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Consumers in Eastern Europe after 25 years

Posted By Agnieszka Górnicka, Inquiry Market Research, Wednesday, April 6, 2016
Updated: Wednesday, April 6, 2016
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By Agnieszka Górnicka, Inquiry Market Research, a.gornicka@inquiry.com.pl

The history of free market economy in Eastern Europe started in 1989-1990 with the first (partially) democratic elections in Poland and the downfall of the Berlin Wall.  For the citizens in Eastern European countries it brought freedom of speech, economic activity and democracy. After many decades of planned ‘socialist’ economy, which only true achievement was constant lack of almost anything, Eastern Europeans were happy to buy anything, just because it was there to buy. After a few years dominated by open-air bazaars, new supermarkets and shopping malls started to open the doors for the public, and shopping became the favourite pastime for families. In order to afford  more expensive products like TV sets or cars, people started to take loans.  A completely serious reason for purchase was ‘because this was advertised’.

After 25 years, all Eastern European markets are now much more mature. In most product categories there are a few market leaders who dominate the landscape and safeguard their market share. Consumers now consider their choices and became picky. Their lifestyles are also more similar to those in the West. But there are a few important differences.

Purchasing power

It is the first and most important factor which plays a role in shaping consumer behaviour.  Still, even if Eastern salaries don’t match those in Western Europe, economic growth is evident in almost all countries. Although the Eastern European countries started from a similar economic level, their current situation is very different. At the beginning, each Eastern European economy had to struggle with devaluation of the national currencies, high inflation and rising unemployment in the early years of freedom. All countries introduced market-economy reforms, but they adopted different strategies. Now, after 25 years, we can see significant differences within the region. It may be surprising at the first glance but the richest countries are not exactly the biggest ones. The GDP per capita is now highest in smaller countries like the Czech Republic, Slovakia and Lithuania. The largest country in the world – Russia – is placed not even in the middle of the ranking. The most obvious difference within the region between the two neighbouring countries, Ukraine and Slovakia, as these separate worlds. In 2013, Slovakia’s GDP was more than three times as high as Ukraine’s; as the consequence of war in Eastern Ukraine, the economy shrank by half so the factor is now closer to 7.

The share of expenditures on food

A good indication of the economic situation of each country is given by the share of  expenditures on food in the monthly household budget. In all Eastern European countries, the proportion of the cost of food has fallen over the past 2 decades, while there was little change in Germany or in the UK. Still, the proportion of the budget that goes to the necessities like food and drink is quite high in Eastern European countries.

It is particularly noteworthy that Russians spend nearly one-third of the monthly household budget on food, while the residents of other countries have to spend an average of only one-fifth of the budget in rest of the region, or even less.
You're probably wondering what happens to the rest of the budget. Spending on various areas of life, goods and services will vary from country to country. Russians have very small household maintenance costs.

Eastern European consumers beyond numbers

For the qualitative researcher, the most interesting part starts when we look for the reasons behind differences in economic indicators, and these come from different values and attitudes across the region. If there is a characteristic that applies to the entire region, it is the mistrust towards strangers and new, unexpected situations.

One of the best starting points to compare different cultures is the Hofstede model (see e.g. Geert Hofstede, Culture’s Consequences: Comparing Values, Behaviors, Institutions, and Organizations Across Nations). The model is based on six indicators, which are Masculinity/Femininity, Individualism/Collectivism, Indulgence/Restraint, Power Distance, Long term Orientation and Uncertainty Avoidance. One of the striking things is that in almost the entire Eastern European region, the Uncertainty Avoidance is very high (with Slovakia as a notable exception). That means that Eastern European consumers are slower to adopt new trends (in particular technology) and need time to accept new situations. Most societies are fairly conservative and, as the recent immigrant crisis has shown, also xenophobic. An extreme showcase of Uncertainty Avoidance is the Eastern Europeans’ love for fences. Most people try to rationalise it (isn’t it safer if we fence off our neighbourhood?) but in reality, the fence is a small-scale manifestation of the same fear: that something unexpected could happen in front of our door. Only Slovaks show a little more relaxed attitude.

