four future scenarios for businesses

7/31/2019 FOUR Future Scenarios for Businesses

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Four future scenarios for businesses


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2 Fourfuturescenariosforbusinesses


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Contents

Preface 4

Introduction 6

Anuncertainworld:thedrivingforces 8

CapriciousConsent 12

AgileAntipoles 22

SlowStrife 32

FlowinglyForward 42

Fourscenarios,evenmorepossibilities 52

References 54

Colophonanddisclaimer 55

Rabobank Nederland Economic Research Department Hans Stegeman Danijela Piljic

Outlook2011 3


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Beinganentrepreneurmeanslookingahead.Theimportantquestionisnotjustwhatdoestheclient

wantnow,butwhatdoes theclientexpect fromyourcompany inthefuture.Therearemanyotherdevelopmentswhichcanaffecthowyourunyourcompanybothnowandlater.Someoftheseareknown

tous.Forinstance,populationageingandtheresultingexpectedtightnessonthelabourmarket.Consider

alsothedemandsthatsocietyandtheenvironmentwillincreasinglyplaceonyourbusinessstrategy.But

therearealsomanyuncertainvariables,andtheonlythingwecanbesureaboutisthattheywilldeter-

mineyoursituationandoursinthefuture.Unknownquantities,suchasenergysources,thedepletionof

naturalresourcesandclimatechange,whicharedifficulttoanticipate.

Howwillourworldlookin2030?Thisisaquestionthathasbeenoccupyingoureconomistsforsome

time.Whichcountrieswillformthemajorpowerblocksintwentyyearstime?WilltheEuropeanUnion

stillexist?Willtheeurobeaglobalcurrencyormerelyavaguememory?Willwehaveapeacefulsociety,

orwilltherebeanotherColdWar?Willtherebeenoughfoodtoprovideforagrowingglobalpopulation?

Willwehavefoundadequatealternativestothefinitesupplyoffossilfuels?Andwhataboutoureconomic

structure?WillthegrowthofservicesintheNetherlandshavecontinued?Andhowsustainablewillour

economybe?

Ofcoursenobodyknowsthefullanswertothesequestions.Yettogainsomeunderstandingofthefuture,

wehavedevelopedfourpossiblescenariosofhowthewouldcouldlookintwentyyears.Ourprojections

revolvearoundtwovariables:conflictversusharmonyandevolutionversusrevolution.Theinteraction

ofthesetwovariableshasresultedinfourscenarios,eachofwhichsketchesapossiblestateoftheworld

in2030.

Capricious Consentisthescenarioofarapidlychangingworldwithoptimalcooperationandadynamic

society.Agile Antipolesisaworldwhereconflictsatalllevelsgohandinhandwithtechnologicalbreak-

throughs. Slow Strife depicts a sharply polarised world, with little forward movement. And finally,

Flowingly Forwardisaworldbasedonconsensus,characterisedbygradual,thoughsteadydevelopment.

Itisnotimpliedthatthesefourscenariosconstitutethe only possibilitiesfortheworldin2030.They

merelyprovideahandletotakeapeepintothefuture,andillustrateinsofaraspossible,theextremesof

whatmightbereasonablypossible.TobemoreoptimisticthanCapricious Consentormorepessimistic

thanAgile Antipoleswouldbeunrealistic.Youmayperhapsfeelaconnectionwithoneofthefourscena-

rios-orevenmorethanone.Atanyrate,wehopethisstudywillhelpyoutoreflectonyourlongterm


Preface


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strategy.Oratleasttofacethefuturewithcourage,eventhoughnoteveryscenariopaintsaprettypicture.

Andeachscenariocontainschallenges-someofwhichyoumaywellhaveanticipatedalready.Becauseaswe have said:being an entrepreneurmeans looking ahead. Iwish youwisdom and success in this

challenge.

Piet Moerland

ChairmanoftheExecutiveBoard

RabobankNederland

Outlook2011 5


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Businesses intheNetherlands are facinga numberof

strategic challenges in the years ahead. Populationageing,theadvanceofChinaandtheemergenceofother

countries, ICTdevelopmentsandenergy andenviron-

mentalissueswillallexertsomedegreeofinfluenceon

thesphereofactivityofDutchbusinessesinthecoming

decades.Theextentofthisinfluenceis,however,uncer-

tain. Consequently, there is a need tocreate a clearer

pictureofallthevariablesandpossibilities.Wheremight

theseleadto:Whatarethelimits?Whatisbeyondthe

boundsofpossibility? And all thingsconsidered, how

canbusinesses best actto anticipate thesekeyuncer-

tainties?

IN2030isascenariostudythatdepictshowthesitua-

tionmightbeforbusinessesin2030onthebasisoffour

scenarios.1 Not onlydowethus place futuredevelop-

ments ina broader perspective, italso becomes clear

how future scenarios can vary and what the driving

forcesbehindthesedifferencesare. Issuessuchas the

sustainabilityoffoodproduction,energyresourcesand

knowledgedevelopmentareexploredagainstabackdrop

of societal and (geo) political movements, aswell astechnological and demographic developments. More

concretely, the four scenarios contain an analysis of

developmentsinsixbusinesssectorsintheNetherlands.

Whichsectorswillshowthemostgrowthin2030?Will

Dutchindustrybeabletokeepupwiththeincreasingcompetition from the Asian countries?What will the

consequences ofdemographic shiftsbe for thepublic

sector?

In order to map the long term development of the

various sectors of industry, we will first look at the

developmentoflabourproductivity.Importantfactorsin

thisrespectareafavourableinnovationclimate,invest-

ment in education andschoolingandembracingnew

technologies.Itmustalsobeasked,towhatextentdo

increasing affluence and lower prices lead to greater

demandforcertainproducts?Finally,theinternational

competitivenessofDutchbusinesses is important.For

eachscenario,differentfactorscandeterminethefuture

developmentofthesectorsofindustry.

IN2030alsohasitslimitations.Ourprimaryinterestis

in developments that reflect the relevant situation in

broadbrushstrokes.Thismeansthatsometopicscannot

bedealtwithindetail,whichwouldbeimpossiblewitha

timeframeof20years.WehopethatIN2030willinspirefurtherreflectiononpossibilitiesfor thefuture, inclu-

dinguncertaintiesandopportunities.

Introduction

1 IntheSpringof2011thebookIN2030:Viervergezichtenvoor

2030willbepublished,whichwillcontaindetailedprojections

ofliving,workinganddoingbusinessintheNetherlandsin2030.

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Howwilltheworldlooktwentyyearsfromnow?While

we cannot expect a precise answer to this question,thereismuchtobegainedbyaddressingit.Weknow

thattheworldischanginginanumberofways.Some

structural changes are fairly clear, such as population

ageingandashortageofnaturalresources.Otherissues

arelessclear.Theseincludetechnologicaldevelopments,

societaltrendsandtheglobalbalanceofpower.These

drivingforces,bothcertainanduncertain,willshapethe

worldinwhichentrepreneurswillsoonhavetotry to

operatesuccessfully.Onecoulddevoteentirestudiesto

theissuesandtrendsthatmayplayaroleinthecoming

twentyyears.Herewelimitourselvestoabriefdescrip-

tionoftheissuesthatweconsidertobethemostimpor-

tant.2

The earths population increasing and getting

older

The global population is set to increase by around a

quarter inthenext twodecades. Thiswill havemajor

consequencesfordemandonournaturalresourcesand

forthesustainabilityofqualityoflifeonearth.Thereis

considerable diversity in global demographic trends.WhileEurope, butalsoChina are greying, India hasa

rapidlygrowing,butrelativelyyoungpopulation.Inthe

Netherlandswehavebecomeaccustomedtopopulation

growth for the past hundred years. Itwill bequite a

challengeintheyearsaheadtochangeourmindsetto

thinkingintermsofacontraction.

Shifting balance of power stable relations?

It is virtually undisputed that the global economic

balanceofpowerwillshifttotheeastduringthenext

twenty years. But whatwill thismean for the world

orderand for international trade?Willtheeastovers-hadowthewest?Willwemoveforwardharmoniously?

Orwilltheconflictinginterestsleadtoafragmentation

ofglobalpower?Ofcourse,thesedevelopmentswillbe

driven and influenced by other trends as well. How

countries and power blocks relate to each other will

largelydeterminetheplayingfieldforeconomicprogress

andfreetrade.

European (dis-)integration?

The process of European unification commenced in

1957. Since then, further integration has takenplace,

stepbystep,culminating sofar intheintroductionof

euronotesandcoinsin2002.Butwheredowegofrom

here?TheGreekcrisishasmadeitabundantlyclearthat

Europeanintegrationcouldstillbederailed.Couldthe

eurozoneortheEuropeanUnionfallapart?Orwillwe

remainonthepathoffurtherintegration,onestepata

time?Will Europe choosetogrow strong together, or

willitbeeverycountryforitself?

Fossil fuels running outWhilethedemandforenergycontinuestogrow,energy

sourcesarebecomingincreasinglydepleted.Whatisto

bedone?Shouldweseektosaveenergy,orconcentrate

onsearchingforalternativeresources?Andifweoptfor

thelatter,willthesebeenvironmentallyfriendlyalterna-

tives, such as biomass and solar or water-powered

energy,orwillthefocusbeonnuclearenergy?Clearly,

theenergyquestionconstitutesoneofourmostdaunting

challenges.Itisalsoclear,thatmuchhastobedone.And

thisisoneofthemainuncertaintiesweface,whichcould

An uncertain world:

the driving forces

2 Forthemorecomprehensivebackgroundstudies,see:

www.rabobank.com/kennisbank



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easilygiverisetointernationaltensions.Theseconside-

rationsapplynotonlytofossilfuels,butalsotoagreaterorlesserextenttootherminerals,metalsandnon-metals.

