The population of the world
continues to grow, as does the average standard of living, increasing
demand for food, water, energy and waste disposal and placing increasing
pressure on the environment. The population of the world doubled from
3.2 billion in 1962 to 6.4 billion in 2005 and is forecast to grow to
9.2 billion in 2050. Fertility rates are dropping in developed
countries, while migration could lead to significant changes in
population compositions. In most countries life expectancy is
increasing, leading to larger populations of retirees who require
pension and health benefits to last longer. Relentless productivity
improvements are causing rising unemployment. All these are placing
pressure on private and state social security systems. As a result,
national budget deficits are
likely to worsen and could lead to default as politicians fail to face
up to proper funding of future liabilities for fear of electoral defeat
or even social unrest.
The health care sector is also
under pressure to provide more cost-effective solutions. With 80% of
deaths from cancer, heart disease and other chronic diseases now taking
place in low and middle income countries, demand for low cost medicines
in developing countries is leading to conflicts with first world
pharmaceutical companies determined to protect their intellectual
property. While the world's workforce is growing apace, education
systems are failing to provide enough skilled professionals, artisans
and managers to meet demand, particularly for the mining, energy,
construction and education sectors. Paradoxically, at the same time
unemployment levels are rising, specially amongst the youth, as
technology drives productivity gains. This situation is likely to worsen
as an ever-shrinking
proportion of the world's population is able to provide the goods and
services required by all. The income gap between the wealthy, on the one
hand, and, on the other, average workers and the unemployed poor,
continues to grow, another potential source of social conflict. The lot
of women, in servitude to ignorant men in many parts of the world,
continues to look bleak.
Though food supplies have more
than kept pace with rising population levels in the past, a combination
of biofuels, rising standards of living and climate change, including
floods and drought, are stressing agricultural production and leading to
significant increases in food prices. With food already representing
10-20% of developed consumer spending but 65% of developing nation
consumer spending, this impacts most on the world's poor. Applying
modern agrobusiness methods in Africa and Asia will drive subsistence
farmers off the land. According to the UNDP, 40% of the world's
population will suffer water shortages by 2050. Scientists forecast that
there could be no commercial fishing by 2048 as present levels of
fishing would cause stocks to decline to less than 10% of maximum
catches recorded.
Fuelled by demand from China, the
mining industry has grown worldwide. Supplies of oil, gas, coal and
uranium are forecast to peak as reserves are depleted, though technology
to access shale gas and oil has deferred that peak. At the same time,
fear of climate change is putting pressure on the energy sector to move
away from carbon burning to solar and other environmentally friendly
energy sources. The future of nuclear energy is uncertain after the
Japanese disaster. The combined pressures of environmental regulation
and higher energy costs will lead to the relocation of energy-intensive,
polluting industries, such as smelting and pulp and paper production,
to developing nations with fewer safeguards.
Experts, in the face of
aggressive disinformation campaigns by sceptics, warn that world
temperatures could rise significantly during the 21st century, leading
to climate changes everywhere, unless governments, companies and
individuals take corrective action soon, something not likely after the
dismal Doha meeting in November 2012 even though recent research shows
global warming accelerating. Australia, for instance, is experiencing
record high temperatures yet persists in exporting coal and natural gas,
while depending largely on coal fired power stations. There is
disagreement between developed nations, with a history of pollution, and
developing nations, industrialising to improve standards of living, on
the appropriate action to take. The transport industry is the one most
likely to
be impacted by the combination of rising standards of living in the
developing world, specially China and India; increased prices of
hydrocarbon fuels; and efforts to mitigate global warming. There will be
a move to more hydrocarbon-efficient vehicles. Transport infrastructure
will have difficulty coping with forecast increases in traffic.
