Article: Interview: Defining the Power of Megatrends

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Interview: Defining the Power of Megatrends

In a candid conversation with People Matters, Dr. Mark Esposito, a Professor of Business and Economics at Harvard Universitys Division of Continuing Education and at Hult International Business School, an academic, consultant, entrepreneur, and Global Nomad talks about the concepts of Fast Expanding Markets and DRIVE that represent new lenses of growth detection.
Interview: Defining the Power of Megatrends

Dr. Mark Esposito is the co-founder of the concepts of “Fast Expanding Markets” and “DRIVE”, and is also the co-author of the bestseller ‘Understanding How the Future Unfolds: Using Drive to Harness the Power of Today’s Megatrends’. Mark is also an active entrepreneur and has co-founded Nexus FrontierTech, an Artificial Intelligence Studio that is aimed at providing AI solutions to a large portfolio of clients. He consults in the area of corporate sustainability and competitiveness worldwide for startups, boards of directors, communities, and national governments. He has advised the President of the European Parliament and is part of the ‘Future of Production’ network at the World Economic Forum, where he was also appointed as Global Expert. 

You are a professor, an entrepreneur, a government adviser, and an author. Tell us how you ventured into this direction of defining megatrends?

For me, it has always been about contributing to both the academia and the practical world. Dr. Terence Tse and I ventured into searching the multiple factors that were impacting the lives of executives around the world. We started thinking about figuring out the risk factors that could be represented in a book so that a wider audience could have access to our findings. We interviewed multiple CEOs and found that irrespective of their positions, they were all being impacted by a certain type of phenomena that comprised integrated megatrends. Our “DRIVE” framework basically represents the common themes that got our attention. 

The first line of the introduction to your book ‘Understanding How the Future Unfolds: Using Drive to Harness the Power of Today’s Megatrends’ says that “We are proud to be outcasts in the academic world”. This is a bit revolting coming from an academician like you. Tell us what made you state this?

Both my co-author Dr. Terence Tse and I have been in the traditional academic careers. We got our degrees and went through different ranks while moving up the career ladder. However, after a while, we realized that we were no longer particularly happy with the way the academic world was and is still carrying itself.  We started to notice irrelevancies in many aspects of academia that were not really helping anyone in the real life or real business. So we left our interest in academia to pursue the real world challenges.

We are still academicians and still believe in the principles that many academic researches support. However, we try to use the challenges of the real world to shape our agendas rather than using the ‘internal agendas’ of the academia.

What are the megatrends? Tell us about the DRIVE framework that you have created?

Megatrends are trajectories of large scale events that are happening today and will impact some important dimensions of our lives in the future. These can be, for example, the impact of demographic changes, natural resources, and problems with our climate or inequality. The purpose is to understand how these megatrends influence other aspects of the real world and how individuals, companies, or governments can prepare for tomorrow by simplifying complexities, taking informed decisions, and identifying new business opportunities today.

The DRIVE framework basically is the organization of the most common factors and things that we have discovered. These are certain large-scale processes that determine how businesses, governments, and societies behave, and how decisions are made. We have found that there are five undercurrents that can give us some direction as to how the future will unfold. These are — D is Demographic and social changes that tell us how the emerging social fabrics are changing and will impact the businesses in the future. R is Resource scarcity that entails the consumption patterns of people along with their social composition and how this impacts the resources of our planet. This also involves how businesses can benefit from the circular economy. I is for Inequalities that points out to the widening gap between the haves and the have-nots. V is the Volatility, Scale & Complexity that stems from technological developments that are having an increasing influence on people, inputs, and distributions and are leading to complex and unpredictable surroundings and contexts at all levels, whether for individuals, businesses, societies or economies. E stands for Enterprising Dynamics which is primarily new business models that are emerging from the emerging economies. The constantly refreshing technologies are allowing many companies to come up with innovative ways of operating businesses, opening up new and previously unimaginable opportunities to individuals, societies, and economies.

When we talk about the economy and the fast expanding markets, tell us where exactly is this growth, how can we find it, and how can organizations nurture it?

The study of fast expanding markets was one of the precursors to our research on trends. The original idea before we came up with megatrends was that in the emerging economies, growth happens in a pure state and faster than other markets. This idea can be easily understood if we look at the trends. The connection I want to make here is – when you understand how trends will possibly evolve, you can understand the ways in which possible opportunities of new businesses can emerge. So there is a direct correlation between megatrends and new businesses. 

