Fasten your seatbelts

Economic growth
Monetary policy
Education - Health
Macroeconomics - Economic growth - Monetary Policy

A sailor seeks his fortune on a small island without realizing it is a giant sleeping whale. As the creature awakens, his future is shattered. In his mind, by an ‘unforeseen event’. In reality, he misread the situation. This myth is shared across cultures [1], from Arabia to India. The inability to assess risk creates insecurity - and leads to irrational fears

Largely unnoticed, megatrends transform the way we live and work. Preoccupied by our daily worries, we tend to overlook the irreversible forces that shape our life. In the past, the printing-press and the telephone forever changed human communication. Combustion and electricity revolutionized energy management. Going forward, the unfolding of similar ‘transformative, disruptive shifts’ will reshape society, business and the global economy.

At home and at work, permanent, cheap connectivity will enable a virtual revolution. ‘Satellite-networks’ orbiting just 500km from the globe’s surface [2] will provide high-speed internet in every remote corner. Powered by artificial intelligence (AI), mobile devices with long-life batteries, cloud-based computer processing and the ‘internet of things’ (IOT) [3] will transfigure the way we live and work. For example, wearable technology will not only monitor health data and model responses [4], but will also blur the lines of reality. Personal identity - including sex - will be defined by a mix of ‘real-world’, ‘virtual self’ and AI. Human interactions will lose appeal. Loneliness will lead to a desire of virtual self-realization, and individuals will establish emotional bonds with virtual beings. Cash will disappear; blockchain-empowered cryptocurrencies will rise as means of exchange. The ongoing technological shift will also redefine privacy and security – but regulation will be unable to keep up with innovation: ‘new laws’ will not address ‘new ethical challenges’ fast enough - creating frictions. Eventually, the take-off of digital technology and AI could challenge economic and political stability.

Healthcare, education and the transport industry are on the cusp of momentous developments. Messenger RNA (mRNA) vaccines [5] will end malaria, tuberculosis and AIDS. DNA sequencing, genomics and genetic modifications will lead to longer lives. A cure for cancer might be around the corner [6]. Personalized teaching solutions - supported by technologies like gamification, augmented reality and AI - will target pupils’ varied learning capabilities. By 2050, more than 50 percent of vehicles will be all-electric (EVs) and autonomous - including buses and taxis. Driver-assisting technologies will prevent injuries and save lives (human error still accounts for 94 percent of all serious accidents). City cars will likely be small, slow, and boxy; long-distance cars will be the opposite: comfortable, fast and aerodynamic. Air travel will be hypersonic [7] and greener, including to the Moon.

We will work less, but ‘jobs for life’ are over. By replacing human labor, AI will reduce employment and wages [8]. Easily replicated, routine tasks - such as separating materials, picking and packaging goods - will be fast-delegated to technology. Autonomous drone delivery will support on-line commerce – i.e. packages up to 5Kg could be at the customer’s doorsteps in less than 30 minutes. White-collar jobs, such as accounting, marketing and basic legal services (e.g.: responding to repetitive customer queries) will follow suit. AI will supplant general practitioners and, almost-certainly, most teachers. Within 15 years, about 40 percent of current jobs could be lost to automation. Initially, ‘skill mismatches’ will likely be resolved via new hiring - rather than by retraining workers. With time, employers and employees will strike a ‘new, mutually beneficial’ deal: the former will look for value-added, engagement and lifelong learning; the latter will ask for flexibility, empathy and purpose. The predictable ‘career ladder model’ will disappear, substituted by work-transitions and up-skilling. Jobs for life will be ‘a thing of the past’. ‘Remote working’ will lead to inequality, companies’ downsizing, and workers’ migration - hampering urban real estate markets.

New business models will emerge. Automated data generation and analysis, machine learning (ML) and deep learning (DL) will revolutionize the design, manufacturing, marketing and delivery of most goods and services. Innovative companies, able to understand this turbulent environment, will transition from product-centric to user-centric. Most manufacturing industries (e.g. automotive) will produce highly customized products in geographically dispersed facilities, helped by AI in the planning and coordination of efficient ‘supply chain networks’. Accessible, reliable connectivity will catalyze the birth of new interactive companies and products – e.g.: media, gaming, and e-commerce. Supported by faster organizations’ processing capabilities, tech mega-firms will rise to monopolist status, controlling their industry and rewriting the rules, attracting talent and customers while eliminating competitors. Yet, small firms – with few employees and little assets - might be able to access the benefits of scale (i.e.: lower costs and higher revenues) by resorting to technology-based platforms and automated processes. Innovation will move into space. Reciprocal accusations of ‘intellectual property infringement’ will sour the relationship between the ‘Group of Seven’ (G7) and China.

