The Shape of the World to Come Part I: How the World is Progressing

The outcome of the US presidential election has the potential to be a pivotal moment for not just the country but the world. The next President will likely be confronted with and need to take decisions on a series of issues that will shape the geopolitical and economic landscape for decades to come. In the final days of what has been a long and tortuous election campaign it is worth taking stock of the major trends which are shaping the world today, both for the better and worse, and will likely give rise to the key decisions America’s and other leaders will need to address.  One of the unique features of the current era is that the world is both on the path of rapid economic and social progress while also facing an increasing array of complex challenges both domestic and international which threaten global development and security. It is the latter which tends to dominate the news headlines and primarily take our attention.  How can one reconcile these two conflicting perspectives, of a world that is better off than ever before vs. a world that is in disarray and falling apart?  Whereas such issues were often found in developing countries with stark differences between rich and poor, these issues are now the phenomenon of the richer nations and threaten to divide their populations into polarised factions.  In addition, there is no denying that in the first 50 years of this century, the world expects to add 50% more people, achieve near universal internet connectivity, be 66% concentrated in cities, use up many of the world’s key natural resources that got us this far and see modern technologies make the majority of industrial age jobs redundant . There is no denying we are in a momentous historic transition, the more important question is how will we handle that transition, with a greater degree of compassion or with competitiveness?  In a three part series, over the next 12 months, the Sign will take a look at the changing nature of the world order and what this means for human development.  In the first of this series, this month’s Sign takes a closer look at megatrends that are shaping the world for positive development. The next in the series will look at the key challenges and how these threaten development and security.  The final in the series will  examine the reasons for the seeming disconnect between the two and put forward a perspective on the shape of the world to come.

Context: Distinguishing Trend Lines from Headlines

After a period of relative stability and growth following the end of the Cold War, globalisation appears to be under a sustained assault by a number of forces which are destabilising the current global economic and political order. The rise of strong popular support for the protectionist and exclusionist policies of Donald Trump, along with the U.K.’s vote to leave the EU in its “Brexit vote”, has revealed a deep reservoir of anti-immigration and anti-trade beliefs in the West as well as a deep antagonism towards globalisation among large segments of the populations in countries that have pioneered and benefited the most over the past 50 years from globalisation. “There is no denying that in the first 50 years of this century, the world expects to add 50% more people, achieve near universal internet connectivity, be 66% concentrated in cities, use up many of the world’s key natural resources that got us this far and see modern technologies make the majority of industrial age jobs redundant” This blowback against globalisation among mass populations, much like globalisation itself, is a global phenomenon, and is being driven by two factors in particular.  Firstly, over many decades, despite high employment rates and rising incomes, there has been a rise in income inequality that has seen large segments of the population feeling relatively marginalised with little change in wages, even as significant amounts of wealth is created in the overall economy. Secondly, relative global peace appears to be under threat from cross-border terror networks which appear to be constantly opening up new conflict theaters in domestic and international territories and threatening to pull in the big powers as well as resulting in large migration flows into their more stable and richer neighbours. These two issues alone point to a world which is heading towards a major disruption. News headlines have been dominated by the unfolding tragedy of displaced peoples from war zones who, as they relocate in neighbouring countries, are seen by many as a threat that will in turn displace the economies and social norms of their new hosts. Those most threatened have tended to be the elder generation and others who feel economically vulnerable. This emotional turmoil has been the topic that has given rise to both socialist and right wing populist politicians threatening the status quo.  Both get their appeal from talking of a world that is falling apart or in need of serious change.

However, a more comprehensive analysis reveals an altogether different picture of the world.  It reveals a world of increasing prosperity and declining poverty, of far greater peace than previous centuries both in terms of inter-state conflict and violent crime.  It reveals a world where technology and the internet is increasingly accessible and enabling large numbers of people to participate in global economic growth. It also reveals a healthier world which is rapidly “Follow the trend lines, not the headlines … If the trend lines are bad, all the happy headlines in the world won't make things come out well. And if the trend lines are not as bad as the headlines, you should wake up every morning full of optimism and be content with the trend lines until the headlines catch up.”
President Bill Clinton, May 2003
eradicating preventable diseases and driving innovation to find solutions to other ailments like HIV and cancer. These developments unfortunately do not get anywhere near the level of news coverage that the negative trends do, contributing to the overall impression that the world is indeed falling apart. Not withstanding the fact that for specific individuals, communities and regions, their world might well be falling apart, this is not true for the world at large. So it is as critical to understand the positive side of the world as it is the challenges if one is to form an informed judgment of the shape of the world to come and the key issues which will confront decision-makers. There are a number of core mega-trends driving a rapidly accelerating path of economic, social and technological progress. The data on these trends is evident and incontrovertible, therefore they represent some basic ‘truths’ which need to be kept in mind as one looks at the key challenges facing the world. A dozen of these key trends is sufficient to point to the positive progress that the world is making.

