The Our Future World report revisits the inaugural report in 2012 and provides an outlook to 2042, looking at unfolding global geopolitical, economic, social, technological, and environmental forces and predicting their likely impact on Australia’s people, businesses and governments.
Like aircraft engineers would use wind tunnels to test the robustness of new aircrafts, we can use these megatrends to develop, test and refine future strategies to ensure they are robust, whatever the future holds.
Adapting to climate change: with natural disasters expected to cost the Australian economy almost three times more in 2050 than in 2017, we can expect to be living in a more volatile climate, characterised by unprecedented weather events. Adapting the healthcare system, critical infrastructure and settlement patterns to climate change and extreme weather conditions will become a growing reality.
Leaner, cleaner and greener: an increased focus on potential solutions to our resource constraints through synthetic biology, alternative proteins, advanced recycling and the net-zero energy transition. By 2025, renewables are expected to surpass coal as the primary energy source.
The escalating health imperative: the post-pandemic world has exacerbated existing health challenges posed by an ageing population and growing burden of chronic disease. One in five Australians report high or very high levels of psychological distress and there is heightened risk of infectious diseases and pathogens resistant to modern antibiotics. There is now a burning platform to also respond to our health risks and improve health outcomes.
Geopolitical shifts: an uncertain future with recent geopolitical developments likely to have long-lasting impacts, characterised by disrupted patterns of global trade, geopolitical tensions and growing investment in defence. While the global economy shrunk by 3.2 per cent in 2020, global military spend reached an all-time high of $2.9 trillion and Australia saw a 13 per cent increase in cybercrime reported relative to the previous year.
Diving into digital: the pandemic-fuelled a boom in digitisation has meant many sectors and organisations have experienced years’ worth of digital transformation in the space of months, with teleworking, telehealth, online shopping and digital currencies becoming mainstream. Forty percent of Australians now work remotely on a regular basis and the future demand for digital workers expected to increase by 79 per cent from 2020 to 2025. While this progress has been significant, experts predict that this is just the tip of the iceberg, with the vast majority of digitisation yet to occur.
Increasing autonomous: there has been an explosion in artificial intelligence (AI) discoveries and applications across practically all industry sectors over the past several years. Within the science domain the use of AI is rising with the number of peer-reviewed AI publications increasing nearly 12 times from 2000 to 2019.
Unlocking the human dimension: a strong consumer and citizen push for decision makers to consider trust, transparency, fairness and environmental and social governance. While Australia saw a record level increase in public trust in institutions during the pandemic, this ‘trust bubble’ has since burst, with societal trust in business dropping by 7.9 per cent and trust in government declining by 14.8 per cent from 2020-21.
CSIRO chief executive Dr Larry Marshall said megatrends help us to understand the challenges and massive opportunities that will shape our future.
“Australia is at a pivotal point. There is a tidal wave of disruption on the way, and it’s critical we take steps now to get ahead of it,” Marshall said.
“From resource scarcity to drug resistant superbugs, disrupted global trade, and an increasingly unstable climate threatening our health and way of life – these are just some of the challenges we face.
“But these challenges also tell us where the most powerful innovation can be found, when we see a different future and leverage science to create it.
“We have the opportunity now to use science to invent the kind of world we want to live in – but we have to act, and we have to do it together,” he said.
The report said meeting the future demand for food will be challenging, but feasible. While a recent meta-analysis estimated global food demand would increase by 35–56 per cent between 2010 and 2050 – a reduction from the Food and Agriculture Organisation’s 2009 prediction of a 70 per cent increase – but the amount of food consumed per capita could change by 0–20 per cent under different future scenarios.55
The United Nations estimate that 75 billion tonnes of fertile soil and 12 million hectares of productive farmland capable of producing 20 million tonnes of grain is lost to desertification and land degradation each year.
CSIRO said global demand for protein is increasing, particularly across Asian nations and that demand will be met by conventionally farmed protein sources, as well as new protein alternatives which are more resource-efficient to produce such as plant-based meats, edible insects and seaweed.
Alternative proteins are expected to make up 11–22 per cent of the world’s protein market by 2035, and sales of plant-based meats could reach $3 billion in Australia by 2030.
Synthetic biology provides tailored solutions to a range of complex challenges impacting the environment, agriculture, medicine and other industrial fields. The report said the market for synthetic biology technologies and products is expected to grow by 24 per cent from 2018 to 2025 and be worth $74 billion by 2025.
These technologies can be applied to produce food with less energy, water and land; grow lower-emissions building materials; engineer biofuel alternatives to petroleum; accelerate vaccine developments; and produce one of the strongest biomaterials, spider silk.
Australia generates more waste per day per capita (1.5 kg) than the rest of the world (0.7 kg). Almost 85 per cent of plastics in Australia were sent to landfill in 2019, and if nothing changes, RMIT University estimates that Australia’s landfill space will reach capacity by 2025.
Advanced recycling technologies can convert end-of-life plastics into their original building blocks to create other valuable commodities and could be used to improve the recovery of plastics in Australia.
Australia has the necessary infrastructure, manufacturing skills and supply chains needed to develop advanced recycling and leverage these opportunities, CSIRO said.
The pandemic has seen a contraction in Australia’s two-way trade with major partners. From 2019 to 2020 we saw our two-way trade with our top five partners decline: China (-2%); the US (-10%); Japan (-23.6%); South Korea (-15.5%) and the UK (-17.7%).
