Ey Megatrends 2020

Are you reframing your future or
is the future reframing you?

Understanding megatrends will help you see
opportunities where others don’t.
Megatrends 2020 and beyond | EYQ 3rd edition | ey.com/megatrends
Foreword
The world changed in March 2020. Almost overnight,
the COVID-19 pandemic strained health care systems
to the breaking point, put much of the global economy
on an indefinite hiatus and radically reshaped societal
norms and interactions. For businesses everywhere,
these events are undermining established assumptions
while catalyzing new models and approaches.
The crisis has accelerated transformation. One way of technologies, such as artificial intelligence (AI) and the
thinking of this is using the S-curve pattern of growth — in Internet of Things, will transform every human domain,
which a paradigm or technology is adopted gradually at from consumer behavior to the nature of work.
first, then rapidly, before slowing again in the end stage
So far, these have been long term trends over a distant
as the model matures and delivers diminishing returns.
horizon. In one fell swoop, the COVID-19 pandemic
COVID-19 has thrust the entire global economy onto a
changed that. It has moved us, almost overnight, into a
new S-curve. The global system has been on the current
new renaissance, a global reset. In an instant, many of
curve, driven by a prolonged wave of globalization and
us have been compelled to adopt remote work, virtual
information technology adoption, for decades. To succeed
learning and online shopping. These changes are often
on this curve meant driving a company toward global
proving to be more effective and sustainable, and they will
market leadership and creating value based on ever-larger
likely be sustained in the long term.
scope, scale and efficiency. This created sustainable and
defensible competitive advantages for decades. But lately, The pandemic has also brought the fault lines of economic
the curve has been waning, as a global economy built inequality into sharp relief, highlighting that we are all
on unfettered “take, make, waste” has delivered made more vulnerable by weaknesses in our social safety
increasingly unsustainable societal, environmental and nets. This could catalyze trends we have been discussing
business outcomes. for some time — populism, renewed social contracts, long
term value and new economic metrics — and accelerate
The next S-curve has been visible for a while now. It
the move to the next S-curve.
doesn’t yet have a name, but it is essentially the future
we describe in our megatrends reports. In this future, These developments make a megatrends-based approach
social contracts will be rewritten to be more inclusive more relevant than ever. For one, the rapid technology
and sustainable, compelling businesses to take a more adoption and other changes catalyzed by the crisis have
proactive role in creating long term value. The global suddenly made the megatrends — from future of work to
system will be reshaped by everything from shifting health reimagined to “superconsumers” — more near-
power dynamics to 3D printing. Human augmentation term. CEOs and boards need to focus on them now to
remain competitive.
Megatrends 2020 and beyond | ey.com/megatrends

COVID-19 and the migration to a new S-curve
The better world S-curve
The post-war S-curve
World War II Global industrialization Technology efficiency boom Pandemic reset Migration to new S-curve New renaissance
The crisis has also brought home a central tenet of our The megatrends discussed in this report existed prior
megatrends approach: that disruption does not come to the pandemic and will continue to move forward in
from technologies and business models alone. It can its aftermath. While COVID-19 has upended much of
equally be unleashed by national elections, climate the world, the basic framework of the megatrends — the
disruption or, in this case, a pandemic. More than ever, forces driving them and the future working worlds they
your strategy needs to look far beyond your traditional enable — remain as relevant as ever.
sector and legacy competitors to identify potential threats
How will you thrive in this new environment — in which
and opportunities. The megatrends are designed to
humans are at the center, technologies are leveraged with
enable precisely such an approach.
greater speed, and innovation scales quickly? The global
This is not entirely uncharted territory. In recent years, EY organization stands ready to help you.
some companies have become market value leaders
by operating by the rules of the new S-curve. These
companies have been labeled as disruptors or “unicorns”
— labels that make them sound rare, almost mythical. In
the world beyond the pandemic, they will be anything
but. Every company will need to revamp its strategy and
Jay Nibbe
approach to operate by the rules of the new S-curve.
EY Global Vice Chair — Markets
A key part of your approach in this new environment
should be future-back planning, as explained in the first
chapter of this report. The megatrends are a valuable
basis to generate new planning scenarios, define a
relevant purpose for the future and execute with urgency
— all with the goal of becoming a more resilient and
transformative company.
ey.com/megatrends | Megatrends 2020 and beyond

CONTENTS
Using megatrends to shape your strategy 4
Primary forces 12
Powering human augmentation 14
Beyond globalization 16
Gen Z rising 18
Exponential climate impacts 22
Megatrends 26
Decarbonization 28
Techonomic cold war 34
Behavioral economy 40
Synthetic media 46
Future of thinking 52
Work and life unbounded 58
Microbiomes 64
Synthetic biology 70
Future working worlds 78

Africa’s new century 80
New economic metrics 86
Mending social fabric 92
Endnotes 98
Acknowledgments 100
Your EY Megatrends contacts 104
Megatrends 2020 and beyond | ey.com/megatrends

ey.com/megatrends | Megatrends 2020 and beyond 1
USING
MEGATRENDS
TO SHAPE YOUR
STRATEGY
2 Megatrends 2020 and beyond | ey.com/megatrends

R

Using megatrends to shape your strategy
Imagine rebuilding a Formula One car not in pit lane, but as you
son sürat gitmek
hurtle around the track. That’s the challenge business leaders face yüz yüze gelmek
bozulma
in this moment of disruption. The recent global pandemic and its
fallout on businesses has been the greatest global disruption in
kalıcı olarak (zarf)
modern history. It is permanently changing the future of society,
work, geopolitics and businesses. If conducting future-back planning
based on megatrends and scenarios was important before, it is
now critical. This way of thinking and resetting for the future will
determine which companies exit the pandemic cycle in a renaissance
and which will become irrelevant.
Leadership teams have always found it hard to plan using • Third, disruption requires you to make investments
megatrends and scenarios despite the best intentions. that might ensure your relevance and survival in the
Why? Because future disruption raises challenges and long term, but could hurt financial performance in the
questions with no easy answers: short run — the fundamental tension underpinning
the innovator’s dilemma. How do you invest for long
• First, disruption comes from far afield. It can emerge
term disruption while continuing to win in the short
from uncontrollable wildfires, geopolitical power shifts
run? How do you solve the now, explore the next and
or a global pandemic that shuts down society and
imagine the beyond?
commerce. Some companies, labeled “disruptors,”
start to build businesses that will thrive within the These challenges are thorny, but not insurmountable if
disruptive scenarios and operate on a different set of you take a structured and deliberate approach. We have
value drivers. Yet, incumbent market leaders often find found that a future-back strategy development process
it hard to even imagine the potential impact of scenarios works best: using megatrends as a key analytical tool
tasavvur etmek
that may disrupt an entire industry, customer needs or to envision where you’ll be in the future, then working
company relevance. How do you make sure you don’t backward to craft strategies for today. This method
miss the next disruptive shift? How do you identify flips the script on the standard approach to developing
the uncertainties or trends you’re afraid to confront? projections, plans and strategy, which uses the current
Metin
state as the starting point. It is particularly suited to
• Second, disrupting yourself requires placing long Metin
Metin which creates entirely new markets and
disruption,
term bets on untested approaches and models. At
ecosystems that make extrapolations based on historical
the same time, disruption reshapes the competitive
trends meaningless. Future-back thinking also broadens
landscape, creating tremendous uncertainty about the
the perspective of executives, helping to confront the
assumptions and projections underlying those long term
reality of potential futures where the company could
bets. Balancing these two forces is not impossible — it
become irrelevant or the industry itself totally redefined.
just needs the right innovation approach How do you
optimally invest scarce resources in a multi-horizon
portfolio, given this uncertainty? How do you identify
which models and approach will succeed?

Megatrends and future-back strategy
A major strategic risk companies face is developing plans With your future scenarios as a starting point, create
that assume today’s industry structure, competitors a multi-horizon strategic map that bridges from the
and profit pools will persist through the 5-to-10-year future back to today. The map targets a clear purpose
planning horizon. Our megatrends help challenge these and vision of the future with a portfolio of initiatives that girişim portföyü
assumptions. They expose teams to trends and forces far provide immediate impact — as well as the optionality
outside their usual scope of analysis, reducing the risk of to test and move into emerging or future markets over
kapsam/dürbün değerlendirmek
“missing the next big thing.” time. You’ll also want to assess whether you have the
capabilities needed for future business models. This
Here’s how we recommend using this report:
engelsiz hantal starts by examining the core business model and business
dış/harici
Start by using the megatrends to envision multiple future practices, and expanding to your external ecosystem
hissedar
scenarios, unencumbered by the past and unconstrained of partners and other stakeholders. This can include
by the present. Customize the list of megatrends based analysis to determine which options to prioritize, inform
on factors such as your sector and channel mix. Our investment decisions and align transformation efforts.
çerçeve framework generates a potentially countless collection
What about the tension between long term investments
of megatrends, since the evolution of primary forces
and short term earnings pressure? To address this,
continuously creates new ones. This helps you to identify
develop a two-speed model, looking to create immediate
other megatrends based on the primary forces. Design
value even as you identify and prioritize initiatives that
thinking and design-based innovation are critical to blend
lay the foundation for longer-term strategies.
creativity and analysis in this process. Environments built
on these principles, such as EY wavespace™ facilities, In a rapidly changing world, developing strategic options
allow executives to experience the art of the possible in an is not a one-off process. It should be part of an iterative
sürükleyici immersive way. journey of continual monitoring, experimentation,
evaluation, execution and learning. Here again, the EY
Megatrends framework can help. It distinguishes between
different types of forces, allowing you to prioritize those
that are relatively near-term, while monitoring others
that are further out (such as weak forces). This enables
you to invest resources more efficiently, while keeping a
watchful eye on trends that might require investment at a
future date.

The EY Megatrends framework

The EY Megatrends framework identifies four types of forces:
Primary forces Future working worlds

• Primary forces are the root causes of disruption: • In the longer term, the combined effect of
technology, globalization, demographics and megatrends reshapes the political and economic
environment. landscape.
• These forces aren’t new. But they evolve in waves; • The future working worlds describe the new rules
each new wave is disruptive in different ways. For that will govern various systems:
instance, we have seen several waves of technology • The global order (in this report, we examine the
in recent years, including personal computers, implications of the rise of Africa)
mobile, social and Internet of Things.
• Societies and economies (topics such as the need
• In this report, we highlight four examples of the for new economic metrics and a new social fabric)
latest waves occurring in the primary forces: • Firms and markets (topics such as superfluid
• Powering human augmentation (technology) markets, discussed in Megatrends 2018)
• Beyond globalization (globalization) • Households and individuals (topics such as our
• Gen Z rising (demographics) exploration of behavioral economics in multiple
Megatrends reports)
• Exponential climate impacts (environment)
Weak signals
Megatrends
• Weak signals are waves of primary forces whose
• The interaction between the waves of primary forces
biggest impact is further in the future (e.g., quantum
creates new megatrends.
computing, passenger drones).
• Our list of megatrends is not exhaustive. Disruption
• Their likelihood and the scale and nature of their
continually spawns new ones at an ever-faster rate
impact are more uncertain.
as the primary forces evolve. Consequently, the
megatrends in our previous reports are still valid.

7
ey.com/megatrends | Megatrends 2020 and beyond
The upside of disruption
A framework for understanding where disruption comes from, where it’s headed and what it means for you
Weak signals Global order
Decarbonization
Techonomic cold war Societies and economies
Behavioral economy
Technology Synthetic media
Future of thinking
Demographics Firms and markets
Work and life unbounded
Globalization Microbiomes
Households and individuals
Synthetic biology
Environment
Evergreen, evolve in waves Medium term (3—10 years) Long term (more than 10 years)
Root causes Cross-sector disruptions New rules of the game
Primary forces Megatrends Future working worlds
Using the EY Megatrends framework to understand COVID-19

The EY Megatrends framework provides a robust basis How is the pandemic catalyzing and transforming the next
for understanding and responding to COVID-19. In our generation of technologies and how will this affect the
framework, the pandemic has emerged mainly from a future of work, learning, health care and more? Consider
highly disruptive wave of the environment primary force, questions such as these to identify the megatrends most
boosted by the other primary forces (e.g., globalization relevant to your business in the age of COVID-19.
and air travel have facilitated its spread across borders).
The framework also provides a good structure with
With this starting point, the framework allows you to
which to explore the world beyond COVID-19. The four
identify and explore the megatrends most likely to affect
future working worlds are the domains that will be
your business.
fundamentally reshaped by the pandemic. How will new
To understand how COVID-19 is shaping existing rules, norms, institutions and networks realign the global
megatrends and spawning new ones, look at the system? How will societies and economies be reinvented
intersections between the COVID-19 wave and waves by changing social contracts, and how will companies’
emerging from the other primary forces. How are the role in society change? How will companies and markets
pandemic’s impacts on global supply chains, trade and be fundamentally altered by the crisis? How will the
migration affecting the backlash against globalization? behaviors of individuals and households change?
How will COVID-19 affect young generations coming of
age under the pandemic and how will this cohort reshape
work, consumption habits and more in decades to follow?
Using the EY Megatrends framework to chart your COVID-19 strategy
Weak signals Global order How will COVID-19 reshape the global balance
of power, trade, networks and institutions?
Decarbonization
Techonomic cold war Societies and economies
Behavioral economy
How will COVID-19 reinvent social contracts
Technology Synthetic media and change companies’ role in society?
Future of thinking
Demographics Firms and markets
Work and life unbounded How will COVID-19 and new technologies
shape the enterprise of the future?
Globalization Microbiomes
Households and individuals
Synthetic biology How will COVID-19 change behavior

(consumer, work, family, social networks)?
Environment
COVID-19
Evergreen, evolve in waves Medium term (3—10 years) Long term (more than 10 years)
Root causes Cross-sector disruptions New rules of the game
Primary forces Megatrends Future working worlds

COVID-19 is a profound wave Explore how intersections between Use the future working worlds to explore the
coming from the environment COVID-19 and other primary force waves new normal across four domains: the global
primary force, catalyzed by other (such as technology, anti-globalization, order, societies and economies, firms and
primary forces. Intersections aging, Gen Z) shape existing and new markets, and households and individuals.
between COVID-19 and other waves megatrends for your enterprise.
(such as populism, technology,
aging) reshape megatrends and
create new megatrends.

PRIMARY
FORCES
Technology
Powering human augmentation
Demographics
Beyond globalization
Globalization
Gen Z rising
Environment
Exponential climate impacts
Primary forces Megatrends

The four primary forces at the root of disruption have existed for millennia.
While they are not new, they evolve in waves — and the interaction between
these new waves gives rise to new megatrends.
Like their counterparts in the natural world, these waves can have different
wavelengths and frequencies. New waves of technology emerge every couple
of years, while waves of environmental change can last many centuries (though
human actions have certainly accelerated them).
Waves are also not unidirectional. They can ebb and flow. We see this in the
globalization primary force, where the most recent waves have been marked
by a retreat.
In this section, we focus on one emerging wave for each primary force:
• The emerging technologies that will be needed for powering

human augmentation
• The shape of the future in a world that is moving beyond globalization
• The implications of a rising Gen Z
• The increasingly urgent pressures created by exponential climate impacts
Future working worlds

Primary forces
Technology: the next wave
Powering human
augmentation
In the 1800s, the Industrial Revolution was visible through an expanding
network of canals, telegraph wire and railroads. We are now on the cusp of
5G will provide the
another revolution, powered by human augmentation technologies — AI,
speed, data volume autonomous vehicles, robots, augmented and virtual reality, and more — that
and low latency to are unprecedentedly lifelike and autonomous (see “Human augmentation” in
become the connective Megatrends 2018).
backbone of human This revolution requires its own infrastructure, more so now as the COVID-19
augmentation pandemic places increasing demands on digital and network resources. Five
technologies will be critical for bringing human augmentation to mainstream
use, and they will likely see increased R&D and funding as they become
100x essential in the post-pandemic world:
Data speed and • 5G is the fifth generation of mobile connectivity, able to power 100 times
devices connected the devices at 100 times the data speed while using 1/10th the energy. The
speed, data volume and low lag time of 5G allows millions of connected devices
1/10th to continuously communicate with each other and adjust their responses to
changing dynamics in the environment. As more autonomous systems, such
The delay as drones and robots, are deployed to mitigate the spread of COVID-19, 5G will
be imperative to enable responsiveness and handle bandwidth demands from
so many more devices.
• Edge computing moves computing from the cloud to the device. This is a
transformative shift for human augmentation technologies. Allowing a self-
driving car or drone to conduct computations locally rather than having to
communicate with the cloud is critical when lives are at stake. In the post-
pandemic future, the need for intelligent edge devices that can substitute
some portion of human acumen is likely to continue. The current renaissance
5G connections by 2025
2023 0.1b
2024 0.4b
2025 1.4b

Powering human augmentation
in the semiconductor industry is helping fuel the growth of new chipsets

and designs to enable edge computing and intelligence. The adoption of
Next-generation
these new architectures could accelerate to enable the future that COVID-19
will bring. batteries will become
• Human augmentation will require highly dependable power sources. The
the sustainable energy
market for next-generation batteries — at one-sixth the cost and 20 times source that powers
the operating life — is expected to grow 120 times between now and 2040, human augmentation
powering the infrastructure of human augmentation.
• Precision sensors that collect accurate data on usage and performance

of digital infrastructure are fundamental to fulfilling the vision of smart,
-90%
responsive environments and experiences. New materials such as graphene
and quantum sensors are enabling new use cases, such as continuous, real- Reduction in power required
time monitoring of changes in the human body or detecting pathogens in the by 5G connections
environment. This latter application gains even more importance as the threat
-85%
of future COVID-19 surges loom large without a vaccine.
• Ultimately, fulfilling the promise of human augmentation requires efficient

computing that can process huge volumes of data in real time. The unique
properties of quantum computing will allow significantly faster and more Decline in battery cost
efficient computing than the most powerful current supercomputers, and
will be particularly useful in solving certain types of complex scientific
problems, especially in the medical domain, such as drug discovery. With
researchers looking for viable vaccines to combat the novel coronavirus,
$620b
quantum computing is starting to get more attention and may see accelerated Projected investment in battery
development. However, significant hurdles remain, but when quantum technologies (to 2024)
computing becomes practical, it will unlock opportunities that will turbocharge
human augmentation in the post-pandemic world.
Science fiction tells the tale of humans and robots, two races apart. The
122x
reality will be more benign and more encouraging. Technology will augment Growth in battery
our bodies, work and home life. But to get there, we will need an entirely storage market
new infrastructure that can enable the real-time sensing, efficient processing
and transmission of data to deliver dynamic, secure and trusted decision-
making. These qualities will become ascendant as the new normal arising from
the COVID-19 pandemic leads to new demands for intelligent and resilient
technology infrastructure.

