Sunday, November 10, 2013

Global Trends 2030: Alternative Worlds

I just read the fifth installment in the National Intelligence Council’s (NIC) series of reports aimed at providing a framework for thinking about the future entitled "Global Trends 2030: Alternative Worlds". It's an excellent report well worth reading.

In this volume, they expanded their coverage of disruptive technologies, devoting a separate section to it in the work. They engaged with research scientists at DoE laboratories at Sandia, Oak Ridge, and NASA in addition to entrepreneurs and consultants in Silicon Valley and Santa Fe to help put together this section of the report.

This volume also contains a chapter on the potential trajectories for the U.S. role in the international System as well as a chapter on delineating possible future directions and their impact on the broader evolution of the international system.

This report is intended to stimulate thinking about the rapid and vast geopolitical changes characterizing the world today and possible global trajectories during the next 15-20 years. The following are some selected excerpts from this report: 

[Excerpts from "Global Trends 2030: Alternative Worlds"] 

MegaTrends
The world of 2030 will be radically transformed from our world today. By 2030, no country—whether the US, China, or any other large country—will be a hegemonic power. The empowerment of individuals and diffusion of power among states and from states to informal networks will have a dramatic impact, largely reversing the historic rise of the West since 1750, restoring Asia’s weight in the global economy, and ushering in a new era of “democratization” at the international and domestic level. In addition to individual empowerment and the diffusion of state power, we believe that two other megatrends will shape our world out to 2030: 
  • demographic patterns, especially rapid aging; and 
  • growing resource demands which, in the cases of food and water, might lead to scarcities. 
These trends, which are virtually certain, exist today, but during the next 15-20 years they will gain much greater momentum.

Underpinning the megatrends are tectonic shifts—critical changes to key features of our global environment that will affect how the world “works”.

NIC – Tectonic Shifts Between Now and and 2030 
  • Growth of the Global Middle Class - Middle classes most everywhere in the developing world are poised to expand substantially in terms of both absolute numbers and the percentage of the population that can claim middle-class status during the next 15-20 years.
  • Wider Access to Lethal and Disruptive Technologies - A wider spectrum of instruments of war—especially precision-strike capabilities, cyber instruments, and bio-terror weaponry—will become accessible. Individuals and small groups will have the capability to perpetrate large-scale violence and disruption—a capability formerly the monopoly of states.
  • Definitive Shift of Economic Power to the East and South - The U.S., European, and Japanese share of global income is projected to fall from 56 percent today to well under half by 2030. In 2008, China overtook the U.S. as the world’s largest saver; by 2020, emerging markets’ share of financial assets is projected to almost double.
  • Unprecedented and Widespread Aging - Whereas in 2012 only Japan and Germany had matured beyond a median age of 45 years, most European countries, South Korea, and Taiwan will have entered the post-mature age category by 2030. Migration will become more globalized as both rich and developing countries suffer from workforce shortages.
  • Urbanization - Today’s roughly 50-percent urban population will climb to nearly 60 percent, or 4.9 billion people, in 2030. Africa will gradually replace Asia as the region with the highest urbanization growth rate. Urban centers are estimated to generate 80 percent of economic growth; the potential exists to apply modern technologies and infrastructure, promoting better use of scarce resources.
  • Food and Water Pressures - Demand for food is expected to rise at least 35 percent by 2030 while demand for water is expected to rise by 40 percent.  Nearly half of the world’s population will live in areas experiencing severe water stress. Fragile states in Africa and the Middle East are most at risk of experiencing food and water shortages, but China and India are also vulnerable.
  • U.S. Energy Independence - With shale gas, the U.S. will have sufficient natural gas to meet domestic needs and generate potential global exports for decades to come. Increased oil production from difficult-to-access oil deposits would result in a substantial reduction in the U.S. net trade balance and faster economic expansion. Global spare capacity may exceed over 8 million barrels, at which point OPEC would lose price control and crude oil prices would collapse, causing a major negative impact on oil-export economies.

Game-changer 1: The Crisis-Prone Global Economy

The international economy almost certainly will continue to be characterized by various regional and national economies moving at significantly different speeds—a pattern reinforced by the 2008 global financial crisis. The contrasting speeds across different regional economies are exacerbating global imbalances and straining governments and the international system. The key question is whether the divergences and increased volatility will result in a global breakdown and collapse or whether the development of multiple growth centers will lead to resiliency. The absence of a clear hegemonic  [leadership or predominant influence exercised by one nation over others] economic power could add to the volatility. Some experts have compared the relative decline in the economic weight of the U.S. to the late 19th century when economic dominance by one player—Britain—receded into multipolarity.

