Price & Growth Realities
Vision 2026 update - Future Thinking
Price & Growth Realities
A new value-based system
Since 2021, the COVID-19 pandemic, the war in Ukraine, and geopolitical tensions have disrupted markets and economies worldwide. Rises in the costs of shipping, materials, energy, and manufacturing may have forced many brands to raise their prices or cut services and quality to make a profit. This inflationary pressure across essential sectors, including food, housing, utilities, clothing, insurance, and transportation, has driven many individuals and families to reevaluate and alter their spending behaviours.
Although global food and fuel prices have retreated from their peak levels, and inflation has begun to decline, the cost of everyday living remains high for many. Despite the moderation in some areas, prices are not returning to their previous levels. Many people are finding it increasingly difficult to make ends meet, to save, and to achieve some financial security as the economic environment continues to put pressure on household budgets and savings.
The “Price and Growth Realities” update delves into the evolving dynamics of value and growth. It explores how demographic changes, economic policies, climate transitions and technological advancements reshape the traditional concepts of growth and value. This analysis highlights how these factors redefine a new perspective on value creation and economic development.
A new value-based system underscores the importance of sustainable growth, human capital, knowledge, and innovation as the primary drivers of economic progress. The transition from consumption-driven to investment-driven economies focuses on fostering long-term growth rather than short-term wins. Substantial investments in education and skills development are needed as artificial intelligence, and other advanced technologies reshape the workforce and economic landscape.
Download the PDF of the report here
“Mine is the Soil and the Toil For Your Paradise”, exhibition by Lena Cobangbang in Towards gallery
Content
The global middle class
The supply chain
Future perspective
The AI economy
Nature positive
Hyper personalisation
The economy as a garden
Neuro economics
Sustainable culture
Human capital
The global middle class
Increased reliance on basic necessities
In Western societies, the middle class is shrinking due to ageing populations, persistent inflation, and stagnant wages, widening economic disparities and leading to a more polarized market. Fewer people can afford their cost of living, and rising prices push people towards ongoing budget reassessment. Financial pressure redefines basic needs and luxuries, with a growing preference for stability and affordability.
Businesses must navigate the complexities of catering to those struggling to meet basic needs by including low-priced product ranges and investments in societal betterment initiatives. Companies can lead by example by implementing fair wage practices and providing stable employment opportunities.
Left to right, It’s Expensive to Be Poor by Yonamine, How the Middle Class Is Changing by Pew Research Center, Nothing CMF 1 phone, affordable modular phone, Nice& Serious socks, 100% of the sale of each pair will go to someone experiencing homelessness., The Rise of the Global Middle Class, a book by Homi Kharas
Growing middle class in Asia
The emerging middle classes in China and India demonstrate a crucial shift in global consumption patterns from the West to emerging Asian markets. These countries are at a critical time to redefine growth and avoid the West's environmental, ecological, and health pitfalls.
Reaching net zero by 2050 and serving the growing middle class will require systemic change, a deep transformation towards environmentally sustainable and economically viable consumption. Integrating sustainability considerations into policy discussions is critical to fostering a robust and resilient middle class, ensuring sustainable development, and promoting long-term health and stability.
The good life
Future perspective
Wealth creation
A warm, dry place to live, nutritious food, fair work and a sense of security are fundamental building blocks for a healthy life. Over the past decade, the economy has failed to build enough homes to accommodate the growing number of households, driving up housing prices. As a result, many young individuals and families find homeownership to build wealth and economic stability beyond their financial reach.
Income is also increasingly linked to health disparities. Today’s richer citizens are healthier than poorer ones. People in the bottom 40 per cent of the income distribution are almost twice as likely to report poor health as those in the top 20 per cent.
Left to right, Startblok Riekerhaven, developed by De Key and Socius Wonen, houses 565 young residents; half are refugees, and the other half are young Dutch citizens seeking affordable housing, Sevgi Comert, photo by Jennifer Carlos, Nourish platform, accessible, personalised nutrition care covered by health insurance, The parenthood dilemma by Gina Rushton
Lack of certainty
Economic challenges affect mental and physical health and influence how families raise children, care for older people, and manage illnesses. Recent data shows that people under 30 spend over 30% of their income on rent, more than any other age group. The rising costs of housing and food, combined with the relentless pressures of modern life, are forcing many young adults to reassess their life choices.
