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Social Dimension

// RESULTS OF THE ANALYSIS OF the Social Dimension

MEGATREND: DEMOGRAPHIC CHANGE

TRENDS RELATED TO DEMOGRAPHIC CHANGE

01

Population ageing is a long-term trend with multiple effects on society as the declining share of working-age people. The population age structure has changed radically over the years [1]: globally, people aged >65 years will double from 728 million in 2020 to 1.5 billion by 2050 [2] and the number of people aged > 80 years is expected to triple between 2020 and 2050 to reach 426 million people [3].

01

Ageing Population Boom

Ageing Population Boom
02

Migration will exceed 4% of the global population by 2030, reaching more than 350 million people [4]. International net migration flows between regions are expected to be at a higher level toward 2050 [2].

02

Migration Flows

<FONT SIZE=5>Migration Flows</font>
03

The world population has been estimated to reach 8.5 billion in 2030 and 9.7 billion in 2050 due to the population growth in less developed countries. Nearly the 90% of young people lives in developing countries and they represent a relevant population share [5].

03

Young Population boom in developing countries

<FONT SIZE=5>Young Population boom in developing countries</font>

*Each trend is represented by some of the statistics that have been collected during the first part of the project.

RISKS FOR SUPPLY CHAINS FROM DEMOGRAPHIC CHANGE

The probability (P) and impact (I) of the different risks identified are categorized according to 5 degrees (very low🔵, low🟢 , medium🟡, high🟠 and very high🔴). The risks have been assessed during the project based on literature analysis and validated with support of experts.

// RESULTS OF THE ANALYSIS OF THE SOCIAL DIMENSION

MEGATREND: URBANISATION

TRENDS RELATED TO URBANISATION*

04

Today, 55% of the world's population lives in urban areas; this quote is expected to increase to 68% by 2050 [6] with nearly 90% of this rise taking place in Asia and Africa [7]. Even if cities represent just the 2% of the world’s land surface, the related activities impact more than 75% of the Earth’s resources (consuming 89 billion tons by 2050) and they will account for 70% of the world’s GDP and 35% of GDP’s growth [8].

04

Densely Populated Areas

Densely Populated Areas
05

The demand for smart city systems and solutions is projected to rise annually by 25%, with an overall market value of about US $517 billion [9]. The global smart cities market is expected to account for US $1380.21 billion by 2030 [10]. Regarding EU regions, 70% of included cities are planning to invest in smart solutions and half of them will spend between €2 and €10 million [11].

05

Smart Cities

Smart Cities

*Each trend is represented by some of the statistics that have been collected during the first part of the project.

RISKS FOR SUPPLY CHAINS FROM URBANISATION

The probability (P) and impact (I) of the different risks identified are categorized according to 5 degrees (very low🔵, low🟢 , medium🟡, high🟠 and very high🔴). The risks have been assessed during the project based on literature analysis and validated with support of experts.

// RESULTS OF THE ANALYSIS OF THE SOCIAL DIMENSION

MEGATREND: CONSUMPTION PATTERNS

TRENDS RELATED TO CONSUMPTION PATTERNS*

06

Environmental, social and governance (ESG) funds are receiving the best-ever inflows and are expected to account for $50 trillion by 2025, signifying more than 30% of total assets [12]. Attitudes towards sustainability differ across generations: usually, younger consumers give priority to social issues such as diversity and inclusion, while mature consumers focus on health and environmental aspects [13]. According to a recent study of Deloitte (2022), relevant trade-offs between sustainability and cost reveal that in 18 out of 20 countries involved, higher-income consumers were more willing to buy sustainably [14].

06

Consumer Consciousness

Consumer Consciousness
07

Consumerism particularly affects some industry sectors such as fashion, increasing the request for affordable and stylish products with significant effects at social and environmental levels [15]. The 45% of fashion executives report that they will update their product mix to adapt to lower consumer purchasing power.

07

Consumerism

Consumerism
08

The 78% of companies are already planning or adopting personalization initiatives and pilots, moreover, 34% of brands are pursuing fully individualized manufacturing approaches, aiming to realize lot-size-one or individualized products [16]. The hyper-personalization enables custom experiences, through data analytics, AI, and automation [17].

