BUS 315
Reaction Paper 1: Megatrends
Joei Gomez
May 28, 2022
Edited after assignment submission on June 4, 2022
The article describes a megatrend as “change that is slow to form, but once in place can influence a wide range of activities.” It continues by stating that the influence can last decades, listing five megatrends to be shifting economic power, resource scarcity, technological breakthrough, social change, and rapid urbanization. Interestingly, the article speaks about trends as something almost inevitable, as the author points out projected data when describing the different megatrends. However, the article was written prior to 2019, and some expectations such as for China may now be different due to the pandemic. Businesses have and continue to adapt to a changing world which has most recently changed due to disease and war.
The first megatrend described is shifting economic power and describes how China is catching up with the US and may surpass the US economy in the near future; however, the Covid Pandemic has caused a big hit for China, especially as the resurgence of Covid has caused new major lockdowns which have affected manufacturing and supply chains. In addition, shifts in politics and world affairs such as China’s continued support for Russia despite their invasion of Ukraine. Regarding Russia, they are experiencing an economic shift due to sanctions and the younger generation is unfamiliar with Russia before its economic growth post-Soviet Union. With sanctions on Russia, many US companies have shifted business away from the country and ended it as a region for market growth.
Resource scarcity, a megatrend I find fascinating because it can work as a benefit depending on where you are placed on the supply chain. For instance, with sanctions on Russian oil, oil prices have risen which has made non-Russian oil companies more profitable. But regardless of the war on Ukraine and sanctions on Russian oil, resources have always been in demand and in threat of eventual depletion. Despite science calling for change to ease the strain on natural resources and the effects on climate change, profit always is the immediate priority. I feel that resource scarcity may be the most significant megatrend to follow yet is the most ignored in the business world; however, with that said, some businesses have emerged to focus on efficiency and recycling. For instance, Back Market is an online marketplace dedicated to reducing e-waste by creating a platform for buying and selling refurbished technology. In a time where supply for computer chips has become an issue, utilizing refurbished technology helps lessen demand for new tech products while also providing a cheaper alternative for consumers in acquiring tech such as iPhones.
Technological breakthrough, social change, and rapid urbanization are the last three megatrends described in the article. In my opinion, these three are closely tied and could have considerable influence over the previous megatrends.
In the pandemic age, we were able to utilize remote computing and teleconferencing technologies to aid in preserving public health while maintaining business operations. In chapter one we talked about several types of managers. With remote work, businesses heavily relied on managers that could manage employees that were not physically present around them, they also had to rely on employees on being independent and productive. In one recent case, the CEO of Better.com fired nine hundred employees over Zoom reasoning that they were underproductive as remote workers, needless to say, the CEO did not think about the public backlash of his action. Perhaps a team with the required critical thinking skills could have been utilized to solve production issues without causing a marketing debacle.
In another example, Hawaii Pacific Health for instance has instituted a major change by moving applicable employees to permanent work from home, which saves the organization money by decreasing expenses on office space leasing. They successfully created an environment where employees happily worked independently and produced efficiently, allowing managers to take a chance on making permanent arrangements. In contrast, contractors for Google’s Google Maps product are facing a crisis. Due to increasingly high gas prices and requirements to return to the office, they are not able to afford the commute to work. Outsourced workers for a tech company do not receive the pay or benefits from a profitable business such as Google, which has been known to provide many benefits to its regular employees. In chapter two we talk about corporate culture, if Google utilizes a high number of outsourced workers, do they truly have an employee-centric culture if it excludes outsourced employees?
The pandemic has heavily interrupted the worldwide economy; however, it has also created opportunities to reevaluate how managers view what makes things efficient and effective for the business. It has forced us to elevate technology which has influenced the megatrends in social change, such as the University of Hawaii System providing hot spots and computers for students who did not have the resources for remote learning, and rapid urbanization, by decreasing the need to have people physically living and working close to each other. In turn, these changes can affect trends in resource scarcity and economic power shifting.