Across countries, geopolitical tensions will rise - driven by the costs of achieving carbon neutrality. Current policies are insufficient to limit global warming [9], but waiting is not an option. Droughts, fires and flooding will convince the skeptics. Yet, the ecological transformation – i.e.: the upgrade from fossil fuels to a ‘net-zero' [10] economy – calls for an increase in government expenditures [11]. Developed countries, where the population is declining [12], will struggle to find the resources [13]. Carbon-dependent emerging markets, where the population keeps growing [14], will refuse to carry the burden. To achieve decarbonization by 2050, the globe will walk a politically fragile path. Just as their geopolitical rivalry is deepening, the West and China need to agree on who is ‘responsible to act and pay’, and co-operate on needed technologies. A new global order might ensue.

Within countries, younger citizens will eventually call for the rewriting of the social pact. Individuals will live longer [15] and become obese. The young – already upset by a lack of opportunities, rising inequality, and a damaged environment – will have to pay for the privileges (i.e.: pensions and healthcare [16]) of fat, old people. The countries least able to manage these tensions will suffer radicalization risks: unrest could lead to ethno-nationalism, loss of trust in global governance and a democratic backsliding. To avoid an unprecedented intergenerational conflict, citizens will demand a fairer, more inclusive social contract, with a focus on social policies (e.g.: the design of social safety nets) and the relationship between state and markets (e.g.: setting standards for businesses [17]).

Thinking about the future gives vertigo. It takes courage to look ahead. The ancient Greeks - when they sought to know - consulted the oracle at Delphi. Religion and magic help manage anxiety, but a dispassionate analysis of data and probabilities may actually provide useful guidance.

Understanding what is next. Predictable megatrends are the starting point, the puzzle’s building blocks. The challenge is to imagine the ‘unpredictable ones’ and the possible interconnections – as their synergies will increase both complexity and speed of change. For example, the combination of advances in the fields of: i) health (e.g.: routinized ‘data exchanges’ with the wellness industry); and ii) genetic engineering (e.g.: ‘less chemical-intensive’ farming) will favor the reallocation of resources from curative to preventive care. How will other key developments affect each other? What will their dynamic interactions lead to? Population growth will drive energy consumption, migration flows and geopolitical equilibria [18]. The transport sector will go green only after the development of clean-energy ‘storage capacity’ and network grids. Blockchain will increase data security and traceability across shared business networks, including banks. To avoid making the world even more unsustainable, governments and firms should assess the long-term implications of megatrends - and act accordingly. They will not. Fasten your seatbelts (and roll up your sleeves).

Source: Harpendore, 2017.


1. Nothing is what it seems to be and anything can happen. The ‘fish-island story’ appears in Sindbad’s first voyage, in the ‘Historia Alexandri Magni’ attributed to Pseudo-Callisthenes, and in the maritime culture of the stories of ‘Kitāb Ağā’ib al-Hind (The Book of the Marvels of India) by Buzurg ibn Šahriyār. “Sailors better keep their eyes wide open”: the basic mood is ‘existential uncertainty’ and ‘potential disaster at every turn’.

2. The growth of commercial space travel will significantly reduce the cost of rocketing satellites into orbit.

3. While IOT will reduce waste and costs, increasing efficiency, its usage will suffer from poor regulation – in particular of the information collected, i.e.: access, use and granularity.

4. Sensors in shirts, shoes, buttons and even contact lenses will convert movement into energy, monitor physiology and habits, learn behaviors and predict intentions - and send data, for example to health providers and insurance companies.

5. Messenger RNA (mRNA) lab-created vaccines teach human cells how to build a (piece of) protein to trigger an immune response.

6. ‘Cancer heterogeneity’ is one of the main challenges of ‘conventional cancer therapy’. Going forward, the development of organoids (lab-based organs) will help personalize oncological therapy and prognostic. Bioprinting in 3D and 4Dwill craft organs for human transplants. In 4D bioprinting, the printed 3D product is able to morph into different shapes after the printing, in response to external stimuli – i.e.: humidity, temperature, voltage, et alia.