Primary forces
Globalization: the next wave
Beyond
globalization
We have grown accustomed to living in a globalizing

Trade disputes have recently escalated world. For more than seven decades, the international
economy has moved toward trade liberalization, and
Jan. 2018 Jan. 2020 increased cross-border flows of labor and capital.
Recent developments are shifting globalization’s tectonic

plates. Populism and nationalism are on the rise. That’s
Chinese average
tariff on US exports 8.0% 25.1% fueling protectionism, with the US and China imposing tit-
for-tat tariffs undermining institutions — such as the World
Trade Organization — that are critical foundations of the
global order.
US average tariff Non-tariff barriers are also appearing, notably in the

on Chinese exports
3.1% 23.8%
high-stakes competition to dominate next-generation
technologies such as AI and 5G networks (for more, see
our “Techonomic cold war” megatrend).
Building on trends that emerged in the aftermath of

the Global Recession, these developments are having a
Global trade is expected to shrink as tangible effect on the volume of international trade, cross-
a result of COVID-19 border capital flows and global supply chains. And there is
a backlash against immigration and migration everywhere,
from the US to Europe and India.
2019
What is the long term outlook for globalization?
2020
First, populism and nationalism are likely here to stay. As
analyzed in Megatrends 2018, the root cause of populism
is growing economic inequality, a long term challenge with
13%—22%
no simple solutions. A change in government in a country
reduction
or two is unlikely to reverse the persistent trend toward
protectionism.

Beyond globalization
Second, regionalization will characterize the future of

globalization. The economies of China and India are Non-tariff barriers are rising
becoming more self-reliant and their companies moving
as competition heats up in
up the value chain, expanding their activities beyond
running back-office operations and assembling products next-gen technologies
for Western companies.
Electric vehicle stock 2013 2018
Real differences in societal values, legal structures and
regulatory approaches will also spur regionalization. This
is particularly relevant in emerging technology spaces, on 8.0%
China 45%
issues such as data privacy and the ethical implications of
AI. Combined with the protectionism arising in the context
of the techonomic cold war, such differences could bolster
Europe 27% 24%
the development of distinct spheres of influence, most
likely along regional lines. As this happens, multinational
companies may no longer operate on a single global
stage and their supply chains may become fragmented. US 44% 22%
Trade and investment flows would become more regional
than global.
Other 21% 9%
Technology could also enable a more regionalized future.
Distributed manufacturing, driven by technologies such
as 3D printing, could radically shrink and localize global
supply chains.
amplified some fissures between countries, it led to
Finally, global collective challenges will shape these unprecedented international cooperation by bringing home
developments. The COVID-19 pandemic, for instance, that global challenges can only be addressed through
could accelerate many of these trends. The pandemic global approaches.
has highlighted economic inequality and taken a
The existential challenge of climate change (see
disproportionate toll on the poor, which could fuel
“Exponential climate impacts”) will similarly complicate
social unrest and more populism. The crisis also
the picture. Large numbers of climate migrants will likely
revealed the fragility of global supply chains, which
fuel more populism, but climate change will also demand
could motivate multinationals to explore nearshoring
unprecedented global cooperation.
more seriously. On the other hand, even as the pandemic

Primary forces
Demographics: the next wave
Gen Z rising
born
1995
between & 2015
While millennials today are having their moment, the
The next decade will be shaped by next decade will be shaped by the maturation of the
largest generational cohort in history — Generation Z.
the maturation of Generation Z, the
This cohort of people between 10 and 24 years old
largest generational cohort in history comprises 1.8 billion people, making up 24% of the global
population, according to our analysis (see endnote on our
Gen Z Gen X boomer
(10–24 years) (40–54 years) (55–74 years) generational definitions).1
The Gen Z future is not evenly distributed. Generational

1.8b 1.4b 1.2b change is occurring between countries, not just within
them. The populations of the world’s leading economies
1.7b 1.3b 0.3b are growing elderly, while developing-market societies
have growing numbers of youths. India stands out with a
millennial New Gen silent
(25–39 years) (Up to 9 years) (75+ years) population that includes 375 million people — 27% of total
— in Gen Z. At the other extreme is Japan, where Gen Zers
Source: EY analysis of World Bank Population Projections and Estimates data make up just 14% of the population.2
for 2020; age ranges adapted from Pew Research for globally consistent data

Gen Z rising
The differences in imperatives between youthful countries in developed markets envision a better future for their
(employing talent and development) and aging countries youths than they had themselves.
(managing social costs and maintaining lifestyles) will
While Gen Z is generally more progressive on social
create geopolitical crosscurrents as domestic politics
issues than preceding generations, important differences
influence economic, trade and foreign policies.
in attitudes emerge across geographies. In developing
Different life experiences shape this large, diverse markets, Gen Z is more socially conservative, trusts
generation. In developing markets where the majority of more in business and feels more pressured to succeed
Gen Zers reside, members of this generation have shared than peers in developed economies. Gen Zers in
an experience of rapid growth, wealth accumulation and developing markets also have a much greater say in
increasing consumption. Developed markets, in contrast, household spending. Companies will have to identify
have seen low growth and slowing consumption. As a the important distinctions among Gen Zers to serve this
result, optimism reigns in developing markets, while few global cohort effectively.
Generational change Youthful Aging
is happening both Nigeria Pakistan India Indonesia US China Europe Japan
within and between

18% 23% 32% 35% 48% 48% 55% 62%
countries as leading Older
economies age and

Millennial 19% 23% 24% 23% 21% 23% 19%
developing market 16%
remain young Gen Z 32% 30% 27% 25% 20% 18%
16% 14%
New Gen 31% 24% 18%
17% 12% 12% 10% 8%
Source: EY analysis using the Quid platform
Gen Zers in developing Per capita

GDP growth
Change in wealth
per adult
Growth in passenger
vehicle sales
countries have
experienced rapid China 487% 1,264% 251%
growth and wealth India 195% 585% 120%
accumulation in their US 40% 105% –22%
lifetimes, while those Europe 42% 147% –5%
in developed countries
see slowing growth
Sources: World Bank Economic Development Indicators; GDP per capita, PPP (constant 2011 international $);
and consumption Credit Suisse Global wealth databook 2019, October 2019; OICA

Primary forces
Gen Z’s fundamental commonality lies in digital. As the

first generation born entirely in the internet age, Gen
Gen Z was born entirely in the internet Z boasts a smartphone penetration that nears 100%
age and finds commonality in digital everywhere in the world.3 Members of this generation
also maintain more social media accounts, and spend
96%+ 7+ 2.9 hours more time on social media, than any other generation.4
Increasing travel has also helped to give Gen Z the most
smartphone social media social media global outlook.
ownership accounts time daily
Gen Zers also share a commitment to global sustainability.
Climate change tops their list of most important global
challenges. Other environmental concerns, such as
pollution and the loss of natural resources, are not
far behind.
Gen Zers from developing markets Gen Z’s fear of climate change is well-founded. Our
are more socially conservative, analysis shows that nearly 60% of the Gen Z population
trusting in business, and pressured lives in countries with a high vulnerability to climate
change but low readiness for responding to it, intensifying
to succeed climate’s impact on this generation. Additionally, in the
top 20 Gen Z countries with coastlines, 121 million people
Gays and lesbians should be free to live their
lives as they wish currently live in areas that will be below high tide by
69++P 83++P
2050, while 252 million will be subject to coastal flooding
by that date.5
69%
Agree
83%
Agree
Will the COVID-19 pandemic and its aftermath distract
Gen Z from the climate crisis? Certainly the pandemic is a
landmark in the lives of this youthful generation. Schooling
Developing markets Established markets at all levels was upended by the need for social distancing.
Because young people disproportionately work in service
High level of trust in businesses in general
51++P 38+P+
jobs and are in the lowest rungs of professional ranks,
Gen Zers were laid off at much higher rates than older
workers. And Gen Zers will be entering or returning to the
51%
Agree
38%
Agree
job market in a severe recession. Yet for the Gen Z climate
activist Greta Thunberg, the takeaway from the global
response to the pandemic shows us that “we can act fast
Developing markets Established markets
and change our habits and treat a crisis like a crisis.”6
Under a lot of pressure to succeed
68++P 60+P+
68%
Agree
Developing markets
60%
Agree
Established markets
Source: Beyond Binary; The lives and choices of Generation Z, Ipsos Mori

Gen Z rising
The digital connectedness of Gen Z and its growing shared The impact of this generational shift will likely be
experience of climate change (see “Exponential climate profound. Compared with their predecessors, this
impacts”) will likely cause more Gen Z figures such as generation will likely bring very different assumptions and
Thunberg to emerge from different corners of the world expectations related to society, technology and ethics,
and demand action on the existential climate crisis. The and the role of private companies in providing public
maturing of Gen Z as leaders, workers, consumers and goods. Think of the business transformations — corporate
voters over the next decade will increasingly drive the purpose, sustainability, ways of working, use of digital
decarbonization imperative in business and society. and new business models — sparked by the emergence
of millennials and Gen Z. The next generational wave of
While COVID-19 is a milestone for Gen Z, it is the starting
transformation is on the horizon.
point for the next generation. Generational cohorts
are defined by the societal changes impacting those in
their formative years, enough to shape their intuitive
understanding of how the world works. For the generation
coming up behind Gen Z, the post-pandemic new normal
will just be “normal.”
Half of Gen Z lives in countries that

are highly vulnerable to climate
change but with low readiness for
responding to it
Iran
United States Egypt Pakistan

Turkey Russia
Bangladesh
China
Nigeria Vietnam
Philippines
Indonesia
Mexico Ethiopia
Congo (DR) India
Brazil Uganda Tanzania Kenya
Size= 1% of global ND-GAIN Country Index | Climate change vulnerability and readiness
Gen Z population High vulnerability Low vulnerability
Low readiness High readiness
Source: EY analysis; Notre Dame Global Adaptation Initiative (ND-GAIN) Index; World Bank Population Projections and Estimates

Primary forces
Environment: the next wave
Exponential
climate impacts

Despite all our technological prowess, humanity depends on the environment

for water, breathable air, food and shelter. With population growth, the use
Climate-driven
of polluting, carbon-intensive technologies and the development of a linear,
take-make-waste economy that overexploits ecosystems, we face a set of changes to the earth
interconnected environmental challenges. are happening faster
For example, land degradation diminishes agricultural productivity and the than we thought
soil’s ability to absorb and retain carbon dioxide (CO2). Air pollution impairs
human health and quality of life. Water scarcity threatens industry and Oceans heating
agriculture, and burdens nearly a billion people with lack of reliable access to 40% faster
safe drinking water. Deforestation decimates the ecosystem’s ability to provide
resources, such as clean water, and creates the human-wildlife interactions Sea level rising
leading to disease transmission. Marine pollution impoverishes the billions of 57% faster
people who depend on ocean biodiversity for their livelihoods and food.
Himalayan glaciers melting
The next wave of disruption in the environment interlinks with and exacerbates
100% faster
these challenges: exponential climate impacts. The earth has passed a climate
change threshold. A centuries-long period of rapid but linear warming and
Greenland ice cap melting
change is now behind us. We are entering a new phase marked by exponential
climate impacts, volatility and disruption. Evidence can be found in the planet’s 670% faster
air, oceans and ice in the wake of the six hottest years on record since 1880.
New technologies reveal that climate-driven geophysical change is happening

much faster than we thought, reducing our time to adapt. For example, new
satellite data shows that the Himalayan glaciers supplying water to 800 million
people in South Asia are melting twice as fast as previous estimates.7 Another
satellite survey indicates that 300 million people worldwide — not 120 million
as thought — will be subject to coastal flooding due to sea rise by 2050.8
What could happen in a time of climate volatility? History provides examples of

how rapid climate shifts can tip precarious social and economic situations into
disruption with far-reaching impact.

Primary forces
In 1788, summer drought and an abnormally cold winter in France caused

Extreme weather is crop failures, famine and rising food prices. The revolt that became the French
Revolution began in the areas experiencing the most extreme weather, and
becoming more
most dependent on agriculture.9
frequent and costly
1816 was the “year without summer” due to a volcanic explosion that blocked
sunlight, reducing global temperatures and causing agricultural failure,
disease, famine and bankruptcy. Rising food prices caused rioting among a
2000s $1,487b
population already dislocated by the onset of the Industrial Revolution. The
disruptions sparked a wave of European migration to the US, and westward
migration within the US.10
2010s $2,450b A decade of drought in North America in the 1930s exacerbated the impact of
unsustainable farming practices, causing dust storms and loss of topsoil — the
Dust Bowl. Agricultural failure accelerated and deepened the Great Depression,
while over 2 million people migrated from the US Midwest to other regions,
Source: Weather, Climate & Catastrophe
Insight 2019 Annual Report, Aon transforming US politics and society.11
How will climate impacts amplify the many dislocations of our era, such
as populism, pandemics, automation, immigration, income inequality and
Climate disruption demographic change? It’s hard to attribute the impact of any event entirely
to global warming: many factors may contribute, from underinvestment in
exacerbates existing
infrastructure to social inequities, lack of resilience and poor planning. Even
resource and social so, the role of climate as catalyst and driver of profound economic and social
challenges disruptions is clear.
Business leaders must look at climate risk in a new way. Exponential climate
Income inequality
impacts threaten more than supply chains and physical infrastructure — they
Extreme heat to cause
endanger growth by exacerbating systems-level disruption to customers,
productivity loss equivalent
investors, employees and communities. The wildfires in California, the world’s
to 80 million jobs
7th-largest economy, and Australia, the 11th-largest, provide an indication of
Food insecurity the potential impacts. It is perhaps no surprise, then, that climate change is
already the signature issue of Gen Z, the largest generation and the one most
500 million people live in
desertifying areas vulnerable to climate impacts (see “Gen Z rising”).
Averting worse climate impacts will require reducing global greenhouse gas
Urbanization emissions by about 8% every year for the next decade to limit global warming
300 million people to live to 1.5 degrees Celsius. Decarbonizing the economy will be one of the biggest
in areas subject to coastal economic transformations ever.
flooding by 2050

The COVID-19 crisis comes amid the climate crisis. There are hopeful signs
that global experience of the pandemic and the lessons learned will help to Public discussion of
mobilize the climate transformation. The global community has experienced these risks and potential
how connected and mutually dependent, and vulnerable to the natural world,
solutions is intensifying
we are. The pandemic’s spread and human toll illustrate the reality of global
existential threats and the need to act on them as quickly as possible. Many Increase in climate news coverage
governments are implementing green recovery plans, funding projects since 2016
designed to stimulate economic growth and accelerate decarbonization.
Even in recovery mode, business can, and must, play a leading role in driving
decarbonization, enabled by market forces and backed by the right policy Financial/
and regulatory incentives. But to lead, businesses must undertake their own insurance 252%
risk
decarbonizing transformation to reposition their business and protect long
term value. As with COVID-19, our human ability to innovate and problem-
solve must be put front and center.
Risk to 149%
property
As the world approaches 1.5 degrees of warming, companies that embrace
the challenge will secure their future, improve their capacity to create long
term value for all stakeholders and be well-placed to capture an innovation Carbon 106%
capture
opportunity of a generation.

MEGATRENDS
Decarbonization
Techonomic cold war
Behavioral economy

Synthetic media
Future of thinking
Microbiomes
Synthetic biology

Megatrends
Decarbonization
New carbon removal solutions are emerging for
decarbonizing business models, driving long term
value and demonstrating climate leadership.
The onset of disruptive climate change underscores the urgency of limiting

global warming to 1.5 degrees Celsius above preindustrial levels (see
“Exponential climate impacts”). Failure will result in wide-reaching social and
economic disruptions. Success depends on decarbonizing the global economy,
an economic transformation on the scale of the fossil fuel-driven First
Industrial Revolution.
For businesses across sectors, this will involve decarbonizing business models
and entire value chains. The main levers of this transformation are cost-
competitive renewables, the “electrification of everything” (transportation,
heating, industrial operations, etc.) with clean energy, digitally-optimized
efficiency and the adoption of decentralized energy generation, particularly
by corporates (see our perspective, As the countdown to a new energy world
intensifies, who will beat the clock?).
An emerging suite of carbon capture and sequestration solutions allow

companies to augment these key levers to not only avoid emissions but reverse
them. These carbon removal approaches include engineered solutions, such
as direct air capture, conversion of waste gases and sequestration in the built
environment (construction), and natural solutions, such as soil sequestration,
reforestation and afforestation. All flip the script on carbon, capturing it and
turning it into a source of value.
For the heaviest emitters, these sequestration and reuse solutions provide
another tool to accelerate the drive to carbon neutrality. But for many global
companies the ability to capture and revalue carbon opens the path to going
carbon-negative, removing more CO2 than they emit or cause to be emitted.
In our climate emergency, the ambition of neutrality — doing no climate
harm — is insufficient when there is a way to do climate good.

Decarbonization
Carbon removal approaches

flip the script on carbon,
capturing it and turning it
into a source of value.