Some of these, such as lithium and phosphorus are

scarce,andarefoundinjustafewplacesgloballya

potentialsourceofconflict,ifnoalternativesforthese

commoditiescanbefound.

Challenges for the food and water supply

Thegrowingworldpopulationandtherisingaverage

standardoflivingmeanthat the foodsupply and the

availabilityofcleandrinkingwatermaybecomecrucial

factorsinthefuturedevelopmentofsocieties.Because

the rapidly growing global population is gradually

becomingbetteroff, theaveragediet isalsochanging.

Thisischieflyreflectedinincreasedmeatconsumption.

Animalhusbandryrequiresmorelandaswellasmore

water.Climatechangeisalsocreatingawatershortage.

In2030,it islikely thathalfoftheworldspopulation

willliveinanenvironmentofwaterstress.3Howisthis

toberesolved?Byjointlyseekinganefficientdistribu-

tionofproductionandusingnewtechnologicaldevelop-

ments?Orwillitbeeverycountryforitself?Thesearefundamentalquestionsthatdeterminethefuture.

Technological Developments

Thereisnodoubtthattechnologywillcontinuetoplay

an important role in society in the future. However,

technologicalinnovationsthatareinitiallyheraldedas

breakthrough developments often take longer to be

universallyembraced than expected.Afterall,westill

dont fly byhelicopter towork every day, contrary to

whatwasbelievedwouldhappenfiftyyearsago.Onthe

otherhand,twentyyearsago,peoplehadnotanticipated

thetechnologicalrevolutionoftheinternet.Whatwedoknowwithcertainty,isthatcommunicationandinfor-

mationtechnologyinparticularwillcontinuetoradically

change our world during the next twenty years. We

should also expect other breakthrough technologies,

which wewill not explore in detail here, butwe will

assume(insomeofour scenarios) that these innova-

tionswillbemainlyinthefieldofenergy.

Working differently with fewer people

Our productivity in twenty years time will largely

dependonhowtheabovetrendspanout.Therewillbea

lotoffactorsimpactingonthe labourmarket:popula-

tionageing,technologicaldevelopments,moreextensive

globaleconomicintegrationandsocietaldevelopments,

allofwhichwillinfluencehowandwherewewillwork

andhowandwhatwewillproduceinthefuture.Willwe

allbe on flexi-time?Will the trendof an increasingly

service-basedeconomycontinue?Orhavewereached

the limit in this respect?Will theNetherlandsstillbe

able to compete with other countries? And will our

population still be sufficiently well educated in thefuture?Theseareallquestionsthatneedtobeaddressed.

Two core uncertainties, four scenarios

Someofthe developmentsoutlinedaboveareunavoi-

dable. Others are very uncertain. What they have in

commonisthattheyareallimportantfactorsincreating

apictureoftheworld,Europeand theNetherlandsin

2030.Combiningallthesefactorsandissueswouldlead

toanendlessnumber ofpossible futureexpectations.

Thatisthereality.Soinordertocreateahandletoenable

3 AccordingtotheFoodandAgricultureOrganisation,waterstressoccurswhenthereislessthan1,700m3of

drinkingwateravailableperpersonperyear.Seealso:FoodandAgricultureOrganisation, Coping with water

scarcity, Challenge of the twenty-first century,WorldWaterDay2007.

Outlook2011 9


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someconsistencyindescribingpossibledevelopments,

wehaveoptedtomapourfutureprojectionsonanaxis:

twodimensionsonwhichtheabovelistedtopicspivot.

Thisproducesfourverydifferentscenariosfortheworld

of2030.Eachofthesereflectsthelimitsofwhatmight

bereasonablypossible.

The axes are designed to highlight processes and

developments, rather than focussing on the concrete

trendsandissues,asdescribedabove.Howthesetrends

and issues pan out will depend on the interaction

betweentheaxes.Theverticalaxisrepresentsthedegree

ofharmonyinwhichdevelopmentstakeplaceandhow

processes evolve. Harmony and conflict are the two

extremeson this axis. Harmony stands for a peaceful

society, consensus andcooperation.Conflict impliesa

morepolarisedsociety,witheachindividualforhimself

andlessemphasisoncollectiveinterests.

The horizontal axis represents the degree to which

developmentsandprocessesoccurgradually(orexplo-

sively):revolutionasopposed toevolution.Revolution

stands for rapid breakthroughs, extreme peaks and

troughs.Evolutionmeansmoreeven-keeledandlonger

lasting developments and processes. Thus the four

squares created by the axes form the basis for four

scenarios in 2030. The harmonious-revolutionarysquarecontainstheworldthatwedescribeasCapricious

Consent.This isa dynamic,uncertain,butharmonious

world where technological progress and the further

integrationoftheglobaleconomyplaypivotalroles.

Theworldin thebottomrightsquareis one ofmajor

conflictsandchanges.ItisaworldofAgile Antipoleswith

considerablepolarisationbothinandbetweencountries.

In thebottom leftsquare(Conflicting-Evolutionary on

theaxes)there isaworldwhich seems tobe stalling.

Lockedintoaneweast-westpolarisation,internationaldialogue fails to produce new solutions. We call this

scenarioSlow Strife.Lastly,abovethiswefind Flowingly

Forward,amoresustainableworldinwhichthesearch

forprogressisbasedonconsensus.

Using the scenarios

Becauseverylong-termdevelopmentsareshroudedin

uncertainty, scenarios are used to try tonavigate the

distantfuture.Theabovefourscenariosarenotintended

topredictthefuture,noraretheytheonlypossiblesitua-

tions for theworld, twenty yearsfromnow.However,

they are consistent possible scenarios, in which one

pictureisnotmoreorlesslikelytooccurthananother.

The scenarios have been created by making various

assumptions about the core uncertainties that are

central to the future issues being illustrated. The

assumptionsarewide-ranging,thereforeproducingfour

verydifferentscenarios,whichreflecttheconsiderable

degree of uncertainty involved. The scenarios thus

representthelimitsofwhatisreasonablypossible.

Theyaredesignedchieflytobeanaidtocompaniesinformulating strategic decisions, and to be used as a

referenceframeworkwhichlooksbeyondthedirection

of existing trends. Each scenario indicates where the

best opportunities might lie. Some of these may be

surprising.



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Figure 1: Core uncertainties and four scenarios

Harmony

Conflict

Evolution

Revolution

Flowingly Forward

Slow Strife

Capricious Consent

Agile Antipoles

Source: Rabobank

Outlook2011 11


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Multipolar world

United States of Europe

Economic interests central

Network economy

Technologcal breakthroughs

Energy crisis averted

Food supply assured through technology

Consent

Harmonious-revolutionary

This world is driven by primarily economic considerations. It is a multipolar

world, which means that more than two economic powers or countries exert

a major influence. Countries prefer to work together, because they realize that

this is the best way to further their interests. Changes take place explosively and

rapidly. Tensions are resolved in a harmonious manner and do not escalate into

large-scale conflicts.

Harmony

Conflict

Evolution

Revolution

Flowingly Forward

Slow Strife

Capricious Consent

Agile Antipoles

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A multipolar world

Theworldof2030willnolongerhaveaunipolarorder

inwhichtheinfluenceoftheUnitedStatesisdecisive

(endofPaxAmericana).Thiswillbeduenotsomuch

toaweakeningof Americaspower,butto therapid

rise of new players on the global stage. Thus the

economic,politicalandmilitarypowerwillbedivided

acrossanumberofstates(figure 2).In2030Chinawill

be the worlds largest economy. Beijing will have

implementedradicalpoliticalandeconomic reforms.

To the satisfactionof the United States and Europe,

Chinaswitched to a flexible exchange ratepolicy in2022. Itsneighbour, India, hassucceeded inpositio-

ning New Delhi as the political and cultural bridge

betweentheUnitedStatesandChina,whileBangalore

hasbecomeaglobalcentreofinformationtechnology.

ThestrongChineseeconomyisgoodnewsforJapan.

Tokyo is thereforekeen to invest in a goodpolitical

relationship with Beijing and greater access to the

Chinesemarket.Thisculminatesinafreetradeagree-

mentbetweenthesetwocountriesin2025.

Thankstoitspro-westerngovernment,inpowersince

2020, Russia has made a remarkable transition to

democracy,positioningitselfasthegrowthengineof

Eurasia andcentralAsia,andstrengthening itslinks

withEurope, and toa lesser extentwith the United

States.In2030Brazilisthefifthlargestoilproducerin

theworldandhasevolvedtobecomearegionalpower

player,havingorchestratedthepoliticalandeconomic

integrationofLatinAmericainthepasttwentyyears.

Thefocusofinternationalcollaborationisoneconomicissues.In2020anew,somewhatwatereddownworld

trade agreement was signed, but is bolstered by

far-reachingbilateralandmultilateralaccords.Regula-

tionofthefinancialsectorhasbeenkepttoaminimum

andischieflyaimedatcreatingalevelplayingfieldand

adequate safeguarding of client protection. In 2028

BaselIVissucceededbyBeijingI,becausetheBankof

InternationalSettlementshassincemovedtoChina.

