Trends, trends, trends – nothing is as constant as change

Posted on 18.07.2023 By Joël Eugster

The world is shaped by various trends, first and foremost megatrends. Megatrends describe complex dynamics of change that shape society for more than ten years. They can be used to make the complexity of change more understandable. Megatrends affect all levels of society and thus influence companies, institutions and individuals.

There is certainly no one right way to deal with megatrends. It is essential for companies to analyze the opportunities and risks associated with the trends at an early stage. Companies that do not have the resources for trend management can use the BEI’s trend impact radar, which analyzes all relevant megatrends, macrotrends and microtrends as well as their impact on various company levels (from customer to strategy to system level) and is updated annually. In the following, we show selected megatrends and corresponding macro- & microtrends. We focus on the megatrends of health and sustainability, as they were very present in society due to the crises of the last two years (e.g., the Corona pandemic) and were also forced by regulation.

Megatrend 1: Sustainability

Organic markets, EU plastic regulation, energy transition – the sustainability megatrend permeates all areas of our daily lives. Whether it’s personal purchasing decisions, social values or corporate strategies – even if it’s not always apparent at first glance, it is increasingly becoming one of the strongest drivers of our time, not least due to regulations in the EU (CSRD) and technological innovations. In Europe, for example, the Sustainable Finance Disclosure Regulation (SFDR) is forcing companies to align their actions with sustainability. On the one hand, many banks are under legal, regulatory and ethical pressure to reduce fossil fuel financing faster than before. On the other hand, climate-friendly banking can also be a new source of value creation and revenue growth.

The megatrend is not only causing a realignment of global social, cultural and political values. It is also changing the elementary foundations of entrepreneurial thinking and action.

It is not only about sustainability in the context of ecology, but also about meaningful economy (why and for whom?). Behind sustainability are mindfulness, the common good (good citizenship) and many other topics that set a counterpoint to profit maximization and limitless growth. The megatrend has a strong influence on employers, e.g. with the trend of the sense economy, to create jobs that contain meaning and meet the demands of the employees.

Macro & Micro Trends in the Context of the Sustainability Megatrend

The Sustainable Finance macrotrend[1] refers to any form of financial service that integrates environmental, social and governance (ESG) criteria into business and investment decisions for the sustainable benefit of customers and society as a whole. A financial service is considered sustainable if it financially supports and accelerates the transition of the economy and society to sustainability. Financing a sustainable economy requires the financial system to enable the transition to sustainability while reducing the financing of harmful activities.

As key drivers of growth in the global economy, banks play a critical role in sustainable finance in their multiple roles as financial market intermediaries, asset owners, investors and employers. Banks can help channel capital into economic activities that have a positive impact on society and encourage new behaviors among customers and business partners. Many banks are using their power and influence to increase their commitment to environmental, social and governance (ESG) issues. They participate in industry bodies that are continuously working to improve accounting and reporting standards for climate risks, including the Task Force on Climate-Related Financial Disclosures (TFCD), the Partnership for Carbon Accounting Financials (PCAF), and the newly formed Net-Zero Banking Alliance. Banks around the world have committed to directing capital flows to green projects and reducing their portfolio exposure to carbon emissions.

The macro trend Sustainable Finance can also be assigned to the micro trend Impact Investing. In impact investing, investors are increasingly taking environmental, social and governance aspects into account, as these can be financially relevant and useful for analysis and decision-making. Investors are expected to become more active in identifying and addressing sustainability issues in areas such as climate, inequality and health.

Another macro trend in the context of sustainability is Green Tech[2] . Billion-dollar initiatives such as the EU’s “European Green Deal” and the new U.S. President Joe Biden’s “Climate Plan” are driving the issue and opening up growth prospects for companies. Investment programs to achieve climate goals are part of how banks are picking up on this trend or even new banks are being founded that are fully committed to the SDGs (Sustainable Development Goals), such as Bank Radicant or HypoVereinsbank. In this context, Green Tech refers to technologies that aim to avoid or reduce environmental impact in the first place, or to repair damage that has already occurred. In addition, the use of green tech helps companies to deal more efficiently with scarce and increasingly expensive raw materials. Innovative digital solutions for more sustainability throughout the company are implemented along the value chain. Data-driven projects, a sustainable technology strategy and greater transparency are the most important aspects here. The company’s energy consumption is reduced through IT-supported sustainability projects and IT systems and tools enable sustainable process optimization. In particular, companies are also involved in the areas of data analytics and data sourcing, since both green IT and IT for green require a reliable database. For example, according to Google, the Eco-Routes feature of Google Maps has reduced greenhouse gas emissions by more than 500,000 tons. Google’s approach to climate change is to help consumers make better choices and decarbonize business operations through the use of its technology.