It is important for businesses to wise up to what is happening in the VUCA world. Do you think there is a roadmap for businesses to navigate in this uncertain future? 

I think there is. It is not a treasure hunt but more about a way of thinking about the future that does not get paralyzed by the things we don’t understand. We come from the 20th century ‘structured’ stock of ideas that had a certain kind of predictability to them, for example, “If you want to know what tomorrow looks like, just look at what happened yesterday”. Although the world has changed, it is still built into the old system. The roadmap happens if we simply allow this new understanding of how the future is really beyond us yet still a part of our lives. The roadmap gets built by allowing people to think about scenarios, look at megatrends and opportunities to expose themselves to different trajectories and allow fluid thinking. It is always more about a cultural shift than a mind-set. 

When you are talking about the present for the future, in a way you are anticipating the future. But it is always hard to predict where one is heading or what one is doing. How do you go about it?

If you go by what the megatrends indicate, scenarios might arise that could be difficult for us to embrace if they really happen. But what megatrends allow us to do is to use these powerful trajectories to enable people to take action in the present and possibly change the trajectory in the future. For example, the global demand for water will increase by 40 percent by 2050, and cities may experience difficulties maintaining their supply and sanitation requirements. But this is an opportunity for individuals or businesses or governments to think about what they can do today to conserve water so that the future is better. We aim to use such powerful trajectories to simply allow companies or people to understand how their businesses will be affected if water was not sufficient for their growing demands or markets. We allude to the future and tie such lessons to the megatrends to change the present.

“Future is not a reflection of the past but a reflection of what we do now.” Can you elaborate on this?

I think there is an assumption about the future that it is always better. We have a glorified and romantic image of the future that depicts more opportunities or possibilities. But if you think about it, the future is nothing more than a number of different ‘presents’ that are now becoming the future through aggregation. If you want to really think about the future, you should think about the present rather than thinking about the future as dissonant or detached from you. We want to correct this wrong perception that future is something that is separate from the present — it is rather the opposite. Changing the future starts by changing the present. This is something we all know, but I think we have drifted away from this notion due to this very romantic view of the future. We want to empower the people to be able to understand the power of today to change tomorrow, rather than thinking that tomorrow will happen anyway.

Your theory is rooted in the assumption that phenomenal growth in organizations is not triggered by business opportunities but by social needs. Can you tell us more about this?

This is something we discovered when we were looking at the megatrends. All of the trends tend to be of a social nature. They are not just about technology or economy – but they are an integration of social needs and are driven by a social dimension. When we discovered this, we tried to discover the business opportunities that were hiding in social issues. For example, the trend of increasing health consciousness and the rise of superfoods. But think about where this started from. Countries in the Latin America that are relatively poor wanted to diversify their food production so they tried to get into the market in a different way, by supplying superfoods – an example being Quinoa. On one hand, you have the trend of health consciousness, on the other, you have the social dimension – of poor countries trying to solve their social and economic challenges. 

Tell about circular economy and why does it matter?

Since the industrial revolution, we have been able to depend on natural resources to achieve economic growth and development. But as these resources become scarcer and more expensive, and the overutilization of these resources is having negative impact on the environment, we need to find new ways to create a more sustainable economic growth model that generates more employment and improve competitiveness. Circular economy was one of the answers we found for organizations currently impacted by resources, but how their resources can be better managed by integrating them back into the production. Circular economy is one of the strategies that emerged from this research that seems to be working pretty well in decreasing our dependency on the resources from the level of extracting resources and integrating the existing resources back into the economy. The circular economy not only represents a paradigm shift that waste is reconstructed to resources, it is also about economic augmentation through resource efficiency and business transformation. 

No one is really talking about the real impact that AI will have on businesses. How do you think AI will change the face of businesses and workforce? What is the real impact this will have?

What we know is that AI is simply increasing the chances for certain types of jobs to be replicated by an algorithm. There is increased efficiency and increased replacement of labor because of AI solutions. We have been seeing the rise of AI as a way of responding to our needs for more efficiency. But of course, when you do this at a scale which is impacting billions/millions of people, the collateral you are creating is that employability becomes weaker.

AI has this opportunity to reshape some of the concepts of our employability.

But it still is not fully developed at the rate that we hear in the media because it is still very expensive to develop AI.

Topics: Change Management, Diversity

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