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What is a megatrend?

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A megatrend is a long-term change that affects governments, societies and economies permanently over a long period of time. Megatrends drive other trends in financial markets in terms of sales, growth and innovation. Some megatrends that have altered the global economy include urbanization, transportation, communications and technology.

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The driving forces behind megatrends are unique and complex. Demographic changes, resource limitations and technological advances all drive trends in certain directions. Demographic changes include aging people or areas with a younger populace. Resource limitations in certain areas drive industry trends, such as mining operations, oil production, solar collection and hydroelectric power. Technological innovations, such as computers, internal combustion engines and power generation facilities, have significantly altered modern countries.

One megatrend that changed the United States from the 19th into the 20th centuries was urbanization. Better transportation meant people could more easily travel to their industrial jobs in cities. Advances in construction allowed for taller buildings and better building materials. This megatrend should continue as developing countries construct more cities.

As urban cities grow, trend watchers must plan for various factors, including homelessness, crime, family cohesiveness, services to citizens, energy consumption, infrastructure and sustainability. Generally, access to resources and growing populations determine how the megatrend of urbanization plays out.

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