Megatrends
Carbon removal innovation Engineered solutions

Carbon is an important input to a variety of commercial
More than 3,000 patent applications related to carbon
removal innovations were made from 2009–18. products and materials, from beverages to chemicals,
diamonds, plastics, building materials, fertilizer, coolants
Carbon-removal patent applications 2009—18 and fuels. Nearly all of that carbon is refined from
petroleum or natural gas. Swapping in recycled carbon,
Carbon capture
or carbon captured from the air, for the manufacture of
Biochar these products could be a $6 trillion market opportunity12
and reduce global emissions by 10%.13
Carbon sequestration
19% 22% Direct air capture

Enabling technologies
Direct air capture extracts carbon dioxide from the
17%
Materials atmosphere. Companies like Carbon Engineering and
12% 27% Climeworks pump air over sorbent chemicals that soak
Laminated timber 3% up the CO2, which is then separated so their chemicals
can be reused. Because the process is energy-intensive,
Annual applications increased by 123% to 419% overall it requires a low-carbon energy source to be net carbon-
during this time. The biggest gainer was biochar, used negative. Global Thermostat’s solution gets around this
in biogas and for sequestering carbon in the built
by using industrial waste heat to power the process. The
environment and soil.
Center for Negative Carbon Emissions at Arizona State
Growth in carbon removal patent applications 2009—18 University is piloting a passive solution a thousand times
more efficient than a tree at removing CO2. Achieving
Overall 123% scale will be critical to driving down costs.
Biochar 504%
Conversion of waste streams
Enabling technologies 196% Another strategy is to capture the highly concentrated
Laminated timber 100% greenhouse gases in the waste streams of heavy emitters,
Materials 85% such as power plants, foundries and chemical plants.
Carbon capture 55% Lanzatech does this with synbio bacteria that convert
Carbon sequestration 9% carbon into fuel and chemicals. NovoNutrients’ specially

Decarbonization
The amount of carbon embodied

in the built environment will
increase through 2050 to
accommodate an increase of
2 billion in the world’s population.
Natural solutions
cultivated microbes grow quickly on waste CO2 to become Carbon capture can also be achieved the old-fashioned
feed for aquaculture. Opus12 creates carbon-negative way, with trees, by reforesting degraded areas or foresting
plastic using chemicals catalyzed from waste gas. (See the treeless areas, and by restoring soil through regenerative
sections on “Microbiomes” and “Synthetic biology” for agricultural practices.
more on bio-based sustainability.)
Reducing and sequestering carbon in

the built environment
About 11% of global CO2 emissions are generated from
the manufacture of building materials and building
construction itself.14 For example, cement, the world’s
second-most-consumed resource after water, is very
carbon intensive: every kilogram produced generates 1kg
of CO2, adding up to about 4gt of emissions annually.15
The amount of carbon embodied in the built environment

will increase as we add an average of 13,000 new
buildings per day through 2050 to accommodate an
increase of 2 billion in the world’s population, mainly in
cities.16 Innovations coming to market could significantly Reforestation and afforestation
reduce or reverse this impact. Companies such as Solidia A recent study identified an opportunity to restore
and CarbiCrete create concrete that sequesters carbon. forests on 900 million hectares of land globally (an area
Cross-laminated timber offers an alternative to carbon- equivalent to the United States) not being used for human
intensive concrete and steel building materials; the industry or in urban areas. The maturing forests could
wood that composes it sequesters carbon (as long as it capture and store two-thirds of the carbon released by
is the result of sustainable forestry practices). Puro has humans since the industrial revolution. Planting a trillion
launched a marketplace for carbon removal certificates trees is a monumental task, but companies like Land Life
based on sequestration in building materials — biochar, are tackling this old-fashioned opportunity with the most
concrete and wood. modern digital tools — drones, robots, satellites and AI —
to optimize and accelerate planting.17

Megatrends
Going negative
Regenerative agriculture Corporations and their CEOs must lead on global
There is more carbon in the soil than in the atmosphere challenges like climate change (the EY global CEO
and vegetation. Farming practices that improve soil Imperative study explores this in depth). Institutional
health by improving the microbiome and increasing investors are prepared to support companies to do so.
stored organic matter can remove carbon from the Boards and investors will support leaders who takes a
air; maintaining those practices can keep it there. We stand. And Gen Z, the largest generational cohort with
could sequester an estimated 4-8gt of CO2 per year in rapidly growing in influence, expects it. (See “Gen Z
this way.18 Several big food and agriculture companies rising” for more on Gen Z and climate change.)
have made commitments to regenerative agriculture.
The end goals for corporate climate leadership have
(See the “Microbiomes” section for more on the role of
shifted with the onset of disruptive climate change.
microbiomes in soil sustainability.)
It’s not enough to be climate-neutral: companies must
To bring regenerative practices to farmers more broadly, make net positive contributions to climate. While
Nori has established a blockchain-enabled carbon removal adopting renewable energy, electrifying operations and
marketplace; individuals and companies can buy credits transportation, and improving efficiency remain the key
for net carbon removals, while farmers are compensated pillars of decarbonization, carbon removal solutions allow
for adopting and maintaining regenerative practices. companies to go a step further, to reverse their emissions.
Other companies have also established regenerative- Microsoft, for example, recently pledged to become
based carbon credits to support farmers. carbon-negative by 2030 with a goal of removing all the
carbon it has emitted since founding.
New verification technologies
Carbon credits generated by soil and forestry With a growing number of countries with net-zero carbon
interventions face questions of quality and persistence. goals, we can expect a supportive policy environment for
Is the resource what it purports to be? Is it still there negative carbon solutions. In a similar vein, 46 national
and performing as expected? Satellites employing and 28 subnational jurisdictions are pricing carbon.19 The
LIDAR technology can now address these questions numbers for both are likely to grow as climate impacts
with fine-grained data regarding trees and soil. Artificial become acute.
intelligence then parses the data to determine carbon
Finally, a warning: greater transparency will expose
performance. Pachama, for example, provides satellite-
companies to greater scrutiny from stakeholders.
verified forestry credits, while Planet provides earth-
The same satellite technologies that monitor carbon
monitoring services.
sequestration can observe corporate assets to measure
carbon and methane emissions and land use (visit ey.com
for a profile of a Canadian entrepreneur monitoring
emissions from space). The resulting data will inform the
decisions of investors, insurers and activists.

Decarbonization
Reframe your future

You’ve already focused on how your organization can reduce carbon emissions,
with the laudable goal of achieving neutrality — doing no further harm to the world’s
deteriorating climate. Now it’s time to be more ambitious. New carbon removal
solutions can actually reverse carbon emissions and secure competitive advantage not
only by getting ahead of regulations, but by generating consumer goodwill, driving
long term value, and capturing value from a $6 trillion market for products with
carbon inputs.
Where to begin: critical questions

• What carbon removal solutions could you adopt to not only accelerate achievement
of your organization’s current climate commitments, but expand them?
• How much of your waste emissions could you turn into value, either independently or
with partners?

Megatrends
Techonomic
cold war
Populism and trade disputes, company
blacklists and a technology arms race,
cyber attacks and information warfare.
The future of war is permanent,
invisible — and fraught with risks for
multinational companies.
We are entering a new kind of cold war, driven by the Populism and nationalism
growing competition to shape the next generation of
technology infrastructure and the rise of a new breed of Populist and nationalist leaders have been gaining power
populist leaders with interventionist instincts. As the line across the world. To varying degrees, such leaders have
between the political and business worlds blur, a variety interventionist and protectionist instincts, as well as an
of protectionist tools emerges, from tariffs to corporate appetite for bucking long-standing policies and norms.
blacklists to cyber war and disinformation. Companies The fact that such leaders are emerging in democracies is
could increasingly find themselves in the crosshairs. shifting long-standing norms across the global system.
Many see this as a temporary aberration, anticipating a

return to the old normal in the near future. But the trend
toward government intervention and domestic boosterism
is widespread and sustained. China’s “Made in China
2025” initiative, for instance, aims to promote domestic
manufacturing across a range of high-technology sectors,
from aerospace to robotics — an ambition that would
increasingly put it in direct competition with the US.

Techonomic cold war
In parallel, the Indian Government of Prime Minister

Narendra Modi has launched a similarly named initiative,
“Make in India,” which gives preference to domestic Cyber warfare has expanded
manufacturing across a spate of industries. into a new domain altogether:
We don’t view populism and nationalism as passing fads disinformation. The target is
(see “Populism” in Megatrends 2018). Regardless of the
back-and-forth of individual election results, populism not physical infrastructure, data
is here to stay because the forces driving it, such as or money, but truth itself.
economic inequality and job displacement, are long term
trends. While the COVID-19 pandemic has undermined
the credibility of some populist leaders, others have
used the crisis to consolidate power. Since populist and
nationalist leaders tend to have interventionist instincts
and, by definition, favor nationalist policies, the examples
above are likely a sign of things to come.

Megatrends
The techonomic cold war Cyber and information warfare

Initiatives such as “Made in China 2025” are driven in Cyber attacks are nothing new. But in the decade since
part by the increasingly heated competition to dominate Stuxnet (often regarded as the world’s first cyber
the next generation of technological infrastructure, from weapon), the line between state and non-state actors has
AI to supercomputers to electric vehicles. The stakes blurred. Governments have begun using cyber attacks
are high; significant economic benefit and power may not just for national security purposes against military
accrue to those who shape these technologies. Is that why assets or public infrastructure, but for financial reasons
governments are intervening in these technology domains (for example, the theft of millions of dollars from the
— and not just with traditional tariffs and quotas? The US Bangladeshi central bank) or to pursue other political
has banned specific foreign (mostly Chinese) companies.20 goals. In many cases, governments are collaborating with
China has indicated it may retaliate in kind.21 There are non-state actors on these cyber attacks, to mask the
reports of increased scrutiny of Chinese scientists working state’s involvement and give it a veneer of deniability.
in the US.22 Russia has banned smartphones, computers
Meanwhile, the targets of state-directed cyber warfare
and smart televisions that are not pre-installed with
have expanded beyond military and infrastructure assets.
Russian software,23 even announcing plans to set up its
Companies are increasingly becoming victims, either as
own alternative to Wikipedia.24 And the US military has
intended targets or as collateral damage.
banned service members from using Chinese-made social
media platform TikTok amid growing concerns about More recently, cyber warfare has expanded into a
security risks. new domain altogether: disinformation. The target is
not physical infrastructure, data or money, but truth
It is hard to untangle the true motivations behind these
itself. This form of cyber warfare burst into the public
actions. They’re often justified not by protectionism but
consciousness after the 2016 US presidential election.
issues such as national security risks, industrial espionage
This experience rightfully raised concern about the use
or human rights violations. While these concerns may
of disinformation in future political campaigns; news
be valid, it’s difficult to tell since much of the relevant
information is classified. And regardless of the motivation,
the result is the same: national governments are targeting
foreign companies, platforms and individuals in critical
technology infrastructure spaces such as 5G, AI and
facial recognition.

Techonomic cold war
coverage of cyber warfare spiked almost 30% in 2017, of it. Cyber and information attacks are considerably
according to our analysis.25 But there’s every reason to cheaper than conventional ones and can be deployed with
think similar tactics could be used to attack companies. pinpoint precision. Since cyber attribution is extremely
Since markets thrive on transparent information, difficult, such attacks also offer the cloak of plausible
undermining its credibility is a potent weapon. deniability. The weaponizing of disinformation itself makes
it easier to undermine cyber attribution, by sowing doubt
Adjusting to permanent, invisible “war” in the public mind about the veracity of information. (For
General Carl von Clausewitz famously said, “war is the more, see “Synthetic media” and “Future of thinking.”)
continuation of politics by other means.” So it is with the These ingredients make cyber and information attacks
emerging battlegrounds of the future. As high-stakes the ultimate weapons of asymmetric warfare, rendering
competition intensifies over everything from mineral it attractive to not just small states, but also failed states
resources to technology infrastructure — and populist and and terrorist groups. “Hacktivists” have been using cyber
nationalist leaders are increasingly willing to intervene attacks to further the cause of fringe political views for
in unconventional ways — states may begin using “other some time now. Expect more to be drawn to these means
means” to further their ends. As company blacklists, in the years ahead.
cyber warfare and weaponized disinformation become just
another instrument of foreign policy or economic state
craft, companies would be fair game.
This is the future of war, in many ways. This permanent,

invisible and bloodless “war” will be increasingly attractive
to those waging it, which is why we expect to see more

Megatrends
Risks and challenges

These trends create significant challenges and risks for government and
business leaders.
The implications for governments are more apparent. States typically don’t
disclose their cyber capabilities, whether offensive or defensive, but this is
clearly an increasingly important area of focus and investment. The other
The techonomic instruments of intervention, from company blacklists to information warfare,
cold war threatens are somewhat newer. They undermine existing norms and make international
relations more complex and unpredictable.
the mechanisms The implications for business are no less disruptive. For one, these trends
that make global reinforce the importance of cybersecurity, while emphasizing the definition
operations possible. of cyber risk is itself expanding. Companies today need to guard against not
just malware and phishing attacks, but weaponized disinformation. A second
challenge is lack of transparency. Commerce thrives on transparency, yet
instruments such as company blacklists are opaque and seemingly arbitrary. To
the extent these instruments undermine transparency, they create uncertainty
for businesses.
The net result of these trends could be an increasingly balkanized global

economy. Multinational companies operate today on a truly global stage, with
sophisticated supply chains, R&D outfits, and sales and marketing networks that
span national boundaries. The techonomic cold war threatens the mechanisms
that make global operations possible. In the future, companies may be restricted
to operating within the spheres of influence of their home states.

Techonomic cold war
Reframe your future

You’re familiar with the risks of running operations around the world. But it’s a whole
new world now. The global arena is becoming more opaque and uncertain. New
instruments of interventionism are targeting companies. Navigating this changing
environment requires understanding the new rules and risks.

• How are you preparing for the cyber risks of tomorrow, such as weaponized
disinformation and so-called deepfakes?
• What risks would you face in an international order that is less transparent and less
governed by rules and norms?
• How might a balkanized international order affect your global operations?

Megatrends
Behavioral
economy
If data is the new oil, behavior is the new data. Armed
with sophisticated capabilities, companies and
governments can shape behavior like never before.
How will you succeed amid shrinking trust?

Behavioral economy
The future of behavior is upon us. Human behavior The internet of behavior
is becoming a commodity — quantified, standardized,
packaged and traded, much as consumer data is today. We all know about the explosion in the volume and types
This commoditization, combined with the maturing of of data our lives generate. This has been enabled to a
disciplines such as behavioral economics and affective significant extent by the expansion from an internet of
computing, will give companies and governments the computers to an Internet of Things — sensor-embedded
ability to influence and shape our behavior as never smart objects that spit out real-time, real-world data
before. And while companies have always been in about the physical world.
the business of seeking to influence what we do, the We are now in the early stages of another shift: from
behavioral economy takes this to a whole new level. the Internet of Things to an internet of behavior. The
Instead of today’s relatively blunt levers, we’re entering technologies we use, and the breakthroughs coming next,
a world of increasingly precise and sophisticated are generating data not just about the digital and physical
instruments of persuasion. realms but, more significantly, about all of us. We unwittingly
reveal more about our desires and fears to search engines
than to our families or friends. Our phones and social media
platforms have more data about our behaviors, preferences
We’re entering a world of and states of mind than we may realize.
increasingly precise and

sophisticated instruments
of persuasion.

Megatrends
Consider how much more data the next generation of

News coverage of the behavioral technologies will produce about our thoughts, motivations
and behaviors. As voice interfaces replace typing and
economy has trended negative in
tapping as our primary way of interacting with technology,
recent years they will make transactions seamless. Will they also
give devices that are constantly listening vastly more
Negative Positive
sentiment sentiment data about us? Facial recognition technology will allow
2016 3% 69% us to instantly check in at an airport or hotel. But in a
world of facial recognition cameras, will simply walking
2017 3% 62% down the street generate data about our movements
2018 7% 54% for law enforcement? A future of on-demand mobility in
which people no longer own cars but instead summon
2019 11% 43% autonomous vehicles whenever needed will provide
tremendous convenience and environmental benefits.
Will it also generate reams of data about our locations,
routines, social networks and travel patterns?
People are already becoming aware of these issues.

The “techlash” against technology companies has been
motivated in large part by privacy concerns, missteps by
technology companies and the growing realization that
when services are “free,” they are really being paid for in
consumer data. Driven by such concerns, the conversation
around behavioral economy topics has become consistently
more negative over the past four years, with positive
coverage dropping below 50% for the first time in 2019,
according to our analysis.26
The European Union has enacted the General Data

Protection Regulation (GDPR) to respond to such
concerns; lawmakers elsewhere are considering
regulations of their own.27 It’s not yet clear how all of this
will play out across different jurisdictions, but it is clear
we are moving to a world in which technology will have
the ability to collect vastly more data about our behavior.
While companies will have to work within emerging
regulatory frameworks, they will aim to combine these
disparate data streams, connect dots and view everything
in context.

Behavioral economy
Breakthrough capabilities
As the volume of behavioral data expands, several
technologies and disciplines are evolving to parse
behavioral data and influence behavior in sophisticated The real challenge will be to
ways. We analyzed the first of these extensively in participate in the behavioral
previous Megatrends reports: behavioral economics
(BE). Academics have studied BE, which applies insights economy while being
from psychology to better understand human decision- transparent with consumers
making, for decades, but the discipline has only gained
mainstream adoption in recent years. By understanding and winning their trust.
and compensating for widespread human heuristics and
biases, governments and companies are now helping
people lead healthier lives, save for retirement and make
more environmentally sustainable choices. Meanwhile, The coming wave of “human augmentation” technologies
marketers and advertisers have been using BE principles will enhance these capabilities. For instance, augmented
to boost sales and profits. and virtual reality could shape behaviors by customizing
interactions in ways far beyond what is possible in the
The second breakthrough capability is even more
physical world. Imagine a salesperson avatar that can
revolutionary: affective computing, also known as emotion
simultaneously maintain eye contact with hundreds
AI. Like behavioral economics, affective computing is
of customers while modifying her accent, choice of
interdisciplinary — in this case, combining insights from
words and tone of voice based on data about each
computer science, psychology and cognitive science.
customer’s preferences.
Affective computing is bringing machines into the realm
of human emotion by enabling systems that can both Governments could also use these capabilities to influence
recognize human emotion (for instance, by analyzing the behavior of citizens. The UK’s Behavioral Insights
eye movements, facial expressions and tone of voice) Team (often referred to as the “Nudge Unit”) has used
and convincingly simulate it when interacting with users. behavioral economics to increase tax compliance,
Startups are already developing applications using encourage charitable giving and more. China’s proposed
these capabilities, from systems that can save lives by Social Credit System could go a lot further, tracking and
recognizing the emotional state of drivers to tools that can seeking to influence a broad range of behaviors among
boost the emotional engagement of fans at live events. its citizens. The COVID-19 pandemic demonstrated the
power of these capabilities, with the use of location and
The combination of behavioral economics and affective
other individual data playing a key role in contact tracing
computing creates a potent toolkit. It will allow platforms
and enforcing social distancing mandates. The ability
and interfaces not just to analyze and simulate behavior
of governments to motivate citizens this way will only
but, ultimately, to influence behavior in ways that are
increase with time.
highly customizable even at a large scale. This is already
starting to happen. For instance, social media platforms
have used consumer data and BE principles to motivate
people to vote in elections.

