We are on course, based on well-accepted trend lines, for a transition from the current world to a quite different one. Nine turning points indicate the nature of this new world, and just how different it is and how near we are to it.
‘Punctuated Equilibrium’ is a theory of biological evolution that posits that evolutionary changes occur in rapid spurts, interspersed with long periods of stability. While this theory was developed to explain the development of biological species, it could just as easily be applied to social and political structures, where periods of relative stability are followed by shorter periods of change and disruption that radically shape a new and stable (for a time) status quo.
The world today appears to be in such a period of mass disruption along multiple dimensions, bring mass change to a series of systems that have been in place for years, decades or even centuries. The US unipolar world of the past generation is being replaced by one of competing power blocs, the global liberal order of post war period challenged by a far less liberal one, and the industrial age of the past two centuries transitioning to the information age, all at a time when the world must seek to mitigate the impact of anthropogenic climate change that is raising global CO2 levels to their highest levels in 14 million years.
The next few years promise to be ones of great upheaval as these various transitions occur and impact each other. Collectively they will drive the transformation of the global order and usher in the next phase of global civilisation. The changes that will bring these about will be far reaching, rapid and sometimes violent, and the detailed course the world will take is therefore difficult to chart. There are however a series of fundamental trends, demographic, economic, political, technological, and commercial, that paint the backdrop against which any radical change will occur, with the power to constrain or catalyse the rate of change. These trends point to a number of macro-turning points that will occur over the course of a generation, turning points that will not only impact the the world’s transformation path, but also more fundamentally the shape of the world to come.
This month’s Sign of the Times looks at nine projected global turning points across economics, politics and society, commerce, and technology between 2030 and 2064 and why these will matter for world.
The world is currently facing levels of uncertainty unknown in anyone’s lifetime. The global security architecture is under threat from Russia’s ongoing invasion of Ukraine, impacting oil and food prices and further fanning rising inflation at a time of macro-economic slow-down, alongside global supply chain bottlenecks, rising interest rates and stock market volatility. Global economic forecasting has been thrown into turmoil as a result. Over the space of a single calendar quarter the World Bank has adjusted global growth projections for 2022 down by nearly 1% (to 3.2%), while the IMF has raised global inflation projections by nearly 2% (reaching 5.7% in advanced economies and 8.7% in emerging markets).
And while the current situation may well be the result of a ‘perfect storm’ of discrete events working in concert to create an unprecedented but temporary spike in risk and uncertainty, it is also clear that there will be no return to the ‘normal’ world of the previous decades and its certainties. Seen more deeply, the current storm is the result of a series of long-term challenges that have been building for decades in some cases and are now reaching a critical threshold threaten to end to the liberal international order. While this order has delivered more peace prosperity and freedom to the world over the past 75 years than any other in history, it has given rise to interrelated challenges that now threaten many of the foundations of Western civilisation that we take for granted, including:
Climate change driving irreversible environmental and ecological damage making industrial economies unsustainable.
Economic power shifts driven by demography and globalisation from Western countries to emerging Asia
Digital technology reorganising social, corporate, economic, and political structures is ending the industrial era
Increasing inequalities in wealth income and access to opportunities pointing to the shortcomings of capitalism
Mass migration on the basis of the aforementioned shifts and inequalities straining the commitment to globalisation
Civic disaffection, amplified by new media technologies, challenging democracy as the ‘best’ political system.
Increasing risk of conflict and war demonstrating the obsolescence of the post-war global security architecture
Until they are resolved, these challenges will continue to give rise to events and risks that destabilise the world. While the current situation may well be a ‘perfect storm’ of discrete events, it is also clear that there will be no return to the ‘normal’ world of the previous decades and its certainties. Successfully addressing these challenges will have a fundamental impact on the shape of the world. A previous Sign of the Times had laid out the elements of the “Great Transformation” set to reshape the world over the course of the next generation, laying out some of the elements of the next stage of human civilisation that lay at its end.i
The trajectory of this transformation is still unclear and will be shaped by the cumulative decisions of political leaders, business leaders and billions of individuals around the world. However, the current trajectories of key political, economics, technological and social trends point with a high degree of certainty to series of critical cross-over points for the world over the next generation.
While there is broad consensus on the certainty of these nine cross-over points between 2029 and 2065, there is no certainty on the nature of the sustainable future that must be forged, the risks that must be managed and the opportunities that must be unlocked.
