by Pen Stuart

The home is the safe heart of many consumers’ lives, but this can make people overlook the changes that are reshaping the way people live, so it’s worth a closer look. The recent Grand Designs Live expo in London highlighted some of the most exciting things in homes. For me there were three highlights:

The future is sooner than you think: Changes in homes and housebuilding are assumed to be slow, incremental, and fairly dull, but Jaya Skandamoorthy, of the BRE, argued in a talk that when we look abroad this may be about to change. China for instance, needs to build 35 million more homes over five years to cope with urbanisation and falling household size. The sheer scale involved means the government can consider new approaches to building design, size of living space, materials used, and even urban planning itself.

Consumers in control: Closer to home, self-build housing has historically been only about 10% of new builds in the UK, compared to almost half on the continent, but now there seems to be an appetite to increase this proportion – among both governments and individuals. A raft of new policies has been launched in the past months, with the intention of doubling the amount of self-build. This could make housing more affordable, especially for young people who are currently squeezed out of the market. House building may become less constrained by the conservative expectations of developers and builders. This also mirrors the wider trends we’ve seen in other sectors.

Fit buildings to people, not people to buildings: The automated home has been talked about enthusiastically for a long time – where all devices will talk to each other seamlessly and resolve domestic problems invisibly. Grand Designs had a special Automated Home display section. But what struck me was how much this looked like a fairground – something you wander around, enjoy the spectacle, and get back to your real life.

As we say in our Technology 2020 report, people are often unwilling to fundamentally change their behaviours. On the subject of green homes, Hank Dittmar, Chief Executive of The Prince’s Foundation for the Built Environment, noted that new eco homes are often judged to be strange ‘teletubby homes’. Planners have declared in the past ‘the buildings work, but the people don’t’. But this is putting the problem round the wrong way. The Prince’s Foundation Natural House shows significant potential – embodying modern, eco-friendly efficient technology, but looking traditional – as a way to combine sustainability with mass market appeal.

The picture at the top of this post is of a street of ‘Natural Homes’ from the Learning from London blog, and it used with thanks.

Ashraf Choudhury writes:

The Futures Company has quite strong views on Millennials, which have been covered in posts here in the past. So when I noticed an academic paper (opens pdf) from San Diego State University, which argued – on the basis of a 30-year tracking study – that Millennials (the generation born in the late ‘80s or so) are much less politically and environmentally engaged than previous generations – it seemed to be fuel for the fire. The data – as analysed by the San Diego State University researcher Jean Twenge – are striking.

So I shared it internally and on our trends site, Trend and Tonic, from where it was picked up by the San Diego paper, U-T San Diego. This was how their reporter called it:

That downbeat assessment raises an important question about the future of green: Will the next wave of leaders care enough about the natural world to maintain momentum that has been won in courtrooms and boardrooms over decades?

One of the good things about American reporters is that they do expect to report, and Mike Lee, who wrote the story, took the trouble to call me and my colleague Lawrence Wykes, who worked on our Millennials segmentation, to canvas our views. The segmentation suggests it’s unhelpful to generalise about a generation, and that there are strong differences in attitudes within it. Two of our segments do rank poorly on political and environmental engagement, but one segment in particular (the ‘Spirits’, who comprise 25% of Millennials in the US) rank very high on this same measure of environmental and political engagement.

It’s also possible that there’s a research effect going on here – that different generations understand the questions differently. And the SDSU study has clearly touched a nerve with Millennials and environmental groups. Either way, this one has some distance yet to run.

The picture at the top of the post is from the environmental campaign site Zoe and is used with thanks.

Ian Christie and Andrew Curry write:

Reading the Economist’s book Megachange:The World in 2050, edited by Dan Franklin and John Andrews, brings an increasingly heavy heart. If you’ve missed it, it is a collection of twenty essays by assorted contributors, and I suppose one can’t fault them for their ambition, since the Franklin-Andrews duo, as editors of the Economist’s annual World In … prognosis series, normally look just the one year ahead. But the lens they turn on 2050 is a surprisingly narrow one.

