Future Urban Environments Dynamics, Lifestyles, and

Commerce

Martin Schwirn Director, Scan™

mschwirn@sbi-i.com

www.strategicbusinessinsights.com/scan

January 31, 2013

Getting an Early Jump on the Future:

The Scan Process Best Practice in Open Intelligence

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Challenges to Identifying ChangeToo Many Sources

Conferences

General-interest publications

University research

Web 2.0 venues

Company R&D

International media

Science publicationsAcademic journals

Hobby and DIY publications

Laboratory and research institutes

Government organizations

Broadcast media

Entertainment magazines

Web-based sources

Popular science magazines

Newspapers

Trade journals

Business media

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Challenges to Identifying ChangeToo Much Information

Productivity Enablers

“Humane” Robotics

Biotechnology

3D and Soundscapes

Genetics Advances

Mobile Systems

Geoengineering Approaches

Mobile Health Care

Smart Materials

Nanotechnology

Augmented Reality

Privacy and Security Considerations

Knowledge Creation and Innovation

Virtual Water and Net-Zero Buildings

Neuroscience and Brain Research

Cloud Computing and Semantic Web

Sensors and Smart Infrastructures Wireless Proliferation

Personalized and Localized Production

Crowdsourcing and Open Collaboration

Emotion and Context Recognition

Software AlgorithmsRenewable and Alternative Energy

Surveillance and Tracking Technologies

Novel Construction Materials Multi-Sensory Landscapes

Novel Interface Technologies

Location-Based Applications

Social Networks and Mashups

Customization and Personalization

Energy Harvesting and Micropower

Smart Grids and Home Automation

Sustainability

Print-Based Manufacturing

Predictive Applications

Virtual Environments

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Challenges to Identifying ChangeMain Goals of a Successful Process

Productivity Enablers

“Humane” Robotics

Biotechnology

3D and Soundscapes

Genetics Advances

Mobile Systems

Geoengineering Approaches

Mobile Health Care

Smart Materials

Nanotechnology

Augmented Reality

Privacy and Security Considerations

Knowledge Creation and Innovation

Virtual Water and Net-Zero Buildings

Neuroscience and Brain Research

Cloud Computing and Semantic Web

Sensors and Smart Infrastructures Wireless Proliferation

Personalized and Localized Production

Crowdsourcing and Open Collaboration

Emotion and Context Recognition

Software AlgorithmsRenewable and Alternative Energy

Surveillance and Tracking Technologies

Novel Construction Materials Multi-Sensory Landscapes

Novel Interface Technologies

Location-Based Applications

Social Networks and Mashups

Customization and Personalization

Energy Harvesting and Micropower

Smart Grids and Home Automation

Sustainability

Print-Based Manufacturing

Predictive Applications

Virtual Environments

How can practitioners prioritize new developments?

How can practitioners initiate meaningful follow-up steps?

How can practitioners identify new developments reliably?

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CustomizedServices

External Environment:Opportunities and Threats

Abstracts(Monthly)

Business Publications Scientific Journals Trade PublicationsPersonal Observations Consulting Work Web 2.0 Media

Magazines Broadcasts ConferencesNewspapers

Patterns(Monthly)

Signals of Change(Monthly)

Scan Meeting:Clustering, Filtering, Selection

Distillation:Background Research, Refinement

Chaotic/ Unstructured

Focused/ Structured

Early Alerts to Changes

Real-Time Data Points

The Scan ConceptThe Scan Process

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Scan™ An Organizational Radar to Navigate the Future

An early warning of pre-trend topics and friction areas in the external environment.

A reflection of the dynamic intersection in the diverse areas of commerce and competition, science and technology, consumers and society.

A systematic and continuous process.

An organizational radar to navigate the future, to cut through clutter, to identify areas of change, and to take time-sensitive actions.

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Food For ThoughtSome Information for Starters

Source: Alison Sander, Boston Consulting Group, Harvard Business Review June Issue, pages 34-35

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Setting the StageInterlocked Aspects of Urban Life

The urban population will grow from 3.3 billion people in 2007 to 6.4 billion in 2025,

when there will be 29 megacities with more than

10 million inhabitants.

In 1900, only 12 cities had more than a million inhabitants. Today,

China alone has more than 50 cities with over a million

inhabitants.

Urban areas will grow by more than 1.5 million

square kilometers by 2030.

UrbanDynamicsImportance

Connectivity

HumanDimensionsDemographics

Lifestyles

Commercial DevelopmentsPhysical and online retail

competition or symbiosis

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Urban Dynamics: ImportanceUrban Environments Set Commercial Framework

“On average, the bigger the city, the

more efficient its use of infrastructure,

leading to important savings in materials,

energy and emissions".

“Urban metabolism" has superlinear-

scaling properties.

Lack of planning’s congestion, housing shortages, pollution have rendered some region's major cities economic problem areas.

Large cities are also developing large areas of destitution.

"By almost any measure, the larger a city's population, the greater the innovation and

wealth creation per person" Congregating of people facilitates the sharing

and advancing of knowledge.

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Urban Dynamics: Connectivity Urban Centers Are Connecting

City growth does not occur in isolation: Major global

centers are influencing and affecting each other.

In the past, migration was viewed as a zero-sum game, a situation in which one country's gain is another country's loss.

This view is changing for many reasons.

Migration establishes networks among people, and those networks have important economic and

social implications globally.

The number of migrants scattered around the

globe has grown by 40% in the past two decades.

Today, 215 million people are considered

migrants.

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Urban Dynamics: ConnectivityUrban Centers Become Networks

An interconnected web of infrastructures has tremendous economic potential and features

opportunities that will ripple through industries.

