In preparing for this final post of 2015, I was struck by the focus on ‘fragmentation’ in my first post of the year in January. That piece highlighted economic fragmentation (or polarisation) and pointed to the uneven growth in different parts of the globe, and different parts of the UK, as we emerge from the 2008 financial crisis at different speeds.
Eleven months on, fragmentation now exists as an important theme beyond the realm of economics. Indeed, if we took a standard PEST (Politics, Economics, Social and Technology) analysis, fragmentation is an important feature of each element.
In politics, we see forces of fragmentation around the world as independence and separatist movements gain ground, most violently, of course, in Syria. In Europe, Catalonia came closer to independence following recent elections there. Within the UK, over a year on from the Scottish independence referendum, few people believe that the issue has been ‘settled for a generation’ as we were told it would be. Rather, the referendum has provoked a wider debate about the further devolution (fragmentation) of power away from Westminster in all four nations of the UK. In England especially, we have seen an acceleration in the development of combined authorities looking to be the centre of decision making for newly emergent city regions. Looking forward, at some point before the end of 2017, we will have referendum on UK membership of the European Union, with those in favour of an exit (the fragmentation tendency) having made all the running in the campaign so far.
Economic fragmentation, first highlighted in January, continues with concerns about the performance of emerging markets globally, with divergent growth rates within Europe and a fragmented patchwork of economic growth across the localities of the UK. In terms of micro-economics, we have continued evidence of an ‘hourglass’ economy. This is the phenomenon that sees developed economies creating only low skill and high skill jobs. The absence of middle skill jobs being another fragmenting force.
In the social realm, one of the most interesting publications to catch our eye this year was Mike Savage’s analysis of the British Social Class Survey. This suggests that a more complex (and fragmented) seven tier class system has replaced the old three tier (‘Upper’, ‘Middle’ and ‘Working’) system. The new system stretches from an ‘Elite’ 6% of the population, through an ‘Established Middle Class’ (25%), a ‘Technical Middle Class’ (6%), ‘New Affluent Workers’ (15%), ‘Traditional Working Class’ (14%), and ‘Emergent Service Workers’ (19%), before reaching 15% who make up the ‘Precariat’. The precariat is a social class defined by a condition of existence without predictability or security, affecting material and/or psychological well-being.
In technology, the notion of a digital divide has become more nuanced. It is no longer simply about access to technology – a divide based on the ‘haves’ versus the ‘have nots’. Today’s digital divide is now determined by the subtler (fragmented) issues of the digital ‘confidence’ of the user and the sophistication of the digital devices they have access to.
Looking forward these forces show no sign of letting up. This is why fragmentation will be a key theme of our work in 2016 (and beyond) and which will be showcased at our first trends breakfast of 2016 (8-30 on 28th January).
Finally, we would like thank all our clients, associates and suppliers for their support in 2015. This has been a terrific year for Trajectory and, of course, we couldn’t have done any of it without you!
All the best for Christmas and the New Year from everyone at Trajectory.