The world is changing. Are you ready? The COVID-19 pandemic is forcing companies to create new business models, causing consumers to rethink the way they buy things, inspiring entrepreneurs to innovate, and resulting in a lot of global economic uncertainty. It can be both energizing and unsettling to be part of such unprecedented times.
Wharton management professor Mauro Guillén has taken this opportunity to try to make sense of it all. In his new book, 2030: How Today’s Biggest Trends Will Collide and Reshape the Future of Everything, he discusses how some of the business, financial and economic changes happening now will affect us in the years to come. “Everyone sees change everywhere, and I think it’s important to figure out where are we going to be five to 10 years from now,” Guillén said during an interview on the Wharton Business Daily show on SiriusXM. “It’s extremely important for businesses and also for individuals – as investors, as savers and more generally as citizens – to figure out what the future’s going to look like.”
“We need to seriously consider how entrepreneurs can come up with new ideas as to what cryptocurrencies, or to be more precise, crypto tokens, will be used for.” — Mauro Guillén, Wharton Management Professor
Here are five ways, according to Guillén’s research, that the world will look different in 2030:
- Demographics. The pandemic has two different effects, depending on the trend. One is to accelerate and intensify things. For example, consider population aging. Inevitably in a recession, we have fewer babies. Postponing having babies accelerates the median age of a population when compared to the age of the total population (in other words, there are more older people), so problems related to Social Security and pensions will arrive earlier. Other types of trends get delayed, or even reversed, by something like this. One of them will be the growth of cities, especially in Europe and in the U.S. They won’t grow as quickly.
- Population Shift. While expansion in North America, Europe and Asia has been vital to the global economy in the last several decades, Guillén talks about other areas of the world starting to come on strong. “I am very bullish on sub-Saharan Africa [the area of Africa that lies south of the Sahara Desert] because of their demographic dynamism, and because the biggest cities in Africa are growing and creating an expanding middle class,” he said. “Now, only maybe 15% of the sub-Saharan African population is middle class. But that proportion is growing. That will change the world, because Africa will soon become the second most populous region in the world.” The expansion of the middle class – defined by how much a certain class of people spends, earns and saves – is thought to contribute to the growth of economies.
- Techno-boom. As a result of the pandemic, technology adoption has been progressing much faster, out of necessity. For example, we’ve been confined to the home, students cannot attend school, and so on. But we also need to watch carefully the new incentives for automation, especially in the service sector, that this public health crisis creates. “We’re going to see more automation,” says Guillén. “We’re going to see, unfortunately, more technological unemployment. Many other jobs have been lost in the American economy. I don’t think they’re coming back. We’re going to have to think very carefully in political terms and in social terms about the implications of further automation, especially in the service sector…We have to figure out how to retrain people and how to help those people find other jobs. We may have to consider very seriously ideas such as a universal basic income. Remember, two-thirds of the American economy is [made up of household] consumption (consumer spending). If people don’t have jobs or don’t have well-paying jobs, then we need to compensate for that.”
- The Shape of Money. Currencies may change, suggests Guillén. “We need to seriously consider how entrepreneurs can come up with new ideas as to what cryptocurrencies, or to be more precise, crypto tokens, will be used for. If cryptocurrencies are just a substitute for the money that governments issue, then I don’t think we’re going to get too far because our regulators are always against cryptocurrencies as a competitor for legal tender. But if we add other functions or other uses to those digital tokens — like if they will help us vote, keep politicians in check or provide incentives for people to save the environment — then there is a bright future ahead for digital tokens. So instead of digital currency, I would say digital tokens, which would include a currency component to them.”
- People and Planet. The wealth gap — economic inequality between different groups of people in society — is becoming more serious. “The pandemic only exacerbates inequality,” said Guillén. “Not everyone can work from the home, and therefore they have to expose themselves to the virus while taking public transportation to go to work. Consider students. It is estimated that up to 20% of K-12 students in the U.S. don’t have the hardware or the connectivity they need at home in order to continue school work. This is the most unfortunate part of this pandemic, and it exacerbates inequality based on income and race…We also need to focus on international collaboration between governments when it comes to climate change. And we need to be more pro-environment in our behavior as consumers.”
What do we need to tackle all these changes? A new mindset. Said Guillén: “The time has come to be a little bit more innovative, to explore things in terms of government policy making that 10, 20 years ago we thought were completely out of bounds. The problems have become so large.”
- Mauro Guillén’s Website
- K@W: Universal Basic Income
- Listen to the SiriusXM Podcast with Mauro Guillén
What does Wharton professor Mauro Guillén mean by “technological unemployment?” How are workers negatively impacted by automation and what needs to be done to counter the effects?
The notion of digital tokens is fascinating. You are an entrepreneur charged with the mission of creating digital tokens to replace legal tender. What will your new digital token model look like? Describe your design in the comment section of this article.
