"History is...an unending dialogue between the present and the past" - E.H. Carr
Just as our view of the past is always changing, so does our view of the future. New evidence comes to light; public attitudes shift; new technologies emerge. A key difference is that there is nothing we can do to change the past, but we can still shape the future. To rethink and transform the way the world works, we must create ‘an unending dialogue’ between the present and the future. We must bring the long view into our actions today. This means keeping track of long-term trends and signals of change that might help us identify opportunities to make better decisions for a sustainable future.
Forum for the Future's new annual publication, Green Futures: The Long View, presents twelve themes that are grounded in present-day change: they bring together the issues and dilemmas that Forum for the Future’s Network of over 100 organisations across the world (and many others beside) are grappling with day to day. We know about these challenges because we are working with our Network members on them – whether their primary concern is the future of retail in the US, opportunities for energy innovation in India, or the global nutrition agenda.
In The Long View, we inform these 12 crucial discussion points by asking how the future changed in 2014. We look at the implications for business and trade and crucially, we ask what it means for those resources on which all industry depends: our societies and ecosystems. Our research encompasses macro trends that set the landscape for everyone; developments in the mainstream of industries and countries; and disruptive activities from the fringes, including new technologies and new business models.
The big picture we see is this: a fragile global system placing increasing pressure on business, and at the same time a genuinely exciting cluster of solutions that show the way forward to a sustainable future. Economically, the reverberations from the financial crisis of 2008 are still being felt, and recovery is at risk. We’re still reaching after growth, which is slow; public debt remains high, and the finance system is essentially unreformed. It could all happen again. Beneath this umbrella of uncertainty and insecurity, there’s rising recognition of the need for change, presenting challenges to both business and public bodies. Five of the twelve chapters in The Long View explore this pressure.
Increasing pressure for change
1. Rising inequality creating tensions
2014 was the year when inequality became big news, exposing concerns that it is indeed entrenched in our economic system. Thomas Piketty’s Capital in the Twenty-first Century, in which he argues that unequal distribution of wealth causes social and economic instability, attracted more attention than most books about economics can ever hope to. Christine Lagarde, Managing Director of the International Monetary Fund said, “In the years ahead, it will no longer be enough to look simply at economic growth ... We will need to ask if this growth is inclusive.” Others, such as author and social activist Naomi Klein, called for a new paradigm. What will the emerging politics of inequality mean for business? How can business address the risk that ever-growing inequality undermines market-based democracy?
2. Expectations of global governance
Global governance has the potential to change the landscape in 2015, with the climate conference in Paris in December aiming to finally set the post-Kyoto climate change framework, and a new set of Sustainable Development Goals expected to replace the Millennium Development Goals in the same month. Yet there is little optimism that meaningful agreement can be reached. As we write, the Lima climate conference has just concluded with an agreement of sorts, but leaving more work than expected to prepare for the main event in 2015. When we surveyed our Network about this, fewer than a 20% of those answering thought a binding agreement in Paris was likely.
3. From radical to ultra-transparency
An unprecedented amount of information is now available to the public, from commercial activities to ecosystem monitoring. New in 2014 was Global Fishing Watch: a collaboration between Google, Oceana and SkyTruth. It shows where and when fishing is happening, allowing anyone to spot illegal activity. This sort of initiative gives civil society the information to hold powerful institutions to account. Just as some organisations are caught out by ultra-transparency, others will use it to competitive advantage.
4. Brands in the firing line
One consequence of greater transparency is being felt by brands, which are facing better-targeted and more effective campaigns from non-profit organisations. Oxfam’s Behind the Brands created a public league table which gave them leverage over all the companies involved, compelling them either to keep up or stay ahead. Campaigns are also making knight’s moves: tackling the culprit from unexpected corners – as Greenpeace did when it attacked Lego for carrying Shell’s logo. The challenge for brands isn’t simply fielding difficult questions. They’ll need to come up with the answers.
5. Volatility in the global economy
Few anticipated such a fall in oil price as at the end of 2014. Unanticipated extremes of abundance and scarcity are affecting trade patterns. One member of our Network reported a widespread impact on commodities: “From rare earths all the way to the construction sector, you can’t buy certain things on the open market.” Will we see more trade come off commodity markets? These are only useful if the items traded are indistinguishable and interchangeable – which means hard to control and hard to trace. But businesses and governments are becoming more concerned about security of supply, leading to so-called ‘land-grabs’ and supply chain integration, while the drive for transparency makes unknown origins a no-no for procurers. What does this mean for the future of trade?
