The Australian Business Foundation's Alternative Futures project, a scenario building study with the help of the international network of futurists, GBN Australia, is an activity as old as humanity. It is a project where we are using our imaginations and we are telling stories.

Like all good stories, the ones we have to tell address the big ideas – tales of good and evil, of taking on urgent challenges and quests, of facing riddles and dilemmas, and all in the cause of advancing the wellbeing of those in our family, our clan, our tribe, our nation.

And, like all good stories – they work well if they manage both to scare and inspire you in equal measure.

Unique among business think-tanks in Australia, this was the challenge that the Australian Business Foundation set itself in its exploration of four alternative scenarios for the future of business in Australia to 2015.

Our aim was to give Australian businesses some foresight about how the future might impact on them. So, they could prepare themselves for different outcomes, rather than being at the mercy of volatile environments and random and surprising events.

More importantly, by thinking about different possible futures, we hoped that Australian businesses could find ways to become effective global players in the new industries and re-invented businesses of the 21st century.

This would not only benefit those individual businesses, but it would also build Australia's national capability leading to jobs, prosperity and increased living standards for the widest reach of the Australian community.

My task today is to provide you with the essentials of the four different pictures of the future we imagined – with the help of the colourful prose and video scripts of Richard Neville.

Preparatory to this, let me tell you something about the methodology we used to reach our pictures of the future and to highlight some of the key forces of change that lie behind our scenarios, but that play out differently in each.

In our project, the process of reaching four alternative scenarios involved desk research and literature reviews; media monitoring and opinion sampling; interviews, analysis and commentary from many businesses, social and educational specialists here and overseas; three scenario building workshops involving over 40 individuals from diverse walks of life; and focus groups and consultations to "road test" emerging scenarios, including with school children and tomorrow's political leaders.

As a result, among the main forces shaping the future that we discerned were the following:

• increasing globalisation and its effects on national boundaries, cultural identity, political decisions, and on the speed and ease of business imitations;
• the unprecedented transformations being wrought on business and commerce by online, open, networking technologies;
• the power of the new consumerism, with production decisions shifting from producers and owners of capital to consumers;
• the rise of the knowledge economy and the ascendancy of intangibles, where what you know is more important than what you make;
• the far-reaching effects of new technology advances and the convergence and recombination of old technologies in everything from bioscience to broadcasting;
• new skills and competencies required to compete in an increasingly wired, informed and connected world; and
• the likely impacts on social cohesion of the way the world is moving, whether it's the gap between the information rich and the information poor, or the increasing mainstream concern with environmental issues and the social record of businesses.

Now, let's visit the four futures we have imagined.

First Global Nation – characterised by the globalisation of business and the wired, interconnected, online economy, where Australia successful finds itself a place.

Australia shows leadership in this "silicon valley" world of knowledge industries, global peace, open markets and economic growth. A vital young country reinvents itself to capitalize on the massive transformations of business and society.

Our cyber-savvy firms sparkle on Wall Street, our skills are sought after and we manage to retain value at home from the plethora of new, nimble Aussie firms playing globally.

Sound the Retreat – the story of the backlash and consequent decay of globalisation, forcing Australia to revalue its bilateral business relationships as multilateral ones become impossible in the face of trade barriers, capital and immigration controls and nationalist and protectionist policies of all sorts.

There is economic downturn, a widespread capital retreat and loss of investor confidence. Some manage to forge commercial partnerships with key nations and drawing on our melting-pot past, create a cultural and business gateway. Australia as the Switzerland of Asia.

Brave Old World – where Australia rests on its laurels of strong economic performance and sound social protections and does not see the need or the urgency to pursue the emerging opportunities of the globalised knowledge economy in any systematic fashion.

Over-reliant on tourism and glamorous yet scant biotech breakthroughs, we miss the global tide. Introspective and smug, the lopping of tall poppies continues, fed by a "she'll be right" complacency. The economy falters, our skills erode, few new start-ups or emergent technologies survive here, and major brands are lost offshore.

Green is Gold – eco catastrophes, feasible clean technologies, and more environmental information and activism brings environmental sustainability to the fore. Skyscrapers sprout trees, goods are produced from renewable resources with zero emissions. Profits and lifestyles are enhanced by a "whole systems" economy designed to restore the balance of nature.

Environment issues become mainstream bottom line business issues and Australia gets caught up in the strengthening of international environmental regulations and agreements, with varying consequences for business.

After hard times for Australia so reliant on fossil fuels, some businesses capitalise on their global environmental management acumen and open up opportunities for Australia.