The global economy continues to
grow with Asian countries leading the way with export led manufacturing
and services industries. However, this growth is dependent on buoyant
consumer markets in Europe and North America. While many countries of
the world continue to report regular GDP growth, the growth itself is
uneven within countries with the rich growing richer and the poor
poorer. As the average standard of living in booming economies rises, so
too does the number of poor people around the world, many of them
moving from the countryside to unemployment in the city slums as part of
a search for a better lifestyle. Globalisation now comprehends the
movement not just of physical goods, but also services, finance, people,
information and ideas. As a result the world is becoming ever more
interlinked putting pressure on global, national and local governance
systems designed in a previous era by those with power and influence at
the time and, as fiscal, trade and environmental agreements are
negotiated, even now. At one and the same time, we are seeing the move
to larger, and even global, groups covered by the same regulations as
well as to the creation of smaller entities with niche interests.
Corruption and crime, particularly drug and human trafficking, have
become huge international money spinners.
Economic power is shifting from
the governments and companies of the USA and EU to those of the energy
rich countries of the Middle East and Russia, low cost Asian
manufacturers and service providers and South American agribusiness.
Asia now has nearly 60% of the world's population, accounts for more
than 35% of world output and 26% of world trade and has contributed more
than 50% of post 2000 world economic growth. Asian average per capita
incomes are now 25% of those of the USA and rising though 20% still live
in poverty. Although reports give the impression of a large scale move
in manufacturing capacity from the G7 countries to Eastern Europe and
the Far East, where wages are lower, the reality is that the move has
been much more gradual and less spectacular. Companies domiciled in
developing nations are increasingly buying companies in the developed
world.
Military power could well follow
the shifts in economic power. Tensions could be exacerbated as groups
with different beliefs and ideologies battle to control scarce
resources. Traditional warfare between national armies is increasingly
being replaced by terrorist groups representing dissident groups and
prepared to conduct suicide missions against civilian targets; drones
and other weaponry that is more powerful and can be more closely
targeted; and cyber-sabotage. The spread of nuclear weaponry continues
to be a major risk.
Technology provides the best hope
for solutions to challenges ranging from cheap medicines to food
production and from greater global democracy to converting the heat of
the sun to other forms of energy. Technology continues to play an
important role in communication, entertainment and improving
productivity. The rise of the Internet has made people data rich and
information poor while convergence is leading to the merging of
computers, cell-phones, hi-fi, TV and other electronic devices, as well
as the blending of cable, wireless and satellite communication.
Smart-phones have become the cake and circuses to distract the modern
unemployed. The rise of outsourcing services in countries such as India
and the Philippines is underpinned by improvements in the global
telecommunications infrastructure.
In the financial sector, technology is also allowing stock exchanges of
the developed and developing worlds to merge and provide sophisticated
trading products. A shift is taking place from traditional money
managers to sovereign wealth funds managing the proceeds from huge trade
surpluses, hedge funds and private equity groups, all of which are less
transparent and relatively unregulated. In time, technology
improvements will also lead to knowledge management jobs being replaced
by artificial intelligence. The gainers will be the deployers of capital
provided consumer markets don't shrink.
And Africa? In the short to
medium term, the continent will be prized as a source of minerals,
energy (oil, gas, uranium, coal, solar) and arable land rather than for
its people. The challenge for its leaders will be to avoid corruption
while making best use of the rent to educate a growing population and
provide an infrastructure so they can produce competitive goods and
services, if only for local consumption, in a world of high energy
prices. As with cell-phones, there will be opportunities to use new
technologies to leap-frog countries with a vested interest in obsolete
technology, though in the medium term technology could lead to the rape
of African resources with minimal local manpower involved. For Africa's
people, the biggest drawback will be, it's reliance on a limited range of commodities and the extractive
industries. Those industries are dead-end activities that
only provide diminishing returns over time (primary agriculture and extractive
activities such as mining, logging, and fisheries). These sectors are not generating the
employment opportunities that would allow the majority of the population to
share in the benefits. This is in marked contrast to the Asian experience,
where the growth of labor-intensive manufacturing has helped lift millions of
people out of poverty.
That's a thumbnail sketch of
today's world and some of the intertwined factors we need to consider.
What will the world be like in 2020 or even 2050? We don't know. All we
can do is scan the mass of data coming our way and try to identify the
signposts which might only hint at where we are all headed.
