THOUGHTS

Megatrends

The whole world is

looking anxiously
at the effects of
climate change,
demographics and
the scarcity of
resources.
We take a different
point of view.

Thoughts Maps
OUR GLOBAL MAP OF OPPORTUNITIES
Page 18

Page 20

Page 22

Page 26

Global map of
opportunities:
climate change

Global map of
opportunities:
demographics

Global map of
opportunities:
scarce resources

Who wins where?

Where climate change yields

opportunities for companies

Where demographic change produces opportunities for companies

Where resource scarcity leads to

opportunities for companies

Who will best manage

scarcity and thus benefit
from the megatrends

THOUGHTS
Megatrends

Beware, megatrends!
The whole world is looking anxiously at the effects of climate
change, demographics and the
scarcity of resources. We take a
different point of view. Our global
map of opportunities shows the
GROWTH POTENTIAL that these
megatrends are opening up for
companies and who can profit
from them. Allow us to introduce
you to a considered but optimistic
view of the major changes of
our times.

Megatrends

Authors:
Burkhard Schwenker
Tobias Raffel

A few weeks back we launched our new

publication series Thoughts with yet another
optimistic economic scenario. As we said then,
we don't worry so much about short-term
turbulence and market trends: We prefer to look
at fundamental strengths and underlying
developments. To date our instincts have been
true. Our forecasts have been relatively stable
and accurate over many years while other
commentators change their predictions every
month or so. They focus too much on quarterly
figures, passing moods (the business climate,
consumer confidence, investment sentiment),
volatile stock markets and supposed trends.
The global economic crisis of 2008/09
showed just how dangerous it is to trust in such
trends. Markets are volatile, moods swing. The
collapse of Lehman Brothers and the subsequent
global recession, the crisis in Greece and
continuing loss of trust in the eurozone as a
whole, Fukushima and Germany's turnaround
on nuclear energy, the sudden slump in stock
market indices in August 2011 for no good
economic reason the list of unexpected events
that require swift action goes on and on.
Commentators refer to these changes as "trend
reversals". The question is, which trend is about
to reverse next?
In a nutshell, that is the question that we set
out to answer here, which simultaneously kicks
off a series on megatrends within Thoughts.
Better yet, we want to find out which trends are
not about to reverse. Which trends can we rely
on when making predictions about longer-term
opportunities and risks for companies? We
believe that the answer boils down to just three
megatrends: climate change, the scarcity of
resources and demographics. All three of these
megatrends have to do with shortages: of people,
of resources and in the environment. Yet in
business terms, shortages drive innovation and
growth. Consequently, we suggest a slightly
different point of view. Rather than painting
pictures of doom and gloom an aging society,
collapsing social structures, insufficient raw
materials to support the functioning of industry,
an imminent climate disaster driven by growth

we choose to focus on the opportunities

created by these three megatrends for business
and the economy. If all goes well, these opportunities may help solve some of the challenges that
face us on the road ahead.

A.
What
exactly are
megatrends?
Which ones are significant?
Future scenarios are ten a penny. Thousands of
self-proclaimed "futurists" earn their living
explaining possible future developments to
decision-makers in business and politics.
Hundreds of scientific think tanks around the
globe publish daily studies dealing with what lies
ahead. More than 40 universities even offer
degrees in "futures studies".
Many of the megatrends that futurists have
proposed in the past often with sexy-sounding
names such as "wellness" or "cocooning" are
great for inspiring discussions but not much help
when it comes to actually developing strategy.
On closer analysis, some of them turn out to be
already covered by other megatrends. So we
need a clearer definition of what is meant by
the term. Megatrends, we would suggest, are
trends that alter business and society in a
profound and lasting fashion, over decades rather
than years. They have an impact on every one
of us. They fundamentally alter the opportunities
and risks for companies. In short, they are those
trends that we must always take into account
when imagining possible futures.

THOUGHTS Megatrends

ROLAND BERGER STRATEGY CONSULTANTS

TREND COMPENDIUM 2030

seven megaTrends
our inTeracTive dvd "Trend compendium 2030" summariZes The
key findings of fuTure research on These seven megaTrends.
of which THree are relevanT To commercial success

START

INDEX

TRENDS

CONTACT

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The second edition of our Trend

compendium 2030 has just been
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ScarciTy OF
reSOUrceS

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reSpOnSibiliTy

Megatrends

These seven trends meet our proposed definition

of megatrends:
Globalization and increasing
worldwide economic integration
Demographic change, i.e. the
expansion of the world's population and the
shrinking of established societies
Technology above all the
growing speed of technological development
that will change the economy and every aspect
of our lives
Scarcity of resources, particularly
fossil fuels and key materials for technology
Climate change, i.e. the impact of
global warming on the Earth
The knowledge society, especially
with regard to knowledge mobility and the
technological advance it engenders
The growing significance of global
responsibility
The key findings of future research on these
seven megatrends are summarized in our
interactive DVD "Trend Compendium 2030". The
second, revised edition of the Trend Compendium has just been published; it is also available
as an app (see box on p. 6).
In this article we go a step further. We
attempt to put flesh on the bones of these seven
megatrends, make them easier to work with and,
above all, identify the growth opportunities that
they entail for companies. Our approach is
intentionally upbeat: We view the megatrends in
a decidedly optimistic light as opportunities for
business and society. We have adopted this
approach in countless client projects over the
years and found that very few of the megatrends
actually turn out to be relevant for business. In
essence, there are just three: climate change,
demographics and the scarcity of resources.
These three megatrends have the greatest impact
on business and offer the most opportunities
for companies. The responses by business to
these megatrends show many similarities. For
example:
Climate change: Renewable energy,
energy efficiency, new energy concepts, modern
resource-saving production processes

Demographics: Increased productivity, automation, age-appropriate production

structures, new products, mobility concepts
Scarcity of resources: Energy
efficiency, new mobility concepts, resourcesaving production concepts, technological factor
substitution
Connecting these three megatrends is the
idea of industrial competence, the basis for our
optimistic economic scenario. By "industrial
competence" we mean the ability to link
industrial skills in fields such as engineering,
electronics and plant engineering with services
and new technologies in such a way as to enable
lasting improvements in productivity. All three
megatrends have to do with shortages: shortages
of raw materials, shortages of people, shortages
in the environment. For this reason we believe
that many other trends can be subsumed at least
partially under these three megatrends. To profit
from the trend of globalization, for example,
companies need to find smart solutions to these
challenges. Knowledge (and hence value)
will gather and concentrate where industry
and services can best be combined. New
technologies will emerge where knowledge is
concentrated.

