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What constitutes middle class, a growing global disruption

What constitutes middle class, a growing global disruption

Today Graeme Codrington and I are part of the London Business School team working with the leadership of a petroleum company from the Middle East. The course is being held in London and we were talking to them about disruptive forces. One of the forces that will change the world is a growing middle income population.  Our studies show that by 2050 the global GDP will quadruple, over 90 million middle class consumers are joining the global economy every year until 2050. That’s an economy the size of Germany being added to the global economy every year. By 2025, Mckinsey, a large consultancy, believe that global consumption will increase by thirty-five-trillion US dollars. In 2009 middle class was 1.8 billion, this will rise to 3.2 billion by 2020 and 4.9 billion by 2030.  Asia is almost entirely responsible for this growth. Its middle class is forecast to triple to 1.7 billion by 2020. By 2030, Asia will be the home of 3 billion middle class people. It would be 10 times more than North America and five times more than Europe.

This growth in global affluence, especially in the emerging nations is going to have a huge impact on business. Do you understand the impact it will have on your business or your industry? The change will be unprecedented. Are you thinking through what the new markets will be? What cities will you concentrate on (not what countries)? What competitors will emerge as companies in emerging nations become more cash rich, sophisticated and more competitive?

If you are not thinking through these questions and many other important one give TomorrowToday a call we can help you think through this and other TIDES of change

For more information of this shift read this excellent article on BBC News click on the link below

[here is an extract...]

The rise of the global middle class

So who counts as middle class?

According to organisations like the United Nations and the Organisation for Economic Co-operation and Development (OECD), it’s someone who earns or spends $10 to $100 per day.

That’s when you have disposable income and enough money to consume things like fridges, or think about buying a car.

As the UN suggests, the growth is being driven by industrialisation. The industrial revolution of the 19th Century transformed the economies of Britain, the US and Germany. The move from agrarian to industrial societies generated income rises that created the middle class.

Now it’s the turn of emerging economies, particularly in Asia. In Indonesia, for instance, investment now exceeds 30% of GDP, a sign that there is more manufacturing.

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Award winning emerging market startups with a global edge

Award winning emerging market startups with a global edge

Seedstars World is a Geneva-based company that holds competitions for startups around the world. Their list of competition winners from the last year includes 19 emerging market companies that are innovating products and services with some exceptional promise.

We believe that disruption (and therefore, innovation) comes from the edges. These edges might be at the edge of an industry, an economy or geography. The interesting thing about the 19 firms listed by Seedstars is that they’re beginning to focus their attention on taking their offerings into established markets. With access to crowdfunding and venture capitalists who are starting to look beyond established markets in order to get higher returns, these companies may be hugely successful. But more than just looking at them, they’re a symbol of the change in mindset of business leaders around the world. Emerging markets should not be ignored.

Elizabeth MacBride, a writer for Forbes magazine took the list and categorised it helpfully as follows:

Financing infrastructure is being constructed fast and at the cutting edge.

    • Accra, Ghana-based Kitawa is building a Bitcoin-based online payments platform.

    • Remit.ug, based in Kampala, Uganda, enables people from all over the world to transfer money to mobile wallets in Africa.

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Insights on Beer, Vinegar and Customer Experience

beerI have come to believe that we are all spinning our wheels in our efforts to change until we learn to understand and embrace our irrationality.  I watched anotherDan Ariely talk this weekend and he shared an analogy that really helps illustrate why we are so irrational about understanding our irrationality.  Humans by nature are irrational beings, so how can we become rational about our irrationality?  He speaks about a study where they provide two types of beer and ask the participants for their preference.   One group is told they are tasting one beer with vinegar added and another beer without; in this case the participants all prefer the one without.  Then they offer the same two beers to a second group only this time they don’t share that one has vinegar in it; and in this case the participants prefer the one with vinegar.  Turns out that vinegar enhances the taste of beer but our preconceived notions of what vinegar would do to beer trump how we experience it.  In other words, our preconceptions shape our experiences and trump reality.  Which highlights that we don’t even have a clue when we are being irrational.

So how can companies design products and services that account for what we are unaware of?  And how can we advocate change when we are neurologically wired by our preconceptions that inhibit us from embracing what we really would otherwise prefer.