In case you’re wondering if you need to spend the thirteen pounds ($20) on the hardback, here’s a quick ten-point guide:

1. Capitalism is supremely innovative, efficient, adaptive, empowering and enriching.
2. It always has been and therefore always will be.
3. Inequalities are good, or at least inevitable.
4. Liberated wealth creators will always generate new value and everyone will benefit as it trickles down.
5. Global environmental risks don’t exist.
6. Or if they do, they are exaggerated.
7. Or if they aren’t, we can adapt anyway.
8. At any rate, we can be confident that they don’t matter to the upward sweep of capitalism and technical ingenuity.
9. More tax cuts, privatisation and de-regulation are essential.
10. I teach you the Super-Man (Nietzsche).

It’s not just us. Will Self was unimpressed too. .

But it’s one of the sad facts about futures work that there’s always a ready market, not to mention lucrative speaking opportunities, for those who say that everything’s going to turn out fine: think of Peter Schwartz’s ill-advised ‘Long Boom’ scenarios in 1999, or George Friedman’s more recent Next 100 Years. And think, in sharp contrast, of the way in which The Limits to Growth scenarios were pilloried for being pessimistic and unrealistic when they were published in 1972. Look again with the benefit of 30 years hindsight (opens pdf) and their model turns out to have been almost completely on the money in terms of industrial production and environmental harm since then. And that should make us afraid, because their particular ‘business as usual model leads to industrial collapse sometime in the 2020s.

Of course, this view of the possible future is notable for its absence in the pages of Megachange. But by discounting the alternatives, such mega-myopia reduces our chances of preparing for some of the more dismal futures which could lie ahead – or even taking action now to try to avert them.

If you feel your book collection needs a work on futures with the term ‘Mega’ in the title, you’d be a lot better off with Stephen Schnaars’s Megamistakes, a thoughtful, provocative and sobering analysis of all the ways we can get long range socio-economic forecasting badly wrong. Schnaars has plenty of warnings for the likes of the contributors to Megachange – including, ‘Avoid Technological Wonder’.

Ian Christie used to work at The Henley Centre. He is now Research Fellow, Centre for Environmental Strategy, at the University of Surrey.

by Pen Stuart

As consultants and researchers try to understand evolving consumer behaviour, we quite often use online survey research. It’s one of those areas which seemed like a revelation when it was first introduced, if only because it pushed down research costs, but has changed little recently. The online world has moved on but online research is still trapped by the legacy of the forms and questionnaires of face to face research. It is a classic example of using technology to do an old thing in a new way.

But there’s a cost to this: dull forms leads to lower engagement with the questions which leads to lower quality answers; poorer data, in other words. So, like all areas which have got stuck, it is crying out for some innovation.

To help us understand what is coming next, we invited the market research specialists GMI in to talk about what they’re doing to refresh the online survey. Their view: survey writing is becoming a creative discipline, a specialist form of communication designed to get people to respond better – exactly as happened with the emergence of advertising as a discipline.

Their research suggests that respondents are happy to spend longer on questionnaires, and provide much richer and more considered results, and without being paid more, if you make the survey process more entertaining. Activating their imagination is crucial, to get respondents to think in more interesting ways about your subject. Instead of just asking ‘what is your opinion on…’, for example, GMI asks you to ‘imagine you are being interviewed by a journalist who asks…’, thereby creating an element of role play. Tests show it gives proven longer and more thoughtful responses.

They’ve also borrowed from games design – turning repetitive actions with little tangible benefit into a structured process that engages and entertains. This can make the survey more of a challenge. But the answer to the obvious question – won’t people just quit the survey? – is ‘no’. But it depends on the design of the challenge. Changing a question from  ‘describe yourself’ to ‘describe yourself in exactly 7 words’ means that people spend more time on it, leading to better responses and better data.

There’s a catch, of course: the cost of developing the questionnaire increases. The solution to that problem is finding clients who care about the quality of the research data they’re getting back. And engagement also opens up new types of response – relevant when you start to think about increasing open source innovation, and getting consumer feedback on new product development. All in all, something to start experimenting with.

The image at the top of the post comes from The Listening Post blog, where there is an interesting post on why respondents abandon surveys. The image is used with thanks.

Christina Linden-Hill writes:

One of the good things about working at The Futures Company is the opportunity to try out new things, to experiment.  When a few of us started thinking about creating a content curation site for the company, we were greeted with encouragement to “do it” and “see what happens”.