Figure 2: The multi-polar world in 2030

Source: Rabobank

14 Fourfuturescenariosforbusinesses Capricious Consent


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The United States of Europe

TheindividualmemberstatesoftheEuropeanUnion

havereachedtheconclusionthatinstitutionalreform

and voluntary surrendering of their national

sovereigntyistheonlywaytoconsolidatetheirinflu-

enceontheworldstage.Thus thetransformationto

theUnitedStatesofEuropewas completed in2027.

Politically the Union is structuredasa federation: a

centralgovernmentheadingalargenumberofstates

thatarerelativelyindependent.TheEuropeanCommis-

sionhasbeenconvertedintoafull-spectrumgovern-

ment, carrying outEuropean policyon internationalaffairs, economic affairs and defence. TheEuropean

Parliament is a national house of representatives,

while the European Council is now the European

Senate.ThecreationoftheUnitedStatesofEuropehas

givenEuropeadegreeofpowerontheworldstagethat

matchestheeconomicweightoftheregion.Anincrea-

singnumberofcountriesareholdingtheirreservesin

Euros. In 2020, the United Kingdom, Sweden and

Denmark introduce theeuro. Three years later they

are followed by the Czech Republic, Poland and

Hungary.TheBalkanstatesjointheEuropeanUnionin

2025, followedbyTurkeyin2028.Negotiationswith

Ukraineaboutaccessionareinprogress (figure 3).

Energy crisis averted

Summitmeetingsbetween themajor powersdonot

longerfocusexclusivelyontradeagreements;bilateral

agreementsarenowbeinghammeredout about the

energy supply.The riseofbothChinaand Indiahas

exacerbatedtheglobalshortageofnaturalresources,putting pressure not only on the supply of oil and

naturalgas,butalsoonwater,importantmetalssuch

aszincandcopperandmineralssuchasphosphates.

Amid these problems, solutions will be found in

technology.Strategicallianceswillbeformedinorder

toinvestinexpandingtheexistingproductioncapacity

oftherelativelycheapoilandgasfieldsinRussiaand

theGulfregionaswellasdevelopingthedeepseaoil

Figure 3: The United states of Europe in 2030

Source: Rabobank

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fieldsoffthecoastofBrazil.Chinasgrowingneedfor

commodities has led Beijing to undertake an active

roleinWestAfrica.TheChineseareinvestingconside-

rablesumsinexploitingoilandgasresourcesoffthe

coastofNigeria.Anotherexampleisthemassexploita-

tionofshalegas,ofwhichtheUnitedStates,China,but

alsoPolandhave considerable reserves. Shale gas is

provingamajorcompetitortotheotherfossilfuels.

At the sametime,countries have adesire toreduce

their dependenceonenergy. Political leadersworld-widearerelyingon technologicalbreakthroughsand

onmarket forces to achieve this.Market effects are

contributing to a cleaner atmosphere, because the

harmful by-products of CO2 and other greenhouse

gasses are fully factored into pricing. Technological

laggardsaredependentonthetradeinCO2emission

rights andcanbarelykeep their heads abovewater.

Against this background, the importance of nuclear

energyingeneratingelectricityhasgrownto25%by

2030. Thanks to technological advances, the predic-

tionsofareducedandvastlymoreexpensiveenergy

supply by 2025 have remained unfulfilled, and the

fearedenergycrisishasbeenaverted.

Safeguarding the food supply through technology

Becauseof thegrowingworldpopulation, combined

witheconomicprogress,notonlyisdemandforfood

rising,butthetypeoffoodsoughtischanging,dueto

dietary modification. Since there is little scope for

increasingthewatersupplyaswellasthelandavailable

forfoodproduction,thefocusisshiftingtothesecondgeneration of geneticallymodified crops, which can

usethescarceinputfactorsmuchmoreefficientlythan

existing varieties. The food strategy, especially of

countries and regions with a low level of self-

sustenance, such as China and the Middle East, is

characterised by bilateral agreements and strategic

allianceswithlarge-scalefoodproducersconcentrated

in Latin America. This strategy will strengthen the

south-southtrade flows at the expenseof the tradi-

tionalnorth-southtradeinfoodstuffs.



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In the heat of competition

For companies, Capricious Consentmeans a highly competitive environment, but one that

contains many opportunities. Labour, raw materials and capital are plentiful, putting new

investment opportunities within the reach of many. It will be essential to operate efficiently

and flexibly. The commercial services sector is growing prolifically, while the agricultural

and industrial sectors have to contend with strong international competition. However, the

added value of these sectors continues to rise, because they produce high-quality products

and knowledge and they serve niche markets.

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Figure 4: Many opportunities for companies

The surface area indicates the extent of the opportunities contained in

the dimensions that determine the environment of companies. The

higher the score on a specific dimension, the greater the opportunities

or the smaller the constraints.

Source: Rabobank

Labour: flexible and diverse

In2030thelabourmarketwillbemuchmoreflexible

andloose than iscurrently thecase.This isvirtually

inevitable in a world in which economic interests

demand the integration of economiesworldwide and

wheretechnologicalinnovationsaretakingplacerapidly

and explosively. With a social security system that

encouragesareturntowork,long-termunemployment

willdroptominimallevels.Employeeswillalsochange

jobsoften.Theeraofpermanentcontractsisover.The

employeeisanentrepreneurandmaychoosetowork

forvariouscompaniessimultaneouslyfortheduration

of a project. Self-sufficiency is essential,while attach-

menttoasinglecompanywillbelessimportant.Peoplesincomeswilllargelyconsistofresults-basedremunera-

tiononanindividualbasis.

Thelaboursupplyin2030willdifferinmanyrespects

fromthecurrentsituation.Thedownscalingofcollective

benefitswillcontributetowardsinducingolderpeople

intheNetherlandsandEuropetocontinueworkinguntil

the age of 70. By comparison, the pensionable age in

Japanhasbeenraisedto75.Besidestheelderly,women

areenteringthelabourmarketingreaternumbers,and

theyaremorehighlyeducated.Insteadofworkingpart

time,morewomenareworkingfulltime.Thankstothe

processofinternationalisation,expansionoftheEUand

theaccompanyingfreemovementoflabourandrelaxed

immigrationpolicy, the laboursupply in2030will be

culturallymore diverse than is now the case. In this

scenario,theeffectofpopulationageingon thelabour

supply is more than compensated for by the rise in

labour force participation and the accompanying

broadeningofthetaxbase.

Two decades fromnow, half of theworkforce will be

employedmainly in thehigh-tech sector, ICT, accoun-

tancy and finance. In this scenario, highly qualifiedemployeeswilltraversetheglobeandonaccountofthe

strengthoftheeconomytheywillbeingreatdemand

butinshortsupply.Atthesametime,therewillbeconsi-

derable private investment in human capital, because

thereturnsgainedfromeducationwillbeconsiderable,

duetothewidediscrepancyinincomes.

Cheap raw materials and financing

Theshortageofrawmaterialswillnotbeaproblemfor

Dutchcompaniesin2030.Atthesametime,theinvest-

mentinreducingthematerialsandenergyrequiredfor

productionwill reap rewards,asnot onlyoutput,but

also the transport of goods can takeplace atamuch

lowercost.

The complete liberalisation and globalisation of the

financialmarketsinthisscenariomeanstherewillbeno

limitson capitalmovement between countriesConse-

quently,companiesandfinancialinstitutionscanchoose

thecountryandcurrencyinwhichtheyseektoborrow

orinvestmoney.Thelargerandmoreaccessiblemarketswillpermittheuseofmoreprofitableinvestmentoppor-

tunities, irrespectiveof their location.Asa result, the

shareofbankcreditinthetotalfinancingofmedium-to-

large Dutch companies will decline from over three-

quartersnowadaystoalittleoverhalfin2030.

Thesearchforaccesstoknowlegeandnewtechnologies

willleadtoanever increasingflowofcapital fromthe

emergingeconomiestotheWest.Besidesinvestmentin

thenationaleconomy,considerableinvestmentwilltake

placegloballyviasovereignwealthfunds.Consequently,



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the management of many Dutch companies will be

decidednotonlybyAmericanandEuropeaninvestors,

but increasingly also by investment companies in

Moscow,BeijingandNewDelhi.

A world of unlimited possibilities

This dynamic world is driven primarily by economic

considerations.Theriseofnewglobalpowersgoeshand

inhandwiththeemergenceofnewinfluentialcompa-

niesandnetworks.Twentyyearsfromnow,thesewill

havematured into true competitorstowesternenter-

prises.Thus,theamountofcompetitivepressurefeltbycompanies in this scenario will act as an incentive

towards improving efficiency and will force them to

continuallyupdatetheirtechnologyandorganisational

methods.Becausetechnologicalprogressistakingplace

atsuchafastpace,thisrequiresalargedegreeofflexibi-

lity,anefficientorganisationofICTprocessesandhigh-

qualityhumancapital.

Progressivespecialisationmeansthattasksoractionsin

aproductionchainofagrowingnumberofproductswill

increasinglybedividedup andspread throughout the

world. Thanks to improving communications techno-

logyandrelativelylowtransportcosts,locationwillno

longermattersomuch.SchipholairportandRotterdam

portaremajorjunctionsfortheinternationaltransport

ofbothpeopleandgoods.Atthesametime,anenormous

consumermarketisopeneduptoDutchinternationally

operatingcompanies.Betweennowand2030,overone

billionChineseandIndiancitizenswilljointheimpor-

tantmiddleclassconsumergroup-doublethecurrent

number.

