Global Trends

Copyright © 2015 Accenture All Rights Reserved. 1
Danilo Mazzara
Milan, 9 November
Key Trends workshop

Danilo Mazzara
Danilo Mazzara @DaniloMazzara
 Lavora in Accenture Strategy
 Si occupa di Consulenza Direzionale in
ambito Banking, Life Science ed
Healthcare
 Ha significative esperienze nell’ambito
di innovazione e start up
 Collabora con UnicreditStartlab
nell'ambito della quale si occupa di
training e mentorship a selezionate
start up

Agenda
Key Global Trends
Impact for Business Strategy
Wrap up

Technology
 Internet of things
 Social Network
 3D printing
Demographic
 She factor
 Aging
population
 Cloud
 Big Data
 Mobility
 Middle class
 Millennials
Demographic and Technology trends are changing consumer
behaviours
Main trends
Consumer
behaviours
 Gamification
 Trading up & down
 Sustainability
 Sharing Economy
SELECTION

There is no doubts that the economy power is structurally shifting
from mature to emerging economy
Demographic: Middle Class
Economic power shifting
Source: Economic Outlook and Interim Economic Outlook OCSE, Sept. 2015
World:
3,3%
2,6%
1,9%
6,5%
7,3%
 Competition at global level for
several industry sectors
 Export as key driver for
sustainable growth in the future
(euro vs dollar advantage)
 The rising of the Middle Class as
the biggest opportunity for all

Across Asia, rising incomes are creating an enormous new class of
consumers, much of that growth is coming from China
Demographic: Middle Class in China
Type Description Working
Population
(mln)
Annual
Income (k$)
RURAL
WORKERS
 Half of China’s workers still live in rural areas.
With lower incomes and fewer available jobs,
their spending is concentrated on essentials
such as food and housing.
387 2,0
MOVERS &
SHAKERS
 China’s wealthiest citizens already make up a
large part of global demand for high-end goods.
Their spending patterns will continue to
influence trends as the country grows
1,4 500
URBAN
MIDDLE
 This is China’s narrow middle class. Nearly half
of them are on the public payroll, so policies to
increase income will have a strong effect here.
11,7
 This group—blue-collar workers and migrant
workers who have moved to cities to find better-
paying jobs—is expected to see the biggest rise in
income. This will allow them to broaden their
spending beyond consumer staples
146
236 5,8URBAN
MASS
770.4
Source: The Rise of Chinese new consumer class, Goldman Sachs

In the future the consumption patterns will gradually shift
discretionary products
Demographic: Middle Class in China
Source: The Rise of Chinese new consumer class, Goldman Sachs
Expenditures across key
spending categories
 Comparing China’s consumption
patterns with those of the more mature
markets shows how as incomes rise,
spending will shift from necessities to
discretionary items
 E-commerce e Tourist inflow the
opportunities can be taken with lower
investment

Millennial generation (people born from 1980 and 2000) is the largest
in the history and as they reach their prime working and spending
years, their impact on the economy is going to be huge
Demographic: Millennials
77
61
92
36-50
(Gen X)
51-70
(Boomers)
15-35
(Millenials)
People per Age Group in USA
(mln)
 Millennials have come of age during a time of
technological change, globalization and
economic disruption. That’s given them a
different set of behaviours and experiences
than their parents
 They have been slower to marry and move out
on their own, and have shown different
attitudes to ownership that have helped
spawn what’s being called a “sharing economy
 They’re also the first generation of digital
natives, and their affinity for technology helps
shape how they shop. They are used to instant
access to price comparisons, product
information and peer reviews
Source: Source: Elaborations Goldman Sachs

