Source: www.itcilo.org

21 Global Developments to Watch Over the

Next Five Years Published on January 6, 2021

Vikram Mansharamani

Author, Academic, Advisor; Worth Power 100; LinkedIn's #1 Top Voice for Finance &

Global Economics (2015 & 2016)

2020 will go down as one of the most anxiety-inducing, stomach-churning, confidence-sapping,

and downright disappointing years on record. While it began with a global fascination on the

potential impeachment of the US president, that news was quickly followed by the US drone

strike on Iranian leader Qassem Suleimani. Humorist Dave Barry’s year in review for

2020 eloquently captures what then followed: “Iran responds – this is a good indicator of what

kind of year it will be – by shooting down a Ukrainian airliner.”

Global attention then rapidly (and completely)

moved to the devastating impact of COVID19.

The zoonotic virus wreaked havoc on a

horrifically large number of lives, threw

economies into a tailspin, intensified growing

mental health conditions such as depression and

anxiety, put globalization into reverse, and

changed how we work, play, learn, teach, and

get medical advice.

The death of George Floyd sparked unrest

across the United States, Beirut was rocked by a

major explosion that led to the resignation of

the Lebanese government, and anti-government

unrest in Hong Kong was met with the

imposition of a draconian national security law

from Beijing. Chinese and Indian troops fought in the Himalayan mountains, resulting in several

deaths. Oh, I almost forgot, America had a presidential election! (There’s been enough ink

spilled on that topic that I don’t feel the need to add to it.)

All in all, it was a tough year. (On a positive note, polio was eliminated from Africa in 2020 and

may soon be eradicated.) Amidst the raging pandemic, devastating locust

swarms, massive flooding, and rampant wildfires, it definitely felt like the end of the

world as we knew it. But as Sonny Kapoor, the young proprietor of the Best Exotic Marigold

Hotel, notes in the similarly named movie: “Everything will be alright in the end,

and if it’s not alright, then it is not yet the end.”

As I’ve stressed before, uncertainty and change are unavoidable realities of

life. Yet all of us are asked to make decisions in the face of these fluid dynamics, shifting

relationships, and seemingly constant instability. What’s the best way to do so? Sadly, there is no

correct answer, but I believe we must look through some of the day-to-day noise to have any

chance of identifying the structural signals. Long-term trends that drive seemingly disconnected

developments offer a compass to guide us through the numerous crosscurrents that plague our

lives.

Unlike many others who tend to make predictions on a one-year view, I opt for a 5 year look as I

believe time allows signals to surface amidst the ubiquitous noise. I’ve been publishing

these rolling predictions since January 2015, and regardless of how they actually fare,

the act of considering them has proven helpful to me in navigating uncertainty. And in the spirit

of Annie’s “just thinking about tomorrow…” in which she pleads for us to “hang on

‘til tomorrow, come what may,” I present my 2021 predictions…

2021-2026 Predictions

1. Inequality intensifies into a growing (existential?) threat to capitalism. Socialism

gains momentum globally as technology-induced job losses spur worker

solidarity. Redistribution pressures build in the form of rapidly rising estate

taxes and minimum wages. Efforts to introduce universal basic income schemes

prove counterproductive as they dampen society’s efficiency and innovative capacity.

2. The power of big tech generates a backlash in which government officials call for the

breakup of the information monopolies. The rapid rise of surveillance

capitalism threatens human autonomy as global outrage over hidden corporate use of

personal data generates popular support for regulations enforcing privacy protection.

3. India becomes a geopolitical hotspot. Tensions rise on the mountain border with

China as well as the desert border with Pakistan, leading to several armed conflicts

among the three nuclear armed nations. In an effort to combat Chinese influence in South Asia,

the United States finds itself supporting India’s nationalist government, opening a new front

with Russia.

4. As technological innovation continues to drive productivity gains, the world struggles to

generate meaningful inflation in goods and services. Central banks of the world stick

to their existing deflation-fighting playbook and continue flooding the world with

money (and keeping interest rates lower for longer), inflating asset prices to

unsustainable levels. When the Fed eventually turns to yield curve control to keep the party

going, the value of “non-printable” currencies such as gold and bitcoin soar to multiples of

their 2020 highs.

The value of “non-printable” currencies such as gold and bitcoin soar to

multiples of their 2020 highs

5. In an effort to promote greater diversity in governance, shareholder advisory groups

Institutional Shareholder Services (ISS) and Glass Lewis begin demanding that the boards of

publicly-listed companies have at least one woman and one person of color.

6. Concluding that the US security guarantees to its wayward province may not

be backed with real military action, China increases the pressure on Taiwan to

reintegrate with the mainland. Beijing succeeds in spurring a diplomatic process to explore

reintegration, but persistent rumors of a forthcoming surprise attack by PLA forces lead

Taiwan’s wealthy to move their families (and assets) to other jurisdictions.

7. NASA’s Artemis program successfully lands the first woman and the next man on the

surface of the moon and announces plans to build an American moon colony using

advanced materials. ICON, the construction technology company NASA retains for lunar

construction, helps kick off a boom in space construction. Bacteria surfaces as an

unanticipated challenge in space.