Universal basic income is one of those radical ideas that Professor Guillén alludes to when he says we have to think differently to solve these big problems. Using the Related Links with this article, explore the concept of universal basic income and how it works. Do you agree or disagree that we need to adopt this type of model in the U.S.?
Tourism might also change significantly. Airbnb co-founder Brian Chesky has claimed that tourism in the next decade in the United States (and perhaps the rest of the world) will shift from densely populated areas to more rural areas. What kind of effect would this have on airlines, hotel chains, restaurants, etc? It might make profit margins smaller, we will have to see.
The shift in tourism may lead to increased commercial activity in rural areas. This could allow for more recreational and entertainment opportunities, and overall revitalization, of towns that were affected by the migration to cities. With increased public interest, rental rates for vacation housing has been rising, improving local economies.
In the 20th century, the United States has experienced significant urbanization with the population shifting away from rural areas. With technological advancements, relocating back to rural areas may provide more land, space, and recreational activities without limiting professional or educational opportunities. As students and adults can attend school and work virtually, more people may opt to enjoy the outdoors without career sacrifices.
In this article, Professor Guillen provides a brief but concise analysis on some major global trends in ten years’ time as well as how COVID-19 accelerates and exacerbates these changes. An example he mentions is population aging. This would lead to economic nuances such as shortage in labor supply and declined productivity among others… and the pandemic certainly did no good to improve the problem. According to Professor Guillen’s book 2030: How Today’s Biggest Trends Will Collide and Reshape the Future of Everything, the postponement of making major decisions when faced with uncertainty and the financial responsibilities of having a baby during a recession are reasons why this trend will intensify. Unfortunately, population aging has long been a worldwide headache, and countries have imposed policies to try to avert the demographic crisis. For instance, China abolished its decades-old one-child policy and allowed all families to have two children in 2015, and when that failed to produce tangible results, it was announced in the beginning of June that married couples could welcome one more family member than before. I believe that families would be way more willing to increase their numbers if working women were given more governmental support and value to their concerns especially under the complex circumstances provided by the global pandemic. As for the United States, I think immigration is the most effective way to alleviate the burden of an aging population. As long as they can find appropriate work, they can contribute to economic growth.
Professor Guillen then goes on to make a fairly bold claim that Africa will be among the most populated regions in the world in the coming years. I was doubtful of the statement until I learned from his new book that Africa has “500 million acres of fertile yet undeveloped agricultural land” — the size of Mexico. After some further research I was convinced that Africa has a lot of potential waiting to be explored, and that can indeed be an eye-opener for most of us. However, land alone can not make the vision a reality. Without sufficient resources and manpower, nothing can be accomplished. As a developing country, Africa needs support from its industrialized neighbors to fuel its expansion, and recently formalized plans such as US and G7’s Build Back Better World (B3W) initiative and China’s Belt and Road initiative, both of which are aimed at improving conditions in developing nations around the globe, can be hugely beneficial to Africa’s growth and development.
In addition, Professor Guillen predicts that there will be more incentives for automation and subsequently more technological unemployment in the future. I totally agree with this point of view, and it’s worth noting that the stay-at-home policy this past year has only expedited this trend. Millions of Americans are losing jobs during the coronavirus outbreak–and robots are replacing them faster than ever. However, instead of lamenting over the inevitable, we should take action. Many have called for the discontinued usage of robots and AI, fearing that they will one day completely take over the economy. But I do not think that we ought to look upon technology as an enemy, but rather as a helper, a friend. Robots are far from perfect–there are a lot they can’t do that humans can, including skills related to perception, creativity, empathy, critical thinking… just to name a few. As Professor Guillen puts it, what we need to do is to “figure out how to retrain people and how to help those people find other jobs”, jobs that robots can never replace, and I think this starts with raising awareness at a young age. Before entering the workplace, every young adult should be well informed on the ongoing trends in the economy. Thus, I believe the key to solving this problem is education. The collective wisdom of humanity can overcome any obstacle, especially one in which we were the sole creator of.
Correction: As a developing REGION, Africa needs support from its industrialized neighbors to fuel its expansion… not country haha 🙂
Lisa, you presented a very nice comment on your perception of the things Professor Guillen predicts to come shortly. It was insightful to see how the world is projected to be different simply due to one event, the COVID-19 pandemic.
