Future Technology Trends 2030

future technology trends in information technology and future technology trends in healthcare and education and insurance, future wireless technology trends
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Published Date:15-07-2017
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OECD Science, Technology and Innovation Outlook 2016 OECD Science, Technology and Innovation Outlook 2016OECD Science, Technology and Innovation Outlook 2016 © OECD 2016 Chapter 1 Megatrends affecting science, technology and innovation This chapter describes and analyses the main global “megatrends” that are set to have a strong impact on societies and economies, including science, technology and innovation (STI) systems, over the next 10-15 years. Megatrends are large-scale social, economic, political, environmental or technological changes that are slow to form but which, once they have taken root, exercise a profound and lasting influence on many if not most human activities, processes and perceptions. Such relative stability in the trajectory of major forces of change allows some elements of a likely medium-to-long term future to be envisioned, at least with some degree of confidence. The megatrends covered in this chapter are clustered into eight thematic areas as follows: demography; natural resources and energy; climate change and environment; globalisation; the role of government; economy, jobs and productivity; society; and health, inequality and well-being. 211. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION Introduction Our future is uncertain, shaped by a multitude of powerful, complex and interconnected forces, and eventually altered by improbable, unpredictable and highly disruptive events. Seen over a time horizon of say 10-20 years, some of the big trends we see unfolding before us are in fact quite slow-moving. These are megatrends – large-scale social, economic, political, environmental or technological changes that are slow to form but which, once they have taken root, exercise a profound and lasting influence on many if not most human activities, processes and perceptions. Examples are global population growth and urbanisation, or the ageing of societies in many parts of the world; the warming of the planet and rising sea levels or the acidification of our oceans and seas; the deepening of globalisation; and the growing momentum of digitalisation, big data and bioengineering. The relative stability in the trajectory of these major forces of change allows us to envision at least some elements of our likely medium-to-long term future with some degree of confidence. What often tends to shake that confidence, at least temporarily, are disruptive events. These come in a multitude of forms and include natural disasters and catastrophes and events related to human intervention, e.g. sudden peaks of violence, large-scale accidents, and economic and political crises. Such events are difficult to build into trend projections, and so are often treated in forward-looking exercises as “wild cards”, defined as high-impact events that are unpredictable or unlikely to happen. Potentially disruptive scientific and technological innovation frequently find a place in forward trend studies, not least because they often occur as an extension of, or as a marked departure from, existing science and technology (S&T) trends. Ultimately, it is how megatrends and disruptive trends – especially in the field of S&T – interact that will set the scene for the coming decades. It is for governments, business, researchers and citizens in general to reflect on what the interplay of such trends means in terms of opportunities to be seized and challenges to be met. In this regard, foresight can be a useful tool for developing and implementing forward- looking research and innovation policies. Analysis of future trends, whether derived from extrapolations, simulations, projections or scenarios, can provide important insights for the future. Foresight can offer support and guidance for decision makers and investors, and alert policy makers, the business community, researchers and society more generally to important upcoming issues. The interpretation of future trends, however, always needs to be done with care: they do not foretell the future, but merely indicate how the future might evolve under certain conditions and in a given subject area. By bringing together and closely examining the interplay between trends in different subject areas, it is possible to assemble a somewhat fuller picture of possible futures. This can strengthen the basis for developing narratives or storylines, which in turn can enrich our view of where the world is heading and what challenges and opportunities may lay on or beyond the longer-term horizon. This chapter covers those megatrends that are expected to have a strong impact on science, technology and innovation (STI) systems. The megatrends covered are clustered into eight thematic areas, as shown in Figure 1.1. While the time horizon adopted in this OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 221. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION STI outlook is 10-15 years, several megatrend projections presented below stretch somewhat longer into the future. This in part reflects the availability of data. It also reflects the fact that large discernible changes for some megatrends are best seen over longer time horizons of 20 years or more. Irrespective of the time horizons adopted, there are implications for STI policy today. Indeed, this focus on the need for policy (re)orientation has guided the choice of megatrends featured below. By way of overview, some of the main megatrends covered include the following: Demography: The world population will continue to grow in the 21st century and is expected to nudge the 10 billion mark by mid-century. Africa will account for more than half of this growth, which will generate significant youth bulges. Elsewhere, including in many developing countries, populations will significantly age, and those over 80 will account for around 10% of the world’s population by 2050, up from 4% in 2010. With a declining share of the population in work, ageing countries will face an uphill battle to maintain their living standards. International migration from countries with younger populations could offset this decline. At the same time, technologies that enhance physical and cognitive capacities could allow older people to work longer, while growing automation could reduce the demand for labour. Natural resources and energy: A growing population coupled