Russia

Russia is a country in which power plays a major role – this is evident in value-centred studies, and the Hofstede’s Power Distance index is also extremely high. Both men and women take care to demonstrate status symbols: martial arts and big cars for men, strong makeup and expensive jewellery for women, all kind of luxury items for both sexes; in fact Russians are the most frequent buyers of luxury watches and clothing across the region.

Czech Republic

On the other side of the scale we find the Czech Republic, where people pay little attention to status symbols. They appreciate tranquility, comfort, domesticity and nature. The last is particularly appreciated by Czechs – even the national anthem is about the beautiful landscapes: rivers and rocks in the woods.

The Czech passion for outdoor clothing is therefore no surprise. Outdoor outfits are worn not only the trip to the countryside but also on a typical weekday in the city. Luxury goods vendors have therefore to look for Russian tourists on the shopping streets of Prague.

Romania

While many Eastern European countries are individualistic, Romanians make a strongly collective society. Group members, be it family or friends, have strong influence on tastes, product choices and even life decisions. Also, group loyalty is more important than many other social norms. Not surprisingly, group opinion will affect clothing, food and almost any other purchase. This is both a challenge and an opportunity for marketers – in Romania, it is often sufficient to convince a few people to achieve success.

Summary

The Eastern European countries are often viewed from the Western perspective as a homogenous bloc. But although they share several decades of common history under the communist regime, they are fundamentally different in their history, culture and traditions. These differences mean that the key fundamental values in the Eastern European societies are different, and this has a direct impact on purchasing behaviour.

Some facts:

Russia

  • Did you know that Russians are true fashion lovers? Russians can afford the love for fashion, because they carry the lowest housing costs within the region. This results from the communist housing policy, which offered anyone the right to housing, even if very modest one.
  • 80% of Russia's financial potential is concentrated in Moscow.
  • When the rouble collapsed at the end of 2014, the Russians bought Cartier watches and rings from Tiffany en masse as a safe investment. Also the large discrepancy in wealth distribution leads to the special importance of status symbols.

Poland

  • In Poland, at the end of  the 80’s you had to spend 10 average monthly salaries to buy a TV set;  20 years later Poles could afford almost 4 TVs for their average salary.

Czech Republic

  • In Czech Republic, people pay little attention to status symbols.They appreciate tranquility, comfort, domesticity and nature. The last is particularly appreciated by Czechs - even the national anthem is about the beautiful landscapes: rivers and rocks in the woods.

Eastern European attitudes

  • Eastern Europeans are not very keen insurance buyers – the very thought of something unexpected is not comfortable.
  • For brands that want to conquer the Eastern European markets, it is always a good idea to present the advertised product as  safe and long lasting. Claims such as "for decades" or "without surprises" are particularly present in the Polish and Russian advertising.
  • Hofstede’s Indulgence scores in Eastern Europe are among the lowest in the world.
  • Advertisers should avoid slogans like "Spoil yourself", "A moment of pure pleasure" as they are hardly a buying incentive.
  • The GDP per capita is now highest in smaller countries like the Czech Republic, Slovakia and Lithuania. The largest country in the world – Russia – is placed not even in the middle of the ranking.
  • Eastern European consumers are slower to adopt new trends (in particular technology) and need time to accept new situations. Most societies are fairly conservative and, as the recent immigrant crisis has shown, also xenophobic.

For more information, visit us at www.inquirymarketresearch.com

See you in Vienna!

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The Sticky Factor - Finding the Yin to the Yang in the App World

Posted By Susan Abbott, ARC Strategy Ltd / Think Global Qualitative, Monday, March 28, 2016
Updated: Tuesday, March 29, 2016

It was a bright, sunny day. Duke could see the clear skyline and drones flying from his window but he was a troubled man.  His first app had broken all records – consumers were ‘Hooked’.  But his second app...

It was a perfect day to be outside. But, his mind wasn’t at peace. He still could not figure out that while his first app broke all records, his second app failed to make the mark. The daily report showing the number of downloads and uninstallations was a constant reminder of his company’s inability to ‘Hook’ the consumers.

