Promising areas for innovation in the future.

Post 519 - In 2009, a research team at McKinsey revisited and retested assumptions about key global trends that they believe will define the years ahead. They identified five areas where the stresses and tensions will be greatest and that therefore offer the richest opportunities for companies to innovate and change. These are:

• The productivity imperative.
Economies in the developed world will need to generate significant gains in productivity to support continued economic growth. The most dramatic innovations are likely to be those that accelerate economic productivity.

• The global grid.
The global economy is growing more and more connected. Complex flows of capital, goods, information, and people are creating an interlinked network that spans geographies, social groups, and economies, which in turn allows large-scale interactions at any given moment. This expanding grid is generating new business models and accelerating the pace of innovation. It also increases the chances of destabilizing cycles of volatility.

• Pricing the planet.
A collision is shaping up among the rising demand for resources, constrained supplies, and changing social attitudes toward environmental protection. The next decade will see an increased focus on the productivity of resources, the emergence of large clean-tech industries, and more regulatory initiatives.

• The market state.
The often contradictory demands of driving economic growth while also providing the necessary safety nets to maintain social stability have put governments under extraordinary pressure. Globalization applies even additional pressure. How will distinctly national entities govern in an increasingly globalized world?

This research is exploratory rather than definitive. Just how these forces will unfold and how they will interact is still a work in progress. However, McKinsey’s research, extensive one-on-one contacts, and broader survey data provide confidence that these topics should be framing every organization’s strategic conversations about how best to chart its future course. The opportunities for smart strategy will likely be most promising where the stresses and tensions will be greatest.