A return to pre-2008 growth rates and previous patterns of rapid globalization looks increasingly unlikely, at least for the next decade. The world’s economic prospects will increasingly depend on the fortunes of the East and South. The developing world already provides more than 50 percent of global economic growth and 40 percent of global investment. Its contribution to global investment growth is more than 70 percent. China’s contribution is now one and a half times the size of the US contribution.

In the World Bank’s baseline modeling of future economic multipolarity, China—despite a likely slowing of its economic growth—will contribute about one-third of global growth by 2025, far more than any other economy. Emerging market demand for infrastructure, housing, consumer goods, and new plants and equipment will raise global investment to levels not seen in four decades. Global savings maynot match this rise, resulting in upward pressure on long-term interest rates


Game-changer 2: The Governance Gap 

During the next 15-20 years, as power becomes even more diffuse than today, a growing number of diverse state and non-state actors, as well as sub-national actors, such as cities, will play important governance roles.

Currently about 50 countries are in the awkward stage between autocracy and democracy, with the greatest number concentrated in Sub-Saharan Africa, Southeast and Central Asia, and the Middle East and North Africa. Both social science theory and recent history—the Color Revolutions and the Arab Spring—support the idea that with maturing age structures and rising incomes, political liberalization and democracy will advance. However, many countries will still be zig-zagging their way through the complicated democratization process during the next 15-20 years. Countries moving from autocracy to democracy have a proven track record of instability.

Other countries will continue to suffer from a democratic deficit: in these cases a country’s developmental level is more advanced than its level of governance. Gulf countries and China account fora large number in this category.

The widespread use of new communications technologies will become a double-edged sword for governance. On the one hand, social networking will enable citizens to coalesce and challenge governments, as we have already seen in Middle East. On the other hand, such technologies will provide governments—both authoritarian and democratic—an unprecedented ability to monitor their citizens. It is unclear how the balance will be struck between greater IT-enabled individuals and networks and traditional political structures. In our interactions, technologists and political scientists have offered divergent views. Both sides agree, however, that the characteristics of IT use—multiple and simultaneous action, near instantaneous responses, mass organization across geographic boundaries, and technological dependence—increase the potential for more frequent discontinuous change in the international system.

The current, largely Western dominance of global structures such as the UN Security Council, World Bank, and IMF probably will have been transformed by 2030 to be more in line with the changing hierarchy of new economic players. Many second-tier emerging powers will be making their mark—at least as emerging regional leaders. Just as the larger G-20—rather than G-8—was energized to deal with the 2008 financial crisis


Game-changer 3: Potential for Increased Conflict

Historical trends during the past two decades show fewer major armed conflicts and, where conflicts remain, fewer civilian and military casualties than in previous decades. Maturing age structures in many developing countries point to continuing declines in intrastate conflict. We believe the disincentives will remain strong against great power conflict: too much would be at stake. Nevertheless, we need to be cautious about the prospects for further declines in the number and intensity of intrastate conflicts, and interstate conflict remains a possibility.

Intrastate conflicts have gradually increased in countries with a mature overall population that contain a politically dissonant, youthful ethnic minority. Strife involving ethnic Kurds in Turkey, Shia in Lebanon, and Pattani Muslims in southern Thailand are examples of such situations. Looking forward, the potential for conflict to occur in Sub-Saharan Africa is likely to remain high.

Insufficient natural resources—such as water and arable land—in many of the same countries that will have disproportionate levels of young men increase the risks of intrastate conflict breaking out, particularly in Sub-Saharan African and South and East Asian countries, including China and India.

With the potential for increased proliferation and growing concerns about nuclear security, risks are growing that future wars in South Asia and the Middle East would risk inclusion of a nuclear deterrent.

The current Islamist phase of terrorism might end by 2030, but terrorism is unlikely to die completely. Many states might continue to use terrorist group out of a strong sense of insecurity, although the costs to a regime of directly supporting terrorists looks set to become even greater as international cooperation increases. With more widespread access to lethal and disruptive technologies, individuals who are experts in such niche areas as cyber systems might sell their services to the highest bidder, including terrorists who would focus less on causing mass casualties and more on creating widespread economic and financial disruptions


Game-changer 4: Wider Scope of RegIonal Instability 

Regional dynamics in several different theaters during the next couple decades will have the potential to spill over and create global insecurity. The Middle East and South Asia are the two regions most likely to trigger broader instability.

