It is my intention to attempt to forecast developments in the next five years in the following sectors:
It is my intention to attempt to forecast developments in the next five years in the following sectors:
I have co-authored a book about the global warming scandal regarding the leaked emails from a UK university. I would be pleased if you would consider buying it. My next question is, would you like to see a book called '2020 Vision: A Look at the World Covering the Next 10 Years?'
"The Climategate scandal covered from beginning to end--from 'Hide the Decline' to the current day. Written by two authors who were on the scene--Steven Mosher and Tom Fuller--Climategate takes you behind that scene and shows what happened and why.
For those who have heard that the emails were taken out of context--we provide that context and show it is worse when context is provided.
For those who have heard that this is a tempest in a teacup--we show why it will swamp the conventional wisdom on climate change.
And for those who have heard that this scandal is just 'boys being boys'--well, boy. It's as seamy as what happened on Wall Street."
As you may have noticed my output has slackened. This is not due to a lack of interest in PESTLE topics, but rather to the fact that I have started as a columnist for Examiner.com. I will be writing more frequently there, as I actually get paid to do so.
I welcome your visit there--bookmark me and check back. I get paid by number of visits...
Here's my Examiner home page.
I will continue to post on this weblog--and will probably get back to a semi-regular schedule after the newness of the new toy wears off a bit. Besides, some of the stuff I write here probably wouldn't make it into a daily newspaper column, right?
In the previous 2 posts I identified two desperate needs for China--they need for America to recover quickly and they need their citizens to replace export earning by consumer spending. It must be galling for the Chinese government to realise their fate is in the hands of the Yanks and their own consumers--they've been sober and conservative in their management of China's macro-economy and just got swamped in the tidal wave. But because they are autocratic and cruel, and more concerned with self-preservation than their country's future, I can't muster up much sympathy for them.
But even if both their desperate needs are satisfied (and I do think the American economy will recover quickly), China is still due for what is essentially the same disruptive period that happens in the transition to developed economies that has afflicted all of their predecessors, from the UK to South Korea, and most definitely including the U.S., which had several break points. And here is where Chinese leadership is failing China.
China has other desperate needs. The stimulus they are injecting into the economy is failing to address them. They need clean energy generation far more than the worried West--Chinese people are dying every day due to air and water pollution, and it is saving up trouble for the future to ignore it now. China is introducing a national healthcare scheme--if they don't fix their pollution problems, this scheme will be overwhelmed just dealing with the effects of pollution.
The demography of China is going to start working against them quite soon, as the one child per family rule works through the population figures like a pig through a snake, and China incredibly starts to look like Japan. Preferential abortion to insure that that one child was male will exacerbate this issue starting now. Increasing unemployment makes the idea of bringing surplus males into the military a fairly sane option. Having a larger military will create pressure to justify its existence. And war is not good for developing countries. It slows down useful development and creates a warped sense of priorities.
The consensus shared between Chinese citizens regarding the central government is entirely an economic transaction. We let you rule if we can better our lot dramatically. If the Chinese government does not keep its end of the bargain, this consensus will disappear. I think this will happen over the next 5 years, and considerable turmoil will be the result.
According to Nationmaster, 22% of the world's poor live in China. I don't know if that percentage will increase--times are tough all over--but the raw number most probably will. And this isn't China of 1978, when the entire population was poor. Now, the 100 million who are living on less than $1 a day have middle class neighbours and rich Chinese people on TV.
Why am I so pessimistic about China regarding the next 5 years? These are smart people, industrious and entreprenurial. Well, partly it's because the rest of the world will let them down. In 2007, China's exports were $1.2 trillion. That compares to their total GDP in 2008 of $4.84 trillion. So far this year, exports are down by a quarter. So far during this recession, worldwide job losses are 50 million. Of that number, 20 million are Chinese.
So we have a deteriorating financial situation in a country with brand new access to communications and growing inequality. Sound like a recipe for social unrest? Add in government corruption. China is ranked at the same level as Romania. China is embarrassingly and publicly failing in its efforts to control corruption--this article in Asia Times is just more of the same. And Chinese people now see and hear this every day--and not just in the newspapers, as China has the most internet users in the world, at 300 million.
China desperately needs for its citizens to spend more and save less to compensate for reduced exports. Chinese people are famous for saving. This is the most publicized economic downturn in history, being covered like an American Super Bowl or the World Cup. Does anyone think the Chinese are going to pull their yuan out from under their mattress and buy a Haier TV on the heels of 20 million job losses and 10,000 factory closures? I do not.
More on China later.
China's manufacturers desperately need America to buy Chinese goods. China's government desperately needs America to become more conservative in its economic behaviour, the better to protect Chinese holdings of American debt.