With theblurringofnational borders, theboundaries

between companies are also being eroded. In 2030

companiesandemployeeswilloperateinanumberof

globalnetworksofbusinesses,researchinstitutionsand

suppliers,inordertoobtainmaximumbenefitfromthe

informationandknowledgefromthedifferentorganisa-

tionsinthenetwork.Largecompaniesthatdontsucceed

in linking into theglobal networks they needwill not

standachanceinthisscenario.

Structure of the economy

In Capricious Consent the Dutch economy is growing

rapidly, ata rateofapproximately3%annually, albeit

withlargefluctuations.Thisgrowthrateiscomparable

tothatofthe1990s,andcanbeattributedtoaflexible

labourmarket with a relaxed (knowledge) immigrant

policyandstrongtechnologicaladvancement.Substan-

tialglobaleconomicintegrationreinforcesthistrend.

Growthintheagriculturalsectorislaggingbehindthat

intherestoftheeconomy.Asagainsttheliberalisationof

tradeandtheopeningupofnewsalesmarkets,therearespatial limitations that threatentocurbthe growthof

thissector.Thediscontinuationofsubsidiesinthewake

of reforms to the common agricultural policy of the

European Union and its further expansion likewise

cause agriculturalactivitiestoshift totheeast. Dutch

agribusiness in this scenario playsa chiefly European

pivotalroleintheareaofmarketinganddistributionof

market garden anddairyproducts,qualityproduction

and high-endknowledge and innovation. Accordingly,

Figure 5: Employment and labour productivity by sector

in 2030

The size of the balls in the figure indicates the size of the sector in

terms of added value. This added value is determined by the deploy-

ment of labour and capital. The X axis represents the average change

in labour productivity per annum in the 2010-2030 period. The Y axis

indicates the average annual change in employment in the 2010-2030

period.

Source: Rabobank

Outlook2011 19


20/56

thesectorwillundergoafurthershiftfromproduction

toservices,as hasbeen thecaseacross theboardfor

some time.Although thebiobased economyhasbeen

gaining importance globally, the Dutch agricultural

sectorwillonlybenefitfromthistoalimitedextent.The

governmentdoes not envisage a role for itself in this

area.Onaccountofthecontinuingabove-averagerisein

labour productivity, employment in the agricultural

sectorwillhavedroppedbysome20%by2030(figure 5).

Inthisscenario,itistheindustrialsectorthatismost

exposed to international competition. The process ofoffshoringandoutsourcingamajorpartofproduction

throughoutthewholeworldwillcontinueunabated.The

risingstandardoflivingworldwidewillleadtogrowing

consumptionofluxurygoods,whiletheconsumptionof

necessary goods - often industrial products - will lag

behind. As in the past, this sector will undergo a

metamorphosis during the coming decades. In 2010,

Dutchindustrywillconcentratemainlyontheproduc-

tion of high-end goods andwill concentrateonniche

markets. The cross-border urban triangle of Lige-

Maastricht-Aachen will specialise in advanced nano-

technology.Theindustrialsectorwillcontinuetogrow

intermsofaddedvalueatarateof2%annually.However,

employment in the sector will decline as a result of

stronglyrisinglabourproductivity,partlythankstoICT

applicationsandrelativelycheapfinancing.

Inthisscenario,thenumberofhouseholdsintheNether-

landswillincrease,albeitataslowerpacethanpreviously.

This is partly a consequence of labour migration. The

continuinggrowthwill feeddemandforhousing,whichwill benefit the construction sector. Despite the high

economicgrowthinthissector,demandforofficespace

willbelowin 2030.Combinedwitha fairly low rise in

labour productivity, employment in construction will

increasesomewhat.Inaddition,thenumberofcompanies

operatingin thissectorwillincrease.Thetrendthathas

becomeapparentinrecentyears(self-employedworkers

whohireouttheirservices)willcontinue.

The services sector will growprolifically in Capricious

Consent.Communicationservicesandtransportarerapid

growers,asareservicesrelatedtoknowledge,suchasin

the area of technology and agricultural technology.

Demand for services will increase thanks to ongoing

globalisationandthefactthattheNetherlandsismoving

furtheruptheproductionchain,aswellasrisinggeneral

affluence. The more affluent an economy, the more

demandshiftsfromgoodstoservices.Thewidespreaduse

ofICTwillimprovelabourproductivityinthetransport

sector and communication services in particular. This

means the rise in employment in serviceswill be lessprolificthanthatof the addedvalue. Inthissector, the

numberofbusinesseswillgrowstronglyasaresultofthe

networkeconomy(figure 6).

Figure 6: Development of the number of companies

by sector

Source: Rabobank

At20%,employmentgrowthwillbelargestinthehealthcaresector.Becausehealthcareiscarriedoutmainlyby

people,itisdifficulttoachievegreaterproductivityinthis

sector.Consequently,more thanhalf ofallnew jobs are

createdinthissector.Demandforlong-termcareinparti-

cular will increase in this scenario, due to population

ageingandtechnologicaladvances.Becauseoftheprolific

growthinaffluence,householdswillhavesufficientmeans

topayforcare.Asagainstrisingexpenditureonhealthcare,

savingswillbemadeintheareaofadministrationcostsas

aresultofadownscalingofthewelfarestate.



21/56

Few companies have updated and adapted themselves to changing

circumstances as much as DSM. The companys history dates back to

1902, when the Dutch State Mines were founded. Coal gas is a by-productof the coking process, when large quantities of coal gas are released. DSM

makes ammonia from these gasses, which is a chemical feedstock for the

production of nitrogen fertilisers. This was the first step in a diversification

process that ultimately meant that the company successfully survived the

closure of the coal mines. After the Second World War, DSM exploited the

growing interest in synthetic materials with its production of industrial

chemicals and raw materials for synthetic fibers and threads. When the

last state mine closed down in 1975, the company rapidly switched its

focus. In 1989 DSM was floated on the stock exchange.

In the 1970s and 80s, DSM implemented organisational changes in order

to realise adequate scale, more guaranteed sales and diversification in

high-quality synthetic materials and fine chemicals. In the 1990s we

sought to find a better match between research output and market

requirements; we then shifted our focus to developing products with a high added value: products for

the pharmaceutical and food industries and high-end synthetic materials for the automobile and

transport industries, electro-technology and the electronics sector. Every three to five years we hold a

Corporate Strategy Dialogue, in which over 50 people meet to map the future direction of DSM. We

also conduct interim evaluations to ascertain whether the strategy is still correct, or whether

adjustments should be made. The world is constantly changing and it is important to anticipate these

changes. In executing our strategy for 2010, DSM underwent a rapid process of internationalisation,both in the area of personnel and in the field of production activities. In 2007, we accelerated the

processes of conversion to Life Sciences and Material Sciences, and for the coming years we have a

strong focus on growth. This focus majors on three global trends: Global shifts in population

concentrations and new technologies, especially in the communications industry; Climate and Energy;

and Health and Wellness. Our evolution would not have been possible without vision, the willingness

to change, a highly innovative capacity, a strong focus on the changing requirements of our clients and

our deeply embedded roots in society.

Hans Vossen (DSM)

You have to constantly

anticipate change

Outlook2011 21


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23/56

Antipoles

Conflicting-revolutionary

International tensions are running high. There are hotbeds of strife all over

the world. Some of these concern ethnic or religious issues, but also the scarcity

of natural resources is leading to conflict between countries and regions.

Protectionism is the order of the day. The European Union has fallen apart,

and the world lives in a continuous state of distrust, high alert and fear.

Strict security measures are deemed essential. The gap between incomes is

large, and because technological advancements are not being shared, there

is fierce competition on the technological front.

Fragmented world

Euro era over

Fragmented markets

Scarcity of resources leads to

technological breakthroughs

Self-sustenance a priority

Harmony

Conflict

Evolution

Revolution

Flowingly Forward

Slow Strife

Capricious Consent

Agile Antipoles

Outlook2011 23


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A chaotic world

Theglobalfinancialcrisisof2008/2009leftalegacyof

internationalcurrencywarfare,awaveofshort-sighted

protectionistmeasuresandtradeboycotts.Thefinancial

worldislocalisedandvolatile.Globallyalargenumber

ofbankshavebeennationalised,whiletheinternational

capitalmarket hasbeen reduced toregionalmarkets.

Theglobaleconomyhasenteredadownwardspiral.In

2018theWorldTradeOrganizationwasdisbanded,and

emergingeconomieshaveexitedfromtheWorldBank

andtheInternationalMonetaryFund.In2023theUnitedStatesgovernment isdeclared officiallybankrupt, and

the country loses ground in economic and political

weightandimportance.Theeraofthedollarasareserve

currency is over. However, an alternative has not yet

emerged,sinceeventheeuronolongerexists.

Inasimultaneousdevelopment,tradeboycottsandthe

closureofthemainexportmarketsinthewesternworld

hamperthe riseofnewpowers.Butthe failureofthe

lattertoimplementpoliticalandsocio-economicreforms

isalsoholdingthemback.TheChinesegovernmenthas

itsworkcutoutincontainingsocialunrestthroughout

thecountry.ThestreetsofBeijingarefullofmillionsof

protestorsonadailybasis,andanti-westernsentiment

is spilling over. The Indian government, on the other

hand,isstrugglingwithrisingpoverty(figure 7).Alarge

numberoffactoriesinthesub-continenthaveceasedto

operate and many former engineers are reduced to

workingapatchoflandoutsidethecity.Russiaiseffecti-vely bankrupt and is torn by corruption and ethnic

tensions.The country is headed for a newdictatorial

regime.InLatinAmerica,Venezuelansocialismissprea-

dingtoothercountries,eruptinginclassstruggles,parti-

cularlyinBrazilandArgentina.Inthisscenario,Africais

likewise the scene of conflict over access to scarce

natural resources. Nigeria is now the fifth largest

supplierofoiltotheUnitedStates,whileChinaisalso

tryingtogaininfluenceintheWestAfricanstate.

