1.Global Trends 2030:AlternativeWorldsa publication of the National Intelligence Council

2. Global Trends 2030: OR OF NAT IOCTAlternative RENA F THE DIL IN LLIGETEWorlds EO ICN F CE OFa publication of the National Intelligence Councildecember 2012NIC 2012-001ISBN 978-1-929667-21-5To view electronic version:www.dni.gov/nic/globaltrendsFacebook.com/odni.nicTwitter: @odni_nic 3. OF NAT OR IO CTRE NAF THE DI L IN LLIGE TEEOIC NF CEOFDear Reader:Global Trends 2030: Alternative Worlds is the fifth installment in the National IntelligenceCouncils series aimed at providing a framework for thinking about the future. As with previouseditions, we hope that this report will stimulate strategic thinking by identifying critical trends andpotential discontinuities. We distinguish between megatrends, those factors that will likely occurunder any scenario, and game-changers, critical variables whose trajectories are far less certain.Finally, as our appreciation of the diversity and complexity of various factors has grown, we haveincreased our attention to scenarios or alternative worlds we might face.We are at a critical juncture in human history, which could lead to widely contrasting futures.It is our contention that the future is not set in stone, but is malleable, the result of an interplayamong megatrends, game-changers and, above all, human agency. Our effort is to encouragedecisionmakerswhether in government or outsideto think and plan for the long term so thatnegative futures do not occur and positive ones have a better chance of unfolding.I would like to point out several innovations in Global Trends 2030. This volume starts with a lookback at the four previous Global Trends reports. We were buoyed by the overall positive review in thestudy we commissioned, but cognizant too of the scope for needed changes, which we have tried toincorporate in this volume.Our aim has been to make this effort as collaborative as possible, believing that a diversity ofperspectives enriches the work. We have reached out to experts far beyond Washington, D.C. Wehave held numerous meetings, many in universities, in Indiana, Texas, California, New Mexico,Pennsylvania, Massachusetts, Colorado, Tennessee, New York, and New Jersey.We also sponsored a public blog which featured blog posts and comments by experts on key themesdiscussed in Global Trends 2030. The blog had over 140 posts and over 200 comments. As ofmid-October, it had 71,000 hits and had been viewed by readers in 167 different countries. To ensurethat the blog posts can continue to be consulted, we are linking them to the web and e-book versionsof the final published report.We expanded our engagement overseas by holding meetings on the initial draft in close to 20countries. Many times this was at the invitation of governments, businesses, universities, or thinktanks. One beneficial outcome of the NICs quadrennial efforts has been the growing interestelsewhere in global trends, including elaboration by others on their own works, which weencourage. Because of the widespread interest in how Global Trends 2030 is seen elsewhere, wehave detailed the reactions of our international experts to the initial draft in a special box followingthe introduction. 4. In this volume, we expanded our coverage of disruptive technologies, devoting a separate sectionto it in the work. To accomplish that, we engaged with research scientists at DoE laboratories atSandia, Oak Ridge, and NASA in addition to entrepreneurs and consultants in Silicon Valley and SantaFe. We have also devoted strong attention to economic factors and the nexus of technology andeconomic growth.Finally, this volume contains a chapter on the potential trajectories for the US role in the internationalsystem. Previous editions were criticizedparticularly by overseas readersfor not discussing atgreater length the US impact on future international relations. We believe that the United States alsostands at a critical juncture; we have devoted a chapter to delineating possible future directions andtheir impact on the broader evolution of the international system.Scores of people contributed to the preparation of Global Trends 2030, and we have sought toacknowledge the key contributors from outside the NIC in a separate entry. Within the NIC, CounselorMathew Burrows was our principal author in addition to orchestrating the entire process frombeginning to end. He was assisted by Elizabeth Arens as senior editor; Luke Baldwin, who establishedthe first-ever NIC blog; Erin Cromer, who oversaw logistical support; and Jacob Eastham and AnneCarlyle Lindsay, who created the design. Dr. Burrows worked closely with regional and functionalNational Intelligence Officers, who reviewed and contributed to the draft. Among NIC offices, theNICs Strategic Futures Group under Director Cas Yost rates special mention for its participation acrossthe board in Global Trends-related work. I would especially like to acknowledge the work of the latesenior analyst Christopher Decker who provided critical help with the forecasts on global health andpandemics before his untimely death.I encourage readers to review the complete set of Global Trends 2030 documents, which can befound on the National Intelligence Councils website, www.dni.gov/nic/globaltrends, and to explorepossible scenario simulations using the interactive material. We also have published the work in ane-book format so readers can download it for their use on a tablet. These formats are available fordownloading from our website.As with our previous Global Trends studies, we hope this report stimulates dialogue on the challengesthat will confront the global community during the next 15-20 yearsand positive and peaceful waysto meet them.Sincerely,Christopher Kojm,Chairman, National Intelligence Council 5. Track Record of Global Trends WorksOROF NATIO CTRE NAF THE DIBefore launching work on the current volume, the NIC commissioned an academic L IN LLIGE TEstudy of the four previous Global Trends studies, beginning with the first editionEOin 1996-97. The reviewers examined the Global Trends papers to highlight anyIC NF CEOFpersistent blind spots and biases as well as distinctive strengths. A subsequentconference focused on addressing shortcomings and building on the studies strongpoints for the forthcoming work. We sought to address the reviewers concerns indesigning the present project.The key looming challenges that our reviewers cited for GT 2030 were to develop: A greater focus on the role of US in the international system. Past works assumed US centrality, leaving readers vulnerable to wonder about critical dynamics around the US role. One of the key looming issues for GT 2030 was how other powers would respond to a decline or a decisive re-assertion of US power. The authors of the study thought that both outcomes were possible and needed to be addressed. A clearer understanding of the central units in the international system. Previous works detailed the gradual ascendance of nonstate actors, but we did not clarify how we saw the role of states versus nonstate actors. The reviewers suggested that we delve more into the dynamics of governance and explore the complicated relationships among a diverse set of actors. A better grasp of time and speed. Past Global Trends works correctly foresaw the direction of the vectors: China up, Russia down. But Chinas power has consistently increased faster than expected... A comprehensive reading of the four reports leaves a strong impression that [we] tend toward underestimation of the rates of change... Greater discussion of crises and discontinuities. The reviewers felt that the use of the word trends in the titles suggests more continuity than change. GT 2025, however, with its strongly worded attention to the likelihood of significant shocks and discontinuities, flirts with a radical revision of this viewpoint. The authors recommended developing a framework for understanding the relationships among trends, discontinuities, and crises. Greater attention to ideology. The authors of the study admitted that ideology is a frustratingly fuzzy concept... difficult to define... and equally difficult to measure. They agreed that grand isms like fascism and communism might not be on the horizon. However, smaller politico-pycho- social shifts that often dont go under the umbrella of ideology but drive behavior should be a focus. More understanding of second- and third-order consequences. Trying to identify looming disequilibria may be one approach. More wargaming or simulation exercises to understand possible dynamics among international actors at crucial tipping points was another suggestion.We will let our readers judge how well we met the above challenges in this volume. 6. Executive Summary This report is intended to stimulate thinking about the rapid and vast geopolitical changes characterizing the world today and possible global trajectories during the next 15-20 years. As with the NICs previous Global Trends reports, we do not seek to predict the futurewhich would be an impossible featbut instead provide a framework for thinking about possible futures and their implications. ... the idea of the future being different from the present is so repugnant to our conventional modes of thought and behavior that we, most of us, offer a great resistance to acting on it in practice. John Maynard Keynes, 1937Global Trends 2030: Alternative Worlds i 7. Global trends 2030: an overview Megatrends Individual Individual empowerment will accelerate owing to poverty reduction, growth of the global Empowermentmiddle class, greater educational attainment, widespread use of new communications andmanufacturing technologies, and health-care advances. Diffusion of Power There will not be any hegemonic power. Power will shift to networks and coalitions in amultipolar world. DemographicThe demographic arc of instability will narrow. Economic growth might decline in aging Patterns countries. Sixty percent of the worlds population will live in urbanized areas; migrationwill increase. Food, Water, Demand for these resources will grow substantially owing to an increase in the global Energy Nexus population. Tackling problems pertaining to one commodity will be linked to supply anddemand for the others. Game-changers Crisis-Prone GlobalWill global volatility and imbalances among players with different economic interests Economyresult in collapse? Or will greater multipolarity lead to increased resiliency in the globaleconomic order? Governance Gap Will governments and institutions be able to adapt fast enough to harness change instead ofbeing overwhelmed by it? Potential forWill rapid changes and shifts in power lead to more intrastate and interstate conflicts? Increased Conflict Wider Scope of Will regional instability, especially in the Middle East and South Asia, spill over and create Regional Instability global insecurity? Impact of NewWill technological breakthroughs be developed in time to boost economic productivity Technologies and solve the problems caused by a growing world population, rapid urbanization, andclimate change? Role of theWill the US be able to work with new partners to reinvent the international