Millenials reject the "must-haves" product of the previous generation
and are developing an "healty life style"
25%
15%
25%
30%
15%
20%
20%
30%
15%
100%
100
CAR
5%
TV
100
I might purchase one if I really need, but indifferent
Extremely important
I don’t intend to purchase one in the near future
Important, but not a priority
I don’t feel strongly about it
Millennials preferences on selected
traditional product
20131998
83%
69%
46%
14% 14%
Boomers
12%
Gen X
12%
22%
Millenials
24%29%
43%
ExercisingNot falling sick Eating Right
What is your definition for Healthy
(% respondent)
Do you disapprove of people (who are 18 older)
doing the following ?
(Smoking one or more packs of cigarettes per day)

Millennials is the digital native generation, they are social and
connected and need to be engage trough new media
2%
7%
16%
44%
32%
15%
19%
Text messaging
38%
11%
25%Social media
38%
8%
Istant messaging
Blogging
Millenials
Boomers
Gen X
After searching on line, how do you communicate
with others about a service/product/brand ?
 Digital engagement
 Ominchannell
 From "monologue" to "dialogue"
 Personalized product and
experience

Examples of innovation
Heineken Burberry
Coca Cola Footlocker
ILLUSTRATIVE

Women are becoming even more important in business
Demographic: She Factor
She factor in consumer shopping
(household expense driven by women)
Source: Catalyst. Pyramid: Women in S&P 500 Companies.
New York: Catalyst, October 13, 2015.
24
12
20152011
33%
67%
Driven by women
 $20 trillion in annual
consumer spending
with an expected
grow by 50% in the
next 5 years
 75% of women identify themselves as the primary
household shopper
 50% of products typically marketed to men are purchased
by women
 80% of healthcare decisions are made by women.
 68% of new car purchase decisions are made by women
She factor in Business
(Women Presence)
Women CEO in fortune 500
Women presence in S&P 500 per level
Source: Elaborations Based on Fona International Research

Address the gender gap is a top priority both for Institutions and
Corporate
Demographic: She Factor
Address the gender gap
(Report Selection from Istitutions)
Address the gender gap
(Report Selection)
Example from Corporate in Italy
(Report Selection)

Having a personalized experience and getting the right work life
balance are the top priority for women
Demographic: SheFactor
Healthcare Well Being
Automotive Sharing economy
ILLUSTRATIVE

Over the last 50 years we have gained 12 years more and by 2050
4,3% of total population will have more than 80 years
Demographic: Ageing population
Life expectancy at birth total years
(OECD Countries)
67,9
80,0
17,8%
Today1960
World
1,5
11,4
1,4
3,7
4,8
2,1
6,8
1,6
6,4
7,2
7,4
4,3
14,5
16,7
2011 2050
Population over 80 years on total population
(World and selected Countries in %)
Source: Elaboration on OECD data, 2014

Global dysfunction erectile market
(%)
Worldwide Aesthetic Market
(in billions of dollars)
Source: Allergan Annual Report, 2013
Source: Elaboration based on Evaluate Pharma and Med Tech
World cataracts procedures
(mln)
Alzheimer's disease or other dementias
(mln on people global)
Source: Elaboration on World Health Organization, 2014
Source: The Global Impact of Dementia, Alzheimer Disease International 2013
5,0
3,2
2,3
2009
+10%
20172012
135,0
76,0
44,0
+3%
205020302010
32,0
20,0
+5%
20202010
5
10
40
45100
Viagra LevitraTotal OthersCialis
Live longer also means incurring in new aging related diseases and in
addition to that, people expect a better quality of life in their "silver
stage"
Demographic: Ageing population impact on the Healthcare
 Cataracts is
responsible of
50% of global
blindness
K
K
 4 BLN $ market
since the first
launch in 1998