Figure 7: A world seething with conflict

Source: Rabobank

24 Fourfuturescenariosforbusinesses Agile Antipoles


25/56

Euro fairytale over

TheEuropeanEconomicandMonetaryUnionfellapart

in2025.TheMediterraneaneurocountrieswereforced

byseverefinancialproblemstoleavetheeurozoneand

introduce their own currency: the medi (figure 8).

Irelanddecidestore-introducethepoundsterling.The

fragmentationandpoliticaldisintegrationmeansanend

totheEuropeanUnion.Theresultisabank-run,particu-

larly in thenewmedi zone,anunprecedentedlossof

both confidenceandaffluenceandanaccumulationoftensions.EuropeanUnionmemberstatesinCentraland

EasternEuropedriftfurtherfromtheUnionandfocus

theirattentionincreasinglyoncollaborationwitheach

other.TheNorthernEuropeanstatescontinuewiththe

euro and try as best they can to bolster economic

relationsintheirownregion.However,thepositionof

Europeancountriesisweakenedbypopulationageing

andthefailuretoimplementnecessaryreforms.Europe

closesitsborders,inordertoprotectitssocialsecurity

Figure 8: Monetary union disbanded by 2030

Source: Rabobank

Virtual escape

Besidesthedivisionbetweenthehavesandthehave-

nots-chieflydeterminedbygeographicalboundaries

- the gap iswideningwithin countries between the

connected and the disconnected. Where physical

barriers are increasingly difficult to overcome, the

virtual world reigns supreme. This is driven not so

muchbycommercialmotives,butmorebyescapism:

highly educated young peopleofgenerationZ (born

between1994and2012approximately)areescaping

thehardrealityoflifeandoptingforavirtual,parallel

life,wheretheyenjoygreaterfreedomandhavemore

control over their existence. Building on the many

socialnetworks,theycreatecompletevirtualsocietiesfor generation Z members throughout the world.

Communicationisnotaproblem,thankstotheavaila-

bility of excellent translation programmes. Yet this

escapism has its limitations.Thevirtual economy is

constrainedby thephysical boundariesofthe tradi-

tionalworld.Moreover,variousgovernmentswilltry

tocurtailthepowerofthisvirtualworld,resultingin

anunproductiverivalry:newsecuritytechnologiesare

soonhackedinto.

Outlook2011 25


26/56

andthe economy.This leads togrowingtradeconflict

betweenthetwocurrencyzonesaswellastoacoolingof

therelationshipwiththeUnitedStatesby2030.

Scarcity of natural resources: impetus for technolo-

gical breakthroughs

Thereislittlefocusinternationallyonlongtermcross-

border issues, such as safeguarding energy and the

depletion of natural resources. The energy supply is

becoming increasingly uncertainandtheprice of raw

materialsis soaring. Inorder toreduceenergydepen-dence,westerncountriesinparticularareinvestingin

energy-saving technologies and alternative energy

sources, such as bio fuels, with the desired results.

Governmentinterventionisconsiderable.Public-private

partnershipsandsubsidies onenergy-savingproducts

support this trend. Investment inbio fuels pushesup

foodprices,exacerbatingtheinstabilityinanumberof

Africancountries.SomeAsianeconomiesareinvesting

chiefly via sovereign wealth funds in resource-rich

African countries, in exchange for natural resources.

Governmentsarekeepingalidonthepriceofstrategic

resourcesviapriceregulationandsubsidies.

Self-sustenance a priority

Owingtothelackofinternationalcoordination,countries

havedevisedtheirownfoodstrategyandpolicy,focusing

onachievingastableinternalfoodsupplyandlikewise

stabledomesticfoodprices.Negativeeffectsofthefood

strategy caneasily bepassedonexternally. Countrieswithalowlevelofself-sustenance-includingChinaand

the Gulf States - have undertaken large-scale food

productionfortheirownpopulationinothercountries.

Thus Chinesecompaniesare active intheagricultural

sectorinMozambiqueandNamibia.Thisleadstorising

tension and increased protectionism on international

agrimarkets.



27/56

Business in chaos

For companies, theAgile Antipoles scenario is a question of survival. Dutch companies will

be hit unprecedentedly hard by a combination of major international tensions, division

within the monetary union and protectionism. Domestic demand has stagnated,

international markets are inaccessible, the energy supply is uncertain and capital markets

are fragmented and highly volatile. Private investment is R&D is negligible, the government

stimulates investment in the high-tech industry. The commercial services sector is shrinking,

while agriculture and industry are showing some limited growth, because domestic demand

for these products has not entirely fallen away.

Outlook2011 27


28/56

Figure 9: Tough times for companies





Source: Rabobank

Demand for labour is limited

The trend towards deglobalisation, combined with

majorinternationaltensionsandthedisbandingofthe

eurozonewillinflictheavydamageontheopenDutch

economy with its internationally oriented business

sector. Consequently, demandfor labourwill contract.

However, because the expected shift of industrial

productiontolow-incomecountrieshasnottakenplace,

norhavetheagrimarketsbeenthrownopen,thedecline

indemandforlow-qualifiedlabourintheworldof Agile

Antipoles will be lessmarked than in the other three

scenarios.At thesame time, owing to the substantial

downscaling of social security, the labour supply willincrease,particularlyamongolderpeopleandwomen.

The pensionableage in 2025will be 70years in the

NetherlandsandEurope.Andalthoughthisishigh,itis

stillfiveyearsyoungerthaninJapan.Ontheotherhand,

the increasing labour supplywill be curtailed by the

discouragedworkereffect,whichmeansitwillbeless

marked than in Capricious Consent. The long-term

unemployment rate will be high. Ultra short employ-

mentcontractswillbeamainfeatureofthejobsmarket.

Assoonasajobisdone,employeesaresetaside.Once

they have found themselves on the sidelines of the

labour market, many people will fail to re-enter the

employmentprocess.Thisisthedownsideofeconomic

flexibilisation:jobsarescarce,socialsecurityislimited

and many workers are the victim. The difference

betweeninsidersandoutsidersonthelabourmarketis

considerable.Thedisbandingofthemonetaryunionhas

alsoputanendtothefreemovementoflabour.Thisis

particularly disadvantageous for highly educated

workers. Immigration is also subjected tomore strin-gent regulation, which means that the inflow of

knowledgemigrantswillbevirtuallyzeroin2030.Asa

resultoftheabovedescribeddevelopments,combined

withpopulationageing,participation intheworkforce

willbelowerin2030thanin2010.Inthisscenariothere

islessinvestmentinhumancapital,becauseofalackof

publicfundsandalowexpectedprivatereturn.

Natural resources and capital: no more plenty

Inthisscenario,accesstonaturalresourcesisbecoming

increasingly uncertain,with soaringprices asa result

andhencealsohigherproductioncosts.Thiswillonlybe

partlyoffsetbymoreefficientuseofenergy,thanksto

substantialgovernmentinvestment.

Because of widespread protectionism, international

capitalflows-insofarasthesestillexist-aresubjected

tostrictregulation.Thedisappearanceofthecommon

currencyhasputanendtotheintegrationof financial

marketswithintheeurozone.Moreover,banks,especi-

ally in the new medi-zone are confrontedwithmasswithdrawalsofsavings.Thiswillhaveaknock-oneffect

ontheavailabilityandcostoffinancingforthebusiness

sector.Notonlywillnewopportunitiesfor profit then

disappear,butthediscipliningeffectoftheinternational

capital markets on company management is lacking.

Althoughthelendingcapacityofbankshasbeenseverely

reduced,companieshavelittlealternativebuttooptfor

thetightenedandmorecostlybankfinancing.



29/56

Closed doors everywhere

With uncertainty abounding and costs soaring, the

globalisation of production processes has ceased. In

someplacestheoppositedevelopmentistakingplace:

wheregovernments consider productionprocesses to

be vital, instead of being internationalised, these are

subjected to national regulation. Protection of vital

companiesviastate support and legislation is increa-

singlycommon-evennationalisation.Thisismostoften

thecaseamongcompaniesthatsupplyelectricity,water

and food, as well as telecommunications companies,airlinesandbanks.

The tensions between regions and countries have

induced internationally operating enterprises to

withdraw from unsafe areas and abandon both sales

markets and production locations. In fact, in this

scenario,therewillbelotsofsmallercompanies,because

ofthelackofbothmajorinternationalcompetitionand

an international playing field. Furthermore, domestic

demandwillstagnate,whilenewmarketsremainclosed.

These smallerbusinessesare oftenpart ofa network

thatseekstoprofitfrompoolingtheavailableknowledge

andproductionchain.

Despite,orperhapsbecauseoftheconsiderableuncer-

taintiesand volatility, technologicalprogress is relati-

vely strong. Yet technological breakthroughs are

unbalanced, are mainly government driven and take

place chiefly in the area of bio and nano technology,

energy and advanced computer technology. New

developmentsareoftenborn fromfear andsuspicion.Overtime,manyoftheseinnovationsonlyreachcompa-

niesthathavegoodgovernmentconnections,withclien-

telism playing a prominent role. Thus a level playing

fieldforcompetitionisfarfromthetruth.Alackofinter-

national cooperation hampers the exchange of

knowledgeand the implementationof foreign innova-

tions. Likewise, the fragmentation of global markets

means the returns from these innovations are disap-

pointing.


