Global megatrends: How prepared are we? (I)

An American comedian once made a racist joke that if you needed to hide money from a black man you should put it inside a book – he is guaranteed never to open it. Two of the most painful stereotypes about black Africans are that (a) they never plan for the future and (b) they never read. Like all stereotypes, they tend to reflect some uncomfortable truth. But the first is not entirely correct. Africans do worry about the future, but with a qualitative difference. When they want to know the future they consult Ifa priests, Mallams, Shangomas and other spiritualist “prophets”. By contrast, when Asians, Americans and Europeans want to know the future, they build models derived from science, data and statistics.

All the great nations of the world that I know of are always obsessed about their preparedness for the future. The project for the New American Century, for example, emerged as a neoconservative strategy to reassert American power and hegemony in the twenty-first century. The Chinese, the Koreans, Singaporeans and Indians are always thinking and planning decades ahead. It is we Africans who were gullible enough to buy into the fraudulent heresy that development planning is bad.

I have always been interested in the future. One of the great minds who inspired my interest in this field was the futurologist Alvin Toffler (1928-2016). Toffler, in collaboration with his wife Heidi Toffler, wrote such runaway bestsellers as Future Shock, The Third Wave and PowerShift, all of them about the future and what it holds for humanity in terms of technology, economics, business and international order.

Global megatrends have been defined as, “overarching global forces that stem from the past, are shaped in the present, and will transform the future”. They are long-term ubiquitous, structural and often irreversible transformations that shape economies and societies. The challenge is that such long-term, non-linear quantum leaps demand more long-term solutions than what obtains with governments with a short-term electoral outlook. Public policies that normally operate within short-term horizons will have to be redesigned in terms of more long-term, systems-based approaches to cope with longer-term structural changes.

Through the process of Delphi analysis (a synthesis of principal findings from various world futurological studies), I have identified 7 major megatrends that are likely to shape our future in profound and irreversible ways: demographics, urbanisation, technology, deepening interconnectedness, rising debt, economic power shift and black swans.

One of the great megatrends leading up to 2030 is population. The world population recently attained the 7 billion mark. By 2030 it is projected to reach 8.5 billion. While developing country demographics will increase exponentially, that of the advanced countries will stagnate. By 2030 the number of people older than 65 is set to double to 1 billion. Russia, China, Japan, Korea and Europe will become predominantly aging societies. America will escape these challenges because of her more liberal immigration policies. Africa and other developing societies, on the other hand, will experience a massive youth bulge, with minimal dependency ratios. Racial tensions will increase in Europe, where youth emigrants will be co-opted into the workplace to make up for labour shortfalls. Demographics will also gradually alter the character of Russian society, as the demographically more fertile minority Muslim population who make up 19 percent of the population begin to assert their rights.

For countries with dwindling demographics, there is likely to be a deceleration in growth. It is also evident that the pension systems of aging societies will come increasingly under stress while public healthcare spending is bound to increase. For countries with youth bulges such as those of Africa, on the other hand, policies will have to be adopted to accelerate human capital development and to boost industrial development and jobs. Unless urgent measures are taken to create opportunities for the youth, the rise in population could easily turn into a time bomb.

In 2010 the world’s middle class population stood at 27 percent. By 2030 it is forecast to reach the 60 percent mark. Of this, 80 percent will reside in the developing countries, with all the implications for global trade, finance and investments. These changing demographics will mean a considerable boost in global aggregate demand and significant expansion in wealth and economic opportunities in the developing world. Ironically, expanding opportunities will also mean rising inequalities and deepening poverty in those pockets of the world where diminishing expectations are structurally embedded in path-dependent economic systems.

A rising world population will also mean shortages in water, resources, land and energy. Water stress could become even more acute in the MENA countries (Middle East and North Africa), East Africa and northern China. The competition for natural resources could also lead to violence and conflict in mineral-rich countries such as Democratic Republic of the Congo (DRC), Central African Republic and others. Demand for food is also set to increase by 35 percent in 2030, which would be a boost for the economies of agricultural products-exporting countries.

For Nigeria in particular, our population is set to dramatically increase from the current 198 million will increase to some 263 million in 2030. According to the UN, at current trends, by 2050 Nigeria will have a population of 440 million; becoming the third most populous nation in the world, coming just behind China and India. I get nightmares thinking of how our country will be if we continue on our current path-dependence of poor governance, grand larceny, religious and tribal agendas, weak institutions and sheer incompetence of leadership.

