Download

Disruptor Scan - July 2024

pdf - 234 KB

Commentary

This quarterly scan aims to alert the sector to possible disruptors to sport and recreation within a two to five-year timeframe. It is designed to be used for discussion on possible implications or the need to adjust approaches. 

Sport NZ will continue to actively monitor these disruptors. All scans and commentary for each quarter can be found on the Sport NZ Futures webpage. 

What are we seeing?

Societal shifts

• Greece introduced a six-day workweek for certain sectors to address worker shortages, contrasting with the four-day workweek trials in other countries.
• The women's soccer team Angel City FC was purchased for $250 million, making it the most valuable women's sports team globally.
• Rapid growth in the non-alcoholic beer market is driven by shifting consumer preferences towards healthier options.
• Pfizer is advancing a once-daily weight loss pill, danuglipron, after abandoning a twice-daily formulation due to side effects.

Economic shifts

• New Zealand faces high net emigration, financial pressures on local and central governments, and a struggling health system.
• The global economy is recovering from the COVID-19 pandemic but faces challenges such as supply chain disruptions and inflationary pressures.
• The European Central Bank reduced its interest rate to 4.25% in June 2024, and inflation rates in OECD countries are easing. New Zealand’s inflation rate was 3.3 percent for the 12 months to June 2024.

Political Shifts

• Tensions between the United States and China are impacting global trade and security, and the ongoing war in Ukraine continues to strain international relations.
• Numerous national elections this year cover 40% of the world's population and 60% of global GDP, with a shift toward right-wing populist parties, especially in Europe, affecting international cooperation.
• This trend reflects broader right-wing populism in Europe, exacerbated by tensions between autocracies and democracies. National security, economic development, and trade are increasingly interconnected, with the U.S. aligning its policies assertively, leading to structural changes in the global economy.
• New Zealand faces financial pressures, with council rates rising and job cuts in the central government. The 2024 tax changes are insufficient to offset rising household costs, impacting various sectors, including education and health.

Technological Advances

• The recent CrowdStrike IT outage affected an estimated 8.5 million Windows devices worldwide, less than 1% of all Windows machines. Despite the relatively small percentage, the incident had significant economic and societal impacts due to CrowdStrike's widespread use by enterprises running critical services, and serves as a stark reminder of the delicate balance between the benefits of global technological integration and the risks associated with widespread dependence on centralised services and software updates.

• Technologies reshape leisure and social interactions, with virtual elements and user anonymity increasing. Generative AI adoption is global but slower in New Zealand. Digital twins aid in climate modelling and sports training, while accelerated medical research promises new treatments for various diseases.
• Alphabet's potential acquisition of Wiz for $23 billion highlights the focus on cybersecurity in cloud computing. However, massive AI investments face scepticism about their transformative potential and cost justification. Industries grapple with AI's impact and other challenges, including political pressures on diversity initiatives.
• The weight loss drug market expands, with Pfizer developing a daily pill to compete with injectables. Samsung enters the smart ring market with its $400 Galaxy Ring, tracking health data and competing with Apple and Oura.
• The FDA's approval of donanemab for early-stage Alzheimer's offers hope for extending cognitive function, slowing decline by 35% in certain patients. While not a cure, it represents a significant breakthrough in Alzheimer's treatment

Environmental shifts

• Climate change has worsened, causing extreme weather, rising sea levels, and biodiversity loss. Focus on conservation, sustainability, and international cooperation has increased.
• Outdoor leisure spending has surged due to a growing appreciation for nature. Sustainability, circular economy, and material innovation are gaining attention to combat climate change.
• Evidence shows more frequent extreme weather and wildfires, with record temperatures. Right-wing victories in Europe may hinder carbon reduction efforts.
• The 2024 Paris Olympics led to a $1.5 billion Seine River cleanup, making it safe for events and potentially public swimming by 2025, showcasing urban river restoration.
• The US West Coast faces record-breaking heat waves, while gross humidity hits the Northeast. Death Valley, CA reached 54°C, too hot for rescue helicopters to operate

Implications for the sport and recreation sector in New Zealand:

1. Economic pressures: Government policies and economic conditions will likely impact funding and services for sport and recreation. Tightened household budgets may reduce participation, putting pressure on existing funding channels and operational models.
2. Sustainability focus: Growing environmental awareness will drive demand for eco-friendly facilities, carbon-neutral events, and outdoor experiences.
3. Digital transformation: Organisations will need to integrate technology for member management, virtual training, and enhanced spectator experiences.
4. Inclusivity and diversity: There will be a growing need for programmes catering to diverse demographic backgrounds and addressing income inequality.
5. Financial diversification: Economic uncertainties will require organisations to explore new revenue streams and cost-effective operations.
6. Health technology integration: Advancements in health and medical technologies will create opportunities for tailored wellness programmes and healthy aging initiatives.
7. Policy engagement: Changing political landscapes will necessitate ongoing engagement with policy shifts and advocacy efforts.