I think it is fair to say that most companies are finally focusing on Customer Experience as a key imperative.  But they are doing this with little to no regard for how we human beings actually experience products and services.  These days data and rational strategies are typically the drivers behind most Customer Experience initiatives, with high rewards.  But with this approach we are only scratching the surface of the opportunity to maximize the value and returns of our efforts.  If we layer in mechanisms to interrupt or disguise our preconceptions that block us from a positive experience than I believe we can exponentially impact outcomes both for our customers and financial stakeholders.

Ariely gives a powerful example of this in context of social conflict.  An example I see time and again in business is when companies deliver a new message, or create a new product or service that they are certain is of great value for their customer.  Yet it gets received with reluctance, caution or even rejection.  Typically the response to this is to either push harder, re-engineer, or to abandon the change altogether.  When really what is needed is to better understand the preconceived beliefs that are in our way.  To complicate this challenge further, our own personal preconceived beliefs about what our customers needs are may be in our way too.  Bottom line is that we need to invest in a sophisticated understanding of human behaviour.  This awareness needs to begin academically, and once we begin to understand the nuances of it we will see, hear, and experience everything differently.  Only then can we really begin to expand on the rewards of designing meaningful experiences for our customers.

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Recent media mentions

Recent media mentions

Graeme Codrington has appeared in the media a few times in recent weeks. Here is a sampling of his contributions:

Speaking on Gen Y at the British Hospitality Association annual convention, Graeme focused attention on the impact that a younger generation is having on an industry that needs to employ significant numbers of young people to succeed. His presentation and contribution to a panel discussion was captured in the June/July 2014 edition of Hospitality Today (page 24-25): read it online here.

Graeme spoke at an Extended Knowledge Conference for Baloise Insurance Group in Germany recently. Here is a summary of the session.

Graeme was recently interviewed on CapeTalk 567 radio, on how to future-proof our children. Listen to the 15 minute interview on SoundCloud here.

A number of the TomorrowToday team have been featured on yourBusinessChannel’s Inside Finance TV channel. See their briefings videos here. We especially like the video on “Blowing Industries Apart”.

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The Mindfulness Circle

Mindfulness CircleConceptually understanding the Cycle of Self is key to maximizing our potential.  It explains our “why”. Why we believe what we believe, why we think what we think, and why we do what we do.  We can leverage Simon Sinek’s Golden Circle to help illustrate the “why”, “how” and “what” of mindfulness.  Simply put, Sinek’s Golden Circle is based on the principle that great leaders take an inside out approach.  Starting with the “why”, then the “how”, before getting to the “what”. More commonly leaders focus on the “what”, which does not motivate or inspire us to act.  The “what” informs people with rational, logical information but it is the “why” that ignites purpose, emotion and instincts that motivate us to act.

By applying the same inside out approach to ourselves we can mindfully design our life experiences.  Starting with our “self”, then tuning into our “awareness”, before trying to “change” ourselves.  Most of us set goals to change or add habits without understanding why our habits exist.  Few of us examine what false beliefs we have that are keeping us stuck.  Trying to change ourselves without understanding our motivations assumes we are rational and logical, but the fact of the matter is we are not.  We are human first.  That is why most New Years resolutions fail, along with all the other attempts we make to start or stop our habits.

My last post examined “self”.  But how do we move beyond conceptually understanding the significant of self?  We do this through “awareness”.  Awareness is tricky business.  It has cyclical complexities similar to the Self Cycle.  It takes discipline to become and remain aware and it takes kindness to ourselves to own ourselves with empathy and without judgement.  And we need to accept ourselves as we are, unconditionally, with the discipline to pay attention to when we act on our false beliefs.  And when we do, we must be kind to ourselves.  Meditation, yoga, golf, walking; essentially any activity that brings us closer to nature and our spirit will help us mindfully navigate through awareness.

Then as we become aware of the parts of self that do not serve us, the parts that get in the way of what we want, we can begin to explore how to create meaningful change in our life.  Our “self” + “awareness” will inspire our intent.  And our intent will take lots of practice.  Quite frankly we will fail (many times) before we succeed.  Which is why we need to reward ourselves each every time we succeed.  This will reinforce the value of our new habit(s). We must keep reminding ourselves or our intent, with discipline, kindness and acceptance, trusting our beliefs and thoughts will design the experiences we desire.

