Every four years, for the benefit of the incoming administration, the US National Intelligence Council puts together a briefing on global trends. It’s a broad overview of where they think the world is going, and after November’s election, the latest one is available to read. Nice of them to share it with the rest of us, I must say.
The NIC divides its forecasts into megatrends, which are likely to happen whatever we do, and gamechangers, which are less predictable possibilities. If you’ll excuse a somewhat rambling post, here are some highlights and impressions. First of all, here are the megatrends:
The first of those is essentially the emergence of a global middle class. This doesn’t sound particularly exciting, but it’s actually a pretty major step forward in the human story. All through history, the majority of people have lived in poverty, and that’s changing. By 2030 the majority of people will have a decent standard of living. This is good news, and it will have consequences. It will mean a shift in political focus from meeting basic needs, to the demands of a middle class for things like a free press, an end to corruption, and more transparent democracy – or democracy full stop, in the case of China.
That new middle class will generate plenty of problems too of course, as that fourth megatrend suggests. More people consuming more resources will create increased pressure on supplies. Global food prices are already hugely unstable, and that’s going to get worse.
The third point above is one that I want to explore a little more, but that will be another post. Suffice to say at this point that demographics have a role in the economy that we’re scarcely beginning to acknowledge.
These are the big trends that are in motion already. There are other things that are possible, but can’t really be called. They’re phrased as questions, and they’re good ones.
These are the kinds of questions that will define the next couple of decades. Can we move fast enough? Are there breakthrough technologies? And the last one there – it’s fascinating to see the US’ own intelligence council asking if the US is going to be cooperative in international relations.
It’s also interesting to see that climate change is assumed here. It doesn’t get its own category in the megatrends, but it’s there in the detail on the ‘food, water and energy nexus’ and all through the document. This is a recurring theme. Plenty of US institutions and government bodies appear to be proceeding as if climate change is happening, regardless of the official stand and public debate. Good for them.
The report is more optimistic, in my opinion, on the matter of energy. The NIC expects rising oil production through 2035, mainly thanks to America’s own shale stocks, and sees a ‘brighter energy outlook’. I think that’s premature, and that while the picture for the US may have improved in the last couple of years, it would be a mistake to extrapolate that to the rest of the world.
There are a couple of other notable points in the report. The first is that they see the economic downturn continuing for some time, probably a decade. “No single country has all the conditions in place to revive growth” they say, citing McKinsey research on sovereign debt. “Most of the leading Western countries could therefore suffer the consequences of low economic growth that lasts longer than a decade.”
The second thing that strikes me is the openness with which the NIC discusses the decline of American power: “the United States’ relative economic decline vis-a-vis
the rising states is inevitable and already occurring” they write. We all know this, and that it’s only a matter of time before China overtakes the US as the world’s biggest superpower, if current trends continue. But how will the US react? Will it retreat, or attempt to re-assert itself as a pre-eminent power? Will it cooperate with China, or seek to compete?
“The US faces stiff economic challenges” says the report, “which will require broad-based structural reform if it is to avoid a rapid decline in its economic position.” They mention the cost of healthcare, ‘weak’ education, inequality, and household debt. Considering how difficult it is to get anything done in American politics at the moment, that should be a warning. For the rest of us, it suggests a healthier balance of global power by 2030. There will be no hegemonic power in 2030, according to the NIC. “Leadership will increasingly be a function of position, enmeshment, diplomatic skill, and constructive demeanor.” Sounds healthy to me.
There’s plenty more I could add, but you’re better off browsing the report itself. You’ll find it here.