Aged people have consumption aptitude extremely polarized between
"Come up to the end of the month" and "Enjoy life"
Demographic: Ageing population – Aged people segmentation
Housewife/Reader
Mick JaggerVicious
Family sustainer
Cruise addicted
Average monthly amount of pension income
Consumeraptitude
Up to €1.000 €1.000 - €2.000 More €2.000
Card player
LowHigh
Number of people belonging to the income class
# people
(mln) 7,3 5,1 1,6
ITALY
Average
€ 1.131
Source: Accenture analysis on INPS data - Rapporto Annuale, 2011 and ISTAT - I cittadini e il tempo libero
 Long life duration will increase the demand
for wealth (health, wellness and leisure)
 The system of Public / Private and Third
Sector will join the national welfare
 Aged people mainly spend time in traditional
home activities such as watching TV (95% of
pensioned) or read newspaper (52%)
 However, many aged people spend their
income in activities as tourism:
• More than 30% of pensioned, between 65
and 74 years, go on vacation at least
once a year with an average-stay of 26
nights, more than young and adult people
Segmentation by retirement pension and
consumption aptitude

Income and Net family Wealth per age class
(% on Italian population)
New technology adoption
(% per age)
Access
in mobility
8%
33%
Buy product
and services
21%
32%
Social
Network
21%
54%
Internet
Utilization
20%
55%
PC
ownership
20%
54%
Total
> 60 years oldSource: Elaboration on ISTAT data
Based
on
internet
users
114
122
102
94
88
84
102
140
118
60
1919
140
120
100
80
60
40
20
-
over 6455 - 6445 - 5435 - 4419 - 34up to 18
Net family wealthIncome
Age class
Source: Elaboration on Istat Bilanci Famiglie Italia
Ageing is impacting in the "digital divide", potentially excluding the
most interesting customer in term of spending power
Demographic: Ageing population and digital divide (Italy)

Technology
 Social Network
 3D printing
Demographic
 Aging
population
 She factor
 Cloud
 Big Data
 Mobility
 Middle class
 Millennials
behaviours
Main trends
Consumer
behaviours
 Gamification
 Sustainability
 Sharing Economy
SELECTION

Digital Technologies are driving the global growth
Tecnology
10%
3%
Utilities
Energy
3%
Materials
10%
Telco
Consumer staples
7%
Industrials
2%
Consumer Discretionary
Information Tecnology
16%
Health Care
15%
21%
13%
Financials
S&P 500 ITS&P 500
7,84%
9,83%
Equity Market 10 years annual return
S&P 500 per industry sectors
+10 pt in
Digital Density Index
+0.4% in Total Factor Productivity for
advanced economies vs.
+0.65% for emerging markets
+0.25%
YOY GDP increase in advanced economies vs.
+0.5% in emerging markets
=
=
Accenture Digital Density Index
Source: Digital Density Index Guiding digital transformation,
Accenture and Oxford Economics

From the emerging technology, Internet of Things will emerge as key
driver to boost efficiency, revenue growth and customer experience
Emerging technologies Access to internet
(bln)
 Transforming Country
Infrastructure
 Improve the Corporate
Value Chain
 Connecting Personal
assets (eg. Car and
House)
 Changing "daily life"
trough wearable devices
Sources: Accenture elaboration on Macroeconomic Insights What is the Internet of Things?, Goldman Sachs
• Social Network
• Mobility
• Analytics & Big Data
• Cloud
• 3D printing
• Voice Recognition
• Internet of things
• …
28,0
6,0
1,0
x28
"Things"
(’06-’20)
Mobile
(’06-’20)
Fix
(’96-’15)
Technology: Internet of Things

Internet of Things will emerge as key driver to boost efficiency,
revenue growth and customer experience for Corporate …
Technology: Internet of Things
Create new revenues stream
Improve worker productivity
81,00Reduce operationa Cost
74,00
74,00
67,00
Enhance worker safety
Improve sustainability
36,00
64,00Enhance customer experience
79,00Opmitize Asse Utilization
Source: World Economic Forum Industrial Internet Survey, 2014
 Sensors, analytics and real-time
data to anticipate equipment
failures and respond more
quickly to critical situations, such
as leaks or adverse weather
events
 Latest locomotives, are
equipped with more than 250
sensors that measure 150,000
data points per minute
 Networked sensors for its
predictive maintenance system
designed to reduce down time
and unnecessary trips by service
personnel for elevator repair
(Extremely Important + Very important)
IOT Benefits
(How important are the following benefits in driving
businesses to adopt the Industrial Internet? )
Selected examples

