Global megatrends demand new strategies and skills from governments, says KPMG

The government needs to plan, think and act differently — in some cases drastically — if it is to be prepared for the global megatrends increasingly straining the world’s resources and economic capacity, according to a global report released by KPMG International.

The Future State 2030 report, developed in partnership with the Mowat Centre at the School of Public Policy and Governance at the University of Toronto, details nine megatrends facing governments at all levels around the world and assesses policy and strategic actions governments need to take now to be successful in the future.

The megatrends encompass some of the world’s most critical challenges, including:

  • Resource scarcity, with a 50 per cent increase in global food supply and a 40 per cent increase in water needed to meet demand in 2030
  • A tidal wave of young people entering the labour force in developing economies, with growing strain of rapidly aging populations in most developed countries
  • An expanding and more technology-adept and connected middle class exerting greater demands on government in the face of rising public debt
  • Economies becoming increasingly interconnected and interdependent

Nick Chism, global head of government and infrastructure at KPMG, said: ‘Understandably, governments have been focused on the short term due to multiple factors, including the global financial crisis and its aftermath.

‘But we are now at a critical juncture for governments to take a longer view of accelerating social and environmental challenges. Without significant changes, the impact of these nine megatrends will far outstrip governments’ ability to meet the needs and demands of stakeholders in the next 20 years.’

The megatrends are highly interconnected but will not affect every part of the world in the same way. This means governments will need to undertake a variety of responses and consider the implications both within their own jurisdictions and more broadly. The report presents KPMG’s strategic review of the policy, the regulatory and programme changes governments will need to consider and the strategies, structures and skills required to effectively implement the changes.

‘The impact of the megatrends is not limited by borders,’ Chism said. ‘As a result, governments cannot respond effectively in isolation and will need to increasingly work collaboratively to find effective solutions. New regulatory approaches will be required that recognise the interconnected nature of the risks as well as the rebalancing of global economic power and influence that will increasingly favour developing economies.’

To deliver effective programmes in a rapidly changing operating environment, governments will need to take a hard look at their own skills and capabilities, including risk assessment and change management, stakeholder engagement and evolving their international awareness, all with a longer-term planning horizon.