THOUGHTS Megatrends

Megatrends

B.
Facts and
figures
What do we know about
these megatrends?
Our aim here is to reinterpret the three
specified megatrends and identify the opportunities they create. With the help of our scenario
database at the Leipzig Graduate School of
Management's Center for Scenario Planning,
we have selected what we believe to be the
ten most important studies relating to each
megatrend and analyzed their findings. A list
of these studies appears on p. 28.
On some points the jury is still out the
causes of climate change, say. But one thing is
clear: Climate change, demographics and the
scarcity of resources will make lasting changes
to our situation in the coming years. These three
megatrends will lead to new regulations (thresholds, permitted materials, etc.) and pressure from
society that requires a response from the business
world. Before we come to our new interpretation
of the megatrends, here are the established facts
and figures in brief:

Megatrend
Climate change
The world is getting warmer and extreme
weather events more frequent two factors that
may have tremendous ecological, economic and
social costs. Scientists disagree about some of the
facts: Is climate change really caused by increased CO2 emissions, in other words human
activity, or at least partially the result of increased solar activity? Nevertheless, widespread
agreement exists that climate change will affect
all of us sooner or later, even if its current impact
varies greatly from region to region. From our
point of view, the following facts are relevant:

THOUGHTS Megatrends

Average global temperatures are

rising. An increase of 0.7 degrees Celsius
has occurred in the last 100 years, roughly
0.5 degrees of it in the last 20 years. By the year
2030, scientists expect to see a further increase
of 0.5 to 1.5 degrees Celsius
Land masses are warming up
twice as fast as the ocean. According to
calculations by the Intergovernmental Panel
on Climate Change (IPCC), the sea level is
expected to rise by between 6 and 11 centi
meters by 2030 as a result of global warming
and the melting of the ice caps
Most scientists expect to see
more frequent and more intense heat waves,
stronger rainfall, faster wind speeds and more
frequent droughts, floods and other extreme
weather events in the future as a result of
climate change
Developing countries on the
Equator will suffer most. Some 95% of deaths
caused by natural disasters in the last 40 years
were in developing countries. Having said that,
extreme weather events are occurring all over
the world. Munich Re, for instance, has been
paying out more compensation for extreme
weather events each year since the 1980s, in
Germany just as much as in rest of the world
Although the ecological, economic
and social costs of climate change are difficult
to calculate, the Stern Report is still considered
the standard reference work on this issue.
According to the report, unless we take swift
action the costs of climate change could amount
to up to 20% of world Gross Domestic Product
(GDP). The United Nations believes that
industrialized nations need to spend some USD
86 billion annually on climate protection from
2015 onward half of it on direct protection
and adjustments, and a further USD 40 billion
on fighting the poverty caused by global
warming.

differenT ways of
seeing how our
world develops

cHaOTic
No structure that humans
can identify at first sight
Chaos theory analyzes
chaotic developments

STiMUlUS-DriVen
Shifts in direction after single events:
Environmental awareness after
chernobyl, focus on security after 9/11
Creationism

circUlar
Religious beliefs of reincarnation
The eradication of existing epidemics and
illnesses (e.g. plague, smallpox) and the
appearance of new ones (e.g. HIV, swine flu)

in WaVeS
Kondratiev: Long waves (S-shaped,
technology-driven cycles of modern
capitalism that last decades)
Business cycles: Economic ups
and downs, labor markets,
interest rates, stock markets

STepWiSe
Marxism: Socio-economic conflicts have historically
manifested themselves as distinct stages:
1. Primitive communism 2. Slave 3. feudalism
4. capitalism 5. socialism 6. communism
Hegel: Thesis, antithesis, synthesis

linear
Darwin: Survival of the fittest
Knowledge, experience, etc. which are based
on what previously existed and therefore
steadily follow a linear trend of the past

THOUGHTS megatrends

Megatrends

Megatrend
Demographics
We are getting older, the global population is
expanding (albeit increasingly slowly) and more
and more of us are living in cities. Of the three
megatrends outlined above, demographic change
is the most predictable and easiest to measure.
However, its interpretation depends to some
extent on what level and period of change you
look at. On a global level, over the long term, life
expectancy is indeed increasing and population
growth slowing down. But in some African
countries, for instance, the AIDS epidemic has
slashed life expectancy over the past decade.
Similarly, while populations are expanding in
most developing countries, they are shrinking in
absolute terms in Germany, Japan and other
industrialized nations. Here are the key facts and
figures in brief:
Life expectancy is growing
continuously: We are getting older and older. A
boy born in Germany today will probably live to
be 78, a girl to be 82. Twenty years ago life
expectancy was 6 years less in each case
The average age worldwide was
24 in 1990, compared to 29 today and a forecast
34 in 2030. Of course, there are enormous
regional differences: Japan leads the way with a
life expectancy of 82.6 years, while Mozambique brings up the rear with a life expectancy
of just 39.2 years
The global population continues to
grow fast, currently by around 70 million
people a year. That is almost like adding
another Germany each year. But growth rates
are declining continuously, from 1.3% a year in
the period 1990-2010 to just 0.9% in the coming
two decades. According to current UN forecasts
(the "middle scenarios"), the world's population
will be 8.3 billion in 2030, 9.6 billion in 2050
and 10.1 billion in 2100 only slightly above
its mid-century level (compared to 7.01 billion
today)
Half the world's population
currently lives in cities, the majority in one of
the world's 306 million-strong cities. This trend