system? UnitedStates Potential worlds Stalled EnginesIn the most plausible worst-case scenario, the risks of interstate conflict increase. The US drawsinward and globalization stalls. Fusion In the most plausible best-case outcome, China and the US collaborate on a range of issues,leading to broader global cooperation. Gini-Out-of-the- Inequalities explode as some countries become big winners and others fail. Inequalities within Bottle countries increase social tensions. Without completely disengaging, the US is no longer theglobal policeman. Nonstate World Driven by new technologies, nonstate actors take the lead in confronting global challenges.Global Trends 2030: Alternative Worlds ii 8. T he world of 2030 will be radically potential Black Swansdiscrete eventswould transformed from our world today.cause large-scale disruption (see page xi). All but twoof thesethe possibility of a democratic China or a By 2030, no countrywhether thereformed Iranwould have negative repercussions.US, China, or any other large countrywillBased upon what we know about the megatrends andbe a hegemonic power. The empowerment the possible interactions between the megatrends andof individuals and diffusion of power among the game-changers, we have delineated four archetypalfutures that represent distinct pathways for the worldstates and from states to informal networks willout to 2030. None of these alternative worlds ishave a dramatic impact, largely reversing the inevitable. In reality, the future probably will consist ofelements from all the scenarios.historic rise of the West since 1750, restoringAsias weight in the global economy, andMegatrends and RelatedTectonic Shiftsushering in a new era of democratizationat the international and domestic level. In Megatrend 1: Individual Empowermentaddition to individual empowerment and theIndividual empowerment will accelerate substantiallydiffusion of state power, we believe that two during the next 15-20 years owing to poverty reductionand a huge growth of the global middle class, greaterother megatrends will shape our world out toeducational attainment, and better health care. The2030: demographic patterns, especially rapidgrowth of the global middle class constitutes a tectonicshift: for the first time, a majority of the worldsaging; and growing resource demands which,population will not be impoverished, and the middlein the cases of food and water, might lead to classes will be the most important social and economicsector in the vast majority of countries around thescarcities. These trends, which are virtually world. Individual empowerment is the most importantcertain, exist today, but during the next 15-20 megatrend because it is both a cause and effect ofmost other trendsincluding the expanding globalyears they will gain much greater momentum. economy, rapid growth of the developing countries,Underpinning the megatrends are tectonicand widespread exploitation of new communicationsand manufacturing technologies. On the one hand,shiftscritical changes to key features of ourwe see the potential for greater individual initiative asglobal environment that will affect how the key to solving the mounting global challenges over thenext 15-20 years. On the other hand, in a tectonic shift,world works (see table on page v).individuals and small groups will have greater accessto lethal and disruptive technologies (particularlyExtrapolations of the megatrends would alone pointprecision-strike capabilities, cyber instruments, andto a changed world by 2030but the world couldbioterror weaponry), enabling them to perpetratebe transformed in radically different ways. Welarge-scale violencea capability formerly thebelieve that six key game-changersquestionsmonopoly of states.regarding the global economy, governance, conflict,regional instability, technology, and the role of theUnited Stateswill largely determine what kind oftransformed world we will inhabit in 2030. SeveralGlobal Trends 2030: Alternative Worldsiii 9. Megatrend 2: Diffusion of Powerresources. Aging countries will face an uphill battle in maintaining their living standards. Demand for bothThe diffusion of power among countries will have a skilled and unskilled labor will spur global migration.dramatic impact by 2030. Asia will have surpassedOwing to rapid urbanization in the developingNorth America and Europe combined in terms ofworld, the volume of urban construction for housing,global power, based upon GDP, population size, office space, and transport services over the next 40military spending, and technological investment. years could roughly equal the entire volume of suchChina alone will probably have the largest economy,construction to date in world history.surpassing that of the United States a few years before2030. In a tectonic shift, the health of the globalMegatrend 4: Growing Food, Water, andeconomy increasingly will be linked to how well theEnergy Nexusdeveloping world doesmore so than the traditionalWest. In addition to China, India, and Brazil, regionalDemand for food, water, and energy will grow byplayers such as Colombia, Indonesia, Nigeria, Southapproximately 35, 40, and 50 percent respectivelyAfrica, and Turkey will become especially importantowing to an increase in the global population andto the global economy. Meanwhile, the economies of the consumption patterns of an expanding middleEurope, Japan, and Russia are likely to continue their class. Climate change will worsen the outlook for theslow relative declines.availability of these critical resources. Climate change analysis suggests that the severity of existing weatherThe shift in national power may be overshadowedpatterns will intensify, with wet areas getting wetterby an even more fundamental shift in the nature of and dry and arid areas becoming more so. Much ofpower. Enabled by communications technologies, the decline in precipitation will occur in the Middlepower will shift toward multifaceted and amorphous East and northern Africa as well as western Centralnetworks that will form to influence state and globalAsia, southern Europe, southern Africa, and theactions. Those countries with some of the strongestUS Southwest.fundamentalsGDP, population size, etc.willnot be able to punch their weight unless they also We are not necessarily headed into a world oflearn to operate in networks and coalitions in a scarcities, but policymakers and their private sectormultipolar world.partners will need to be proactive to avoid such a future. Many countries probably wont have theMegatrend 3: Demographic Patternswherewithal to avoid food and water shortages without massive help from outside. Tackling problemsWe believe that in the world of 2030a world pertaining to one commodity wont be possiblein which a growing global population will have without affecting supply and demand for the others.reached somewhere close to 8.3 billion people (upAgriculture is highly dependent on accessibility tofrom 7.1 billion in 2012)four demographic trendsadequate sources of water as well as on energy-richwill fundamentally shape, although not necessarily fertilizers. Hydropower is a significant source of energydetermine, most countries economic and politicalfor some regions while new sources of energysuchconditions and relations among countries. Theseas biofuelsthreaten to exacerbate the potential fortrends are: aginga tectonic shift for both for thefood shortages. There is as much scope for negativeWest and increasingly most developing countries; tradeoffs as there is the potential for positive synergies.a still-significant but shrinking number of youthful Agricultural productivity in Africa, particularly, willsocieties and states; migration, which will increasingly require a sea change to avoid shortages. Unlike Asiabe a cross-border issue; and growing urbanization and South America, which have achieved significantanother tectonic shift, which will spur economic improvements in agricultural production per capita,growth but could put new strains on food and water Africa has only recently returned to 1970s levels.Global Trends 2030: Alternative Worldsiv 10. In a likely tectonic shift, the United States could fracking drilling technologies on difficult-to-reachbecome energy-independent. The US has regained itsoil deposits could result in a big reduction in the USposition as the worlds largest natural gas producernet trade balance and improved overall economicand expanded the life of its reserves from 30 togrowth. Debates over environmental concerns about100 years due to hydraulic fracturing technology. fracturing, notably pollution of water sources, couldAdditional crude oil production through the use ofderail such developments, however.Tectonic Shifts between now and 2030Growth of the Middle classes most everywhere in the developing world are poised to expand substantially inGlobal Middle terms of both absolute numbers and the percentage of the population that can claim middle-Class class status during the next 15-20 years.Wider AccessA wider spectrum of instruments of warespecially precision-strike capabilities, cyberto Lethal and instruments, and bioterror weaponywill become accessible. Individuals and small groups willDisruptivehave the capability to perpetrate large-scale violence and disruptiona capability formerly theTechnologiesmonopoly of states.Definitive ShiftThe US, European, and Japanese share of global income is projected to fall from 56 percentof Economic today to well under half by 2030. In 2008, China overtook the US as the worlds largest saver; byPower to the2020, emerging markets share of financial assets is projected to almost double.East and SouthUnprecedented Whereas in 2012 only Japan and Germany have matured beyond a median age of 45 years, mostand WidespreadEuropean countries, South Korea, and Taiwan will have entered the post-mature age category byAging 2030. Migration will become more globalized as both rich and developing countries suffer fromworkforce shortages.UrbanizationTodays roughly 50-percent urban population will climb to nearly 60 percent, or 4.9 billion people,in 2030. Africa will gradually replace Asia as the region with the highest urbanization growth rate.Urban centers are estimated to generate 80 percent of economic growth; the potential exists toapply modern technologies and infrastructure, promoting better use of scarce resources.Food and WaterDemand for food is expected to rise at least 35 percent by 2030 while demand for waterPressures is expected to rise by 40 percent. Nearly half of the worlds population will live in areasexperiencing severe water stress. Fragile states in Africa and the Middle East are most at risk ofexperiencing food and water shortages, but China and India are also vulnerable.US Energy With shale gas, the US will have sufficient natural gas to meet domestic needs and generateIndependencepotential global exports for decades to come. Increased oil production from difficult-to-accessoil deposits would result in a substantial reduction in the US net trade balance and fastereconomic expansion. Global spare capacity may exceed over 8 million barrels, at which pointOPEC would lose price control and crude oil prices would collapse, causing a major