08

Individualisation

Individualisation

*Each trend is represented by some of the statistics that have been collected during the first part of the project.

RISKS FOR SUPPLY CHAINS FROM CONSUMPTION PATTERNS

The probability (P) and impact (I) of the different risks identified are categorized according to 5 degrees (very low🔵, low🟢 , medium🟡, high🟠 and very high🔴). The risks have been assessed during the project based on literature analysis and validated with support of experts.

TRENDS RELATED TO DIGITAL SOCIETY

// RESULTS OF THE ANALYSIS OF THE SOCIAL DIMENSION

MEGATREND: DIGITAL SOCIETY

09

Remote working has become very popular during the Covid-19 pandemic, and a new generation of digital nomads has emerged from the existing workforce [18]. Younger workers are now expecting a digital employee experience, ergonomic tools, and job satisfaction. Europe faces an estimated 400,000 shortage of lorry drivers, and a research study on warehouse modernisation strategies revealed that 83% of respondents are increasing or planning to increase their number of employees by 2024 [19].

09

Reshaping the Workplace

Reshaping the Workplace
10

73% of the companies are expected to have remote workers by 2028. Therefore, virtual workplaces will become more important and desirable [20]. Further, 25% of people will be spending more than an hour a day in the metaverse by 2026 either for shopping, work, education, social purposes, or entertainment [21]. Consumers share their purchasing experience, information on brands, and products on social media and 71% of consumers rely on the information on social media to make their purchase decisions [22], [23].

10

Change of Communication Patterns

Change of Communication Patterns
11

Consumer behaviour has changed drastically, especially after Covid-19, and consumers developed the habit of purchasing more products and services online [24]. Online buyers (87% of individuals are 25-34 years old) increased by 20% over the last decade [25]. Finally, the rate of using smartphones has more than doubled in a few years in many countries [26].

11

Change of Purchasing Patterns

Change of Purchasing Patterns

*Each trend is represented by some of the statistics that have been collected during the first part of the project.

RISKS FOR SUPPLY CHAINS FROM DIGITAL SOCIETY

The probability (P) and impact (I) of the different risks identified are categorized according to 5 degrees (very low🔵, low🟢 , medium🟡, high🟠 and very high🔴). The risks have been assessed during the project based on literature analysis and validated with support of experts.

TRENDS RELATED TO KNOWLEDGE-BASED SOCIETY

// RESULTS OF THE ANALYSIS OF THE SOCIAL DIMENSION

MEGATREND: KNOWLEDGE-BASED SOCIETY

12

58% of employers are struggling to find employees at every level [27]. Moreover, the personnel currently working in supply chains are not skillful enough to manage innovative technologies in the supply chain [28]. Therefore, to be able to adapt to innovations, companies need to have personnel with the skills to design, configure, and maintain innovative technologies. A survey also suggests that 55% of 71 supply chain leaders of global companies prefer reskilling their workforce compared to redeploying the existing workforce internally or hiring permanent or temporary workers [29].

12

Emerging Skills Required

Emerging Skills Required
13

Almost 90% of global leaders believe that their companies are not prepared to tackle the digital skills gap [30]. 45% of the global supply chain workforce has a skill set that is too traditional to meet the emerging challenges for the SC of the future technology-oriented expectations [31]. Finally, a study showed that the level that supply chain managers are seeking is mainly mid-level positions rather than low-level [32].

13

Increased Demand for High Qualification Jobs

Increased Demand for High Qualification Jobs
14

Even though millennials and Gen Z are better at developing themselves, they are more stressed about the need to continuously develop themselves in terms of new skills and knowledge compared to Gen X and baby boomers [33]. 77% of Gen Z find it significant to work at organisations whose values are similar to theirs which also significantly impact their loyalty [34].

14

Continuous Learning Culture

Continuous Learning Culture

*Each trend is represented by some of the statistics that have been collected during the first part of the project.

RISKS FOR SUPPLY CHAINS FROM DIGITAL SOCIETY

The probability (P) and impact (I) of the different risks identified are categorized according to 5 degrees (very low🔵, low🟢 , medium🟡, high🟠 and very high🔴). The risks have been assessed during the project based on literature analysis and validated with support of experts.

