By IMD President Dominique Turpin

The future is hard to predict and a lot of "experts" regularly get it wrong. However, there are some facts so important and trends so inevitable that leaders would be ill-advised to ignore and not try to anticipate. Here are three of many future megatrends that will not necessarily determine what will happen, but will most likely have a big impact on everybody’s business in the coming years to decades.
 
Changing demography
 
This is one of the only indicators that cannot lie about the future: Tomorrow, we will all be older than we are today!
 
Some of the major changing tides of demography may have important political, economic, and potentially military consequences. For example: what are the implications of Russians having a life expectancy of 59, versus 61 for Bangladesh people?
 
Statistics show that populations in Europe and Japan are having fewer children, while both places face distressing recent levels of youth unemployment. This makes for some potentially troublesome situations such as smaller less-experienced workforces who will have to financially support larger elderly populations. And right now Europe is witnessing a historic migration crisis. What effect will this eventually have on its long-term demography? Only time will tell.
 
For many mature economies like Japan and the U.S., the workforce will be older, healthcare costs will be higher, and it looks like we will see diminishing pension benefits. Overall competitiveness in these countries is being challenged.
 
Looking to another part of the world, a number of analysts are betting that China, the most populous country on the planet, will take up some demographic slack and be the growth engine of the future. While today’s generation may be relatively prosperous, smaller numbers of the next generation will have to support a massive pool of aging citizens. Mainland China will still fuel world economic growth, but the pace of growth will more than ever vary province by province.
 
There will be big growth in the world but it will be elsewhere in places like India or the African Continent, where there will also be some big opportunities. Over the next five years, some African economies (Ethiopia, Mozambique and Tanzania, just to name a few) are likely to grow as fast as, or faster, than some of the recent Asian champions.
 
This growth comes with challenges however. It could easily be squandered if problems like corruption, political instability, lack of infrastructure, and poor education persist or get worse.
 
These predicted shifts in demography don’t only spell decline, though. There will be a lot of room for new business opportunities in the healthcare and nutrition sectors for example. Infrastructure will need to be redone and rethought, creating a lot of openings for building and technology innovators. Companies need to be creative and find new business models to take advantage of the shifting makeup of their operating countries’ populations.
 
Explosion in technology
 
If you think we have seen a stark increase in technology in our lives over the last few years with the omnipresence of smart-phones and wearable heath trackers, you haven’t seen anything yet.
 
One example of how fast we have been speeding up is that the number of mobile web users is growing eight times faster today than the number of people getting on desktops in the mid-1990s. And this change will only continue to move quicker.
 
In the coming era, everything will be connected: from buildings to roads to satellites to your refrigerator. The internet of everything is on its way. Advances in 3-D printing will change the cost and efficiency of making a lot of products and even body parts or organs.
 
Leadership challenges

You have probably noticed by now that we are living in an increasingly volatile, uncertain, complex, and ambiguous world. 
 
There is no end in sight and leaders are struggling to cope. Add to that the fact that all sectors are becoming more transparent; leaders are much more exposed today than they were ten to 15 years ago. They are under pressure for quick results in a difficult environment with an unprecedented level of scrutiny for their every decision.
 
We need great leaders more than ever to overcome the challenges we face ahead. But it is getting harder and harder for leaders to navigate obstacles and to obtain the mandate and leeway needed to make their mark.
 
What can we do?
 
In these tough times some of the biggest, and most common mistakes companies can make are to compete on price or to lower investments in education, research and development or innovation.
 
The most successful organizations will continue to invest in innovation in a broad sense and relentlessly collect business and customer insights. They will also focus on "customers' headaches" — not just their needs — to ensure that they have a great experience, once is not enough anymore.
 
We all face tough times ahead and no one approach will work for every organization or in every industry. But if you follow these general principles you will be off to a good start.
 
The stakes are high; these megatrends are all but certain to come and have the potential to make or break your business. 

How are you preparing for the megatrends of the future?

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