negativeimpact on oil-export economies.Global Trends 2030: Alternative Worlds v 11. Game-Changers Earlier economic crises, such as the 1930s GreatDepression, also hit when the age structures ofGame-Changer 1: The Crisis-Pronemany Western populations were relatively youthful,Global Economyproviding a demographic bonus during the postwareconomic boom. However, such a bonus will not existThe international economy almost certainly will in any prospective recovery for Western countries. Tocontinue to be characterized by various regional andcompensate for drops in labor-force growth, hoped-fornational economies moving at significantly differenteconomic gains will have to come from growth inspeedsa pattern reinforced by the 2008 globalproductivity. The United States is in a better positionfinancial crisis. The contrasting speeds across different because its workforce is projected to increase duringregional economies are exacerbating global imbalances the next decade, but the US will still need to increaseand straining governments and the international labor productivity to offset its slowly aging workforce.system. The key question is whether the divergences A critical question is whether technology canand increased volatility will result in a globalsufficiently boost economic productivity to prevent abreakdown and collapse or whether the development long-term slowdown.of multiple growth centers will lead to resiliency. Theabsence of a clear hegemonic economic power could As we have noted, the worlds economic prospects willadd to the volatility. Some experts have compared the increasingly depend on the fortunes of the East andrelative decline in the economic weight of the US toSouth. The developing world already provides morethe late 19th century when economic dominance bythan 50 percent of global economic growth and 40one playerBritainreceded into multipolarity.percent of global investment. Its contribution to globalinvestment growth is more than 70 percent. ChinasA return to pre-2008 growth rates and previouscontribution is now one and a half times the size of thepatterns of rapid globalization looks increasinglyUS contribution. In the World Banks baseline modelingunlikely, at least for the next decade. Across G-7of future economic multipolarity, Chinadespite acountries, total nonfinancial debt has doubled sincelikely slowing of its economic growthwill contribute1980 to 300 percent of GDP, accumulating over a about one-third of global growth by 2025, far moregeneration. Historical studies indicate that recessions than any other economy. Emerging market demandinvolving financial crises tend to be deeper and requirefor infrastructure, housing, consumer goods, and newrecoveries that take twice as long. Major Western plants and equipment will raise global investment toeconomieswith some exceptions such as the US,levels not seen in four decades. Global savings mayAustralia, and South Koreahave only just begun not match this rise, resulting in upward pressure ondeleveraging (reducing their debts); previous episodeslong-term interest rates.have taken close to a decade.Despite their growing economic clout, developingAnother major global economic crisis cannot be ruledcountries will face their own challenges, especially inout. The McKinsey Global Institute estimates that the their efforts to continue the momentum behind theirpotential impact of an unruly Greek exit from the eurorapid economic growth. China has averaged 10-percentzone could cause eight times the collateral damagereal growth during the past three decades; by 2020as the Lehman Brothers bankruptcy. Regardless ofits economy will probably be expanding by only 5which solution is eventually chosen, progress will be percent, according to several private-sector forecasts.needed on several fronts to restore euro zone stability.The slower growth will mean downward pressure onDoing so will take several years at a minimum, with per capita income growth. China faces the prospectmany experts talking about a whole decade beforeof being trapped in middle-income status, with itsstability returns.per capita income not continuing to increase to thelevel of the worlds advanced economies. India facesGlobal Trends 2030: Alternative Worlds vi 12. many of the same problems and traps accompanyingduring the next 15-20 years. Countries moving fromrapid growth as China: large inequities between rural autocracy to democracy have a proven track recordand urban sectors and within society; increasingof instability.constraints on resources such as water; and a needfor greater investment in science and technology to Other countries will continue to suffer from acontinue to move its economy up the value chain.democratic deficit: in these cases a countrysdevelopmental level is more advanced than its levelGame-Changer 2: The Governance Gapof governance. Gulf countries and China account fora large number in this category. China, for example,During the next 15-20 years, as power becomes evenis slated to pass the threshold of US $15,000 permore diffuse than today, a growing number of diversecapita purchasing power parity (PPP) in the next fivestate and nonstate actors, as well as subnational actors, years, which is often a trigger for democratization.such as cities, will play important governance roles. Chinese democratization could constitute an immenseThe increasing number of players needed to solvewave, increasing pressure for change on othermajor transnational challengesand their discordant authoritarian states.valueswill complicate decisionmaking. The lackof consensus between and among established andThe widespread use of new communicationsemerging powers suggests that multilateral governance technologies will become a double-edged sword forto 2030 will be limited at best. The chronicgovernance. On the one hand, social networking willdeficit probably will reinforce the trend towardenable citizens to coalesce and challenge governments,fragmentation. However, various developments as we have already seen in Middle East. On the otherpositive or negativecould push the world in differenthand, such technologies will provide governmentsdirections. Advances cannot be ruled out despiteboth authoritarian and democratican unprecedentedgrowing multipolarity, increased regionalism, and ability to monitor their citizens. It is unclear how thepossible economic slowdowns. Prospects for achievingbalance will be struck between greater IT-enabledprogress on global issues will vary across issues.individuals and networks and traditional politicalstructures. In our interactions, technologists andThe governance gap will continue to be most political scientists have offered divergent views.pronounced at the domestic level and driven byBoth sides agree, however, that the characteristicsrapid political and social changes. The advancesof IT usemultiple and simultaneous action,during the past couple decades in health, education,near instantaneous responses, mass organizationand incomewhich we expect to continue, if notacross geographic boundaries, and technologicalaccelerate in some caseswill drive new governancedependenceincrease the potential for more frequentstructures. Transitions to democracy are much morediscontinuous change in the international system.stable and long-lasting when youth bulges begin todecline and incomes are higher. Currently about 50The current, largely Western dominance of globalcountries are in the awkward stage between autocracystructures such as the UN Security Council, Worldand democracy, with the greatest number concentratedBank, and IMF probably will have been transformed byin Sub-Saharan Africa, Southeast and Central Asia, and2030 to be more in line with the changing hierarchythe Middle East and North Africa. Both social science of new economic players. Many second-tier emergingtheory and recent historythe Color Revolutions powers will be making their markat least asand the Arab Springsupport the idea that withemerging regional leaders. Just as the larger G-20maturing age structures and rising incomes, political rather than G-7/8was energized to deal with theliberalization and democracy will advance. However, 2008 financial crisis, we expect that other institutionsmany countries will still be zig-zagging their waywill be updatedprobably also in response to crises.through the complicated democratization processGlobal Trends 2030: Alternative Worlds vii 13. Game-Changer 3: Potential for in Asia and the Middle East. A more fragmentedIncreased Conflictinternational system in which existing forms ofcooperation are no longer seen as advantageous toHistorical trends during the past two decades showmany of the key global players would also increasefewer major armed conflicts and, where conflictsthe potential for competition and even great powerremain, fewer civilian and military casualties than inconflict. However, if such a conflict occurs, it almostprevious decades. Maturing age structures in many certainly will not be on the level of a world war withdeveloping countries point to continuing declines all major powers engaged.in intrastate conflict. We believe the disincentiveswill remain strong against great power conflict: tooThree different baskets of risks could conspire tomuch would be at stake. Nevertheless, we need to be increase the chances of an outbreak of interstatecautious about the prospects for further declines inconflict: changing calculations of key playersthe number and intensity of intrastate conflicts, and particularly China, India, and Russia; increasinginterstate conflict remains a possibility.contention over resource issues; and a wider spectrumof more accessible instruments of war. With theIntrastate conflicts have gradually increased inpotential for increased proliferation and growingcountries with a mature overall population that contain concerns about nuclear security, risks are growing thata politically dissonant, youthful ethnic minority. Strife future wars in South Asia and the Middle East wouldinvolving ethnic Kurds in Turkey, Shia in Lebanon, andrisk inclusion of a nuclear deterrent.Pattani Muslims in southern Thailand are examplesof such situations. Looking forward, the potential forThe current Islamist phase of terrorism might endconflict to occur in Sub-Saharan Africa is likely toby 2030, but terrorism is unlikely to die completely.remain high even after some of the regions countries Many states might continue to use terrorist group outgraduate into a more intermediate age structure of a strong sense of insecurity, although the costs tobecause of the probable large number of ethnic anda regime of directly supporting terrorists looks settribal minorities that will remain more youthful than to become even greater as international cooperationthe overall population. Insufficient natural resources increases. With more widespread access to lethal andsuch as water and arable landin many of the same disruptive technologies, individuals who are expertscountries that will have disproportionate levels of in such niche areas as cyber systems might sell theiryoung men increase the risks of intrastate conflict services to the highest bidder, including terroristsbreaking out, particularly in Sub-Saharan