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

COVID-19 has thrust the global economy onto a new trajectory. Understanding EY Megatrends can help you make the right strategic choices.

The world changed in March. The COVID-19 pandemic has strained health care systems to breaking point, put much of the global economy on an indefinite hiatus and radically reshaped societal norms and interactions. Trends that seemed far off suddenly arrived, undermining established assumptions and leaving leaders scrambling to formulate business models and approaches that address a very different economic, social and political environment.

So, how do you make sense of this emerging reality? We have long advised that disruption does not come from technologies and business models alone; it can equally be unleashed by elections, climate disruption or, in this case, a pandemic. The EY Megatrends approach seeks to provide an organizing framework, allowing you to formulate strategy by looking far beyond your traditional sector and legacy competitors to help identify potential threats and opportunities.

This year, such an approach is more important than ever. By understanding the forces shifting the world’s tectonic plates, leaders can take an approach that works back from a vision of the future to create scenarios for growth beyond the COVID-19 pandemic, using them to set an action agenda today. In short, EY Megatrends can help you reframe the future of your organization and build competitive advantage in a better post-pandemic world

A new S-curve

Understanding where we are today requires understanding where we’ve been. Since the Second World War, the global economy had, generally speaking, been on an S-shaped growth curve based on a decades-long wave of globalization, information-technology adoption and resource extraction. Success meant creating value based on ever larger scope, scale and efficiency, and striving for global market leadership. This established long-term and defendable competitive advantages. But as the system matured and growth waned, a global economy built on unfettered “take-make-waste” production delivered increasingly unsustainable societal, environmental and business outcomes.

The pandemic abruptly accelerated the transition to a new S-curve. It has moved us, almost overnight, into a new renaissance or a global reset — making possible what was once unthinkable. Remote working has become widespread, with employees equally or more productive, and companies now considering eliminating corporate headquarters. The future of campus-based education is being weighed after an abrupt shift to virtual learning. Changes that had been sporadic or resisted have been implemented by necessity, suddenly proving more effective and sustainable. Many will likely endure.

Yet, the pandemic has also exposed the fault lines of economic inequality, highlighting we are all made more vulnerable by weaknesses in social safety nets. This could catalyze trends we have been discussing for some time — populism, renewed social contracts, long-term value and new economic metrics — and accelerate the move along the new S-curve. That’s why, for business leaders, now is the time to question the merit of seemingly positive short-term actions that yield poor long-term outcomes. A better baseline has become thinkable.

Using megatrends to widen your frame

This new S-curve has been visible for a while now, albeit in the form of long-term trends that lay over a distant horizon. It’s the future described in EY Megatrends reports, where social contracts are rewritten to be more inclusive and sustainable, compelling businesses to take a more proactive role in creating long-term value. A future where the global system is reshaped by everything from shifting power dynamics to 3D printing. Where human augmentation technologies such as artificial intelligence and the internet of things transform every human domain, from consumer behavior to the nature of work.

All of which is to say: we’re not in entirely uncharted territory. In fact, some companies have in recent years become market value leaders by operating by the rules of the new S-curve. They’ve been labeled disruptors or “unicorns,” making them sound rare and almost mythical. In the new normal, though, they’re anything but — every company will revamp its strategy and approach to operate by the rules of the new reality.

So, how do you use the EY Megatrends framework? First, it generates a potentially countless collection of megatrends, since the evolution of primary forces continuously creates new ones. This helps you identify other megatrends based on the primary forces. Design thinking and design-based innovation can blend creativity and analysis in this process. Environments built on these principles, such as EY wavespace™ facilities, allow executives to experience the art of the possible in an immersive way.