by Robert Yi
(Adapted from a presentation given for FUSION Leaders on March 17, 2021)
Continuing from last month, here are the last 3 global megatrends that you and your business should be aware of. Consider how to position your business in light of rapid changes taking place within the next 10 years.
3) LABOR
The Labor Megatrend I’d like to highlight is this: Over the next decade, traditional jobs will give way to the “gig economy” – where the majority of people will work as freelancers and not employees.
As we transition from technology to labor, it’s appropriate to note that labor automation is one of the most meaningful outcomes of technological convergence. Computers will not just help us do our jobs better but will in many cases do our jobs for us.
McKinsey estimates about 50% of current work activities can be automated today. By 2030, automation could displace between 15 and 30% of workers, including white collar jobs such as mortgage origination, paralegal work, and accounting.
The result of these advances in innovation will be an overall boost in productivity, economic growth, and higher standards of living. Experts believe that there will be sufficient new jobs created to offset those lost by automation.
However, many workers may lose out in the transition. Ensuring that these workers have the support needed to obtain new economy jobs will be a significant challenge. Consider self-driving cars as an example. In the U.S., we are already seeing a growing presence of autonomous vehicles on the road. If and when these cars are allowed to freely operate without a human, over 4 million jobs will be at risk, including drivers of trucks, taxi, shared ride services, and buses. As autonomous vehicles are expected to reduce accidents, other jobs may be at risk as well, such as auto body repair shops and paramedics.
McKinsey warns: “Brace yourself. All countries will face large-scale workforce transitions over the next 15 years as automation displaces some workers and labor demand shifts. Enabling and smoothing these transitions will be a significant challenge for policy makers and business leaders.”
In light of this, businesses and ministries will need to be prepared to serve the growing number of workers who are displaced by technology. It’s a tricky dance for businesses… taking advantage of efficiencies from automation, while also training up team members to employees to continue providing value. For churches, rescue missions, and other social service organizations, developing effective job transition and training services will be critical over the next decade.
What will that new job landscape look like?
Since the 2008 financial crisis, the U.S. has seen a significant increase in the number of people pursuing freelance work – going from one gig to the next – instead of traditional employment.
One of my favorite Millennial terms is “side hustle.” I guess that sounds cooler than “my other job.” Today, about 25% of people are engaged in the “Gig Economy” on a full-time or part-time basis. By 2030, experts that will grow to over 50% of workers. The freedom to “be your own boss” is especially appealing to Millennials, 63% of whom are willing to work for “on-demand” jobs.
A key enabler of the Gig Economy are online platforms that facilitate on-demand work. Uber and Lyft are obvious examples. Upwork is a popular platform that connects businesses to independent web developers, designers, writers, marketing, and other talent. The Mom Project is another online service that connects experienced moms with flexible professional opportunities.
In light of the COVID-19 pandemic we’ve seen more people working remotely and organizations seeking greater flexibility in their workforce. All this is accelerating the Gig Economy movement. As you contemplate your long-term strategy, I’d encourage you to consider a robust evaluation of your organizational design. How can you structure job opportunities that can be appealing to freelance workers?
One of the impacts of the coronavirus crisis we are living through is that it is forcing us to redefine how we go about our work. Take this level of creativity into organizational redesign looking for ways to reimagine jobs that work in the Gig Economy.
4) DEMOGRAPHICS
Many of you are already aware that over the next decade, the global population will grow increasingly older as fertility decreases and life expectancy increases.
By 2030, the global population will reach 8.5 billion, up from 7.8 billion people today. There are two underlying drivers of global population growth: decreasing fertility and increasing life expectancy.
2.1 is the most important number you’ve never thought about. It is the fertility rate at which a population sustains itself. If a society has more than 2.1 births per woman, the population grows. Less than that, and the population shrinks.
The global fertility rate has been dropping rapidly since 1950 when the rate was 5.0 live births per woman. Today, the fertility rate is half that (2.5 births per woman) and the United Nation forecasts the rate to drop further by 2030.
By 2065, the UN predicts that global population growth will end. Let that sink in! In a couple generations, people will grow up in a world that is shrinking.
That’s already a reality in many nations, including Japan and Italy.
In the US, population growth was the lowest on record, at 0.35%. With a fertility rate of 1.8 births per woman, the reason the US is growing at all is immigration.
