The Five Forces Defining Our Future
INDEED, THE LAST THREE YEARS SEEM TO HAVE FLIPPED OUR WORLD UPSIDE DOWN
First, the pandemic brought unseen challenges, disrupted our exchanges and constrained our mobility, forcing families and employees into isolation – either by one’s choice or against one’s wishes. Even if global trade was not affected as much as it has been first feared, bottlenecks paralyzed several industries: from semiconductors and car manufacturers to antibiotics – sending prices of few but strategic components and services through the roof. Governments and global companies responded, and the search for self-reliance or, as we called it in Europe – strategic autonomy – has become the new paradigm, first out of necessity, then out of choice. Globalization has been tainted with regional flavor; “just-in-time” being increasingly complemented with “just-in-case”.
Then, the aggression of Russia in Ukraine or, as non-Europeans call it, “war in Europe” sent tectonic waves throughout the world. Exacerbated inflation; bringing food and energy resources scarcity not only in Europe but to its trade partners – basically all the planet, starting with the Middle East and North Africa to South-East Asia. Liquified Natural Gas pulled away from Pakistan, Bangladesh, China and Brazil together with exceptionally mild winter, protected European citizens from energy shortages and blackouts. But it did not protect European industries from decreasing output and losing competitiveness. Offshoring industrial production in search of cheap energy is a looming specter, hunting European decision-makers.
But taking a closer look, both “black swans” – as many people started calling these events – contribute to the acceleration of history but do not change its course. Five forces have been driving the world since the beginning of the century; both the pandemic and the war simply enhanced their consequences.
So, What Are These Five Forces?
First, the technological shift in the digital and energy spheres redefines the boundaries of possibility. Already during the 20th century, our civilization footprint became global. But the last period has been astonishing. 40 years ago, few would have predicted the computer revolution our world is undergoing. 30 years ago, none of us were using Facebook or Google. 20 years ago, few had any idea renewable energy production would develop as dynamically as it is at present. 10 years ago, not many people believed in the future of electric-powered vehicles. Technological advances allow us to make use of tools which were unthought of in the recent past. All this is happening at a pace which is beyond the planning potential of even the largest states in the world – in ways which are transforming international relations, power dynamics and lifestyles being enjoyed by different communities all over the globe.
Second, Asia is gradually becoming the global core in terms of both politics and trade, with the Pacific Ocean becoming a new field of intense rivalry between global superpowers. This is an era-defying change – previously, the key competitions shaping our world took place first across the Mediterranean Sea in the age of antiquity, then the North Sea during the late medieval era, ending up in the North Atlantic during the modern era, and now finally shifting for the first time ever to the Pacific in the early years of the 21st century. On the eastern side of this ocean, we find California and the West Coast of the US, which are home to Apple, Microsoft, Amazon, Alphabet, Nvidia, Meta, and Tesla – seven of the largest companies whose shares are traded on the world’s stock markets. On the other side of the Pacific Ocean is China, its every move being followed by experts from all over the globe – this is home to firms such as Tencent and the Alibaba Group, two more giants from a list of the largest stock trading companies in the world. And Taiwan is home to the biggest producer of semiconductors – TSM, which recently became one of the ten largest companies listed on global stock exchanges. Up until the 2000s, the largest firms in the world dominated the shorelines of the Atlantic, while today eight of ten of these are found on the Pacific coast. The political and economic world order now depends mostly on what happens in the Pacific region.
Third, new resources necessary for the technological shift, such as copper, lithium, nickel, manganese, cobalt or rare metals indicate a completely new global energy geopolitics. The shift from hydrocarbons to these resources will create new giants and challenge existing ones. Middle East needs to readjust its wealth sources while new powers, such as Indonesia, Chile, Bolivia, Australia, and Canada are taking the opportunity to reassess their international position. Of course, Chinese domination is evident when we take into account all necessary components for the energy and electronic revolution. It is even more obvious when we know that that it produces 71 percent of all photovoltaic panels in the world, 97 percent of all silicon plates, 79 percent of photovoltaic cells, and 67 percent of all polycrystalline silicon as well as the fact that China has exceeded 70 percent of the world’s production of all lithium-ion batteries. New supply routes and new cartels already now force US and Chine to rethink their global engagements. From new resources to new geopolitics, the course is launched.
Fourth, shifting demographics with part of the world getting inexorably older and all of the world becoming increasingly urban. Some societies, especially Western but Chinese as well, are expected to experience labor shortages, while some others, especially African and ASEAN are full of youth. If demography is destiny, it marks a possible turnaround in which Europe is further shrinking and South East Asia growing even faster. Then urbanization brings a completely new landscape for the future of humanity. In the year 1800, 80 million people lived in cities. This number has increased forty-fold over the past 200 years – today, 3.5 billion people live in urban areas, a number predicted to keep growing in the near future. By the mid-21st century, it is estimated that cities will be home to two out of three of the world’s ten billion inhabitants.
Fifth, the globalization of values provokes a reaction and some people question such universalism aspiring to redefine or rediscover their own. In part, it is also the outcome of aspirations to redefine the spheres of influence global superpowers have, just as local identities are being reclaimed in the struggle for self-sufficiency. From the “End of History” to “Identity: The Demand for Dignity and the Politics of Resentment” – this shift is well illustrated by Francis Fukuyama’s books, respectively from the beginning of the 1990s and 2018. Pax Americana is being questioned. Old powers, such as Russia are being challenged. New, regional powers, such as Turkey, Iran, Saudi Arabia, and Indonesia struggle to find their place and aspire to redefine the new world order.
The five forces were here before the Covid and the war in Ukraine. They will continue to shape the world. And new “black swans” will be enhancing their impact. Progressively intertwined by the technologies we use the world we enter in 2023 will be also increasingly fragmented politically. This will definitely not be a “boring time to live”. ©℗
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