Global Evolution: An Assessment of the Next 10 Years

Global Evolution: An Assessment of the Next 10 Years

In downtown Montreal rests an idiosyncratic relief sculpture by Raymond Mason, titled The Illuminated Crowd. The narrative tells the story of man’s emotions through space – from illumination, illumination, hope, involvement, hilarity, irritation, fear, illness, violence, murder and death. The line separating societal progress and regression is indeed fine.

As is often the case at year’s end, futurists, philosophers, and economists put forth a series of alerts on the risks and rewards that await nations in the year to come. Having the fortune of making it past the Mayan apocalyptic augury of December 21, 2012, I would agree the worst is behind us.

When we consider the biggest macro factors affecting the world, a few notable themes come to mind. This article serves to remind us of some of the larger priorities for the global citizenry to ensure societal progress.

Security

The past decade has been dominated by the U.S. lead War on Terror, an ill-defined, open-ended commitment to eradicate non-state and state-backed terrorist groups. While this war has had limited strategic success for the U.S. and its allies, it has had the primary destabilizing effect of expediting the transition of Middle Eastern countries: Iraq, Syria, and to a certain extent, the Arab Spring. These security investments have not been essential for the maintenance of American hegemony and its monopoly on hard power. While they have allowed for American ‘fire power’ testing, diplomatic innovation, and nation building; they have not necessarily guaranteed American preparedness to face challenges in South Asia, South East Asia, and East Asia.

In the coming decade, the major security threats to the world will continue to be regional in scope. These will be dominated by countries undergoing a massive transition from authoritarian regimes to socialist or democratic ones; namely North Africa, Sub-Saharan Africa, Middle East, Iran, and Central Asia. These conflicts will seem like déjà vu, think: Libya and Syria. Alternatively, these conflicts may arise from internal migrations, or rebellion by sub-state actors, think: Sudan, Mali, Chad, and Iraq. While strategic stalemates will remain, think: Korean Peninsula, Taiwan, Kashmir, and Gaza/West Bank; there are broader transitions in place that may impact massive amounts of territory and populations, namely, the continued demise of Russia, and its inability to control its vast stretches of territory from competing powers like China. An awareness of these risks by policy makers is essential to ensure reduced risk of global conflict.

Nonetheless, we should recognize humanity’s achievement in reaching an all-time low in inter and intra-state armed conflict. Global defense spending remains at an all-time low. Not only are we at an all-time low of armed conflict, we are at an all-time low of genocide, and crimes against humanity. This is no small feat. For the past 3,000 years, civilizations have been in a constant state of war. Their destructive capability climaxed in World War II, and the subsequent Cold War conflicts, placed the world on a trajectory of self-annihilation for three generations. However, under the conditions of a unipolar world, and the prevalence of the democratic governance system (democracies don’t go to war with one another), the risk of conflict continues to decline.

Risk Factors

– Countries in transition from authoritarian to democratic rule will continue to be at highest risk of internal conflict. The primary geographies are Sub-Saharan and North Africa, Middle East, Central Asia and South Asia.

– While the likelihood of a cold war between the U.S. and China is very low, it is important to keep these risks in mind over the coming twenty years.

– Strategic stalemates like the Taiwan Straits, North Korea, Straits of Hormuz, and the South China Sea are critical components of regional power balances; upsetting those stalemates risks destabilizing their respective regions.

– The guarantor of trade routes and flow of commerce remains the U.S. America’s inability to serve as a defender of last resort for free markets and democracy would certainly expedite the unraveling of global security.

Society

The past decade has seen the most massive transition of humanity in history. Not only have two billion people migrated from abject poverty to some form of middle-income, they have also gained access to formal education and information technology. At no time before, did such a large percentage of the human population experience such a massive change in living and working conditions. While China and India account for the majority of the causation, we must recognize a few highlights.