… and in the consumer markets already had a huge impact
Amazon Dash
Smart umbrellaD Lynk Home suite
Drug dispenser
Technology: Internet of Things - Examples ILLUSTRATIVE

Technology
 Social Network
 3D printing
Demographic
 Aging
population
 She factor
 Cloud
 Big Data
 Mobility
 Middle class
 Millennials
behaviours
Main trends
Consumer
behaviours
 Gamification
 Sustainability
 Sharing Economy
SELECTION

 Rising costs for material,
energy, land, water
 Extreme volatility in
commodity markets
 Economic and social risk of
supply disruptions
Resources optimization as became a big issue and customer
consciousness around sustainability is improved
Consumer: Sustainability
Sourrce: Circular Advantage Innovative Business Models and Technologies to Create Value in a World without Limits to Growth, Accenture
Resources supply/demand imbalance 2015-2050

Business as usual simply cannot continue, Governments and
companies around the world are looking for alternative approaches to
drive future growth
Consumer: Sustainability the rising of Circular Economy
1. Circular Supplies: Provide renewable energy,
bio based- or fully recyclable input, material to
replace single-lifecycle inputs
2. Resource Recovery: Recover useful,
resources/energy out of disposed, products or
by-products
3. Product Life Extension: Extend working
lifecycle of products and components by
repairing, upgrading and reselling
4. Sharing Platforms: Enable increased
utilization rate of products by making possible
shared use/access/ownership
5. Product as a Service: Offer product access
and retain ownership to internalize benefits of
circular resource productivity
Emerging Business model in the
circular economy
Circular Economy framework
Sourrce: Circular Advantage Innovative Business Models and Technologies to Create Value in a World without Limits to Growth, Accenture

Resources optimization is about space, waste and energy and next
innovation will come from emerging market
Dyson Cube
Car Parts incubatorMobile Recovery services
Gillette Guard
Consumer: Sustainability - Examples ILLUSTRATIVE

The sharing economy, most impactful trend in consumer behaviours
change, in the future will reach the traditional rental industry value
Consumer: Sharing Economy
335,0
15,0
20252013
29,5%
Sharing Economy revenues
(bln $ and cagr)
Sources: Sharing Economy sizing the revenue opportunity, PWC
 P2P lending
 On Line staffing
 P2P
accommodation
 CarSharing
 Music/ video
Streaming
 Technology breakthroughs
that can easily connect asset
and people
 Sustainability consciousness
increase and resource
scarcity
 Social change and trust on
peer review system
Market Segment
Traditional
Rental
sectors
240,0 335,0
Growth drivers

The sharing economy is gradually shifting from Consumer to
Business market
UBER
Executive assistantInvoices
Co work space
Consumer: Sharing Economy - Examples ILLUSTRATIVE

Technology
 3D printing
 Social Network
Demographic
 Gender "Pink"
 Multiethnic
society
 Cloud
 Big Data
 Mobility
 Millennials
 Aging population
behaviours
Main trends
Consumer
behaviours
 Gamification
 Sustainability
 Sharing Economy
SELECTION

Agenda
Key Global Trends
Wrap up

Unicorns by industryRank FORTUNE 500 (2000 vs 2015)
We are in the "Big Bang Disruption" Era, where business models are
replaced very quickly
Rank 2000 Rank 2015
284 5
Not Present 40
229 13
87 147
29Not Present
Source: Accenture analysis on market data (Fortune, CBInsights)
Innovation is necessary to survive
37 363
Company
124 Not Present
(# - 100%=140)
7
3
3
5
6
7
7
9
10
13
17
22
31
Others
Adtech
Media
Mobile Software & Services
Hardware
Social
Cybersecurity
On-Demand
Healthcare
Big Data
Fintech
Internet Software
eCommerce/Marketplace
*merged with EMC
56 Not Present
30 82

