By
Kewill Ludens.
The world is such an unpredictable place that looking far into the future can seem a waste of time.
But it is fun to try plus you can attempt to align your investments with major unfolding trends. Big trends can provide a powerful following wind which helps your investments to be successful. What is certain is that judging by the incredible changes over the last 20 years we can expect plenty of action over the next 20.
I have been reading extracts from a report by Innovaro, reportedly Europe’s leading ‘innovation and insight’ consultancy, called ‘The World in 2027. They anticipate some dramatic developments. They expect China’s GDP (Gross Domestic Product) to have eclipsed the US while India’s economy is storming past France and Germany.
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China has become the second largest driver of technology
As the world’s largest consumer and with an annual military spend of US$250bn China is the second largest driver of global technology development. Biofuels are fast becoming the major source of transportation energy and China’s energy demands are a major strategic concern.
Innovaro see the global population surpassing 8bn (versus 6.67bn presently) and 2027 was the year when the 35 countries in the European Union (by now I suppose including Papua New Guinea and Antarctica) had 50 per cent more people over 65 than children under 15.
Shortage of water has become a more critical issue than oil and water re-use and purification have become major sources of innovation. The rapid acceptance of GM (genetic modification) mean the rapid uptake of high yield rice and grain is finally overcoming the historic imbalance in food distribution. Food as well as phones and finance are widely available across the developing world.
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Average life expectancy passes 90
In Europe the average life expectancy has passed 90. The effects of Parkinson’s and Alzheimer’s are reversible and replacement body parts are commonly available. Neutra-ceuticals have overtaken organic foods and cosme-ceuticals have also become commonplace.
Asia has become dramatically more important with Mandarin the second language of choice for many children. Chinese and Indian firms are amongst the most recognised global brands. McDonalds has noodle bars and Bollywood has replaced Hollywood as the movie capital of the world.
Tele-presence has replaced most business travel and, for those who need to travel, fast European rail is preferred to air travel. Physical solitude is a luxury and disconnecting from an always-connected world has become a tradable commodity.
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The Dow hits 100,000, houses for £1bn
So much for what Innovaro thinks. What else might have happened? Here are some of my ideas. The US Dow Jones will be approaching the historic round number level of 100,000 though by then it may be an outmoded index like the FT 30 share.
The world’s most expensive residential property may no longer be in London but it will cost you; there will be change from £1bn but not that much.
Attitudes to age will have changed dramatically. Anyone under the age of 40 will be regarded as young, middle age will extend to 70 and many people will know somebody who is 100 years old.
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Cancer and heart disease will have been beaten
People will rarely die of cancer or heart disease and with Alzheimer’s reversible (see above) we may see a step change in life expectancy in richer western countries. It will become even harder to tell how old somebody is just by looking at them; that gorgeous blind date you have just met in the bar may be 50, not 25.
You will have thrown away your Zimmer frame, will now have a full head of hair and piercing blue eyes with 20:20 vision unaided by glasses. Your waist size may also be in line with the national average, around 40 inches if you are a man.
You will routinely use cosmetics or cosme-ceuticals and will be as vain as any woman unless, of course, you are a traditional person who has no truck with such modern fads.
In case I am sounding sexist I expect there will have been an explosion in the numbers of women chief executives who will be running some of the most successful businesses.
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Most companies will trade globally
Very few of the shares quoted on the various global stock exchanges administered from London will do a majority of their trading in the UK. It will be almost impossible to invest in strange little regional companies that only do business in one country.
Businessmen may talk to each other over the ether but tourism and second, third and fourth homes will have become huge global activities with massive seasonal movements of people including vast armies from China and India visiting the west and soaring values for longer-established tourist attractions. Large numbers of people in western countries, particularly those from the UK but increasingly elsewhere, will live off the rents generated by their international property portfolios.
Tax competition will be rife forcing tax rates for companies and individuals lower across the world. Fortunately this will generate so much wealth that allied to greater efficiencies what is left of the public sector will be well funded and will finally be delivering good results.
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Underclass still with us as middle class numbers explode
Sadly this will not solve the problem of the underclass. There will still be dramatic disparities between rich and poor although a growing proportion of the world population will be members of an increasingly massive global middle class.
Government administration of strict Sharia law in the Shia part of an Iraq partitioned between Kurds, Shia and Sunni will have convinced the rest of the Arab world that a totalitarian religious life has been hugely over-rated. OK maybe this is a little far fetched!
Most Arab countries will be enthusiastically capitalist and Arabs will have reclaimed their reputation for producing some of the world’s most talented merchants. A strong reaction against fundamentalism will have reduced but not eliminated the problem of terrorism.
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More change and faster too
I could go on and on; you probably think I already have. A key point is that on the basis of the last 20 years we can expect many and probably accelerating changes over the next 20.
This will create a dynamic and potentially highly rewarding backdrop for investors. It is a brave new world out there and it is becoming braver and newer all the time. Remember that 10 years ago Google was not even a twinkle in the eye. Now it is bigger tha