Suggested References:

[1] D. E. Bloom and L. M. Zucker, “Aging is the real population bomb,” International Monetary Fund, 2023, 2023. https://www.imf.org/en/Publications/fandd/issues/Series/Analytical-Series/aging-is-the-real-population-bomb-bloom-zucker

[2] C. Krys and D. Born, “Trend compendium 2050, Mega trend 1 People and society,” Roland Berger, 2021. https://www.rolandberger.com/en/Insights/Publications/Roland-Berger-Trend-Compendium-2050-Population-and-Society.html

[3]  “Ageing and health,” WHO, 2022. https://www.who.int/news-room/fact-sheets/detail/ageing-and-health

[4] V. Boutenko, J. Harnoss, and N. Lang, “5 key predictions for the future of talent migration,” World Economic Forum, 2022. https://www.weforum.org/agenda/2022/11/5-key-predictions-for-the-future-of-talent-migration/#:~:text=Migration will accelerate&text=Yet only 280 million people,more than 350 million people

[5] “Youth and Empowerment,” Unesco, 2023. https://www.unesco.org/en/youth-and-empowerment

[6] “Urban Development,” The World Bank, 2022. https://www.worldbank.org/en/topic/urbandevelopment/overview

[7] “68% of the world population projected to live in urban areas by 2050, says UN,” United Nations Department of Economic and Social Affairs, 2018. https://www.un.org/development/desa/en/news/population/2018-revision-of-world-urbanization-prospects.html

[8] B. Venditti, “This chart shows the impact rising urbanization will have on the world,” World Economic Forum, 2022. https://www.weforum.org/agenda/2022/04/global-urbanization-material-consumption/

[9] “World Cities Report 2022: Envisaging the Future of Cities,” United Nations Human Settlements Programme, 2022. https://unhabitat.org/sites/default/files/2022/06/wcr_2022.pdf

[10] B. Thormundsson, “Smart cities market revenues worldwide 2019-2030,” Statista, Mar. 03, 2023. https://www.statista.com/statistics/1256262/worldwide-smart-city-market-revenues/#statisticContainer (accessed May 03, 2023).

[11] “‘Fit for the Future’ Cities: How technology can accelerate sustainable change,” Vodafone, Sep. 2022. https://www.vodafone.com/sites/default/files/2022-09/vodafone-fit-for-the-future-cities-report-final.pdf (accessed May 03, 2023).

[12] K. McCann, “Conscious consumerism is transforming industries,” The consumer goods forum, Oct. 04, 2021. https://www.theconsumergoodsforum.com/blog/2021/10/04/conscious-consumerism-is-transforming-industries/ (accessed May 09, 2023).

[13] K. Alldredge, T. Charm, E. Falardeau, and K. Robinson, “How US consumers are feeling, shopping, and spending—and what it means for companies,” McKinsey & Company, May 04, 2022. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/how-us-consumers-are-feeling-shopping-and-spending-and-what-it-means-for-companies (accessed May 09, 2023).

[14] L. Pieters, D. R. Novak, D. Pankratz, and S. Rogers, “The cost of buying green,” Deloitte, Jun. 17, 2022. https://www2.deloitte.com/xe/en/insights/industry/retail-distribution/consumer-behavior-trends-state-of-the-consumer-tracker/sustainable-products-and-practices-for-green-living.html (accessed May 09, 2023).

[15] McKinsey & Company, “European consumer pessimism intensifies in the face of rising prices,” McKinsey & Company, Oct. 27, 2022. https://www.mckinsey.com/capabilities/growth-marketing-and-sales/our-insights/survey-european-consumer-sentiment-during-the-coronavirus-crisis (accessed May 17, 2023).

[16] F. Shariff, M. Ahuja, N. Dalmia, S. Dulay, S. Ivic, and S. Ebrahim, “Connecting with meaning: Hyper-personalizing the customer experience using data, analytics, and AI,” Deloitte , 2020. https://www2.deloitte.com/content/dam/Deloitte/ca/Documents/deloitte-analytics/ca-en-omnia-ai-marketing-pov-fin-jun24-aoda.pdf (accessed May 15, 2023).