So far, it's the worst of both worlds. America has quit buying Chinese goods, but it hasn't started acting conservatively enough to protect Chinese holdings of Treasuries.
It's a real dilemma. One of several Catch 22's that China faces over the next 5 years. We're going to focus on China for a bit.
We can start with a bit of a contrary view, one written by James Fallow for the Atlantic. Read it. He doesn't really disagree with me that China is going to have a rough 5 years--but he's considerably more optimistic about China's future after that. Well, I am, too, depending on how you define 'after that.' In 25 years, maybe, China will be back on the road to superstardom. But this five year period is going to be so tough for China that it will take 20 years to recover.
Time to look around the intertubes and see if anything is new on subjects I've covered so far.
The Decline of Russia: Well, if anyone needs a second opinion on Russia, I'd refer you to World Affairs, and an article by Nicholas Eberstadt called Drunken Nation: Russia's Depopulation Bomb. Eberstadt takes a much longer and closer look at the demographics destroying Russia today.
Green Technology: Venture capital investment in green technology fell 48% in the first quarter of 2009, to a paltry total of $1 billion in 82 countries. (No comment on how poorly VC investment is doing in other sectors--I'd be surprised if Green Technology fared any worse than anbyody else.) But nobody will even notice, I imagine, as governments around the world have earmarked $400 billion for various green technologies.
Nanotechnology. Two story leads here, reported without comment: 1. An article in the April 2009 The Lancent Infectious Diseases, highlights research being conducted using nanotechnology to prevent, diagnose and treat infectious diseases. Saying that progress in this field is moving at an exponential pace, the author quotes Karin Forsberg-Nilsson, chair of the EuroNanoMed Network Steering Committee, as urging industrial players to collaborate more closely with scientists and clinicians, to shorten the delay from patents to patients. 2. The European Parliament's Environment Committee this week adopted a report that calls for nanotechnology products already on the market to be withdrawn until safety assessments can be made.
Robotics: ADAM is the first robot—but maybe not the last—to have independently discovered new scientific information, according to scientists who recently built themselves the mechanical colleague.
Genetics: Gene mutations that cause infertility in men could point the way to a male birth control pill, American and Iranian researchers say.
That's it for Sunday--more rigorous work on tap for tomorrow.
We've just looked at 8 countries that account for half the population and two-thirds of the GDP in this world. They certainly can serve as a proxy, as they include the BRICs, the U.S., France, the United Kingdom and Japan.
The U.S. looks schizophrenic right now, as companies are laying off workers at the same time their order books are filling up. To say this is typical is to be too kind. US managers have never yet gotten this right, and it doesn't look like they will this time, either.
China's manufacturing seems to be reacting favorably to the huge stimulus package of the government, with sentiment rising into expansionary territory. But there, too, unemployment is rising and set to rise faster. It's hard to track homelessness in China, due to migrant workers who will return to the farms and also to the quake last year that left millions homeless. But they are doubling the number of urban homeless centers, so it must be an issue.
India is just diving into the hard part of the recession, and stronger family ties may cushion the worst of unemployment rates there. But there's no question it's increasing. And although they're trying to put a brave face on it, India's manufacturing activity is decreasing. It could be a lot worse, however.
In Russia, manufacturing output was down 20% year on year in January and 13% in February. Stocks rose! Bloomberg forecasts unemployment in Russia to rise to 12%. That is just going to be really tough--inflation at 13%, unemployment at 20%, and the government having to bail out the oligarchs right and left. Hey, but stocks rose...
In the United Kingdom, manufacturing dropped 4.5% for the quarter after falling 1.8% the previous quarter. Meanwhile, unemployment skyrocketed at the fastest rate in history there, to 6.5%. I think the UK will be first in, last out of this recession.
Japan's PMI is even lower than France's, at 33.8, and even that is an improvement over Februay. Manufacturing activity has declined in Japan for 13 consecutive months. Wow. Unemployment rose to 4.4%, which is high for Japan and a 10% increase in one year.
So yeah, I guess you'd call it anything short of a depression. Countries massage their figures to make them look better. There are a lot of people in really tough times right now. Considering that it looks like it's going to get worse before it gets better, I think my comment in a previous post--that world GDP looks set to decrease for the first time since WWII may actually come true.
According to the Economist, the 8 countries I have selected for further analysis will contribute a negative $648 billion to the world economy this year. The only two countries on my list that they think will grow in 2009 are India (at 5%) and China (6%). The Economist forecasts that all but two (the UK, at -1.1%) and France (0.0%) will return to positive growth the next year. It's the second worksheet in this file, titled The 8. Download Top 10 in 3 categories
I don't really agree with the Economist's numbers for individual countries, but it could be that the net difference is small--as I roughly agree with the numbers for USA and Japan, the big difference is that I think China will go in the tank, but that's for another post.