10

THOUGHTS Megatrends

is growing. In the coming decades more and

more people will move to cities; indeed, over
180,000 already do so every day. In 2030,
4.9 billion people will live in cities, or 59% of
the world's population. In developed countries
the proportion of city dwellers will be even
higher, at 81%, compared to today's 75%

Megatrend
Scarcity of resources
Key industrial raw materials and energy sources
are increasingly thin on the ground. In the long
term this means higher prices and more fiercely
contested raw material markets. Mostly this
concerns oil and gas, metals such as copper,
steel and aluminum and rare minerals. But
other raw materials like timber, coal and even
water are also finite, or at least will not always
be as abundantly available as today. So what
does the future hold? Here are the facts:
It is unclear when exactly we will
run out of oil, gas and coal. Scenarios differ on
this point. Taking an average of various
forecasts, current thinking appears to be that
oil reserves will last another 46 years, gas
another 63 and coal another 119 years
Perhaps more interestingly,
according to the latest studies we could reach
the "oil peak" the point in time when the
maximum amount of crude oil is extracted
worldwide as early as 2020. In any case, the
rate of extraction will probably be in decline by
2030 at the latest. Once we pass the oil peak,
the price of oil is likely to rise strongly given
continuing growth in global demand
Globally, oil will remain the most
important source of energy in the next 20
years, meeting 31% of the world's energy needs
(compared to 35% today). It will be followed by
coal at 27% (today: 26%), gas at 23% (unchanged
from today), renewables at 13% (today: 10%)
and nuclear power at 6.4% (today: 5.5%).
New extraction techniques such as oil sand
mining in Canada, deep-sea drilling off the
coast of Brazil and offshore drilling in the
Arctic could significantly extend the availability

of fossil fuels. As oil becomes scarce, these new

approaches will become profitable. However, in
many cases they also face political opposition
and so involve greater risks
Metals, rare minerals and timber
are also likely to grow scarcer in the coming
years. Demand for copper has been growing
constantly for years. Recently, demand from
China and India has led to an explosion in
prices on the world market. Today's copper
price is in excess of USD 8,500 a ton compared
to less than USD 1,500 a ton in the year 2000.
Copper producers are unable to keep up with
demand, and many of the world's biggest copper
mines are already in decline in terms of
production volume. Finding new sources of
copper takes a long time
Rare metals used in high-tech
products yttrium, indium, lithium, niobium
and neodymium are in a particularly tight
situation. Demand for these and other valuable
metals is expected to triple by 2030. Yet they
are only mined in a handful of countries
China, Russia, the Congo and Brazil which
brings additional insecurity
The scarcer raw materials become,
the more expensive they grow. Price predictions vary wildly: The International Energy
Agency (IEA) is forecasting an oil price of USD
190 in 2030, while the US Energy Information
Administration puts it at between USD 124 and
204. The scarcity of resources is also a highly
politicized issue, as demonstrated by the
conflict over Russian gas supplies, competing
pipeline projects from Siberia and Central Asia
to Europe, and the political embargoes and
restrictions on the export of rare earths
imposed by China
Another thing that our three
megatrends have in common is that they are
viewed as negative phenomena by the vast
majority of experts and futurists. Here are some
of the things they say:
Climate change is destroying our
habitat. Entire countries are sinking as sea
levels rise, others are becoming uninhabitable
due to drought, heat or extreme weather events

Demographic change means that

we are growing old and lazy. Our social
systems depend on contributions by today's
workers and are on the verge of collapse.
Our innovative talent is drying up
The scarcity of raw materials means
will have to say goodbye to the quality of life to
which we have grown accustomed in the past.
Finite resources cannot be replenished
The consequences of climate change,
demographics and resource scarcity are almost
universally seen as negative. A favorite method
used by analysts to illustrate global phenomena
is the world map: Where are there increasing
numbers of hurricanes, floods and droughts?
Where are populations aging particularly fast?
Where are fossil fuels running out and how
soon will it be before they are all gone?
The map on p. 12 "Who loses out where?"
illustrates the mainstream perspective on the
consequences of climate change, demographics
and the scarcity of resources, as reflected in
the studies listed in the appendix. It paints
a grim picture of unavoidable deterioration and
universal menace.

THOUGHTS Megatrends

11

Thoughts Map #1
Who loses out where ?
Who is worst affected by the negative impact
of the megatrends?

Climate change
Negative impact of hurricanes, floods,
droughts and extreme weather events

Demographics
Negative impact of shrinking,
aging populations

Scarcit y of resources
Negative impact of increasingly scarce
and more expensive raw materials

12

THOUGHTS Megatrends

Megatrends

THOUGHTS Megatrends

13

C.
OUR APPROACH:
A FRESH ANGLE
ON MEGATRENDS
We accept neither these prophecies of gloom and doom,
nor their widely assumed inevitability. As we see it, the
most important thing is not where hurricanes, floods and
droughts are increasing, but where new farmland and
living space is becoming available and what business
opportunities are being created by ecofriendly technologies. Our concern is not (yet again) to identify whose
populations are aging at an alarming rate or whose social
welfare structures will collapse the quickest. What really
interests us is where birth rates and life expectancy are
increasing fastest and how longer life and better health
can be combined with new technologies to deliver new
benefits. We pay less attention to where ever more scarce
reserves of fossil fuels can be found, by when they might
run out and what pricing and/or political conflicts might
be triggered as a result. Instead, we prefer to focus on the
industrial and social potential that is linked to renewable
energy and energy efficiency.
In a nutshell, we are consciously seeking a positive
interpretation of today's megatrends. We are specifically
looking for the (growth) potential that is so often obscured by all the threats and dangers and that might
actually more than make up for them. To do so, we have
developed an approach that is rooted in three lines of
thought: going for growth, reducing complexity and
translating comparative advantages into opportunities.