Megatrends
Opportunities and challenges

The shift to the behavioral economy brings significant challenges
and opportunities.
Governments will be at the center of these issues in a couple of ways. First,

they will set the rules of the road. Privacy mishaps by social media platforms
are already spurring a regulatory response; calls for oversight will only grow
Investment in the as the amount of behavioral data expands and the sophistication of behavioral
behavioral economy capabilities increases. Second, governments will themselves adopt some of
these techniques, since behavioral change could generate better societal
has already been outcomes and significant savings for public budgets. The challenge will be to
skyrocketing, growing do so in ways that do not feed fears about “Big Brother” or the “nanny state.”
by about 146% over The implications for companies could be even more profound. Our analysis
shows investment in the space has already been skyrocketing, growing by
the past five years. about 146% over the past five years.28 The biggest growth opportunities might
go to those who can create the new business models this segment needs.
Consumers are hungry for innovative approaches using behavioral capabilities
to empower and engage with them rather than exploit and alienate them.
Companies able to fill this void could see tremendous market potential. Among
other things, this will involve using behavioral design (see Megatrends 2018)
and will require identifying and building the relevant skills and competencies.
Compliance with evolving regulatory frameworks will be a complex task,

especially if disparate approaches evolve in different regions. But mere
compliance is a low bar. The real challenge will be to participate in the
behavioral economy while being transparent with consumers and winning their
trust. Appropriately enough, this is itself a behavioral challenge. Addressing it
will require companies to examine not just consumer behavior, but their own.

Behavioral economy
Reframe your future

We are moving from the data economy to the behavioral economy. Like data,
behavior is becoming quantified, standardized, packaged and traded. Using
sophisticated capabilities such as behavioral economics and affective computing,
companies can now measure, understand and shape behavior — a key driver of value
and competitive success.

• What new business models will the next generation of behavioral economy
companies need?
• What new risks does the behavioral economy raise (e.g., regulatory, reputational,
market) and how might you mitigate them?
• Will every B2C company need to become a behavioral company, and do you have
the required competencies?

Megatrends
Synthetic
media
Synthetic media is emerging as a new cyber
risk for businesses. Ensuring authenticity
will be critical to maintain trust with
stakeholders, safeguard brand reputation
and drive business performance.
Around the world, governments, businesses and media

face a significant trust deficit. While there are multiple
causes, the net result is the same: the loss of a shared
reality and the growing irrelevance of facts. Access to
information in our increasingly digital world has proved
a double-edged sword, and it’s only getting worse as
it becomes easier and quicker to create and spread
false information.
It’s now easier than ever to fabricate realistic graphical,

audio, video and text-based media of events that never
occurred. Moreover, the availability of sophisticated digital
editing tools is also making it easier to creatively edit
audiovisual information, manipulating the context and

Synthetic media
messaging — these are called “shallow fakes.” The issue

has captured public attention in recent years, with media Synthetic media has become a
coverage of synthetic media increasing tenfold between 638
hot topic in recent years
2016 and 2019, and coverage of deepfakes mushrooming
more recently over the last year.
Articles covering 108
deepfakes
Disinformation — completely forged or selectively 761
edited existing information — deployed on social media
platforms can spread like wildfire, generating pervasive 587
497
and profound impacts on public opinion and behavior. So
far, election campaigns, politicians and celebrities have
Articles covering
been the main targets of synthetic media. Now the risk synthetic media 121
to businesses is beginning to emerge, with substantial 2016 2017 2018 2019
implications for brand reputation, customer loyalty, stock Source: EY analysis using the Quid platform
performance and other factors.

Megatrends
Confronting corporate cyber threats

With enough training data, AI algorithms can generate credible audio, video
and text showing anyone doing and saying things they never did or said.
Adversaries can wield synthetic digital content and deploy it in a variety of
ways, making companies vulnerable to fraud, defamation, extortion and
market manipulation.
A well-timed, sophisticated deepfake video of a CEO saying their company

won’t meet targets could send the share price plummeting. Phony audio of
an executive admitting to bribing officials is prime fodder for extortion. If
released, these could cause serious reputational damage, alienate customers,
impact revenue and contribute to the volatility of financial markets.
Three successful While the media has focused on deepfake videos, the first attacks have come
deepfake audio in the form of audio. Earlier this year, reports emerged29 of three successful
deepfake audio attacks that impersonated a CEO’s voice, requesting an
attacks that urgent money transfer from a senior finance officer. The officer, thinking the
impersonated a CEO’s request was authentic, initiated money transfers, resulting in the theft of
millions of dollars.
voice initiated money
It’s not just C-suite-level fraud. Industries that rely on visual evidence are
transfers, resulting in particularly vulnerable. In the insurance industry, digital claims processing
the theft of millions requests customers to submit digital photos of damage. It is easy to see how
bad actors could use doctored photos to defraud insurance companies.
of dollars.
The selective editing of original audio, video or text altering its intended meaning
or reusing old digital media and presenting it as new or current is perhaps even
worse. Consider that a 2011 video of consumers apparently swarming a grocery
store in a suburb of Amsterdam to stock up because of the novel coronavirus
went viral.30 Although the video is real, it has been taken out of context and in
a time of heightened anxiety, could stoke unnecessary panic. Now imagine the
consequences if a speech or interview with a CEO was similarly edited to have
them admitting to dangerously low stocks of groceries.
Although we have not yet seen a string of high-profile deepfakes or shallow
fakes targeting the private sector, companies need to be prepared. The reality
distortion created by even one attack will make it difficult for the public to believe
any subsequent information they read, hear or see. This could create suspicion
in interactions within companies and with customers. In the absence of trust,
businesses will struggle to operate, much less to succeed.

Synthetic media
A technology solution?
Cyber attacks are not new to the business landscape. Phishing, spam, malware
and the like have plagued companies since the advent of the internet, spurring
a burgeoning array of tools and techniques to mitigate and respond to threats.
We now require an entirely new set of antibodies to fight the risks posed by
synthetic media.
Technology may deliver the solution. Cybersecurity companies, startups,

academic institutions and government agencies are exploring and cultivating
means of authenticating videos, photos and text on the internet — our analysis
shows patents filed in this space jumped by 276% between 2007 and 2017.31
Techniques under development to restore trust in digital media include:
1. Digital forensics. Typically used for after-the-fact detection, this approach

identifies contrived media by looking for inconsistencies in lighting and
shadows in an image or eye-blinking patterns in a video. Some employ
machine learning to analyze pixel-level incongruities that may trick the Authentication
human eye. patents jumped
2. Digital watermarking. This helps identify bogus content by placing by 276% between
hidden marks in images or videos. Such signatures could also be built into
software for cameras, speakers and other content-creation devices to 2007 and 2017.
automatically tag images, videos or audio at the moment they are created.
3. Hashing and blockchain. This technique takes digital watermarking one

step further. Once created, content is tagged with date, time, location
and device-level information that identifies how it was generated. A
hash representation of the content is then written to a public blockchain,
creating an immutable copy directly from the source. An audit log
establishes provenance by recording future alterations.
Each solution has upsides and downsides. While these techniques provide
some ways to identify fakery, will they be enough to curb the production
and distribution of fake information? And what about shallow fakes
that are generated from factual content but manipulate the originally
intended message?

Megatrends
Adopting a multi-tool approach

The use of AI to generate media poses a particularly must act. PR and marketing departments will need to be
complex set of challenges. Those creating fake media and judicious about how much media of senior leadership is
the experts battling to uncover them are engaged in a exposed to the public and what technologies are used to
cat-and-mouse game. AI techniques enabling counterfeit establish the provenance and integrity of digital content
content are becoming increasingly sophisticated and being shared across the internet.
cheaper, enabling creation with far less skill. Each time
Policymakers and regulators face even thornier problems.
new detection techniques arise, algorithms learn to create
Some may see verification technologies as infringing
realistic forgeries that circumvent them. Eventually, it
on free speech and individual privacy. And if these
may become nearly impossible to distinguish original
tools become the de facto solution, they will need to be
content from counterfeit. In addition, the sheer volume
accessible and affordable to everyone; otherwise only
of information published to the internet makes real-time
those who can afford them will be able to publish their
discovery of fakes daunting, to say nothing of attempting
content. This risks further sidelining and repressing
to debunk unaltered video twisted out of context through
already marginalized populations.
editing. Controversial information — regardless of its
authenticity — can go viral in an instant, with damage Companies, markets and customers rely on trusted
already done by the time a forgery is proved. information to function; in its absence, the very
integrity of our modern economy and society is at stake.
Techniques, such as digital forensics and machine-
Legislative bodies around the world are investigating how
learning-based detection, will be critical for identifying
best to meet the challenge of synthetic media. Yet for any
media lacking provenance information. The challenge
policy to be meaningful, mechanisms for enforcement,
for digital watermarking or blockchain-based tracking
auditing and compliance will be essential.
systems is they demand new digital publishing policies
for social media platforms, requiring every piece A long term imperative
of uploaded content to be stamped with a seal of
authenticity. Establishing provenance from the moment Information creation and consumption technologies
of creation would require new software to be installed are becoming increasingly digitized. Augmented reality
on hardware from speakers to cameras, which could add (AR) and virtual reality (VR) experiences immerse the
cost. And provenance standards will need to be adopted senses. If tampered with, they can become powerful
and enforced globally to be truly effective. That raises tools for manipulating public sentiment and behavior.
concerns32 that such a system may have unintended — The technology of 3D printing promises to democratize
and potentially worse — consequences for issues such as manufacturing, but virtual designs can be altered,
privacy rights, surveillance and democracy itself. resulting in potentially dangerous consequences from
faulty car or machine parts. With these technologies,
Ultimately, practical solutions will have to draw from developing guarantees of authenticity will be critical to
all approaches, including those that extend beyond realizing their potential while securing trust.
technology. Companies will need to institute media
literacy and critical-thinking training, equipping While a technology-based approach to re-instilling trust
employees to detect phony information. In schools, such may work in an increasingly technology-driven world,
training has successfully helped students become better it may not be enough. With fake news, deepfakes,
at spotting fake news.33 In addition, as AI algorithms shallow fakes and misinformation already in the public
underpinning fraudulent content are trained on publicly consciousness, we may see a fundamental reshaping of
available audio and video of C-suite-level executives from human behavior and cognition. We explore this in our next
industry events and quarterly earnings calls, companies megatrend: “Future of thinking.”

Synthetic media
Reframe your future

You have already seen the impact of synthetic media on politicians and
celebrities. Now it’s time to consider the threats posed by disinformation,
misinformation and deepfakes on your business — from operations and marketing
to employees and customer perception. New authentication tools and techniques
will need to become part of your broader cybersecurity arsenal to safeguard your
brand reputation, customer loyalty and revenue streams.

• How will your risk management framework and strategy need to change to
account for and mitigate the threat of synthetic media?
• What technological and non-technological approaches will you take to help

your customers and employees distinguish authentic information from fakery?

Megatrends
Future of
thinking
Phone addictions and filter bubbles are so 2019.
How will AI, deepfake videos and autonomous
vehicles change mental faculties — and transform
workers and consumers?
Technology is profoundly changing how we think. Yet while we’ve all

experienced the dramatic effect that social media and smartphones have
on behavior and cognition, there could be even broader effects from the
coming wave of human-augmentation technologies, such as AI, robots and
autonomous vehicles. This will create significant challenges for not only us as
individuals, but for companies and governments in terms of how they interact
with customers, employees and citizens.
Your brain on today’s technology

Here’s a short list of ways our minds are shifting as mobile devices proliferate
and we become more and more dependent on social media:
Addiction
We can’t put our smartphones down, to the point where the condition now has
its own name: nomophobia. A survey found 66% of British adults are addicted
to their phones.34 The average millennial checks their phone 150 times a
day.35 Parents are increasingly concerned about the effects of smartphone
addiction on children and adolescents. Our analysis shows that news coverage
of smartphone addiction and youth development increased by 251% from
2017 to 2018.36 There is emerging evidence that smartphone addictions have
a deleterious effect on mental health, including correlations with increased
depression and suicidal behavior.37

Future of thinking

Megatrends
Polarization vaccination rates have fallen, diseases once under

A big reason our phones are so addictive is that they have control have come roaring back. There is, of course,
become the primary means by which most of us use social broad consensus in the scientific community that our
media platforms. And we increasingly use social media planet is indeed spherical and that the safety and efficacy
platforms not just to connect with friends, but to get our of vaccines far outweigh their risks. But one result of
news — which is also why social media is being associated declining trust is that many people no longer trust the
with other worrying trends, such as growing polarization experts with PhDs and medical degrees.
and declining social trust. Pew Research data finds a
These trends were on display even in the depths of the
sharp increase in political polarization in the US since the
COVID-19 pandemic. While social media platforms made
mid-1990s, and similar trends are occurring in other parts
a concerted effort to disseminate factual information and
of the world. Social media is not the only factor behind
tackle fake news, misinformation was still prevalent. Even
these shifts; they were underway before social media
in the face of a lethal pandemic, many individuals proved
emerged, and developments such as growing economic
susceptible to conspiracy theories and pseudoscience.
inequality and the fragmentation of broadcast and print
While the pandemic forced political opponents to join
media have likely played a role as well. But social media’s
forces and close some gaps, the response to the crisis
echo chambers and filter bubbles make it easier to widen
schisms between segments of society.
Perhaps this should never have come as a surprise. Coverage across mis- and
The business model of social media gives users free
access, then depends on maximizing and monetizing
disinformation increased 573
Articles
user engagement to earn a return. Through millions of 93% in 2019
real-time experiments, programmers and designers have
honed ways to do just that. As a result, social media apps,
Anti-vaxxers
and the phones on which they reside, have ended up
designed in ways that lead to dopamine-fueled addictions Deepfakes 212
— from “infinite scroll” feeds to delayed notifications to Disinformation (fake news)
algorithms that maximize engagement by serving up ever Conspiracy theories
more extreme content.
Other
Critical thinking
We may also be witnessing a more fundamental shift 297
273 Articles
in how we analyze information, interpret it and even 115
Articles 21
distinguish fact from fiction.
229 33 48
Consider that the Edelman Trust Barometer finds about 14 Articles
22
6 in 10 people, across 27 countries, are no longer sure 9
what’s true and what’s not.38 This is astonishing at a 103
48 83
time when practically all the information in the world is 96
instantly accessible to anyone with a smartphone in their
pocket. Part of the problem, of course, is that our mobile
devices have not just given us access to information; 144
125 120
they also enabled the proliferation of misinformation 107
and disinformation.
This can range from the simply absurd — such as the 25 19 21 23

growing popularity of flat-earthism — to genuinely 2016 2017 2018 2019
dangerous, such as the anti-vaccine movement. As Source: EY analysis using the Quid platform

Future of thinking
Here comes human augmentation

remained somewhat polarized in the US, where the This is probably a partial list — and almost certainly
acceptance of facts and seriousness of response was a partial understanding — of what’s happening.
correlated with political affiliation. Researchers are only just starting to study the effects
of social and mobile technologies on our thinking and
These developments have been getting attention in recent
behavior. Meanwhile, technology marches on. It’s
years. Our analysis finds that in 2019, the news coverage
worth considering, and preparing for, the effects the
of fake news and conspiracy theories increased by 93%,
next generation of innovation might have on our
after remaining relatively flat the three years prior.39
cognitive abilities.
Other cognitive abilities
Consider how social media has undermined our ability
Our ability to focus might similarly be declining. A 2019
to discern truth, enabled by technologies that make it
study by researchers at the Technical University of
easy for anyone to create deceptive articles or doctored
Denmark suggests attention spans are shrinking globally40
photographs. So far, video has remained beyond the reach
— not surprising, perhaps, at a time when much of our
of the fake news merchants, but with the emergence
communication has been reduced to short tweets and text
of deepfakes, that’s rapidly changing. How much more
messages, and when we are constantly distracted by the
will our ability to tell fact from fiction be damaged when
beeps and chimes of alerts. Similarly, researchers at McGill
deepfake videos become mainstream? Or consider how
University have found evidence that increased dependence
autonomous vehicles will likely build on the effects of GPS
on GPS may reverse the navigational capabilities — and
to undermine both our ability to navigate and our ability
enlarged hippocampi — drivers used to acquire when they
to drive. It’s conceivable that today’s youngest children
navigated using printed maps and mental compasses.41
may live their entire lives without ever taking a driving
Finally, a meta-study at the University of North Dakota
test or consulting a map, whether printed or digital.
found reading online is linked with lower retention of
information.42 Even more noteworthy, this trend is visible Finally, consider what brain-machine interfaces might
across all age groups, refuting the conventional wisdom do. While the prospect of communicating directly with
that younger generations have a greater ability to learn on computers using brain waves sounds like science fiction
digital media. to many, researchers have made noteworthy strides
toward this frontier. It’s hard to tell what technologies
that interface directly with our brains might do to human
cognitive abilities, but they’ll surely impact how we think.