The Cross-over Point. Chinese GDP is projected to grow by 5.7% y-o-y until 2025, 4.7% per year from 2026-2030, at which point it is poised to overtake the US to become the world’s largest economy, and further strengthening its leadership in global trade over that period, driven by an increased focus on high-tech manufacturing, and deepening economic linkages across Asia and into Europe and Africa.
Why it Matters for the World. American political, security, financial, multi-lateral and even soft power dominance are ultimately underpinned by the strength and scale of its dominant economic position, and China’s coming economic dominance will allow it to mount increasingly credible challenges to US leadership across many of these areas, outspending its rival to offer an alternative for the rest of the world to follow.
The Cross-over Point. Competition, scale, and low-cost manufacturing are reducing the costs of smartphones and driving global affordability, with global smartphone penetration expected to cross 100% by 2030 at current growth rates.
Why it Matters to the World. Given fundamental challenges around funding and building physical infrastructure in developing countries, many of their human development challenges can only be solved digitally, making digital inclusion a critical gateway to virtually all other forms of economic and socio-political inclusion, whether financial, education, healthcare, labour, or political.
The Cross-over Point. The cost of sequencing a full human genome has fallen by over seven orders of magnitude since 2003, from c.US$3bn to $200 in 2020, and is expected to reach US$10-50 by 2030, the lower end of which is equivalent to the World Bank definition of weekly income of individuals below the poverty line in some of the poorest countries (US$1.9/day).
Why it Matters to the World. Affordable and precise sequencing will drive a paradigm shift to preventative medicine based on individual genetic risk factors, with personalized testing and treatment plans, together with accompanying innovations in technologies like gene editing technologies and enabling gene therapies targeting diseases at the cellular level.
The Cross-over Point. India’s GDP is expected to surpass that of Japan by 2030 to reach a GDP of US$7tn, making it the world’s third largest economy and an upper-middle-income economy, driven by rapidly growing domestic consumer markets and large industries across manufacturing and services including IT, banking, healthcare, auto and chemicals.
Why it Matters to the World. With China seeking to establish global trade leadership as well as a regional security and political sphere of influence, India’s emergence as a major global power bloc positions it as both a counterweight and as a powerful potential ally to the US and EU in maintaining a global rules-based order based on shared values of political liberalism, economic liberalism, and liberal internationalism. If it maintains its multilateral approach to geopolitical relationships, it may also be an asset that seeks a balance with China while rivalry increases.
The Cross-over Point. Based on currently announced and planned decarbonisation policies, the world is projected to fully exhaust the energy-related CO2 emission budget associated with a global temperature increase below 2°C by 2037, well in advance of most countries net zero target dates, leading to a significant temperature overshoot.
Why it Matters to the World. With the world currently on track to warm by 3.2°C this centuryii , it it risks facing potentially catastrophic consequences from "unprecedented heatwaves, terrifying storms, and widespread water shortages", with a ‘business as usual’ approach estimated to cost the world’s economy US$178 trillion by 2070III.
The Cross-over Point. Based on current forecasts, renewable energy will provide half of the world’s energy requirement by 2043, up from c.18% in 2015, driven by new policies and regulations to power system planning, the development of new technology and cost breakthroughs such as cost-effective battery storage systems, significant international coordination, and a diversification in manufacturing capacity globally.
Why it Matters to the World. The global investment need for renewables totals US$5.7 trillion per year until 2030, with a significant portion of this spending required to be made in developing countries, which lack the necessary financial resources to fund the transition. Industrialised countries will need to support developing countries’ economies transition to low carbon models in a manner than delivers continued economic stability and growth.
The Cross-over Point. Exponential advances in computing speed are helping to transform artificial intelligence (AI) systems, which are evolving from narrow problem solving to a wider capability for cognition and general intelligence exceeding a human being’s understanding and learning capacity, with the computing power of a single system expected to perform more calculations per second than the brains of all the nearly 10 billion people alive in 2045.
Why it Matters to the World. Increasingly powerful AI will disrupt every aspect of human decision making., delivering things as varied as increased agricultural crop yields, customised healthcare, improved education levels, but also fundamentally disrupt global labour markets, with 375m of the world’s jobs today estimated to be made obsolete in the next decade aloneiv. With AI leadership across business, trade, politics, economies and even warfare will provide countries with critical geopolitical advantages, countries are already racing to dominate the technology.