GOING FOR GROWTH

Our first line of thought is a plea for (more) growth. Back
in the 1970s, the "Limits to Growth" touted by the Club of
Rome planted the first seeds of lasting skepticism about
economic expansion. To this day, this pessimism continues to shape mainstream public opinion despite the fact
that the club's forecasts manifestly turned out to be
wrong. Suggestions that we should choke off our growth
are put forward with increasing regularity. "Qualitative
growth", so the argument goes, is needed to make our

14

THOUGHTS Megatrends

resources last longer. We see this view as both wrong and

dangerous, as it systematically underestimates the hugely
dynamic force of technological progress. Who would have
imagined 20 years ago the extent to which the Internet
would shape our society and our business? How biotechnology would drive advances in medicine? How nanotechnology would change material research? How green
technology would precipitate new directions in energy
policy? Who would have imagined what undiscovered
resources were still there and with what comparatively
inexpensive exploration techniques they can now be
tapped? However, new technologies and technological
progress are contingent on growth. Companies can only
invest in research and development if they grow and
generate cashflow. Even government-backed research
needs money that has to come from somewhere. Zero
growth would put the handbrake on innovation: Cutting
costs and curbing spending has never fueled innovative
ideas and fresh strategies.
We do not deny that hopes of a constant stream of
ever faster technological innovations can, of course, be
dashed. But what is the alternative? Growing more slowly
to save resources would only delay the date by which
finite resources come to an end. Ultimately, that would be
a form of self-deception. And even if it sounds like a risky
bet on the future: We should encourage growth precisely
because resources will one day be exhausted, in order to
give ourselves the chance of finding new inventions and
alternatives.
Casting growth as the villain of the piece is also
dangerous because we are not alone in the world.
Extensive time series show a positive correlation between
growth and prosperity. The fact that these correlations are
still valid today is demonstrated vividly by what is
happening in developing economies such as China, India,
Brazil and Southeast Asia. In these regions, constant
economic growth is boosting employment, which in turn
is giving more and more people the chance to generate
income and live better. This in no way contradicts either
economic theories or the findings of "happiness research",
which indicate that the marginal utility of happiness
declines as of a certain level of income. American Nobel
prize winner Daniel Kahnemann cites roughly USD
75,000 as the magic income threshold for the US.
Whatever we think about this number, it is so far
removed from the reality of life in many countries that we
can safely assume that growth can go on for many, many

Megatrends

years before other "happiness issues" begin to bite.

However, the desire for (material) growth does not exist
in isolation. Day in, day out, the networked global
economy confronts us with ever greater competition. If
we were to ease off on our growth ambitions, we would
lose out to our competitors with unforeseeable consequences for our prosperity.
Scarce resources be they natural, human or
productive resources do not necessarily cause growth to
slow down. On the contrary: If we do things right, they
can actually be a powerful lever for growth. Why?
Because new growth potential arises above all where ever
scarcer resources can be offset by ever faster productivity
growth and new products: automation, new production
methods, intelligent mobility concepts, greater energy
efficiency, green energy, and so on.

REDUCING COMPLEXITY
Our second line of thought reflects a pragmatic attempt
to diminish complexity. Literature on the subject contains
widely varying views on how we should envisage the
development trajectory of the future (see page 9):
Darwin's principle of the "survival of the fittest" plots the
classic linear path, while Marx's gradual socioeconomic
development and the Hegelian dialectic of thesis, antithesis and synthesis point to development in a sequence of
steps. Yet the future could just as well unfold in waves
(such as Kondratiev cycles and business cycles) or in
circles (viz. the religious belief in reincarnation). Then
again, it could be stimulus-driven (think of the rise in
environmental awareness that followed Chernobyl and
the security mindset that prevailed in the wake of 9/11)
or might even be completely devoid of any perceivable
logic (in line with chaos theory).
Each of these perspectives on the development of
our world helps us think about the future. Increasingly,
however, it is becoming impossible to see what we should
do in response to these considerations. Our already
complicated world is growing ever more complex:
Diverse and dynamically changing structures, processes
and systems are now being reinforced by uncertainty and
ambiguity on a scale that make it almost impossible to
say anything (especially anything that establishes causal
links) for certain. Moreover, there seems to be an
increasing overlap between many trends. To at least arrive
at consistent statements, nonetheless, we have abandoned

traditional methods and adopted a pragmatic approach to

reducing complexity:
We deliberately seek to identify benefits
and opportunities rather than risks and threats in the
three specified megatrends. In other words, we consciously position ourselves in the optimistic camp regarding
possible future developments
We initially see developments from a
business perspective and only then try to draw conclusions for economies (in line with our conviction that an
economy's growth potential is rooted first and foremost
in the corporate sector)
We analyze existing studies of future
scenarios (see the list of selected studies on p. 28) to
identify what is "mainstream thought" and then
consciously seek arguments that contradict this mainstream view

TRANSLATING COMPARATIVE
ADVANTAGES INTO OPPORTUNITIES
The third line of thought revolves around identifying
opportunities. When we speak of opportunities, we mean
comparative opportunities that exist for one entity where
they do not for others. Wherever there is change, some
benefit more than others. Some companies and economies
become more competitive while others lose ground.
However, this does not mean that in absolute terms
anyone is precluded from the possibility of exploiting
opportunities to their own benefit.
The economic fact of increasing scarcity forms the
starting point for our deliberations regarding the identification of opportunities. Analytically, there are only two ways
to deal with scarcity: You either use what you have more
efficiently (by improving productivity) or you find alternatives for scarce resources (through substitution or mobility).
What that means for our three megatrends is this:
Climate change: Opportunities will arise
either through green technologies that are kind to the
environment (lower consumption, lower emissions, more
recycling), or by moving to regions where climate change
poses less of a threat to the environment (or even creates
new habitats). While the latter option is not feasible in global
terms, it can certainly be a viable regional alternative
Demographics: Opportunities arise either from
the more efficient use of labor i.e. thanks to automation
and/or better trained people or by encouraging immigra-

