Picture a world with more grandparents than grandchildren in most countries, especially Western ones. An era when the number of middle-class shoppers in Asia outnumber the number in the U.S. and Europe—put together. Where women control more of the planet’s wealth than men. Where there are more robots than humans in the world’s factories and computers, and sensors vastly outnumber human minds and eyes on Earth.
That world is about a decade away— and may arrive even sooner thanks to subtle transformations being unleashed by Covid-19.
That, at least, is the prediction of Wharton professor Mauro Guillen, author of the forthcoming 2030: How Today’s Biggest Trends Will Collide and Reshape the Future of Everything (August 2020, St. Martin’s Press). He sees a world that’s changing right before our eyes, but in such an evolutionary rather than revolutionary way that it will surprise most of us when it finally “arrives.” In hindsight, these changes will be decades in the making.
And while some crises are clear turning points in history, disruptions like the Black Death of the 1300s or the Great Depression of the 1930s, where everything before is swept aside and a new order emerges, don’t believe the hype: The coronavirus pandemic is not one of those times, argues Guillen. “I think it is an empirical question, and we need to be analytical about,what things are changing in the world right now as a result of this crisis and whether those trends are a continuation of previous trends that we had identified before or not,” he told Corporate Board Member recently.
So what are the biggest shifts to which we should be paying attention? They’re driven by demography. Birth rates are falling, which will lead to an older population in many areas of the world. Most business people are aware of this shift—and it’s implications.
What you may not have contemplated, says Guillen, are the implications of the trend behind that trend. Falling birth rates are being driven by women deciding to stay in school longer and pursue careers all over the world. The result: “Before you realize it, there will be more female millionaires than male millionaires.”
This trend will also fuel the growth of urban areas (where more of the world’s populations will cluster as they look for better jobs), expand the global middle class and accelerate more urban—and aspirational—lifestyles. These will feed more technology disruption and so on.
Each trend will drive the next in reinforcing loops, in obviously-connected and unexpected ways alike. Global tastes will become even more female-driven and Asian than male and western, as businesses push to capture these growing markets. Meanwhile, many of these expanding urban areas are often clustered along coasts, in hot climates. They will be more vulnerable to rising sea levels and higher temperatures.
Where does he see the biggest impacts?
Smaller families reshape markets—and nations. People usually postpone major decisions when faced with uncertainty. Having a baby is a huge financial commitment, and a recession will force many to reconsider whether the timing is right. In addition, the virus will reduce immigration, especially to the U.S. and Europe, further slowing birth rates in these regions, impacting everything from consumer spending to stressing social safety nets, like Social Security and Medicare. “On both counts, we’re going to see an intensification of that trend,” says Guillen.
Generational divides expand. With Europe and East Asia composed of an older age cohort and Africa and South Asia experiencing a baby boom, the share of the world’s population moving to the latter will only accelerate if the Covid-19 mortality rate among the old continues at the pace we are witnessing, with financial and other impacts.
Large-scale automation happens. Covid-19 is providing the manufacturing, service and transportation sectors with more incentives to automate than ever. The risk of disrupted operations and supply chains due to illness will tip the scales on the costs of conversion. “Inevitably, some people will lose their jobs, and you know who they are,” says Guillen. “They tend to be people in their 50s with skills that are not really employable. They can’t find jobs. That contributes to economic inequality.”
Women rise (a bit) faster. One of the big takeaways from Guillen’s book is the enormous changes that will come about in the next few years thanks to the increasing wealth of women. Covid could speed that change—a bit. Why? So far, Covid-19 has killed men at nearly two times the rate that it kills women. And it mostly affects people above the age of 60. It won’t be a “dramatic” change, but “I would say that it may get accelerated as well, as a result of this crisis,” says Guillen.
Emerging economies truly emerge. According to the IMF, emerging economies this year are projected to grow by about 2 percent. That’s paltry, yet the U.S. should have -5 percent GDP, Europe, -7 percent. “Asia is worse off than it was before the pandemic, but they’re going to keep growing, whereas we’ll just be shrinking in economic size,” Guillen says. “So, that’s only going to accelerate their rebalancing of geopolitics in the world based on the size of economies.”
Online wins the customer. Social distancing and “sheltering in place” are already intensifying shifts toward online shopping, virtual communication and digital entertainment. That will increase, and it will not be reversed. Banks, for example, are already seeing an unprecedented acceleration away from physical branches, with knock-on impacts for finance, real estate and the labor market. “This is a big experiment, and people have been forced to use the online channel given this crisis. And the learning, the experience, that is going to stay with them forever.”
Income inequality and health. The working poor and the homeless are unlikely to have access to good healthcare, and their immune systems may already be compromised due to poor diets or insalubrious living conditions. While the virus won’t discriminate by income or healthcare coverage, people at the bottom of the socioeconomic pyramid are far more exposed to the consequences of infection. This will have long-term, perhaps multigenerational, consequences.
His best advice for contemplating all this change? Avoid linear thinking, which blinds you to the “unexpected and unusual” and instead “approach the problem laterally.” By that he means reframing questions and attacking problems sideways. “Breakthroughs occur not when someone works within the established paradigm, but when assumptions are abandoned, rules are ignored and creativity runs amok.” Now that sounds like an agenda item for your next board meeting.