But if 8 countries wipe more than 1% of world GDP off the board this year, the other 200 countries are going to have to make up for a lot of ground if world GDP is to grow at all in 2009. And I don't see where that growth is going to come from.
So it looks as if, for the first time in a very long time, world GDP may decrease this year. That's big news.
The 8 countries I have chosen for Pestle analysis have 50% of the world's population, 66% of the world's military spending and account for 69% of the world's GDP. We will be developing further statistics on these 8 over the next--indeterminate--period of time, which depends on my work schedule.
The first look shows three countries--USA, France and Brazil--as being in pretty good shape for the next five years, at least in a macro sense. There is no shortage of problems everywhere you look, but there are relative differences. One country, Russia, appears to be a train wreck in progress, while China looks to me like it's heading off a cliff. The United Kingdom appears to be shooting itself, but I can't tell yet if it's shooting itself in the foot or the head. And India--trying to figure out what's going to happen in India is going to be a lot of work. (Anybody want to help?)
We'll take a short break from this type of post for a while, as there are some current event-y type of topics I want to explore. Some of them I will try and relate to this analysis--I don't think I'll get famous for my opinions about global warming, Tim Geithner or other headline generators.
This is the preliminary data collection for a Pestle analysis of the United States, drawn from publicly available information on Wikipedia, the CIA World Factbook and Nationmaster. The United States has the largest GDP in the world, $14.3 trillion. That's almost as much as the next four on the list combined. The United States also spends more on the military than anyone else. A lot more. U.S. spending, at $651 billion per year, is almost 10 times as much as second place China, and about 48% of all military spending is American. It is the third most populous country in the world, with 306 million people.
Well, I guess this is where I get controversial, at least a bit. There are others who have predicted that China was in for a tough ride over the past few years, but they mostly got ignored, or were proven wrong by events. And, to a certain extent, if you cry doom long enough you'll always get proved right, given the laws of entropy. So this is a bit 'faux' controversy...
Once again, these are the topline notes to kick off a Pestle analysis of India--this is very basic stuff culled from Wikipedia, CIA World Factbook and Nationmaster. India is the largest democracy in the world, the second in population, with 1.16 billion people, and 12th in GDP, with $1.23 trillion. India is a country that benefits from having its GDP converted to purchasing power parity, and given the much lower cost of goods and services there its probably accurate to use this, whereas it's not much use for the countries we've looked at so far. At PPP, India's GDP is $3.39 trillion. A lot of that money gets spent on the military--India is 10th in the world with $32.7 billion in annual spend on defence, in no small part due to its nuclear weapons programme.
Once again, this is just note gathering for further analysis, taken from Wikipedia, the CIA World Factbook and Nationmaster. Japan is 10th in the world in population, with 127 million people, 6th in the world in military spending, with $48 million per year, and either second or third in GDP, depending on how you measure it, with $4.84 trillion.
Well, after the lost decade of the 90s, Japan had a brief interlude of mediocre economic performance, to be followed by what looks to be another lost decade. What they've lost is their people. Japan is by some measures one of the richest countries in the world. Their population peaked in 2005 and declined by about 200,000 last year. That decline is set to continue. Their population is also getting older--their median age is 44, compared to 28 for Brazi, and 22% of their population is 65 or older.
Japan has developed a two-tier workforce, with the salaryman in protected jobs with established companies, and temporary workers everywhere else. This second category, almost 30% of the workforce, is getting massacred with the recession going on now.
Their politics is entangled--they've had the same ruling party for 55 years, although that looks set to change, and that's just too long. There is corruption within government, business and even the Yakuza is getting old, fat and lazy--but still powerful. Their signature corporations, the Sonys, Canons and Mitsubishis, got fat and lazy too. Toyota is still getting it done, but doesn't have enough company.
The Japanese live forever, it seems. Their life expectancy is 81 and climbing, and they have 36,000 centenarians 32,000 of them female). With an aging population that is insular and conservative, their attitude towards much-needed immigration is skeptical at best.
The Kyoto Protocol was signed in er, Kyoto, and Japan takes global warming seriously. They lead the world in developing patents for alternative energy generation, and have paid a lot of attention to pollution since Minamata's mercury tragedy.
It wasn't supposed to be like this for Japan.
Okay, here we go with our initial look at France (just a topline summary of major facts, drawn from Wikipedia, CIA World Factbook and Nationmaster). France is 5th worldwide in GDP, with almost $3 trillion, and 3rd (why?) in military expenditure with $61.6 billion, and 22nd in population, with 61 million.
France is the best-positioned of all the countries we will look at here to deal with the economic crisis facing the world. Their ingrained habit of dirigisme will bail out their industry, their nuclear power plants will protect them from energy shortages, while giving them all the street cred they need for global action against greenhouse gases. They have a beautiful geographic location, brilliant public transportation, excellent education and one of the few growing populations in Europe, thanks to generous subsidies for mothers.