with economic growth will place considerable burdens on natural resources. Severe water stress is likely in many parts of the world, while food insecurity will persist in many, predominantly poor, regions. Energy consumption will also rise sharply, contributing to further climate change. Global biodiversity will come under increasing threat, especially in densely populated poorer countries. Climate change and environment: Mitigating the considerable extent and impacts of climate change will require ambitious targets for the reduction of greenhouse gas emissions and waste recycling to be set and met, implying a major shift towards a low- carbon “circular economy” by mid-century. This shift will affect all parts of the economy and society and will be enabled by technological innovation and adoption in developed and developing economies. Globalisation: The world economy’s centre of gravity will continue to shift east and southwards, and new players will wield more power, some of them states, some of them non-state actors (such as multinational enterprises and NGOs) and others newly emerging megacities. Driving and facilitating many of these shifts in power and influence is globalisation, which operates through flows of goods, services, investment, people and ideas, and is enabled by widespread adoption of digital technologies. But globalisation will inevitably face counter-currents and crosswinds, such as geopolitical instability, possible armed conflict and new barriers to trade. Role of government: Governments will be compelled to respond to the many grand challenges arising in the future in a context marked by mounting fiscal pressure, eroding public confidence in government and the continuing transition to a multipolar world, with the consequent potential for growing instability. Economy, jobs and productivity: Digital technologies will continue to have major impacts on economies and societies. Over the next 15 years, firms will become predominantly digitalised, enabling product design, manufacturing and delivery processes to be highly integrated and efficient. The costs of equipment and computing will continue to fall, while the rise of open source development practices will create further communities of OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 231. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION developers. There will be greater opportunity for entrants – including individuals, outsider firms and entrepreneurs – to succeed in new markets. At the same time, the decreasing cost of computing power and advances in machine learning and artificial intelligence will further disrupt labour markets, with one in ten jobs in OECD countries at high risk of being automated over the next two decades. Society: The future will see striking changes in family and household structures in OECD countries with significant increases in one-person households and couples without children. Access to education and acquisition of skills will be one of the most important keys to improving life chances. Growth in female enrolment at all levels of education will continue, and will have important implications for labour markets and family life. The global population will be increasingly urban, with 90% of this growth occurring in Asia and Africa. Urbanisation could bring several benefits to developing countries, including better access to electricity, water and sanitation. But it could also lead to extensive slum formation with negative consequences for human health and the environment. Health, inequality and well-being: The treatment of infectious diseases that affect the developing world disproportionately will be further compromised by growing antibacterial resistance. Non-communicable and neurological diseases are projected to increase sharply in line with demographic ageing and globalisation of unhealthy lifestyles. Inequalities will grow in many developed countries, as will poverty rates and the profiles of those at risk of poverty. In this changing world, STI can work as a double-edged sword. On the one hand, technological advances have the potential to reinforce the destabilising effects of many of the megatrends described here. On the other, they have the potential to improve humankind’s response to many of the global challenges facing the planet. Either way, they will have a major influence, often in unexpected ways. OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 241. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION Eight megatrend areas covered in this chapter Demography Health, inequality Natural resources and well-being and energy Society Climate change The future of science, and environment technology and innovation Economy, jobs Globalisation and productivity Role of governments OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 2560+ 1. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION Demography 1 From 7.4 billion in 2015, the global population will reach 8.5 billion by 2030 and 9.7 billion by 2050 5 267 738 433 707 4 393 358 2 478 1 186 784 Africa’s By 2050, population will more 57 634 over a quarter than double by 2050 and 39 of the world account for more than will live in half the global population Africa increase 2050 2015 1 Regional % change, 2015-50 Population (million) Africa +109% Oceania +46% Latin America +23% North America +21% 1 Global parity between seniors and children Asia +20% -4% Europe 2015 2050 21% 21% Young Africa 1 Median age in the world and % of population living in Africa 1 in Africa 26% 12% 36 Working age 25 20 30 population 16% 26% 2015 2050 2015 2050 62% 58% 2 Flow of highly skilled migrants to OECD, 2001-11 1 Gender ratios Intra-OECD 31 Middle East and North Africa Europe (non-OECD) and Central Asia million 60% 40% Latin America Asia and Oceania The older population (80+) Sub-Saharan Africa will be predominantly +50% +75% +100% female in 2050. OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 26 -15 yr olds1. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION 1 Growing global population Most populous countries 2015 2050 • A larger global population, together with increased educational attainment China India and economic development, will likely OECD OECD translate into more consumers, India China innovators and researchers at a global United States United States level. Indonesia Nigeria • The demands and needs of the Brazil Indonesia centres of largest population growth, Pakistan Pakistan e.g. in Africa, could increasingly shape Nigeria Brazil Billion Billion innovation agendas. These areas will also further develop localised research 2 1 0 1 2 0 and innovation capabilities. • A greater focus on technology Population and migration transfer to centres of largest 3 population growth will likely be OECD, 1990-2060 needed to help them manage the Population 15+ Population 15+ (excl. migration) Million multiple development challenges they 1 200 face. Ageing societies • Ageing societies could see slower economic growth and resources 1 000 diverted to social and health spending. This could draw resources away from STI spending. • Ageing implies changes in lifestyle 800 and consumption patterns, which will 1990 2000 2010 2020 2030 2040 2050 2060 influence the types of products and services in demand and the direction of innovation. Migrant workers will be an important factor to mitigate the effects of ageing in most OECD countries. • Ageing-related illnesses, including cancer and dementia, will increasingly dominate health research agendas. • New technologies, e.g. robotics and 1 Fewer births and longer life spans neurosciences, could help the elderly Fertility rate Life expectancy live longer, healthier and more (Children per woman) (years) autonomously. 80 3.0 Labour and international migration 2.5 75 • Fewer people of working age will affect the labour market for STI skills and could lead to an ageing research 2.0 70 workforce in OECD countries. • The flow of highly skilled migrants 1.5 65 into OECD countries is likely to intensify, further contributing to the 60 1.0 STI labour force. 2010-15 2025-30 2045-50 • Though much debated, new technologies, e.g. robotics and artificial The population in all major regions of the world is ageing. intelligence, could alleviate expected labour shortages in the wider economy. Sources: 1. UNDESA (2015a). The population refers to persons aged 15 and above. Iceland is excluded from OECD destinations when comparisons between 2000-01 and 2010-11 are made.; 2. OECD (2015a); 3. Westmore, B. (2014). OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 271. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION Population growth in less developed countries The world’s population is expected to grow during the 21st century, though at a slower rate than in the recent past, reaching 8.5 billion by 2030 and 9.7 billion by 2050. Growth will take place almost entirely in less developed countries and Africa will account for over half of the expected increase. Population size in much of the developed world will stabilise and many countries will even experience a population decline. In Japan and much of Central and Eastern Europe, for example, populations are expected to fall by more than 15% by 2050. Global population growth will place unprecedented pressures on natural resources, e.g. food, energy and water, and STI will continue to be called upon to play essential roles in enhancing their production and conservation. In general, a larger global population, together with continuing economic development, should translate into more research and innovation activities. At the same time, research and innovation agendas may be significantly influenced by the multiple development challenges faced by countries with large population growth. New international STI co-operation and agreements – for example, around the UN’s SDGs and COP21 Paris Agreement – will seek to accelerate technology transfer to these countries to augment existing channels of diffusion through trade, foreign direct investment (FDI), and the acquisition of capital goods. Developing countries will need to expand and deepen their own research and innovation capabilities if they are to absorb and adapt these technologies for their own needs. Ageing societies A combination of low fertility rates and longer life spans will lead to future ageing in all major regions of the world. At current rates, there will be almost global parity between the number of over-60s and the number of children by 2050. This is a significant change from the past and present: while there are around 900 million over-60s in the world today, their number is projected to increase to 1.4 billion by 2030 and 2.1 billion by 2050. Europe is expected to have the largest proportion of over-60s (34% in 2050 compared to 24% in 2015). But rapid ageing will occur in other parts of the world as well, particularly in Asia (UN, 2015a). Almost 80% of the world’s older population will live in what are currently less developed regions. The People’s Republic of China (hereafter “China”) will have about 330 million citizens aged 65 or more, India about 230 million, and Brazil and Indonesia over 50 million by 2050 (UN, 2011). Globally, the number of over-80s is expected to multiply threefold by 2050 (from 125 million in 2015 to 434 million in 2050 and 944 million in 2100). The over-80s group accounted for just 1% of the OECD population in 1950, but its share rose to 4% in 2010 and is projected to be close to 10% by 2050. Ageing implies changes in lifestyle and consumption patterns, and this will have significant implications for the types of products and services in demand. New markets will emerge as part of a flourishing “silver economy” (OECD, 2014a), while more traditional ones may have to adapt or will even disappear, all of which will have implications for innovation. At the same time, ageing societies could see slower economic growth. High old-age dependency ratios, together with more prevalent non-communicable diseases and increased disability among the elderly, will place considerable burdens on healthcare and other services. The resulting fiscal pressures could draw public spending away from other areas, including STI. Ageing-related illnesses, including cancer and dementia, may also increasingly dominate health research agendas. As the world grows older together, including many emerging economies, international research co-operation on tackling age-related diseases could intensify. OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 281. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION International migration The smaller proportion of working-age people in the population will affect the labour market for STI skills in many OECD countries. The size of the working-age population (15-64) is currently at an historical peak and will very soon begin to diminish. This means the size of the dependent population (currently defined as younger than 15 and older than 64) relative to the working-age population that provides social and economic support will increase. While the ability of elderly citizens to remain active and continue working beyond official retirement age is set to increase, this alone is expected to be insufficient to meet workforce shortages. However, estimations of future workforce shortages should also consider technological change as an important determining factor, particularly the impacts of robotics and artificial intelligence. Though much debated, these technologies may reduce the demand for labour and help balance future skills mismatch. Such technologies and others (e.g. neurotechnologies) may also enhance physical and cognitive capacities, allowing people to work longer in their lives. International migration may help reduce anticipated labour and skills shortages in receiving countries. The central scenario in the OECD’s long-term growth projection assumes that inflows of migrant workers will be an important factor to mitigate ageing in most OECD countries (Westmore, 2014). All the signs point to a further strengthening of factors pushing and pulling migratory flows in the decades to come. Youth bulges in some parts of the developing world are creating conditions ripe for outward migration: a likely lack of employment opportunities and growing risks of internal conflict will force many to seek better lives and safety elsewhere. Climate change may also have more of an influence on future international migration flows (European Environment Agency, 2015). Many migrants bring qualifications and skills with them. There were 31 million highly educated migrants in OECD countries in 2011, and high-skilled migration increased by 72% over the previous decade (OECD, 2015a). In Europe, over the past decade, new immigrants represented 15% of entries into strongly growing occupations, such as science, technology and engineering as well as the health and education professions. In the United States, the equivalent figure is 22% (OECD and EC, 2014). However, migrants’ skills are not fully utilised in the labour markets of destination countries, and close to 8 million migrants with tertiary education in OECD countries are working in low- and medium-skilled jobs (OECD, 2015a). This is also a loss to origin countries facing “brain drain”, particularly developing ones, and compromises their ability to develop the indigenous research and innovation capabilities needed to address their development challenges. A further concern is the growing size and importance of ethnic minority communities in destination countries, some of which may be poorly integrated and economically disadvantaged, which could give rise to tensions and instability (OECD, 2016a). OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 29OECD 1. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION Natural resources and energy 1,2 Areas of floods, water stress, pollution and droughts today, and locations of megacities in 2030 Moscow Paris New York Istanbul Beijing, Tianjin Los Angeles Chongqing Tokyo Osaka Chengdu Cairo Kolkata Lahore Delhi Shanghai Dhaka Mexico City Guangzhou, Shenzhen Karachi Bangkok Ahmedabad Hyderabad Manila Mumbai Bangalor Bogota Ho Chi Minh Madras Jakarta Areas Lagos Dar es Salaam Lima Kinshasa Floods/sea-level rise Rio de Janeiro Luanda São Paulo Water scarcity Johannesburg Pollution 60% By Buenos Aires 2050, of the global Soil degradation/ up to 50% desertification population will face yield lost in some water issues by 2050 Megacities of African 10 million or more countries. Growing tensions on water-food-land resources 2050 52% of agricultural land is already affected +60% food to by moderate to severe feed 9.7 billion 3 degradation . 4 people by 2050 . 2015 GLOBAL 5 +55% water demand by 2050 . DEMAND 3 km +37% increase in global energy Electricity generation 6 000 6 demand by 2040 . Manufacturing World Domestic use 5 000 (Mtoe) Agriculture 17 000 4 000 BRIICS 15 000 3 000 Economic growth in 12 000 non-OECD will drive 2 000 OECD 9 000 further increases in 1 000 global energy 6 000 0 2000 2050 2000 2050 2000 2050 consumption. Asia will 3 000 account for around 60% 6 of the total increase . 2013 2020 2030 2040 OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 30 NON-OECD WORLDS E S L E B L A B F A Capture 1. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION 7 The promise of innovation Agricultural production outlook in 2025 • New STI knowledge could improve the monitoring, management and productivity of natural resources and, ultimately, decouple economic growth from their depletion. • Technology diffusion efforts will be as +10%/14% +16% +23% +17% +22% +15% important as developing new Cereals Meat Dairy Fish Sugar Ethanol technologies and should promote wide products adoption of best available technologies for efficient resource use. Price increases for most agricultural commodities will likely affect the poorest populations the most. Agriculture, food and water • In agriculture, as in other sectors, innovation is the main driver of 7 Aquaculture driving the expansion of global fish supply productivity growth. New innovative agricultural technologies and methods (Mt) could help increase land productivity 100 in a more sustainable way. 80 • New technologies will play a central 60 role in adapting agricultural practices to climate change and more extreme 40 weather-related conditions. 20 • Improvements in irrigation technologies and new agricultural 0 2000 2005 2010 2015 2020 2024 practices should help better monitor water use and slow groundwater South and East Asian countries will continue dominating overall depletion. aquaculture production, with China, India, Indonesia and Viet Nam • A new generation of wastewater accounting for the majority of projected growth. treatment plants using advanced technologies will be needed to deal with the challenge of micro-pollutants New markets for renewables 8 from medicines, cosmetics, etc. Energy supply mix (% of electricity generation) 2013 2040 Energy • Onshore wind and solar Solar PV 4% photovoltaics are ready to be Bioenergy 4% Other 1.5% mainstreamed, but high levels of deployment will require further 22% innovation in energy storage and smart Wind grid infrastructure to increase their Hydro 9% adaptability to weather variability. 15% • The Internet of Things and advanced 12% energy storage technologies offer Coal 30% opportunities to better monitor and manage energy systems. Cities could Gas 23% play a leading role in deploying these smart innovative approaches. Oil 1.5% Sources: 1. FAO (United Nations Food and Agricultural Organization) (2015). By 2050, up to 50% yield lost in some African countries if no significant improvement is achieved in production practices.; 2. UNDESA (2015b); 3. UNCCD (2014); 4. FAO (2012); 5. OECD (2012a); 6. IEA (2015a); 7. OECD/FAO (2016b). Cereals include wheat (10%), rice (13%), and maize (14%).; 8. IEA (2015a). OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 31 33.5% O W W S S E F E Aquaculture I O L N N S E S E I L R R R A E L C R U A N E L C U N1. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION Natural resources and energy Natural resources are a major – if not the primary – foundation of economic activity and thus ultimately of human welfare. Water, air, land and soil provide food, raw materials and energy carriers to support socio-economic activities. Their extraction and consumption affects the quality of life and well-being of current and future generations. Their efficient management and sustainable use are key to economic growth and environmental quality (OECD, 2014b). Future population growth, changing lifestyles and economic development will enlarge global demand for water, food and energy and increase pressures on natural resources. Agriculture will remain the largest consumer of water, affecting the quality of surface and groundwater through the release of nutrients and micro-pollutants. Several energy sources change the quality and quantity of water available (e.g. hydraulic fracturing, hydropower, and cooling techniques for thermal and nuclear power plants), so that future shifts in the energy mix have to factor in water management as well (OECD, 2012a). The growing demand for biofuels has raised competition on arable yields. Further reallocation of productive lands towards non-alimentary production will be driven by price volatility and relative profitability of food commodities but could challenge food security in the medium term. Developments in STI are set to bring new knowledge, innovative solutions and enhanced infrastructures to improve monitoring, management and productivity of natural assets and, ultimately, to decouple economic growth from their depletion. Governments are expected to play significant roles, providing knowledge infrastructures (e.g. databanks, centres of technology convergence), sharing knowledge and best practices, and financing research on agriculture, energy and natural resource management. Water Severe water stress is likely in many parts of the world, as water demand has outpaced population growth during the last century (OECD, 2012a; 2014b). If current socio-economic trends continue and no new water management policies are implemented (a baseline scenario), water demand is projected to increase by 55% globally between 2000 and 2050. The sharpest increases are expected from manufacturing (+400%), electricity generation (+140%) and domestic use (+130%). Groundwater is by far the largest freshwater resource on Earth (excluding water stored as ice), representing over 90% of the world’s resource (UNEP, 2008; Boswinkel, 2000, cited in OECD, 2012a; OECD, 2015b). In areas with limited surface water supply, such as regions of Africa, it is a relatively clean, reliable and cost-effective resource. Yet, groundwater is being exploited faster than it can be replenished in many parts of the world. Its rapid depletion is a consequence of the explosive spread of small pump irrigation throughout the developing world. Such intensive groundwater use is not confined to the developing world, however, with the volume of groundwater used by irrigators in several OECD countries also substantially above recharge rates, e.g. in some regions of Greece, Italy, Mexico and the United States, undermining the economic viability of farming (OECD, 2012a). Improvements in irrigation technologies and the introduction of new agricultural practices and robotics in agriculture could help better monitor water use and slow groundwater depletion, though will need to be coupled with wider institutional changes to be effective (OECD, 2015b). Surface and groundwater are also becoming increasingly polluted because of nutrient flows from agriculture and poor wastewater treatment. Surpluses of nitrogen in agriculture OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 321. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION are projected to decrease in most OECD countries by 2050 with greater efficiency of fertiliser use. The trend is, however, expected to go in the opposite direction in China, India and most developing countries. In parallel, nutrient effluents from wastewater are projected to increase rapidly due to population growth, rapid urbanisation and the growing number of households connected to sanitation and sewage systems. The nutrient removal in wastewater treatment systems is also expected to improve rapidly, but not fast enough to counterbalance the projected rise in inflows. Micro-pollutants (e.g. medicines, cosmetics, cleaning agents, and herbicides) are particularly worrying because they enter water bodies of various types (urban drainage, agriculture, rainwater runoff), have negative and cumulative effects on organisms (e.g. interference with hormone systems, cancers, births defects) and are resistant to regular treatment technologies. The consequences of degraded water quality will be increased eutrophication, biodiversity loss and disease (OECD, 2012a). The economic costs of treating water to meet drinking water standards are also significant in some OECD countries. Eutrophication of marine waters imposes high economic costs on commercial fisheries for some countries (e.g. Korea and the United States) (OECD, 2012a). Advances in synthetic biology, for instance, for crop genetics, and improved efficiency in water sanitation, will require more R&D and the implementation of new generations of wastewater treatment plants and sanitation and sewage systems, combining the use of sensors and nanotechnologies (see Chapter 2). Tapping alternative water sources, such as rain and storm water, used water, and desalinated sea, and encouraging successive uses of water to alleviate scarcity are also emerging innovative practices. Water is likely to become a major political issue. Over 40% of the world’s population (3.9 billion people) is likely to live in river basins under severe water stress by 2050, but, at the same time, almost 20% (1.6 billion) are projected to be at risk from floods. Most of the future growth in water demand will arise from developing countries where the degradation of environmental conditions is already well-advanced. By contrast, water demand across the OECD area is expected to fall in line with efficiency improvements in agriculture and investments in wastewater treatment (OECD, 2012a). Food Global food and agriculture systems face multiple challenges. More food must be produced for a growing and more affluent population that demands a more diverse diet. At the same time, competition for