These include, first and foremost, the advancement of women. Gender equality is the single-most important factor in societal evolution. Not only does the advancement of women (educationally and professionally) lead to a reduction in fertility rates, and an ‘economic dividend,’ but it also leads to growth in per capita GDP, greater secular governance, and less armed conflict. The significance of this single factor cannot be understated. Over the coming decade, we will observe the greatest advancement of gender equality as an additional two billion women move from abject poverty into some form of middle income; bringing massive societal transitions to Africa and South Asia.

In addition, the second most significant factor in societal progress is urbanization. The past decade has seen the largest shift in humanity from rural to urban ever known to man. While approximately four billion humans live in an urban setting today, we are expected to cram an additional three billion humans into cities within the next decade, for an approximate total of seven billion out of nine billion humans living within some form of urban sprawl. The significance of these changes should not be taken lightly. While obvious benefits include greater access to education, information, markets, financial services, and materials, they also signify increased risk of mental disorders, pandemic diseases, and other health risks.

Lastly, we should commend humanity for reaching an all-time high in literacy, access to education, and possession of passports. These factors all facilitate the flow of ideas and labor across borders, ensuring greater progress. Over the coming decade, nearly 90% of humanity will have access to education, information technology, and will have the means to travel to urban centers within our outside the home nation. The societal implications of these shifts are simply massive; not only will societal evolution accelerate at an increased rate, but, the potential spillover effects could mean huge economic and educational gains for billions of humans.

Risk Factors

– What I call ‘Hub Theory,’ implies that innovation advances fastest when there exists a global hub to facilitate the flow of ideas, commerce, and peoples. Ensuring the unobstructed flow of all three is essential for maintaining progress. As the moment, the U.S. remains the most attractive geography for the flow of all three. However, this is not guaranteed. Leaders like Canada, Australia, New Zealand and Singapore have demonstrated that incentives can successfully challenge historical hubs like the U.S. Presently countries like the U.S., Japan, the E.U, Russia and South Korea are failing to do more to attract the worlds brightest minds and equipping them to produce best-in-class scholarship.

– Deliberate control of information, namely by state-actors, remains a key impediment to the free flow of opinions, ideas, and people. Censorship of internet, manufactured propaganda, and public/private surveillance of individuals all risk disrupting societal progress.

Economics

The state of the global economy has dominated Internet keyword search and the blogosphere over the past four years. Understandably so, deteriorating economic conditions in the fall of 2008, threatened economic depression in the U.S., the collapse of currency unions like the EU, recession in China, and a complete rollback of economic gains in Eastern Europe, Latin America and South Asia.

Despite the threats of global economic collapse, the past four years have proven less destructive than forecasted. In fact, while global trade suffered a decline of nearly 13%, it has quickly recovered to a near pre-recession high. Threats of a Eurozone collapse have subsided (despite counter productive political negotiations), and the largest free trade zones known to man are in the midst of being finalized: the Trans Pacific Partnership (TPP), and the EU-US Free Trade Zone. Expansion of NAFTA and Russia/CIS duty-free zone all point towards deeper global economic integration.

These achievements should not be undervalued. In June in 1998, global trade reached an all-time high (as a percentage of global GDP), not seen since 1914 (the start of World War I). A decade later, central bankers were staring directly into the potential unraveling of the entire global financial system with the collapse of Lehman Brothers.

Despite the inability for political apparatus in the U.S., EU, and Japan to reduce macro risks and stimulate domestic demand, central bankers have bravely stood at the economic helm to ensure that quantitative easing and inflation targeting (within a bearable range), lead to higher investment and domestic consumption. Had central bankers not acted in a concerted effort, we would have entered into a period of competitive devaluation not seen since the intra-war period, which lead to the economic collapse of Germany, flight from the British Sterling to the U.S. Dollar, and the rise of Fascism and Totalitarian Communism.

