Governments must respond to urbanisation, climate change megatrend: report

International consultancy KPMG has released “The Future State 2030” report, identifying global megatrends that will require governments to change their actions to be effective in the future

Global professional services firm KPMG International launched on Thursday its “Future State 2030” report, which identified the megatrends worldwide that will affect the way people live and how governments should act in the years ahead.

There are nine megatrends in the report, and while all interrelated, the firm has divided these trends into three categories. One of them is the the physical environment, which considers urbanisation, climate change, and resource stress as critical developments affecting this area.

The other six megatrends are grouped into those affecting the status of people – demographics, the rise of the individual, enabling technology – and changes in the global economy, specifically public debt, economic power shift, and economic interconnectedness.

According to the firm, which collaborated with The Mowat Centre of the University of Toronto, the impacts of these trends are far-reaching, and require a coordinated set of responses that will ensure its effects are addressed, if not eliminated.

We are now at a critical juncture. Governments must take a longer view of accelerating social and environmental challenges. Without significant changes, the impact of these identified megatrends will far outstrip governments’ ability to meet the needs of people in the next 20 years

Satyanarayan R Satya, KPMG head for government and infrastructure in the Asia Pacific

“Governments have been focused on short-term issues due to different factors, such as the global financial crisis and its aftermath,” noted Satyanarayan R Satya, KPMG’s head for government and infrastructure in the Asia Pacific.

“But we are now at a critical juncture. Governments must take a longer view of accelerating social and environmental challenges. Without significant changes, the impact of these identified megatrends will far outstrip governments’ ability to meet the needs of people in the next 20 years.”

Climate change, for instance, due to the increasing greenhouse gas emissions around the world, has already resulted to unpredictable changes in the environment, testing the resilience of both built and natural systems, explained the firm.

Governments have to achieve the right combination of adaptation and mitigation policies to combat climate change, they added.

Similarly, the “combined pressures of population growth, economic growth, and climate change” have put an enormous stress on the environment, the report noted. Natural resources are dwindling, which can trigger crises on water, food, land and energy.

There needs to be a 50 per cent increase in global food production and a 40 per cent increase in water if demand in 2030 is to be met, cited the report. This dynamic is strongly tied to resource scarcity, it added.

As such, governments have to put a sustainable resource management in place, KPMG noted.

Cities and their local leaders also have to pay close attention to the challenges posed by the increasing population in these areas. The report cited how urbanisation is exerting pressure on infrastructure and resources, most notably, on energy.

“The impact of these megatrends is not limited by borders. Governments will have to consider implications both within and outside of their jurisdictions,” said Satya.

Nick Chism, global chair for government and infrastructure, noted in the 80-page document how governments have to increase international collaboration, and not just focus on local engagement.

“Concerted capacity development in evidence-based policy development and stakeholder management will be essential to making the most of opportunities and managing risks in a changing world.”

The report, while outlining the trends, also recommended changes that the public sector should implement.

The effectiveness of leaders will be judged on their long-term planning and how they deliver effective programmes, the firm emphasised.

“Further, they have to work to continue building trust with their people so that the difficult changes that the megatrends necessitate can be put through,” noted Satya.

 

To learn more about the Future State 2030, read the full report here.

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