alternative uses of natural resources is increasing and agricultural practices and technologies will have to adapt to climate change and more extreme weather-related conditions. It is estimated that 60% more food will be required to feed the world population by 2050 (OECD, 2013a). On a global level, food production should be able to support this demand and the proportion of people who are undernourished should drop slightly from 11% to 8% by 2025 (OECD/FAO, 2016). However, food and nutritional insecurity will persist in many, predominantly poor, regions where water scarcity and soil degradation will continue to damage agricultural lands (FAO and WWC, 2015). Today, around half of arable land is already affected by moderate to severe degradation. Desertification and drought are likely to transform around 12 million hectares of productive lands (the equivalent of Bulgaria, Honduras, or Nicaragua) into barren regions annually (UN, 2015b). If no significant improvements are achieved in production practices, the loss of yield may be as high as 50% in some African countries by 2050 (UNCCD, 2014). The situation in most OECD OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 331. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION and BRIICS countries is, however, less severe, as continuing yield improvements will lead to more efficient use of land. Instead of agricultural land expansion, land abandonment is planned in many countries, which will allow ecosystems to partially recover and regenerate (OECD, 2012a). Modern agricultural technologies and methods could help increase land productivity in a more sustainable way. In agriculture, as in other sectors, innovation is the main driver of productivity growth (OECD, 2013b). Innovation can also improve the environmental performance of farms and the quality of agricultural products. Sensors can help farmers manage their tractor fleet, reducing downtime and saving energy (OECD, 2016b). Some innovations (e.g. around irrigation, animal medicines, pesticides, improved seeds, and innovative risk management tools) have the potential to help farmers better deal with production and income uncertainties, and ultimately increase earnings. For instance, increased production, together with innovation in aquaculture, has significantly lowered production costs in fisheries, providing benefits to both consumers and producers (OECD, 2015c). In some regions, the challenge is to adapt agricultural production systems to more difficult natural environments, e.g. due to salinity, more frequent drought, etc. Food consumption habits will likely change, reflecting growing living standards, higher participation rates of women in the labour force, and reduced time available for meals (OECD, 2013b). The prices of most agricultural commodities are projected to increase significantly by 2050, which will especially affect poorer populations (Ignaciuk and Mason- D’Croz, 2014). Innovation will have a key role to play in helping the agrifood sector produce more nutritious, diverse and abundant food, address changes in food diets, and provide raw materials for non-food use. At the same time, innovation should alleviate natural resource depletion and enable adaptation to the expected changes in natural conditions caused by climate change (OECD, 2013b). Aquaculture will continue to be one of the fastest growing food sectors and, in 2025, is expected to provide over half the fish consumed worldwide. Fish consumption will expand in all continents, but particularly in Oceania and Asia, and South and East Asian countries, predominantly China, India, Indonesia and Viet Nam, which are projected to dominate production (OECD/FAO, 2016). Energy Energy consumption will rise sharply, driven by population and economic growth. Based on existing and planned government policies (the International Energy Agency’s IEA so-called “New Policies Scenario”), global primary energy demand is set to increase by 37% between 2012 and 2040. Most of this increased demand can be ascribed to economic growth in OECD partner economies, particularly in Asia, which will account for around 60% of global energy consumption (IEA, 2015a). Growth in global demand is expected to slow down after 2025 as a result of price and policy effects, and structural shifts towards services and lighter industrial sectors (IEA, 2014a). However, industry will likely remain the largest consumer of energy in 2040, followed by transportation and commercial and residential buildings. The global energy mix will be transformed, mainly on account of the growing use of renewables. This means that low-carbon sources and fossil energies (i.e. oil, gas and coal) will make up almost-equal parts in the world’s energy supply mix by 2040. Worldwide, the largest share of growth in use of renewables for electricity generation will be from wind power (34%), followed by hydropower (30%) and solar technologies (18%) (IEA, 2014a). At the OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 341. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION same time, biofuels may provide up to 27% of the world’s transportation fuel by 2050, up from the current level of 2% (IEA, 2011). New markets for renewables will depend on technological breakthroughs and smart infrastructures, enabled by significant investments in R&D and infrastructures and new strategic public-private partnerships (IEA, 2014b). The water-food-energy nexus The interconnection of water-food-energy issues and their interdependence make them difficult to address separately. The Internet of Things (IoT), smart apps, sensors, machine-to- machine communication, and the greater connectivity of people and objects offer opportunities to better monitor pressures on the water-food-energy nexus, anticipate critical tensions and balance supply and demand (see Chapter 2). Cities are the places at which these smart innovative approaches could arise and be efficiently deployed (OECD, 2014c). The nexus among water, food and energy (and environment) is close, complex, and challenging. Policy coherence and a co-ordinated approach among water, agriculture and energy policies, as well as other sectoral policies – particularly transport, industry and construction – will be essential. Smart regulation will be required to regulate natural resources consumption (e.g. water extraction licenses) and put sustainable prices on natural resources and related services as a way to signal scarcity and manage demand. International co-operation on R&D, on resource management and for aligning national policy frameworks will be needed. OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 352°C Australia/Ne I ndonesia Brazil North Americ World w Zealand China 1. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION Climate change and environment Energy-related CO emissions per capita, 2030 2 1 CO emissions account for 75% of global GHG emissions, with most coming from energy production 2 Russia US 12.0 EU 10.9 Caspian 4.7 6.0 China World 7.1 Middle East 3.0 3.4 Mexico Japan 8.2 2.1 7.3 Korea 0.9 9.4 India 2.7 Africa 2.5 Southeast Asia Latin America +50% GHG emissions by 2050, mostly driven by energy demand and economic growth in key emerging economies. 1 tonne of CO 2 2 40%-70% reductions Global emissions and the 2°C target 4 Terrestrial biodiversity loss in global GHG emissions by 2050 to Emissions Global 3 meet the 2°C Scenario . (GtCO e/yr) warming (%) 2 +6°C 75 100 +5°C 10% 70 80 Biodiversity loss by 2050, with a +4°C 65 60 highest losses in Asia, Europe 4 +3°C and southern Africa . 60 40 +2°C 55 20 +1°C 60% 50 0 +/-0 of the world’s biocapacity is held by only 2010 2020 2030 ten countries that suffer most from 2010 2030 2050 5 heavy land and forest degradation . OECD biodiversity is at threat 5 % of threatened species 19% 13% 20% 25% Mammals Vascular plants 39% 33% Birds Marine fish Reptiles Amphibians OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 36 Baseline1. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION International co-ordination 6 Key technologies to reduce power sector CO emissions 2 • The global nature of climate change (GtCO ) 2 and environmental degradation will Electricity savings 25% 25 require greater international Fuel switching and Efficiency gains co-operation on solutions, including efficiency 2% 20 Carbon capture and research and innovation. storage 14% 15 • Climate change mitigation and adaptation will depend on technology Nuclear 15% 10 transfer to less advanced countries, Other 2% Wind 15% which are set to account for the largest 5 Solar 14% increases in GHG emissions over the Renewables and nuclear 0 Hydro 6% next few decades due to their rapid Biomass 7% development. 2012 2020 2030 2040 2050 Research strategies 7 Space junk: danger of collision Exploding sales of hybrid vehicles • Energy technology innovation will be 8 Total vehicle sales in % key in achieving the 2 °C scenario. A Number comprehensive portfolio of low-carbon of objects technologies, including solutions for (thousand) decarbonisation, will be needed to 50% 16 achieve policy climate goals. • Challenges of climate change and 12 ongoing degradation of the natural environment, including loss of 8 biodiversity, could become even more dominant themes in future national 4 research agendas. 2014 2040 • The “circular economy” concept will 0 Hybrid cars are expected to likely gain momentum and shape become cost-competitive by 2025. 2010 future innovation agendas. New 1956 1980 technologies, processes, services and business models will be fundamental 9 requirements for a circular economy. Waste disposal: ever more efforts to reduce landfilling Material recovery (recycling + composting) Multi-actor perspective Incineration with energy recovery Incineration without energy recovery • While governments are expected to Landfill (%) play a leading role in enabling the 100 transition to low carbon societies, the 90 private sector will need to lead 80 innovation efforts in this direction. 70 • The Internet of Things, smart apps 60 and sensors will enable a closer 50 monitoring of climate change, 40 ecosystems and biodiversity. 30 20 • Participatory monitoring and big data 10 will generate large amounts of novel 0 data that could support new research practices and citizen science in support of more sustainable growth. Over the past two decades, OECD countries have put significant efforts into curbing municipal waste generation. Sources: 1. IEA (2015b). Energy-related CO emissions per capita by selected region in the INDC Scenario and world average in the 2 450 Scenario. ; 2. UNEP (2015); 3. UNEP (2014); 4. OECD (2012a). Terrestrial mean species abundance (terrestrial MSA) is a relative indicator describing changes of biodiversity with reference to the original state of the intact or pristine ecosystem (i.e. a completely intact ecosystem has a MSA of 100%).; 5. OECD (2016c). OECD figures are simple average of available country shares. However simple average does not reflect cross-country differences, and some species are more threatened in some countries than in others. Species assessed as Critically Endangered (CR), Endangered (EN), or Vulnerable (VU) are referred to as “threatened” species. Reporting the proportion of threatened species on The IUCN Red List is complicated by the fact that not all species groups have been fully evaluated, and also by the fact that some species have so little information available that they can only be assessed as Data Deficient (DD).; 6. OECD and IEA (2015). The 2°C Scenario (2DS) is the main focus of Energy Technology Perspectives. It limits the total remaining cumulative energy-related CO emissions between 2 2015 and 2100 to 1 000 GtCO .; 7. NASA (29 September 2016); 8. ExxonMobil (2016); 9. OECD (2015d), OECD (2014d), OECD (2014e). 2 OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 37 Debris b i t r o cts Tot a l o in e bj 1% DEU CHE BEL JAP NDL SWE DEN NOR AUS KOR LUX FIN FRA GBR SVN ITA IRL ISL PRT USA CZE AUS ESP POL HUN EST SVK CAN GRC ISR MEX TUR CHL1. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION The world is warming Global land and ocean surface temperature data show an averaged combined warming of 0.85°C over the period 1880 to 2012. The greatest warming over the past century has occurred at high latitudes, with a large portion of the Arctic having experienced warming o of more than 2 C. The last 30 years were likely the warmest of the last 1 400 years in the northern hemisphere (IPCC, 2014). Further global warming over the next few decades is now inevitable. There is a strong relationship between projected global temperature change and cumulative CO emissions (IPCC, 2014). Anthropogenic greenhouse gas (GHG) emissions are 2 extremely likely to have been the dominant cause of the observed warming since the mid-20th century. Atmospheric concentrations of carbon dioxide (CO ), methane and nitrous oxide are 2 unprecedented in at least the last 800 000 years. CO emissions account for around 75% of 2 global GHG emissions, with most coming from energy production. Around half of the anthropogenic CO emissions since 1750 have occurred in the last 40 years. Fossil fuel 2 combustion represents two-thirds of global CO emissions (OECD, 2012a) while agriculture is 2 a