This journey will feel a lot like taming a wild horse.  We need to have patience with the parts of ourselves that like to run free, fast and wild.  But we will also need focus and concentration to  have the discipline to resist distractions that are not aligned with our beliefs and intentions.  This is a life long journey, not a destination.

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Peugeot unveils a new car that runs on air.

Peugeot unveils a new car that runs on air.

We are living during a era of great technological innovation. At TomorrowToday we love technology that has the ability to disrupt not only products but entire industries, even countries. Peugeot Citroën  appears to be doing just that . The car manufacturer has unveiled a new hybrid drivetrain that uses compressed air instead of electricity to provide a secondary source of propulsion. They call this innovation Hybrid Air and it’s a technology they claim will be available in their compact models (Citroën C3 or a Peugeot 208) by 2016 for a price of £16,000. The company claims that the car using a hybrid system emits as little as 69g/km of CO2 i.e. 2.9l / 100km. Peugeot aims to reduce this to 2l/100km by 2020 

 An innovative full-hybrid gasoline solution. An important step towards the 2l/100 km car by 2020 

The car travels on compressed air propelling it to speeds of 43mph where after the petrol or diesel system kicks in. 60-80% of journeys can therefore be completed, in an urban city environment, using just air!

A car that runs on compressed air has the potential to not only disrupt the motor industry, but the massive oil industry too. This is great news for environmentalist, but not for those who invest in the future of fossil fuel. Understanding the impact of this disruption needs to be a boardroom topic for energy companies. TomorrowToday is partnering with London Business School and our facilitators are working on a leadership programme for Kuwait Petroleum Company. We’ve learnt that 80% of the Kuwaiti economy is depedent on the oil industry. What happens when an abundant, cheap and pollution free source of propulsion replaces or reduces significantly the demand for their liquid gold? It’s a question we will put to them at the next session with KPC senior leaders in Spetember. The answers should be interesting.

 

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Cut away view of the hybrid air compression propulsion system

 

Ray Massey became the first UK journalist to test drive the new car in Paris. Here is an excerpt on his driving experience:

Driving feels a little different to a conventional automatic car. It’s nimble. A visual display on the dashboard screen tells you when you are in zero pollution or petrol mode. It chugs happily along in town running only on air. It certainly didn’t run out of puff and giving the accelerator a quick burst — vital on Parisian roads to keep you out of trouble — meant the combined force of the 82bhp petrol engine and the 40bhp air motor kicked in together to put wind in its sails.

Screen Shot 2014-07-09 at 10.37.52

Ray Massey test driving Hybrid Air

You can read his full review of the car at the Daily Mail

 

 

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The 10 Most Important Work Skills in 2020

Last week I was sent a link to an interesting infographic on the ten most important work skills in 2020. It is a graphic respresentation of research done by the University of Phoenix and the Institute for the Future (see their PDF report here). What I like about this is that the team that put it together has looked at the significant drivers of change in society and then worked out what work skills will be required to address these.

It’s a thought provoking read for parents, educators and businesses alike. Whilst none of the skills listed are really new, the emphasis is on their growing importance. The timeline is only 6 years away anyway, and so the focus was not on new skills but on what is becoming vital for success right now in our workplaces. You can find the infographic here, and a summary of their points below.

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Just for fun: Why you really, really want a drone at home

June 20, 2014 Graeme Codrington Future Trends, Innovation, Technology No Comments

It’s Friday, and the weekend is here. So, for a bit of fun check out this wonderful use of a drone. Drones are now readily available. My brother, a video producer based in Atlanta USA (see his video channel here) has one of his own that he uses to create amazing camera shots.

These drones can be programmed to follow GPS co-ordinates, and one smart guy has programmed his drone to take his dog for a walk around the neighbourhood. Here’s the video:

Dogs and drones

What would you use a drone at home for?

