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The 4 Megatrends That Will Shape the Future

If anything is inevitable, it is change. Current waves of trends will change the world as we know it. There will be winners. There will be losers. Here are the four major megatrends that will shape humanity in the coming decades:

Forget old warnings about a future population explosion and starvation. They are just not valid anymore.

Demographic changes are mostly predictable. Demographers tell us that global population growth is falling dramatically. Most nations will soon have fertility rates below replacement level. This could mean a global population peak as early as around 2060. By then, many countries will see their populations fall.

Africa is the giant exception. With populations constantly rising every day, Africa’s share of the world’s economic output will increase. As it happens in the rest of the world, rapid urbanization will boost African productivity, and the remittances from migrant workers will grow wealth even further.

How much the African economy will grow depends mainly on two factors: education and good governance. New technology makes it possible for young Africans to have access to a top-notch education. Mobile technology makes education accessible to more young Africans than ever before.

Good governance is more complex. The nations that will succeed are those that can establish good leadership, accountability, and the rule of law. In the 1990s, Burundi was twice as rich as Rwanda. Since then, Rwanda has seen incomes increase more than three times. In Burundi, incomes have fallen. The difference is that Rwanda has a functional government, while Burundi does not.

While Africa stays young, the rest of the world will be getting older. The so-called dependency ratio will climb dramatically, especially in emerging markets.

Wealthier nations are better prepared and equipped to handle the rising costs of a more aging population than the poor ones. Productivity could fall, and economic growth will suffer. An older population could also hamper innovation: fewer workers mean a reduction in the generation of ideas, which are an essential driver of productivity growth.

The only palpable solution to fewer available hands will be the introduction of much more automation. There will be a massive shift towards robotics, artificial intelligence, and automation to keep the wheels running.

However, there are upsides to the demographic shift too. The fewer workers left will command higher wages; fewer people means less pollution, and falling birthrates in the developing world will create a demographic bonus that will increase productivity and wealth in those nations.

The situation for women will improve tremendously. More people moving into cities bring higher education levels, falling fertility rates, and less social control. All are changes that benefit women. Values change, too; the role of religion means less, and individualistic values will strengthen.

It is heating up, but we will handle it.

Climate change is trickier to predict. Looking at what cuts countries have promised to take, and how far they have gone in keeping those promises, the Paris goals will not be reached.

Figures from the Climate Action Tracker tell us that the world is currently on track to reach 2.6 degrees Celsius (4.7 degrees Fahrenheit) of warming by the end of the century. But based on measures they have put into place, the figure is closer to 2.9 degrees Celsius (5.2 degrees Fahrenheit).

The findings echo a UN publication which concluded that in order to reach the goal of holding warming to 1.5 degrees Celsius (2.7 degrees Fahrenheit), “countries would need to increase their targets at least fivefold, a change that would require rapid and profound shifts in how societies travel, produce electricity and eat.”

So, we are off track. Does that mean we are heading for a climate-induced collapse?

Absolutely not. Green technology advances evolve at an incredible speed and scale. In terms of solving climate change, technology is the least of our challenges.

Already today, we have most of the technologies needed to scale down carbon emissions. The obstacles to a massive change are political will and economic incentives. If those obstacles remain unsolved and unremoved, and I am skeptical of our leaders in that sense, the Paris goals will not be met. I hope that I am wrong, but most likely, people in 2050 will encounter more extreme weather events, such as wildfires and flooding. Large areas could be left uninhabitable.

Despite these obvious hindrances, I believe we humans will handle climate change reasonably well. It may be costly, but we will adapt by making ourselves less vulnerable to the effects of climate change.

Dams will be built to avoid rising sea levels. New buildings will be moved to higher grounds. In Indonesia, the government decided to relocate the entire government’s administrative functions from Jakarta to a yet-to-be-built city in Kalimantan, more than 1,000km away. The move is made to relieve some of the burdens on Jakarta, including the persistent water shortages.

