Emergent Markets: Business model transformations

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Economic Markets : Business model transformations

High impact trends that are changing the way businesses across all sectors operate identified through our economic forsighting project

Future trends : Business model transformations

The global trends described on this page were all identified as ‘high impact’ trends in our economic market’s foresight project. They are classified as high impact because they are deemed likely to coverage with other trends pushing market growth in a common direction.

Many of these new business models are enabled by technological advances in areas such as the internet of things, blockchain and the data economy. This allows the increased use of digital assets in everyday business operations, which would not be possible without technological change. These trends are likely to drive demand for digital business in addition to changing the way buisnesses in other sectors operate.

These trends were all clearly evidenced before Covid-19, but in some cases, especially online-to-offline commerce, have been accelerated by the pandemic.

Circular economy

A circular economy is an industrial economy that, contrary to the traditional linear economy, reclaims used materials and reuses or recycles them as secondary raw materials for new products. The circular economy presents a $1 trillion opportunity to advance sustainability by 2030. The efficient use and recycling of raw materials not only benefits the environment and the economy, but also creates new job opportunities and improves health through reduced environmental pollution. It will be driven by policies and economic incentives as well as by technologies such as blockchain, artificial intelligence (AI), the internet of things (IoT) and nanotechnology which facilitate the tracking of critical materials. These technologies will enable raw materials used for manufacturing and construction to be traced from extraction through to first use, re-manufacture and eventual deconstruction and reuse.

Useful further reading

Data as a service

Total worldwide generation of data will expand to 163ZB by 2025, which is approximately 10x the amount of data generated in 2018. The key driver of this expansion is the rapid increase in the number of devices connected to the Internet - Internet of Things (IoT) - including sensor technology for built environments, automatic monitoring of user data, communication between devices and the proliferation of things like smart clothes. Data-as-a-service (data monetisation) involves the act of productising data and trading it through bartering, brokering and/or business intelligence models, to offer critical insights. The collection, storage, analysis, and effective utilisation of this vast amount of data will drive new business models and revenue streams through the forecast period. For example, the automotive industry has a data monetisation market potential of $33 billion by 2025. It may be necessary for policy makers to develop binding international conditions for data ownership, data flows and privacy, as well as to prevent data monopolies.

Useful further reading

Offline to online commerce

O2O commerce is a broad concept that describes when businesses aim to provide a seamless and holistic customer experience with integration across both online and offline platforms. Online retail sales are expected to constitute 30% of total retail sales by 2030, but with offline retail expected to constitute two-thirds of total retail in 2030, companies will increasingly invest in online-to-offline integration. O2O commerce will therefore present a $1 trillion market opportunity by 2030. ECommerce giants, such as Amazon and Alibaba, will lead the way, with significant investments pouring into the O2O model.

Useful further reading

Sharing Economy

This business model describes the sharing of assets and their costs across individuals or groups. It has been driven by a range of factors such as increasingly digital lifestyles, urbanisation, and environmental urgency around the efficient and economic use of resources. The sharing economy has the potential to add $1 trillion in value, globally, to total new consumer spending. It allows people to unlock the value of assets, connect with local communities, and to increase productivity by enabling the trade of space, skills and goods. The UK’s sharing economy is estimated to grow to an estimated £140 billion in 2025. The pandemic has disrupted some parts of the sharing economy, such as car sharing or ride sharing, so there is some uncertainty around the speed of returning to normal, as well as how many other types of physical assets lend themselves to this model.