THOUGHTS Megatrends

15

Megatrends

tion to compensate for ever scarcer labor resources in parts

of the world whose populations are shrinking. Here again,
the second option is viable only on a regional level
Scarcity of resources: Here too, opportunities
arise either from the more efficient use of scarce resources
such as factories that consume less input materials because
excellent production expertise leads to more productive
processes or by finding substitutes (alternative resources)
that are less scarce (such as non-fossil fuels)
As we said at the outset, we believe not only that
productivity gains have the power to drive growth, but
that further growth is also the only way to drive productivity gains. The sections that follow therefore zoom in on
the specific opportunities that lie in this direction. We
begin by exploring the demand side: In which regions of
the world are our three megatrends creating new demand
potential? What for? And why? We then outline developments on the supply side: Who can satisfy this new
demand? In other words, to whom do these megatrends
present additional growth opportunities?

D.
THE DEMAND
SIDE:
OPPORTUNITIES DRIVEN BY
THE MEGATRENDS
Our global map of opportunities (maps 2-4 on pages
18-23) show that all three megatrends climate change,
demographics and the scarcity of resources have the
potential to generate fresh demand in virtually every
corner of the world, albeit to different degrees and in
different ways. In some places this demand will come
from the need to avert risks in good time. In others it will
be fueled by a fortunate combination of population
growth and increasing prosperity. In still others, natural
benefits such as newly discovered reserves of raw
materials will be the key.
This section seeks to systematically identify the
benefits and opportunities that result from all three lines of
thought and as far as possible to literally "put them on
the map". As simplistic as this approach admittedly is, we
believe that it still accurately reflects the relevant trends.

CLIMATE CHANGE
(SEE MAP 2, ON PAGE 18)
We believe that, from a geographical perspective, climate
change will create new demand potential in three
different types or clusters of regions:
The first cluster concerns regions that
cannot escape the consequences of climate change.
Densely populated, home to established industrial
structures and under threat from climate change, these
regions will, in the decades ahead, focus primarily on
containing the risk to and negative impact on people and
infrastructure to the greatest extent possible. Demand
will thus arise from the need for (more) protective
systems (such as dams and dikes, warning systems and
irrigation systems) and/or for productivity-enhancing
technologies (to prevent the climate-driven decline in food
production, say, or to enable water to be used more
efficiently)

16

THOUGHTS Megatrends

The second cluster consists of those regions

that are responsible for a large proportion of (anthropogenic) climate change. The more environmental awareness gains ground, the more pressure there will be to
scale back behaviors that damage the climate. New
demand will thus emerge for green technologies: renewable energy, new energy concepts, energy storage, energy
efficiency, material efficiency, waste management and
recycling, and sustainable water management. In the
years ahead, the increase in demand will presumably be
strongest in those regions where the cash needed to
finance the transition to more ecofriendly behavior either
already exists or can readily be sourced
The third cluster is made up of regions
where environmental awareness is already highly
advanced, irrespective of whether they themselves share
much of the responsibility for causing climate change. In
these (mostly more prosperous) countries, demand for
ecofriendly products, technologies and processes will be
driven largely by a sense of responsibility toward the
environment and humankind as a whole. This sentiment
will also influence both consumer and electoral behavior

DEMOGRAPHICS
(SEE MAP 3, ON PAGE 20)
Similarly, it is possible to identify the following three
clusters of regions where demographic change will lead to
new demand potential:
The first cluster includes regions in which
the population is growing and prosperity is increasing.
Both of these trends more people and more purchasing
power tend to drive additional demand, either as new
consumers are born or migrate to these regions, or as
existing consumers' demand patterns change (as the
middle class swells or as older people discover new needs)
The second cluster encompasses regions
where (aging) populations are shrinking but prosperity is
continuing to increase. The principal issue here is demand
among the over-50s for new and innovative products and
services as well as for healthcare and nursing care
services, etc
The third cluster comprises what we call
"demographic hotspots", irrespective of whether they are
growing or shrinking, becoming more prosperous or not.
These hotspots are mostly large cities and "extreme"
places where (only) very young people or (only) very old

people live, for example. They will become a dynamic

testing ground for innovative solutions such as intelligent
mobility concepts, special infrastructure offerings (e.g.
space-saving homes) and collective care facilities. On our
map, the 20 largest cities in the world are marked in
orange as examples of this category

SCARCITY OF RESOURCES
(SEE MAP 4, ON PAGE 22)
For demand potential that is driven by the growing scarcity
of resources, it is also possible to systematically identify
regional clusters this time two of them:
The first cluster is made up of regions where
new (scarce) resources are discovered. Demand for technologies to exploit and extract the discovered reserves will
emerge in these regions. This is true for oil and gas, but also
for copper, aluminum, tin and rare earths. Moreover, since
tapping new sources is growing increasingly difficult and
expensive, new methods and (capital-intensive (technologies)
will be needed in many cases
The second cluster consists of regions that
(have no choice but to) consciously scale back their dependency on scarce resources. Here, demand for two things will
increase: On the one hand, there will be fresh demand for
technologies that allow scarce (fossil) resources to be used
more efficiently. On the other hand, demand will grow for
alternative technologies that use metals and minerals that
are less scarce but whose physical properties are still
comparable, for example. Renewable energy sources such as
the sun, wind, water, tides and geothermal sources are other
obvious examples
If you superimpose all three global maps of opportunities as we have on the title page of this publication
the resultant picture would make an even more powerful
impression than the three separate maps already do.
Why? Because the specified megatrends give rise to new
business opportunities in nearly all regions of the world!