One of the key questions going forward will be how France tries to take advantage of this perfect positioning. Their tendency has been to try and control the European Commisssion and get over-represented in multi-national organisations. If they could figure out how to work softly and not piss everybody off, they could really work wonders. But they've never managed to do that, and I'm not sure they'll start now that they are in a privileged position.
France has just rejoined NATO, which should help them militarily and may give them cover to reduce defense spending. Their foreign policy is essentially to work behind the scenes maintaining covert control of the DomToms, their former colonies. Suspicions abound that they were heavily involved in the recent coup in Madagascar, as only the latest example. But they are pretty ham-handed about it all, and what would in a more congenial climate be a source of international support from the DomToms ends up being grudging acquiescence.
Domestically, France grumbles and strikes a lot, but has it pretty good. They have essentially 100% literacy, great schools, very productive workers, and although they can't count ethnicity, there is a tacit assumption that most unemployment occurs amongst the immigrant population stranded in the banlieues.
Nicolas Sarkozy is fortunate in his choice of enemies, as the left has formed a circular firing squad. There has been some high level corruption in France, and continued disclosure may prove embarrassing for the government, although not for Sarkozy. Embarrassment for him tends to be purely personal, as the hot rabbit has ex-lovers all over the place and word gets around.
It could be that fifty years from now people will be saying how blessed it was to be Brazilian in 2014. I don't think they'll be saying that in 2014, however. This is the starting point for a Pestle summary of Brazil. It is drawn on information from Wikipedia, the CIA World Factbook and Nationmaster, and will be developed in detail later.
Brazil is roughly the same size as the United States, and has 62% the population of the U.S.--191 million, 5th largest in the world, and growing at 1.1% per year. Its GDP is $1.66 trillion, 10th in the world. It is blessed in that it does not need to be in the top 10 in military spending, spending a very European 2.6% of GDP on the military. It is energy independent, has a very respectable inflation rate of 6%, and its public debt is an equally respectable 40% of GDP. Rich in natural resources, Brazil is placed to be the major competitor to the United States for owner of the 21st Century. Its people are young, with a median age of 28, with average education of 14 years, and a literacy rate of 88%. So, look out world?
There are a few bumps in the road ahead for Brazil. They are cursed with oil, doubly cursed in that they have had to deal with corruption for quite a while (67% of managers say corruption in Brazil is a major business constraint). Lula da Silva has done a magnificent job since 2003, but he has not been able to clean out the stables completely, and having a history of corruption and a windfall discovery of oil has been a curse for countries ranging from Russia to Nigeria. They are also stuck with the Amazon, in the sense that the rest of the world will demand they take good care of it, but probably won't pay Brazil to do so. Perhaps most importantly, Brazil is in a part of the world that is almost guaranteed to be troubled, fractious and even combative over the next few decades, and this will bother Brazil more than it would after a few more decades of development.
With Embraer and a few others, Brazil is beginning to develop indigenous technology suppliers, though they need a lot more. They need to work on their higher education, but are coping for the moment by sending the children of the elite abroad for education. They have class and racial issues, but seem to be coping with them far better than many other countries.
The oft-repeated joke about Brazil is that it is the country of the future--and always will be. I think this is the last period that that joke will be relevant.
Again, this is a first sort--just an overview that will back up further analysis. The United Kingdom is 23rd in world population, with about 61 million people. It is 6th in GDP, with about $2.9 trillion. And it is 4th in military expenditure, with about $61 billion per year. (Statistics as usual compiled from Wikipedia, CIA World Factbook and Nationmaster).
Politically, it seems as if the string has run out on Labour, and the Conservatives will in all probability take over in late spring of 2010. David Cameron, a pleasant man who sadly just lost a son, will inherit a mess. In the same way that current Prime Minister Gordon Brown has tried to micro-manage his government, his government has been trying to micro-manage the United Kingdom. There are local councils in England that put microchips on people's garbage bins to check if they are throwing out the right stuff. Scotland's National Party's long term plans to split off from the UK are on indefinite hold due to the economic downturn.
Economically, the UK had too many eggs in one basket--too much of their economy is based on complex financial services--read U.S. sub-prime mortgages... and they are taking a worse hit to their economy than most developed countries. The recession will bit deeper and last longer here than in most countries.
Socially, this class-conscious society will carry on, with too big of an underclass being supported by too small of a middle class. One tends to think it will boil over at some point, but the stolidiy and placidity of England seems never ending. Immigration has subsided as the issue, replaced by the recession and its effects on home prices. The NHS, the state-supported healthcare system, has improved dramatically, although it could still get a lot better, and people know it.