Concerning the current demographic crisis, your point that “families would be way more willing to increase their numbers if working women were given more governmental support and value to their concerns especially under the complex circumstances provided by the global pandemic” is an interesting take on a possible reform the government should take to address. However, in today’s status quo, governmental support itself is already providing the necessary support for women, but it does not produce the results that you have claimed. The impact of making room for more governmental support would not promote the changes for working women to increase their family size as past norms and misogyny are now outdated with today’s shifts. The governmental support provides women the choice to be independent. In the article “Fertility rate: ‘Jaw-dropping’ global crash in children being born” by James Gallagher, he notes that more women in education and work, as well as greater access to contraception, has led to women choosing to have fewer children. Your point on immigration as an “effective way to alleviate the burden of an aging population” indeed is a factor. Though immigrants will naturally age as time passes, the rapid rates of the aging population will see a decline with an influx of young working-age immigrants. However, I do not think immigration should serve as the leading plan to solve the aging population as immigration could lead to several cons such as the potential drop in real wages, possible negative impact on real GDP per capita, increased pressure on public services, social disharmony, etc. Instead, I believe that we should turn our focus on economic policies as solutions to the issue of the aging population. To create changes to the current demographic issues, we can look more into adjustments with phased-in retirement and fiscal sustainability.
I also thought that your further research outside of this article on Professor Guillen’s claim that “Africa will be among the most populated regions in the world in the coming years” was interesting. Largely, Africa faces many negative perceptions: war-torn, disease-filled, impoverished and more. Thus, in a way, it can be hard to see Africa as a prospective region for population shift. On the other hand, these proper plans that you have brought up could hopefully alleviate the burdens faced in developing regions in Africa. By projecting Africa as the runner-up to becoming the most populous region in the world, it is without a doubt that Africa should utilize external resources to help this come to fruition. Your selective highlights of formalized plans like “US and G7’s Build Back Better World (B3W) initiative and China’s Belt and Road initiative” can potentially prove to be fit to settle in. To add, plans like China’s Belt and Road initiative aim to improve regional integration, increase trade, and mutually promote economic growth with Asia’s land and maritime networks with Africa. Similarly, COVID-19 has certainly ravaged parts of Africa. However, efforts like the United States’ investment of over $100 billion in the health of sub-Saharan African nations over the past 20 years has made the United States a leading partner in assisting these nations. 2030 is still quite far, but these are goals that would allow Africa’s growth and development to be an eye-opener for us.
Following your points when you shifted to discussing the high possibility of technological unemployment in the future, these facts are inevitably true. Technological improvement has rapidly evolved during the 21st century, and we are most certainly not going to see it level off. Your point that many would fear that the usage of robots and AIs could take over the economy has fair reasoning in that automation would solely replace workers rather than enhancing human capabilities. One notable example would be truck drivers. Given this day and age, the perfect technology could soon replace their work with the progression in automated truck driving. According to the Los Angeles Times, a projection of 1.7 million American truckers will be replaced by self-driving trucks over the next decade. Without a doubt, by 2030, many more fields could slowly be obsolete. To add to your concerns about the rise in automation, it is within the discussion to bring up the problems the replacement of human work will create, especially for the lower class. Your suggestion for urging education is a great thought but is potentially concerning. One such limitation is that not everyone within the lower class has access to higher degrees of education, mainly due to the costly tuition. However, even outside the discussion financially, workers switching from their current work to something new is also difficult as a result of the lack of help in that transition as well as the time consumption required to make the shift work. Overall, I do agree with your claim that we should focus on pushing others at a young age to pursue work that robots could never replace through means of education. Having a stronger understanding of the economy’s currency will become very important in learning about the shifts made every day.
The comments that you have made on Professor Guillen’s claims about the changes projected to occur in 2030 were very interesting and pushed me to want to research more into the topic. Nevertheless, these changes are sure to come, but the actions we can take now could help to ease the world’s unexpectedness soon.
how will the world change in 2030？Professor Mauro said that the aging of the population in the future is largely due to the low fertility rate caused by the economic recession and the slow pace of urban construction. I actually have my own views on population growth, and it has a lot to do with sex education. Many countries are particularly taboo about sex education, which has produced a lot of heterosexophobic marriage-phobic groups, who are afraid to see the opposite sex. Some men can’t look beautiful women in the eye, they prefer to vent on their own, which is caused by inferiority. Due to the development of the Internet, virtual characters are also popular, and many men will also vent their desire to the virtual characters. If the number of human beings drops to a certain level, I have a suggestion, which is to let the men and women face their problems directly, open their hearts to the dialogue, and get some people to be interested in the real opposite sex again, not afraid of the opposite sex.
The expansion of the middle class will cause many problems, and labor-intensive enterprises will be short of workers. But this dilemma will be broken by the development of automation, which will greatly reduce or even eliminate the need for workers in future production. This technology will widen the gap between the rich and the poor, making those who can invest in automated production lines the new rich and those who can support themselves by hand the very poor.
Cryptocurrencies are already illegal in China, and in Sichuan, many people who were unable to move money after a government power outage were hit hard. As the Chinese government’s new currency, the digital yuan will be segmented by the virtual currency market.