Editor's note: "Tomorrow and tomorrow and tomorrow" is a three-part series on the future of the global economy in 2025. Read part 2: Competitive edge will sustain US economic advantage in 2025; Read part 3: Resource limits and slow-moving institutions may hamper economic growth
Happy 2013. We are now officially a dozen years into the century. This is as good a time as any to imagine what the next dozen years leading up to the 2025 milestone might have in store.
The reason is simple – if you cannot imagine the future, you will never play a part in shaping it. What is worse, the future that you have been blind to can blindside you. We all know how 2012 played out; this may not help us in 2025. As Macbeth, who helped with the title for this article, also reminds us that “all our yesterdays have lighted fools the way to dusty death.”
Unfortunately, our collective track record for imagination has not been stellar. We have a tendency to get excited about the news that spikes in the near-term and that colors our view of the longer term ahead.
To get a sense of just how bad this cognitive dissonance can be, imagine you were back at the dawn of the century in January 2000, perhaps celebrating the non-event of the past year: the Y2K bug that fizzled. This was already a harbinger of more misconceptions about the most significant developments of a dozen years to come.
Consider some of the most exciting game-changers from 1999: the first human chromosome successfully sequenced changing human health care forever; an amazing device called the BlackBerry arriving on the scene threatening an addiction that we would never be able to shake off; Lance Armstrong, a heroic cancer survivor, winning his first Tour de France; the breakout dorm room innovation of the year, Napster, ringing the death knell for the music business.
Today, in the warm glow of hindsight, we have a very different view of how any of those events changed the game or even what the real game was. In the meantime, back in January 2000, the words “Al Qaeda,” “iPhone,” “Barack Obama,” “Wikipedia,” “Arab Spring” or “Twitter” would have drawn blank stares.
If the future is so elusive, what should we do? It is impossible or too costly to build in infinite flexibility to adapt or to hedge all bets. My first suggestion: just as 1999 was not terribly helpful in our understanding of the 12 years to follow – ignore the “big stories” spiking in 2012. Instead, ask: what do the secular trends tell us about the broad outlines of where we might be headed? Perhaps these can provide us with a starting point.
Luckily, 2012 closed out with a 200-page door-stopper of a report from the United States National Intelligence Council on the megatrends that will shape the planet all the way up to 2030. Of all the trends outlined, the report singles out the growth of a global middle class as a “tectonic shift.” It goes on to declare:
For the first time, a majority of the world’s population will not be impoverished, and the middle classes will be the most important social and economic sector in the vast majority of countries around the world.
My old firm, McKinsey, through its independent analysis, also came to a similar core conclusion this past year: by 2025, the majority of the world’s population will have at least $10 a day at their disposal, placing them in the “consuming” class.
Let us go from there. These broader outlines synthesize many macro developments and structural changes. While no conclusion is inevitable, such outlines should provide the best working foundation for imagining the future. But don’t get too comfortable yet. Given our January 2000 thought experiment, I feel a moral obligation to stir the pot some more. How you interpret the impact of a “global middle/consuming class” can lead toward very different visions of the next dozen or so years: will the glass be half full or half empty?
Of course the reality will be somewhere in between, but neither extreme is beyond reason — arguably not a straw man. Every reader of this piece will have a different perspective from a unique vantage point. My purpose is to provoke some reactions and get a conversation started. Through this interchange and aggregation of views, we will have a more nuanced view of the global economy’s path to 2025. We can practice the future and lead, rather than follow the events to come.
Consider two bookends: the glass half full and the glass half empty views of the global economy.
Read part two in this series: Competitive edge will sustain US economic advantage in 2025
Read part three in this series: Resource limits and slow-moving institutions may hamper economic growth
Bhaskar Chakravorti is the senior associate dean of International Business & Finance at The Fletcher School at Tufts University. He is founding executive director of Fletcher’s Institute for Business in the Global Context. He has taught innovation and entrepreneurship at Harvard Business School and Fletcher and was a leader of McKinsey’s Innovation and Global Forces practices as a partner based out of the Boston office. He is the author of the book, "The Slow Pace of Fast Change." The Institute recently started its Fletcher Futures project: http://fletcher.tufts.edu/IBGC/fletcherfutures.