We spend much of our working days thinking about trends, and about the future, but sometimes struggle to share our thoughts and opinions outside our project teams, because of constraints of time and geography. To get round these, we decided to create a central site for fresh content, lightly salted with our opinion, which everyone can share, inside and outside of the company. The result is the newly launched Trend and Tonic section on the website – “a daily mix of foresight and futures.”

The new site includes a number of authors from The Futures Company contributing to the site daily; each author writes in their own style about topics that interest them. The intention is to highlight potential cultural shifts across the globe, and where we think these might lead, and to do this concisely.

The posts are categorised by subject,which should make the site easy to navigate, and there is space to comment and to contact the author. Thinking about the future is essential to good strategy, innovation, and risk management. It’s early days, but we hope that Trend and Tonic will be a quick way for people to keep track of the changing landscape.

Vera Kiss writes:

In his controversial 1970 New York Times article, Milton Friedman set the tone for a generation when he argued that the sole responsibility of businesses was to generate profit for their shareholders. But today’s Millennials disagree. Even those in corporate ranks. A recent Deloitte survey of a thousand Millennial employees of the firm reveals that 92% reject the idea that the sole measure of a company’s success is profit.

Importantly, more than 50% believe the primary purpose of business is innovation and societal development. This resonates with the Futures Company’s 2011 Global MONITOR survey, which found that 63% of Millennials believe that companies have a responsibility to support the society in which they operate.

Of course, not all Millennials are engaged with social issues. The Futures Company’s Millennial segmentation reveals significant variation between four global groups of Millennials. Against a global average of 62%, 55% of ‘Striders’ and 43% of ‘Satellites’ consider it important in their lives to make a difference. 76% of ‘Steppers’ and 85% of ‘Spirits’, in contrast, agree with this statement. Spirits, the poster children of the generation, stand out for their interest in global and local issues and are concerned with the ethics of consumption.

Millennial attitudes towards business tell us two stories. One now familiar story is about higher expectations of ethical conduct. The newer story is about the increasing appeal of business-inspired and even business-led solutions for global challenges.

We have seen a proliferation of business-inspired initiatives in the development sphere. Microfinance organizations have mushroomed around the world, pinning the hopes of poverty reduction on micro-entrepreneurs and small scale businesses. Websites such as Kiva provide easy connection between micro-donors and entrepreneurs in developing countries.

Importantly, the corporate sector is increasingly drawn into addressing societal issues through solutions that are designed to do long-term good while also being profitable. The founder of microfinance, Nobel Peace Prize winner Muhammad Yunus, now tours the world engaging big business in social enterprise initiatives that seek to maximise their social impact rather than shareholder returns. He has already partnered with Danone to address childhood malnutrition in Bangladesh through a business selling fortified yoghurt products. Inclusive business strategies are also gaining visibility, with development agencies partnering with large companies to include bottom of the pyramid consumers as small investors and suppliers.

Business-influenced strategies won’t provide all-encompassing solutions to global issues, or replace public and non-governmental organisations. The point is that businesses can increasingly act as legitimate agents of social change. Perhaps it shouldn’t come as surprise (especially given the sample) that most respondents to the Deloitte survey think that business has the greatest potential of any sector to achieve societal change.

This creates opportunities for businesses and brands to connect with socially conscious Millennials – but they have to understand the differences within the cohort, and be able to demonstrate real impact through their business practices.

The picture of the Danone Grameen logo on the side of its factory at Bogra is from the Danone Communities Flickr photostream, and it is used with thanks.

Pen Stuart writes:

It’s international women’s day, and the question of women’s work is top of mind – internationally women perform 66% of the world’s work, but earn only 10% of global income. For many, work is unavoidable, a burden rather than a right – the International Labour Organisation notes that in China and India there is falling female workforce participation among some groups, as more affluent families take pride in the fact that the women in the household can focus on childcare, homemaking, and informal social support for the whole family. Something similar happened in Britain in the 19th century, when the middle classes were glad to show their ‘superiority’ over the working classes, where women had to do manual labour.