Megatrends
The upside of mental disruption

The picture isn’t all doom and gloom. While technology may be
negatively affecting our mental capabilities in some ways, it is also
We are already giving us instant access to vast amounts of information and computing
seeing the effects power. The technologies discussed here generate huge benefits for
users, including convenience, connectivity and mobility. They enable
of social media on positive changes in our thinking and behavior, from motivating
societal cohesion and people to lead healthier lifestyles to empowering them to save more
for retirement (for more, see “Behavioral revolution” in Megatrends
democracy. What will 2016). Our goal is not to deny such benefits, but to focus on a
the next generation troubling set of risks.
of technologies do to Some are taking steps to curtail these risks. For instance, researchers
in Australia have developed a new font, Sans Forgetica, designed
informed citizenship, to help users retain information they read online. New apps and
trust and our shared smartphone features allow users to measure and limit the amount of
time they spend on their devices. Social media networks are making
sense of reality? positive moves, such as hiding “likes” on users’ feeds and banning
deepfakes. These are all encouraging steps, but they are dwarfed by
the scale of the problem. More needs to be done.
Implications
We are already seeing the effects of social media on societal cohesion
and democracy. What will the next generation of technologies do to
informed citizenship, trust and our shared sense of reality? While
disinformation campaigns have so far most visibly attacked elections,
it’s very likely that they will soon target companies as well. Imagine
a deepfake video impersonating a CEO to drive down the company’s
stock price or a viral disinformation campaign that refuses to die.
More fundamentally, companies will be affected as these trends

reshape stakeholder behavior, from employees to consumers to
investors. Corporate talent and human resources leaders will struggle
to motivate employees to function at their highest capacity amid
technology addictions and dwindling attention spans. Marketing
functions will need to fundamentally rethink branding and advertising
if consumers become increasingly dependent on technology to make
their purchasing decisions. Investor relations and public relations
functions will need to be vigilant against new forms of disinformation,
requiring skill sets that these departments likely do not possess today.
The future of thinking will require rethinking by companies,

governments and all of us.

Future of thinking
Reframe your future

People — customers, employees and investors — are key to the success of your
enterprise. From marketing to human resources to investor relations, you have entire
functions dedicated to understanding and influencing these stakeholders. What if
every assumption and insight you have into these groups of individuals is up for
question? How is technology reshaping the cognitive abilities of your customers,
employees and investors?

• How much productivity are you losing to shrinking attention spans and
social media distractions?
• How prepared are you for next-generation cyber attacks that use weaponized
disinformation or deepfake videos?
• At a time of diminishing trust, how will you ensure that you remain trusted by
your key stakeholders?

Megatrends
Work and life

unbounded
Imagine a world without weekends, colleges replaced by lifelong
learning, and 30-year-old retirees and 70-year-old workers. Are you
ready for the unbounded future of work, leisure and learning?
The boundaries that define our lives are shifting to Norms are changing
an extent not seen in generations — blurring work,
leisure and learning, and enabling profoundly different The four major components of life’s portfolio — work,
approaches to each. We are moving to a future in which leisure, learning and retirement — have already been
individuals will adopt a portfolio approach, repeatedly changing in recent years, presaging even bigger
rebalancing their mix of these three activities according shifts ahead:
to changing life circumstances. Work
Entrenched norms govern the time we spend on these The century-old norm of the eight-hour workday and
activities today. Why do we choose to concentrate on the five-day workweek is shifting. Across the rich,
learning in the first couple of decades of life? Why do we industrialized member states of the Organization for
roughly work eight hours each weekday, then take two Economic Cooperation and Development (OECD, the
days off? Why do we retire when we do? average number of hours worked per year fell by 11%
between 1970 and 2018.43 But this downward trend
Relative to the arc of human history, these norms is not as visible in the developing world; in 2019,
are recent developments, relics of the last industrial Chinese technology entrepreneur Jack Ma attracted
revolution. They’re not permanent and unchanging and, considerable attention for espousing the “996 system,”
indeed, a radically different future of work promises to in which workers work from 9:00 a.m. to 9:00 p.m.,
completely reshape them, bringing profound implications six days a week.44
for individuals, businesses and societies.

Leisure Retirement
As work has become less bounded, so too has leisure The norm of retirement, the biggest block of leisure time
time. Among elite professionals, being busy has for many, is changing as well. As people live longer and
frequently become a badge of honor. Smartphones today remain healthier, some are choosing to work well into
ensure workers are “always on,” and this blurring of their silver years. Financial necessity is also fueling this
work and leisure has even spurred French legislators to “unretirement” trend, with millions worldwide projected
respond with a “right to disconnect” law in 2017.45 For to outlive their retirement savings by decades. Yet as
low-income individuals, work has seeped into leisure in some work longer, others are retiring earlier. The Financial
other ways. Growing income inequality and the escalating Independence, Retire Early (FIRE) movement has gained
cost of living are compelling many to take on multiple traction as a small but growing cohort of people attempt
jobs to make ends meet. Longer commute times, fueled to live frugally, save aggressively and retire in their 30s
by a global affordable-housing crisis and unsustainable or 40s. Our analysis shows a tenfold increase in media
migration to the cities of the developing world, have coverage of the FIRE movement between 2016 and 2019.46
created a new class of “supercommuters” for whom long
Learning
commutes have cannibalized leisure time.
The norms that anchor our educational systems were
originally created to churn out armies of workers
for industrial-era factories. Those norms are shifting
gradually. While the education sector has been slow to
change overall, there are promising pockets of innovation.
For instance, the adoption of educational technology is
empowering students to learn in customizable ways and
putting teachers to their best use.

Megatrends
The unbounded future

What lies beyond? The future of work, leisure and learning is much more
than the sum of these individual shifts. It promises to undo the boundaries
between work, leisure and learning, fundamentally reshaping the institutions
and norms we take for granted — from higher education to weekends to
retirement savings.
Nine decades ago, economist John Maynard Keynes forecast that technology
would soon allow people to work 15 hours a week. That never happened, but
the scale of technological disruption ahead may finally bring Keynes’ forecast
to fruition. Automation has the potential to significantly reduce the amount
of time spent on work, albeit by inevitably taking over much work traditionally
done by humans. That will theoretically allow us to focus on more creative
and nuanced work, leaving drudge labor to machines, while technology’s
enablement of more flexible, on-demand working arrangements promises to
further erode the boundaries of the nine-to-five workday.
The COVID-19 epidemic has blurred the boundaries between work and leisure
in other ways. As social distancing mandates went into effect across much of
the world in March 2020, large segments of the working population moved
almost overnight to remote work models. While the technologies enabling this
shift had been around for years, their adoption had been spotty. In the wake
of the crisis, companies and workers put unprecedented effort into adopting
remote work.
These developments are likely to be sustained beyond the pandemic. Over

time, they will have profound implications for the future of work, affecting
everything from team building to the demand for commercial real estate. For
many workers, these shifts also had an immediate impact on the structure of
time. As commutes disappeared, workers gained a leisure dividend in their
daily routines. But this windfall has been accompanied by other complications
— the challenge of demarcating personal and work domains, declining
motivation, and feelings of isolation — highlighting issues that will need to be
addressed in a more virtual future of work.
The trends disrupting work will also reshape the norm of shared time off. The
erosion of the five-day, 40-hour week could eliminate the concept of weekends
as we know them. The norm of giving the vast majority of society the same
two days off helps build social cohesion, and its loss could undermine social
capital at a time when it is already being depleted (for more, see our article on
“Mending social fabric”).

Within a generation, the concept of retirement could

be fundamentally redefined. Retirement may no longer
be a back-loaded, monolithic block. A world of more To remain relevant in a world of
flexible work arrangements could give many the ability
to unbundle retirement, and take time off for leisure ever-faster disruption, education
activities along the way — moving from retirement to will be transformed to become
“pretirement.” This assumes, of course, that people have
the financial means to retire early or take significant truly lifelong.
chunks of time off, which will require measures to
moderate economic disparities as well as new financial
planning and benefits programs. Meanwhile, as many stay
in the workforce beyond traditional retirement ages, work
Interest in lifelong learning
cultures will need to evolve.
has increased significantly
The biggest shake-up could be in learning. The education
sector is largely tradition-bound and slow to change,
in recent years 1,756
Articles
but our legacy educational institutions will soon find
themselves increasingly misaligned with the future 1,574
Lifelong/continuous learning Articles
of work. To remain relevant in a world of ever-faster
Future of education
disruption — in which the average worker may have not
just multiple jobs, but multiple careers, across their
lifetime — education will be transformed to become 1,267
Articles 57%
truly lifelong. Individuals will take time off for learning 45% 1,007
repeatedly over the course of their lives. And businesses 706
will play a central role in this new learning ecosystem. 1,004 37%
No wonder interest in lifelong learning is increasing: our Articles 468
analysis shows while coverage of the future of education
was relatively flat between 2016 and 2019, articles about 29%
lifelong learning increased by more than 250% during the 287
same period.
63% 55%
71% 868 43%
799
717 749
2016 2017 2018 2019


Megatrends
Opportunities and challenges

This vision of the future brings profound challenges for day may even induce a societal shift in how we sleep —
societies, governments, businesses and individuals. the norm of sleeping in a single eight-hour block is
another artifact of the Industrial Revolution, and
For one, it is not clear that large amounts of leisure time
returning to historic patterns of biphasic or polyphasic
will be good for life satisfaction and social cohesion.
sleep would better align with our natural circadian
People need a certain amount of work to remain happy
rhythms, while paying dividends for mental health and
and healthy. What new mechanisms will we develop to
worker productivity.
keep individuals engaged and productive? Public policy
will have a role in addressing transitional challenges and Employers will also fundamentally rethink their approach
distributional impacts. How will we equip workers to talent and the workplace. To thrive in this fluid
to reinvent themselves repeatedly? How will people ecosystem, companies will need adaptive workforces
make ends meet in a world with less work? Given the and environments, making workforce agility and the
early experience with the gig economy, how will we workforce experience critical competitive differentiators.
ensure new work models are empowering and not In the wake of the COVID-19 pandemic, this will extend
exploitative? How will we address the prospect of not just to the physical workspace, but to the increasingly
widening economic inequality? virtual and remote environments in which teams now
operate. Achieving this will require developing new
solutions that enable teaming in increasingly flexible
ways. It will involve creative work arrangements that give
Being finally unshackled from employees the ability to repeatedly rebalance their work
and life portfolios. A world in which pretirement becomes
the nine-to-five day may even increasingly popular will also demand new approaches to
induce a societal shift in how financial planning based on near-term flexibility and not
just long term security. Lastly, companies will play a key
we sleep. role in reinventing learning, making it continual, flexible
and customizable to individuals’ changing needs.
Some of the biggest implications for businesses may lie

Addressing these societal challenges will create beyond their walls. While an unbounded future of work
opportunities for business. We are already seeing, for will create tremendous opportunity and flexibility, it will
instance, new business models emerging to provide also bring significant dislocation in the lives of individuals.
specialized services to meet the unique needs of gig Corporate leaders will increasingly be called on to help
workers: our analysis found that funds invested in mitigate these impacts. How will companies help share
banking for gig economy workers rocketed by almost the cost of lifelong learning and retraining programs? How
6,500% in 2019.47 far will they go in helping not just their employees, but
gig workers, laid-off workers and society at large? To fully
For employers, this future presents huge opportunities
realize the upside potential of an unbounded future of
— and significant challenges. Companies will have an
work, leaders will need to find answers to these questions
unprecedented opening to boost purpose, job satisfaction
with courage and creativity.
and productivity. As drudge labor is offloaded to
machines, humans can focus on work that is truly
satisfying. Being finally unshackled from the nine-to-five

Reframe your future

How you optimize and manage your workforce — from recruiting to training to
retirement planning — is based on the ways in which work, learning, leisure and
retirement have traditionally been structured. Now, those structures are becoming
reshaped, creating the impetus and the opportunity to fundamentally rethink the work
environment, approaches to learning and the meaning of retirement in ways that are
better aligned for the future of work.

• How are you reinventing learning to be continual, flexible and customized?
• How are you preparing workers for a fluid future of retirement?
• How do you build employee experiences that transcend the physical boundaries of
the work environment?

Megatrends
Microbiomes
Harnessing the capabilities of microorganisms will
help solve our biggest challenges and create innovation
opportunities across industries.
All visible life depends on organisms we can’t see: Small but mighty
multitudes of microorganisms such as bacteria, archaea,
fungi, viruses and nanoplankton. This invisible life inhabits These advances are just in time, too, because microbiome
microbiomes in the soil, air, oceans and buildings, as well applications could play a critical role in solving severe
as on and in plants and animals, including humans. Half global challenges. From mitigating climate disruption to
of the earth’s oxygen comes from the ocean microbiome. treating chronic disease, microbiomes present companies
Microbes in the soil sequester carbon. The human gut with opportunities to address challenges with new
microbiome plays such a large role in our physical and products, services and operational approaches. How
mental health that it’s considered a “virtual organ.” And can microscopic organisms help solve problems of such
we’ve long harnessed microbiomes — think yeast for bread scale? It is possible by taking advantage of their natural,
or wine, or bacteria for cheese or yogurt. alchemist-like ability to turn one substance into another
and supercharging it with synthetic biology.
What’s changed? While we already enlist microbes for
myriad tasks including making antibiotics and insulin, The climate challenge
turning biomass into biofuels, and purifying wastewater, Innovative companies have gene-engineered microbes in
the emergence of a powerful set of tools is enabling us to the fight against climate change to turn CO2 and methane
not just better understand and mobilize the microbiome, into carbon-neutral, or even carbon-negative, commercial
but supercharge it. Metagenomics, for instance, rapidly biochemicals and materials. Newlight Technologies, for
sequences the deoxyribonucleic acid (DNA) of an entire example, utilizes microbes to produce carbon-negative
microbiome to identify its constituent organisms and thermoplastic for bottles and parts. Photanol and
genetic makeup. Metabolomics identifies all chemicals Phytonix repurpose cyanobacteria — the ones in the
produced by a microbiome in real time. Synthetic ocean giving us oxygen — to photosynthesize valuable
biology imbues microorganisms with new functions chemicals. Researchers in Israel recently evolved bacteria
and capabilities (see also “Synthetic biology”). And big to live on a diet of CO2 directly from the air, opening a
data and AI analyze large volumes of genetic data and path to carbon-neutral food, fuels and other products
undertake predictive modeling. at new scales.48 The climate crisis and the opportunity
for negative emissions are explored in the “Exponential
climate change” and “Decarbonization” sections.

Microbiomes

Megatrends
Climate disruption exposes crops to extreme heat, drought, heavy rainfall,

flooding and saltwater incursion from sea rise. Yet, agriculture will have to
produce 56% more calories to feed the world’s population by 2050.49 One
way to increase agricultural productivity while reducing climate impacts is to
promote the symbiotic relationship between plants and microbes in the soil
to improve nutrient uptake and resilience. Mammoth Microbes, for example,
deploys a consortium of four soil bacteria that release enzymes making it
Last year US$621 easier for plants to absorb the phosphorus in fertilizer. Pivot Bio focuses on
providing nitrogen, another key nutrient, through root-colonizing microbes
million was invested gene-edited to enhance their nitrogen-fixing properties.
in startups pursuing Crop productivity improves as a result of soil probiotic applications such
microbiome solutions as these, while farmers save money because they can apply less synthetic
fertilizer. Less fertilizers mean fewer greenhouse gas emissions, while
related to climate and improved soil quality allows the earth to sequester more carbon. Developing
agriculture. markets, most vulnerable to climate change and most farming-dependent,
stand to benefit from microbiome solutions that result in hardier, more
productive crops that require fewer inputs.
Even cows present an opportunity. If the global cattle herd were a country,
it would be the world’s third-largest greenhouse-gas emitter because of its
production of methane, a gas that traps 30 times as much heat as CO2. Cows
are also very inefficient at converting their feed into food for humans, which
will present a problem as meat and milk demand is likely to double by 2050 as
the world becomes more populous and wealthier.50 The cow’s gut microbiome,
source of the methane, could also be the solution. Researchers recently found
that a small subset of a cow’s microbiome influences methane emissions and
milk productivity. More importantly, a low-methane, high-milk production
microbiome is a heritable trait — some cows just have it in their DNA. This
opens the door to targeted changes in the bovine microbiome and breeding
for more efficient and climate-friendly cows.51 (Further insights into food
and sustainability can be found in this article on “Food by design” from the
Megatrends 2018 report.)
Money is following opportunity: last year US$621 million was invested in

startups pursuing microbiome solutions related to climate and agriculture,
according to our analysis.52
Human health and performance

A growing body of research links an imbalance in the gut microbiome
to diseases affecting billions of people, with enormous costs in terms of
medical spending, lives lost and diminished quality of life. Microbiome-
influenced illnesses include type II diabetes, cancer, food allergies, a variety
of inflammatory diseases (such as asthma, multiple sclerosis and rheumatoid
arthritis), Parkinson’s disease, obesity, autism, depression and anxiety.

Microbiomes
A number of biotechs are pursuing potential therapies. These range from

individualized microbiome-based diets to prebiotics that nourish desirable
microbes, probiotics that introduce beneficial species and applications that
target the gut-brain axis. Annual investment in microbiome health and wellness
startups has risen by 1,600% to US$863 million since 2010, our analysis
shows.53 Given the huge potential upside, large pharmaceutical companies are
moving into the space through investments and partnerships. We can expect to
see increasing numbers of microbiome therapies come to market. Annual investment
And the adage that an army marches on its stomach could be truer than ever in microbiome health
imagined. The U.S. Army is investigating how stress affects the composition
and metabolic activity of troops’ gut microbiomes and the resulting impact on
and wellness startups
their performance, while another research stream looks at how the microbiome has risen by 1,600%
could help maintain troop health and cognition at high altitudes. The aim
is to develop prebiotic or probiotic foods to help maintain troop health and
to US$863 million
performance in the field. If the Army is successful, applications in sports and since 2010.
other physically demanding occupations won’t be far behind.
The built environment

As the world’s population continues to urbanize, people moving to cities are
for the first time interacting with an urban built environment suffused with
pollution, adopting a more Westernized diet, increasing antibiotic use and
changing hygiene practices.54 There is evidence that the microbiomes of new
city dwellers become less diverse and converge on the Westernized microbiome
that has been linked to certain health problems.
Each room in every building hosts a unique microbiome affected by its human
occupants and their activities; heating, cooling and ventilation; plumbing
and the outside air. Building microbiomes are so distinct that one startup,
Phylagen, offers a global supply chain authentication service based on the
microbial fingerprints of suppliers and shippers. The company establishes
the DNA fingerprint of the entire microbiome at manufacturing facilities and
intermediate stops along the way to consumers. Each of those fingerprints can
then be detected on authentic products at the end of the chain, avoiding the
need for physical tags.
The onset of the COVID-19 pandemic has sparked growing concerns about the
possible presence of the virus in the microbiome of the built environment. In
response, a biotech company has developed an RNA-based COVID-19 test for
businesses to test objects, such as door handles, pin pads and handrails, that
could carry the virus. The not-for-profit MetaSub Consortium, which samples
and conducts metagenomic analysis of the microbiomes of cities, subways and
beaches worldwide, has prioritized looking for COVID-19. As a result of the
pandemic, we will likely have much greater visibility into the microbiomes of
our shared spaces and a much better understanding of whether they harbor
any potential threats to human health.

