Why you must plan for disruption on the road to 2035

“Every business leader wants to know how today’s strategic decisions will play out in the short, medium and long term,” says Angela Johnson, Vice-President of Ricardo Strategic Consulting. “Problem is, none of us can predict the future.”

Scenarios are alternative futures in which today’s decisions will take effect. Scenario planning is a tool to help organisations make these decisions more effectively.

Ricardo’s unique approach to scenario planning combines unrivalled strategic insight with more than 100 years of trusted engineering capability.

Responding to the pace of change

“Conventional forecasting,” Johnson explains, “does not take into account the inherent uncertainties within a market, such as economic downturns and geopolitical fractures.

“Factor in political change, such as the election of a new national leader or the UK leaving the European Union, or the seismic consequences of a pandemic, and it is clear that the long-term future cannot be calculated simply as an extrapolation of past trends or cycles.

“There is increasing uncertainty in our world. Too many disruptive forces are at work. And I would argue that uncertainty is moving closer and closer to us. Change is happening faster.”

Preparing for risks and opportunities

The challenge for industry leaders and decision-makers is twofold: to understand the potential risks and opportunities that their enterprise may face in the years to come and to make meaningful preparations for them.

“By blending the known and the unknown into plausible views of what lies ahead of us,” says Adrian Greaney, Ricardo’s Director of Technology and Products, “business leaders are better placed to ask themselves: if I place my organisation into one of those scenarios, how robust is the strategy that I’m following?

“Work with scenarios can expose gaps and anticipate weaknesses and inflexibilities against which action can be taken. It can also show where unexpected strengths may lie.”

Ricardo’s deep strategic expertise equips business leaders to navigate the complexities of the future while our world-class technical design, engineering and automotive experience supports planning for implementation.

To help achieve both these aims, Ricardo’s experts have created four scenarios from the perspective of the world in 2035.

Introducing Creative Scavengers

The first scenario, called ‘Creative scavengers’, depicts what Johnson describes as “a tough place to live – a world shaped by disruption. There’s a lot of geopolitical fracture, along with social unrest, political battles over the supply of critical raw materials and poor employment levels compounded by the deployment of AI.”

“Some aspects of this scenario,” adds Greaney, “are already playing out in our world today. Russia’s invasion of Ukraine was more than a dark day for Europe. Among its consequences has been the closure of Ukraine’s two leading suppliers of neon, which produce about half the world’s supply of the key ingredient for making chips; and traders avoiding sourcing new cobalt from Russia. The impact will inevitably be shortages and sharp price rises.”

The scenario describes economic and industry shocks including a global battery recycling and disposal scandal we’ve dubbed ‘Batterygate’, where batteries are simply being discarded and left to pollute. Sluggish economic growth and poor GDP are really impacting consumers and contributing to a slowdown in mobility sector revenues with new players struggling.

“Well,” says Greaney, “our reality now is that a raw materials shortage is set to bring severe disruption to the electric vehicle battery supply chain, with vital rare earth metals unavailable, limited or being hoarded by some manufacturers.

“And in terms of the global economy, Nomura is predicting that a US recession is more than a 50/50 possibility this year. World Bank President David Malpass has gone even further and pessimistically stated that for many countries, recession will be hard to avoid.”

In this scenario, responses to critical climate issues are disconnected. There’s a major growth in recycling, repurposing and reuse, which has improved the life cycle footprints of many goods and services – but, says Johnson, “this is driven by necessity. The internal combustion engine has prevailed because energy storage costs remain high and technology advances have been only sporadic.”

Learn more about Creative Scavengers

‘Creative scavengers’ is one of four plausible alternative futures developed by Ricardo. In each scenario our experts drill down into the engineering detail to give a detailed and informed view of the challenges that may lie ahead.

The critical uncertainties in this scenario are the driving forces that have a major impact on your decision-making.

Learn more about the creative scavengers scenario.

Register to learn more from Ricardo’s experts and receive regular updates that will help answer two key questions:

• Is your strategy robust to the risks and challenges that ‘Creative scavengers’ and other scenarios will bring?
• Are you equipped to deliver against that strategy?

If your strategy is robust against our scenarios, then it will very likely be robust against whatever the future actually brings.