This was connected to a global contraction in trade associated with the pandemic and restrictions on the movement of people, goods and services.
In late 2020 and early 2021, China introduced tariffs and sanctions on Australian exports of coal, seafood, beef, wine, timber logs and barley.
These trade barriers, combined with other shifts in the global trade landscape, have caused some Australian exporters to pivot into alternative markets or change to an alternative domestic or international supplier. For example, Australia’s trade with India has grown 5.5 per cent over the past five years.
The extent to which the current post/late pandemic situation prompts longer-lasting changes to Australian trade patterns is not known. It’s likely that both exporters and importers will be looking for ways to reduce risks and diversify over the coming years.
The COVID-19 pandemic and geopolitical shocks have revealed Australia’s vulnerability to global supply chain disruptions.
In February 2022, 37 per cent of Australian business experienced supply chain disruptions, 50 per cent of which were unable to find alternative suppliers.
Supplier diversification, onshoring and contingent contracting have been proposed as potential risk mitigation strategies for firms and governments.
Enhancing the uptake of agile manufacturing approaches, leveraging artificial intelligence (AI), robotics and other technologies, could enable Australian manufacturers to dynamically respond to market changes in a cost-effective manner.
Recent supply chain issues have been associated with the pandemic and trade disputes.The report said that as we look to the future, there is further risk that geopolitical events could impact trade. For example, the Australian Strategic Policy Institute estimates that 80 per cent of global trade is via sea and that between 20-33 per cent of that trade moves through the contested waters of the South China Sea.
In the future, it is plausible that we will see Australian households, industries and governments place greater emphasis on sovereign capability and local supply chains (especially for critical goods and services), along with efforts to build more resilient supply chains that are capable of handling a broader range of disruptive events
The adoption of high-performance computing, AI, machine learning, sensors and the Internet of Things (IoT), robotics and other Industry 4.0 technologies is growing globally. The next wave of digital innovation is expected to generate $10–15 trillion globally, and currently available technologies could contribute $140–250 billion to Australia’s GDP by 2025.
The Australian Government has invested $6 million to establish six Industry 4.0 ‘testlabs’ to support the adoption of Industry 4.0 technologies.
Compared to other advanced economies, Australia has captured less value from digital innovation (11.2 per cent versus 7.4 per cent of GDP, respectively), particularly in regards to developing new digital industries. There are untapped opportunities for Australia to accelerate digital adoption and its associated productivity gains.
Amid COVID-19 restrictions and health directives, there has been a rapid growth in e-commerce. The Queensland Investment Corporation estimates that over 18 per cent of retail sales will be online by 2030. Companies listed in the S&P/ASX All Technology Index are also outperforming ASX 200 listed companies.
There is a drive to increase the technical capabilities of transport and logistics using IoT, data analytics and automation to boost efficiencies and productivity.
Indeed, Australia Post had to suspend operations in New South Wales, Victoria and the Australian Capital Territory (all of which were under lockdown directives) for three days in September 2021 to reduce the stress on the system after 500 staff were required to self-isolate.
Food fraud costs the Australian food and wine sector around $1.7 billion in 2017 and this is a growing issue. Emerging technologies are being applied to track the movement of products across global supply chains and can be used to protect Australia’s reputation for safe, high-quality products. Examples include blockchain technologies, radiofrequency chips, nanotechnologies and laser technologies which can track products across the supply chain and verify their authenticity.
Biological identification techniques such as DNA fingerprinting technologies and spectroscopic analysis can also be used to verify ingredients and detect contaminants to prevent food fraud, substitution, and adulteration.
These technologies could help build trust with international regulators and customers around Australian exports and minimise trade disruptions for producers.
According to the International Data Corporation, 64.2 zettabytes of data (or 64.2 billion terabytes) were created or replicated in 2020 and this is predicted to grow at a compounding annual rate of 23% over the next five years. Many organisations are increasingly realising the value of big data.
A 2021 study of 85 Fortune 1000 businesses found that 96 per cent benefited from using big data and data-driven decision making, and a separate study found companies that use customer analytics are twice as likely to generate above-average profits than those who do not.
But we are only at the early stages of the data-driven transformation. Only 24 per cetn of the Fortune 1000 businesses surveyed in 2021 identified as a data-driven organisation, and 27 per cent of Australian firms rated themselves as highly data-driven in 2016 (versus 39 per cent of global firms).
Our Future World co-lead author Dr Claire Naughtin said: “Trust emerged as a central theme – trust in institutions, technology, supply chains and security will all be key issues over the coming two decades.
“Currently just under 70 per cent of Australians do not trust AI systems but would be more willing to use these systems if appropriate ethical measures were in place.”
Co-lead author Dr Stefan Hajkowicz said: “We analysed thousands of data points collected over decades. Some of the trends we identified have been widely discussed, while others are newer and directly related to our experiences during the pandemic.
“We are, for example, just beginning to understand the potential long-term impacts of the pandemic on mental health and chronic illness.”
Naughtin added: “We anticipate that while the pandemic sped up digital transformation, the real explosion in our capability is yet to come.
“This latest update on the global megatrends gives us line of sight as to what has changed over the past decade and a view to the coming decades.
“Like aircraft engineers would use wind tunnels to test the robustness of new aircrafts, we can use these megatrends to develop, test and refine future strategies to ensure they are robust, whatever the future holds.”
Access the report here.
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