In this scenario, theDutch economywill struggle.On

balance,therewillbenoeconomicgrowthby2030,with

theinterveningperiodconsistingofalternatingperiods

ofgrowthandcontraction.Thestagnationof interna-

tional trade and the disbanding of the eurozone will

haveleftanegativelegacyforDutchcompanies.

For industry and agriculture, this may contain some

opportunities, but only in theabsence ofbetterones.

Accordingly, the agricultural sector will encounterreducedcompetitionon thedomesticmarket,butwill

havelittleornoaccesstonewmarkets.Thesamewill

apply to industry, with virtually no opportunities for

development in growthor nichemarkets. Thepartial

collapseoftheeurozonewillnothelp,needlesstosay.As

opposedtothis,outsourcingorrelocatingofproduction

will proceed slowly inAgile Antipoles.However, partly

thanksto publicinvestment,energy-saving technology


in 2030






period.

Source: Rabobank

Outlook2011 29


30/56

will advance, which will be to the benefit of Dutch

chemicalandhigh-techcompanies.Onaccountofthese

opposingforces,growthwillbeslightinbothindustry

and agriculture. And employment will fall in these

sectors, owing to the above average rise in labour

productivity (figure 10).

For agriculture and industry it is partly a long-term

process of re-evaluating core activities, given the

changingenvironment,bothnationallyandinternation-

ally. Entrepreneurs who succeed in completing thetransformation process as well as companies with a

trustworthyimagewillbetheonesthatdowell.Trustis

keyinthisscenario.

Apartfromtheagriculturalandindustrialsectors,there

will be some limited growth in the healthcare and

government sectors. Population ageing is the main

reasonforgrowthinhealthcare.Becauseoftheoverall

lackofeconomicgrowthinthisscenario,therearelittle

meansavailabletostimulatequalityimprovementand

technologicalprogressinthissector.Inaworldwhere

conflict,fearanddistrustprevail,governmentspending

on security will rise. Employment will increase

somewhatinareassuchasdefence,policeandlawenfor-

cement(figure 11).

Theproblemsfacingtheconstructionindustryareofa

much largerscale.With thepopulationoftheNether-

landsindecline, thenumberofhouseholdsfallingand

littledemandfrombusinessesfornewbuildings,times

willbetoughfortheconstructionsector.Littlesupport

canbeexpectedfromthegovernment.Consequently,the

sector will contract significantly, with a considerable

shake-outintheworldofcontractors,particularlyinthe

areaofcommercialrealestate.

The commercial services sector will also undergo

contraction inthis scenario - anunprecedentedsitua-

tioninthepost-warperiod.Thiswillbe largelydueto

limiteddomesticdemand(puttingpressureontheretail

trade)plusthelackofanexternalgrowthimpulse.The

only business to show growth in this sector will be

communicationstechnology.

Figure 11: Employment development by sector

Source: Rabobank



31/56

CheapTickets.nl is a business venture of the Beins Travel Group which

was originally set up in 1971 in the Dutch city of Oosterhout and was

taken over in 1996 by Lex Beins and Ton Berends. While the majorityof travel agencies opted to expand by opening offices in various

cities, the Beins Travel Group decided to concentrate its expertise in

one location and to explore other growth opportunities. Since 2001

the company has been selling tickets online. With the Internet

making huge advances, Beins wholeheartedly embraced the new

concept.

In 2006 we realised that if we wanted to be a big player in the

market, we would have to make significant investment. It was all or

nothing. We invested all our profits in a marketing campaign, in

order to gain as much exposure as possible within a short period: ads

on radio and TV, billboard posters along the motorway. Flexibility is a

key factor in this story. It is important to be able to act and respond

promptly as situations develop. Selling airline tickets was a conscious

decision. It is a straightforward product - the price of every airplane seat can be compared - and it

is a market with an upside. Because online ticket sales are booming, the entire organisation has

changed. We used to have lots of staff working behind the counter; now there is a complete call

centre, and even a branch in Curaao to facilitate evening calls. When things were going well in the

Netherlands, we explored possibilities for expanding abroad. The first place we looked at was

Germany. However, as we know, a good football club in the Netherlands will not necessarily be a

success in the Champions League. Germany was lagging behind in internet connections andonline payment systems - two essential pre-conditions for selling online tickets. In 2008 we beefed

up our team with a new CEO: Raymond Vrijenhoek. Its his job to keep the team together and to be

in charge of communication, so that Ton and I are free to engage in scouting activities and explore

more countries - to become true Champions League players.

Lex Beins (CheapTickets.nl)

It was all or nothing

Outlook2011 31


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33/56

Strife

Conflicting-evolutionary

Slow Strife is a bipolar world. As in the last century, tensions abound between

East and West. However, now it is China and the United States that oppose each

other. International organisations such as the International Monetary Fund and

the United Nations continue to be dominated by the West. The arms race has

evolved into rivalry over economic sanctions and strongly protectionists

measures. Regionalism has become the norm. It has become impossible to avert

the energy crisis. There is an increasing shortage of food and clean drinking

water, and the gap between rich and poor, as well as between the generations is

widening. Amid interminable discussion, these opposing forces lead to

long-term stalemate situations

Bipolar world

Europe: status quo unchanged

Free trade stagnates

Technological progress limited

Food certainty a priority

Harmony

Conflict

Evolution

Revolution

Flowingly Forward

Slow Strife

Capricious Consent

Agile Antipoles

Outlook2011 33


34/56

Regionalism the norm

From the 1950s through the 1980s itwas the United

States and the SovietUnion that opposed each other

menacingly during theColdWar. Half a century later,

historyisrepeatingitself,albeitwithChinanowfacing

downtheUnitedStates.Thewesterneconomicsystem,

basedonmarketmechanismsis opposedbythe state

capitalismofnewglobalplayers (figure 12).TheWest,

andinparticulartheUnitedStates,isreluctanttoshare

itsinfluentialpositionwiththenewcomers.Theformer

cannotbereliedontosupport thenecessaryreformswithininternationalorganisationssuchastheInterna-

tionalMonetaryFund,theUnitedNationsandtheWorld

Bank,requiredtomakeroomfornewworldpowers.In

2030theworldislookingbackontwolostdecades.

Asiancountriesareinvestingincreasinglyinstrengthe-

ning political and trade links with the surrounding

countries. Easternization is an increasing trend.The

maincurrentofglobalizationhasunleashedanopposing

currentofindividualityanddiversity.In2018theAsian

TradeOrganisation issetup inBeijing, andthe Asian

EconomicRegionis a fact. China,RussiaandtheGulf

StatesformtheglobaleconomicspacewithDubaiand

Dohaasmajorfinancialandtransporthubsintendedto

competewithNewYorkandLondon.Scarcelytwoyears

aftertheAsianTradeOrganisationhasbeenformed,the

AsianSecurityCouncilissetup-acounterparttotheUN

Security Council - for thepurposeoftackling security

issuesintheregion.Becausethesecuritycommitment

oftheUnitedStatesintheregionhasweakened,Japandecides to seek collaborationwith Beijingconcerning

regionalsecurityissues.

Intheabsenceofaworldtradeagreement,international

freetradeinagriculturalproductsandservicesfailsto

getofftheground.Bilateralagreementsarereached,but

tradebarriersremaininplacebetweentheEasternand

Westerntradeblocks.Thereisadearthofagreements

on issues such as environmental and climate policy,

Figure 12: The world divided into two trade blocks

Source: Rabobank

34 Fourfuturescenariosforbusinesses Slow Strife


35/56

intellectual property rights and capital movement,

whichleadstoacounter-productiverivalryinlegislation

andregulationbetweenbothtradeblocks.

European Union: status quo unchanged

TheroleoftheEuropeanUnioninthisbipolarworldis

relatively small. The bureaucratic and untransparent

approach taken by Brussels in reaction to the global

financialcrisisof2008/2009hasfurtherstrengthened

themember states in their resolvetohold onto their

sovereigntyandconcedelesspower.Moreover,economicintegrationwith theEasternEuropeanmemberstates

andfurtherdeepeningoftheinternalmarketarefraught

with difficulty (figure 13). Expansionof theEuropean

Unionhasbeenhalted.Atthesametime,thenorth-west

of Europe is intensifying its trade relationswith the

United States.Far-reaching bilateral liberalisationhas

resulted in a new transatlanticmarket without trade

barriers.Consequentlythereis growthin thetradeof

servicesinparticular,aswellasgreaterlabourmobility;

however, a lack of reform ispreventing theEuropean

economyfrombeingsufficientlycompetitiveandflexible

to fully benefit from this development.TheEuropean

financialsectorisalsosubjecttomorestringentregula-

tioncomparedtotheUnitedStates.Encouragedbythe

strengtheningofthetransatlanticmarket,north-western

Europeinparticularfindsitselfleaningpoliticallymore

andmoretotheUnitedStates.