7. Hypersonic air travel (i.e.: above Mach 5, five times the speed of sound) could be a reality by 2030, for both military and commercial use. A hypersonic passenger plane would travel from New York to London in 90 minutes. The effort is led by defense spending. According to the US ‘Government Accountability Office’, between 2015 and 2020 ‘hypersonic research funds’ increased by 740 percent. In 2021, the defense budget alone increased funding by 20 percent. China, Russia and North Korea claim to have successfully tested hypersonic missiles.

8. The ongoing trend - driven by aging (industrial robot adoption is partly driven by shortages in middle-aged labor) and the Covid-19 pandemic – is set to accelerate.

9. The Paris Agreement on climate change - a legally binding international treaty adopted in 2015 – sets a long-term temperature goal: “keep the rise in mean global temperature to 1.5 – 2.0 °C above pre-industrial levels”, to be achieved by reducing ‘net greenhouse gas emissions’ and replacing fossil fuels with clean, renewable energy (i.e.: 85 percent of the electricity must come from solar, wind, ocean and thermal sources). In other words, cutting emissions requires a drop in the ‘carbon intensity of the energy mix’. For example, in the EU the goal of being CO2 neutral by 2050 requires almost a ‘threefold increase’ in ‘annual reduction volumes of carbon emissions’ - a giant reduction if compared to what has been the case to date.

10. ‘Net-zero’ refers to the balance between the amount of greenhouse gas produced and the amount removed from the atmosphere.

11. Decarbonization demands extensive investments in low-emission infrastructure, transportation, public and private buildings, etc. Being a knowledge-based activity, it also requires government spending in both the education sector and R&D - to achieve high skills, especially in the areas of natural sciences and technology.

12. The phenomenon is mostly due to an abrupt decline in the ‘global total fertility rate’, from 5.0 in 1960 to 2.3 (down to 1.6 in OECD countries) in 2020. The ‘old-age dependency ratio’ - also known as “the pensioner ratio” - indicates how many people ‘aged 65 and older’ (i.e.: of retirement age) there are for every 100 people ‘aged between 15 and 64’ (i.e.: of working age). With the highest ‘old-age dependency ratio’, Europe’s population is set to shrink – making it the oldest region in the world.

13. Financial resources: a steady decline in the number of ‘citizens of working age’ will lead to lower potential growth and reduced tax receipts. At the same time, developed countries will need to spend growing amounts on pensions, health care, and long-term care. In other words, an aging population shrinks the fiscal space.

Political resources: the risk of social protests and political tensions is increased not only by an unfair sharing of the structural change’s ‘adjustment costs’ (i.e.: the ‘young’ getting worse off), but also by a reduction of ‘social security benefits’ (i.e.: the ‘old’ losing their privileges); in a society where voters are aging, unpopular cuts make the achievement of a political majority impossible.

14. Barring deadly new viruses, the world’s population will increase by 2.1bn people (+27 percent), from 7.8 billion in 2021 to 9.9 billion in 2050 – mostly in emerging markets. Cities will burst: about 70 percent of the world’s population will be urban, compared to 56 today. With more people to feed, agriculture will need to boost food production by 70 percent. In absence of corrective action, overconsumption and waste are likely to lead to resource depletion (e.g. water shortage) and environmental degradation.

15. Globally, life expectancy has increased by more than 6 years – from 66.8 years in 2000 to 73.4 years in 2019.

16. Spending on ‘health care services’ for the elderly has been increasing since 1965; between 1977 and 1984, it increased at an annual rate of 14.5 percent. Per capita health spending is six times higher among the ‘over 85’ and ‘55-59’ age groups. In the three years before death, medical spending accounts for 13.4 percent of aggregate medical spending. Worldwide obesity has nearly tripled since 1975. In the United States, 20 percent of the population is obese, creating an enormous cost: an estimated USD147 billion (in 2008 dollars) per annum is spent in obesity-related medical care.

17. E.g.: corporate governance, company operations, executive pay, audits, internal controls and shareholder rights – and, last but not least, socially-conscious investments.

18. By 2050, while in developed economies ‘older citizens’ will demand pensions and health care, in emerging markets ‘younger citizens’ will voice their needs. International migration will surge - swelling new and existing urban centers.

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