by Robert Yi

(Adapted from a presentation given for FUSION Leaders on March 17, 2021)

Earlier this month while I was taking my 8th grader to school, we heard that the latest Space X rocket prototype exploded upon landing.  This was the third consecutive explosion of a SpaceX Starship rocket.  To which, Christina responded, “Seems like that’s not a good thing for a rocket ship company.”

We all know that Elon Musk is a visionary, right?  Anticipating trends that are decades away, and willing to break a few eggs today in order to get there.

Well, I’ll confess, I’m no Elon Musk level visionary.

But, one of my passions is organizational strategy.  Identifying the right paths for sustainable growth.  In business, that means increasing competitive advantage.  In ministry, increasing mission fulfillment.

One of the first steps in building a long-term strategy is to gain a deep understanding of the external environment. To that end today I will describe five megatrends – high-level global forces that shape our future.

As the global community works through the COVID crisis, I reflect back on another crisis from Biblical times – the great famine – that Joseph managed through.  Recall that through Pharaoh God provided a picture of what was to come over a fourteen-year period – seven years of plenty followed by seven years of famine.  With that picture of the future in mind, God granted Joseph the discernment, wisdom, and favor needed to navigate through the crisis.

At this moment, we are at an extraordinary and unique time.  Over the past year, we have been fighting the worst pandemic in modern history.  Through it our organizations have adapted – sometimes painfully, sometimes with extraordinary results.

I was talking with an anti-trafficking ministry recently whose model relied heavily on face-to-face training and coaching of law enforcement in other countries.  In the midst of COVID, they shifted to – of all things – a new approach to connect with law enforcement using WhatsApp alerts.  And you know what, they increased their conviction rate a hundred fold!

Our organizations are going to come out of this crisis changed.  With new skills and competencies.  With different resources and income streams.  With a transformed team.  And even with new constituents to serve.

This is the time to start thinking about the organization you are going to become.  You need to toss the old strategic plan, and start afresh.  Does the current vision still work, or do you have a new vision for the impact you will have?  And how will you get there?

As you tackle these questions, one of the first things you need to consider is this:  what will the future look like?  I’m not talking about next year or three years, but the longer-term future.  What is the environment your [business or] ministry will be operating in in 2030?

The decisions you make today will set your organization on a trajectory that will define how you operate in 10 years.

Our exploration of the future will be summarized in five megatrends: economics, technology, labor, demographics, and urbanization.

GLOBAL ECONOMY
Our first Megatrend is this The global economy will become increasingly diverse, driven by the purchasing power of China, India, and other developing economies.

First, consider what will the Global Economy look like by 2030.

Prior to the COVID pandemic, Standard Chartered Bank issued a projection of GDP by country based on purchasing power parity (PPP), an economic adjustment for cost of living.  This is an internal perspective that speaks to the quality of life enjoyed by a country’s population.

By 2030, Standard Chartered forecasts that China will be the world’s largest economy by a PPP basis.  What’s more surprising, is that the U.S. is not #2 in 2030.

That spot is projected to be held by India.  While India’s GDP growth is not as strong or consistent as China’s, its population growth rate has more than doubled China’s such that both countries have 1.4 billion people, more than 4x the US population. The relatively low cost of living in India as compared to the US is a key reason why India jumps to #2 on this list.

I liken this shift in global economic power to 100 years ago when the US overtook the UK as the world’s economic leader.  Since then, consider how dominant the US has become on the global stage.

Given the trends we’re talking about today, it’s clear that we will see a different driver of the global economy over the next few decades.

In addition to China and India, emerging economies will continue growing rapidly, leading to further decentralization of global financial power.

For example, Standard Chartered projects that the economies of Indonesia, Turkey, Brazil, and Egypt are expected to grow past developed nations such as Japan, Germany, the U.K., and France.

The impact of rapid economic growth in China, India, and various development nations – on a purchasing power parity basis – can be summed up in two words:  discretionary income.  Over the next decade, there will be a massive increase in the global middle class.

By 2030, the U.N. predicts two-third of the world population will be middle class or rich.  This growth in discretionary income around the world has significant implications for consumer spending and charitable giving.

What opportunities does your business have to reach the growing global middle and upper class with your products and services?

For international ministries, start broadening fundraising appeals to reach the growing global middle class.  Also, consider shifting the narrative for U.S. donors to underdeveloped countries outside of Asia, such as Africa, the Middle East, and Central and South America.

The private equity firm Blackrock confirms [another] trend, saying “China is already on a path to usurp the U.S. as the world’s leading superpower. When it does, political agendas, global trade and the sphere of influence are likely to shift towards Beijing from Washington.”

I do want to make it clear, that I am not fatalistic about the economic future of the United States.  In fact, I believe America will still have significant influence in 2030.  We will still have strong and stable capital markets, robust institutions of higher education, and continued leadership in innovation.  These and other factors are foundational to our influential role in a diverse global economy.

That said, over the next decade I expect the culture of business to be redefined as a melting pot of global values, influenced by Chinese and Indian norms.  This will also be true in the world of philanthropy, which will increasingly reflect the culture, politics, and spiritual views of China and India.