Aside from successfully navigating the global economy out of depression, we should emphasize that the past decade has seen the greatest poverty alleviation ever known to man. Since 2000, two billion humans have come out of abject poverty (on $2.00 a day), and entered some form of low or middle-income status. China’s ability to move 400 million citizens into the middle-income bracket is the most impressive economic empowerment to the masses ever witnessed on earth. Along with the entry of another two billion people into the global market place (namely India, Indonesia, Vietnam, Turkey, Brazil, Malaysia, Philippines, and to a less extent Nigeria), we are witnessing a massive shift in global labor rates and wealth creation.

In 1998, only two out of over five billion humans were connected to the global marketplace on a daily basis. Fourteen years later, over five billion out of seven billion are directly connected. The side effects are incredible. Global GDP has nearly tripled in size from $29 trillion to over $70 trillion in 2012 (adjusting for inflation). The vast amounts of value creation in Asia have completely revolutionized the word; leading to decreased borrowing costs and suppression of labor rates in the Wet, rising global commodity prices, and increased labor rates in the East.

Looking ahead to the next ten years, an additional three billion people will enter the global marketplace, for a total of eight billion, out of an estimated nine billion humans. The implications of that shift will be even more dramatic. Global GDP will probably triple over the same period, while consumption, construction, energy use, investment, and trade will be at all-time highs. The compounding economic effects of an additional two billion humans moving from low income to middle income (namely in South and South East Asia), will be mind blowing.

Risk Factors

– The global economic system remains fragile. We have seen over half a dozen examples of contagion over the past fifteen years: Asian Financial Crisis, Russian Financial Crisis, Brazil, Mexico, Turkey, Pakistan, Eurozone Disintegration, and America’s Financial Crisis of 1998. Despite all these warning signs, the financial and monetary systems serving as the backbone of economic integration remain susceptible to a sudden collapse. Greater regulation of financial products, though not a panacea, would limit value creation in financial services industry, but could also potentially negate the adverse effects of economic contagion.

– While the risk of Chinese political and economic turmoil subsided after a peaceful transition of power in fall of 2012, there remains a growing need for China to move towards greater individual political and economic rights so as to not create reactionary imbalance of rebellion among the 400 million Chinese who remain rural and poor.

– With the boom in global oil and natural gas production, the threat of conflict in the Middle East disrupting energy flows continues to subside with every passing year, making energy markets less prone to political shocks.

– Lastly, a combination of moderate inflation, low energy costs, low technology costs, high access to information technology and financial services all excellent point to excellent economic conditions for the empowerment of an additional three billion humans entering the marketplace.

Health

With over seven billion humans going about their day-to-day, we should wonder, what is the expected median longevity of man today? The good news is that humanity has achieved an all-time high for longevity, an all-time low for infant mortality, and an all-time high for access to healthcare. Never before has a greater percentage of the human population been able to seek and receive the medical attention they need.

More dramatically, global health scourges like the spread of AIDS have receded to near 1980’s lows. We are within a decade of eradicating major killers like malaria, malnutrition (dehydration and diarrhea), and polio. In addition, advancements in life science (namely genomics), healthcare data science, and the reduction in the cost of healthcare, all make accessibility, affordability, and speed of delivery more efficient and effective than ever before.

Risk Factors

– Great challenges to global healthcare systems remain ahead. Ironically, it’s not malnutrition or dehydration. Diabetes, obesity, and heart disease will affect an estimated 40% of the global population, or over 3.3 billion humans. Unfortunately, these health risks are more expensive to service than say, malnutrition or dehydration. Without the ability to service these healthcare risks at a low cost, hundreds of millions of humans will live less productive lives due to these illnesses.

– With nearly 80% of the human population migrating to cities, the risk of stress and mental disorders compounds for billions of humans. Finding low cost, and accessible solutions to address mental health are critical in maintaining social cohesion.

– Lastly, with decreasing costs of healthcare data, and increased access to patient conditions, we are quickly moving into a world where there will be less patient privacy, potentially higher insurance rates, and lower rates of subsidized care. Simply put, there is too much demand for affordable healthcare by too many humans. Managing these risks is critical for the progress of society.