Clusters of solutions
This is a crucial time for those interested in action for a sustainable future. Despite – and perhaps because of – increasing pressures on business and the precarious global situation, many solutions are maturing.
6. The circular economy adds value
Closed-loop resource use is now talked about in a way that would have been unimaginable a couple of years ago. And there is substance behind the headlines: last year, Novelis put $500 million into the world’s largest aluminium recycling plant in Germany. But the ideal of a circular economy goes beyond recycling: it requires a company to rethink its relationships with suppliers and end-users, accessing new skills and developing new incentives, so that value is retained and regenerated as materials are recirculated.
7. The sharing economy matures
This is no longer the game of the nice kids on the block, who care more about sharing than showing off their wares. It’s a multi-billion dollar global industry, with monopolies forming and backlashes under way – whether it’s Barcelona taxi drivers demonstrating against Uber or New York regulators bemoaning Airbnb’s purported lack of health and safety standards. How can governments protect users without stifling creativity? How can incumbents respond positively, and perhaps even find opportunities to surf this shift?
8. The internet of things comes home Homes don’t just house people and pets: now objects with unique identifiers can communicate over the web, unleashing vast potential for smarter living. As new designs and business models emerge, companies that provide products for the home – from laundry to bathrooms to interior design – face disruption. The question remains, what real value will these intelligent devices bring to our lives? Can they be used to give people greater control over their wellbeing? Or will they simply give profiteers a larger handle on domestic lives?
9. Bioeconomy offers solutions
Perceptions of the potential role for the bioeconomy have shifted, as new realms of economic activity have opened up based on the application of molecular and genetic understanding to industrial processes. Synthetic biology comes under this heading. The potential benefits are huge. For example, Pronutria has developed a process that converts algae to protein for human nutrition. The company claims it can feed a billion people from an area of land the size of Rhode Island. But the domain remains controversial. Should we mess with nature so profoundly? The challenge is to create common understanding and structures so we can develop and deploy these technologies well.
10. Renewable energy at tipping point
Was this the most significant change of all in 2014? Incumbent energy models – the centralised, fossil-fuel based system – finally seemed to be giving way to the new: decentralised, smart and renewable models. Coal use declined in China for the first time in a century, and the World Bank announced it would no longer invest in coal projects except in extreme circumstances. Most new capacity installed around the world is now from renewable sources. How will this change global power dynamics? How is it already transforming the future of communities around the world?
Individually these solution areas are interesting, but taken together they become extremely exciting. What happens when the sharing economy meets the internet of things? Or when the circular economy is driven by decentralised renewables? We are starting to model the transition to a sustainable future. Windows of opportunity are opening which may provide the means to move beyond incremental impact, reforming the fundamentals of the economy to shape something radically different – based not on invisible externalities but on far-sighted values. This brings us to the two final themes.
11. Beyond the constraints of shareholder value
Every year, a few leaders of large public companies assert that maximising shareholder value in the short-term undermines the success of the company in the long-term. This year it was Tim Cook of Apple, who told shareholders, “If you want me to do things for ROI reasons you should get out of this stock.” The last two years have seen the continued rise of impact investing, co-operatives, social enterprises and other different legal forms that side-step the requirement to maximise shareholder value. Several US states have changed the law to release ‘for-benefit’ companies (aka B corporations) from the burden of maximising returns.
12. Collaboration recognised as transformative
Collaboration is emerging as the gate-keeper to most solutions: either because the material issues stretch beyond the bounds of any single organisation or because only a group would have the credibility and the muscle to create the extent of change required. To respond to these challenges new forms of collaboration are emerging. Some are business-only, and some are business with civil society and government. Barriers, such as competition law, are exposing the need for systemic shifts before ‘collaboration fatigue’ sets in. Will smaller ‘vanguard’ groups try to increase the pace of change?
Don't just read this
There is an opportunity to capitalise on the clusters of solutions we see maturing now. We’ve brought together journalists, analysts, artists and practitioners to explore some of the more distant horizons, and we offer you their insights not just for entertainment but as prompts. Keep their vision in mind as you choose your next steps, and you’ll be less likely to meet a dead end.
David Bent is Director of Sustainable Business and James Goodman is Director of Futures at Forum for the Future
Image credit: Justin De La Ornellas