He got up to pour himself a coffee, to take his mind off things. He was pouring himself a coffee when he noticed a comic book lying right next to it, no doubt left by a coder. It was the March 2016 edition of ‘Justice League’, it filled his mind with nostalgia about his childhood days. He started flipping through the comic book when it dawned on him.  Ta-dah! This was the answer!  Just like our books/movies follow the hero’s journey, each consumer’s decision making journey also follows the ‘Monomyth’. (Ref: Joseph Campbell). He suddenly felt ecstatic; there still might be hope to understand what is not working in the new app and revive it. This realization led him on the path to  discovering and developing ‘The Sticky Factor’.

He immediately went back to his office and looked for his copy of ‘Hooked’ (by Nir Eyal) on his Kindle. The Hook model by Nir Eyal, brought an important facet into the model.  He felt that this model might help him find the Yin to the Yang. While the Hook model told him of all the important business considerations to keep in mind, the Hero’s journey would help him understand the consumers’ part of the story.

He used the Hero’s journey to develop techniques that would help him see beyond the superficial/ rational responses of the consumers.

Now, the time had come for the real trial. It was the moment of truth! He met the consumers of his apps and used the techniques developed with the help of his model to understand the consumer journey of using the app.  As he superimposed the findings received onto the Hook model, he could finally see the full picture. He figured out what made the consumers hook to his first app and unhook from his second app. He could see the exact stage where his consumers started falling off the wagon.

This April, we will be presenting the story of Duke and his adventures, ‘The Sticky Factor – Finding the Yin to the Yang in the app world’ at the QRCA Worldwide Conference 2016 and sharing our journey in more detail. Look forward to seeing you all there.

 

Raji Bonala is a Director and Vox Populi Research India and Priyam Chawla is a research manager at Vox Populi Research MENA, together they will be presenting ‘The Sticky Factor – finding the Yin to the Yang in the App World.

https://twitter.com/rbonala

https://in.linkedin.com/in/raji-bonala-7575454

https://twitter.com/priyamchawla90

https://ae.linkedin.com/in/priyam-chawla-00961a54

Tags:  #WWQual 

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Minding your language in the Rainbow Nation!

Posted By Susan Abbott, ARC Strategy Ltd / Think Global Qualitative, Monday, March 21, 2016

Lesley Croskery is Director of In Focus Qualitative Research, based in Cape Town, South Africa, and will be presenting Mind your language in the Rainbow nation! - why forcing South African respondents to speak English is holding back transformation and discovery’ at the QRCA Worldwide Conference.

 

Lesley@infocusresearch.co.za

http://infocusqualitative.co.za

 

@lesley_inf

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A True Vienna Coffeehouse Experience

Posted By Administrator, Thursday, March 10, 2016
Updated: Thursday, March 10, 2016
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I’ve always wanted to go to Vienna.  Beautiful city.  Legendary music venues.  And, of course, there would be the coffee shops! 

Several years back I was noodling around on the Internet looking at coffee shops, dreaming of a trip to Vienna and stumbled upon the Vienna Coffeehouse Conversations.  I had no idea that Vienna’s coffeehouses were so steeped in a tradition of verbal exchange.  One with such great value, that the Vienna Coffeehouse tradition has earned an UNESCO Intangible Cultural Heritage designation.  

Talk about being gob-smacked!!

What motivates Viennese residents to sign up – at their own expense – and come to engage in conversation with travelers?  What is it about a one-on-one conversation that can be so powerful that it must be preserved?  What elements work to create such substantive and engaging conversation – conversation so profound – that those at the table come away with answers, more questions and the desire to return?  And, importantly, what might we as researchers learn from one-on-one conversations that would permit us to step away from our seat at the table and learn from the interaction of two individuals simply engaged in conversation?  I had to find out more.

When I shared this with several QRCA friends, interest sparked.  (…not surprise, eh, since we are all about conversation!)  Long story short, this year’s conference will include a pre-conference Vienna Coffeehouse experience.   I always love the conference, but admittedly, I’m particularly intrigued about going this year and finding out more about this Vienna Coffeehouse Conversation. 

…Starbucks eat your heart out!