People will adjust to rising temperatures in all possible ways. New plants that are resistant to high temperatures will be planted. New buildings will be energy efficient. Artificial coral reefs will be planted to promote marine life. Air-condition will make unlivable places livable. Ten years ago, Singapore built “supertrees” as tall as 50 meters in a project called “Gardens by the Bay.” The trees generate solar power, collect rainwater, and cool the buildings in the area.

The rising effects of climate change on life and infrastructure will create a massive focus on the pressing need to reduce carbon emissions. Voters will demand swift action, and so will investors and consumers. The legislation will push for concepts such as the circular economy and carbon taxes to slow down emissions. Investors will set new requirements for the environmental accounts of companies.

The rise of Asia.

When the Covid-19 pandemic swept the world, doomsayers foresaw the end of globalization. In the years before 2020, tariffs were at their peak. After decades of continuous expansion, global trade growth started to go down.

In the United States, the message was “America First.” In Britain, voters opted out of the European Community. When the pandemic hit, all sorts of cross-border flows nosedived.

Surely, 2020 marked the finale of globalization?

Absolutely not. Only a year after the pandemic, globalization was back on track. Trade and capital flow were back to normal, while the passage and transmission of information were much stronger than before.

Digital information surged as people worked, learned, and shopped from home. International internet traffic soared 48 percent from mid-2019 to mid-2020. Only the last component of globalization, the flow of people, stays low. Once the vaccines are in place and societies are back to normal, people will travel, study and work abroad again. Trade and capital flows will once again increase, alongside the mobility of workers.

Manufacturing is a big question mark. Many companies and nations came to the realization that they were incredibly exposed to global supply chains. There was hardly a nation that did not depend on others for hygiene and medical products, like masks. Some degree of homeshoring is expected, especially as technologies such as 3D printers make local manufacturing competitive.

Less trade from manufacturing will be more than offset by an upward spike in the trade of services. Digitization makes it possible to easily sell a skill to a buyer anywhere in the world. As the authors say in Globality, “Business these days is all about competing with everyone from everywhere for everything.”

“The playing field is being leveled,” says globalization guru Thomas Friedman. Today, a global, Web-enabled playing field allows for multiple forms of collaboration without regard for geography or distance. This means that more than two billion Indians and Chinese can suddenly compete for a growing number of jobs. “The chances are good that Bhavya in Bangalore will read your next X-ray,” he says.

For talents anywhere in the world, this opens up immense opportunities for wealth and a better life. Bill Gates explained the massive change in this way:

Emerging economies have thrived on globalization. Millions have been brought out of poverty. In one generation, China has risen to become a global powerhouse and is now the world’s second-largest economy. The emerging market countries represent 60 percent of the total global GDP, up from less than 50 percent just a decade ago. There has been a substantial rise in the number of emerging market firms that have been acquired by American and European companies.

The global economy is shifting, and such a shift brings with it geopolitical consequences. With the falling (relative) importance of the West, there is a resurgence of the Rest. As power structures are changing, tension is sure to rise between the old and the new powers, the United States and China. China’s global ambitions are ensured through trade and infrastructure programs, such as the Belt and Road Initiative.

When some win, others lose, and the B-student in Poughkeepsie could be one of them. In the United States, once well-paid manufacturing jobs have been outsourced to China, it will give birth to fierce opposition against globalization among many. In its footsteps follow mistrust in governments and even in democracy itself.

Globalization is inevitable, so instead of fighting it, western nations would do wise to update the work skills of the Poughkeepsie B-student and others like him. Governments should help to make their workforce more adaptable and better skilled.

Technology change is not linear; it is exponential — and that changes everything.

American inventor and futurist Ray Kurzweil came up with “the law of accelerating returns.” The concept says that the pace of technological change accelerates exponentially. “The reality of information technology is it progresses exponentially,” he told the Financial Times. “30 steps linearly get you to 30. One, two, three, four, step 30 and you’re at 30. With exponential growth, it’s one, two, four, and eight. Step 30, you’re at a billion.” That core principle sets the rules of the technologies in the future, making change rampant.