The energy crisis is a fact

Accesstonaturalresourcesisseverelyhampered.Inandaround the year 2030 three-quarters of oil and gas

reservesworldwideare located inpolitically unstable

regions. The problems are not only of a geo-political

nature, butarealsorelated todifficultiessurrounding

thenecessary(coordinated)investmentintheexplora-

tion and exploitation of new energy fields. For this

reason,thereisinsufficientinvestmentinthedeep-sea

fields of Latin America and in expanding theexisting

capacityinRussia.TheEasterntradeblockhasmanaged

Figure 13: Split within the European Union

Source: Rabobank

Outlook2011 35


36/56


37/56

Between a rock and

a hard place

A shortage of labour, an energy crisis and a fragmented capital market. These are tough

times for businesses. Trade between two power blocks is hampered by inefficient

regulation. The transatlantic market offers only some compensation. Although company

investment in R&D is negligible, the rivalry between the two power blocks is a catalyst for

development in the arms industry, space travel and medical technology. Production in the

agricultural and industrial sectors is more or less stable, while commercial services show a

fluctuating development.

Outlook2011 37


38/56

Figure 14: Limited opportunities for companies





Source: Rabobank

Sluggish labour market

In a bipolarworld,with a clear divisionbetween the

eastern and western trade blocks, North-Western

Europe,includingtheNetherlands,strengthensitstrade

relationswiththeUnitedStates.Thistransatlanticcolla-

boration results in higher employment potential and

greater labour mobility than for instance in Agile

Antipoles. But because the government has failed to

addressitssoftsocialpolicyandmakethelabourmarket

moreflexible,thereislessgrowthinthelaboursupply,

especiallyofolderpeopleandwomen.Accordingly, in

thisscenario,thepensionableageonlyreaches68years

in2050.ThefailuretoimplementreformstotheDutchlabourmarketmeansthatitisdifficulttocombinework

and private life (financially). Consequently large

numbersofwomenopttoreducetheirworkinghoursor

toleavetheworkforcealtogether.Theinfluxofmigrant

workers is insufficient tocompensate for thegrowing

shortageoflabour,particularlyinthepublicsector,and

moreoverleadstotensionsinsociety.Inthisscenario,

thereisgreaterinvestmentineducationthanisthecase

in Agile Antipoles because government spending is

higherandtheexpectedprivatereturnsofextraschoo-

lingaregreaterinaclimateofslightlybettereconomic

growth.

Energy crisis and fragmented capital market

Access to natural resources is limited, both for

geo-politicalreasonsandonaccountofalackofcoordi-

nated investment. Using cheap coal is thealternative.

Nonetheless,productionandtransportcostsarerising.

Atthesametime,thereisonlylimitedinvestmentinICT

and innovation, severely curbing the development of

moreefficientandflexibleproductionprocesses.

Thefinancialsectoris regulatedalongthefaultlineof

thetwopowerblocks.Yetwithintheseblocksregulation

is far from harmonious, which has consequences for

businessfinancing.Inthefirstplace,thecapitalmarket

islessdeepthaninCapricious Consentwhichpushesup

the financing costs of large companies. And Chinese

investmentinDutchcompaniesiscurbedbyregulation.

Secondly, the stringent regulation of the European

banking sector has reduced the lending capacity of

banks. While this can be partly offset by loans from

UnitedStatesbanks,whichare less strictlyregulated,

DutchSMEswillcontinuetofeelthesqueeze,astheyare

dependentonfinancingfromdomesticbanks.

East versus West

OwingtotherockytraderelationswithChinaandIndia

combined with less integration with Eastern Europe,

both an important, growing import partner and an

emergingexportarea have disappeared. Thisputs the

DutchtradepositionandDutchaffluenceunderpressure.Oneofthemajorbastionsofeconomicgrowthinthepast

twentyyearsintheNetherlandshasbeentoppledi.e.

theinwardprocessingofgoodsfromAsiatotheEuropean

hinterland.Increasedtransatlantictradecanonlypartly

compensateforthisloss,becausefundamentalreforms

to the Dutch economy are slow to be implemented.

Furthermore, an acute shortage of natural resources,

particularly in the West, is impacting negatively on

economicdevelopment.Inthisscenario,Dutchinterna-

tionalcompetitivenessaswellasitslogisticpositionhas



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lostmuchground.TheattractivenessofNetherlandsasa

location for basing business is also reduced, due to

factorsincludinginefficientregulation,tightnessonthe

labour market and insufficient private investment in

R&D.AndDutchbusinessesthatareoperatinginternati-

onally are hampered by the fragmented regulatory

frameworksbetweenthetwopowerblocks.Mergersand

acquisitionsaretime-consumingandexpensive,leading

to an increasing number of loosely arranged joint

ventures that are less efficient and less profitable.

Attempts to access the sales market in the opposingpowerblockareopposedbymeansoftheextraregula-

tion.Becauseitwillbedifficultforlargecorporationsin

the Netherlands to operate in this environment, the

suppliers,theSMEswonthaveiteasyeither.

Technologicalprogressislimitedinthisscenario.Owing

toalackofknowledgeexchange,limitedsalesfieldsand

thepartialprotectionofpatents,privateinvestmentin

R&Disnegligible.Governmentsarepromotinginnova-

tionintheirowntradeblockbysettingupR&Dcentres

withthehelpofsubsidies.Atthesametime,therivalry

betweenthetwo tradeblocks isanenormouscatalyst

foranumberofindustries,suchastheweaponsindustry,

spacetravelandmedicaltechnology.


Duringthenexttwentyyears,theDutcheconomywill

growatonlyapiecemealpace,atarateoflessthan1%

perannum.Thedisappearanceofsalesmarketsaswell

as the poor development of competitiveness will be

mainlytoblame.The lack of globaltradeagreementsand thereform of theEuropean common agricultural

policywillcontributetoadeteriorationofinternational

competitivenessintheDutchagriculturalsector.Agricul-

turalexportsoutsidetheEuropeanUnion(circa20%of

totalexports) andagricultural imports ofanimal feed

productswillbehamperedbyprotectionistmeasures.

Thankstoitspre-eminentknowledgebase,however,the

sector will have succeeded in maintaining it strong

positionontheEuropeanmarket, thereforeremaining

stableonbalance.

The industrial sector in theNetherlands, traditionally

export oriented, will suffer due to the protectionist

measuresinthisscenarioandthedifficultyinaccessing

the sales markets in the eastern trade block. Dutch

industry will also have to battle with a shortage of

naturalresources,accompaniedbyrisingcommodities

pricesandmoreexpensivefinancing.Consequently,the

sectorwillhavetofocusonproducinghigh-endgoods

andonservicingnichemarkets.Inthisscenariothatwill

be more of a challenge than in Capricious Consent

althoughthegovernment-subsidisedR&Dcentresmayhelp somewhat. InSlow Strife production will remain

fairly stable,givena rise in labourproductivity,which

willalsoleadtoadeclineinemploymentintheindustrial

sector(figure 15).

The construction sector is struggling and is losing

ground.Becausetherisein thenumberof households

andincomegrowtharelow,demandforbuyinghousesis

fallingback.Theloweconomicgrowth,combinedwith


in 2030






period.

Source: Rabobank

Outlook2011 39


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anunfavourableclimateforbasingbusiness,haspushed

downinvestmentincommercialproperty.Construction

is further hampered in this scenario by inefficient

regulationandunsatisfactorylicensingpolicy.

The services sector showsa fluctuating development.

While the transatlantic market has led to growth in

services inparticular, the lack of reform in theDutch

economymeansitisnotcompetitiveorflexibleenough

to benefit from this trend. The services that mostly

depend on the domesticmarket, such as commercial

services,aregrowinginapiecemealfashion.Thesameis

truefortheretailtrade.In2030,Dutchhouseholdswill

havescarcelymoredisposableincomethantoday,which

means totalmarket volumewill have expanded little.

However,communicationswillstillbeagrowthmarket.

Andtradeandtransportwillfarebetterinthisscenario

thaninAgile Antipoles,althoughthegrowthratewillbe

lowerthaniscurrentlythecase,onaccountofthelower

levelofworldtrade.

In2030therewillbemoreemploymentinthegovern-

mentandhealthcaresectorsthanin2010.Theshareof

thepublicsectorin totalemploymentwillincreaseby

5% (figure 16). Inparticular, spending onhealthcare,

education and innovation will rise, with increasing

financialproblemsforthegovernmentasaresult.The

healthcaresectorwillbemarkedbyahybridmixtureof

marketforcesandstateintervention.Forexample,new

technology,originatingfromtheUnitedStates,willnot

beentirelyfinancedbypublicfunds.However,thiswill

leadtoincreasedbureaucracy,curbingthehopeforrise

inproductivity.

Figure 16: Employment development by sector

Source: Rabobank



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Wolters Kluwer was formed in 1987 from a merger of the publishing

company founded in 1889 by educator Aebele Kluwer, and Wolters

Samsom (a combination of the publishers Wolters, Noordhoff andSamsom). By 2010, after a series of international acquisitions and

expansion, Wolters Kluwer has evolved into a global, modern,

professional (online) information and software services provider,

servicing many professional fields, including the legal, fiscal, financial,

administrative, HRM, medical and commercial professions.

