Each month Salesforce offers “The Leading Edge,” an informative webcast designed to provide Salesforce leaders with practical, emerging tactics to help businesses grow. As an appexchange partner for Salesforce, we had the opportunity to join forces with Sage and Xactly to help make December’s webcast possible.
This month, Jamie Domenici, VP of Product Marketing at Salesforce sat down with Forbes Editor at Large and Global Futurist Rich Karlgaard to discuss the global economic, political, demographic, and technology trends that are impacting businesses in 2016. Let’s explore the first two megatrends:
“How do you stay competitive as a company in an era where technology is evolving as fast as it is when global population and demographic trends are evolving as fast as they are? That’s the main event,” said Karlgaard.
- Global population: Older, richer, more urban
While the current population is approximately 2 billion, this number is expected to rise to 9 billion by 2050, while simultaneously becoming richer: “We have approximately 2 billion middle class people out of 7 billion in the world today,” said Karlgaard.” “By 2050 we’ll have 3.5 to 4 billion. Middle class being defined as you have enough to eat, you have a roof over your head, and you have discretionary income.”
The population is also getting older. While we currently have 600 million people in the world over the age of 65, that number is expected to rise to 1.5 billion by 2050. “Think about what that’s going to do to healthcare and everything else,” he continued. Food, transportation, and entertainment will be more widely consumed as the middle class grows.
Finally, more and more of the population will be moving into cities. “We’re going to have a net increase of 2.5 billion people moving from small places to large places between now and 2050. That’s bigger than the growth of the overall population. So big city infrastructures — what do the cities of the future look like? There are trillion dollar opportunities out there for companies who figure out these demographic trends.”
How can companies take advantage of this trend?
While it’s important not to become overwhelmed by this vast change in population, Karlgaard stressed a healthy amount of fear can be beneficial. “Think about Indonesia,” he said. “A lot of Americans don’t realize that Indonesia is the fourth most populated country in the entire world. 250 million people…It’s a great example of a country that has moved a lot of people into the middle class. Indonesia has gone from an economy almost completely dependent on oil and gas….Indonesia is now a much more balanced, consumer-driven economy.” The lesson? Don’t be fearful of change, but rather, embrace the growing, evolving demographic.
- Technology: Understand the collection of technology trends that are driving change
The quality of technology is rising, and the costs are lowering. “Things in the digital world get twice as good every two years at the same price point. And at the same performance point, costs drop about 30 percent per year,” said Karlgaard. “Our smartphones are as powerful as our laptops ten years ago and so on.”
While Americans opt for higher-priced phones, highly affordable devices such as sub-$100 smartphones and even sub-$50 smartphones will have a large impact on the world. Currently, there are 2 billion smartphones in the world, and that number is expected to rise to nearly 4 billion in just four years.
How can companies take advantage of this trend?
“India is just as the beginning of the smartphone revolution,” said Karlgaard. “Africa. Parts of South America. You think about what the world looks like with 5G wireless and 4 billion smartphones as a web commerce platform, as both consumers of goods and services, but also contributors to the global economy now? It’s phenomenal to think about.” The rapidly increasing number of devices combined with the rapidly increasing population leads to Metcalfe’s law, Karlgaard argues, which focuses on the power of connections.
For example, “3.6 billion smartphones would give you 648 followed by 18 zeros. [That’s] the number of theoretical human connections. This isn’t even Internet of Things — it’s simply human connections.”
Regardless of your company’s purpose, or how intelligent the employees, the number of intelligent people outside of a given organization will automatically overwhelm the number of smart people within the organization. “Stop thinking about the number of people inside your organization and think about the ecology and all the potential cheerleaders or critics on social media, etc. It’s your extended community,” said Karlgaard.
Industries that were once immune to digital disruption have reached a point where to succeed, they must evolve. “Companies have chief information officers, and these CIOs are increasingly asked to think about data security,” says Karlgaard. “But who is the head digital honcho who is going to think about revenue growth and profit growth? Cisco has created a title called Chief Digital Officer,” said Karlgaard. “That’s pretty interesting.” As technology becomes more and more a part of our daily lives, it’s important to adjust both on an individual basis and as a company. “You have to evolve your operational model at the pace of Moore’s law. You have to become twice as good at what you’re doing every two years because the outside world of technology is going to move that fast.”
Want to learn more about the remaining megatrends poised to influence business globally — and how you can strategically leverage these trends to grow your company? Click here to see the full presentation, “The Leading Edge: Four Megatrends That Will Change the World And Your Business.”