Megatrends
Tapping the biochemical potential of

the microbiome Growing microbiome innovation
The global microbiome is a vast reservoir of genetic The past decade has seen a growing wave of microbiome
diversity that has been described as a “biochemical innovation. The annual number of global microbiome-
treasure chest.”55 Microbes produce secondary related patents grew by 233% over the past 10 years,
reaching 613% in 2018, according to an EY analysis of Quid
metabolites, biochemicals generated in response to data. A total of 3,748 patents were filed from 2009–18.
their environment. These give us products worth
billions annually: antibiotics, antitumor agents, Microbiome patent applications 2009—18
cholesterol-lowering drugs, pigments, flavorings,
nutraceuticals, bioherbicides, bioinsecticides and Health and wellness
enzymes used in a variety of industries.
Yet, this biochemical potential has been hardly tapped Agriculture 72%
because wild microbes usually don’t produce secondary
metabolites once put in the laboratory setting. Also, Climate change 7% 17%
genetic engineering tools have traditionally been
tailored to individual microorganisms, requiring a slow,
Manufacturing 4%
one-at-time approach to testing. Source: Quid; EY analysis
This is changing as synthetic biology unlocks the

biochemical potential of the microbiome (see also
“Synthetic biology”). For example, a team at Lawrence Growing microbiome investment
Berkeley National Laboratory has developed genetic
engineering tool called chassis-independent recombinase- Annual microbiome financing has more than doubled
assisted genome engineering (CRAGE) that accelerates since 2010.
the discovery of valuable secondary metabolites. CRAGE 2010 2019
enables researchers to transfer groups of genes from
one microorganism to many other potential production
hosts simultaneously. By compressing the design-build- Microbiome
test cycle, CRAGE makes it possible to quickly identify the startup $0.6b $1.6b
investment
00252658600
organisms that will produce in the lab and the ones best-
suited to particular jobs (such as producing biofuels at
scale). One immediate application is speeding the search
for new antibiotics, given growing drug resistance and the The most money went to health and wellness during
lack of new products in the pipeline. this period.
Microbiome investment 2010—19

Arrival of the microbiome era
Our ability to harness and enhance the powers of the $3.6b Health and wellness
microbiome is rapidly accelerating. In the next decade,
we can expect the microbiome to become an important $3.5b Climate and sustainability
part of the solutions to our global sustainability
challenges. We can also expect the microbiome to play $1.6b Industrial
a bigger role in the innovation of nearly every industry.
$1.5b Agricultural
Above all, we’ll be surprised by what emerges from the
microbiome’s biochemical treasure chest as it’s explored
in greater depth.
Source: Quid; EY analysis

Microbiomes
00025265860
Reframe your future
When you think of microbes — if you think of them at all — it’s most often as the
enemies of human health or as the helpers in food and beverage production. But these
ubiquitous, innumerable organisms are essential to global human and environmental
sustainability. Their vast genetic diversity represents a biochemical treasure chest for
applications across industries. Innovations that work with, not against, microbiomes
and unlock their potential with synbio can help solve both your business challenges and
humanity’s global challenges.

• How could innovations using the microbiome’s “biochemical treasure chest” improve
the sustainability or performance of your company’s products and operations?
• How could you expand your innovation ecosystem to encompass the microbiome?

Megatrends
Synthetic
biology
Our ability to read and
rewrite the code of life is
transforming the way we
treat illness, make things
and feed ourselves.
You awaken to subtle changes in your window shades, as their embedded

protein-based sensors adjust to the rising sun. Slipping on faux-spider
silk pants and lab-grown leather shoes, you’re hit by the aroma of woolly
mammoth steak and hen-free eggs. Grabbing coffee with cow-free milk, you
hop into your car furnished with bioplastics and powered by biofuel made from
the waste gases generated when the metal in its body was forged. On your
drive, you smile, knowing the gene-tailored medicine you took is keeping at
bay the Alzheimer’s that runs in your family. And it’s a big day: you’re revealing
how your company’s vast digital archives can be safely stored for millennia on
a DNA-based device the size of a sugar cube.
This isn’t science fiction. It’s not far away, driven by synthetic biology (synbio)
— or what many call this century’s equivalent of computing, given its potential
to reshape our world. As Steve Jobs put it, “The biggest innovations in the
21st century will be at the intersection of biology and technology. A new era is
beginning.”56 Synbio is transforming the way we treat illness, make things and
feed ourselves.

Synthetic biology
“
The biggest innovations in the 21st century
will be at the intersection of biology and
technology. A new era is beginning.
Steve Jobs

Megatrends
Reading and rewriting the code of life

How does synbio bring to life innovations like these? The speed and scale are democratizing synbio. Already,
Synbio is an interdisciplinary science that uses an high school students are conducting CRISPR-based
engineering approach to biology to design and build experiments in class using synbio educational kits and
functions in cells. At the heart of synbio are tools for participating in boot camps to learn how to tap into the
reading and writing DNA, the code that drives cell field’s vast potential. Community biolabs that strive
operations. The synbio approach also standardizes to expand access to synthetic biology are organizing
biological parts and systems to copy, change and scale workshops around the world. Public labs take a sharing
genetic innovations much more quickly than legacy economy approach, providing the essential tools and
genetic engineering methods. infrastructure. Small groups with small budgets can now
create products with powerful impacts, such as the mobile
What’s fueling synbio’s moment?
malaria-testing kit piloted in Africa.
Four technological advances:
Innovators are seizing the opportunity. Our analysis shows
• The rapidly declining cost, and increasing speed, of
that annual private investment in synbio reached $US4.4
DNA sequencing and synthesis
billion in 2019, an increase of 310% since 2010.58
• Machine learning’s ability to crunch data to identify
ideal DNA configurations for products or processes
• Editing tools, such as clustered regularly interspaced

short palindromic repeats (CRISPR), that can snip and
combine new genes quickly, with surgical precision
• Emerging public and private “biofoundries” that enable

affordable, standardized, plug-and-play genetic designs
that can be copied or tweaked for multiple purposes
For a sense of the speed of change, consider that the first

sequencing of the human genome required 13 years and
US$3 billion; today, it takes a week and US$600.57 This
increasing speed and power drives the agile design-test-
build-learn-based work synthetic biologists have adopted
from the coding world.
The GP-Write Project, an outgrowth of the Human

Genome Project involving hundreds of scientists, aims
to make our ability to synthesize (write) human and
other large-scale genomes as fast, powerful and cheap
as our ability to sequence (read) them. Achieving this
will supercharge progress in human health and magnify
synbio’s impact across industries.

Synthetic biology
Synbio’s revolutionary business potential

Synbio applications are poised to disrupt the world’s largest CAR-T cell therapies coming to market genetically modify
industries, such as health care, food and chemicals, even as a patient’s T cells to recognize and attack the patient’s
they help us address chronic disease, climate change, food specific cancer cells. Biotech startup Humane Genomics
security and other pressing global challenges. is working on a therapy that identifies the unique
characteristics of each patient’s tumor and then genetically
Personalized therapies
tailors a virus to infect and kill it. Researchers at Stanford
We will likely look back with incredulity at today’s standard
Medicine have developed a therapeutic approach called
therapies for chronic disease and genetic disorders. Synbio
rewiring of aberrant signaling to effector release (RASER)
promises smart, personalized health care applications,
that rewires cancer cells so the hyperactive proteins
from editing out cystic fibrosis genes to tweaking bacteria
fueling tumor growth instead kill cancer cells, potentially
in the gut biome to address metabolic diseases.
eliminating or reducing the costs and harmful side effects
One major stream of work surrounds efforts to cure of chemotherapy.
cancer — the annual number of synbio patents focused on
Personalized gene therapies such as these dramatically
cancer rose fivefold between 2013 and 2018, according to
change the flows of information and materials in health
our analysis.59
care. Where today drugs move from factory to patients
for mass treatment, tomorrow’s individualized genetic
therapies will move from patient (cellular material)
to factory (personalization) and back to patient
(administration) in a process some experts call “from biopsy
to bedside.” This will require the pharmaceutical supply
chain to collaborate in new ways with zero faults while
ensuring patient data privacy.
COVID-19 response
Synbio approaches are being quickly deployed in the
response to COVID-19. When the pandemic struck, several
synbio companies pivoted from developing vaccines for
other viruses to focus on the novel coronavirus. Their
bioengineering tools and approach has already enabled
several of them to bring forward COVID-19 vaccine and
antibody candidates faster and with greater potential
functionality than classical approaches, which involve
creating a weakened or neutralized form of the virus.
Because these synbio vaccines don’t involve cultivating the
virus in any form, their manufacture requires much less
space, doses occupy less volume and scaling up production
can go faster. If a synbio company is the first, or among
the first, in the race to end this pandemic, it will be an
important validation of the engineering approach to biology
and a dramatic debut to the broader public.

Megatrends
Biosensors
Synbio-powered sensors bring new capabilities to identify
diseases and other risks in the body and environment as
they emerge. One company recently launched a graphene-
based CRISPR chip that detects gene mutations in DNA.
While its first application is medical, later it could be used
to detect DNA in the environment; a hand-held device, for
example, could identify pests in a farm field.60 Scientists in
the UK have developed paper-based biosensors to test for
infectious diseases such as Ebola.61 An MIT team is working
on a “wearable laboratory” using synbio to stretch tracking
beyond physiological data into measuring hormones,
genomes and microbiomes.62 Pakistan’s IGEM team won
a prize for developing a genetically modified “reporter
fish” that changes color in the presence of heavy metal
contamination in water.63
Sustainable manufacturing
The synbio era is already here for efficient bio-based
manufacturing, offering far more sustainable ways of
creating or improving clothing, food, drugs, energy,
chemicals, consumer goods and building materials.
(The “Decarbonization” article discusses the opportunity
to address climate change with new materials enabled
by synbio).
Gene-edited microorganisms or cells make possible the

production of chemicals and proteins for food, clothes
or building materials in ways not found in nature.
Think fermentation by gene-edited or modified yeast,
bacteria or other microorganisms — the microbiome is
the workhorse of synbio (the article on “Microbiomes”
explores this intersection in more detail). Some fragrances
and flavors are already made this way; so is the malaria
treatment artemisinin and most insulin. Now this
approach is being used to produce milk and egg proteins,
leather like materials, polymers for bioplastics, monomers
for bio-rubber, and fuel from industrial waste gases. The
metabolic engineering and food companies doing this
work received US$634 million in 2019, up 314% over
five years.64
Like nature itself, biomanufacturing is decentralized.

Production can take place close to demand, using local
bio-based inputs. This shortens supply chains, cuts
energy use, improves resilience and reduces the need for
petrochemicals as manufacturing inputs. The efficiency
of nature also reduces byproducts and waste because it
generates only what is needed.

Synthetic biology
The U.S. Army, for example, is researching ways to use

synbio to produce important chemicals for basics, such
as glue and detergent, in forward operating bases rather
than depending on factories using petrochemicals in the
US thousands of miles away. The US military is investing
millions of dollars in these and other synbio initiatives, such
as fabric with higher tensile strengths and armor that can
detect contaminants.
Optimized food production

Synbio not only produces food in new ways, it also
improves the performance, sustainability and resilience of
traditional agriculture. Where once agronomists undertook
lengthy breeding programs, with CRISPR they can now
quickly edit a plant’s DNA to optimize productivity, size,
disease resistance, flavor, aroma, drought tolerance and
other important characteristics. Some crops are already in
development, including drought-resistant soy, caffeine-free
coffee beans, low-gluten wheat, heirloom-tasting tomatoes
and fungus-proof bananas.65
Gene editing will improve the characteristics of vegetable

proteins in the fast-growing vegetable-based meat
category, enhancing veggie versions of hamburgers,
sausage and other meat products (see “Food by Design”
in Megatrends 2018 for further discussion on the shift
to plant-based proteins). And researchers hope to
commercialize new crops with CRISPR that reduce reliance
on the three crops that provide more than half the world’s
calories from plants: rice, corn and wheat.
Work is also underway to modify the soil microbiome to

reduce the need for fertilizer, improve drought tolerance
and minimize pesticide use (see the “Microbiomes” section
for further discussion of the intersection of synbio and the
microbiome in agriculture.)
What leaders need to know

The world’s oldest technology — DNA — will become one
of the most disruptive over the next decade as humans
continue to read and write the operating system of life.
Though the science may appear complex, the end is
simple. The Fourth Industrial Revolution, as described by
The World Economic Forum’s Klaus Schwab, anticipates
the synthesis of the physical, digital and biological, and
synbio provides the final piece of the puzzle.

Megatrends
Governments globally recognize synbio as both an

economic opportunity and a means to solve some hard Diverse synbio innovation
problems. For example, China, Singapore and the UK
view synbio as a national industrial priority. Japan has Nearly 4,000 synbio patents were filed across several
a bioeconomy strategy, and last year launched a global categories over the last decade.
biofoundry. The US calls synbio a priority industry for
Synbio patent applications 2009—18
innovation, employment and sustainability, although
it has not yet articulated a national strategy. Similarly,
the EU supports a variety of synbio initiatives in pursuit Agriculture and food
of its innovation, bioeconomy and sustainability

Diagnostics and therapies
objectives, while India sees the need to develop synbio
capacity to accelerate its national priorities in biofuels DNA sequencing and synthesis
and biopharma. 18% 25%
Microbiome and
With so much at stake, moving so fast, what should metabolic engineering 15% 33%
business leaders do?
Industrials 9%
Scan and imagine
Start conversations and stress-testing ideas early. Source: Quid; EY analysis
Consider the inputs, products, processes or properties
that synbio could optimize or replace. What would be
the net benefits from the perspectives of supply chain,
sustainability, climate risk and customer? Surging synbio investment
Take an ecosystem approach to expand your horizons.
Annual microbiome financing has more than trebled since
Scan the innovation pipeline to understand the new 2010.
products and capabilities coming to market. Augment
2010 2019
your innovation ecosystem with synbio researchers,
investors and innovators. Don’t just solve the now and
explore the next but devote time and investment to $1.0b
Symbio
imagining the beyond. startup $4.4b
investment
0071114600
Watch regulations
As with any fast-moving technology with potentially
profound impacts, there are regulatory and ethical
concerns to consider, from the safety of health care Diagnostics and therapies have been the major focus of
and food to the ethics of human genetic engineering, synbio investment during this period.
biowarfare and biosecurity to the potential unintended Synbio investment 2010—19
consequences as synbio organisms are introduced.
Industry participants also debate how to balance the $14.0b Diagnostics and therapies
intellectual property protection with the benefits of broad
adoption of synbio technologies and products. $3.3b DNA sequencing
and synthesis
The global regulatory landscape is multi-speed, varying by $2.5b Machine

and AI
learning
geography and application. Cultural attitudes play a large
role. As the regulatory questions posed by synbio are
settled, new markets and product opportunities will open. $1.6b Agriculture and food
Source: Quid; EY analysis

Synthetic biology
0071114600
Reframe your future
In an increasingly digital world, you’ve come to expect the next disruption in
your industry to come from engineering electronic bits and bytes. Now the same
approaches are yielding an unprecedented ability to control a much older, biological
code — DNA. Drawing on software engineering approaches, and enabled by big data
and AI, synbio has become a platform for DNA innovation. This ability to read and
rewrite the code of life at scale will have far-reaching impacts across industries.

• What new possibilities for supply chains, materials, manufacturing, logistics and
business models can synbio create in your industry?
• What are the innovation opportunities for bringing synbio into your value chain?

FUTURE
WORKING
WORLDS

Africa’s new century
New economic metrics
Mending social fabric

The global order

With supercharged growth and interactive mobility,
Africa is forging its own path to economic development.
Is the continent finally reaching the tipping point?
What’s your Africa strategy?

Grand prognostications about Africa seem to surface every few years.