Experience promises to "go beyond Schonbrunn Palace and Wiener Schnitzel to a deeper conversation with a Vienna resident about their perspective on the world."

Clearly, there is an intimacy that forms. 

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Tory Gentes Tells Secrets

Posted By Susan Abbott, ARC Strategy Ltd / Think Global Qualitative, Wednesday, March 9, 2016
Updated: Wednesday, March 9, 2016

We interviewed Tory Gentes about why she is excited about speaking in Vienna. Here's what she told us. Tory is a past winner of QRCA's Young Professionals Grant.


I feel extremely fortunate to have had the opportunity to join the QRCA community which started after receiving the Young Professionals Grant for the past conference in Orlando, Florida.

As a young person in the field of qualitative research, I have especially appreciated having access to a community of people who understand the non-traditional life and path into market research. I’m sure many can relate, but qualitative research was not a discipline readily offered or even mentioned by my University. My initial exposure came back in 2011 while I was a student studying entrepreneurship and pursuing my own start-up.

I will forever be grateful that Daniel Berkal answered my email I sent back on March 18th, 2011. In search of companies who might offer advice on my business plan, my random Google search returned about 20 companies and The Palmerston Group was the only one to respond. The rest is history as I have since worked on projects with The Palmerston Group for over 5 years.  

"We are so excited to share how we turned our passion project into real insights that can be used by other market researchers"

As I’ve learned, some of the best researchers might not be traditionally trained, rather they have a unique combination of inter-personal skills, self-awareness, and intense world curiosity. This is a world that allows me to continue being a student who asks questions, channels insights, and has an insatiable desire to understand the world around me.

Our topic was formed from an initial seed of curiosity and it grew with the idea to drive across country asking a simple question, “tell me a secret.” The project was then put into motion after a simple conversation of “Should we do this? Actually drive across country?” and the response, “why not?!”  We are so excited to share how we turned our passion project into real insights that can be used by other market researchers. For transformation to take place, individuals must feel something. Our presentation will help people connect with something in themselves that they can directly use to transform the work they do everyday. 

I am personally excited about the format of this conference. As I understand the group will move through different speakers together instead of forming breakout sessions. I think there’s intense power in having us stay as a group together. This offers a different dynamic than choosing breakout sessions and also eliminates the fear of “the right choice.” 

Tory Gentes and Daniel Berkal are presenting "Why Exploring Secrets Will Make You Question Everything."

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Maria Kreuzer talks Brand Sculpting

Posted By Susan Abbott, ARC Strategy Ltd / Think Global Qualitative, Wednesday, March 9, 2016
Updated: Wednesday, March 9, 2016

We asked Maria Kreuzer if she can give us a hint about what brand sculpting is all about, and why she is looking forward to Vienna.

What excites you about the Vienna Conference?

Science in the 21st century aims to understand non-conscious processes of the human brain and the interplay between body, mind, and brain. Cognitive psychology has laid foundation for this thrilling challenge. Vienna with its very long history in psychology, its great personalities like Sigmund Freud, and its scientific and artistic nature is the perfect place for mind-opening ideas and multi-sensory experiences transforming and advancing our thoughts and behaviors.  

 

The goal is to leave attendees transformed. How do you see your presentation contributing to that transformation?

I am happy to present Multi-Sensory Sculpting®, the joint work of my colleague and friend Sylvia von Wallpach and me. Multi-Sensory Sculpting® allows retrieving multi-sensory and non-conscious consumer (brand) knowledge via sculptures. In in-depth interviews respondents describe their brand sculptures. Retrieving consumer (brand) knowledge via sculptures is transforming non-conscious sensory thoughts into concrete physical manifestations. In describing their sculptures, respondents get aware of thoughts and ideas they were not consciously aware before. A really creative and transformative act.

Conference participants have the chance to actually experience this mind-opening transformation by building their own brand sculpture backstage. So come and join me!

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Tags:  #WWQual  Brand Sculpting  Maria Kreuzer  Vienna 2016 

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Abbey Clemens talks about the Death of Segmentation, and Keeping it Fresh

Posted By Susan Abbott, ARC Strategy Ltd / Think Global Qualitative, Wednesday, March 9, 2016
Updated: Wednesday, March 9, 2016

We interviewed Abby Clemens by e-mail about why she is excited about Vienna, and her topic, "Segmentations Are Dead". We were hoping she'd tell us about Bronies, but we have to wait till we hear her session!