“The increasing deployment of sensors and hand-held electronics

in recent years is allowing a new approach to the study of the built

environment”

Living PlanIT, Cisco Systems, Deutsche Telekom create an operating system (OS) for entire urban environments.New Songdo City in South Korea and Masdar in the United Arab Emirates are experiments in smart cities.

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Urban Dynamics: ConnectivityMultiple Networks & Approaches Converge

Municipal governments leverage social media to provide services.

"The ingredients for a successful startup and a successful city are remarkably similar.”

A wide range of infrastructure pockets—connecting objects and physical-world events—are emerging: the Internet of Things:

Proliferation of connected productsEmerging application pockets (wireless parking

meters, connected homes)Completely new concepts (wireless health care, a

World Wide Web for robots)

To enable the effective and efficient navigation of urban environments, companies need to

focus on all aspects of urban environments and old concepts are unlikely to be successful.

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Human Dimensions: DemographicsSocieties Are Aging and Polarizing

The world population will continued to grow until 2100, to level out at slightly more than

10 billion people. Most of the world's nations now have demographics similar to

those of the industrialized nations, characterized by a low

birth rate and an aging population. The only area that

does not yet follow this trend is Africa.

Between 2000 and 2050 the portion of people 65 years of age and older will more than

double in Japan and more than triple in China, India, and

Indonesia.

Substantial shifts in the strength and distribution of the middle class are

occurring globally.Most countries see shrinking middle classes, except for, again, regions in

Africa

Demographic changes are glacial, but their impact is substantial almost by definition.

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Human Dimensions: Personal LifestylesFamilies Are Transforming

Families are increasingly embracing a collection of professional, communal, and individual activities—a new, looser arrangement, in which members pursue individual goals separate from or unrelated to those of the family.

The nuclear family is only one of many alternatives.Increasing number of multigenerational households in some regions.Technologies also change family structures and household definitions, bringing far-flung members together and isolating individuals.

Redefinition of family meaning, structural household transformations, and changing

member relationships affect markets.

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Human Dimensions: Professional LifestylesWorkplaces Become Fluid and Uncertain

Companies in various industries have started to adopt contract-

and freelance work models.

Relentless improvements in computing technology are now threatening traditionally secure middle-class jobs.

“We have hit an inflection point at which technology destroys jobs faster than it creates them."

Increasing specialization and division of labor has a substantial impact on workforce

dynamics and team management.

“The next decade or two will be defined more by fluidity than by any new, settled paradigm.... [Generation Flux

has] a mind-set that embraces instability, that tolerates—and even enjoys—recalibrating careers,

business models, and assumptions”

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Commercial Developments: Physical Retail Consumers Crave Frictionless Transactions

Telecommunications providers, handheld manufacturers, financial institutions, and startups all try to establish a new mobile-digital-payment form.

Friction in the shopping experience can discourage consumers from becoming customers and put off existing customers.

Even low-price retailers benefit by more, well-paid employees.Shoppers reduce shopping trips and stay local to save time.

"Many outsized outlets now look like dinosaurs in an age when

Amazon.com's offerings dwarf even the most bountiful in-store selection.” Small and local retail stores

allow intersecting more frequently with consumers'

personal and professional life.

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Commercial Developments: CompetitionOnline-Offline Tug of War Is Intense

Online retail has always been competition for brick-and-mortar retail; now explicit strategies follow words.

Consumers now use stores for recommendations and the web for purchases.

Physical Stores charge consulting fees that get refunded upon purchase.

Apps redirect consumers from brick-and-mortar stores to online stores.

Reviews and ratings sites have become vital for marketing, but feature arbitrariness, biases, and plain fraudulent use.

The sites can level the playing field between global chains and local outlets.

"What appears to be a wise crowd is just an oligarchy of the enthusiastic”

Businesses bribe consumers to write positive reviews.

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Commercial Developments: Retail SymbiosisOnline and Offline Concepts Are Merging

Symbiotic and reinforcing relationships exist between virtual and physical worlds.

Start-ups offer foot-traffic-analytics solutions similar to online analytics solutions.

Analysis of facial features is providing ever more detailed information on demographics, emotions, and intentions.

Virtual environments find

use in physical stores and

advanced online apps allow judging

experiential products in cyberspace.

Social-networking types of

applications are slowly creeping

into the real world.

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Signals of Change and Patterns Used in this Presentation

SoC590, “The New Employment Model”SoC584, “Local Governments Embrace Social Media”SoC583, “Reviewing Ratings”SoC579, “Strategic Complexities and Adaptability”SoC561, “Urban Connectivity”SoC559, “Migration's Beneficiaries”SoC556, “Urban Economic Forces”SoC551, “Navigating Urban Futures”SoC535, “International Middle-Class Shifts”SoC531, “Global Demographic Changes, Global Challenges”SoC507, “Novel Retail Payment and Charging Approaches”SoC502, “Best of Both Worlds: Virtuality in Retail”SoC499, “Retro Retail: Small and Local”SoC490, “Family Definition(s)SoC489, “A Different Kind of 'Internet of Things'”SoC441, “Family and Work Merge”P0352, “Frictionless Business Models”P0314, “Open Conflict: Online Retail versus Offline Retail”P0306, “Machines versus Human Resources”P0290, “Retail-Store Analytics”P0274, "Hyperspecialization and Teams”

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About SBI

Strategic Business Insights works with clients to identify and map new opportunities based on emerging technology and market insights. We combine ongoing research with consulting services to create insights that affect customers, business, and technology.

SBI is the former Business Intelligence division of SRI International; we have worked with clients on opportunities and change since 1958. Headquartered in Silicon Valley—with offices in Europe and Japan and on the U.S. East Coast—we have a global reach and work across a wide range of government and business sectors, including electronics, health care, energy, and financial services.

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