It is also reflected in shifts in Pew Global Attitudes data: while 86% of the Chinese sample in 2002 felt the most satisfying kind of marriage is one where both husband and wife have jobs, this had fallen to 78% in 2010. Yet agreement with this statement rose in other emerging markets like Mexico and Russia, showing that you cannot take a ‘one-size fits all’ view of women’s empowerment.

Meanwhile in affluent markets, where work has become a central part of many women’s identity, this is becoming a luxury for some. Women in the US and the UK are actually being forced out of paid work by the rising cost of childcare – in the UK alone 30,000 women have left paid work since last year for this reason.

This challenges traditional understandings of the evolving female market – both in terms of spending power and how they see their identity – and therefore of how you should communicate with them. Women want to be talked to about expanding opportunities, and want more ability to choose their own direction in life – both of which are being squeezed by austerity. But in some markets, those who are no longer single, or feel that they have been squeezed out of the labour market, may not be striving for ‘having it all‘, but for a proper celebration of the work of being a home-maker, wife or mother.

The still from The Homemaker (1925) is from the archive at Stanford University, and is used with thanks.  The film is an early role-reversal movie: the wife goes out to work when the husband loses his job.

Amy Tomkins writes:

A couple of things which have come across the desk this week reminded me of the increasing visibility of well-being as a set of social and public issues. The first was the latest edition of the United Nations Human Development Index (pdf), which combones health and education scores with economic measures to give an overall view of human development (Norwayis currently top, which is probably a tribute to how smartly they invested their North Sea oil revenues). The other is the UK’s first set of well-being data from the National Statistics Office.

As it becomes more important to people, it is increasingly under threat – from demographic change, economic volatility, climate change, and lifestyle pressures. Our Global Monitor data tells us that emotional wellbeing is declining, from 54% in 2011 to 46% in 2010.

With this in mind, we’ve recently explored how in a Future Perspectives report consumer attitudes to wellbeing are being reshaped. Our research suggests we are seeing the emergence of four new consumer wellbeing mindsets, each with their own implications.

• ‘Reclaiming mental health’: consumers are increasingly engaging with mental and emotional wellbeing as a means of self preservation. Might we see the emergence of a more self aware society as a result?
• ‘Search for new solutions’: globalisation and the desire for flexible wellbeing solutions are driving a fusion between East and West. Will this herald the development of a new global language around wellbeing?
• ‘Coping with risk’: consumers across markets are acutely concerned about the threat from external risks. How will data from the physical environment help them to manage risk in the future?
• ‘Safeguarding the future’; concern for the wellbeing of future generations is promoting the admission of responsibility from society. Will we see a shift to accountability as this becomes more widespread?

This may add up t the emergence of a Well-being Generation, which will expect products and services to deliver well-being benefits as well as functional benefits. They will exist within a more accountable society, where governments and companies are scrutinised for their impact on future well-being. Health practice will adopt – and adapt -approaches to well-being from around the world, which will create innovation opportunities.

The biggest challenge will be inclusivity. We expect the winners in the re-framed world will be those that manage to create mass market approaches  that drive engagement with well-being.

You can download Reframing Wellbeing from our website.  The image at the top of this post is from San Francisco State’s College of Extended Learning, and is used with thanks.

J Walker Smith writes:

It’s dangerous to take the news of late at face value.  While a Greek deal appears to be in place and the Council of Economic Advisors, headed by Alan Krueger, is opining that the US recovery is stronger and faster than expected, there is some way to go.

To put it bluntly, the developed West is in for a long slog. Slow growth is the new normal for Western developed economies.

The implications of this slow-growth West for brand marketers and business strategists are explored in our latest Future Perspective, Quickening the Pace.  For most business leaders, it’s a new situation. They came of age during the ‘Great Moderation’, a period of relative stability, greater predictability and virtually uninterrupted growth.  What marketers and strategists learned as they began their careers offers little guidance for the marketplace they face today.

The Great Recession has left the marketplace smaller and more polarized than ever.  Consumer confidence has reset at a lower baseline and frustration and anger have boiled over into the street.  Every corner of the world is on edge about the trade implications of weak, stagnant demand in the developed West.

