Future tense

As directors approach the year ahead, long-term strategic foresight work from CSIRO has identified seven megatrends to help inform how their organisations think about risk and opportunity.

American baseball catcher Lawrence Peter “Yogi” Berra famously said “The future ain’t what it used to be”. That saying certainly rings true in the most recent work on megatrends at CSIRO. We’ve been working in this space for more than a decade. Our first major public launch was back in 2012. We’ve kept the work alive — and continually updated — ever since. And our narrative of the future has changed.

One of the big shifts in the narrative is that over the past decade, we’ve moved from the possibilities to lived realities. Emerging trends that were in their early stages back in the 2012 are now known realities, and what lies ahead of us are the next waves of innovation, disruption and transformation.

Extreme weather associated with climate change has been expressed through the unprecedented severe bushfire season of the 2019–20 summer and the 2021–22 extremely heavy rainfall and severe flooding in Queensland, NSW and Victoria. The weather extremes are something that is being felt not only in Australia, but across the world, with the most recent heatwaves in Europe adding to a string of hot and dry summers.

The geopolitical shifts that were once a footnote in our trends about global economic change are now a central theme, now with a dedicated megatrend. And technologies like artificial intelligence (AI), which were not on the radar in our 2012 report, have exploded in recent years and are set to impact on how just about every industry and organisation in Australia operates. 

Our current view of the future captures a new set of seven megatrends. They describe global trajectories of change impacting Australia over the coming 10–20 years. We present these megatrends as overlapping Venn circles to signal their interconnectivity — the trends under one megatrend often drive, influence or accelerate those of another.

Adapting to climate change

Regardless of the emissions- reduction path the world takes, there’s an urgent need to build resilience to climate-related disasters. Heatwaves, droughts, bushfire conditions, floods and cyclones are all expected to become more frequent and severe. Insurance costs and repair bills are rising and the impacts on human health and infrastructure are already substantial. This is no longer a distant or long-term future, it’s happening now. However, there are many solutions and cost-effective approaches to build resilience, and many governments, companies and communities are taking action. Future climate adaptation will be as important as climate mitigation.

Leaner, cleaner, greener

The global population continues to rise, placing increased pressure on finite food, water, mineral and energy resources. While these pressures have long been known, this megatrend highlights the emerging science, technology and innovations that provide a path forward for operating within tighter environmental envelopes. It also captures efforts to achieve net zero (or net positive), reduce pollution and protect biodiversity. While the challenges are considerable, the science and technology platform for problem-solving is higher than ever before. Many of the solutions don’t require “rocket science” — but relatively simple changes to business processes and lifestyles.

The escalating health imperative

Multiple health emergencies are putting compounding pressure on our healthcare system. We have seen more pandemics in the past 20 years than in the previous two decades, fuelled by rising air travel, population growth and density, and increased livestock and wild animal handling. Antimicrobial drug resistance is another looming global public health challenge. This is happening against the backdrop of an ageing population and high rates of chronic disease and mental health issues. Precision health and preventative health approaches will be critical tools in helping to flatten this demand. 

Geopolitical shifts

Global economic restructuring is shifting into an era of geopolitical strategic repositioning. Worldwide defence spending has reached an all-time high at US$2.1 trillion. Many Australian businesses have been disrupted by global supply chain problems. And sovereign capability is now a key priority. New technologies are also reshaping the defence strategy landscape. The journey through the 2020s–30s to a more stable, secure, peaceful and prosperous world will require cooperation and collaboration between democratic countries — and respect for international law on the global scale.

Diving into digital

Digital technology adoption was already happening quickly, but the pandemic has given it a huge boost. Telework, telehealth, online retail, education and entertainment have all boomed in recent years. We are arguably still in the early phases of the digital transformation, with the majority of change ahead. These impacts could be substantial. The coming years will reveal whether the recent changes to settlement and mobility patterns arising out of the pandemic will sustain, with these trends having significant implications for the future of our workforce, cities and regional centres — and ways of conducting business.

Increasingly autonomous

AI didn’t feature in the 2012 report, but we’d be hard-pressed to ignore the significant and profound advances in the capability and application of advanced autonomous systems. Practically all fields of science — from physical and natural science to social science and humanities — are AI. It is already leading to productivity improvements, but ongoing and future developments will require investment in research and development. This is an area where Australia is going against the global tide, with the level of research and development among Australian organisations declining over the past decade. 

Unlocking the human dimension

Australian trust in institutions saw a short-term boost in the early to mid stages of the pandemic, but this trust bubble looks to have burst. There are also important human and ethical dimensions to technologies such as AI that are increasingly gaining attention. Income inequality has risen gradually over the decades in most advanced economies. One of the ways it has expressed itself in Australia is through the housing market and accommodation insecurity. These social dimensions provide an important overlay for how leaders think about future business, policy and community decisions.

From foresight to action

Informed by a rich database of trends and expert insights, this is how we see the world evolving over the coming 10–20 years and its impacts for Australia. The megatrends are the trajectories of change, but there are many different ways they can play out. We can use scenario planning to identify alternative plausible futures, or identify wildcard events to shed light on hard-to-foresee and left-of-field occurrences that could knock a megatrend onto a different direction.

But as a director, leader and decision-maker what do you do with these megatrends? Strategic foresight is a field of research that explores multiple plausible futures. There is no crystal ball, but megatrends can still be extremely helpful. They provide a structure for conversations about the future. These conversations need to occur with staff, leadership teams, customers (current and future), investors and a wide-ranging stakeholder ecosystem for your organisation. Typically, the process begins with conversations about the future based on the evidence contained within megatrends. Conversations about plausible futures then naturally progress into conversations about preferred futures. And a shared view of preferred futures can translate into strategies, plans and actions to be implemented. That’s the typical pathway from foresight to action.

This last part is critical. So many times, in our experience, companies have foreseen plausible futures, but failed to act — famously, Kodak and the digital camera. Kodak helped invent it, but eventually filed for bankruptcy under a wave of digital disruption. The company failed to act in the correct way, in a manner proportional to the extent of forthcoming change.

Think about the megatrends that will reshape your business environment. Use them to structure conversations with customers, staff, leaders and investors. Then — crucially — translate what you’ve seen into practical actions that mitigate risk and harness opportunity.