Four Grand Challenges and Megatrends

As part of its Industrial Strategy, the Government identified four “Grand Challenges to put the UK at the forefront of the industries of the future”. The aim is to build on the UK’s existing strengths and develop new ones through the collaboration of business, science and policy makers. In this note we explore how the twelve “megatrends”, identified by SAMI through its ongoing horizon scanning, will impact on these challenges.

The four Grand Challenges are:

• Putting the UK at the forefront of the artificial intelligence and data revolution
• Maximise the advantages for UK industry from the global shift to clean growth
• Become a world leader in shaping the future of mobility
• Harness the power of innovation to help meet the needs of an ageing society

SAMI identified twelve complex inter-related megatrends, and categorised them using a standard Social, Technological, Environmental and Economic/Political approach.  Many of these are global trends and so may have varying levels of impact on the UK.

AI and the data revolution

Pervasive IT and the Internet of Things incorporating many more sensors will generate massive amounts of data. Big Data analytical tools will enhance our understanding, and machine learning/AI will come to respond and take decisions. Not only will developments spawn industries in their own right, they will radically change the structure of existing sectors, the pattern of employment and  skills requirements. The UK has many existing strengths, in microelectronics, cybersecurity, games, VR/AR, and the Government plan to set up an “Office for AI” to help build on these.

But this technological trend doesn’t exist in isolation. Some trends are supported and enhanced by AI and Big Data; others may have surprising outcomes. Developments in biotechnology will be significantly accelerated by such tools, the development of “smart” energy systems too,  and one would expect economic growth will benefit as well. AI and IoT offer the prospect of better health care and support for an ageing population.

But depending how they are exploited within the economic system, there is the potential for increased inequality and significant job disruption (though new jobs may be created they are likely to located in different places), challenging social cohesion, and potentially changing societal values. A Universal Basic Income has been suggested (even trialled) to address such disruption, but there remain significant problems with that concept.

The global trend to a multi-polar world means that many innovations in this field will not be made in the West, but in faster growth countries such as China and India.  Different motivations and values will underpin these innovations, which may not be readily apparent when AI algorithms are doing the reasoning.

Clean growth

With the Paris Agreement looking to limit global warming to 1.5°C above pre-industrial levels, there is significant stimulus globally for growth in clean energy technologies.  Various alternative energy sources are identified, though surprisingly perhaps solar isn’t touched on. Apart from the technologies themselves, and the links with AI and smart systems, perhaps the key megatrends affecting policies in this area are social cohesion and changing generational attitudes.  The latter is likely to encourage the deployment of new technologies, while the former could be a challenge if austerity policies continue.

Mobility

The Government plans to build on the work of the Office for Low Emission Vehicles, the Transport Catapult, and the Centre for Connected and Autonomous Vehicles.  It seeks to put in place enabling legislations which will see Autonomous Vehicles (AV) on the roads by 2021, though many practical challenges remain.  The drivers of climate change and changing generational attitudes will stimulate the take-up of electric vehicles.  Changing attitudes to asset ownership (the “sharing economy”) may underpin a move towards “mobility as a service”. Similarly, the boundaries between public and private transport could blur, as one can summon a shared vehicle. Many commentators assume that AVs will lead to more car sharing, but this is not inevitable as the “car” could remain “My” space – my mobile office or living room – in the same way that people personalise the interiors of their cars today.

An ageing population may be made more mobile by AVs and other transport innovations. Increasing urbanisation would be expected to put more pressure on city transport systems, so smart city solutions will become increasingly important. In general, we can expect to see greater interaction between vehicles and the road network as a whole – eg AVs taking instructions from the centre as to which route to take to minimise congestion.

Biofuels, especially for marine transport, will become increasingly important.

Ageing population

The AI/data challenge and the mobility challenge will be major forces for providing innovative services to the ageing population. Biotechnology, with more gene-tailored medicine will also be powerful.

There are two distinct aspects of the challenge of an ageing population – health and finance.  An ageing population need not necessarily be an increased burden on the health service. Improved health monitoring and treatments may enable people to live healthily for longer.  Robotics can improve healthcare, though there could be an issue with their acceptance (conversely, some people may prefer intimate care to be done by a robot to avoid embarrassment).

Changing attitudes to healthy lifestyles will have an effect.  Today’s younger generation drink less and smoke less than their predecessors, so should have healthier outcomes; conversely, they suffer more obesity and diabetes, and mental health problems.  The key issue overall is the proportion of people’s lives when they are healthy.

Financial stresses will emerge unless there are changes to working lifetimes or perhaps the more radical UBI concept. The IMF projected in September 2006 that in Europe we will go from four workers per retiree to two workers per retiree by 2050.

What does this mean for you?

Both the opportunities from the Government’s challenges, and the uncertainties of the megatrends will affect most organisations.  If you would like to read our review of megatrends, or work through the implications for you, please contact us at 4GC@samiconsulting.co.uk

Written by Huw Williams, SAMI Principal

The views expressed are those of the author and not necessarily of SAMI Consulting.

Set up by the University of St Andrews as the St Andrew’s Management Institute over 25 years ago, SAMI Consulting helps leaders and their organizations take robust decisions in uncertain times. Working with clients in business and government we explore key drivers of change and use a range of tools and techniques, such as scenario planning, to encourage understanding of how political, economic, societal, and technological forces will shape their future.

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