Headlines such as, “Why Africa Can Thrive Like Asia”66 or “Africa Rising”67
or “Africa is Becoming the New China and India,”68 seek to will into being the
continent’s tremendous potential. So far, they’ve been off the mark. Yet we
believe this time is different. Within this decade, Africa will likely hit a unique
and unprecedent inflection point of positive economic development for the
countries in its rapidly forming regions.
Africa in regions
Because of Africa’s vastness, history and proximity to neighboring continents,
experts increasingly view the continent through the lens of regions. With a
unified and frictionless Africa in a similar vein to the European Union as long term
aspiration, economic cooperation and integration will first take place regionally.
For instance, the regional currency of CFA franc was initially set up by the French
during the colonial days and has now become a catalyst to intra-Africa trade.
Moreover, these regional blocs have the added benefit of enhanced bargaining
power with foreign countries. (For more, listen to the Africa episode of the EYQ
Better Question Podcast69)
Why is it different this time? Because Africa’s economy is evolving in an age

of supercharged mobility, allowing the continent to escape the traditional
model of linear growth (see sidebar, “Solow-Swan model explained”). The
combination of technology, globalization and demographics has the potential
to supercharge Africa’s productivity, allowing its economy to leapfrog
the traditional growth trajectory. For companies, this trajectory presents
tremendous opportunities — and challenges.
Solow-Swan model explained

For several decades, the Solow-Swan Economic Model has been the framework of
choice for economists and policymakers for explaining economic growth. The model
suggests countries experience a linear economic path: a “catch-up growth” phase
where savings and investment rapidly accelerate economic growth from a low base,
followed by a “sustained growth” phase driven by technological progress.70

Mobility unbounded
How is supercharged mobility upending Africa’s economy? First, Global
System for Mobile Communications (GSMA) forecasts mobile penetration in
sub-Saharan Africa to be 50% by 2025, compared with 44% in 2018.71 Mobile
devices allow farmers to quickly identify pockets of demand and up-to-date
prices for their crops. Impoverished students can access top-quality education
online previously available only to those in the developed world, with the
added benefit of curriculum being uninterrupted by pandemic. Parents can
learn to apply preventative measures to lower their newborn’s exposure to
diseases such as COVID-19, malaria and Ebola. In other words, information
can increasingly be disseminated in a frictionless manner. (For more, see
“Superfluid markets” in Megatrends 2018.)
Second, technological advancement has led to a major uptick in the velocity

of capital. The increasingly ubiquitous mobile network coverage in Africa,
together with payment platforms, is facilitating the almost instantaneous
transfer of wealth between people and entities, driving financial inclusion. The
capability for people to connect virtually, share information and wire funds
is boosting trade: intra-Africa trade jumped to 14.8% of total trade in 2017,
compared with around 10% a decade ago.72
The enhanced reach of information also becomes the mobility of people. As the
dissemination of real-time information becomes cheaper, the impoverished can
quickly and easily become cross-border economic migrants. In fact, migrants
from Africa rose to 26.5 million people in 2019 compared with 15 million in
2000, according to United Nations.73 This same force, however, is also driving
a growing number of aspiring Africans to pursue overseas education, as the
continent accounts for 8.3% of all international students pursuing tertiary
education at Organization of Economic Cooperation and Development (OECD)
countries in 2017.74 Not unlike the experience in China, where there have
been 3.1 million returnees since 197875 from a population of 1.3 billion, these
young and globally educated Africans are returning in greater number and will
have an outsize impact on Africa’s development as entrepreneurs, scientists,
innovators and professionals.
Last but not least is the movement of goods. Regional trade unions such as
Economic Community of West African States (ECOWAS76), Common Market for
Eastern and Southern Africa (COMESA77) and Southern African Development
Community (SADC78) have helped boost intra-Africa trade, driving it to 14.8%
of total trade in 2017 from the 10% a decade ago.79 Total exports, averaged
at US$760 billion during 2015–17,80 will grow with further effort to bridge
Africa’s annual infrastructure gap of between US$68 billion and US$108
billion80. The most notable influencer in recent years is China, which, through
its Belt and Road Initiative, has committed US$614 billion since 2013.81 As
policy response, the EU and Japan have pledged US$54 billion82 and US$20
billion83 respectively. While it is likely too early to ascertain the exact impact of
COVID-19 on these pledges, the secular trend of increased trade will prevail as
the world learns to overcome this pandemic.

Supercharged economic development

Africa has a landmass greater than the US, China, India and Europe combined;
the precise manner and pace in which economic development for each country
remains unclear. But the nonlinear nature of such growth, due to supercharged
mobility, will make development uneven.
Agriculture
The first economic growth engine is agriculture, because the challenge of
feeding Africa’s growing population (forecast to double by 2050) cannot be
solved with imports alone. Despite having 60% of the world’s arable land,84
farmland productivity in Africa has yet to evolve beyond subsistence levels,
largely because of the lack of economies of scale from fragmented ownership
and insufficient technology and capital. Yet there are already promising signs
that the continent’s farmers can dramatically increase productivity through
basic mechanization and agricultural technologies such as fertilizer, irrigation,
crop rotation and improved seeds. The production of cocoa from Ghana and
Ivory Coast now makes up 60% of the world’s supply,85 while major exporting
countries such as Kenya, Ethiopia, Uganda, and Tanzania increasingly view
coffee and tea (from which Africa generates 11% and 12% of world’s supply
respectively86) as high-value crops.
Manufacturing
The second engine is manufacturing, where low-cost labor and proximity to
natural resources will be Africa’s competitive advantage. Unlike Asia, exports
mainly served markets in the West, Africa will develop its own manufacturing
capability to serve its nascent consumer market, further boosting already
burgeoning intra-Africa trade. For example, Rwanda recently announced
made-in-Africa smartphones87 solely for local consumers. North Africa has in
recent years88 successfully lured European automotive manufacturers to build
operations there, with the near-term strategy of lowering cost of production
for their home markets and the long term strategy of developing cars for
Africans.
Services
Finally, Africa’s services sector is taking off, even though traditional models
suggest it should expand only after the industrial and agricultural economies
are well-established. In financial services, banks and insurance companies
already benefiting from the increasing ubiquity of mobile payments will get
a further boost when a modern identity system,89 akin to India’s Aadhaar, is
implemented. On the back of improving physical infrastructure, e-commerce
companies such as Jumia, Kilimall and Takealot are playing a significant role
in a consumer market developing even more quickly than its peers in Latin
America and Southeast Asia. In the longer term, the knowledge economy will
also emerge; green shoots are already appearing with the recently established
R&D centers of American technology giants. Furthermore, francophone
countries such as Madagascar,90 Morocco 91 and Tunisia are already developing
a thriving business process outsourcing (BPO) market.

Africa matters
While this confluence of factors suggests Africa’s ascension is at last imminent,
challenges remain. First and foremost is governance and state capacity.
Ethiopia and Rwanda, the poster children of successful economic development
in the past decade or so, are both landlocked with few natural resources. They
succeeded largely because of their focus on building business confidence by
stamping out corruption, ensuring stability and enhancing the ease of doing
business. In 2014, faced with the threat of Ebola, the containment actions
undertaken by Nigeria and Senegal were exemplary.92 In 2020 and beyond,
COVID-19 presents another daunting challenge. Only with a stable, healthy and
business-friendly environment will foreign direct investment flow in — and stay.
Another potential impediment to African economic growth is the level of

mistrust for foreign powers sown throughout African’s colonial history, and
among African countries dating back to their tribal histories. Pan-continent
initiatives such as common currency and free trade agreements cannot
progress quickly without earnest dialogue fostering trust.
If the barriers can be overcome, the potential upside for businesses is obvious.
The continent has abundant resources and a young and increasingly educated
population93 that is eager to rise above poverty as Africa becomes an even
bigger player in the global economy. That potential — and its geopolitical
importance — also explains why Africa is quickly becoming an ideological
battleground between China’s state-directed capitalism, as seen by the success
of Rwanda and Ethiopia, vs. the US-led free enterprise capitalism. Regardless
of how it develops, Africa matters to everyone because of its impact on
collective challenges such as climate change, biodiversity and overpopulation
that threaten planetary survival. (For more, see “Decarbonization.”)

Reframe your future

Africa is both a resource and an opportunity —
the potential to leverage the collective brainpower
of 1.2 billion people and develop innovative
solutions, not just for the continent, but for the
rest of the world. Successful strategies will find
sustainable business models for lifting Africa’s
impoverished out of poverty and turning them into
valued customers.

• Is your business purpose aligned with prevailing
social values in the 21st century?
• Is your organization investing enough in

intangibles, including human and social capital?
• Are governments moving quickly enough in

leveraging new data technologies to promote
greater well-being?

Societies and economies
New
economic
metrics
Is GDP aligned with a digital
economy? Is the unemployment
rate relevant in the future of work?
Does shareholder value reflect
what society values? As capitalism
changes, so must our metrics.
What we measure no longer reflects what we value. Moving beyond GDP

The metrics guiding national policies and corporate
investments focus narrowly on short term financial value. Gross domestic product (GDP) is the most well-known
As social values diverge, growing misalignment between measure of economic activity, with a correspondingly
businesses and governments foments critical policy huge influence on policymaking. However, GDP suffers
failures, including inequality, climate change and falling established weaknesses that we can no longer ignore.
living standards. These crises are destabilizing Western GDP captures the financial value of goods and services
democracies, so we must act now. By not fully accounting exchanged (i.e., as in an income statement), but omits:
for the long term impact of externalities, businesses are • Anything “external” to the market, including
more free to impose them. Without appropriate feedback, environmental and social costs, which is a fatal
policymakers lack visibility on the true impact. Making flaw as the costs of climate change mount (see our
progress solving these fundamental challenges requires “Decarbonization” megatrend)
a longer-term perspective, a deeper understanding of
• Income and wealth distributions, which contributes to
value, and new metrics measuring human, social and
rising inequality, boosts populist leaders and diminishes
environmental well-being.
trust in our political institutions (see our “Techonomic
cold war” megatrend)
• Stocks of assets (e.g., as in a balance sheet), which

combined with frequent election cycles, skews
policymaking incentives to the short term

• “Free” digital services such as internet search and communicating something so multi-faceted.96 One
mapping or social media, which renders it ill-suited for promising new metric is the genuine progress index, or
much emerging activity94 “GPI,” developed in a handful of American states, Finland
and Canada.97 It’s designed to take broader measures of
• Intangibles such as knowledge and data, which
social well-being explicitly into account. For example, the
represent an increasing share of output
GPI falls in value if the poverty rate increases.
Incorporating a broader set of metrics, such as hours
To realign policies toward what people value, some
worked and life expectancies, dramatically changes our
policymakers are seriously exploring alternatives to
understanding of the economy. To illustrate, although
measures of output. China’s leadership announced
the UK’s per capita GDP is 75% of the US, UK citizens live
a reduced emphasis on GDP in its policy approach,
2% longer than Americans and enjoy a third more leisure
declaring that “harmonious” economic growth requires
time. After reasonable adjustments for these differences,
preserving the natural environment.98 Following China’s
overall well-being in the UK is estimated at 97% of the
initiative, the Asia-Pacific Economic Cooperative (APEC)
US level.95
selected “Beyond GDP” as the theme of its Malaysia 2020
Many groups are developing new metrics as social meeting.99 Elsewhere, New Zealand built a supplementary
pressures stimulate a government response. The United 2019 budget around measures of well-being.100 In doing
Nations and the OECD support a dashboard approach so, its leaders acknowledge a hard truth: that despite
to measuring well-being, arguing a range of indicators enviable GDP performance, well-being isn’t keeping pace.
is appropriate given the challenges of quantifying and

Measuring work’s worth

The rapid emergence of the gig economy has exposed
flaws in how we measure employment.101 As labor
markets become more fluid, binary measures of
unemployment are increasingly irrelevant. Platform
companies in the ride-sharing industry often rely on
contractor rather than employees, arbitraging gaps in
labor regulations and leaving workers exposed to greater
risks. Moreover, headline unemployment figures exclude
people who have given up looking for work.102 The
forces of technology and globalization have displaced
many of these “discouraged” workers. Their omission
risks encouraging policymakers to ignore precisely the
constituencies where targeting reforms may help stem
the rise of populism and nationalism (see “Techonomic
cold war” megatrend).
In addition, unemployment statistics don’t capture, and

companies don’t systematically report, metrics measuring
the quality of work, such as employee autonomy,
absenteeism, engagement, the precariousness of worker
income, instances of harassment and mistreatment, or
hours spent in training. Surveys consistently indicate the
most important factor in job satisfaction is the opportunity
to learn new skills. This is logical; accumulating skills and
competencies are the most important driver of growth
in recent years.103 And much valuable human capital is
co-created by businesses and their employees via training
and learning-by-doing. But measuring job quality poorly
restricts the flow of talent to its most productive use.
Without vital information signals, prospective workers may
end up in a job that isn’t suited to their preferences, culture
or lifestyle. Job satisfaction suffers as a result, and so does
well-being. Measuring the quality of employment is thus
essential to promoting well-being.

Corporate metrics and the business of long term value

Enabling better measurement at the national level requires a priority. Employees represent an important new
concurrently changing the way companies report activities, stakeholder in the emerging value framework.
because macroeconomic statistics are typically aggregated Employers can collect more detailed and granular data
from firm-level reporting. Current social and environmental about their workers than any government agency.
exigencies demand that businesses finally report But they generally fail to report informative statistics
externalities. These changes are already underway with the on worker well-being, such as the share of employees
boardroom focus shifting toward the long term. participating in wellness programs.
Business leaders face increasing social pressure as A redefined business purpose demands changes to
millennials come of age (see our “Gen Z rising” megatrend) traditional notions of shareholder value. In 1975, more
and environmental damage accumulates (see the EY 2019 than 80% of value was captured on balance sheets. Today
CEO Imperative Study). For example, Blackrock CEO Larry it’s common to see just 20%, the balance derived from
Fink, head of the world’s largest asset manager, overseeing intangibles, which are difficult to measure. Yet rising
a US$7 trillion balance sheet, recently announced investment in intangibles is the defining characteristic
sustainability as a key new benchmark. Fink called for all of the current economic paradigm shift. EY analysis has
governments, companies and shareholders to confront previously found intangibles account for roughly half
climate change.104 Similarly, the Business Roundtable of all corporate assets, and as much as 90% for certain
chaired by Jamie Dimon acknowledged the changing highly innovative firms.107 After all, a smartphone
corporate environment by announcing support for a more isn’t special because of the silicon and glass used to
inclusive, long term variety of capitalism. It also redefined construct it, but the intangibles such as design, branding
the purpose of the corporation to reflect a wider set of and innovation. Existing accounting metrics show
stakeholders, including employees and communities rather these intangible investments as expenses in income
than just shareholders.105 But without new metrics and more statements, but the assets that result (such as a stronger
robust cost accounting, it’s impossible to know if strategy is workforce and deeper human capital) never make it to
aligned with purpose. the balance sheet. This skews strategic and financial
incentives against innovating.108 As a greater share of
Companies that fully account for externalities can
economic activity shifts to the production of intangibles,
incorporate the complete range of stakeholder impacts.
our mismeasurement problems compound. Misaligned
The announcement in Davos of a new accounting
incentives for innovation reduce living standards and
framework with broad business support is a welcome
aggravate existing social inequities. Encouraging the
first step.106 Environmental targets might include carbon
accumulation of human capital is key to creating long
intensity, water usage and resource efficiency. Where a
term value.
new product has a negative spillover into public health,
disclosure of risks and reasonable costing becomes

Charting a new path

Moving away from our existing metrics won’t be easy. It’s Governments also have an opportunity to leverage data-
a monumental coordination challenge requiring steady generating technologies to enhance feedback. More than
leadership commitment to battle deeply entrenched 20 countries from Singapore to Sweden have “smart
habits, philosophies and incentives. Groups such as the city” initiatives, demonstrating how better measurement
Business Roundtable and the Embankment Project for through data can improve public safety and citizen
Inclusive Capitalism can facilitate communication and services, albeit not without risks. The UK’s National
collaboration, both between public and private sectors Health Service has dozens of partnerships with leading
as well as across countries (see the EY EPIC report with technology companies analyzing the vast troves of patient
the Coalition for Inclusive Capitalism). Policymakers can data to support the provision of its services.109 And big
encourage the shift toward new metrics by establishing data techniques have also proved a significant part of
consistent global accounting principles for externalities the policymaking process when fighting the COVID-19
and intangible assets. Such changes may help realign pandemic. Countries that successfully implemented track-
strategic and investment incentives with changing social and-trace techniques using smartphones fared better in
values while simultaneously promoting innovation. Senior managing the deadly outbreak.
business leaders can help by engaging seriously in the
An inflection point is approaching, driven by necessity.
dialogue around long term value, and by embracing a
Our industrial-era metrics are misaligned with the
modernized business purpose. Developing strategies
needs of a knowledge-based economy characterized by
to achieve inclusiveness starts with a fresh perspective
widespread technological disruption. We are on the cusp
focused on the long term (see EY LTV initiative).
of a significant change in the way societies make policy
To some extent, technology can help meet these new and conduct business. Companies will either evolve to
challenges. The costs of data collection and analysis realign with new values, or risk dissolving as their social
are falling rapidly thanks to Internet of Things and AI. contract is withdrawn. There is no looking back.
Satellites and sensors, for example, can generate highly
accurate real-time data. A broader corporate data
strategy aimed at collecting social and environmental
cost data, in addition to the well-being of employees
and local communities, might help fill significant gaps in
measurement. Useful new corporate reporting that details
progress toward a broader business purpose means
building the prerequisite data capabilities first.

Reframe your future

Your organization already has a data strategy
designed to increase customer retention and boost
sales. Now it’s time to rethink that strategy as
momentum builds behind stakeholder capitalism.
New corporate reporting challenges are emerging
to enable monitoring of key externalities. It’s now
necessary to broaden your company’s data and
transformation strategy to include measuring your
company’s ecological and social impacts more
completely and precisely.

• Is your business purpose aligned with prevailing
social values in the 21st century?
• Is your organization investing enough in

intangibles, including human and social capital?
• Are governments moving quickly enough in

leveraging new data technologies to promote
greater well-being?

Societies and economies
Mending
social fabric
Endemic loneliness, financial fragility,
political polarization, rapid shifts in
migration, family structure and digital
media are creating new risks. Mending our
social fabric requires investment.
After an Australian gunman killed 50 Muslims at their houses of worship in

Christchurch, New Zealand, in March 2019, the country reacted as one to the
horrific violence. Prime Minister Jacinda Ardern donned a hijab at victims’
funerals, while hundreds of non-Muslim New Zealand women went to work
wearing headscarves. News anchors began broadcasts with the Arabic greeting
“as-salam aleikum.”110 New Zealand’s notorious Mongrel Mob street gang
became volunteer mosque guards, providing a protective circle around houses
of worship at the invitation of New Zealand imams.111
This nation of under 5 million people, less than 1% of whom identify as Muslim,
showed something remarkable in the face of national tragedy: a resilient and
supportive social fabric. People who had nothing in common beyond being New
Zealanders supported one another in ways that can seem all too rare in a world
often polarized and isolating. Often it seems we see the benefits of a strong
social fabric only at moments of crisis and terror, not in everyday life.
Fears of a weakening social fabric — the intricate network of weak ties that
connect us in our neighborhoods, workplaces and public spaces — have long
been a topic of debate. In his influential 1995 essay “Bowling Alone: America’s
Declining Social Capital,” Robert Putnam blamed the loosening of social
bonds on the demise of voluntary organizations, including fraternal, civic

and religious organizations such as the Elks, the Lions Club and the Knights
of Columbus, as well as the titular bowling leagues. These groups brought
together neighbors who might otherwise have had no reason to interact,
and created a web of ties that could be used to find a job or launch a political
campaign. Putnam saw 1960s counterculture, television and sprawling
suburbia as reasons why social capital declined and social fabric frayed.
Subsequent to Putnam, dozens of commentators have mourned the
death of social capital, blaming everything from increased geographical
mobility (Bill Bishop’s The Big Sort) to the rise of social media (Sherry Turkle’s
Alone Together).
Yet nostalgia for a time when neighbors took care of each other disguises
some uncomfortable truths. Political philosopher Danielle Allen points out
that most of the clubs Putnam celebrated were all-male clubs before a 1987
U.S. Supreme Court decision forced them to allow women.112 The rich civic
fabric Putnam warns we’re losing was built in part on the exclusion of women
and people of color. When we consider the challenges of building a resilient
social fabric today, we can’t look back to a past when the fabric was solid, but
exclusionary. Our challenge is living and working in a world where the strength
of the social fabric comes from its variability and diversity.