It is critical that all business and nonprofit leaders become skilled at understanding a global culture and adapting their practices accordingly.

Take a second to consider this megatrend and its impact, and what your organization should do in response.

TECHNOLOGY

The second megatrend deals with Technology:  Artificial Intelligence will lead the convergence of technological innovation that delivers a more personalized and meaningful experience.

We could spend hours and days talking about advances in technology, including artificial intelligence.  Allow me to paint a really big picture here. The CEO of Alphabet – Google’s parent company – noted that “Artificial Intelligence is one of the most profound things we’re working on as humanity. It’s more profound than fire or electricity.”

When talking about artificial intelligence, it’s important to make the distinction between two types.

Artificial Narrow Intelligence are machines programmed to complete a specific task.  This does not mimic human intelligence, but rather simulates human behavior based on a narrow range of parameters.  Siri and Alexa represent advanced applications of Artificial Narrow Intelligence.  This is the only type of AI that has been successfully realized to date.

Artificial General Intelligence occurs when a machine is able to learn and apply independent human-like intelligence to solve any problem.  The human brain is the best model for creating this general intelligence.  The computer processing power needed to achieve artificial general intelligence is well beyond our reach today.  A few years ago, one of the worlds fastest supercomputers took 40 minutes to process 1 second of neural activity.
While I’m not predicting artificial general intelligence will be achieved by 2030 (it may take 100 years or more), progress made toward AGI will generate technological breakthroughs that will have extraordinary impact on our daily lives.

Over the next decade, artificial intelligence will be able to harness what McKinsey & Company refers to as the “Combinatorial Technology Explosion”… the integration of a massive amount of technological innovation across multiple arenas.

  1. Cloud/Edge Optimization – access to almost limitless computing power and storage available to all devices
  2. Bandwidth – the next generation of wireless infrastructure provides exponentially greater bandwidth
  3. Connectivity – 500 billion devices connected to the Internet (vs 20 billion today) will work together to improve learning, decision making, and user experience
  4. Big Data – the exponential growth of connected devices and increasing online engagement will grow the global datasphere from 33 zettabytes in 2018 to 175 zettabytes in 2025
  5. Robotics – automation of commercial and personal tasks through machines becomes ubiquitous
  6. 3D Printing – on demand creation of goods brings us closer to realizing Star Trek’s replicator
  7. Mobile Access – 3 out of 4 people engage the world through a mobile device

A milestone achievement in artificial intelligence was reached by IBM’s Project Debater.  After years of research and development, the Project Debater team created a machine that was able to engage in a live back-and-forth debate with a world champion debater. After revealing the topic – should preschool be subsidized – both the machine and human were given 15 minutes to prepare.  Both crafted opening statements, a rebuttal, and a closing statement.

Advances in technology over the next ten years will change almost every aspect of every industry.  Improved artificial intelligence and integration of data from the “Combinatorial Technology Explosion” will provide greater insights in impact and effectiveness, as well as improve program delivery and customer engagement.

The first impact I’d call out is that that computer systems will create and manage unique interactions with customers and other constituents that deepen the bond with the organization.

Within the next decade, a sophisticated AI system – designed with a great deal of human ingenuity, of course – will canvas vast amounts of data about a customer, identify the most compelling offers, construct a captivating appeal, and deliver it at the best time through email, direct mail, and/or social media.

The second impact of technology may seem a bit contrarian:  High value relationships will be even more reliant on in-person engagement, even though face-to-face meetings will be harder to secure.

In the near future, human-to-machine interactions will be ubiquitous and even inescapable.  Life in an always-connected world will drive a hunger for real – non-virtual – experiences.  After a year of the pandemic, I’m sure we’re all feeling the need for in person engagement.

Research from professors at Cornell University concluded that “real” offline experiences have become key to personal fulfillment.  In person experiences create more lasting happiness because they tend to be more positive; they become more meaningful parts of one’s identity; and they do more to foster social relationships.

Of course, this principle applies to all relationships your organization holds:  among your team members, customers, partners, volunteers, congregants, students, constituents, and donors.  In the future, it will be even more important to deliver live experiences that bond your stakeholders to your organization.

[Again, please take] a few seconds to consider this megatrend and its impact, and what your organization should do in response.

Next month, we will share the rest of the presentation content about the last 3 global megatrends: Labor, Demographics, and Urbanization.

As President and COO of Westfall Gold, Robert leads strategy and operations for the nation’s premier major donor fundraising consultancy. Previously, he was Managing Partner of Ten Talents Partners, a private equity and consulting firm, and COO/General Counsel of Evangelical Christian Credit Union (ECCU). Robert also taught operations and strategy courses as an adjunct professor at Biola’s Crowell School of Business. Robert earned his BA in Rhetoric from UC Berkeley, JD from Loyola Law School, and MBA in Strategic Management from the Wharton School. Currently, Robert serves on the boards of the FUSION Leaders, Christian Leadership Alliance, International Sanctuary, and Town and Country.

For more information, or to ask questions, please feel free to contact Robert Yi at: robert.yi@westfallgold.com.