Written by Andrew Curry, Director, Kantar Futures

Finding and developing new markets is one of the core activities of business. Looking for growth is more challenging in a post-crisis world where consumers are more considered in their decisions, and resource pressures push up costs for everybody.

This article, which summarizes a longer Future Perspectives report, Unlocking New Sources of Growth, focuses on where new sources of growth can be found, and how businesses can identify them and assess them in a structured way. The growth framework in this report is based on extensive research into how markets change and where opportunities emerge.

Sources of growth

Finding growth is about looking for new pools of money. At risk of over-simplifying, these tend of come from one of four places: demographics, economics, changing values and technology change. The full report has more detail on each of these.

    • New markets: people—mostly in emerging markets—who have reasonable amounts of disposable income for the first time, e.g. the “emerging middle classes”. Conventional wisdom is that these represent easy wins because of the recent rates of growth seen in these markets. In practice these opportunities are more complex—and perhaps less immediate—than is generally believed. And not all middle-income countries are destined for a high-income future.
    • Changing values: shifting social values and behaviors create new market spaces. Changes in the way we work have led to a boom in the high street (or main street) café. Combined with health concerns they have created a multi-billion-dollar market in pre-packaged salad. Value shifts take a generation; the growth opportunities are in second-order changes.
    • Shifting money: within richer markets, money moves between different consumers, sometimes quite quickly. In the United States, for example, the financial crisis has created a new group of the “working old,” who are still earning and spending.
    • Emerging technologies: new technologies have long been identified as a source of new growth. The trick is always in the timing, for technology-led innovation can take decades to reach the market. There are techniques to help to get the timing right: in particular, look for platforms which have achieved reasonable penetration levels, and then for applications that will sit on them.


UNSG End-to-End process summary chart

New value is likely to be both more substantial and more durable where changes in different areas align with each other. It is better to look for growth platforms that are supported by more than one dimension of change—even if it takes longer—than bet on a single driver of change. This works even better when changing values and changing technology connect to create new business models, offering the opportunity to gain competitive advantage.

New business models

The risk in basing growth on business model change is that it is easy to jump too soon, and invest in a change that isn’t yet there. But it is possible to identify whether markets are ready for a shift in business models, or whether that is going to take time. A framework developed by The Futures Company identifies six indicators, “The Pressure GaugeSM”, to help make this assessment.

Taken together, and approached systematically, they make you look at your markets and categories through the eyes of others, asking new questions about them. They help you to find your new sources of growth.

    • A shift in underlying consumer attitudes, values and behaviors: How are these changing? And why?
    • A technology mature enough to achieve reasonable levels of penetration. What are the relevant technologies (not always obvious): What are their penetration levels among likely customers?
    • Signs of “new practices” in related sectors or at the edge of the existing sector: What are leading-edge users, communities of interest, and entrepreneurs doing differently?
    • Evidence of pain points in the practice of leading edge users: What do leading-edge users find costly, difficult or time-consuming about these new practices?
    • A set of existing institutions, regulations, or business models that are under strain: Do industry critics, or experts or analysts, see problems with the way the sector works at present?
    • Business models that advantage suppliers significantly compared to their customers: Who benefits most from the current business model?

If most or all of these factors can be seen in the sector, then it suggests it is primed for business model change. Overall, they suggest that there are deep shifts going on in the conditions that shape the category, that it is being primed for change by entrepreneurs and users, and that mainstream users may have enough motivation to change habits and practices.

Taken together, and approached systematically, they make you look at your markets and categories through the eyes of others, asking new questions about them. They help you to find your new sources of growth.

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