major emitter of the more powerful greenhouse gases of methane and nitrous oxide. Mitigating global warming requires much more ambitious strategies to reduce GHG emissions. The IEA’s New Policies Scenario is consistent with a long-term temperature rise of 4°C. This ambitious scenario requires significant changes in policy and technologies, but will still lead to dangerous levels of climate change. A more stringent scenario (2DS) that would meet the 2°C target agreed at the Paris climate conference requires a 40%-70% reduction in global GHG emissions by 2050. It will mean increasing the share of low-carbon electricity supply from 30% to more than 80% by this time (IPCC, 2014). Energy technology innovation will be key in achieving the 2DS. A comprehensive portfolio of low-carbon technologies, including solutions for decarbonisation, could make climate goals achievable (IEA, 2015c). Some solutions will be broadly applicable, while others will target specific sectors. In the power sector, onshore wind and solar PV are ready to be mainstreamed. But high levels of deployment will require further innovation in energy storage and smart grid infrastructure to increase their flexibility to weather variability (IEA, 2015c). Carbon capture and storage (CCS) technologies are projected to play an important role, though require further technical and market development before they can be extensively implemented. Nanotechnology can provide innovative solutions for CCS materials (OECD, 2016b). Biotechnology also offers unique solutions to dependence on oil and petrochemicals. Bio-based batteries, artificial photosynthesis and micro-organisms that produce biofuels are some recent breakthroughs that could support a bio-based revolution in energy production. There are also expanding markets for low-energy products and components and, in sectors such as industry, transport and buildings, energy efficiency technologies are expected to play a leading role. Nanotechnology can provide innovative solutions to lower energy use in industry and enable the replacement of energy-hungry processes with low- cost processes. In addition, low-energy components or technologies could be instrumental to the development and uptake of other technologies. For example, additive manufacturing can support less material and energy use through sophisticated design and lean production principles. This can be achieved by printing replacement parts that would otherwise be discarded; by reducing weight in a vehicle; or by improving a product’s energy efficiency. Such energy savings can be quite large, especially in sectors like aerospace. OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 381. MEGATRENDS AFFECTING SCIENCE, TECHNOLOGY AND INNOVATION As emerging economies are projected to account for most of the increase in GHG emissions over the coming decades, their uptake of innovative low-carbon technologies will be crucial – and could account for almost three-quarters of worldwide CO emissions 2 reductions by 2050 in the 2DS. Rapid economic development in these regions will support technological deployment but international co-operation will be required to ensure technology and knowledge transfer. Furthermore, future technology adoption will require raising domestic skills and organisational capabilities (IEA, 2015c). Consequences for climate, ecosystems and health are dramatic A series of severe climatic changes will accompany global warming. Heat waves will likely occur more often and last longer, while extreme precipitation events will become more intense and frequent in many regions. Rainfall will most likely increase in the tropics and higher latitudes, but decrease in drier areas. The oceans will continue to warm and acidify, strongly affecting marine ecosystems. The global mean sea level will continue to rise at an even higher rate than during the last four decades. The Arctic region will continue to warm more rapidly than the global mean, leading to further glacier melt and permafrost thawing. However, while the Atlantic Meridional Overturning Circulation will most likely weaken over the 21st century, an abrupt transition or collapse is not expected (IPCC, 2014). Climate change will have profound impacts on water and food security at regional and global levels. Extreme and variable rainfall will affect water availability and supply, food security, and agricultural incomes, and will lead to shifts in the production areas of food and non-food crops around the world (IPCC, 2014). The impacts of climate change will likely reduce renewable surface water and groundwater resources in the driest regions, intensifying competition for water among different sectors (IPCC, 2014). As climate change modifies water-food systems and the quality of air, new diseases could appear or existing ones expand. Global premature deaths from outdoor air pollution are set to double by 2050 (OECD, 2012a). Malaria is the most important infectious disease that is exacerbated by climate change. Currently, more than half of the world’s population (3.7 billion) lives in areas at risk. This number is expected to grow to 5.7 billion people by 2050. The bulk of the population living in risk areas (i.e. warm areas which are a suitable habitat for the malaria mosquito) will be in Asia (3.2 billion) and Africa (1.6 billion). The number of weather-related disasters has increased worldwide over the last three decades, particularly floods, droughts and storms (EMDAT data, cited in OECD, 2012a). Science and technology will play a vital role in monitoring ecosystems and managing natural disasters. National meteorological agencies that are often in charge of early warning systems will increasingly rely on satellite data, in addition to ground-based networks of radars, to maintain continuous observation of global weather, making warning systems more efficient (OECD, 2012c). In particular, the deployment of constellations of nano- and microsatellites could support a continuous monitoring of wider geographic areas, including oceans, and improvements in forecasting (see Chapter 2). Construction and transport industries will draw on innovative materials and technologies to adapt to new extreme environmental conditions. Global biodiversity is at threat Changes in temperature and precipitation regimes influence the distribution of species and ecosystems. As temperatures increase, ecosystems and species’ ranges tend to shift towards the poles or to higher altitudes (OECD, 2012a). This migration causes some OECD SCIENCE, TECHNOLOGY AND INNOVATION OUTLOOK 2016 © OECD 2016 39

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