African and who would focus less on causing mass casualtiesSouth and East Asian countries, including China and and more on creating widespread economic andIndia. A number of these countriesAfghanistan, financial disruptions.Bangladesh, Pakistan, and Somaliaalso have falteringgovernance institutions.Game-Changer 4: Wider Scope ofRegional InstabilityThough by no means inevitable, the risks of interstateconflict are increasing owing to changes in the Regional dynamics in several different theaters duringinternational system. The underpinnings of thethe next couple decades will have the potential topost-Cold War equilibrium are beginning to shift. spill over and create global insecurity. The MiddleDuring the next 15-20 years, the US will be grappling East and South Asia are the two regions most likelywith the degree to which it can continue to play theto trigger broader instability. In the Middle East,role of systemic guardian and guarantor of the global the youth bulgea driving force of the recent Araborder. A declining US unwillingness and/or slipping Springwill give way to a gradually aging population.capacity to serve as a global security provider would With new technologies beginning to provide the worldbe a key factor contributing to instability, particularly with other sources of oil and gas, the regions economyGlobal Trends 2030: Alternative Worldsviii 14. will need to become increasingly diversified. But the Europe would provide a smaller stabilizing force forMiddle Easts trajectory will depend on its political crises in neighboring regions. On the other hand,landscape. On the one hand, if the Islamic Republic a Europe which overcomes its current intertwinedmaintains power in Iran and is able to develop nuclearpolitical and economic crises could see its globalweapons, the Middle East will face a highly unstablerole enhanced. Such a Europe could help to integratefuture. On the other hand, the emergence of moderate, its rapidly developing neighbors in the Middledemocratic governments or a breakthrough agreementEast, Sub-Saharan Africa, and Central Asia into theto resolve the Israeli-Palestinian conflict could haveglobal economy and broader international system. Aenormously positive consequences. modernizing Russia could integrate itself into a widerinternational community; at the same time, a RussiaSouth Asia faces a series of internal and externalwhich fails to build a more diversified economy andshocks during the next 15-20 years. Low growth, more liberal domestic order could increasingly pose arising food prices, and energy shortages will pose stiffregional and global threat.challenges to governance in Pakistan and Afghanistan.Afghanistans and Pakistans youth bulges are Progress toward greater regional cohesion andlargesimilar in size to those found in many Africanintegration in Latin America and Sub-Saharancountries. When these youth bulges are combined Africa would promise increased stability in thosewith a slow-growing economy, they portend increased regions and a reduced threat to global security.instability. India is in a better position, benefiting from Countries in Sub-Saharan Africa, Central America, andhigher growth, but it will still be challenged to findthe Caribbean will remain vulnerable, nevertheless,jobs for its large youth population. Inequality, lack to state failure through 2030, providing safe havensof infrastructure, and education deficiencies are key for both global criminal and terrorist networks andweaknesses in India. The neighborhood has alwayslocal insurgents.had a profound influence on internal developments,increasing the sense of insecurity and bolstering Game-Changer 5: The Impact ofmilitary outlays. Conflict could erupt and spread New Technologiesunder numerous scenarios. Conflicting strategic goals,widespread distrust, and the hedging strategies by allFour technology arenas will shape global economic,the parties will make it difficult for them to develop asocial, and military developments as well as the worldstrong regional security framework. communitys actions pertaining to the environment by2030. Information technology is entering the bigAn increasingly multipolar Asia lacking a data era. Process power and data storage are becomingwell-anchored regional security framework able to almost free; networks and the cloud will providearbitrate and mitigate rising tensions would constitute global access and pervasive services; social media andone of the largest global threats. Fear of Chinesecybersecurity will be large new markets. This growthpower, the likelihood of growing Chinese nationalism, and diffusion will present significant challenges forand possible questions about the US remaining governments and societies, which must find ways toinvolved in the region will increase insecurities. An capture the benefits of new IT technologies whileunstable Asia would cause large-scale damage to the dealing with the new threats that those technologiesglobal economy. present. Fear of the growth of an Orwelliansurveillance state may lead citizens particularly in theChanging dynamics in other regions would also developed world to pressure their governments tojeopardize global security. Europe has been a criticalrestrict or dismantle big data systems.security provider, ensuring, for example, CentralEuropes integration into the West after the end of Information technology-based solutions to maximizethe Cold War. A more inward-focused and less capablecitizens economic productivity and quality ofGlobal Trends 2030: Alternative Worlds ix 15. life while minimizing resource consumption andon social acceptance and the direction and resolutionenvironmental degradation will be critical to ensuringof any ensuing political issues.the viability of megacities. Some of the worlds futuremegacities will essentially be built from scratch,Last but not least, new health technologies willenabling a blank-slate approach to infrastructure continue to extend the average age of populationsdesign and implementation that could allow for thearound the world, by ameliorating debilitatingmost effective possible deployment of new urban physical and mental conditions and improving overalltechnologiesor create urban nightmares, if such newwell-being. The greatest gains in healthy longevitytechnologies are not deployed effectively.are likely to occur in those countries with developingeconomies as the size of their middle class populationsNew manufacturing and automation technologies swells. The health-care systems in these countries maysuch as additive manufacturing (3D printing) andbe poor today, but by 2030 they will make substantialrobotics have the potential to change work patterns progress in the longevity potential of their populations;in both the developing and developed worlds. In by 2030 many leading centers of innovation in diseasedeveloped countries these technologies will improve management will be in the developing world.productivity, address labor constraints, and diminishthe need for outsourcing, especially if reducingGame-Changer 6: The Role of thethe length of supply chains brings clear benefits.United StatesNevertheless, such technologies could still havea similar effect as outsourcing: they could makeHow the United States international role evolvesmore low- and semi-skilled manufacturing workersduring the next 15-20 yearsa big uncertaintyandin developed economies redundant, exacerbatingwhether the US will be able to work with new partnersdomestic inequalities. For developing economies,to reinvent the international system will be amongparticularly Asian ones, the new technologies willthe most important variables in the future shape ofstimulate new manufacturing capabilities and furtherthe global order. Although the United States (and theincrease the competitiveness of Asian manufacturers Wests) relative decline vis-a-vis the rising states isand suppliers.inevitable, its future role in the international systemis much harder to project: the degree to which the USBreakthroughs, especially for technologies pertaining continues to dominate the international system couldto the security of vital resourceswill bevary widely.neccessary to meet the food, water, and energy needsof the worlds population. Key technologies likelyThe US most likely will remain first among equalsto be at the forefront of maintaining such resourcesamong the other great powers in 2030 because ofin the next 15-20 years will include geneticallyits preeminence across a range of power dimensionsmodified crops, precision agriculture, water irrigation and legacies of its leadership role. More importanttechniques, solar energy, advanced bio-based fuels, and than just its economic weight, the United Statesenhanced oil and natural gas extraction via fracturing. dominant role in international politics has derivedGiven the vulnerabilities of developing economies from its preponderance across the board in both hardto key resource supplies and prices and the early and soft power. Nevertheless, with the rapid rise ofimpacts of climate change, key developing countries other countries, the unipolar moment is over andmay realize substantial rewards in commercializingPax Americanathe era of American ascendancymany next-generation resource technologies first. in international politics that began in 1945is fastAside from being cost competitive, any expansion or winding down.adoption of both existing and next-generation resourcetechnologies over the next 20 years will largely depend The context in which the US global power will operatewill change dramatically. Most of Washingtons historicGlobal Trends 2030: Alternative Worldsx 16. Potential Black Swans That Would Cause the Greatest Disruptive Impact SevereNo one can predict which pathogen will be the next to start spreading to humans, or when or Pandemicwhere such a development will occur. An easily transmissible novel respiratory pathogen that kills or incapacitates more than one percent of its victims is among the most disruptive events possible. Such an outbreak could result in millions of people suffering and dying in every corner of the world in less than six months. Much More Dramatic and unforeseen changes already are occurring at a faster rate than expected. Most Rapid Climate scientists are not confident of being able to predict such events. Rapid changes in precipitation Changepatternssuch as monsoons in India and the rest of Asiacould sharply disrupt that regions ability to feed its population. Euro/EU An unruly Greek exit from the euro zone could cause eight times the collateral damage as the CollapseLehman Brothers bankruptcy, provoking a broader crisis regarding the EUs future. A Democratic or China is slated to pass the threshold of US$15,000 per capita purchasing power parity (PPP) in Collapsed China the next five years or soa level that is often a trigger for democratization. Chinese soft power could be dramatically boosted, setting off a wave of democratic movements. Alternatively, many experts believe a democratic China could also become more nationalistic. An economically collapsed China would trigger political unrest and shock the global economy. A Reformed Iran A more liberal regime could come under growing