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Sharing Your Secrets: What Elon Musk’s latest move at Tesla means for you

Sharing Your Secrets: What Elon Musk’s latest move at Tesla means for you

I’ll admit it: I have a huge man-crush on Elon Musk. I like everything this guy does. From his passion for space exploration and madcap vision of a one way trip to Mars, to his recent announcements about building both flying and submerisble cars, Elon is the very eptimony of a swashbuckling hero for the modern age. He’s also a South African – land of my birth too. Yet, in between the media hyped pronouncements there is some serious thought going on about the future shape of the world. Every industry he touches he also changes.

Yesterday, Elon’s electric sports car company, Tesla, announced that it will release all its patents to the world for free. Now anyone can build an electric car like they have.

There is some sanity behind this madness. In order for Tesla to grow now it really does need an entire electric car around it. Elon has seen that instead of protecting the slice of the pie he currently has (which is quite big), it’s going to be better for him to build a bigger pie. I think he’s spot on. Too many businesses spend too much time and effort protecting their piece of a pie, rather than building the pie. Lesson #1 right there.

But the bigger lesson, and the more important issue for everyone else is that Elon and Tesla understand that we’re increasingly living in a world where information is no longer power and everyone will know everything anyway. Many industries are currently built on what I call “knowledge arbitrage”: you and your company know things that other people (very often including your customers) don’t. By 2020, this will not be true. Good examples include investment banking, financial planners, pharmaceuticals and law firms.

What would your industry look like if everyone knew everything that everybody else did? What would your business model look like if it could not be based on having a corner on a set of information no-one else has? How would you add value to your clients if they already know everything you know? You may not need the answer to these questions this year, but you will need them by 2020. So you might as well start now.

Elon Musk is already one step ahead of you.

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Surprising ideas about the future from TED2014 speakers

May 24, 2014 Graeme Codrington Disruptive Forces, Future Trends 1 Comment
Surprising ideas about the future from TED2014 speakers

At TED2014, the speakers and attendees were asked to think about the conference’s theme, “The Next Chapter” and then suggest what might radically change society, life, technology and the world in the next 30 years. Their insights may surprise you.

“One of the things about learning how to read — we have been doing a lot of consuming of information through our eyes and so on — that may be a very inefficient channel. So my prediction is that we’re going to ingest information. You’re going to swallow a pill and know English. You’re going to swallow a pill and know Shakespeare. The way to do it is through the bloodstream; once it’s in your bloodstream, it basically goes through and gets into the brain and when it knows it’s in the brain it deposits the information in the right places. I’ve been hanging around with Ed Boyden and Hugh Herr and a number of people… This isn’t far-fetched.”
Nicholas Negroponte, founder, MIT Media Lab

“I hope it will be a rejection of technology that makes us more isolated from one another and more easily surveilled. I also hope we will have a sudden, dawning realization that we forgot to read books for a while and came to regret it.”
Laurel Braitman, writer, TED Fellow

“20 years from now, we’ll have nanobots — another exponential trend is the shrinking of technology — that go into our brain through the capillaries and basically connect our synthetic neocortex and the cloud, providing an extension of our neocortex. Now today, you have a computer in your phone, but if you need 10,000 computers for a few seconds to do a complex search, you can access that for a second or two in the cloud. In the 2030s you’ll be able to connect to that directly from your brain. I’m walking along, there’s Chris Anderson, he’s coming my way, I’d better think of something clever to say. I’ve got three seconds — my 300 million modules in my neocortex won’t cut it — I need a billion more. I’ll be able to access that in the cloud. Our thinking then will be a hybrid of biological and non-biological thinking.”
Ray Kurzweil, inventor, futurist, CEO, KurzweilAI

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The greatest challenge facing the future of business, requires your attention now.

The greatest challenge facing the future of business, requires your attention now.

Peter Menzel, is an award winning photographer, takes photographs of people posing next to their possessions taken out of their home and piled high on the pavements. The pictures paint a vividly clear picture – we live in a Material World, also the name of his book. You do not need to look at the pictures for long before it becomes clear that around the world, the industrial system has been immensely successful. Our parent’s parents bought into the system, our parents bought into the system and so have we because it has given or promised to give us a lot of cheap stuff. But here is the catch; whilst capitalism has served us enormously well – it has helped reduce property, improved standards of living around the globe, there are a number of perversions and the system  come at an enormous cost: unsustainable levels of public and private debt, excessive consumerism, and, way, too many people who are left behind. As Paul Poleman explains in a recent Mckinsey article: “Any system that prevents large numbers of people from fully participating or excludes them altogether will ultimately be rejected. And that’s what you see happening. People are asking, “What are we doing here?”