A sense of uncertainty and instability has led to prioritizing immediate needs like secure housing and steady employment over long-term investments and family planning. The challenge lies in creating a stable environment where young people can feel safe enough to make significant life decisions, such as starting a family, in a world that often can feel on the verge of collapse.
Building blocks
Nature positive
Co-existence
Severe weather events like hurricanes, droughts, and floods can disrupt supply chains, damage infrastructure, and reduce agricultural yields, leading to increased prices and economic instability. Adapting means recognizing and respecting nature’s limits, ensuring human activities do not overextend resources.
A different attitude towards the force of nature means appreciating its power and understanding human vulnerability. By aligning our growth with nature’s rhythms, we can create a harmonious and sustainable coexistence and symbiosis that benefits humanity and the environment.
Left to right, Left to right, AI weather forecasts can be used to show how greenhouse gas emissions affect extreme weather by Oxford University Physics, Biofabricate’s future vision, Spotify announced Nature as an official artist on their platform in partnership with AKQA and the Museum for the United Nations, The Greenhouse Project by Companion–Platform
Sustainable growth
True sustainability involves carefully managing resources and investments to foster long-term growth without overextending our ecological or financial capacities. To meet climate goals, significant investment is required, potentially doubling current levels.
Regulation is crucial in ensuring sustainable growth and setting boundaries that protect the environment while allowing economic development. This shift from consumption-driven to investment-driven economies benefits various sectors, including industries, construction, services, and transportation, by fostering innovation and resilience against climate impacts.
Partnership
The economy as a garden
An ecosystem of value creation
The focus is shifting towards sustaining value throughout the entire lifecycle and creating ecosystems of products and services to reshape the future valuation of goods and materials. This transition needs practical sustainability practices, green, inclusive growth and a model that harmonizes growth with ecological and social well-being.
Supporting a new paradigm requires addressing structural issues in value-creation ecosystems. This involves re-evaluating what constitutes value and for what duration and altering our consumer habits and perceptions. Prioritizing the quality of life, environmental impact, and personal fulfilment over conventional wealth metrics can lead to meaningful change.
Left to right, Garden proposal Deep Time by Piet Oudolf, Think like a Tree by Maurizio Donadi, i Light Singapore, Green Economy (won, yuan, yen) by Yuken Teruya
Shrink to grow
An evolution in values prompts businesses and policymakers to innovate in ways that promote durability and long-term value creation. Embracing concepts like “shrink to grow” and strategic pruning can help streamline efforts and ensure that resources are allocated efficiently and effectively. Just as a gardener plans for long-term growth and seasons and spends more time tending to the struggling parts of his garden, policymakers should devote more significant effort to maximizing opportunities for those at the bottom of the income distribution to improve.
This shift in perception of value is not just a change but a commitment. It might cause a loss of freedom. However, focusing on long-term value and durability can cultivate a deeper sense of purpose and fulfilment, growing resilience and adaptability in the world and taking over endless consumption.
Rethinking value
Sustainable culture
A better future
Building a sustainable culture focused on responsible growth is needed for a better future. To create a positive impact, we must change the way we think, engage, and act. Humanity and nature are best served if we distance ourselves from the existing economic growth model.
To be realistic about the fundamental challenges of growth, we must adjust our cultural assumptions and reform unsustainable business models. This needs a fundamental shift from reducing or compensating emissions to avoiding emissions from the start when conceiving and designing products. Reusing and repairing existing products that are slowly being introduced is a start to changing current consumption habits.
Left to right, Transnomadica “31 unusual jackets”, a restoration project of 31 Carhartt jackets, Vida.Kit, a virtual and green influencer, developed by the University of Sheffield to educate children about sustainable behaviour and climate change, Design Council plans to ‘upskill’ 1 Million UK designers by 2030, SOJO repair service
Green design skills
Designing for the planet is driving a new generation of designers to view sustainability as a fundamental principle. There is an increasing need to share diverse approaches to crafting more responsible practices and approach design as an ecology with the objective of reusing as much material as possible.