How plausible these scenarios are is a matter of judgement, but some recent developments suggest that the Australian Business Foundation's work is on the right track:

• The meltdown of World Trade Organisation negotiations in Seattle is straight from the pages of Sound the Retreat.
• New markets in "green" electricity trading and growing public concern about genetically modified foods suggest a mindset that points to the Green is Gold scenario.
• Australia's internet uptake rate and new Australian companies riding the technology, internet and e-commerce boom positions us well for First Global Nation.
• And, sources as authoritative as the IMF, the OECD and the Brookings Institute talk about the current "Australian economic miracle", a necessary pre-condition for Brave Old World complacency.

Let me draw out two main messages from the Australian Business Foundation's work on future business scenarios.

Firstly, about scenario planing itself. Scenario planning doesn't always have to involve large scale, lengthy and costly projects, sanctioned and resourced through the management hierarchy and employing high-priced consultants and facilitators.

Kees ver der Heijden, one of the world's foremost authorities on scenario planning and its applications for business strategy in particular, stressed in recent discussions with the Australian Business Foundation that the key was getting into the habit of futures thinking.

If you have a business problem or a strategic issue to sort out and have only two hours to do so, then use those two hours for some futures thinking.

By this he meant,

• mapping out the social, political, economic, cultural, environmental and technological forces at work;
• drawing on as many opinions and perspectives as possible, even if it's just putting yourself into others' shoes and asking what their attitude to the problem or issue is likely to be;
• substantiating these forces and their interconnections by applying data that you have available on the subject, whether that's in Board papers, corporate plans, business cases and competitor analyses, market surveys, literature, web searches or media reports;
• thinking deliberately outside the square and imagining the wild cards, the disruptions and discontinuities that could impact on your task;
• devising at least 3 alternative plausible future scenarios based on all this thinking and analysis;
• testing how robust or risky your current corporate strategies and responses are in the light of these different pictures of the future; and
• identifying other more productive strategies and responses to your business problem or issue that would be effective across more than one of the possible futures you've imagined.

The other key message I'd draw from our work on future scenarios is that innovation is crucial for Australia to make the grade in the future. The ability to unleash ideas and know-how seems to me to be a recurring theme for robust business behaviour in light of our different versions of the future.

Innovation in its broadest sense, meaning:

• doing novel things or scoring breakthroughs;
• doing old things more intelligently;
• turning new ideas into businesses; and
• adapting and gradually improving the way we work and how we organise.

In short, securing the future is about competing on the basis of cleverness and know-how in a world where free and fast information flows reduce the shelf-life of ideas, the duration of first mover advantage, and the product cycles of businesses. Thus, making continuous innovation a survival strategy.

Central to this is creating an environment which builds Australia's national capability by fostering a critical mass of agile, adaptable, inventive and customer-driven Australian firms with global reach.

They must be operating in all areas of economic endeavour, not just in the science, high-technology and dot.com worlds. The trick is harnessing innovation in traditional, mature and even, declining sectors by gradual adaptations and improvements, technological upgrading, superior marketing and more intelligent managerial and work processes in response to marketplace pressures and demands.

The challenge for us is to resist the conventional wisdom that makes us a spectator in this game, fearful of picking winners, of distorting markets or becoming captive of special interests.

David James made the point extremely well in his 16 June 2000 BRW article assessing the political reluctance for bold initiatives to action the recent Innovation Summit. He suggested that the role of government should not be described as picking winners, but of learning to umpire a new game.

If there is a key message from the Australian Business Foundation's futures thinking then it is that we are in a new game. Old strategies that have been effective in the past will be less so in the future.

If Australia is to succeed we need new partnerships and alliances, as the boundaries blur between public interest and commercial gain, between national goals and corporate strategies, between the regulators and the regulated, between the economic and social.

This new perspective impacts on everything from immigration policy to government purchasing and outsourcing to Australia's stance on foreign affairs, trade and security.

Further, it implies new approaches by individual firms to their business strategy:

• the need for action to create and access new markets;
• explicitly defining and reinventing new business opportunities and new possibilities for creating value for customers;
• the crucial importance of technology upgrading;
• priority to investment in human capital and skills; and
• systematic consciousness of and attention to the community and social impacts of business operations.

Let me conclude by saying that the power of scenario planning lies in the story telling. Pictures, images and symbols often remain long after the logic and the technical detail has been forgotten. And if they are good stories, they will leave you with a sense of urgency, a need to act.

Greater deftness and flair will be required of our business, community and political leaders to chart a path through the alternative futures open to us.

I am reminded of the saying that the best way to predict the future is to invent it!