THOUGHTS Megatrends

17

Thoughts Map #2
Global map of opportunities:
climate change
Opportunities for companies to profit from climate change
will arise in IN THE REGIONS BELOW:
Scandinavian
countries
Iceland

EXAMPLE: CLIMATE-DRIVEN
STORM/FLOOD DISASTERS:
Demand for protective systems

VICTIMS
REGIONS IN WHICH THE CONSEQUENCES
OF CLIMATE CHANGE CANNOT BE ESCAPED
(THROUGH MIGRATION, FOR EXAMPLE).
Densely populated, home to established
industrial structures and under threat from
climate change, these regions will, in the
decades ahead, focus primarily on containing
the risk to and negative impact on people and
infrastructure to the greatest extent possible.
Demand will thus arise from the need for (more)
protective systems (such as dams and dikes,
warning systems and irrigation systems) and/
or for productivity-enhancing technologies
(to prevent the climate-driven decline in food
production, say, or to enable water to be used
more efficiently).

18

THOUGHTS Megatrends

Costa Rica

EXAMPLE: CLIMATE-DRIVEN DECLINE

IN FOOD PRODUCTION: Demand for
productivity-enhancing technologies

Chile

PERPETRATORS
REGIONS THAT ARE RESPONSIBLE FOR A LARGE PROPORTION OF (ANTHROPOGENIC) CLIMATE CHANGE . The more environmental awareness gains ground, the

Megatrends

more pressure there will be to scale back behaviors that damage the climate. New demand
will thus emerge for green technologies: renewable energy, new energy concepts, energy
storage, energy efficiency, material efficiency, waste management and recycling, and
sustainable water management. In the years ahead, the increase in demand will presumably be strongest in those regions where the cash needed to finance the transition to more
ecofriendly behavior either already exists or can readily be sourced.

Germany

EXAMPLE: CLIMATEDRIVEN DEPLETION OF

WATER RESOURCES:
Demand for productivityenhancing technologies

Mauritius

PIONEERS
COUNTRIES WHERE ENVIRONMENTAL
AWARENESS AND ECOLOGICAL
STANDARDS ARE ALREADY HIGHLY
ADVANCED irrespective of whether they
themselves share much of the responsibility
for causing climate change. In these (mostly
more prosperous) countries, demand for
ecofriendly products, technologies and
processes will be driven largely by a sense
of responsibility toward the environment
and humankind as a whole. This sentiment
will also influence both consumer and
electoral behavior.

New
Zealand

THOUGHTS Megatrends

19

Thoughts Map #3
Global map of opportunities:
demographics
Opportunities will also arise for companies to profit from
demographic change in IN THE REGIONS BELOW:

New York

Mexico City

YOUNG
REGIONS WHERE THE POPULATION
IS GROWING AND PROSPERITY IS
INCREASING. Both of these trends
more people and more purchasing
power tend to drive additional demand,
either as new consumers are born or
migrate to these regions, or as existing
consumers' demand patterns change
(as the middle class swells or as older
people discover new needs).

Lagos

Lima

So Paulo

20

THOUGHTS Megatrends

Megatrends
Old
REGIONS WHERE POPULATIONS ARE SHRINKING BUT PROSPERIT Y
IS CONTINUING TO INCREASE. The principal issue here is demand
among the over-50s for new and innovative products and services as
well as for healthcare and nursing care services, etc.

Moscow

Istanbul

Beijing
Teheran

Seoul

Tokyo

Shanghai

Cairo

Delhi
Shenzhen

Karachi
Mumbai
Bangkok

Kinshasa

Jakarta

HotSpots
REGIONS THAT WE CALL "DEMOGRAPHIC
HOTSPOTS" IRRESPECTIVE OF WHETHER
THEY ARE GROWING OR SHRINKING,
BECOMING MORE PROSPEROUS OR NOT:
These hotspots are mostly large cities and
"extreme" places where (only) very young
people or (only) very old people live, for
example. They will become a dynamic testing
ground for innovative solutions such as
intelligent mobility concepts, special infra
structure offerings (e.g. space-saving homes)
and collective care facilities. On our map,
the 20 largest cities in the world are marked
in white as examples of this category.

THOUGHTS Megatrends

21

Thoughts Map #4
Global map of opportunities:
scarce resources
Lastly, opportunities for companies will also arise as resources become
increasingly scarce. This will happen in THE REGIONS BELOW:

TREASURE
REGIONS WHERE NEW (SCARCE)
RESOURCES ARE DISCOVERED AND
EXTRACTED. Demand for technologies to
exploit and extract the discovered reserves will
emerge in these regions. This is true for oil and
gas, but also for copper, aluminum, tin and rare
earths. Moreover, since tapping new sources
is growing increasingly difficult and expensive,
new methods and (capital-intensive) technologies will be needed in many cases.

22

THOUGHTS Megatrends

Megatrends

SEEKERS
REGIONS THAT ARE SCALING BACK THEIR
DEPENDENCY ON SCARCE RESOURCES.
HERE, DEMAND FOR TWO THINGS WILL
INCREASE: On the one hand, there will be fresh
demand for technologies that allow scarce (fossil)
resources to be used more efficiently. On the other
hand, demand will grow for alternative technologies that use metals and minerals that are less
scarce but whose physical properties are still
comparable, for example. Renewable energy
sources such as the sun, wind, water, tides and
geothermal sources are other obvious examples.
THOUGHTS Megatrends

