Drivers of change

Demographic Shifts

Current demographic projections indicate that population growth will slow down and humanity will reach its peak population in 2080s. However, these changes are not uniform across the globe. Developed economies face contracting populations and rapid ageing, while less developed countries are still experiencing significant growth. Simultaneously, longevity is predicted to increase, leading to the necessity of reviewing social policies (retirement age, healthcare) in developed economies. The demographic dynamics result in a significantly better outlook for growing economies due to larger working populations but are simultaneously threatened by climate change and insufficient social infrastructure to sustain a bigger population.

Migration

Changing demographics will encourage migration from growing, poorer countries into ageing, developed ones. In addition, due to global warming, significant parts of poor sub-Saharan and Asian areas might become uninhabitable, further fueling migration into cooler, northern areas. As migration is currently one of the most polarising topics, tensions in developed societies are expected to rise. Urbanisation is another aspect of migrating populations, especially visible in the developing world, where only bigger cities offer social infrastructure. Population growth, coupled with the desire to move to cities with better education, jobs, and healthcare, will create pressure on existing infrastructure and require significant investment from local governments, where finding funding will be challenging.

We are observing unprecedented progress across multiple technologies that will converge to create an interconnected world. AI, Virtual Reality, Web 3.0, and Quantum computing, working jointly, will drastically change human capabilities. Whether it's creating new materials, exploring new energy sources, increasing longevity, or mass automation, progress will be seen across multiple disciplines. As these technologies are interconnected (e.g., Web 3.0 and quantum computing are enablers for AI), their development will not follow a linear path; some major breakthroughs can be expected to arise in a short timeframe. The race for supremacy will be very much focused on technological capability, creating further tensions not only on the political but also on the social level.

AI

The rise of Generative AI has captured the world's imagination. Its applications, from chatbots to content creation, offer a more intuitive, human-like interaction with technology. With the exponential growth of data, the interconnectedness of systems, and the advent of quantum computing, AI's capabilities are set to expand far beyond what we can currently envision. Big Tech companies, once fiercely protective of their AI models, are increasingly embracing open-source approaches, inviting collaboration and innovation from a global community. This shift, coupled with the rise of no-code platforms, is democratising access to AI development, empowering smaller players, and potentially reshaping the IT landscape towards insourcing. However, this rapid progress is not without its challenges. Concerns about the quality of AI-generated output, biases embedded in training data, and the environmental impact of its massive power consumption are growing. AI security could also impede progress for AI with its new wave of cyber risks like sophisticated impersonation, prompt injection attacks or data poisoning. Following Generative AI, the rise of Predictive AI looms large, promising an even greater transformation, with predictions estimating 50-80% of jobs being affected by AI in the next 10 years.

Web 3.0

Web 3.0 is the next iteration of the internet or World Wide Web, based on the concepts of decentralization and the semantic web, underpinned by blockchain technology. While Web 2.0 gave users the capability to create and share their own content, Web 3.0 promises that users will be able to control their data and have transparency on its use; therefore, it may challenge today's big tech companies. Web 3.0 is seen as an enabler of decentralized finance (DeFi), smart contracts, and asset tokenization—concepts that are very relevant to financial services. Semantic content will also help AI models to better understand the data exchanged.

Quantum 

Quantum computers use quantum mechanic principles to solve very complex problems. The technology is still in development, with both big-tech companies and states investing in R&D in this space. Quantum computing is seen as the ultimate enabler for AI—speeding up training, improving performance, and decreasing the resources required to run AI models. Quantum sensors will deliver detailed and very accurate data to further enable AI data analysis. On the other hand, quantum computing poses a security threat to existing encryption methods and may cause further division and inequality between advanced and emerging economies due to significant investment required to develop the infrastructure and knowledge.