public pressure to end the international sanctions and negotiate an end to Irans isolation. An Iran that dropped its nuclear weapons aspirations and became focused on economic modernization would bolster the chances for a more stable Middle East. Nuclear War orNuclear powers such as Russia and Pakistan and potential aspirants such as Iran and North Korea WMD/Cyber see nuclear weapons as compensation for other political and security weaknesses, heightening Attackthe risk of their use. The chance of nonstate actors conducting a cyber attackor using WMD also is increasing. Solar Solar geomagnetic storms could knock out satellites, the electric grid, and many sensitive Geomagnetic electronic devices. The recurrence intervals of crippling solar geomagnetic storms, which are less Stormsthan a century, now pose a substantial threat because of the worlds dependence on electricity. USA collapse or sudden retreat of US power probably would result in an extended period of global Disengagement anarchy; no leading power would be likely to replace the United States as guarantor of the international order.Global Trends 2030: Alternative Worlds xi 17. Western partners have also suffered relative economic in continuing their economic development anddeclines. The post-World-War-II-era was characterized political consolidation than contesting US leadership.by the G-7 countries leading both economically andIn addition, the emerging powers are not a bloc;politically. US projection of power was dependent onthus they do not have any unitary alternative vision.and amplified by its strong alliances. During the nextTheir perspectiveseven Chinasare more keyed15-20 years, power will become more multifaceted to shaping regional structures. A collapse or suddenreflecting the diversity of issuesand more retreat of US power would most likely result in ancontextualcertain actors and power instruments willextended period of global anarchy.be germane to particular issues.ALTERNATIVE WORLDSThe United States technological assetsincludingits leadership in piloting social networking andThe present recalls past transition pointssuch asrapid communicationsgive it an advantage, but1815, 1919, 1945, and 1989when the path forwardthe Internet also will continue to boost the powerwas not clear-cut and the world faced the possibilityof nonstate actors. In most cases, US power willof different global futures. We have more than enoughneed to be enhanced through relevant outsideinformation to suggest that however rapid changenetworks, friends, and affiliates that can coalesce onhas been over the past couple decades, the rate ofany particular issue. Leadership will be a function change will accelerate in the future. Accordingly, weof position, enmeshment, diplomatic skill, andhave created four scenarios that represent distinctconstructive demeanor.pathways for the world out to 2030: Stalled Engines,Fusion, Gini Out-of-the-Bottle, and Nonstate World.The US position in the world also will be determinedAs in previous volumes, we have fictionalized theby how successful it is in helping to managescenario narratives to encourage all of us to thinkinternational crisestypically the role of great powers more creatively about the future. We have intentionallyand, since 1945, the international communitysbuilt in discontinuities, which will have a huge impactexpectation of the United States. Should Asia replicate in inflecting otherwise straight linear projections ofEuropes 19th- and early 20th-century past, the Unitedknown trends. We hope that a better understanding ofStates will be called upon to be a balancer, ensuring the dynamics, potential inflection points, and possibleregional stability. In contrast, the fall of the dollar surprises will better equip decisionmakers to avoidas the global reserve currency and substitution bythe traps and enhance possible opportunities foranother or a basket of currencies would be one of the positive developments.sharpest indications of a loss of US global economicposition, strongly undermining Washingtons political Stalled Enginesinfluence too.Stalled Enginesa scenario in which the risk ofThe replacement of the United States by another globalinterstate conflict rise owing to a new great game inpower and erection of a new international order seems Asiawas chosen as one of the book-ends, illustratingthe least likely outcome in this time period. No otherthe most plausible worst case. Arguably, darkerpower would be likely to achieve the same panoply scenarios are imaginable, including a completeof power in this time frame under any plausible breakdown and reversal of globalization duescenario. The emerging powers are eager to take their potentially to a large scale conflict on the order of aplace at the top table of key multilateral institutions World War I or World War II, but such outcomes dosuch as UN, IMF, and World Bank, but they do notnot seem probable. Major powers might be drawnespouse any competing vision. Although ambivalent into conflict, but we do not see any such tensions orand even resentful of the US-led international order, bilateral conflict igniting a full-scale conflagration.they have benefited from it and are more interested More likely, peripheral powers would step in to tryGlobal Trends 2030: Alternative Worldsxii 18. to stop a conflict. Indeed, as we have stressed, major rapidly, ensuring that China avoids the middle-incomepowers are conscious of the likely economic andtrap. Technological innovationrooted in expandedpolitical damage to engaging in any major conflict.exchanges and joint international effortsis criticalMoreover, unlike in the interwar period, completelyto the world staying ahead of the rising financial andundoing economic interdependence or globalizationresource constraints that would accompany a rapidwould seem to be harder in this more advancedboost in prosperity.technological age with ubiquitous connections. Gini Out-of-the-BottleaStalled Engines is nevertheless a bleak future. Driversbehind such an outcome would be a US and EuropeThis is a world of extremes. Within many countries,that turn inward, no longer interested in sustaining inequalities dominateleading to increasing politicaltheir global leadership. Under this scenario, theand social tensions. Between countries, there areeuro zone unravels quickly, causing Europe to be clear-cut winners and losers. For example, countries inmired in recession. The US energy revolution fails the euro zone core which are globally competitive doto materialize, dimming prospects for an economicwell, while others on the periphery are forced to leaverecovery. In the modeling which McKinsey Company the EU. The EU single market barely functions. Thedid for us for this scenario, global economic growth US remains the preeminent power as it gains energyfalters and all players do relatively poorly.independence. Without completely disengaging, the US no longer tries to play global policeman on everyFusion security threat. Many of the energy producers suffer from declining energy prices, failing to diversify theirFusion is the other book end, describing what we economies in time, and are threatened by internalsee as the most plausible best case. This is a world conflicts. Cities in Chinas coastal zone continue toin which the specter of a spreading conflict in Souththrive, but inequalities increase and split the Party.Asia triggers efforts by the US, Europe, and China toSocial discontent spikes as middle-class expectationsintervene and impose a ceasefire. China, the US, and are not met except for the very well-connected.Europe find other issues to collaborate on, leadingThe central government in Beijing, which hasto a major positive change in their bilateral relations, a difficult time governing, falls back on stirringand more broadly leading to worldwide cooperationnationalistic fervor.to deal with global challenges. This scenario relieson political leadership, with each side overruling In this scenario, economic performance in emergingits more cautious domestic constituencies to forge a and advanced economies leads to non-stellar globalpartnership. Over time, trust is also built up as Chinagrowth, far below that in our Fusion scenario, butbegins a process of political reform, bolstered by the not as bad as in Stalled Engines. The lack of societalincreasing role it is playing in the international system. cohesion domestically is mirrored at the internationalWith the growing collaboration among the major level. Major powers are at odds; the potential forpowers, global multilateral institutions are reformedconflicts rises. More countries fail, fueled in part by theand made more inclusive. dearth of international cooperation on assistance and development. In sum, the world is reasonably wealthy,In this scenario, all boats rise substantially. Emerging but it is less secure as the dark side of globalizationeconomies continue to grow faster, but GDP growthposes an increasing challenge in domestic andin advanced economies also picks up. The globalinternational politics.economy nearly doubles in real terms by 2030 to$132 trillion in todays dollars. The American Dreamreturns with per capita incomes rising $10,000 ina The Gini in this scenario title refers to the Gini Coefficient, which is aten years. Chinese per capita income also expandsrecognized statistical measurement of inequality of income.Global Trends 2030: Alternative Worlds xiii 19. Nonstate World perpetuate violence and disruption on a large scale. Economically, global growth does slightly betterIn this world, nonstate actorsnongovernmental than in the Gini Out-of-the-Bottle scenario becauseorganizations (NGOs), multinational businesses,more cooperation occurs on major global challengesacademic institutions, and wealthy individualsas well in this world. The world is also more stable andas subnational units (megacities, for example), flourish socially cohesive.and take the lead in confronting global challenges. Anincreasing global public opinion consensus amongelites and many of the growing middle classes onmajor global challengespoverty, the environment,anti-corruption, rule-of-law, and peaceform the baseof their support. The nation-state does not disappear,but countries increasingly organize and orchestratehybrid coalitions of state and nonstate actors whichshift depending on the issue.Authoritarian regimes find it hardest to operate inthis world, preoccupied with asserting politicalprimacy at home and respect in an increasingly fullydemocratized world. Even democratic countries,which are wedded to the notion of sovereignty andindependence, find it difficult to operate successfullyin this complex and diverse world. Smaller, more agilecountries in which elites are also more integratedare apt to do better than larger countries that lacksocial or political cohesion. Formal governanceinstitutions that do not adapt to the more diverseand widespread distribution of power are also lesslikely to be successful. Multinational businesses, ITcommunications firms, international scientists, NGOs,and others that are used to cooperating across bordersand as part of networks thrive in this hyper-globalizedworld where expertise, influence, and agility count formore than weight or position.This is nevertheless a patchwork and very unevenworld. Some global problems get solved becausenetworks manage to coalesce, and some cooperationoccurs across state and nonstate divides. In othercases, nonstate actors might try to deal with achallenge, but they are stymied because of oppositionfrom major powers. Security threats pose an increasingchallenge: access to lethal and disruptive technologiesexpands, enabling individuals and small groups toGlobal Trends 2030: Alternative Worldsxiv 20. Tab le o f ContentsIntroduction1game-changers38The Crisis-ProneMegatrends6Global Economy40The Plight of the West40individual empowerment8Crunch Time Too forpoverty reduction 8the Emerging Powers 43an expanding global middle class8A Multipolar Global Economy:Education and the gender gap10 Inherently More Fragile?46role of communications technologies 11The Governance Gap48improving health11Governance Starts at Home:A MORE CONFLICTED IDEOLOGICAL risks and opportunities 48LANDSCAPE12INCREASED FOCUS ON EQUALITYDiffusion of Power15 AND OPENNESS53THE RISE AND FALL OF COUNTRIES: NEW GOVERNMENTAL FORMS 54NOT THE SAME OLD STORY17 A New Regional Order? 