What excites you about the Vienna conference?

Anything that talks about discovery gets my intellectual juices flowing automatically. In everything I do, I strive to look at the world and experience it in a different way, whether that’s in the countries I choose to visit, the type of holiday I have once there (public transport round Morocco with my parents anyone?)  or the methodology of research I employ. I don’t want to follow the status quo: I want to question what we’ve defined as the status quo and push that boundary. A conference that is dedicated to discovery and pushing thinking, speakers being challenged to bring their edgiest work, thus connects on a deep level. It excites me to hear what others are doing differently and I look forward to getting inspired in my own thinking.  

 

"I don’t want to follow the status quo: I want to question what we’ve defined as the status quo and push that boundary."

How is this conference different? 

Short punchy keynotes and presentations keep the content fresh and the audience stimulated. I think the themes are intriguing and what I think what will be different about this conference is its very core: the focus on pushing boundaries and thinking differently, something that all delegates will walk away from inspired and keen to try new things when they get back to the office. 

Who should attend and why?

Anyone who is constantly looking at new ways of doing things, trying new techniques in their research or analysis, will be inspired by the conference. Maybe they’ll get inspiration from a methodology or thought or maybe they’ll simply view things differently to how they viewed them when they first arrived. People with an open mind will benefit the most and will leave with a fresh take on research and how they can help their clients, or their teams, build their business.  

 

"We should not be using segmentations in our brand strategies if we want to grow our brands."

The goal is to leave attendees transformed. How do you see your presentation contributing to that transformation?

I’ll be challenging a very well-used type of research, segmentations, and presenting an argument about how we should not be using segmentations in our brand strategies if we want to grow our brands. I hope that attendees will be motivated to think about their audiences differently, reconsider who they are, how we talk to them and where the brand fits into their lives. The alternative proposition that I will make to using segmentations will hopefully inspire delegates to conduct their research differently, delivering something that is more meaningful to their brand or to client’s brands. And if nothing else, they will walk away more knowledgable about the unusual cult of Bronies, useful, I’m sure, as a conversation starter or for pub quizzes.

Anything else?

I’m really excited to be a part of a conference that is all about discovery and pushing the boundaries. I’m also excited that I get to talk about something that I feel really strongly about and moreover that I can bring in a topic that captivated and fascinated me from the minute I first heard about it: the wonderful world of Bronies. 

We can't wait to hear more about Bronies!

Tags:  #WWQual  Abby Clemens  Tonic Insight  Vienna 2016 

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Learn by Doing: The Cafe Conversation Immersive Experience

Posted By Susan Abbott, ARC Strategy Ltd / Think Global Qualitative, Wednesday, March 9, 2016
Updated: Wednesday, March 9, 2016

From Rebecca Bryant

 

 

I’ve always wanted to go to Vienna.  Beautiful city.  Legendary music venues.  And, of course, there would be the coffee shops! 

Several years back I was noodling around on the Internet looking at coffee shops, dreaming of a trip to Vienna and stumbled upon the Vienna Coffeehouse Conversations.  I had no idea that Vienna’s coffeehouses were so steeped in a tradition of verbal exchange.  One with such great value, that the Vienna Coffeehouse tradition has earned an UNESCO Intangible Cultural Heritage designation.  

Talk about being gob-smacked!!

What motivates Viennese residents to sign up – at their own expense – and come to engage in conversation with travelers?  What is it about a one-on-one conversation that can be so powerful that it must be preserved?  What elements work to create such substantive and engaging conversation – conversation so profound – that those at the table come away with answers, more questions and the desire to return?  And, importantly, what might we as researchers learn from one-on-one conversations that would permit us to step away from our seat at the table and learn from the interaction of two individuals simply engaged in conversation?  I had to find out more.

