What lies ahead, now that America’s Lost Decade and Asia’s Best Decade are behind us? I just returned from a month in Singapore, China and Korea and, for the first time in a dozen years, I’m not going to the World Economic Forum in Davos, Switzerland. So you can tell what frame of mind I am in.
I believe 5 Big Trends will shape the future decade. The 5 trends are:
1- Rise and Fall of Nations (US and Europe falling, Asia rising).
2- Rise and Fall of Generations (Boomers falling, Gen Y rising).
3- Behavioral Modification of Organizations (social media-ization of businesse, health, education, politics).
4- Urbanization of world’s population.
5- Global warming (winners and losers in the restructuring of the global economy).
Within this context of 5 Big Trends, here are 7 specific forecasts.
1- Peak Globalization:
Just as the world globalized in the second half of the 19th century, only to return to nationalism in the first half of the 20th, so too will we see a strong backlash against globalization in the decade ahead. Over the past 10 years, the expansion of the middle class in China and India has been matched by the immisseration of the middle class in the US. Corporation profits have gone to CEOs, top managers, and the financial elite, not employees or workers. In the near future, they get angry and demand a greater share of the pie.
Top corporations and financial institutions of Europe and America have also de-coupled from their nation-states to become global, putting personal and shareholder interests above national interests. As China, India, Korea, India, Japan and other countries pursue strictly national strategies, Western governments and publics increasingly counter with theirs.
Finally, the Boeing 787 fiasco highlights the problems with extreme outsourcing of complex systems. As Boeing has moved to insource and control the 787, so too other US and European companies follow.
2- Radical Remodeling:
The social media form of organization found in Facebook and Twitter spread to business, healthcare, education and, politics. This is Gen Y’s technology platform and the 16-27 year-old demographic cohort take social media with it as it takes power and moves through it’s life cycle.
Design Thinking, behavioral economics, social media, social business, and new military strategy flow into a new paradigm of organization, process and action. A culture-centric, behavior-focussed model replaces the current rationalistic, math-basaed, theoretical economic model. Bye-bye to the Chicago school of economics. Hello Harvard.
The valuation of “friendships” and relationships in general begins to replace the value of transactions in the economy. Personal networks will increasingly determine wealth.
New consultancies spread the word in business culture and healthcare.
The Ford Foundation sponsors a complete overhaul of the MBA curriculum to reskill business school graduates, with a special focus on ethnography, sociology and design thinking.
America becomes increasingly ungovernable and incompetent. Ideological polarization, political corruption (legal lobbying but pay-to-play), growing inequality, globalization of corporate and financial elites, and large-scale social system failures (education, healthcare, intelligence, industry), cut America’s economic, political and military power. The shift to a green economy is slow. The dollar sinks and inflation rises to ease paying for huge government debt.
The US decline reverses by end of the decade, as innovation heralds a renewed economy and Gen Y takes political power, ending the ideological and political stalemate in the country.
4- Return to Big Power Conflict:
The rise and fall of nations generates new Big Power conflict. China challenges the US militarily in Taiwan and nearly succeeds in blinding US naval computer systems.
China and India fight a small-scale border war that is really about controlling water. Pakistan and India engage in conflict.
5- China stalls out:
A huge aging population, soaring inequality and anger at the rich, over-investment in infrastructure, industrial capacity and failure to shift from a producer/exporter to a consumer/importer economy combine to produce a financial crisis in China that ends its 30-year, double-digit growth streak. The decline of the US consumer-of-last-resort is not matched by the rise of Chinese consumption. China becomes “Japanized.” Stuck as the world’s second largest economy, growing but not leading.
Beijing uses nationalism and external conflict to remain in power.
6- India Becomes Global Growth Engine:
A large, young Gen Y population, a vast middle class consumer base, an innovative corporate elite, a large, educated, English-speaking IT industry, a stable government and an ever-closer military alliance with the US push India’s growth rate to double digits, making it the biggest importer of investment and goods from the US and Europe by the end of the decade. Problems remain—corruption, Maoist rebels, inequality.
7- Europe Fades Further:
Benefits from a successful shift to a green economy by many countries are countered by the burdens of paying for a huge aging population. .
Turkey is invited to join the EU by the end of the decade—and turns it down. Working population continues to shrink.
Continued nationalism stops the rise of a strong European government—until the end of the decade when one is actually formed.
That’s it. There will be terrorist events, Middle East changes and scientific/technological breakthroughs that impact our lives. I don’t know that much about thess. I’ve kept the trends and forecasts here to things I do know about—economics, innovation, design, politics, demographics, policy, global.
So here’s to a new decade. It’s going to be exciting—and rough.
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