Progress toward greater regional cohesion and integration in Latin America and Sub-Saharan Africa would promise increased stability in those regions and a reduced threat to global security. Countries in Sub-Saharan Africa, Central America, and the Caribbean will remain vulnerable, nevertheless, to state failure through 2030, providing safe havens for both global criminal and terrorist networks and local insurgents.


Game-changer 5: The Impact of New Technologies 

Four technology arenas will shape global economic, social, and military developments as well as the world community’s actions pertaining to the environment by 2030. 

Information technology (IT) is entering the 'big data' era. Process power and data storage are becoming almost free; networks and the cloud will provide global access and pervasive services; social media and cybersecurity will be large new markets. This growth and diffusion will present significant challenges for governments and societies, which must find ways to capture the benefits of new IT technologies while dealing with the new threats that those technologies present. Fear of the growth of an Orwellian surveillance state may lead citizens particularly in the developed world to pressure their governments torestrict or dismantle certain big data systems.  [See OHN articles about 'Big Data' versus 'Open Data'.] 

New manufacturing and automation technologies such as additive manufacturing (3D printing) and robotics have the potential to change work patterns in both the developing and developed worlds. In developed countries these technologies will improve productivity, address labor constraints, and diminish the need for outsourcing.

Breakthroughs, especially for technologies pertaining to the security of vital resources—will be neccessary to meet the food, water, and energy needs of the world’s population. Key technologies likely to be at the forefront of maintaining such resources in the next 15-20 years will include genetically modified crops, precision agriculture, water irrigation techniques, solar energy, advanced bio-based fuels, and enhanced oil and natural gas extraction via fracturing. Given the vulnerabilities of developing economies to key resource supplies and prices and the early impacts of climate change, key developing countries may realize substantial rewards in commercializing many next-generation resource technologies first.

New health technologies will continue to extend the average age of populations around the world, by ameliorating debilitating physical and mental conditions and improving overall well-being. The greatest gains in healthy longevity are likely to occur in those countries with developing economies as the size of their middle class populations swells. The health-care systems in these countries may be poor today, but by 2030 they will make substantial progress in the longevity potential of their populations; by 2030 many leading centers of innovation in disease management will be in the developing world.


Game-changer 6: The role of the U.S. 

How the United States (U.S.) international role evolves during the next 15-20 years—a big uncertainty—and whether the US will be able to work with new partners to reinvent the international system will be among the most important variables in the future shape of the global order. Although the U.S. (and the West’s) relative decline vis-a-vis the rising states is inevitable, its future role in the international systemis much harder to project: the degree to which the U.S. continues to dominate the international system could vary widely.

The U.S. most likely will remain “first among equals” among the other great powers in 2030 because of its preeminence across a range of power dimensions and legacies of its leadership role. More important than just its economic weight, the U.S. dominant role in international politics has derived from its preponderance across the board in both hard and soft power. Nevertheless, with the rapid rise of other countries, the “unipolar moment” is over and Pax Americana—the era of American ascendancy in international politics that began in 1945—is fast winding down.

The fall of the dollar as the global reserve currency and substitution by another or a basket of currencies would be one of the sharpest indications of a loss of U.S. global economic position, strongly undermining Washington’s political influence too.


Conclusions 

Finally, the report concludes by stating that we have more than enough information to suggest that however rapid change has been over the past couple decades, the rate of change will accelerate in the future.  One final warning – beware of Black Swan events, which could derail many of the predictions.

Black Swan Evemts – The following are selected examples of discrete events that could cause large-scale disruption and alter the predictions made in this report.
  • Severe Pandemic - No one can predict which pathogen will be the next to start spreading to humans, or when or where such a development will occur. Such an outbreak could result in millions of people suffering and dying in every corner of the world in less than six months.
  • Rapid Climate Change - Dramatic and unforeseen changes already are occurring at a faster rate than expected. Most scientists are not confident of being able to predict such events. Rapid changes in precipitation patterns—such as monsoons in India and the rest of Asia—could sharply disrupt that region’s ability to feed its population.
  • Solar Geomagnetic Storms - Solar geomagnetic storms could knock out satellites, the electric grid, and many sensitive electronic devices. Crippling solar geomagnetic storms could pose a substantial threat because of the world’s dependence on electricity


Read the Global Trends 2030 report. It might provide you with some valuable insights.

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