The Cross-over Point. Launch costs for orbital payloads have been falling rapidly since the beginning of the Space Age, having decreased by 97% since the launch of NASA’s Space Shuttle in 1981, and continuing to decline thanks to the introduction of reusable rockets, with the use of new materials and fuels, more cost-efficient production methods, and advancements in robotics and electronics systems, projected to cross below US$10 by 2050, equivalent to the current cost of international air freight.
Why it Matters to the World. The space economy has been forecast to become a trillion-dollar industry by 2040, driven by satellite industry, government space budgets, and a proliferation of new applications and industries< and opening a stream of new opportunities including space-based solar power, microgravity R&D and construction, Moon/asteroid mining, and eventually space colonisation, allowing humanity to make the leap to an interplanetary species.
The Cross-over Point. Technically a turning point rather than a cross-over point, credible forecasts project the global population to peaking to 9.7 billion mid-century before declining to 8.8 billion by 2100, driven by rising levels of female education, increasing participation by women in the workforce and improved access to contraception in the developing world.
Why it Matters to the World. A stable global population has important implications for sustainability, reducing the stress on food systems, reducing the rate of resource depletion and emissions, and improving human development indicators as finite resources are shared by a smaller group of people. However, countries formerly experiencing population growth will face pressure on their social security and support systems as the working age population declines as a percentage of the total population and overall economic growth will moderate.
While there are no certainties in life, the underlying drivers of the eight trajectories are fundamental ones and unlikely to be stopped, for example China’s overtaking of the US is rooted in the reality of an increasingly educated population more than four time the size of America’s;‘Black swan’ catastrophes aside, global events will only only change the timing of the cross-over points, rather than bend the trajectories so far that they do not happen at all.the drop in orbital payload prices is being driven by competition and economies of scale; and the continued emission of C02 globally is the inevitable result of the tight integration of fossil fuels and manufacturing into our global economic, political, financial and social systems (at least for the time being).
But while the drivers may be fundamental, the trajectories they are powering are of course not set in stone. If there is one thing the early years of the 2020s have taught the world, it is that unforeseen events can derail even the best laid plans. Barring ‘black swan’ catastrophes however, such events will likely impact ‘just’ the timing of the cross-over points, rather than bend the trajectories so far that they do not happen at all. Barring prematurely exhausting the global CO2 budget, these turning points provide the contours of the emerging scenario for humankind in the second half of the 21st Century and they begin to change the current scenario quite dramatically from a decade onwards.
Of course, they offer no more than a glimpse of the shape of the world to come and how we will live, work, cooperate and compete in a digital and decarbonised world of nearly 10 billion people remains to be seen. The world today is already consuming resources at nearly twice the rate that the planet can sustainability supply, making the innovation of radical breakthroughs absolutely critical.Those outcomes are likely to depend on two interrelated macro-factors. The first one is innovation: The world today is already consuming resources at nearly twice the rate that the planet can sustainability supply, making the innovation of radical breakthroughs absolutely critical. How quickly these breakthroughs are achieved and rolled out are a function of the second macro-factor: the shape of the social contract underlying global governance. The past 70 years have been characterised by a global governance model focused on multilateralism and globalisation, which have facilitated the open sharing of information and ideas, accelerating innovation around the world. Whether this model will survive the current upheavals underway however remains to be seen.
While much is said about the failures of the liberal world order of the past, it might be more appropriate to say it has very much delivered on its objective of maintaining peace and creating prosperity. What is missing is the vision, leadership and plans to create the next geopolitical order. A recent Sign of the Times looking at geopolitical implications of Russia’s invasion of Ukraine also noted the importance of the West uniting to address the issue with speed, unity, and determination. This war made reform and revitalisation of the world order not just a pragmatic imperative but a moral one if human peace, prosperity, and freedom are to be advanced.
- Source: See the June 2020 Sign of the Times “The Coronavirus Pandemic Part III: The World Emerging from this Crisis”
- Source: IPCC
- Source: Deloitte
- Source: Zippia
- See the April 2022 Sign of the Times: Lessons from the Russian Invasion of Ukraine in 2022 The West’s Opportunity to Reset the World Order
Lessons from the Russian Invasion of Ukraine in 2022 The West’s Opportunity to Reset the World Order