The facts of the situation are alarming:

  • we currently use is 1.5 times the world’s resource capacity.
  • Over a billion people still go to bed hungry.
  • The richest 85 people have the same wealth as the bottom 3.5 billion.

None of this is sustainable. If the post industrial capitalist system does not change itself it will be changed through the power of protest. Just because we are living in the 21st Century does not mean that the power of protest will not result in another “French Revolution.” As digitisation and the Internet give consumers enormous abilities to connect and aggregate their voices,  we will see the impact of power being dispersed and the pressure in the system will rise while wealth remains concentrated. Further development and population growth will put a lot more pressure on our planet and more and more people will ask why so few do so well when so many suffer. We are sitting on a powder keg of disruption like no other ever seen in the history of our planet.

Addressing the perversions of capitalism needs to become a strategic priority for all companies. Virginia Rometty, the Chairman of IBM cucintley puts it in her message to shareholders “How will we engage with an emerging global culture, defined not by age or geography, but by people determined to change the practices of business and society?”

I believe this is the single biggest threat facing the world of business today. By 2035, a single person, through a bio-pathegen will have the ability to end it all. But that should not be the motivating principle to find a solution. Capitalism on the whole is a very good system, but it can be made better and in doing so business can make a lot of money and society can prosper. So, I’m on a quest, to change the future of capitalism. It’s a big quest, and ideological one but it is a quest worth fighting for. Let me make this clear, I am a capitalist, it is a system I believe in, but…and this is a big BUT, capitalism needs to change if it is to be the relevant economic system propelling economic growth and prosperity into the future. I fear for society if it does not. But there is good news on the horizon because increasingly a number of hard nose business leaders and successful businesses are positioning themselves for the changes that will redefine capitalism as we know it. We are entering an exciting time and whilst there will be naysayers and people who want to protect the current status-quo I’m optimistic that business leaders will find solutions. Want proof? Here’s a starter-for-ten. Unilever chief executive Paul Polman explains why capitalism must evolve, his company’s efforts to change, and how business leaders are critical to solving intractable problems.

 

 

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24 “Future of Work” Voices You Should Know About In 2014

24 “Future of Work” Voices You Should Know About In 2014

Our colleague and co-founder of TomorrowToday, Dr Graeme Codrington, has just recently been included on two lists of business experts worth following. Switch & Shift named him amongst their “Top 75 List of Human Business Champions“. Global Workforce Transformation included him in “24 Future of Work Experts” that you should know about in 2014. Both are impressive lists and we’re extremely proud to see Graeme’s work included.

GWT said this: We all know that workplace and the constituents that make it, are changing. To understand and be ready for this change organizations need thought leaders, thinkers, writers and doers, to help them understand and navigate through it.

To get you started, we have created a list of important voices who understand “future of work” and have been sharing their thoughts about it for a while now. These experts are the ones you should listen to if you really want to understand how “future of work” is going to look like.

You can read the full article here or continue reading below

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Primary Blog contributors

The main contributors to this blog are:

Dr Graeme Codrington, co-founder of TomorrowToday, author, speaker and expert on the changing world of work
Dean van Leeuwen, co-founder and CEO of TomorrowToday UK & Europe, speaker, consultant and Chief Intellectual Adventurer
Keith Coats, co-founder of TomorrowToday South Africa, leadership development guru, speaker and author
Professor Nick Barker, director of the Asia Pacific Leadership Program at the East-West Center in Hawaii, leadership development expert
Markus Kramer, marketing director for Aston Martin and brand building expert
Keith Holdt, Visionary Enabler of business growth and change, currently works for LDC as an investment executive.
Dil Sidhu, Chief External Officer, Manchester Business School; Executive education specialist.
Dawna MacLean, expert on fostering meaningful change and creating authentic experiences through transparent and trusted partnerships.

Click here for a full list of contributors


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