23

Megatrends

E.
THE SUPPLY
SIDE:
WHICH COMPANIES AND
ECONOMIES HAVE THE BEST
PROSPECTS?
To find out who can profit from these opportunities, let us now turn our attention to the
supply side. Who is best placed to satisfy the
new demand spawned by the three megatrends? Who, to put that another way, has the
best growth prospects? Once again, close
analysis reveals different clusters or groups of
companies and economies. We identify two
key clusters:
The first cluster comprises those
companies and countries that possess the
necessary expertise the industrial competence
and experience and whose corporate,
economic and environmental policies have
already anticipated the new requirements
shaped by the megatrends
The second cluster consists of
those that are quite simply fortunate enough to
have a geographical location that spares them
the negative consequences of climate change
and/or gives them sufficient access to scarce
(natural, human and productive) resources
From a business perspective, the winners
can be picked fairly intuitively. Companies that
already operate in the green lead markets energy efficiency, material efficiency, water
management, mobility and recycling will
naturally benefit from the development. But so
too will companies that sell productivity gains
in the form of automation, age-appropriate
production structures and new materials. The
same goes for companies that provide the
collective infrastructure for life in growing
cities and the urban spaces that are seeing their
population thin out. Companies that deliver

24

THOUGHTS Megatrends

attractive and innovative healthcare services,

nursing care and suitable consumer goods to
the growing ranks of senior citizens likewise
stand to benefit.
The profile of competencies is similar for
whole economies. Apart from the good fortune
of a favorable geographical location, those
economies that boast a dynamic and innovative
manufacturing sector populated by leading
international companies that deliver an
intelligent mix of mechanical, plant and
electrical engineering as well as high-quality
technical services they are the ones that will
do well. European countries such as Germany,
France, the Scandinavian countries, (northern)
Italy and Poland deserve a mention in this
context, as do Korea, Chile, Brazil. A little
further down the road, the US will find itself
back in the fray, as will China in particular.
And perhaps one other country will play a
major role: Japan. Armed with a wealth of
industrial competence and severely impacted by
all three megatrends, the country has both the
skills it needs and the external pressure to act
in response to them. It is eminently possible
that, a few years from today, we will once again
be talking about a "Japanese decade" that no
one would have conceived of in advance.
We have prepared a map for the supply side
too: our map of "Who wins where?" (map 5 on
page 26). The map highlights those regions
that, based on our analysis, are best placed to
benefit from the identified megatrends. Once
again, the map reflects a comparative view,
depicting those regions that will benefit the
most or have the best prospects of doing so.

F.
THE WAY
FORWARD
The aim of this publication, as we have said, is
to reinterpret the megatrends of our day to
see them from a fresh angle that does not
magnify mainstream doom-mongering scenarios, but rather focuses on the growth opportunities for companies and economies as a result of
climate change, demographic development and
the scarcity of resources. Instead of assessing
risks and analyzing weaknesses, we are more
interested in the two forward-looking elements
of SWOT analyses: the strengths needed to turn
risks into opportunities and the nature of the
opportunities that can result from this process.
We have very consciously simplified
matters on the maps of the world, for example,
and in our identification of regional clusters and
groups. Our discussion also involves direct and
indirect assumptions and preconceived mindsets:
that growth drives innovation, for instance, and
that necessary actions can be financed, thereby
creating viable demand in the first place. In spite
of all these qualifications, however, we firmly
believe that this publication makes one thing
abundantly clear: If it is true that climate change,
demographics and the scarcity of resources are
all rooted in different forms and levels of scarcity,
as we have attempted to argue, and if the
obvious response is therefore to raise productivity, then precisely these megatrends will open up
tremendous growth opportunities for those
economies and regions
whose smart industrial policies
enable them to strengthen their industrial
competence, improve their core industrial skills
and thus create the necessary conditions to
attract high-quality services and blend these
with industry to provide new solutions
that consciously align their
research policy with the specified megatrends

and invest in corresponding research projects:

in energy, new materials, surface technologies,
nanoelectronics, organic electronics, mobility
and healthcare, for example
that give pride of place to education, flexibility and mobility, creating a social
environment that neither shies away from risks
nor abandons its growth ambitions, but that
thinks and acts as (optimistic) entrepreneurs
Is that going to be enough? On balance, will
these megatrends give rise to more opportunities
than risks? Can new growth opportunities make
up for the damage to the climate and the pain of
rebuilding our social systems that lie ahead?
Future editions of Thoughts will address these
issues too. One thing is for sure, however: If we
fail to exploit the growth opportunities, we will
end up even worse off in the long run. We will
examine these questions in future issues of our
new trend series. Using additional analyses,
figures and examples for new business systems,
we will describe what advantages can be
gained from our new perspectives on the
megatrends. One thing is for sure, however,
even with just this kickoff issue: If we fail to
exploit the growth opportunities, we will end
up even worse off in the long run.

THOUGHTS Megatrends

25

Thoughts Map #5
Who wins where?
Who will best manage scarcit y and thus benefit from the megatrends:

CLIMATE CHANGE
Regions whose expertise (in green technologies,
for example) will increasingly be in demand

DEMOGRAPHICS
Regions that know from experience how to
manage scarce labor resources and that
know how to sell this knowledge

SCARCITY OF RESOURCES
Regions that are particularly efficient in
their handling of resources and regions
that possess scarce resources

26

THOUGHTS Megatrends

Megatrends

THOUGHTS Megatrends

27

Selected studies
on megatrends
A.
Megatrend
Climate
change
1.
Fourth Assessment
Report of the Intergovernmental Panel on Climate
Change (IPCC), 2007 (next
IPCC report to be published
in 2013/14)
Series of comprehensive
reports on scientific findings
about climate change, its
impact and possible solutions
2.
Synthesis Report of
the Economics of Adaption
to Climate Change; World
Bank, 2010
Study of the cost of climate
change around the world and
courses of actions for individual regions
3.
OECD Environmental
Outlook to 2050: The
Consequences of Inaction;
OECD, 2012
Global study of the worldwide
economic and ecological
ramifications of climate
change through 2050