The pace of change looks a bit like a hockey stick. At first, the change was slow. For thousands of years, technological change has run at a very slow pace. But with the industrial revolution, change rose upwards. Today, change peaks through the roof at a remarkable pace.

Say you lived as a farmer in Lincolnshire, England, in the early middle ages. Apart from an occasional Viking invasion, not much happened. You would work in the fields, plowing and harvesting, using the same tools as your ancestors. Daily life for peasants was harsh, and life consisted majorly of hard work. A poor harvest and your life could be over. You would have many children, but few of them would live on to see adulthood. Only half of all children born lived beyond age one.

If you put the Lincolnshire farmer from the early middle ages in a time machine and dropped him in the early 1800s, he probably would not notice any change. Life would still be harsh. In 700 years, there was little noticeable technological change.

With the industrial revolution, change began to take root. In the 19th century, there was more technological change than in the nine centuries preceding it. Then in the first 20 years of the 20th century, we saw more advancement than in the entire 19th century. Cars, airplanes, and electricity changed the world. Today, these same shifts are taking place at an even faster rate.

The iPhone was introduced only in 2007, and today everyone has one. We have video meetings with people on the other side of the world, and we do it for free. Self-driving cars were not long ago something taken out of science fiction, and now we are witnessing it happen. So are stem cells used to grow kidney, lung, and heart issues.

Technology ahead will move so fast that making a reliable prediction of the future is impossible. Some things are certain, though. We know that technology is accelerating the speed of change.

We also know that it will cause discontinuities. Rapid technological advancements will increase the pace of change and create new opportunities.

But unfortunately, it will also strengthen divisions between those who can handle technology and those who cannot. Automation and artificial intelligence will bring millions into unemployment. Many will find work in labor-intensive areas, such as at-home care for a rapidly aging population.

Overall, new technologies will make our lives better. Medical advancements will make our lives longer and better. Gene editing and technologies like artificial intelligence can prevent diseases from happening altogether.

Global heating will be halted thanks to these new technologies, and it is the technology that will give billions of people free access to education.

Big data and AI will even help us make better decisions: evidence will triumph over intuition and emotion.

To stay ahead of the curve, make sure that your skills are continuously updated. Lifelong learning is the key to continued employability.

The four megatrends described will form the years ahead of us. Keep them in mind as you make long-term decisions. Use them to identify opportunities on the horizon. Act on them whenever possible. Instead of fighting the trends, do your best to follow them. Do your best to coincide and coexist with them.

New technology, demographic changes, and global heating are all major trends that will impact our lives. Recognize the changes taking place and make sure to leverage them. Don’t try to fight them, because there will only be one loser.

Embrace the incoming changes in order to make sure that you come out on top. Use the examples of successful companies and individuals who took advantage of megatrends to reinvent themselves.

Think of Philips, once one of the largest electronics companies in the world. After years of poor financial performance, the newly appointed CEO Frans Van Houten decided to focus on health technology. Van Houten looked at the megatrends and realized that the best opportunities did not lie in consumer electronics. Growth in the future would come in emerging markets, especially in health technology.

Philips decided to shift focus to healthcare, lifestyle, and energy needs of aging and increasingly prosperous consumers. The headquarters of the Domestic Appliances business was moved from Amsterdam to Shanghai, its biggest growth market. The appointed leader was an Asian and not a European ex-pat. The medical division accounts for over two-thirds of its corporate revenue, and profits have soared.

The advantages of knowing what is ahead are obvious. You can shape your future. You do not need to let changes unfold by chance. You can solve problems before they happen.

Even better, if you know what to expect, why not become a disrupter instead of being disrupted. You can then get ahead of everyone else and see opportunities before others can see them.

Imperfect as they may be, megatrends define some significant events that will take place in the future. Once you know what the future trends are, you are ready to act on them.

Good luck.

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