Global shifts and strains

While Putnam focuses on the US, similar changes Digital connection:
are visible in other developed economies and many During the wave of migration between the 1880s and the
developing nations. In Japan, low birth rates and the 1910s, immigrants were usually expected to rapidly adopt
emergence of “ohitorisama” — people committed to living the culture of the nations they’d moved to. Separation
single — are rapidly changing social dynamics.113 Solo forced by long distances aided this assimilation; many
households make up 28% of all households in Canada, migrants never saw their families again. The rise of the
and 34% across the European Union.114 The massive internet means that modern migration is a very different
decrease in church attendance across much of Europe, experience. Not only can families stay in touch via online
leading one scholar to conclude that secularism is now the communication platforms but the Pakistani migrant to the
continent’s default belief system, has consequences for UK can remain culturally in Pakistan, watching television
community ties, as houses of worship provide key points and movies from their homeland while abroad. The same
of social connection.115 technological developments that allow migrants to remain
Four major social shifts have radically changed the nature culturally rooted while being geographically mobile
of the social fabric in the past 50 years: allow ideological partisans to surround themselves with
consonant information; the progressive German need not
Transnational migration: watch the same news as his conservative neighbors when
In the 1970s, less than 5% of the US population was he moves to Poland. The rise of digital media allows us to
born in another country; that number approaches 14% choose our social ties, which may be a blessing for the gay
today, nearing the 1890s high of 14.8%.116 While the teen in a homophobic community, but can create strains
percentage of a population that is foreign-born ranges in diverse, multicultural cities.
widely by country, from almost 30% in Switzerland to
well below 1% in China and India, we are experiencing Racial and religious integration:
a global migration boom, echoing the pre-World War I As we’ve moved from low to higher immigration rates,
wave of mobility that reshaped the world. In 1970, 2.2% most societies have recognized the ways that the
of the world’s population lived in countries other than dominance of particular races and religions raises deeply
country of birth; that number was 3.4% in 2017, a 55% unjust barriers to civic inclusion. A society that believes
increase.117 In nations where many neighbors were raised the default citizen is white, Anglo-Saxon and Protestant
speaking different languages in different school systems, is always going to make black, Latinx, Asian, Catholic,
watching different teams and different sports, it’s harder Jewish and Muslim individuals feel excluded. But as
to assume common experiences with the people we we recognize the legitimacy and full citizenship of all
encounter every day. our neighbors and their values and beliefs, we lose the
assumption of a common culture. Instead of appealing to
common experiences in our cultural pasts, we are forced
to look for experiences we’ve shared together, creating a
common culture in real time.

Family transformation:
Finally, the full inclusion of women in the workforce
is only one transformation we’ve experienced to the
structure of the family. Acceptance of marriage equality
for gay and lesbian couples and the rise of transgender
and nonbinary identities have broadened the range of
shapes that families can take in the 21st century. A
move toward later household formation and fewer or no
children changes not only the shape of families, but of
communities. Traditionally, children create a set of loose
social ties for their parents, who are likely to befriend
parents of their children’s friends. In many communities,
schools become a center for civic engagement as well, as
children’s education is a government function that parents
are inclined to pay close attention to. As the shape of the
modern family shifts, we may need new mechanisms that
help build and recognize connections to our neighbors.

Challenges of a shifting social fabric What leaders can do

In the past few decades, managers have learned that What responsibilities do business and government leaders
employee health and well-being are part of a leader’s have for addressing the challenges of a fraying social
responsibilities. Workers struggling with alcohol or opioid fabric? Should businesses try to provide the community
addiction aren’t able to be full parts of a team; workers connections many neighborhoods and cities lack, or do
overcoming domestic violence or suffering from mental they risk invading sacrosanct parts of an employee’s
illness require our help and support to thrive at work. life in the process? Is the rise of loneliness a temporary
In the next few decades, we will begin to recognize phenomenon that will disappear as generations master
loneliness as a serious public health issue that requires the art of interacting digitally, or are we on a dangerous
our attention. path toward individual isolation? Will we develop new
social institutions that bring people face to face in the way
Close relationships with friends and family are now
churches and festivals once did? Can we imagine a social
regarded by the scientists behind the Harvard Study of
fabric in which diverse traditions and ways of interacting
Adult Development, the longest-running longitudinal
with our neighbors interoperate smoothly, or do diverse
study of adult health, as a critical element of long term
societies necessarily have a looser social fabric?
health, alongside more conventional factors such as
cholesterol levels. Loneliness, one researcher found, is as Faced with these challenging questions, New Zealand’s
damaging as smoking or alcoholism.118 resilience offers lessons for both societies and companies.
Older institutions such as churches and social clubs
But as the social fabric shifts, loneliness is becoming
were such powerful reservoirs of social capital not just
epidemic in some societies, with 1 in 7 Britons reporting
because they brought people together, but because they
they are often or always lonely; Teresa May’s Government
united them in shared projects. Ardern and other New
named a minister for loneliness in 2018.119 And while
Zealanders took on the Christchurch attacks as a common
there’s an understandable fear of the elderly suffering
project to heal and comfort the nation, bringing together
from loneliness, people age 18-34 report loneliness at
everyone from television anchors to gang leaders. More
twice the rate of older people.120 Some 42% of single
than any other contemporary institution, the workplace
people said remaining alone was their worst fear,
has the possibility of bringing together diverse groups
outpacing chronic illness, terrorist attack or other
toward a common goal. As more people choose work
catastrophic event.
that aligns with their values rather than just seeking to
In addition to the psychologically and physically corrosive maximize their earnings, workplaces become a place to
effects of a weakening social fabric are increases in unite with the like-minded and seek meaning from working
financial fragility. As economic inequality rises, many together. Perhaps the workplace, in turn, can be a site for
individuals in wealthy nations are finding themselves the revitalization of a social fabric we all benefit from.
unable to cope with routine financial shocks. A 2019
report from the Board of Governors of the Federal
Reserve System found 39% of American households would
have difficulty paying for an unexpected US$400 expense,
such as a medical bill or a car repair.121 This fiscal fragility
is amplified by a fraying social fabric: people with strong
familial and friendship ties can rely on their community
to navigate these difficult straits, while those facing
loneliness have fewer resources.

Reframe your future

In many societies, social fabric — the ties that
connect people in their neighborhoods, workplaces
and public spaces — is becoming increasingly
frayed. Companies exist in a social setting, and
these trends have implications — and create
opportunities — for enterprises to rethink their roles
and responsibilities.

• What challenges and risks does a fraying social
fabric create for your enterprise?
• What responsibility should businesses assume for

mending our social fabric?
• What could companies do to reimagine the

workplace as a place for repairing social fabric?

Endnotes
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economic-well-being-us-households-201905.pdf

Acknowledgments
We wish to thank the following individuals, who provided input in various forms
for different sections of the report:
Powering human augmentation Behavioral economy

Caroline Day (EY), Jipson Matthew (EY), West Coghlan (EY) Giorgio Patrini (Deeptrace Labs), Jeremy Bailenson
(Director, Stanford University Virtual Human Interaction
Beyond globalization Lab), Josh Epstein (Agent-Based Modeling Lab at NYU),
Kyle Lawless (EY), Mary Cline (EY), Scott Sarazen (EY), T. Dalton Combs (Boundless Mind), Tali Sharot (University
Sven Behrendt (EY contractor) College London)
Gen Z rising Synthetic media
Marcie Merriman (EY) Derek Belch (Strivr), Ethan Zuckerman (MIT Center for
Civic Media), Giorgio Patrini (Deeptrace Labs), Jeffrey
Exponential climate impacts McGregor (Truepic), Kris Lovejoy (EY), Paul Brody (EY),
Ryan Carrier (For Humanity), Shamir Allibhai (Amber
Benoit Laclau (EY), Jane Simpson (EY), Jenny Byars (EY),
Video), Tali Sharot (University College London)
Mathew Nelson (EY)
Future of thinking
Negative carbon
Giorgio Patrini (Deeptrace Labs), Jeremy Bailenson
Alex de Sherbinin (Columbia University),
(Director, Stanford University Virtual Human Interaction
Benoit Laclau (EY), Gail Whiteman (Lancaster University),
Lab), Josh Epstein (Agent-Based Modeling Lab at NYU),
Isabelle Santenac (EY), Jane Simpson (EY),
T. Dalton Combs (Boundless Mind), Tali Sharot (University
Jenny Byars (EY), Jules Kortenhorst (Rocky Mountain
College London)
Institute), Matthew Nelson (EY), Mark Holland (EY),
Michael Puma (Columbia University), Nathan Ramsay Work and life unbounded
(EY), Paul Young (Lancaster University), Stefan Heck
(Nauto), Stephan Dolezalek (Wheatsheaf Group and Allison Bream (EY), Ankur Gopal (Interapt),
Resourcient), Volker Sick (Global CO2 Initiative) Danny Ferron (EY), Hayley Pearson (University of
Pretoria), Heather McGowan (author and speaker),
Techonomic cold war Joe Detmann (EY), Lauren Huray (EY), Liz Fealy (EY),
Lucia Sickova (Pixel Federation), Natalie Johnson (EY),
Benjamin Bordeaux (RAND Corporation),
Nicola Kleyn (University of Pretoria),
Bruce Schneier (Harvard Law School), George Attala (EY),
Nicole Gardner (Perkins School for the Blind),
Jonathan Welburn (RAND Corporation), Kris Lovejoy (EY),
Simon Sicko (Pixel Federation), Silvia Hernandez (EY),
Kyle Lawless (EY), Mary Cline (EY), Nicola Kleyn
Stephen Koss (EY), Stijn Broecke (OECD)
(University of Pretoria), Scott Sarazen (EY),
Sven Behrendt (EY contractor)

Microbiomes Mending social fabric
Brajesh Singh (Western Sydney University), Authored by Ethan Zuckerman, Director of the MIT
Itzhak Mizrahi (Ben-Gurion University), Center for Civic Media and an EYQ Fellow. Eric Noel
Jason Soares (NSRDEC Warfighter Directorate (US Army), also provided input.
Jessica Green (University of Oregon), Kenneth Racicot
(Natick Microbiome Interest Group (US Army), Strategic guidance and input
Matthew Wallenstein (Colorado State University), The following EY Partners provided guidance on the
Nathan Ramsay (EY), Yasuo Yoshikuni (Lawrence Berkeley Megatrends project and report: Braden Dickson,
National Laboratory) Constantin Gall, Jonathan Zhao, Laura Giovacco, Nigel
Moden, Orlan Boston, Steve Wilkinson and Ulrika Eklof.
Synthetic biology
Several EYQ Fellows, EYQ’s external advisory board,
Adlai Goldberg (EY), Ally Huang (Harvard University),
provided feedback and helped refine the report’s themes:
Andrew Hessel (Humane Genomics), Ellen Licking
Aaron Maniam (Government of Singapore), Chris Meyer
(EY), Johnathan Napier (University of Cambridge),
(EYQ Fellows Chair), Ethan Zuckerman (MIT),
Manoela Miranda (UN), Mark Holland (EY), Michael Lin
Jennifer Zhu Scott (Radian Partners), Markku Markkula
(Stanford University School of Medicine), Ming Hammond
(European Committee of the Regions), Nicola Kleyn
(University of Utah), Nathan Ramsay (EY), Paul Freemont
(University of Pretoria), Stefan Heck (Nauto), and
(Imperial College), Peter Emanuel (US Army)
Tali Sharot (University College London). Esther Dyson
(EDVentures) and Paul Saffo (Stanford University) also
provided input.
Adrian Saville (University of Pretoria), Ajen Sita (EY),
EY member firm partners and professionals provided
Aubrey Hruby (The Atlantic Council), Courtney McCaffrey
input for the “Using megatrends to shape your strategy”
(EY), Eric Osiakwan (Chanzo Capital), Frank Aswani (Africa
article, including: Ansh Thakur, Michael Kanazawa,
Venture Philanthropy Alliance), Graham Thompson (EY),
Minsoo Pak, Raj Mirchandani, Ryan Canale and
Kyle Lawless (EY), Kyle Newell (EY), Maryanne Ochola
Steve Basili.
(Aspen Institute), Nicola Kleyn (University of Pretoria),
Sandile Hlophe (EY)

Aaron Maniam (Government of Singapore), Charles Bean
(formerly Bank of England), Mark Besca (EY),
Murray Patterson (Massey University), Stijn Broecke
(OECD), Vijay Vaitheeswaran (The Economist),
Zhe (Walter) Wang (Lawrence Berkeley National Lab)

Your EY Megatrends contacts
Jay Nibbe
EY Global Vice Chair — Markets
[email protected]
Gil Forer
EY Global Markets Digital and Business Disruption Leader, EYQ Leader
[email protected]
Primary contact for:

• Mending social fabric
Michael Kanazawa
EY Global Innovation Realized Leader and
EY Americas Advisory Growth Strategy Leader
[email protected]

• Using megatrends to shape your strategy
Gautam Jaggi
EYQ Insights Director
[email protected]

• Beyond globalization
• Techonomic cold war
• Behavioral economy
• Future of thinking
• Work and life unbounded

s
John M. de Yonge
[email protected]

• Gen Z rising
• Exponential climate impacts
• Decarbonization
• Microbiomes
• Synthetic biology
Prianka Srinivasan
[email protected]

• Powering human augmentation
• Synthetic media
• Weak signals
Edmund Wong
[email protected]

• Africa’s new century
Ben Falk
[email protected]

• New economic metrics

EY | Assurance | Tax | Strategy and Transactions | Consulting
About EY
EY is a global leader in assurance, tax, transaction and advisory services.
The insights and quality services we deliver help build trust and confidence
in the capital markets and in economies the world over. We develop
outstanding leaders who team to deliver on our promises to all of our
stakeholders. In so doing, we play a critical role in building a better working
world for our people, for our clients and for our communities.
EY refers to the global organization, and may refer to one or more, of the
member firms of Ernst & Young Global Limited, each of which is a separate
legal entity. Ernst & Young Global Limited, a UK company limited by
guarantee, does not provide services to clients. Information about how EY
collects and uses personal data and a description of the rights individuals
have under data protection legislation are available via ey.com/privacy. For
more information about our organization, please visit ey.com.
About EYQ
EYQ, EY’s global think tank, generates new insights by bringing together
business, the public sector and academia to challenge entrenched thinking,
shift perceptions and help catalyze change. We want to sense new trends
early, and understand and communicate their implications quickly and
powerfully. By seeking the answer to “What’s after what’s next?”, we help
leaders anticipate the forces shaping our future — empowering them to
seize the upside of disruption and build a better working world.
© 2020 EYGM Limited.

All Rights Reserved.
EYG no. 004116-20Gbl

2001-3365203
ED None
This material has been prepared for general informational purposes only and is not
intended to be relied upon as accounting, tax or other professional advice. Please refer
to your advisors for specific advice.
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Are you reframing your future or

is the future reframing you?

Megatrends 2020 and beyond | ey.com/megatrends

The better world S-curve

The post-war S-curve

ey.com/megatrends | Megatrends 2020 and beyond

Exponential climate impacts 22

Future working worlds 78

Mending social fabric 92

Megatrends 2020 and beyond | ey.com/megatrends

2 Megatrends 2020 and beyond | ey.com/megatrends

ey.com/megatrends | Megatrends 2020 and beyond 3

4 Megatrends 2020 and beyond | ey.com/megatrends

ey.com/megatrends | Megatrends 2020 and beyond 5

The EY Megatrends framework

Primary forces Future working worlds

6 Megatrends 2020 and beyond | ey.com/megatrends

Using the EY Megatrends framework to understand COVID-19

Using the EY Megatrends framework to chart your COVID-19 strategy

Synthetic biology How will COVID-19 change behavior

Primary forces Megatrends Future working worlds

8 Megatrends 2020 and beyond | ey.com/megatrends

Primary forces Megatrends

10 Megatrends 2020 and beyond | ey.com/megatrends

• The emerging technologies that will be needed for powering

• The shape of the future in a world that is moving beyond globalization

• The implications of a rising Gen Z

• The increasingly urgent pressures created by exponential climate impacts

Future working worlds

ey.com/megatrends | Megatrends 2020 and beyond 11

Technology: the next wave

12 Megatrends 2020 and beyond | ey.com/megatrends

in the semiconductor industry is helping fuel the growth of new chipsets

• Precision sensors that collect accurate data on usage and performance

• Ultimately, fulfilling the promise of human augmentation requires efficient

ey.com/megatrends | Megatrends 2020 and beyond 13

Globalization: the next wave

We have grown accustomed to living in a globalizing

Recent developments are shifting globalization’s tectonic

US average tariff Non-tariff barriers are also appearing, notably in the

Building on trends that emerged in the aftermath of

14 Megatrends 2020 and beyond | ey.com/megatrends

Second, regionalization will characterize the future of

ey.com/megatrends | Megatrends 2020 and beyond 15

Demographics: the next wave

The Gen Z future is not evenly distributed. Generational

16 Megatrends 2020 and beyond | ey.com/megatrends

Generational change Youthful Aging

is happening both Nigeria Pakistan India Indonesia US China Europe Japan

within and between

economies age and

Source: EY analysis using the Quid platform

Gen Zers in developing Per capita

ey.com/megatrends | Megatrends 2020 and beyond 17

Gen Z’s fundamental commonality lies in digital. As the

Under a lot of pressure to succeed

18 Megatrends 2020 and beyond | ey.com/megatrends

Half of Gen Z lives in countries that

United States Egypt Pakistan