55THE LIMITS OF HARD POWER IN THE Global Multilateral Cooperation 55WORLD OF 2030 18demographic patterns20 The Potential forIncreased Conflict59widespread aging20INTRASTATE CONFLICT: CONTINUEDshrinking number of youthfulDECLINE59countries22Interstate Conflict: chances rising 61a new age of migration23Wider scope ofthe world as urban26regional instability70Growing Food, water,The Middle East: At a Tipping Point 70and Energy Nexus30south asia: shocks on the horizon 75food, water, and climate30east asia: multiple strategic futures 76a brighter energy outlook 34europe: transforming itself 78sub-saharan africa: turninga corner by 2030? 79Global Trends 2030: Alternative Worldsxv 21. Latin America: More Prosperous butInherently Fragile81The impact ofnew Technologies83information technologies83AUTOMATION AND MANUFACTURINGTECHNOLOGIES87Resource Technologies 90health technologies 95The role of theUnited States 98Steady US Role98Multiple Potential Scenarios forthe United States Global Role101alternative worlds107stalled Engines110FUSION116gini-out-of-the-bottle122Nonstate world128acknowledgements134GT2030 blog references137Global Trends 2030: Alternative Worlds xvi 22. introduction The backdrop for A Tale of Two Cities was the French Revolution and dawn of the Industrial Age. We are living through a similar transformative period in which the breadth and scope of possible developmentsboth good and badare equal to if not greater than the aftermath of the political and economic revolutions of the late 18th century. It was the best of times, it was the worst of times... it was the spring of hope, it was the winter of despair... we were all going direct to Heaven, we were all going direct the other way... Charles Dickens, A Tale of Two CitiesGlobal Trends 2030: Alternative Worlds1 23. The world is transforming at an unprecedented rate... Global population in urban areas is expanding quickly...As the graph below shows, it took Britain 155 yearsto double GDP per capita, with about 9 million peopleEvery year, 65 million people are added to the worldsin 1870... The US and Germany took between 30 urban population, equivalent to adding seven cities theand 60 years with a few tens of million people... but size of Chicago or five the size of London annually.India and China are doing this at a scale and pacenot seen before: 100 times the people than Britain andin one tenth the time. By 2030 Asia will be well on itsway to returning to being the worlds powerhouse, justas it was before 1500.Average increase in percentage point share of global GDP, per decade Percent urban population6805 6043402 2010 UK,US, Japan, China, India,01950 2010 20301820-701900-501950-802000-202010-30 ... and the pace of technological change will... but it is not totally back to the future. accelerate.The world has been transformed in other ways. By Absorption of new technologies by Americans has2030, majorities in most countries will be middle-class, become much more rapid. The absorption rate innot poor, which has been the condition of most peopledeveloping states is also quickening, allowing thesethroughout human history.states to leapfrog stages of development that advanced economies had to pass through.7Share of global middle-class consumption, 2000-2050 (percent) world wide100 web 19911390Others mobile phoneEU80 1983US70 18JapanColor60Other Asia TeleVison 195150India 18702000China4031radio 1897302035TElephone 1876years necessary for an10 46 invention to be used by0 Electricity 187325 percent of the US 2000 201020202030 2040 2050populationGlobal Trends 2030: Alternative Worlds2 24. IntroductionIn describing potential futures, we identify inflectionpoints as well as opportunities and risks to helpThis report is intended to stimulate thinking about readers think about strategies for influencing thethis rapid, vast array of geopolitical, economic, worlds trajectory.and technological changes transforming our worldtoday and their potential trajectories over the nextThese game-changers... are the raw15-20 years. elements that could sow the seeds ofWe begin by identifying what we see as the mostglobal disruption or incredible advances.important megatrends of our transforming worldindividual empowerment, the diffusion of power to In looking out 15-20 years, we have sought not tomultifaceted networks and from West to East and be overly influenced by what has been in the West,South, demographic patterns highlighted by agingat least, a gloomy outlook resulting from the 2008populations and exploding middle classes, and natural financial crisis. Rather, we have taken a broad viewresource challenges. These megatrends are knowable. of global developments at this historical juncture andBy themselves they point to a transformed world, butof the forces that are working to sway them in onethe world could transform itself in radically different direction or another.ways. We are heading into uncharted waters.As with the NICs previous Global Trends reports,We contend that the megatrends are interactingwe do not seek to predict the futurean impossiblewith six variables or game-changers that will featbut instead provide a framework for thinkingdetermine what kind of transformed world we willabout potential outcomes, their implications, andinhabit in 2030. These game-changersquestionsopportunities to influence the course of events.about the global economy, national and globalgovernance, the nature of conflict, regional spillover,advancing technologies, and the United States rolein the international arenaare the raw elementsthat could sow the seeds of global disruption orincredible advances.Based on what we know about the megatrends, andby positing the possible interactions between themegatrends and the game-changers, we envision fourpotential worlds. At one end of the spectrum is aStalled Engines world in which the risks of interstateconflict increase and the US retrenches. At the otherextreme is a newly rebalanced and Fused world inwhich social, economic, technological, and politicalprogress is widespread. In the middle are two otherpossibilities: a Gini-Out-of-the-Bottle world in whichinequalities dominate or a Nonstate World in whichnonstate actors flourish both for good and ill.None of these outcomes is inevitable. The futureworld order will be shaped by human agency asmuch as unfolding trends and unanticipated events.Global Trends 2030: Alternative Worlds3 25. International Reactions to Muslim women who learn to read will read theGlobal Trends 2030 Koran, not the Bill of Rights.We met with experts in nearly 20 countries onArab Spring. Some Chinese analysts saw thefive continents to solicit reactions to the initialArab Spring as the beginning of a very chaoticdraft of Global Trends 2030. Governmental andperiod and disorder, including unintendednongovernmental institutions in several of the consequences. For Russian analysts, the emergingcountries we visited also have undertaken similarstrategic environment was not just multipolar butstudies. Thus we took the opportunity to gainalso multi-civilization. Our Russian interlocutorsa better understanding of how others view theexpressed concern about the potential forfuture. Obviously, it would be impossible to capture increased global instability created by extremistsall the reactions to our very wide-ranging draft in the Muslim civilization. Our UAE interlocutorscovering a large number of topics. However, athought there was no such thing as a moderatenumber of common themes surfaced from thejihadist, and some doubted whether the Arabnumerous discussions:uprisings would lead to democracyeven over the longer term.Too Much Optimism? To many, the draft appearedtoo optimistic about likely progress from trends Consumerism Run Amok? Most everyone agreedlike individual empowerment and technologicalthat the rising middle classes were a key megatrendadvances. One critic stated, I am puzzled about with momentous implications. However, someyour optimistic view on the Internet because onparticipants, such as those from Brazil, cited theone side the Internet could carry irrational things, likely environmental stresses from growing resourcenot only ideology but crazy cults. One participantconsumption by the middle classes. One saw ansaid that, we tend to think that when people have ecological disaster happening simultaneously withaccess to more goods and services, they will calmthe rise of the middle classes.down, but when they have more they have risingexpectations. New generations do not have theChina. China was a key theme in all the discussions,patience to work for 20-30 years to get rich so they as much outside China as inside. Some thought thewill be destructive.initial text emphasized the country too much, but others wanted an even more fulsome treatment,The World Looks More Like Hobbes than Kant:seeing China as it own game-changer. For someMany felt that the initial draft did not adequatelyChinese analysts, it is the best of times and theaddress identity politics. One reviewer opined,worst of times in China. Corruption is at its worst. Inindividual power could be balanced by collective2030, the situation will be better including in politicalempowerment. Another said, The growing risereform. African analysts said that as Africans, weof the politics of identity... leads to fragmentation need to decide what we want from China and beincluding within states. This does not lead to strategic, not leave it to them to set the rules ofconvergence of values because the politics ofengagement. Indian analysts worried about theiridentity is to differ with others rather than find own position as the economic and technological gapcommon ground. Another thought that, religious with China widens. Most agreed with the point madeobscurantism, sectarianism and strife (could) throwin the text that the US-China relationship is perhapsentire regions to the past. Commenting on the the most important bilateral tie shaping the future.section in the work about social media expandingthe roles of Muslim women, one participant stated,Global