Technologically, the UK is still a hotbed of innovation and still resolutely unable to exploit it. Oxbridge (Oxford and Cambridge) still are 2 of the top 10 universities in the world, and the Russell Group of universities rival the Ivy League in America. The UK government makes a real effort to encourage entrepreneurs, up until the time they actually invent something, at which point they almost all sell out to foreign companies with capital. In that, they are only following the example of too many larger UK companies.
Legally, the UK has more problems than they care to admit. There is corruption in high places--witness BAE's dodgy deal with the Saudis some years back, a deal that still goes uninvestigated. There are also worrying signs of the UK backing away from important freedoms, such as jury trials. Terrorism is being used as an excuse for taking away too many liberties.
Environmentally, the UK is clean and green and worried about CO2. They have made some of the most ambitious pledges about going even greener, and nobody knows how they are going to pay for them.
It is easy--maybe too easy--to predict a return to the era of moth-eaten sweaters and shabby bedsits for the UK. They're actually too smart and too hard working for that to be a guarantee. But the middle classes need to develop a mechanism for expressing political will--right now, the only voices heard are the protestors. There is no real voice for most of England. Until that develops, they will flounder.
GDP: 8th in the world 2009, 1.75 trillion
When looking at international trends, it doesn't make sense to look at 295 different countries. If you want to look at economics, the top 10 countries make up about 75% of world GDP at nominal rates. Similarly, the top 10 countries hold about 59% of the world's population (note that it's not the same 10 countries). And for military spending, the top 10 account for 75% of the total. If you capture strong trends in these, it will have a marked influence on the total--especially as the big spenders for military are also the big exporters, and the top GDP producers also account for a good chunk of FDI.
Five countries are in the top 10 in all three categories: The United States, China, India, Russia and Japan. (Hmm. Three from Asia... fits right in with current thinking about the Asian century...). Those five should occupy most of our time, then. We should also look at Brazil because of its potential, and France because of its achievement--and I like to throw in the UK, because of its history and the Commonwealth. Which gives us eight countries to explore in depth. Adding those extra three also increases the total percentage of world activity covered on this weblog. I will try to look at each of these under each of the PESTLE categories, and then I'll tend to look at regions to try and give a bit of decent coverage overall.
But! I do take special requests. A lot of people visiting this blog are using country specific search terms and PESTLE. Toss a request my way and we'll see what happens.
Well, for those readers who have been slightly numbed by the technology focus of recent posts, this may be a welcome change. It's time to look at American politics over the next 5 years.
The key political change has been Democratic control of the levers set in motion by the 2010 Census. The passing of state legislatures into Democratic hands, the ability of Congress to move towards inference instead of enumeration in some instances will tend to make Democratic districts stronger and some fence-sitting districts lean leftwards. Spoils of victory and all that. The effect will be that Democrats will be able to continue to control much of the machinery of government despite what I predict will be a 10% loss of 'countable' popularity--countable meaning various outputs including, but not limited to, voting.
The Democrats would be crazy not to factor in this 10% loss in popularity--there is no magic wand to fix the economic mess America's in, and they are the party in power during a downward slope in the economy. But the Democrats are not crazy--the Democratic leadership is experienced, savvy and saw Republicans play the same game twice during their careers. They will maintain working control with the grudging assent of a thin majority.
At the top, President Obama seems sure to be re-elected, mostly due to the lack of a qualified candidate on the Republican side. There does not seem to be one Republican or even independent candidate who could move the polls significantly, and the most likely nominee, Romney, will not exactly unite the Grand Old Party.
There are 16 senators over the age of 74, so nature will change the composition of the Senate more than will the next two elections. Those 16 are split evenly between Democrats and Republicans, so no predictions here. The oldest members of the Supreme Court are liberals or moderates and will probably allow President Obama to name their replacements during his term. But they will be hoping its his second term.
The 2010 elections are a threat to Democrats, as the only event that they can use as leverage is the state of the economy. I do believe the economy will be recovering by election day, but perhaps not enough to help Democratic incumbents--especially if conservatives find effective talking points, and voices to utter them. Democrats will be happy if Rush Limbaugh and Anne Coulter continue to be the mouthpieces for conservative doctrine--but they are unlikely to be so lucky. Fortunately for Democrats, 8 Republicans have already decided to retire by 2010, compared to only 4 Democrats (so far--both numbers are likely to grow).
The external factors most likely to influence the political situation in America are narco-war in Mexico, the disintegration of Pakistan and/or Afghanistan, and the follow-on effects of severe problems in China. I would suspect the third as being the most likely cause of political problems in the U.S.
Five years from now we will be spending prodigious sums of money on alternative ways of generating power. Today, most people think that means building more windmills and installing more solar panels--and that may end up being the case.