28

THOUGHTS Megatrends

4.
Global Environment
Outlook Database; UN
Development Program, 2012
Database containing
information and forecasts on
the state of the environment,
including water, forests, the
climate and emissions
5.
Stern Review on
the Economics of Climate
Change; Nicholas Stern,
2006
Benchmark study of the
economic ramifications and
cost of global warming
6.
Club of Rome:
2052 A Global forecast
for the Next Forty Years,
2012
Update to the benchmark
study "The Limits to Growth"
(1972) on the consequences
of climate change and the
limits to growth
7.
Climate Change
Scenarios; Geographic
Information Systems
Initiative, 2012
Open source database from
various US research centers
containing long-term climate
forecasts
8.
Roadmap 2050:
A practical guide to a
prosperous, low carbon

Europe; European Climate

Foundation, 2010
Study with recommendations
on how to significantly
reduce carbon emissions in
the EU by 2050
9.
Climate change and
industries: Some like it
hot! Deutsche Bank
Research, 2007
Study of the various effects
climate change will have
on individual industries
10. The Food Gap The
Impact of Climate Change
on Food Production: A 2020
Perspective; Universal
Ecological Fund, 2011
Global climate follow-up
study with a focus on food
production in 2020

B.
Megatrend
Demographics

1.
World Population
Prospects: The 2010
Revision; United Nations
Department of Economic
and Social Affairs, 2011
Publication with an overview
of global demographic
developments through 2100
2.
World Population
Prospects Database: The
2010 Revision; United
Nations Department of
Economic and Social Affairs,
2011
Most extensive demographic
data collection in the world,
containing key indicators for
each country and region from
1950 to 2100
3.
World Urbanization
Prospects Database:
The 2011 Revision; United
Nations Department of
Economic and Social
Affairs, 2012
Most extensive data collection
on the topic of urbanization,
containing key indicators for
each country and city with
populations over 750,000 by
2050
4.
The State of World
Population 2011: People
and Possibilities in a World
of 7 Billion; United Nations
Population Funds, 2011

Study with a global focus that

analyzes demographic trends
and describes the drivers and
ramifications of global
population growth

Study of demographic
developments and purchasing power forecasts in
regions around the world
through 2030

Extensive statistical
database on the energy
sector, including global
energy resources and
consumption

Scenario paper containing

forecasts on the devel
opment of the global
gas market over the next
20 years

5.
Europe's Demographic Future Growing Regional
Imbalances; Berlin-Institut fr
Bevlkerung und Entwicklung,
2008
Europe-focused study that
analyzes the future viability of
285 European regions using
24 socioeconomic indicators

10. The Expanding

Middle: The Exploding World
Middle Class and Falling
Global Inequality; Goldman
Sachs, 2008
Forecasts on the development of populations and
household incomes in the
coming decades

3.
Energy Innovation
Milestones to 2050; Energy
Research Partnership, 2010
Study forecasting when in the
next 40 years energy sources
will become mature and what
impact this will have on their
usage

8.
Mining & Metals:
Scenarios to 2030; World
Economic Forum, 2009
Study presenting three
different scenarios for the
possible development of the
mining and metal industries
through 2030

4.
Global Energy
Scenarios 2020: 2011
State of the Future; UN
Millennium Project, 2011
Comprehensive multi-topic
study of the future scarcity
of resources and energy
scenarios for 2020

9.
Mineral Commodity
Summaries; US Geological
Survey, 2012
Database of facts and
forecasts regarding the
availability and prices of
over 90 minerals

6.
Global Aging
Preparedness Index; Center
for Strategic and International Studies, 2010
Index describing how well 20
countries are prepared to
handle their aging populations
7.
The Global Impact
of an Aging World; Nielsen,
2011
Study forecasting the behavior
patterns of aging populations
based on extensive interviews
in over 50 countries
8.
The World in 2030:
The Future Demographic;
Euromonitor, 2012
Global study of the demographic trend and consumer
segmenting in the coming
20 years
9.
The New Global
Middle Class: A Cross-Over
from West to East; Brookings & Wolfensohn Center
for Development, 2010

C.
Megatrend
Scarcit y
of resources
1.
World Energy
Outlook; International
Energy Agency, 2012
Study featuring long-term
scenarios for the development of world energy
consumption, carbon
emissions, energy prices
and the energy mix
2.
Key World Energy
Statistics; International
Energy Agency, 2011

5.
Shell Energy
Scenarios to 2050: Signals
and Signposts; Shell, 2011
Global energy scenarios for
2050 and steps that could
bring about each of these
scenarios

10. The Energy Report

2050: 100% Renewable
Energy by 2050; World
Wildlife Fund & Ecofys, 2010
Provocative global scenario
through 2050, including
steps toward a complete
break with fossil fuels

6.
BP World Energy
Outlook 2030; BP, 2010
Study containing scenarios
for the global energy mix and
key energy trends through
2030
7.
The World Gas
Market in 2030: Development Scenarios Using the
World Gas Model; DIW,
2009

For anyone interested in scenarios: At the "Center for Scenario

Planning", we develop scenario methods and regularly analyze
over 500 current trend and scenario studies.
www.scenariomanagement.de

Center for Scenario

Berger
Planning Roland
Research Unit

THOUGHTS Megatrends

29

THOUGHTS
PUBLISHER
Roland Berger School of Strategy and Economics
Roland Berger Strategy Consultants Holding GmbH
Mies-van-der-Rohe-Str. 6
80807 Mnchen
Germany
+49 89 9230-0
RBSE@rolandberger.com
www.rolandberger.com/RBSE

THE AUTHORS WELCOME

YOUR QUESTIONS, COMMENTS
AND SUGGESTIONS
Prof. Dr. Burkhard Schwenker
Chairman of the Supervisory Board
+49 40 37631-4100
burkhard.schwenker@rolandberger.com
Dr. Tobias Raffel
Senior Expert
+49 30 39927-3559
tobias.raffel@org.rolandberger.com

LAYOUT & DESIGN

July 2012

Roland Berger Media Design

30

THOUGHTS Megatrends