Environment

Lastly, environmental risks will dominate our attention over the coming decade and beyond. While security, economic, societal and healthcare risks can be quantified, studied, and explained; changing weather patterns have proven more challenging. Despite unambiguous evidence of global warming, and rising sea levels, we still don’t know exactly how these effects will manifest themselves in ocean currents, and weather patterns. Would the yearly melting of the artic ice release such an abundance of fresh water into the north Atlantic shutting down arctic oscillation, and casting Europe into a mini ice age, while North America warms up? Would rising sea levels lead to greater coastal flooding? Would El Nino appear in greater frequency? And lastly, does all this imply desertification of landmasses within the tropic of Cancer and Capricorn?

With over five billion humans living at or near sea level, rising waters threaten our entire way of life. In addition, desertification of once abundant agricultural zones, like the Mississippi basin, the Volga basin, the Indus Valley, and Nile Valleys, threaten global food supplies. Lastly, greater frequency of coastal flooding threatens water supplies, destruction of major electrical generation and oil pipelines, not to mention ports, transportation hubs, and infrastructure arteries.

Worst of all, we do not even know what the lag factor is in climate change. We could be paying the consequences of increased release of carbon into the atmosphere from 2000. The compounding effects of greater release of carbon on an already heating planet could simply be catastrophic; temperatures rising exponentially, and fresh water resources vanishing.

In regards to environmental risks, humanity simply cannot move fast enough. Even though it may already be too late, there remains time for citizens to collective employ innovation in power generation and consumption to reduce carbon emissions. These include the elimination of the incandescent light bulb, more efficient cold storage, carbon capture technologies, and artificial greenhouses to stimulate rainforest growth in places like the Amazon. Sadly, with eight billion humans connected to the global marketplace in urban centers, the Earth may simply be unable to sustain such a massive growth in energy, water, food and lifestyle demand over such a short period of time. Perhaps we could all sit around and pray for a massive volcanic eruption in a remote location of the Earth that would provide an atmospheric shield against the greenhouse effect. Sadly, not even the Mayans could predict such events.

Risk Factors

– Preparing for rising sea levels means planning for the migration of billion of humans from sea level dwellings, to dwelling several meters above sea level. This massive undertaking has never been accomplished by man, and may simply lead to greater intra or intra-state conflict as nations compete for natural resources.

– Elimination of incandescent light bulb use, along with carbon capture, and investments in renewable or clean energy are all essential for global societal and economic security.

Conclusion

The last decade has seen, to a certain extent, the triumph of industry and markets. Never before has market access and technological innovation allowed for such a massive reduction in costs of consumer products, information, education, and services. This success of the markets has brought billions of humans out of poverty and into healthier, longer lives.

However, it is important to note that while much of the 20th century has been dominated by a male-centric view of market theory as being ‘pro-business,’ the coming 80 years will increasingly have to be dominated by a less chauvinistic mindset and a more cooperative one; that of being ‘pro-industry.’ Being pro-business simply protects the interests and economic advantages of the incumbent. This leads of low technology transfer, and dead weight losses for society. Being pro-industry, on the other hand, disseminates economic advantages over new entrants; leading to the creative destructive power of capitalism and the ability to replace old technologies with new, lower cost, and more innovative ones.

We should take stock of our gains over the past decade, and not take it for granted. In 1914, at the start of World War I, global economic integration reached an all-time high. That rate was not achieved for another 85 years until 1998, a year prior to the admission of China into the WTO. Ten years later, we were at risk of seeing the entire system unravel in a matter of weeks during the financial crisis of 2008.

The challenges facing humanity in the coming decade are as severe if not more so than ever before. But they are very different. With the risk of global conflict subsiding, our attention is increasingly turning towards building a long-term sustainable form of high-quality living for every human soul.

Jesse R. Sandoval, Commentator and Futurist

December 2012

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