Linked to demographics is the trend towards rapid urban agglomeration. One of the major megatrends by 2030 is rapid urbanisation. In 1950, 30 percent of the world’s population lived in urban cities. According to some forecasts, on average terms, 66 percent of the world’s population will live in cities in the coming decade. In the case of developing countries, by 2030 urban dwellers are likely to constitute around 50 percent, up from the current average of 30 percent.

A remarkable trend in present-day urbanism is the phenomenon of megacities, defined as cities with more than 10 million people. This phenomenon is bound to increase in the coming decade. By 2030 the population of some cities would have risen rather substantially: Delhi (36 million), Shanghai (30 million), Tokyo (27 million), Karachi (24.8 million, Cairo (24.5 million), Lagos (24.2 million), Sao Paulo (23.8 million) and Kinshasa (20 million).  In fact, a new form of urban agglomeration is emerging, known as gigacities, i.e. super cities exceeding 50 million dwellers. For example, the Chinese government is said to be to have a plan to connect 5 cities into a massive urban conurbation, such that Greater Shanghai could exceed 170 million before the next 5 years.

Megacities will become powerful vortices for business, money and capital. They will have a capacity to wield economic power well beyond their national frontiers. Several of those cities have a GDP higher than many countries. New York’s economy stands above a US$1.5trillion while that of London is US$845 billion. At US$136 billion, the GDP of Lagos is significantly higher than that of Ghana at US$ 45 billion and Côte d’Ivoire at US$38.37 billion.

The “new thinking” about urbanisation centres on the need to create “smart cities” that are both innovative as well as creative. Drones will be used to carry messages from one part of town to another as they are already carrying medicines to reach remote villages in Rwanda. Waste disposal networks by way of tubes will carry wastes from building to building into recycling plants for production of biogas. Driverless cars and buses will gain increasing acceptability while maglev subways will become one of the popular means of mass transportation. But there will be substantial differences in the demographic mix of the megacities. In Asia, the population of over 60 will outnumber the young while in Africa it will be the opposite.

Another major megatrend relates to rapidity of technology changes. By 2030 the global information revolution would have reached the mature stage of consolidation. The so-called “digital divide” would have been increasingly in retreat. Current rudimentary technologies such as robotics, nanotechnology and sustainable energy systems would have begun to flower. Intercontinental supersonic maglev trains traversing oceans will become a reality. Supersonic flights will be back after the disappearance of the French Concorde. Electric cars would have taken over fuel-powered automobiles that would now be in the minority.

The Age of Big Data would reign supreme, including use of blockchain in business, finance and public communications. While algorithms deriving from use of big data could assist in optimising strategic business decisions, they could also foster socially regressive policies, as has been shown by the American mathematician and finance expert, Cathy O’Neil in her book, Weapons of Math Destruction: How Big Data Increases Inequality ad Threatens Democracy (Penguin 2016). Unless governmental authorities take measures to curtail it, electronic money such Bitcoin will wax stronger to the extent of threatening the survival of some national currencies in developing countries.

There is also the expansion of the worldwide web and the global information highway. While developed countries may have greater access to many of these technologies at present, many technological innovations provide ‘leapfrog’ opportunities for less developed countries to capitalize on new growth opportunities. New technologies of the future will shape transport, communication and energy systems. Manufacturing will also be greatly enhanced by intensification of computational systems, 3-d printing and robotics, with all the implications for productivity, labour and employment. Increasing sophistication in financial technology will increase risks for cyber security particularly in the banking and investment world.

There will further be advances in biotechnology by way of manipulation of DNA to produce new organisms with novel features. There will also be production of artificial tissue and advanced nanotechnology for surgery and remote monitoring of patients. It will become technically possible to reverse the aging process. Such innovations will portend a revolution in medicine and public healthcare.

Governments that care about their people will accelerate policies to manage the demands and expectations of youth. Prudent policies to care for the elderly and for pensioners will also have to be designed. Creative and effective delivery solutions will have to be structured to ensure that the needs of the youth, the middle class and the elderly are effectively addressed.

More vigilance will have to be paid to cyber-security to ensure that banking systems are safe and technology-based digital money transfers are secure. Just as new jobs will emerge in technology and communications, many more will be lost. Governments must therefore invest in human capital and skills while updating the technical competencies of young people to ensure that they are well placed to enjoy gainful employment in the emerging new industries.