Design is a crucial green skill, encompassing practical skills in efficiently using and reusing natural resources and even replenishing them and conceptual skills in making regenerative lifestyles more accessible, appealing, and inclusive.
Green skills
The supply chain
Product pricing
A large percentage of products made are not sold, indicating a serious imbalance between supply and demand. Solving overcapacity and unsold inventory is needed to maintain an efficient supply chain and lower waste. Effective inventory management and made-to-order can mitigate the effects of overproduction and excess inventory.
For many people, making a sustainable choice is too expensive. Making sustainable products more affordable can lead to more ethical and environmentally friendly choices. Increasing product volumes and becoming more cost-effective can lead to lower prices. Moving away from overconsumption to an attitude of buying less but better items is the way forward.
Left to right, Sample sale announcement by Conner Ives, Critical and strategic raw materials map by Geological Survey of Sweden, Rubble Renaissance by Assemble, ‘Tag’, a project focused on addressing the ecological impacts of production and consumption by Kvadrat and Maxwell Ashford
True costs
A deeper understanding of the factors influencing product pricing is needed to achieve transparency in pricing mechanisms so businesses and customers can make more informed decisions. This transparency promotes market fairness and enhances trust, as customers are assured that they are paying a fair price based on clear and accessible information.
Transparency in pricing mechanisms may raise prices as low costs will surface as unsustainable. Currently, 8 out of 10 fashion companies are not paying livable wages for people in the supply chain. Brand involvement, commitment, and long-term investments in the supply chain will lead to better monitoring and reporting on working conditions, environmental practices, and quality control and can increase the value chain for farmers and factory workers.
Transparency
The AI economy
Efficiency
AI can enhance economic growth and productivity, leading to more efficient processes, reduced costs, and new markets and opportunities. The efficiency gains and cost reductions AI can achieve can lower production and long-term labour costs, translating to lower prices for goods and services. In an economy where inflation is a concern, this can help maintain stable prices.
Integrating advanced technologies can support the workforce and maintain a competitive advantage. A shorter workweek can boost efficiency by allowing employees to recharge and focus better during their working days. When AI streamlines administrative tasks, employees can maximize their productivity within reduced work hours.
Left to right, The Turing Trap by Erik Brynjolfsson, Stretch warehouse automation by Boston Dynamics, AFAS Software transitions to a four-day workweek while still paying employees for full-time hours, Real-Time Tech Supply Chain Analysis Tool
Leisure time
According to the IMF, in advanced economies, about 60 per cent of jobs may be impacted by AI, and in the future, humans could have more leisure time thanks to AI. This shift can lead to broader societal changes in how work is valued and structured and asks us to rethinking traditional tax structures. People may increasingly focus on personal health and wellbeing and spend more on entertainment, travel, creativity, art, and lifelong learning and skill development.
In emerging markets and low-income countries, AI exposure is expected to be 40 per cent and 26 per cent, respectively. AI may drive bigger inequalities and gaps in society. Also, the concentration of AI technologies in the hands of a few large corporations could lead to a disproportionate accumulation of wealth and power.
The age of the robot
Hyper personalisation
Digital twins
Digital prototyping can be a strategy for running scenarios, predicting risks, and limiting overproduction. Digital twins of physical entities can test potential issues before they are created in the real world to make better decisions and provide insights into performance, maintenance needs, and operational efficiencies. Working with digital twins for scenario testing and optimization can result in personalized, customer-centric solutions.
The concept of the human digital twin has emerged in healthcare and will lead to precision medicine. The human digital twin enables personalized treatment plans, enhances disease prevention strategies, and identifies genetic factors influencing health outcomes.
Left to right, Human Digital Twin Processes and their Future by R. Hepziba Gnanamalar, I woke up to find myself scattered across continents by artist trio Troika, Anna’s Digital Twin by Siemens Healthineers, The Price of Value mirror by Johnny Welcome
What is a person? What is identity?
In the post-TV era, advertising and brands reaching out to connect with people is changing quickly. AI tools allow for highly personalized content related to individual tastes and emotions to connect with audiences on a deeper, more personal level. AI enables dynamic content customization based on real-time user interactions and feedback. Algorithms personalize experiences, ensuring content that resonates with people’s unique preferences.