Well, many of you may have been surprised to learn that the number of new patents in medical technology has been declining for years. I was. But now we learn, thanks to WIPO, that the same is true for environmental technology. Every year the decline has been 1.1%. If we actually do need to save the world, you'd think it would be growing. In the sexiest areas of technology, new patents can grow by 5% per year or even more.
So, with all the hype about how alternative technology is needed to replace fossil fuels, which country is actually doing the most work about making alternative technology a reality? For solar, it's Japan, head and shoulders above the crowd--between 2001 and 2005, Japanese companies filed over 9,000 patents for solar energy technology. Second place, with only 2000 patents, went to South Korea.
Japan's lead is even greater in fuel cell technology patents--over 12,000 patents in the same time frame. The U.S. was second--with 2,900 patents.
For wind power, the leader is... Germany! in the 5-year span, they generated 1,383 patents, narrowly edging out--Japan, with 1,336.
So who is serious about alternative energy technologies?
Although a lot will happen in the next five years regarding technology used in healthcare, to some it will seem like small beer. An annual 2% decline in patents in medical technology makes it less likely that some stunning breakthrough will arrive soon. Although patent activity is more promising in biotechnology and pharmaceuticals, business and politics conspire against us all in these fields. Hope I'm wrong...
Both the EU and the US will be focussing on interoperable healthcare records and more efficient data interchange. Expect breakthroughs in areas like greater use of software to detect potentential drug interactions and improvements in automated diagnostic tools. This is important and will save lives, as will improved communications between health care stakeholders.
Many improvements will feed through into healthcare after being invented and piloted outside of healthcare environments. This will include the routinely miraculous improvements in ICT efficiencies overall, but pay special attention to work being done in voice recognition software and automated translation tools, which will further improve communications.
Assisted living should get easier on a steady curve, with more intelligent devices to summon care and take care of household logistics, mostly via the internet. And stay tuned for surprises from the world of robotics--there may be domestic robots used in healthcare, both off hospital grounds and in the wards themselves.
Nanotechnology will play its part, mostly in terms of coating materials for stents, implants and devices, but to a certain extent in drug deliveries--but the major breakthroughs in that seem further out than five years.
Genetics and biotechnology will continue their tortuous mating dance with pharmaceuticals, but the courtship will be painful and the adjustment period long. Individual advances will continue to go unexploited and we will all continue to hold our breaths waiting for the big one. Maybe 10 years out. Maybe 20.
Overall good news, solid improvements--but everyone in the developed world is waiting for the big one. Not this time around.
The great ICT explosion of the past 25 years did not happen because of one invention or innovation. It was literally thousands of incremental improvements in circuit design, chip fabrication, software, batteries, fans, mobile technology, etc., etc., that have created this new world.
There is a major split between technologies used in healthcare. On one side are technologies used to increase efficiency and lower costs. On the other side are technologies used to improve care and extend life. The first side will tend to make it easier to increase access and level the playing field. The second side will actually increase costs and probably inequality of access.
Why is President Obama trying to convince the world that making the right choices about technology in healthcare can make such a difference in the recovery of the American economy? Well, because he's right, at least from my point of view.
Before I examine evidence and give links, let me state my prior assumptions: First, that the changing demographic composition of the U.S. makes this the most appropriate time to make a major technology upgrade to healthcare. The retiring Baby Boomers (perhaps too aware of surface healthcare issues and perhaps a bit too worried about them) desperately need remote healthcare to avoid clogging up the physical plant of the healthcare system. The desire for assisted living by the Greatest Generation can better be met by remote monitoring and consultations. Meeting both of these 'patient' preferences head on could reduce inpatient and even outpatient admissions. Reducing admissions brings many, many big benefits--huge reduction in costs, blessed reduction in number of errors, lower need for capital expansion, and (importantly, but probably not something that is measured), lower external costs to families.
This is all before examing the potential effects of technology in record-keeping, staff communications, improved performance of wards and rooms, better prescribing practices and avoidance of both over-medicating and conflictual medicating, facilities maintenance, etc. And it is also before examining the potential for technology to help detect, delay and treat medical conditions.
You can see it's a big subject.
Armed with these prejudices, let's survey the field. Okay, in the next few posts. It is Saturday morning...
Before I continue with healthcare technology, let's take a minute to talk about the third sector, the charities, not for profits and non governmental organisations that have assumed such a large role in society over the past decades.
Let's look at lung cancer. It is decreasing by 1.8% per year among men and increasing 0.5% per year among women, tracking cessation and adoption rates of 30 years ago quite closely. The overall cost of treating lung cancer was $9.6 billion in 2004, and you can bet it hasn't gotten cheaper since then. Again in 2004, 13.3% of all spending on cancer treatment was on lung cancer.
