Scenario: News
Newspaper for 1st June 2015

Foresight 2020 - Executives view of the future

Foresight 2020 - A report from the Economist Intelligence Unit, looks at economic,industry and corporate trends.  While there is much good stuff in this report, it made the mistake of asking people to think forward - what do you think the future has in store.  When we are asked that question, we usually come up with a picture that carries forward todays hopes and fears with a few personal theories that reflect our areas of expertise.  What we don’t take account of, is the unexpected, the changes that are coming from outside our area of expertise, and as we get older, the changes that are already happening but we are blissfully unaware of.

But ask us to look back from a future defined by global trends, and say what that future is like, and you unleash to power of the human mind to bring together large amounts of disparate information into a coherent story. 

energy

Coming from an energy perspective, this report clearly identifies increases in prices in the energy sector:

Rising growth in energy demand, fuelled by consumption in developing countries, allied to concerns over security of supply will create a backdrop of high and volatile energy prices over the next 15 years.

And the implications seem to be understood when they talk of Russia:

The economy’s dependence on energy also does not augur well for sustaining high long-term growth.

and yet this fact is not taken into account in other sections!  There is no consideration that growth might be effected by high and volatile energy prices, that globalisation of production might be effected by high and volatile energy prices. That consumption might be effected by high and volatile energy prices and so on.

Similarly, 77% of respondants said “environmental issues will be a major driver of corporate strategy.” and yet this is not reflected in ideas these same executives have about the future.

Had they been asked, in 15 years time, there will have been a long period of high and volatile energy prices, far greater concerns for environmental issues - how do you think this has effected your business?  They might have had a stronger and more useful report.

Risk

Historians have observed some uncanny parallels between the world today and the world on the eve of the first world war at the end of the golden first age of globalisation that lasted from 1870 to 1914. That era was marked by a high degree of international mobility

of goods, capital and labour and the dominance of a free-trade orthodoxy that was periodically challenged by protectionist sentiment. There was relatively free trade, hardly any limits on capital movements and freer immigration than today. The first world war

This is used as part of the introduction to an alternative scenario “Globalisation Sunk” (probability 5%) where the first World War brought an end to this period of globalisation, suggesting a similar scenario might be repeated.

David McWilliams, in an article for the Sunday Business Post, Financial markets blind to worldwide risk in October 2005 also draws a parallel between today and the period before WW1 but for a different reason:

The pre-World War I period was remarkably similar to the present. Capital and goods were highly mobile. Europeans in particular were migrating in huge numbers, not only to the US, Canada and Australia, but also to Argentina, Brazil and South Africa.

Railroads in Russia were financed by Anglo-Irish gentry, many of whom invested the proceeds of land reform in rural Ireland in the Tsarist empire. This was the first age of globalisation.

The article goes on

The basic narrative which we all learned was that, if you were knocking around Vienna, Paris or London at the time and didn’t see this one coming, you were some sort of eejit. But the reality is quite different. The people paid to forecast the future at the time – who were as sophisticated, learned and greedy as anyone hanging out on a trading floor today - hadn’t a clue.

We are simply no good a predicting the future if we stay within the confines of what we know.

Conclusion

A test of a good future scenario is that it takes us outside our comfort zone.  If we had been told of the world wide terrorism, fast pace of life, deaths on the road, health and food scares we experience now 20 years ago, it would have made us deeply uncomfortable.  And yet we have adapted to it and find it normal (and it’s not all bad news).

This is a valuable report, not for it’s forcast of the future, which is comfortingly like today, but for showing what is in the minds of today’s high ranking executives.