People are multifaceted, displaying different aspects of their identity in various circumstances and are not flat and predictable. This complexity means that individuals cannot be easily categorized or understood. Understanding and respecting the richness of individual identities asks for more authentic engagement, fostering deeper connections and more meaningful interactions.
Preventative mindset
Neuro economics
The human brain
The attention economy may end as people are disillusioned with what the web has become. AI may enhance that. It asks for a deeper understanding of the human brain's workings and what people aspire to, not just a response to clicks or mood. Humans are irrational; the tales we tell ourselves and our perceptions about the world drive behaviour.
Neuroeconomics can give insights into how the brain evaluates the perceived value of goods and address behavioural biases and emotional influences. People are often reluctant to accept short-term losses for long-term gains. They evaluate risks non-objectively, influenced by subjective factors such as emotions, personal experiences, biases, and context.
Left to right, Brainlight by Laura Jade, Anthrobots by researchers at Tufts University and Harvard University’s Wyss Institute, Thoughtography, real-time rain visualisation by La Trobe University, Designing for Emotion by Aarron Walter
Hedonic values
Economic growth encompasses both hedonic and utilitarian values. Hedonic values such as curiosity, entertainment, visual attraction, escape, intrinsic enjoyment, relaxation, and self-expression are essential for human fulfilment and drive consumer behaviour. On the other hand, utilitarian values focus on practical benefits, like efficiency and functionality. Both values influence emotions and play a significant role in shaping demands and priorities.
Narratives are part of our lived experiences and differ across various parts of the world, influenced by unique cultural, historical, and social contexts. People purchase goods not just for their utility but to express who they are, to feel good, and to signal their place in society. Understanding people and truly connecting with them requires a diversity of perspectives and cultural and local understanding.
Understanding people
Human capital
Foundations
Focusing on the human aspect of growth and seeing it as continuous exploration and self-development creates a culture of growth, improvement, innovation, and resilience. This ability to adapt leads to more innovation as creative thinking grows from personal growth. Mentorship and coaching can guide this process, offering guidance and support to individuals on their path.
When people feel safe to experiment, speak up, and learn from mistakes, they explore new ideas and seek cooperation and knowledge. This culture of psychological safety and continuous collaboration drives cohesion and interconnectivity. Multidisciplinary interactions lead to transformation, new thinking, and new ideas that build on the knowledge of others.
Left to right, Left to right, Rei a co-op, co-owned by the people, The three main dimensions in societal development “You can have old people or you can have an economy” artwork by Douglas Coupland
Local manufacturing
As seen in co-op constructions, co-ownership further enhances this dynamic by giving individuals a sense of autonomy to direct their growth, resulting in higher engagement. Holistic approaches, combined with the freedom and trust to be self-guided, motivate people and stimulate their curiosity, leading to elevated creativity and innovation that drive personal and organizational development and growth.
An ageing population may strain public pension systems and increase healthcare costs. Products and services tailored to older adults present new business opportunities. Many older adults continue to contribute to the economy through extended careers or volunteer work. Engaging older adults as mentors, utilizing their extensive experience, can strengthen companies through a more integrated and versatile workforce where wisdom and knowledge are transferred and passed on.
Personal development
Looking forward
Key take aways
Caution
- Avoid overlooking people's evolving needs and preferences, be mindful.
- Avoid producing more than the demand, which leads to excess inventory and waste.
- Avoid prioritizing short-term profits over long-term sustainability and value creation.
- Stop underpaying workers in the supply chain and a lack of transparency, do not obscure pricing mechanisms or business practices.
- Avoid a one-size-fits-all approach; consider local and cultural differences in strategy and operations.
Banner image, A Forest for the Trees by Glenn Kaino
Download the PDF of the report here
Look out for
+ Stay updated on emerging technologies like AI and machine learning, which can drastically alter operational efficiencies.
+ Monitor the effects of climate change on supply chains, resource availability, and regulatory requirements. Adaptation and mitigation strategies will be crucial.
+ Be prepared for economic fluctuations due to geopolitical tensions, inflation, and changes in global trade policies.
+ Engage in societal betterment initiatives and contribute to social well-being.
+ Cultivate a future-facing continuous innovation and adaptability culture to create impact and stay ahead of market changes and challenges.