[17] “Increased Competitiveness and Resiliency through Next Generation Manufacturing,” Roland Berger and Manufacturers Alliance, Apr. 12, 2023. https://www.rolandberger.com/en/Insights/Publications/U.S.-manufacturers-disrupting-themselves.html (accessed May 17, 2023).

[18] “Shaping the Trends of Our Time,” United Nations, 2020. https://www.un.org/development/desa/publications/wp-content/uploads/sites/10/2020/09/20-124-UNEN-75Report-2-1.pdf

[19] Zetes, “Five supply chain trends to follow in 2022,” 2022. https://www.zetes.com/en/supply-chain-visibility/supply-chain-visibility-software/five-supply-chain-trends-to-follow-in-2022

[20] M. Guta, “73% of All Small Business Teams Will Have Remote Workers by 2028,” Small Business Trends, 2019. https://smallbiztrends.com/2019/03/remote-workforce-trends.html

[21] FutureIoT, “Gartner: 25% of people to spend 1 hour daily in the metaverse by 2026,” 2022. https://futureiot.tech/gartner-25-of-people-to-spend-1-hour-daily-in-the-metaverse-by-2026/#:~:text=“By 2026%2C 30%25 of,and services ready for metaverse.”&text=The adoption of metaverse technologies,heavily in a specific metaverse

[22] K.-Y. Kwahk and B. Kim, “Effects of social media on consumers’ purchase decisions: evidence from Taobao,” Service Business, vol. 11, no. 4, pp. 803–829, Dec. 2017, doi: 10.1007/s11628-016-0331-4.

[23] C. Beer, “Social Browsers Engage with Brands,” Global Web Index, 2018. https://blog.gwi.com/chart-of-the-day/social-browsers-brand/

[24] H. Tao, X. Sun, X. Liu, J. Tian, and D. Zhang, “The impact of consumer purchase behavior changes on the business model design of consumer services companies over the course of COVID-19,” Front Psychol, vol. 13, 2022.

[25] “E-commerce statistics for individuals,” Eurostat, 2023. https://ec.europa.eu/eurostat/statistics-explained/index.php?title=E-commerce_statistics_for_individuals#E-shopping:_largest_increase_among_young_internet_users

[26] C. Wulff, “New trends are shaping shopping behaviour,” PwC, 2019. https://www.pwc.de/en/retail-and-consumer/digitisation-is-transforming-shopping.html

[27] “Supply Chain and Logistics HR Trends Report.” [Online]. Available: https://occupop.s3-eu-west-1.amazonaws.com/Supply-Chain-and-Logistics-HR-Trends-Report-Occupop.pdf

[28] “Supply Chain: skills for the Digital Era,” 2019. [Online]. Available: https://assets.ey.com/content/dam/ey-sites/ey-com/en_uk/topics/advisory/ey-supply-chain-skills-for-the-digital-era.pdf

[29] M. Knut, Alicke; Dumitrescu, Elena; Protopappa-Sieke, “Transforming supply chains: Do you have the skills to accelerate your capabilities?,” McKinsey & Company, 2022. https://www.mckinsey.com/capabilities/operations/our-insights/transforming-supply-chains-do-you-have-the-skills-to-accelerate-your-capabilities

[30] K. McCann, “Conscious consumerism is transforming industries,” The consumer goods forum, Oct. 04, 2021. https://www.theconsumergoodsforum.com/blog/2021/10/04/conscious-consumerism-is-transforming-industries/ (accessed May 09, 2023).

[31] S. Knut, Alicke; Hoberg, Kai; Fischer, Julian; Welter, “The future of work in supply chain,” Supply Chain Quarterly, 2022. https://www.supplychainquarterly.com/articles/6233-the-future-of-work-in-supply-chain

[31] L. Cecere, “Are you building next-generation supply chain talent?” Supply Chain Quarterly, 2016. https://www.supplychainquarterly.com/articles/1224-are-you-building-next-generation-supply-chain-talent

[33] B. Thomas, “Why Continuous Learning is Attractive to Gen Z and Millennials,” Market Scale, 2020. https://marketscale.com/industries/education-technology/continuous-learning-gen-z-millennials/

[34] C. Ro, “How climate change is re-shaping the way Gen Z works,” BBC, 2022. https://www.bbc.com/worklife/article/20220225-how-climate-change-is-re-shaping-the-way-gen-z-works