Climate Crisis

Experts warn that we may reach a point of irreversible damage to the planet within the next 25 years. The effects of the climate crisis are already being felt worldwide, with extreme weather events becoming more frequent and rising temperatures forcing communities to relocate. As the crisis deepens, access to vital natural resources like water is dwindling, and the degradation of fertile land is threatening agricultural production. The urgency of the situation is undeniable, and the pressure on governments and businesses to take decisive action is mounting. In response, we can expect to see stricter regulations aimed at reducing carbon emissions in the near future. The climate crisis also presents a huge economic challenge, as the cost of transitioning to net-zero and other climate-related investments requires capital that can only be provided by a mix of state and private investment.

Resource Depletion

Our growing population and consumption-driven economy are putting immense pressure on the planet's finite resources, from metals and fossil fuels to everyday materials like wood. Since the 1970s, resource extraction has tripled, and we're currently consuming resources 1.7 times faster than they can be replenished. The risk of disruption to supply chains for critical resources and goods was highlighted in the World Economic Forum's 2024 report. Organisations are racing to develop synthetic alternatives to reduce our reliance on limited natural resources. The clock is ticking, and the race is on to find a balance between our needs and pursuit of growth and the planet's limits.

Increasing Debt 

Public debt has been growing continuously since 2007 across the globe. In recent years, the most significant increase in public debt was observed in developing economies. The expectation is that public debt will continue to grow, both in developed, ageing nations due to increased healthcare costs and financing the net-zero economy, and in emerging economies due to the increased cost of infrastructure projects. However, while spending in developed nations may not initially increase productivity, infrastructure projects in emerging economies could bring productivity gains. High debt levels will challenge governments, restricting their ability to invest in new technologies and potentially ceding ground to big tech companies.

Interconnectedness

Technology has enabled new digital, easily scalable, and global business models, fueling the rise of mega-companies. These mega-companies are highly profitable and, in some cases, are creating oligopolies with not only significant economic but also social influence. At the same time, they deepen economic inequality as they generate profit globally but create value primarily in their domicile locations. The expectation is that global trade in services will further increase in the coming years, as it is still lagging behind the global trade of manufactured goods, leading to increased interconnectedness. Simultaneously, global supply chains affected by COVID-19 and geopolitical conflicts are being reviewed, especially in light of new technologies allowing for lower-cost manufacturing closer to the distribution market. For years now, economic activity has shifted eastward, resulting in a sharp increase in the percentage of global GDP generated by Asian powerhouses (China and India). Although outsourcing of manufacturing might decrease in the future, the growth of Asian economies is predicted to continue, underpinned by stronger local Asian markets and improving quality of products and services developed locally.

Polarisation

Deep societal divisions and starkly contrasting viewpoints on social and economic issues have emerged as a new global norm. This polarisation is fueled and exacerbated by social media algorithms and the spread of fake news, creating echo chambers that amplify existing disagreements. These societal rifts manifest on multiple fronts, encompassing climate change, economic inequality, inclusivity, immigration, ethical considerations, healthcare choices, attitudes towards ongoing military conflicts, and the implications of artificial intelligence. As society fragments and pulls in opposing directions, the landscape for political decision-making and regulatory frameworks becomes increasingly uncertain. Brands also face the challenge of navigating this divided landscape, as they strive to craft messaging and positioning that resonates with diverse and often conflicting audiences. The trend of polarisation has been steadily intensifying over the recent years, and the list of contentious topics continues to expand, painting a complex and challenging picture for the future.

Increasing Conflict

Recent years have brought an escalation of conflicts on the military, cyber, and trade fronts. The war in Ukraine and conflicts in the Middle East have dislocated millions of people and threatened fragile economic relations due to sanctions and disruptions of supply chains. Cyberattacks are becoming more common and severe, whether originating from states or independent hacker groups intending to disrupt or manipulate. The trade war between the US and China has been unfolding since 2018 and might soon include the EU as well. International organisations seem to have less and less influence and ability to de-escalate these situations, presenting a rather grim outlook for the fragile world peace.