Trends 2030: Alternative Worlds 4 26. Future of Europe. More than in reviews of previousdefenses. Many anticipated further nuclearGlobal Trends works, Europe was a lively topic forproliferation and questioned whether stablediscussion. The Russians saw an even greater need multipolar nuclear deterrence would be achieved.for partnership with Europe and stronger US-Russian Indian analysts talked about the need to think aboutties to ward off growing instability. Many European a new extended commons which would includeinterlocutors saw fragmentation as summing up cyberspace, outer space, and maritime space. OurEuropes future, while some European businessmenAfrican interlocutors particularly worried aboutstressed the likelihood of fiscal integration and the climate change creating new social and economiccontinued importance of transatlantic economictensions that could flare into civil conflict.ties to the global economy. Outside of Europe,participants raised the possibility of decline with Continuity as well as Change in the Internationalmany in Africa worrying that Europes decline would System. Most saw momentous, historic changeslead to too much dependence on China and otherunderway, sharing our view that the rapid changeemerging powers.makes it difficult to forecast the future of theinternational system in 2030. One expert succinctlyAmbivalence Toward the US. Many saw the commented, old is gone, new is not here yet.need for a strong power like US to uphold the Many worried about a chaotic situation in the futureinternational system: according to some of ourfor the international system which would no longerRussian interlocutors, the US never will stop beingbe rules-based but interests-based. However, aa world superpower guaranteeing the world ordernumber saw some continuity. As one said, Wethere will not be isolationism... Nevertheless, think the system of international relations will besome disputed whether the US had been a goodmore polycentric, although with the same hierarchysecurity provider. The US has been the instigator of of powers. Our Chinese interlocutors stressedconflicts like Iraq, and the US has been involved inthat it would take decades for China to catch up tomore wars since World War II than anyone else. the US: China will not be the United States peercompetitor in 2030. Most agreed that nonstateThe Governance Gap. The need for better actors were gaining power, but some disputedleadership and governance was a universal theme,whether they will ever come close to wielding aswith most analysts bemoaning the lack of it in theirmuch power as governments.regions. The state is becoming bigger everywherebut less capable and powerful... Some Chinesesaw major disruptions: if there is no globalgovernance in 2030, we will still need to satisfyour economy with resources. As there is no globalgovernance mechanism, it could be a crisis.Increasing Risk of Conflicts. Participants worriedthat the number of conflicts could increase in thefuture. Some Russian analysts noted that futureconflict will be characterized by new areas ofmilitary potential, including cyberweapons, themilitarization of space, a precision global strikecapability, and non-nuclear anti-ballistic missileGlobal Trends 2030: Alternative Worlds5 27. CHAPTER 1M e gat r e n d s 28. Four overarching megatrends will shape the world in 2030: Individual Empowerment. The Diffusion of Power. Demographic Patterns. The Growing Nexus among Food, Water, and Energy in combination with climate change.These trends exist today, but during the next 15-20 years they willdeepen and become more intertwined, producing a qualitativelydifferent world. For example, the hundreds of millions of entrantsinto the middle classes throughout all regions of the world create thepossibility of a global citizenry with a positive effect on the globaleconomy and world politics. Equally, absent better managementand technologies, growing resource constraints could limit furtherdevelopment, causing the world to stall its engines.Underpinning the megatrends are tectonic shiftscritical changes tokey features of our global environment that will affect how the worldworks. (See table on page v.) 29. MEGATREND 1 for a long time, but the rate has been declining with population growth. Significant numbers of people have individualbeen moving from well below the poverty threshold empowerment to relatively closer to it due to widespread economic development. Absent a global recession, the numberIndividual empowerment is perhaps the most of those living in extreme poverty is poised to declineimportant megatrend because it is both a cause and as incomes continue to rise in most parts of the world.effect of most other trends including the expandingThe number could drop by about 50 percent betweenglobal economy, rapid growth of the developing 2010 and 2030, according to some models.countries, and widespread exploitation of newcommunications and manufacturing technologies. Numerical declines of those living in extremeOn the one hand, we see the potential for greaterpoverty in East Asia, notably China, have alreadyindividual initiative as key to solving the mounting been substantial, and the number is expected to dropglobal challenges during the next 15-20 years. On thefurther owing to rapid economic growth. The numbersother hand, in a tectonic shift, individuals and small are also expected to drop rapidly in South Asia andgroups will have greater access to lethal and disruptive the Middle East as well as North Africa. In Sub-Saharantechnologies (particularly precision-strike capabilities,Africa, however, the average person living in extremecyber instruments, and bioterror weaponry), enabling poverty will remain about 10 percent below thethem to perpetrate large-scale violencea capability extreme poverty threshold during the next 15-20 years.formerly the monopoly of states. (See pages 67-70 forfurther discussion.) ... we see the potential for greaterIndividual empowerment will accelerate substantiallyindividual initiative as key to solving theowing to poverty reduction and a huge growth of the mounting global challenges during theglobal middle class, greater educational attainment,next 15-20 years.and better health care. The growth of the middle classconstitutes a tectonic shift: for the first time, a majority Under most scenariosexcept the most direof the worlds population will not be impoverished,significant strides in reducing extreme poverty will beand the middle classes will be the most importantachieved by 2030. However, if a long global recessionsocial and economic sector in the vast majority of occurred, the 50 percent reduction of those livingcountries around the world. The ability of individuals in extreme poverty would be more than halved: asto affect governance will be enabled by many existingmany as 300 million more people would remain inand yet-to-be-developed communications technologies. extreme poverty and experience malnutrition. UnderDespite the greater empowerment of individuals, many low-growth scenarios, smaller reductions in thewill not feel secure owing to intensified competitionextreme poverty rate would occur and fewer newfor jobs.entrants would join the global middle class.POVERTY REDUCTIONAN EXPANDING GLOBAL MIDDLE CLASSToday about 1 billion people globally are living inMiddle classes most everywhere in the developingextreme poverty, earning less than $1.25 a day,a and 1 world are poised to expand substantially in termsbillion are undernourished. The number of those living of both absolute numbers and the percentage of thein extreme poverty globally has been relatively stable population that can claim middle-class status during the next 15-20 years. Even the more conservativea Extreme poverty is defined as earning less than $1 per day atmodels see a rise in the global total of those livingpurchasing power parity (PPP); most recently rebased to $1.25 per day. in the middle class from the current 1 billion orGlobal Trends 2030: Alternative Worlds | MEGATRENDS8 30. Shares of Global middle-class consumption, 2000-2050Percent100Others European Union90 United States80 Japan70 Other Asia60 India China504030201002000 2010 2020 20302040 2050Source: OECD.so to over 2 billion people.a Others see even moremiddle class will be faster than elsewhere in thesubstantial rises with, for example, the global middlerapidly developing world, but the base is now very low.class reaching 3 billion people by 2030.b All theanalyses we reviewed suggest that the most rapidEstablishing the threshold for determining whengrowth of the middle class will occur in Asia, with someone is middle class versus climbing out of povertyIndia somewhat ahead of China over the long term. is difficult, particularly because the calculations relyAccording to the Asian Development Bank, if China on the use of purchasing power parity. Most newachieves the new plan target of increasing household members of the middle class in 2030 will be at theexpenditures at least as rapidly as GDP, the size oflower end of the spectrum. Their per capita incomesits middle class will explode with 75 percent ofwill be still rated as poor by Western standards evenChinas population enjoying middle-class standardsthough they will have begun to acquire the trappingsand $2/day poverty will be substantially wiped out.of middle-class status. Growth in the number of thoseGoldman Sachs in its study of the global middle class living in the top half of the range of this new middleunderlined that even not counting China and India,classwhich is likely to be more in line with Westernnew [middle class] entrants would still be larger than middle-class standardswill be substantial, risingthe world has seen for many decades. Multiple studiesfrom 330 million in 2010 to 679 million in 2030. Muchproject that the rate of growth in the size of Africas of the future global leadership is likely to come fromthis segment.a There are multiple applicable definitions of what constitutesmembership in the middle class. The International Futures model that weThe rapid growth of the middle class has importantuse in this report focuses on per capita consumption expenditures ratherthan GDP per capita. In that model, middle-class membership is definedimplications. Demand for consumer goods, includingas per capita household expenditures of $10-50 per day at PPP. Goldmancars, rises sharply with the growth of the middle class.Sachs used a comparable GDP per capita of $6,000-30,000 per year, whichyields a similar estimate of 1.2 billion middle-class people in the world inThe Goldman Sachs study indicated that resource2010. Kharas (OECD study) calculated the number of those in the middleconstraints are going to be arguably tighter than theyclass at 1.85 billion in 2009; Ravallion (World Bank) calculated that 2.64billion people were in the middle class in 2005.b The source for this estimate is a 2008 Goldman Sachs study.Global Trends 2030: Alternative Worlds | MEGATRENDS9 31. were in late 19th-century Europe and the US whenand be dwarfed by the wave of new middle-classthe middle classes also made enormous gains. consumers (see graphic on page 10) in the developing world. Slower economic growth among many