Twenty years ago, clients received everything on paper. Since then,

the importance of online and software products has grown

exponentially. Now, 55% of our turnover is electronically based. Only

about a third is paper-based. The remainder consists of services

related to internet and software. No matter what part of the world

our clients are in, they want more solutions for better, more efficient

and more accurate work processes. For instance, a surgeon wants to

be able to use a system to record what has just taken place in the

operating theatre and to complete the invoice directly. We convert the details into a workflow. For

the hospital, the advantage is that part of the back-office can be reduced as many administrative

processes are no longer necessary. At the same time this growing diversity means building a

relationship with the client. Finding out how the client wants to receive the information. In what

format? And what are the priorities? The client becomes an increasingly important player in the

entire process. We conduct a lot of research with and about the end user. Because it is the client

who determines a major part of the end product, it is important to involve him as much as possiblein the process. You need to know how the client thinks and translate that into software and

content. This is what makes Wolters Kluwer so unique, and what keeps clients loyal to us. Every

year more and more people are renewing their subscription to us, mostly through a positive

response to electronic products. This is where growth is - which also has a cultural dimension.

Americans and Asians are generally more willing to go digital. The drive in our clients to constantly

stay up to date is crucial to our existence.

Boudewijn Beerkens (Wolters Kluwer)

Translating clients preferences into

solutions makes Wolters Kluwer unique

Outlook2011 41


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Forward

Harmonious-evolutionary

This world is characterised by a strong commitment to improve the effectiveness

of international organisations and to tackle cross-border issues in the area of

energy and climate management and security. At the same time, decision-

making progresses slowly, because so many interested parties are involved.

Consensus is sought on virtually all issues, which holds up the entire process of

seeking solutions. Technological breakthroughs are few and far between and

focus mainly on improving production processes.

Multilateral consultation structure

Europe: no political integration

International commitment

Emphasis on process innovation

Scarcity of natural resources

Regulated food supply

Harmony

Conflict

Evolution

Revolution

Flowingly Forward

Slow Strife

Capricious Consent

Agile Antipoles

Outlook2011 43


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The West reaches out

By2030, China, India,BrazilandRussiahave evolved

into influentialworld players (figure 17). TheChinese

governmenthassucceededinembracinganopendoor

policy, without jeopardising thepoliticalmonopoly of

theCommunistParty. India is able toprofit from the

ongoingdivisionoflabourthroughknowledgetechno-

logyandinvestmentininfrastructure.Atthesametime,

however, the country is still combating security

problems,environmentalpollutionandover-population.

China and India are engaged in rivalry over exerting

influence in the regionandaroundthe IndianOcean,withitsstrategicshippingroutesfortradeandthefood

andenergysupply.In2030,Russiastillhasnosepara-

tionofpowersorTrias Politica.Thecountrywasandisa

steered democracy with a steered economy, but is

regardedasastableandreliablesupplierofenergy.In

Latin-America,Brazilseffortstoengineeraneconomic

unionarecurbedbypoliticalinstabilityandfragilelaw

enforcementintheregion.

In2030,theUnitedStatesisstilltheworldseconomic,

politicalandmilitarysuperpower.TogetherwithEurope,

Americaiswillingtosupportnewglobalplayersininter-

national organisations and forums, allowing them

greaterinfluence.In2015aninitialroundofdiscussions

commences,withaviewtoreformingtheUNSecurity

Council.In2027,Brazil,JapanandIndiahaveacquired

permanent seats with veto rights. After 26 years of

negotiations, Russia has been admitted to the World

Trade Organisation. Illustrative of the Western olive

branchistheclosecollaborationbetweenNATO,Russia

and China with a view to resolving conflicts such asthoseintheMiddleEastandCentralAsia.

In2025asupra-nationalsupervisorissetup,inwhich

theInternationalMonetaryFundandtheBankofInter-

nationalSettlementsaresubsumed.Thisisinresponse

tothedissatisfactionofnewworldplayersconcerning

their ceremonial role in the International Monetary

Fund.Fiveyearslater,in2030,thankstotheeffortsof

thenewglobalpowers,anewworldtradeagreementis

Figure 17: New powers appearing on the world stage

Source: Rabobank

44 Fourfuturescenariosforbusinesses Flowingly Forward


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signedatlast.Butbecauseitwilltakeuntilthenforthe

newagreement totake effect, therewill benobreak-

through in international free trade in agricultural

productsduringthecomingtwodecades.

Political integration in Europe - a bridge too far

Inresponsetothefinancialcrisis,theEuropeanUnion

has further deepened its monetary and economic

integration.Nationalmarkets for energy, services and

government spending have been openedup. A sound

internal market plus harmonised regulation havereinforcedEuropeancompetitivenessandmadeEurope

intoamajoreconomicplayerontheglobalstage.Croatia

joinedtheEuropeanUnionin2017,whilerelationswith

Turkeyarebeingintensified(figure 18).

By contrast, political integration is proceeding less

smoothly. Within the European Union, France and

Germanyareheadinginitiativestoachieveclosercoope-

rationintheareasofforeignpolicy,immigrationpolicy,

defenceandsecurity.Thishasledtotheformationofthe

EuropeanCouncilforDefenceandSecurityin2020.

Scarcity of natural resources: putting a brake on

sustainable growth

Thedepletionoffossilfuelsvirtuallycomestoaheadin

2030.Peakoilisnowbehindus.Becausethegeo-political

landscapehasbeen relatively stable for twenty years,

theenergyshortagehassofarnotbecomeexplosive.For

thepasttwodecadesgovernmentshavebeenoccupied

with creating a climate that stimulates the long-terminvestmentrequiredtodevelopenergy-savingtechnolo-

gies. By 2030, the permitted level of CO2 emissions

arounda third lower thanthe level in 2000; this has

been brought aboutbyhighCO2 leviesandexpensive

CO2 rights;manyprocessesarealreadylowcarbonor

evennocarbon.Cradletocradleisthenorm.

China,theUnitedStatesandtheEuropeanUnionentered

a collaboration ten years previously in the area of

Figure 18: European Union in 2030

Source: Rabobank

Outlook2011 45


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energy-saving technology, which is financed by the

Chinesesovereignwealthfund,ChinaInvestmentCorpo-

ration.Althoughthisinitiativegoesa longwaytowards

reducingenergyintensity,itisnotsufficienttosubstan-

tiallylowerdependenceonfossilfuelsandothernatural

resources.Highenergycostsmeanitiscost-effectiveto

use biomass (such as plant or animal residues) for

non-foodapplications.Thefocusonabiobasedeconomy

constitutesonlyapartialsolutiontotheenergyproblem.

Evenwithsubstantialgovernmentsupport,onlyasmall

partoftheeconomycanbebiobasedby2030.

Food certainty through regulation

The steady economic growth and the growing world

populationmeannot onlymoredemandfor food,but

demand for a different type of food, due to dietary

change.However,thescopeforadditionalfoodproduc-

tionislimited,andasisthecasewithpopulationgrowth,

is unequally distributed throughout theworld.At the

sametime,thereisoptimalinternationalcoordinationin

tacklingthefoodshortageproblem.Multilateralorgani-

sations, including theFood andAgriculture Organisa-

tion,theWorldBankandtheWorldTradeOrganisation

haveabroadsupportbasewiththeinvolvementofmany

countries.Accordingly, thereis support forthe forma-

tion of a strategic supply fund of agricultural staples

includinggrainsand oil seeds.Theaimis topromotestabilityinthefoodmarketsandmitigatetheeffectsof

price shocks on basic foodstuffs. The additional food

requiredforthegrowingandchangingglobaldemand

willbecreatedviainnovation,leadingtohigheryields

fromtheexistingproduction.

46 Fourfuturescenariosforbusinesses Flowingly Forward


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Business as usual

For companies, this scenario can best be described as business as usual. A shortage of

labour and of natural resources is only being partially addressed. Capital flows are being

subjected to regulation at the expense of new profitable investment opportunities. That

said, companies are able to operate in an environment of economic stability and flourishing

world trade. Better use is being made of existing ICT applications. In this scenario, the

commercial services sector is performing better than average, while the industrial and

agricultural sectors show only limited growth. Thus we see a continuation of a process that

has already been ongoing for several decades.

Outlook2011 47


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Figure 19: Opportunities for companies





Source: Rabobank

Labour market reforms go ahead

From a European and international perspective, the

government finds itself impelled to introduce labour

marketreforms,inordertoincreaseworkforcepartici-

pation.Whilethesereformshavebeenannounced,the

transitionphaseislengthy,becauseofadelayinreaching

agreement among all the parties involved. In this

scenario, solutions are sought in the consultation

process,ratherthanindecisivegovernmentaction.The

pensionableageintheNetherlandsonlyrisesto68 in

2040.Consequently,workforceparticipationbywomen

andolderagegroupsinparticularrisesonlygradually.

Businesseswill have toinvest considerablyin recruit-mentinordertoreplacetheoutflowofworkers.Inorder

tocompensate for population ageing, educated young

migrants from Turkey, the Middle-East and Asia are

welcomedintothelabourforce.Twentyyearsfromnow,

a significant percentage of the population will be

employedinthehigh-endknowledgesector,specialising

in services, such as ICT, accountancy and finance.

BecausetheEuropeaninternalmarketisfullyintegrated

andthe international environment isstable,it will be

relativelyeasyfor(highlyeducated)employeestotake

upemploymentworldwide.WiththeintegrationofICT

applications continually improving, itwill bepossible

for most companies to allow distance working and

flexibleworkinghours.Thelabourmarketisgradually

evolvingintoaflexiblemarket.

The government ensures a well educated workforce.

However,withastillgeneroussocialsecuritynetwork,

theincentiveforschoolingisnogreaterthanisnowthe

case.Thisresultsina certainincomegap,butisalsoacurbonthegrowthpotentialoftheDutcheconomy.

Scarcityofnaturalresourcesandregulatedcapitalflows

Thescarcityofnaturalresourcesalmostreachesahead

four future scenarios for businesses

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