In contrast to fertility rates, global life expectancy will continue to increase. By 2030, life expectancy is projected to hit 74.4 years, up from 72.8 years today.
These trends in fertility and life expectancy represent the changes described by the demographic transition model. As countries experience social and economic development, families have fewer children, resulting in a drop in fertility rates. And improved health care leads to increasing life expectancy. Over the next decade, these trends will reshape the world’s age structure.
As I noted before, Africa stands out as a region in a different stage of the demographic transition model. It will have the biggest influence on global demographics, increasing by 28% to 1.69 billion. Fertility rates will drop, and life expectancy will increase over the next decade. However, the average life expectancy will still be well below other regions of the world.
On the topic of developing markets, don’t assume that the younger generation around the world are all alike. Ernst & Young [did a study which] makes this very critical point: Gen Zers from developing nations are more socially conservative, trusting in business, and pressured to succeed than their developed nation counterparts.
On a global level, the combination of lower fertility and higher life expectancy means that people 65 and over will be the fastest growing demographic, representing 11.7% of the total population by 2030. The shift toward an increasingly older population will have significant implications for all sectors of society.
Retirees who haven’t saved enough will be counting on benefits that will place a substantial burden on younger workers. As a whole, we all must find ways to support our elders in need. Among other things, this means engaging retirees in meaningful work. How can we appropriately leverage their wisdom and experience to advance Kingdom purposes?
Over the next 25 years, $68 trillion is expected transfer from Boomers to Gen Xers and Millennials. This transfer of wealth has already begun and will be hitting its stride by 2030. What opportunities will your organization find in the midst of this great wealth transfer?
5) URBANIZATION
Closely related to demographics, is the megatrend related to urbanization: Rapid growth in urban populations will create opportunities for many, while also increasing challenges for the poor and vulnerable.
Since 1990, the number of cities with over 10 million people grew from 10 to 28. By 2030, over 60% of the world’s population, about 5 billion people, will live in cities. 90% of this urban growth is expected to occur in African and Asian cities.
The shift to increasing level of remote work brought about by COVID, may have some impact on this move toward urbanization. I believe we will continue to see movement toward metropolitan areas in general, but with slightly more emphasis on suburban growth. A clear impact of the growth of cities, will be the demand for improved infrastructure and commercial and residential construction. This movement is well under way in developing nations. I expect that over the next decade, the pace of construction will pick up significantly.
Although rapid growth in urban middle-class populations will drive greater discretionary spending, poor and vulnerable populations – especially in cities – will continue to face significant challenges.
In 2019, the U.N. reported that the number of people living in slums or informal settlements grew to over 1 billion. 80% of these people live in Asia and Sub-Saharan Africa.
As people flock to cities to find employment, they will experience a higher cost of living that makes it more difficult to work their way out of poverty. By 2030, the U.N. projects 3 billion people will require adequate and affordable housing.
As a case study, consider New York City. The most recent poverty rate from 2019 was 16% – [which is] 52% higher than the national rate. This is based on a poverty threshold for a family of four at $25,926. The percentage for New York City residents living at or near poverty is around 40%. My point is this: as urban populations grow, so too do the population of poor and vulnerable.
The poor and vulnerable living in urban areas will continue to have great needs, especially those living in slums and informal settlements. As a community of Kingdom-building ministries, what can we do to share the love of Christ to the least of these?
This represents an opportunity for us to expand our witness as Christ followers to billions of those in need.
CLOSING
As I promised at the beginning, we covered a lot of ground today!
As we chart a path out of the COVID pandemic, our world, our country, and your organization have been transformed. This is the time to re-imagine how you will serve the Kingdom in the future.
As you do, I encourage you to carve out some time and go over your notes for this session. Review each of these megatrends and develop your own perspective. Then reflect on the implications these trends have for your organization’s future, and what that means for you today.
And pray for God’s revelation as you do, reminding yourself of what James said: We do not know what tomorrow will bring. Instead we ought to say, “If the Lord wills, we will live and do this or that.” [James 4:13-15]
In that vein, I pray, as the Lord wills, may you and your organization experience the protection, care, and blessing of our Lord. May He grant you supernatural clarity about what He has in store for the future. And may He give you the wisdom and courage to pursue His will for you.
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.