OECDMore generally, values shift and demand forcountries will further ingrain the perception of asociopolitical change rises as more individuals move struggling Western middle class that also faces greaterup into the middle class. Historically, the rise of middle competition from an increasingly global employmentclasses has led to populism and dictatorships as well as market, including competition for jobs requiring higherpressures for greater democracy. The value of $12,000skills. Some estimates, for example, see middle-classGDP per capita income is sometimes considered to beconsumption in North America and Europe only risingthe level above which democracies do not revert to by 0.6 percent a year over the next couple of decades.authoritarian systems. In contrast, spending by middle-class Asian consumers could rise 9 percent a year through 2030, according toWith the expansion of the middle class, income Asian Development Bank estimates.inequalitieswhich have been a striking characteristicof the rising developing statesmay begin to lessenEducation and the gender gapin the developing world. Even if the Gini coefficients,which are used to measure inequalities, decline in The educational sector is likely to be both the motormany developing countries, they are still unlikely and beneficiary of expanding middle classes. Theto approach the level of many current European economic status of individuals and countries willcountries like Germany and Finland where inequalitygreatly depend on their levels of education. Theis relatively low. average years of completed formal education in the Middle East and North Africa are likely to rise from about 7.1 to more than 8.7 years. Moreover,All the analyses we reviewed suggest that the level for women in that region could rise from the most rapid growth of the middle class 5.0 to 7.0 years. Women throughout much of the will occur in Asia, with India somewhat world are steadily narrowing the gap with men in ahead of China.years of formal education and have moved ahead in enrollment and completion rates in upper-middle andThat said, a perception of great inequality will remain, higher-income countries.particularly between urban- and rural-dwellers,motivating a growing number of rural-dwellers to The closing of the gender gap on educationalmigrate to the cities to seek economic opportunities.attainment (and health outcomes as well) during theTheir chances of becoming richer will be substantially past couple decades has had limited effect, however,greater in cities, but the increasing migration to urban on narrowing differences on economic participationareas will mean at least an initial expansion in the and political empowerment. Increased entry andslums and the specter of poverty. If new middle-classretention of women in the workplace will be aentrants find it difficult to cling to their new statuskey driver of success for many countries, boostingand are pulled back toward impoverishment, they will economic productivity and mitigating the impactspressure governments for change. Rising expectations of aging. Better governance could also be a spinoffthat are frustrated have historically been a powerfulof greater political involvement of women, as somedriver of political turmoil. studies suggest participation of women in parliament or senior government positions correlates strongerThe increase in the overall numbers of the middlewith lower corruption.aclass worldwide disguises growing pressures on themiddle class in Western economies. The share of global a For more on the role of women as agents of change in the economic and political spheres, see previous Global Trends worksGlobal Trendsmiddle-class consumers from the US will decline2020: Mapping the Global Future, pp 38-39 and Global Trends 2025: A Transformed World, pp 16-17.Global Trends 2030: Alternative Worlds | MEGATRENDS10 32. According to the World Economic Forums GlobalGender Gap Index,a only 60 percent of the economic How Social Media Are Accelerating thegap and only 20 percent of the political one have been Process of Individual Empowermentclosed globally in 2012. No country has completelyclosed the economic participation or the political Muslim women have historically lagged inempowerment gap, but the Nordic countries have educational skills and integration into thecome closest to gender equality. Their cases are market economy. More recently, they haveinstructive of the time and effort involved in achieving become prolific users and consumers ofparity. Most Nordic countries enfranchised women social media. Although some data points to arelatively early (in the early 20th century), and many connection between online participation andpolitical parties introduced voluntary gender quotas radicalization of Muslim women, indicationsin the 1970s. The quotas have led to a high number ofof female empowerment and solidarity arewomen parliamentarians and political leaders in thosefar more plentiful. Muslim women are usingsocieties. The Nordic countries also have promoted online communities to reach beyond theirhigh female employment participation rates through everyday social networks into safe spacesgenerous childcare and maternity policies, which has to discuss such issues as womens rights,contributed to higher birth rates. gender equity, and the role of women within Islamic law. Participation in online and socialLooking ahead to 2030 using the International Futuresmedia platforms hinges on income, literacy,model suggests that pace of change will continue toand access. As these expand by 2030, abe slow in all regions. The Middle East, South Asia, growing number of Muslim women are likely toand Sub-Saharan, which start from a relatively low participate in online forums, potentially affectingbase of economic and political gender parity, will their societies and governance.continue to lag other regions. The fastest pace inclosing the gender gap is likely to be in East Asia andLatin America. The gap almost certainly will remain of the impact of such technologies on governance.)significantly narrower in high-income countries inThe spread of smartphones in Africa during the pastNorth America and Europe in 2030, where the gap isfew years65 percent of the continents populationalready smaller than elsewhere. now has access to themhas been particularlyimpressive. Now millions of Africans are connected tothe Internet and the outside world, and they are usingROLE OF COMMUNICATIONSsuch technologies to mitigate deep-seated problemsTECHNOLOGIESsuch as waterborne illness, which have slowedEmerging technologies such as second-generation development. For example, an innovative program inwireless communications (smartphones) are alsowestern Kenya to distribute water filters and stop thelikely to accelerate the empowerment of individuals,use of contaminated water involved using smartphonesintroducing new capabilities to the developingto monitor changes in behavior.world in particular. The second wave of wirelesscommunications engenders a reduced need for IMPROVING HEALTHdeveloping countries to invest in and build expansive,costly communications infrastructures. Such By 2030 we expect to see continued progress ontechnologies will reduce the urban-rural split that healthincluding extending the quality of life forcharacterized first-wave technologies, especially inthose aging (see discussion on pages 98-102). Evendeveloping countries. (See pages 55-56 for discussion in the face of the HIV/AIDS epidemic, the globaldisease burden has been shifting rapidly for severala World Economic Forum Gender Gap Report 2012 is available athttp://ww3.weforum.org/docs/WEF GenderGAP Report 2012.pdf.Global Trends 2030: Alternative Worlds | MEGATRENDS11 33. decades from communicablea to noncommunicableideas of scientific reason, individualism, seculardiseases. Absent a virulent pandemic (see box on pagegovernment, and primacy of law to societies seeking14), global deaths from all communicable diseases the Wests material progress but reluctant to sacrificeincluding AIDS, diarrhea, malaria, and respiratory their cultural identites and political traditions.infectionsare projected to decline by nearly 30 Managing the intensifying interaction of traditionalpercent by 2030, according to our modeling and other political, religious, and cultural norms with thestudies. AIDS appears to have hit its global peak ideologies of the globalizing West will be a corearound 2 million deaths per yearin 2004. Greatchallenge for many rapidly developing societies,strides are being made toward wiping out malaria,affecting prospects for global and domestic governancebut past periods of progress have sometimes givenand economic performance through 2030.way in the face of donor fatigue and growing diseaseresistance to treatment. Nevertheless, in Sub-SaharanAmid this fluid ideological landscape, the WestsAfrica, where the provision of health-care services hasconception of secular modernity will not necessarilytraditionally been weak, we believe the declining totalprovide the dominant underlying values of thedeaths from communicable diseases and the increasing international system. The persistence, if not growthnumber from noncommunicable causes (such as from and deepening, of religious identity, growingheart disease) will cross over in about 2030.environmental concerns, and resource constraints, and the empowerment of individuals through new communications technologies are alreadyBy 2030 we expect to see continued providing alternative narratives for global politics. progress on healthincluding extendingAs non-Western societies continue their economic the quality of life for those aging. transformation, the prospect of a retrenchment along religious, ethnic, cultural, and nationalistic lines couldElsewhereeven in other parts of the developingfuel dysfunction and fragmentation within societies.worlddeaths from chronic maladies such as Alternatively, the intersection of Western ideascardiovascular disease, cancer, and diabetes have been with emerging states could generateparticularlypreponderant for some time, and the ongoing progress over timenew hybrid ideologies that facilitateglobally against noncommunicable or chronic diseases collaboration in an expanding number of areas, leadinghas resulted in longer life expectancy. With the to increased economic output and greater consensusdramatic reduction of infant and child mortality, due to on global governance issues. The recent EU globalthe continued success against communicable diseasestrends studyb using global survey data saw moreand maternal and perinatal diseases, life expectancy convergence than divergence in norms and valuesin the developing world almost certainly will improve. as diverse peoples confront similar economic andHowever, a significant gap in life expectancy will mostpolitical challenges.likely remain between rich and poor countries. The role assigned to religion by the state and society probably will be at the center of these ideologicalA MORE CONFLICTED IDEOLOGICAL debates within and across societies. ReligionLANDSCAPE especially Islamhas strengthened as a key forceA world of surging middle classes, varying economicin global politics owing to global in