A matching microtrend to Green Tech is e.g. Sustainable Data[3] . Data is created every day all over the world and in enormous quantities. The data obtained are valuable sources of information for the private sector and also for the public. The data collected can play a key role in sustainable development. For example, the major index providers and market data companies are in the process of building or buying sustainability offerings. The demand for sustainability data could drive the volume of the market for related data and services to over USD 5 billion³ in the next five years.

Megatrend 2: Health

As a central goal in life, this megatrend has become deeply inscribed in the consciousness, culture and self-image of societies and is shaping all areas of life. Health and satisfaction can hardly be separated. With independently acquired knowledge, people are confronting the healthcare system on an equal footing and placing new expectations on companies and infrastructures: health-conscious people want to live in health-promoting environments and demand this as the new normal. In companies, HR departments are increasingly taking over occupational health management activities and developing prevention programs for employees. This is not just about healthy eating, e.g. in the canteen, but also about dealing with stress, conflicts or the design of the workplace (light, air, plants, etc.) in order to retain employees or attract new talent.

Macro & micro trend in the context of the health megatrend

The Digital Health macrotrend[4] describes the use of software and hardware to solve problems in the healthcare sector. It is an umbrella term for many different areas such as mobile health applications, electronic patient records, wearable devices with sensors, telemedicine and personalized medicine.

Equitable access to affordable and competent healthcare has the potential to improve patients’ quality of life and reduce reliance on emergency and late-stage interventions. A range of connected health devices not only improves doctor-patient interaction, but also promotes patient self-interaction and thus health care, which is referred to as mHealth by the World Health Organization. In particular, mHealth devices for prevention in the bathroom will be relevant in the near future. Already today, people unconsciously perform health checks in the bathroom, for example by weighing themselves on a bathroom scale. Now, networked smart bathroom scales are becoming true platforms for health monitoring. New options use technologies to passively record detailed body measurements and other fitness values that go beyond weight and also enable better prediction of long-term health.

The mHealth microtrend[5] is a special aspect of digital health. It describes the technical requirements for using health-relevant data from mobile medical devices, e.g., fitness wristbands, in overarching infrastructures, e.g., via the electronic patient dossier (EPD). Interoperability is of great importance in the context of mHealth, as it creates the basis for recording treatment-relevant health data or vital signs of the population with mobile devices or apps and storing them in the EPD.

The megatrends of sustainability and health are transforming all areas of life

While the number of megatrends is relatively small and they are very long-lived, there are, on the other hand, a large number of macro- and microtrends that change more rapidly over time. Understanding the opportunities and risks associated with them for individual companies is quite complex. In an increasingly volatile environment, however, it is important to identify the developments and trends relevant for business success as a first step. This includes not only the identification of relevant trends but also the analysis of their impact on the individual company levels. We would be happy to discuss our findings with you.

Sources

[1] Deloitte 2021, UBS, Sustainable Finance – Ten trends for 2021, 2022 Deloitte: Banking and Capital Markets, 2022 Accenture: Banking Top 10 Trends

[2] 2022 Forbes: Green Technology, 2022 Deloitte: Tech Sustainability Strategies.

[3] UBS, Sustainable Finance – Ten trends for 2021, 2023

[4] 2022 McKinsey: Digital Health for Equity, 2022 Forbes: Digital Health

[5] https://www.e-health-suisse.ch/gemeinschaften-umsetzung/ehealth-aktivitaeten/mhealth.html

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Joël Eugster

Joël Eugster is an industrial engineer (B.Sc.) and business information scientist (M.Sc.) and combines business and technology for the benefit of our customers. For more than 3 years he has been applying his broad expertise to the field of business engineering. Prior to that, he worked for more than 6 years as a project manager in large international companies in the area of investment and optimization projects. His passion is the analysis and design of business models and digital transformation, where he convinces with innovative methods. His experience as an officer in the Swiss Army and his work as a lecturer and examination expert at various educational institutions round off his profile.