There are still growth opportunities for smart companies. But only the smart companies will grow, for there is no longer a rising tide to lift all boats.  Quickening the Pace reviews seven ways in which brands can revive their value propositions for economically challenged consumers.  Three are worth special mention.

First, consumer reference points have changed from high to low.  Aspiration now seems risky, even out of reach. Worse, the prospect of losing it all seems closer than ever. As a result, consumers no longer compare themselves to those with more; instead, they worry about winding up like those with less.

Surrounded by so many who have hit the bottom, consumers are worried that they might wind up there themselves.  So rather than being attracted by those with more, consumers now live in fear over those with less.  While this is different for brands, it is not impossible for brands able to take the risk out of buying.

Second, debt has become a more important marker of financial well-being than income.  It is a better targeting criterion.  It is a more predictive of spending.  It is more strongly correlated with confidence.  The overhang of debt is keeping consumer spending in check, so contrary to conventional wisdom, growth opportunities are to be found by analyzing what people owe, not what they earn.

Finally, lifestage assumptions are being turned on their head.  The traditional focus of marketers on young people and their lifestage transitions has been undercut.  A suffocating job market has kept younger consumers from even getting started.

But the same economy that has made young people less attractive to marketers has made older consumers more attractive.  Battered by economic losses, many older consumers have changed their retirement plans and are planning now to work longer, which will extend their peak consumption years.  Marketers will have to change, too.

The brands which lrearn these new rules – and adapt to them – could have breakout success.  Not every ship is grounded by an ebbing tide. Some brands will find the enduring pockets of dynamic spending potential.  There is less spending to go around, and not all brands will succeed. The battle for share will go to the savviest, those best able to take advantage of the principles for success in a slow-growth West discussed in Quickening the Pace.

The image at the top of the post is from 123RF.com, and is used with thanks. Quickening the pace, and another economics report, The future of the eurozone, also published this week, can be downloaded from our website.

Andrew Curry and Matthew Lynn write:

As the Greek financial crisis plays out on the streets and in the council chambers of Europe, it’s hard to look beyond the day-to-day drama to the longer term. But that’s what we’ve tried to do in our new Future Perspectives report, which we have published this week. And the results are surprising. The crisis will end, because ecomnomies don’t continue is a state of permanent crisis. To do that, Germany will have to export less, and the peripheral economies will have to export more – and there’s a lot of opportunity in that economic re-balancing.

The report has developed five scenarios for the future of the eurozone, ranging from its survival in its present form to a return to national currencies. From this it forecasts three big changes, looking out to 2020.

One: New powerhouses will emerge. Italy will be one of the big winners of the pos-euro crisis economy, just as it was in the ‘dolce vita’ economy of post-war Europe. If it leaves the euro, it will renege on its debts, and massively devalue. That will massively boost the economy, enabling it to rapidly catch-up with its more prosperous Northern neighbours. Meanwhile, countries such as Poland – with big populations, low debts, and strong growth – will emerge as the powerhouses of Europe.

Two: Germany will have become a consumer society – and rely less on exports. That will mean boosting retail and leisure spending, property development, and industries such as financial services, where it has not been very innovative. Paradoxically, while the UK is trying to re-balance its economy to become more like Germany, Germany will need to become more like the UK.

Three: There will be huge opportunities for companies that read these trends right. New markets will open up in Germany as retail, leisure and property grow – all areas where domestic German companies are not very strong. In Spain, youth unemployment will come down dramatically, meaning that young people will start spending. In Italy, a growing economy will see a huge rise in female participation in the workforce – changing the shape of consumer demand. We’ve done some analysis of the impact of that change on the Italian economy, and reckon that it’s worth around €48 billion a year – or 3% of Italian GDP.

Four: Europe’s banks will be the big losers. Debt will be written off, sooner or later, and as a result, most will end up in public control.

In short, businesses will have to redraw their mental maps of what the European economies look like, and where the opportunities will be found.

Andrew Curry is a Director of the Futures Company in London, Matthew Lynn runs Strategy Economics. The report, The future of the eurozone, is published as part of The Futures Company’s thought leadership programme, Future Perspectives. We are also publishing this week a report on doing business in slow-growth economies, called Quickening the pace, which will also be available from the website.  The picture at the top of tjhis post is published by Wikimedia Commons.