Megatrends are an issue that City-REDI has written about previously. We have a fantastic podcast series which is well worth a listen to and a 2021 report focussing on the West Midlands. This latest blog is written to coincide with a new report produced by City-REDI in collaboration with the Midlands Engine looking at Megatrends in the Midlands.
The new 2023 report ‘Megatrends in the Midlands’ identifies four major megatrends likely to impact the region. It considers how they are likely to unfold and what policy can do to address them. Matt Lyons and Charlotte Hoole provide a short overview of the report.
What are megatrends?
“Megatrends are large scale trends that could have significant economic consequences and scarring effects for population sub-groups and places because of impacts on human, social, physical and natural capital.”
Figure 1 shows the four identified megatrends (on the left in blue) and a series of ‘impact areas’ (on the right white boxes) that relate to each of the following trends:
Megatrend 1: Technology and Digitization refer to the rapidly evolving impacts of new technologies such as artificial intelligence programs and increasing acceptance of old technologies in new sectors such as remote working, and teleconferencing in healthcare.
Megatrend 2: Climate Change and Net-Zero refers to the impacts of climate change such as excess heat, flooding, and agriculture issues, and also the impacts of policy in mitigating climate impacts (net-zero).
Megatrend 3: Rising Geopolitical Tensions refers to an increasingly multi-polar world which after recent conflicts has led to increasing prioritisation of supply chain resilience and security over efficiency.
Megatrend 4: Demographic Trends refers to the ageing population in much of the West and China. It also refers to changing migration patterns and what impacts these changes could have on the economy and health systems.
Figure 1 – Diagram showing the four identified megatrends and their interrelationships.
The trends are highly interconnected as shown by the linking lines in Figure 1. For example, Artificial Intelligence is being used in the AgriTech industry to improve issues related to food production. Food production is also related to international conflict as we have seen in Ukraine over the past year.
These interactions and feedback effects between megatrends add complexity to strategic planning at the national, regional and local levels.
What do the megatrends mean for the Midlands?
On a global scale, the impacts of the megatrends are highly heterogeneous. Climate Change is anticipated to have far more severe consequences for the global south than the north. Demographic trends are seeing much of the West and China growing older and facing new challenges related to labour supply and health systems. Europe is likely to see fast-growing migration from rising geopolitical tensions and climate refugees.
The heterogeneity of impacts from megatrends is also seen at the regional and local scales. Regions differ in their geography, industrial composition, labour market and infrastructure. These factors can mean that regions have different competitive advantages and structural vulnerabilities in the face of exogenous shocks (like megatrends).
Figure 2 shows the approach taken in the 2023 report to assess these impacts. The figure presents megatrends as having potential opportunities and risks which can be bolstered or mitigated through the use of policy.
Figure 2: The impact and mitigation of megatrends in the Midlands Engine
What can regional policy do to address megatrends?
The report closes with a broad scope of what these trends mean for policy and attempts to show what responses are possible at different spatial scales.
Table 1 shows a summary of how policy at the national, regional and local levels can respond to issues raised by each Megatrend.
For example, Climate Change and Net-zero are both issues that should be tackled at the national level with consistent regulation to incentivise change. Net-zero has involved national regulation on industry such as the phasing out of internal combustion vehicles. At the regional level, policymakers in the Midlands can bring together industry and academia to foster green innovation clusters – as is indeed happening through ventures like the Tysley Energy Park and Warwick Manufacturing Group. At the local level, councils can build natural flood defences, and incentivise walking and public transport.
What is shown here and in the report is fairly high-level. An important next step in this research is to better map what policy levers are available at what scales and reflect on what action is being taken versus what actions could be taken.
Table 1. A top-level summary of policy responses to Megatrends in the Midlands
| Megatrend | National Policy Implications (UK) | Regional Policy Implications (Midlands Engine) | Local Policy Implications (city, Local Authority) |
| Technology & Digitization | Skills Agenda | Cluster development & HEI collaboration | Raising public awareness of AI & Digital skills initiatives |
| Climate Change & Net-zero | Environmental regulations | Green innovation | Local climate action plans |
| Rising Geopolitical Tensions | Trade & export strategy | Regional economic development | Cultural initiatives |
| Demographic Trends | Preparing for an ageing population | Lifelong learning | Local public health initiatives |
Source: Midlands Engine 2023
Concluding remarks
The nature of working on megatrends means attempting to predict the future, but there are some areas we can consider with some levels of confidence (e.g. IPCC reports on climate change), such as demographic trends of ageing that are highly predictable. However, there are some areas that are much less predictable. The explosion of AI in 2023 has been a shock to numerous industries, including academia.
The purpose of this report is to set the scene and start a discussion about how megatrends might unfold and how we can approach the future with some strategy to address them whilst being flexible to change.
To keep up to date with this project contact Matt Lyons.
This blog was written by Dr Matt Lyons and Dr Charlotte Hoole, Research Fellows, City-REDI / WMREDI, University of Birmingham.
Disclaimer:
The views expressed in this analysis post are those of the authors and not necessarily those of City-REDI / WM REDI or the University of Birmingham.