As 85% of lung cancers occur in smokers (and, sadly for me, in ex-smokers), lung cancer is the poster child for the theory that up to 70% of all cancers are behaviour-related--it is what we eat, drink and smoke that gives us more cancer than anything else.
Hence the healthcare dilemma: New technology will without doubt provide new treatments for lung cancer. But, these new treatments will be expensive. The most cost-effective way of eliminating lung cancer is by persuading people to not start smoking. The second most effective method is by persuading current smokers to quit smoking.
President Obama's healthcare plan intends to use technology to improve communications and reduce errors. But there will also be support for new research. Some of that research will be regarding cancer. So, the $64 billion question is, should research be focussed on changing behaviour or on finding new treatments for cancers? Obviously it will be both, but what should the proportions be?
Organised medicine wants the bulk of money to be spent on changing behaviour. The patient community and some technology providers want the bulk spent on improving treatment. There will probably not be enough to fully fund both. Is there a Solomon in the house?
There is obviously some uncertainty about the near term future, but it seems clear that a series of major stimuli will eventually overcome the series of major shocks to the economy and America will begin to recover. So what will the American economy look like in 5 years time?
The most probable outcome of the current economic crisis will be the devaluation of the pools of money that the middle classes have set aside for their retirement. The first blow has already been felt in the sharp decline in stock valuations and interest paid on conventional savings. The second will come in about two years as inflation begins to further erode the value of savings of any type, as inflation will certainly exceed interest rates. As this will be the solution to what government sees as a greater problem than your retirement, complaints will go unanswered. Government's great challenge will be to keep the spread between inflation and interest rates acceptable to foreign holders of US Treasuries, and consumer concerns just won't be on the radar, except at election times. Government will have to use inflation to make its own debt manageable, as other countries will be less able to finance our spending. I consider this to be more or less inevitable.
Well, this article regarding the 2001 recession reaffirms the common sense idea that immigration doesn't stop in an economic downturn. As I remarked on another subject, hard times are harder for the poor, and the payoff for immigration is high. This report (PDF) from the Migration Policy institute strongly suggests that, while immigration from Central and South America may be slowing (by half--from 1 million per year to 500K), there is no evidence of a massive return to country of origin. The paper strongly suggests that legislation drives immigration flows more than economics, and that anti-immigration legislation may strengthen during recession. In other words, it's what recession does to the host country and their attitudes towards immigration that has the greatest effect.
(hat tip for references above to Two Weeks Notice)
As someone who believes (based on the numbers, which are certainly disputed) that immigration is a net benefit to the host country, I certainly hope that the US does not impose draconian restrictions on immigration--especially not in response to the current economic downturn. But there will certainly be policy tension in the Obama administration, as organised labour did a lot to elect him, and they are rarely advocates of looser immigration policy. On the other side of the battle line will be the large numbers of Hispanics who turned out for Obama and see the issue as considerably more nuanced.
My five-year prediction is that immigration policy in the US will get more entangled and the public opinion of immigration considerably more confused. I think that one of the great idiots on the public scene today is Lou Dobbs, and I think he will experience greater success and achieve greater fame stoking the fires of xenophobia. Worse luck for us all.
Historically, crime goes up when the economy goes down, for obvious reasons. What else changes? Fear of immigration? And do immigration rates actually change? Fear of being uninsured? And do insurance rates actually change?
I'll continue this post later, but what I've noticed is that, where a year ago people were worried about immigration and healthcare, now everybody is worried about keeping their job--except those who have already lost theirs. When I get back to this, I'll bring numbers...
Should policy aim at specific goals or at enabling mechanisms to reach those goals?
I ask because American energy efficiency improves on average by 2% per year. In the past, we have sort of squandered that efficiency by asking motors to carry a greater load and by getting newer and bigger appliances.
If, on the other hand, we simply used these efficiency gains to reduce energy consumption, by 2050 we would be using half the energy we're using today. That's all we would have to do.
Now, if we also started reducing the load on motors, turbines, etc., by driving cars that weighed less and plugging gaps in our homes, we might be able to do it quicker.
And that's where policy should point--we know that new technology is just around the corner, but we don't know which technology will best serve our needs or when it will be of optimum efficiency to adopt it. So why not focus our energy on a proven way of getting to where we want to be? Just asking...
Interesting discussion on the subject here.
In my heart of hearts, I don't think we'll double alternative generating capacity any time soon, although I think we'll make significant progress. In that same black heart of mine, I don't think we'll recycle and re-use much more than we currently do. But I do think we can weatherize houses and buildings a lot. I think we can move a lot of people onto public transport. I think that telecommuting will take people out of the commute.
And in my heart of hearts, I do think we'll get to where we need to be. Not in five years, although I think we'll start being hopeful by then. But in 40 years. And I think that's soon enough.