A Dozen Reasons that the World is Not Falling Apart

1. Political Freedom is Growing World-Over. Following the end of the Cold War, when only half the world’s population was living in democratic societies (vs. autocracies), participative democracy has become the preferred political model for developing economies, with c.70% of the world now living in democracies . The notable exceptions to this are of course China, which accounts for c.80% of the population living in autocracies, and Russia, which accounts for an additional 8%. However, most of the rest of the world population, including increasing portions of Sub-Saharan Africa , now live in relative political freedom.

2. Armed Conflict and Deaths Due to Wars are Declining. In spite of the newsflow that seems to indicate an increasing number of global conflicts making the world much more dangerous, data shows quite the opposite: war-related deaths (as a portion of population) have declined sharply since the end of World War II, and also in the 1990s following the end of Cold War, to an all time low in 2005. While recent years have seen this number increase slightly (driven by the intensification of the Syrian and Iraq civil war as well as conflicts in Afghanistan and Africa, the overall level of war-related deaths remains c.50% lower than the average level during the 1990s and and c.80% lower than the average level during the 1970s and 1980s.

3. Violent Crime in Developed Economies has Declined Significantly. Despite the almost weekly news of gun violence in the U.S. and terrorist incidents in Europe, the rates of violent crime, including homicide and rapes have declined significantly, particularly in the last 25 years. Despite an increase in recent years, the overall level of violent crime in developed countries remains more than 50% below the levels at the beginning of the 1990s. Taking a long period of history, Europe is much safer taoday than in the previous 600 years. Given the evidence for a strong correlation between a society’s levels of wealth and education and its reduction in violence, although long-term statistics for developing countries are hard to come by on this topic, it is also likely that similar decreases in violent crime are occurring more widely across the world today.

4. Worldwide, Fewer Children are Dying Early or Being Forced into Work.The rate of infant mortality and child labour has declined significantly in the last 25 years. The mortality rate of children under five years of age nearly halved between 1990 and 2012 and is now within reach of the Millenium Development Goal of 3%. At the same time, more parents are sending their children to school rather than forcing them into work, enabled by increased government incentives and investments in education infrastructure. The number of children being forced into labour has declined by c.30% since 2000 (from c.250m children to c.170m).

5. The End of Extreme Poverty is in Sight. The number of people living in extreme poverty (defined as people living on less that US$1.25 per day) has steadily declined in absolute terms from its peak of 2.2bn people in 1970, despite the global population having doubled from 3.7bn in 1970 to 7.4bn today. As of 2015, less than 10% of the world’s population, or 700m people, continue to live in extreme poverty, with the rate declining by 1-2% each year. The U.N.’s Millenium Development Goal of ending extreme poverty by 2025 therefore looks to be achievable.

6. Literacy and the Level of Education for the World Population Have Increased Significantly. Education is a critical enabler of economic participation, and the world has seen a sharp increase in both the relative and absolute levels of education in developed and developing economies. Global literacy rose from c.20% at the beginning of the 20th century to c.50% in the 1960s and has risen to c.85% today. In terms of absolute numbers, the increase is even starker with a c.5x increase in the number of literate people, from 1.3 billion in 1960 to 6.2 billion today.

7. Global Hunger is Gradually but Steadily Declining. Until the mid 2000s. the number of malnourished people across the world hovered stubbornly around 1.0bn. Since 2005, global malnourishment in absolute terms has declined by c.20%. Much of this improvement has occurred in South Asia and Sub-Saharan Africa, both of which have seen their economic growth accelerate in the last decade, with a resulting decline in absolute poverty and hunger.

8. Healthier and Living Longer Across the World. With increasing investments in heathcare and mass adoption of healthcare innovation, people across the world are leading healthier and longer lives. Global average life expectancy has increased from 64 years in 1990 to 70 years in 2011. Much of this growth came from emerging markets such as India and China which both have seen a seven year jump in life expectancy since 1990, driven by the development and improvement of national healthcare systems. Further, average life expectancies in OECD countries is 80 years or longer and is showing signs of continued growth over the coming decades.

9. The World’s Energy is Cleaner and More Efficient. The world has been in the midst of a clean energy revolution which has accelerated over the past decade, with power from renewable sources (excluding hydropower) increasing from 2% to 14% of total global power generation capacity between 2004 and 2015. This has been driven primarily by the rapid expansion of wind and solar capacity and helped by declining capital costs of these technologies. Solar PV has now reached grid parity in at least 20 countries, meaning that it is cost competitive with purchasing power from the electricity grid . This combined with a drive towards energy efficiency, means the world uses c.20% less energy than before to sustain itself compared to a decade ago.

10. Increasing Global Income Growth and Trade Driving Jobs and Purchasing Power, Benefiting the Poorest in the West Too. Finally, despite regional or event drive setbacks, the global economy has continued to expand, driven in part by high growth in global trade. Temporary blips such as the global financial crisis may have very real and significant short-term impacts on growth, but the long term trend continues to be one of expansion, both the Western and developing world. Moreover, increasing trade has a positive benefit on both diposible incomes and job creation, even in countries with significant negative balances of trade such as the US, where the number of jobs tied to trade has tripled between 1992 and 2014, growing at 4.8% annually vs. non trade related job growth of 1.0%. Further, trade increases purchasing power by reducing prices for consumers, particularly at lower end of the income spectrum, where over half of effective household purchasing power comes from international trade.

