainability.
– Place a high value on financial
infrastructure. “Individuals need safety nets & insurance against crisis.”
Organizations can help build those safeguards.
Review of the Reading:
Inevitable Strategies
• Preparing for the future:
– Actively network.
– Cultivate connections.
NEW TREND
Global Economy Growing More Integrated
Trend Analysis: The Global Economy is Growing More Integrated.
• Only half of the world’s one hundred largest economies are nation-states.
(The rest are multi-national corporations).
Trend Analysis: The Global Economy is Growing More Integrated.
• European Union:
– Relaxation of border controls.
– Relaxation of capital controls.
– Adoption of a common currency.
– Uniform product standards.
• Make it easier to distribute products and support functions throughout the continent.
Trend Analysis: The Global Economy is Growing More Integrated.
• The internet is bringing
manufacturers closer to remote suppliers & customers. (They can communicate more often and more effectively.)
Trend Analysis: The Global Economy is Growing More Integrated.
• Companies are outsourcing high- cost, low-payoff secondary
functions to suppliers, service firms and consultants (many of them in
other countries).
Trend Analysis: The Global Economy is Growing More Integrated.
• Parts for the new Boeing 787
“Dreamliner” are being made in at- least eight countries around the
world for assembly in the U.S.
Trend Analysis: The Global Economy is Growing More Integrated.
• Toyota has manufacturing or assembly plants in:
– Japan, Australia, Canada, Indonesia, Poland, South Africa, Turkey, The
United Kingdom, The United States, France, Brazil, Pakistan, India,
Argentina, The Czech Republic, Mexico, Malaysia, Thailand, China, Vietnam,
Venezuela, and the Philippines. (22)
Trend Analysis: The Global Economy is Growing More Integrated.
• Jobs in Western Europe are
migrating to Eastern Europe, the former Soviet Union and the
English/French speaking former colonies of Africa.
• India has begun to ship jobs to even lower cost countries in Africa.
– That’s right India is outsourcing.
Implication Analysis: The Global
Economy is Growing More Integrated.
• The growth of e-commerce enables businesses to shop globally for the cheapest raw materials and
supplies.
– Also allows small companies to compete with giants.
Impact Analysis: The Global
Economy is Growing More Integrated.
• The internet has allowed for the development of web-based
businesses which compete in the global market. (“e-preneurs”).
– These new forms of companies may have production, inventory storage,
order fulfillment and other functions all outsourced.
Impact Analysis: The Global
Economy is Growing More Integrated.
• Demand will grow for employee
incentives suited to other cultures:
– To aide executives going overseas.
– To assist with other aspects of doing business in foreign countries.
Impact Analysis: The Global
Economy is Growing More Integrated.
• Rising demand for foreign-language training is likely to be a temporary phenomenon, as more countries
adopt English as part of their basic school curricula.
Trend Analysis: The Global Economy is Growing More Integrated.
• Questions?
Assignment
• Read “Inventing the Future”
