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Global megatrends demand new strategies from governments 

Singapore, 5 December 2013
New KPMG report looks at changes governments must make to be effective in 2030

To be prepared for megatrends which are straining resources and economic capacity, governments globally will have to change the way they think, plan and act.

This is according to Future State 2030, a report developed by KPMG in partnership with The Mowat Centre at the School of Public Policy and Governance at the University of Toronto.

The report is the first in a series of conversations that KPMG plans to have with government organisations over the next few years to stimulate thinking about the future. It identifies nine megatrends, and assesses actions governments need to embark on to be successful in future.

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

  • Resource scarcity: a 50 percent increase in global food supply and a 40 percent increase in water is needed to meet demand in 2030;
  • Demographic changes: a tidal wave of young people is entering the labor force in developing economies while most developed countries are grappling with rapidly aging populations;
  • Rise of the middle class: an expanding, more technology-adept and connected middle class is exerting greater demands on governments in the face of rising public debt;
  • Economic power shift :rebalancing of global power as emerging economies lift millions out of poverty
  • Urbanisation and climate change

"Governments have been focused on short-term issues due to different factors, such as the global financial crisis and its aftermath," said Mr Satyanarayan R (Satya), KPMG's head for Government & 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."

Changes required as a result of these megatrends

The megatrends are interconnected but will not affect every part of the world in the same way.

Said Satya: "The impact of these megatrends is not limited by borders. Governments will have to consider implications both within and outside of their jurisdictions.

"Increasingly, governments will need to collaborate to find effective solutions, taking into account how global economic power will shift to favour developing economies. New regulatory approaches will also be required."

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

"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," said Satya.

Learn more about the Future State 2030 report