Long-term business trends could trump Brexit for significance

As the Brexit debate rages on, and the wait for resolution goes on (and on!) it is important to remember that Brexit, while important, is not the be-all-and-end-all when it comes to future business planning. Here, Warwickshire County Council head of economy & skills Dave Ayton-Hill highlights three key longer-term trends which may prove to have a more significant impact than Brexit on future business growth and activity. 

Changing global economy

Without minimising the importance of current discussions around future free trade agreements, a longer-term look at global economic growth shows that the locus of activity is likely to significantly shift our current view of trade.

The maps below show where the top 20 largest cities in the world were in 2010 and where they are expected to be by 2100. One can see the huge explosion of growth, and therefore economic activity, in Africa and the continued strong growth in India and China.

This may require a fundamental rethink as to where the key markets and consumer population will be in the future and how this may challenge and change current export and market development activity for businesses within Warwickshire.

Technology Singularity

The rate of technological change is happening at an exponential rate, often characterised by the so-called “Moore’s Law” which, based on historical evidence, states that computing processing power doubles every two years. 

Technology is now capable of things considered impossibleless than a decade ago - and this rate of growth and development will rapidly increase in the future. Highly-regarded futurist Ray Kurzweil believes that we will achieve “technological singularity” by 2045. 

At this point, technology will have advanced so far, Kurzweil believes, that we will have created a super-human artificial intelligence (AI) of a level that will conceive ideas that no human being has thought about in the past and invent technological tools more sophisticated and advanced than anything we have today. 

While some way off yet, the advances being made in AI, machine learning and utilisation of big data are already pushing the boundaries of what people thought were possible. This will undoubtedly be a fundamental driver of future economic activity.

Millennials & Generation Z

According to research by Deloitte, by 2025 millennials (those people born between 1981 and 1996) and Generation Z (born after 1997) will make up 75% of the global workforce and those aged 15-24 will account for 20% of the world’s population. Not only will these two generations form the bulk of the future labour force for businesses, they will also be a hugely important consumer base.

However, these generations have a very different outlook on life and careers than current business leaders and managers. They are impatient when it comes to career growth (71% are likely to leave an employer in the first two years if they feel their leadership skills are not being developed) while members of Generation Z, the most tech-competent generation so far, are able to pick up developments quicker than other employees and therefore may require a shift in thinking to maximise the opportunities that this changing population may bring. For instance, Generation Z are digital natives – they have never known a life without always being online and connected. It is estimated that Gen Z spend, on average, 10 hours a day online.

This generation is also more pragmatic and somewhat more cautious than previous generations as they have grown up in a time in and around the financial crash, austerity and global terrorism. Saving money, stable work, investing in education, empowering work and opportunities for career progression are key personality traits. This contrasts with millennials, who tend to be more optimistic and entrepreneurial having grown up in a time of sustained economic growth. They are more driven by having had experiences travelling and are more likely to want to start up and run their own business.

Both generations place a high premium on equality and diversity, valuing brands and employers that share their values and beliefs and feel “authentic.” Finally, both generations – but particularly Gen Z – expect to work harder than previous generations, but also want their employers to invest in their future development through continued training.