Digital is creating extraordinary new challenges and opportunities
 New Contestable Markets
creating and disrupting industries, markets,
products, services and value chains
 Disruptive Speed
product and service development lifecycles are
changing from years or months to weeks
 The New Value Equation
companies must simultaneously deliver value for
customers AND society AND shareholders
Digital
Innovation is necessary to survive

The disruptive speed of innovation is changing traditional industry
models from years to weeks
How changed the innovation curve adoption
Innovators
(2.5%)
Early
Adopters
(13.5%)
Majority Anticipatory
(34%)
Late Majority
(34%)
Laggards
(16%)
Trial
Users
All
Market segments in the
Big Bang Disruption
Technological innovation
allows us to offer better
products at ever lower
prices
Fonte: "Big Bang Disruption,” di Larry Downes e Paul F. Nunes, Harvard Business Review (Marzo 2013)

The rule of the game are changing
The four stages of the Big Bang Disruption
1.Looking at the
future
2.Climbing the
operating model
3.Disengage from
assets
4.Repositioning
Strategic priorities
(In various stages)
Singularity Big Bang Big Crunch Entropy

The rule of the game are changing
Suggested actions for the different stages of the Big Bang Disruption
 Listen to their "truthtellers"
 Time to market
 launch experiments
 Surviving the catastrophic success
 Conquer markets where the winner takes all
 Create the slow motion effect
 Anticipate saturation
 Dispose of assets before they become liabilities
 Quit while you are ahead
 Escape from the black hole
 Become component suppliers
 Move to a new singularity
Singularity
Big Bang
Big Crunch
Entropy
Phase What to do Example

Implication and good news for you is the rise of the "Open
Innovation" which are moving across the whole industry sectors
The rise of Open Innovation for Large Corporate
Companies' preferred partners for collaboration
(survey % of respondents)
90
84
84
80
78
78
63
Customers
Large Companies
R&D Institutes
Public
Institutions/
Government
Startups/
Entrepreneurs
Academics/
Universities, etc.
Nonprofit
Organizations
17
39
40
42
48
50
53
Enhancing company’s
brand/image
Enhancing the
entrepreneurial culture
of your company
Improving return on in-house
R&D investment
Designing new
products and services
Entering new
markets
Accelerating disruptive
innovation in your company
Accessing specific
skills and talent
Companies' top benefits related to collaboration
with entrepreneurs (survey % of respondents)
Source: Harnessing the Power of Entrepreneurs to Open Innovation, Accenture 2015

Dynamics Start Ups and Entrepreneurs (likes you), can easily
connect with established companies to accelerate route to market and
growth
Research and
Development
Crowd Innovation Ecosystem Innovation
Sustaining
Innovation
Disruptive
Innovation
Improve
The rise of Open Innovation for Large Corporate
WhatistheInnovation
How to Innovate
BWM
Drive now
BMW
New Series 3
Motorola
Smart Watch
P&G
Connect & Develop
Apple
Car
Apple
Developer Program
Apple
Renewable Energy
BMW
Active Hybrid
GE
Innovation Platform for
Connected Products
 Need to address
some cultural issues
from both sides (Start
ups and Large
Corporate)

The cultures of entrepreneurs and large companies often diverge
significantly and those differences must be understood and managed
effectively if the collaboration is to be successful
Cultural differences between Start-ups and Large company
Comparative cultural trends between startups
and large companies
 Align to the market
 Adapt culture
 Adopt mentors
 Time it well
Source: Harnessing the Power of Entrepreneurs to Open Innovation, Accenture 2015
Suggestions for Start Ups

Agenda
Key Global Trends
Wrap up

To summarize
 The world is changing very fast, demographics and new
technologies are creating new consumer behaviours
 Startups and New Entrepreneurs can take a competitive
advantage thanks to their agility and flexibility
 The rising of Open Innovation from the large Companies is a
further and concrete opportunity to monetize
Be connect with the ecosystem

Danilo Mazzara
Danilo Mazzara @DaniloMazzara
Thank you for
your time.
Danilo.Mazzara@accenture.com

Global Trends

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