The analysis of trends and external drivers plays a critical role in my process for developing strategies and scenarios for industries and markets, products and services. In a world that is moving/evolving/changing as rapidly as ours, it is fundamental to the construct of a viable and adaptable path forward that we incorporate an assessment of the potential and/or probable impacts that trends and drivers might have on our planning assumptions.
External driving forces are things/situation/events that manifest outside of the company and are by and large beyond the control of company leadership. Examples of external driving forces include changes to industry structure, revolutionary technologies, dynamic economic activity, evolving demographics, non-traditional competition, and political interference.
Trends very often emerge as the result of external drivers. Identifying and assessing emerging trends is fundamental to establishing some understanding of new market opportunities that lead to innovation in products and services. For a corporate strategy to remain reliable and relevant it must integrate a recognition of the company’s internal drivers and core competencies with knowledge of industry structure and the external drivers/trends that create change and opportunity.
McKinsey and Company have always possessed the intellectual bandwidth to identify the macro-level trends that will impact our lives, business and governments before most others see them. They have recently identified five forces, or crucibles, where the stresses and tensions will be greatest and thus offer the richest opportunities for companies to innovate and change:
The great rebalancing. The coming decade will be the first in 200 years when emerging-market countries contribute more growth than the developed ones. This growth will not only create a wave of new middle-class consumers but also drive profound innovations in product design, market infrastructure, and value chains.
The productivity imperative. Developed-world economies will need to generate pronounced gains in productivity to power continued economic growth. The most dramatic innovations in the Western world are likely to be those that accelerate economic productivity.
The global grid. The global economy is growing ever more connected. Complex flows of capital, goods, information, and people are creating an interlinked network that spans geographies, social groups, and economies in ways that permit large-scale interactions at any moment. This expanding grid is seeding new business models and accelerating the pace of innovation. It also makes destabilizing cycles of volatility more likely.
Pricing the planet. A collision is shaping up among the rising demand for resources, constrained supplies, and changing social attitudes toward environmental protection. The next decade will see an increased focus on resource productivity, the emergence of substantial clean-tech industries, and regulatory initiatives.
The market state. The often contradictory demands of driving economic growth and providing the necessary safety nets to maintain social stability have put governments under extraordinary pressure. Globalization applies additional heat: how will distinctly national entities govern in an increasingly globalized world?