When I shared this with several QRCA friends, interest sparked.  (…not surprise, eh, since we are all about conversation!)  Long story short, this year’s conference will include a pre-conference Vienna Coffeehouse experience.   I always love the conference, but admittedly, I’m particularly intrigued about going this year and finding out more about this Vienna Coffeehouse Conversation. 

…Starbucks eat your heart out!

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The Last Frontier

Posted By Susan Abbott, ARC Strategy Ltd / Think Global Qualitative, Tuesday, March 8, 2016
Updated: Tuesday, March 8, 2016

Sergey SheykhetovAfrica and Middle East. The Last Frontier. The only region which is still pretty much untapped by marketers and market researchers.

 

What comes to your mind when you hear “Africa” or “Middle East”? Do you imagine natural beauty? Arabian Desert, Kilimanjaro Mountain, elephants grazing on savannah? Or, do you see some manmade wonders, historical and contemporary? Pyramids of Egypt, skyscrapers of Dubai, the ancient town of Timbuktu?  Or, perhaps, your imagination offers you some pictures from the recent CNN news about military conflicts, people dying of starvation, and refugees fleeing their home countries?   

 

Well, all these associations make sense. AME has everything of that. However, what rarely comes to mind is its phenomenal economic growth. Yes, Africa and Middle East are still much poorer and economically underdeveloped compared to many other regions, but they are quickly catching up. The social-economic transformation which is happening here remind us another that occurred in China and Asia Pacific thirty years ago.  It is not a surprise that many multinationals look at the AME region as the “next (and the last) big one”.    

 

 

If the region continues to grow as fast as it has been doing for the last ten years, we will get a half billion of middle class consumers by 2025. This is of course a very tempting target for marketers and, if international business continue its expansion in AME, that will surely create a huge opportunity for market researchers.   

 

Doing research in Africa and the Middle East can bring a lot of surprises to those who are not familiar with the region. Some basic things you take for granted may not work here because of cultural or infrastructure restrictions. At the same time, these cultural, religious or infrastructural challenges can give you a unique opportunity to successfully employ methods that you cannot imagine using in the developed world.  

 

 

I believe that Africa and Middle East are capable of not only borrowing experience from the more sophisticated markets but also sharing some experience as well. What we have plenty in AME, and what is becoming scarce in the developed world, is the desire to understand context. In the US and Europe researchers take for granted many aspects of the respondents’ lifestyle, mentality and value system. A lot of qualitative projects have to do with communication tests, pack tests, product concept tests, etc. We do not spend as much time understanding the consumer as a human being, a personality, a member of a certain national culture. In Africa or Middle East we do not have a choice but to study all these characteristics even though we may just be doing a simple ad test.

 

I may be exaggerating but I think Africa and Middle East research can help shift attention from the utilitarian aspects of qualitative research to a more holistic understanding of consumers as people.   

 

Sergey Sheykhetov

 

Sergey Sheykhetov is a head of qualitative practice area at TNS East Africa in Nairobi, Kenya, and will be presenting on qualitative research in Africa and Middle East at the Worldwide Conference.

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Tags:  Sergey Sheykhetov 

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New Video with Tamira Snell, Futurist, Keynoter

Posted By Susan Abbott, ARC Strategy Ltd / Think Global Qualitative, Thursday, March 3, 2016
Updated: Thursday, March 3, 2016

QRCA Worldwide Conference - Keynote Speaker from QRCA on Vimeo.

Our keynote speaker, Tamira Snell, did a video interview with co-chair Kendall Nash and committee member Anya Zadrozny, who also provided video editing services.

If you haven't yet seen the video of Tamira Snell yet, take a minute to watch. I'm looking forward to meeting her and hearing her Megatrends talk! It's posted on the speaker bios page, here

She'll be talking about Megatrends, and how we can understand them and use them in our work to bring a fresh lens to interpretation for our clients. 

Clients are looking to us to be consultants and problem solvers who bring a special set of research skills to the table to do this. Thinking about futures lenses is a great addition to the toolkit.

The Copenhagen Institute for Future Studies is renowned for its work. We are thrilled to have one of their members kicking off this event!

https://dk.linkedin.com/in/tamirasnell

@tamirasnell

Copenhagen Institute for Future Studies

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Tags:  #WWQual  Keynote 

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