8. Global supply chains shift dramatically as “just-in-time, lowest-cost” logic

gives way to “just-in-case, security-of-supply” objectives in corporate

boardrooms. Companies around the world begin stockpiling raw materials and

building inventories to buffer against possible disruptions. Although the physical distance

between producers and consumers of goods shrinks dramatically as factories move closer to

consumers, the “reshoring” doesn’t produce the expected number of jobs as the use of robots

decreases worker demand.

9. As global wealth surges in the wake of strong asset markets, the retirement of

America’s older workers accelerates. Boomers move away from saving and investing towards

consuming. The virtuous cycle of flows driving prices driving flows turns vicious as

the passive investing bubble pops, sapping investor confidence as broad index levels

drop. Despite warnings about the imminent death of active management, stock-

pickers outperform.

10. The ongoing vulnerabilities emanating from Chinese and Russian cyber-

attacks surface in unexpected ways, leading to persistent worries about whether these

federal government and private sector systems continue to be compromised. A chorus of

disparate voices ranging from cyber experts to national security professionals call for

a complete rebuilding of penetrated systems.

11. The increasingly polarized dynamic between Republicans and Democrats opens the window

for the formation of a third major political party. Bull Moose 2.0?

12. Having successfully experimented with remote work during COVID lockdowns, CEOs

of the world’s largest companies drastically reduce their real estate footprint by

allowing some staff to work remotely and others to adopt hybrid in-office/remote arrangements.

Office vacancies surge leading to plunging commercial real estate values. Meanwhile,

the mad dash to suburban real estate proves fleeting as the appeal of urban

living returns post-COVID.

13. Synthetic biology advancements accelerate at a breakneck pace. Bacteria and

other single-cell organisms that consume carbon dioxide are used as the raw

ingredients for animal feed; food ingredient companies begin to market themselves

as geoengineers fighting climate change.

Food ingredient companies begin to market themselves

as geoengineers fighting climate change

14. On the back of intensifying US-China great power rivalry, the global

economy bifurcates into a Western-led and a Chinese-led ecosystem. While

both economies are fairly self-sufficient, two glaring imbalances emerge. The Chinese ecosystem

is deficient in food while the West finds itself with inadequate supplies of critical

materials. Enormous capital flows to address these strategic vulnerabilities, leading

agricultural commodities and rare earth prices to hit all-time highs.

15. Personal data analytics that enable microtargeting and deepfake technologies that use

seemingly authentic videos of trustworthy sources combine to drive a global surge in

disinformation campaigns. High profile individuals demand regulators intervene to create an

authentication system to search for and rapidly remove fake videos

16. Geopolitical competition in the Arctic leads to rapidly rising tensions as Canada,

Russia, and Denmark claim the Lomonosov Ridge, an almost 1800km underwater

mountain ridge that runs from Siberia towards Greenland, as sovereign extensions of their

territory. US military exercises with NATO allies in the Arctic further agitate Russia, making the

Kola Peninsula the world’s most likely site for a nuclear exchange.

17. The increasing attention on hypersonic weapons leads to breakthrough advancements

in propulsion technology that prove useful in space. The US military continues to declassify

data on UFOs, spurring theories that the advanced capabilities were created by

aliens. Ursa Major Technologies emerges as one of the world’s hottest companies.

The US military continues to declassify data on UFOs, spurring theories

that the advanced capabilities were created by aliens.

18. Jealous of the exorbitant privilege and power conferred on America through the US

dollar’s role as the de facto global reserve currency, a group of nations led by

China and Russia present a hard currency alternative. The new option fails to gain meaningful

adoption because the world’s largest pools of capital continue to demand rule of law and

protection of property rights.

19. The electrification of the world continues unabated; the demand for key battery

materials (specifically lithium, nickel, graphite, and phosphate) at low costs far exceeds

available supply, spurring a wave of vertical consolidation as electric vehicle makers begin

acquiring battery technology, chemical processing, and mining companies.

20. After decades of thinking about US treasuries as a “safe haven,” global investors

begin to question the sustainability of America’s ballooning debt as it is increasingly used to

fund entitlement spending that offers little prospect of future returns. As concern about a

potential default rises, The Mandibles: A Family, 2029-2047 by Lionel Shriver is

made into a movie.

21. Using lessons learned from the development of COVID vaccines and therapies, the

global health community makes meaningful progress towards the elimination of human deaths

from HIV, rabies, tuberculosis, and malaria.

Each year, I end my predictions with the prescient words of John Kenneth Galbraith, who

eloquently captures the essence of forecasters. There are, he notes, two types: “those who don’t

know and those who don’t know they don’t know.” Feel free to decide which you think I am, but

I do hope that these 21 possibilities are useful in spurring your thoughts.

Best wishes for successfully navigating the uncertainty in the years ahead!

-Vikram

Vikram Mansharamani is a Lecturer at the Harvard John A. Paulson School of Engineering and Applied Sciences. He is the author of THINK FOR YOURSELF: Restoring Common Sense in

an Age of Experts and Artificial Intelligence (HBR Press, 2020) as well as BOOMBUSTOLOGY: Spotting Financial Bubbles Before They

Burst (Wiley, 2011). His podcast is available on Apple Podcasts, Spotify, and Podbean and he can be followed on twitter @mansharamani.