11. Equality and the Role of Women.There has been substantial global progress on gender equality in the world. While the US election has focused attention on the first potential female US president, the fact that since 1960 over 60 countries have elected female leaders is often overlooked. The gains in education for women is even more significant, with an estimated 60% of college degrees in the US expected to go to women by the end of next year, up from c.40% in 1970. This trend is a global one, with female participation in secondary education nearly on parity with male education, up from 75% in 1970, pointing to increasing educational gender equality.

12. Digital Connectivity and Innovation is Growing Rapidly. The growth of telecommunications infrastructure and proliferation of smartphones has allowed rapid growth of internet access with 3.0 billion internet users as of 2015. This has unleashed a wave of digitisation across the world which is creating new businesses, empowering consumers and large segments of the population in developing markets like India and China to participate in the global economy, access information and reach each other. This has been accompanied by an exponential increase in data and new tools available to analyse it, thereby enabling automation and driving efficiency for businesses and governments.

 

Conclusions

People, the world over, are more free, less violent, better educated, healthier and living longer, providing better lives for children, consuming cleaner energy, trading more with each other, accessing cheaper products and services, providing more opportunity for women, with better access to each other and to information and on the brink of ending extreme poverty.

These characteristics are based on substantial and positive advances in our world and provide grounds for long term optimism, and are compelling evidence that we are indeed living in the “best of times”. Why then do so many people feel like we actually do not live in better times?  The next Sign of the Times in this series will examine why that is. Part of the answer lies in us as people.  Each of the positive trends listed above is gradual and long-term in nature, with its benefits unfolding over decades.  There are a number of critical human factors that work against this in this day and age.  These factors are psychological and innate to the human condition.  Three alone provide a large part of the answer as to why we view the same things so differently. Firstly, “Recency” – by which we give greater weighting to more recent events – is one of the most compelling psychological forces inside humans, since without it we would not react well to life-threatening risks but it also leads us to over-weight recent bad news. The second key factor is the “fight-or-flight” instinct which sparks fear and leads us to react with aggression and conflict or  retreat in the face of threats. The third is our concept of “us” – who we define as ‘one of us’ and who as an outsider – and this leads us to exhibit sharing behaviour or hoarding in the face of new people arriving in ‘our space’, it determines our openness to outsiders and accounts for why many reject migrants in desperate situations.  Given each of us, as individuals, over our lifetimes, develops different levels of tolerance to the innately human programming regarding recency, fear and openness (and a host of other factors), it is no surprise that we might have very different reactions to the same data.  This is amplified by the now 24 hour access to newsflow focused on the short-term – since this naturally plays to one of the compelling human appetites which is for information on events that pose a threat to us - covering current events and their immediate consequences rather than long term trends. By their nature however, the short term consequences of events are more likely to be negative rather than positive. For example, while the benefits of a peace deal, including economic growth, prosperity and social  development, accrue gradually, the costs of war, in the form of death and destruction of property and livelihoods, are more short term, especially given modern weaponry. Or to use a political example, the violence that often accompanies a regime change is immediate, but the development of a stable democracy is a much longer and complex process, as the Arab Spring has shown. Our attention immediately focuses on the former, and only takes in the latter on reflection (and in hindsight). In this context it becomes easier to understand why many believe we are living in the “worst of times”. While each of the very human qualities had an important role to play in the survival of individuals and the human species, they can have an equally important role to play in our demise. If we react with excessive fear and aggression towards what are merely short term events in the context of a story that is unfolding highly positively, we may well derail the positive unfolding itself, and make our fears come true. 

What does this mean for us as individuals and leaders, with choices to make for ourselves, our families, communities and countries but also the ever-present need to make immediate-to-short term decisions on a daily basis?  In the next edition of the Sign, we will look at the key issues facing the world that will need to be successfully managed as we transition to a world that will be quite different from today’s one. 

Notes:-

2. Source: United Nations

3. See the Sign leader from July 2016, Brexit and Other Forces Destabilising and Reshaping the World

4. See the Sign Leader from April 2012, China and the Freedom Advantage

5. As of 2015, 49% of Sub-Saharan African population lives in relatively free conditions (Source: Freedom House 2016 report)

6. E.g., in 2013, General Martin Dempsey, Chairman of the US Joint Chiefs of Staff, in his testimony

before the U.S. Senate, stated: “I will personally attest to the fact that [the world is] more dangerous than it has ever been… There is no foreseeable peace dividend. The security environment is more dangerous and more uncertain.” (Source: Foreign Policy

7. In Nigeria, Cameroon, Niger and Chad

8. Source: Deutsche Bank, Nov 2014