As Kevin Drum has so succinctly pointed out, President Obama's recently announced Cap and Trade policy, properly executed, will reduce overall emissions without overly tight management of how it is achieved. Further targeting through a modest carbon tax can supplement this. An increase in the gas tax can push consumption down. Investment in alternative generating technologies and in a smart grid for transmission is long overdue and badly needed.
In short, President Obama's energy policy is really, really good. I voted for him and I am still surprised at how good he has been in the past six weeks.
How can technology support his policy? Perhaps I should rephrase the question--how can society use technology to steer towards his policy ends?
Given what he is preparing to spend money on (weatherizing residences and pushing broadband infrastructure, and a more intelligent power grid), it appears that the easy win is broad encouragement of more working (and schooling) from home. This may be a bit easier than it would have been just a year ago, as recessions usually generate a higher start-up rate of small, home-based businesses. Distance learning and distance training are getting easier and more widely accepted, and can reduce education costs for students as well as institutions. Employers can retain more staff by spending less on infrastructure.
What am I missing?
One reason that it's tough to slog through the blogs is that they are susceptible to a rigid madness of dogma, a sort of hysteria that prevents them from looking at an issue with any sort of reason. This hysteria is the same for both 'left' and 'right' wing bloggers, and it means that it's tough to trust what you read out there.
George Will wrote a column in the Washington Post about climate change. (And he offended me in his first paragraph: "Predict catastrophe no sooner than five years hence but no later than 10 years away, soon enough to terrify but distant enough that people will forget if you are wrong." I guess pundits don't need forecasts.) He went on to sound the horn on the recent history of debate on climate change, with the familiar skeptic chorus of the previous debate on global cooling and the more recent news which so obviously served as a hook on which to hang his column, the recent recovery of Arctic ice. Because of the controversy this column caused, he wrote a follow-up piece published February 27.
Liberal bloggers went berserk. Bloggers I have read (and considered reliable) for years--Brad DeLong, Mark Kleiman and many more went on multi-post tirades, blasting Will for having 'invented' the global cooling consensus of the 70s and lying about the Arctic ice recovery. They seized on this as evidence of the moribund condition of the Washington Post and demanded a retraction or, amusingly enough, a factual correction of an opinion piece.
I hold no brief for George Will. He plays the game the same way he's getting played now, and has a bigger stage to play from. But he's right on both of these counts. Will quoted numerous articles in the national press from the 70s on global cooling, and it took me 15 minutes on Scirrus.com to find two dozen scientific, peer-reviewed articles between 1970 and 1975 that mentioned global cooling in the abstract. Download Scirrus search for global cooling . Will didn't call it a consensus, and he was correct about the level of coverage.
More important is the issue of Arctic ice. Will wrote "As global levels of sea ice declined last year, many experts said this was evidence of man-made global warming. Since September, however, the increase in sea ice has been the fastest change, either up or down, since 1979, when satellite record-keeping began. According to the University of Illinois' Arctic Climate Research Center, global sea ice levels now equal those of 1979." Liberal bloggers jumped all over this, saying that ice was lower by a mass the size of California. But at about the time Will's piece was published, the NSIDC had a sensor give out and gave out wrong data on ice levels for a few days. Global warming skeptics had a bit of a field day on this, with some blog commenters (not the bloggers themselves) muttering about conspiracy.
Yesterday, Walt Meier of the NSIDC wrote an open letter to Watts Up With That (a rationally skeptical weblog--one of the good ones), explaining what had happened, why and what they were doing to avoid future incidents of this type. It was an extraordinarily gracious communication, full of good will and the presumption of good will on the part of his readers.
But Meier continued the dialogue in the comments thread of the post, and was drawn into commentary on Will's opinion piece. He cited three mistakes he felt George Will had made (the other two are substantive and well worth a look, but my post here is exactly about the froth on weblogs that deliberately obscures the substance--I strongly advise you to go to Watts Up With That and read his letter and later comments). The first mistake was:
"1. He was factually incorrect on the date that he reported his “daily
global ice” number. However, he was merely out-of-date with his facts (it was true on Jan 1, but wasn’t 6 weeks later). This is somewhat nit-picky, though it illuminates how fast things can change in a relatively short period of time, meaning that one should be very
cautious about drawing any conclusions about climate from an isolated event." (Don't forget to go look at his other two mistakes.)
My clients pay me money to tell them what's going to happen in the environment in the medium term future, the 5 years out that George Will laughs at. It's a pity that I won't be able to rely on Brad DeLong and Mark Kleiman as anything more than weathervanes on environmental topics. It's more of a pity that I will have to treat everything they say going forward in much in the same way they treat the Washington Post.
And because of all this froth, we put off to yet another distant day the serious discussion about global climate change, green technology and Obama's energy plan that we so sorely need to have. Much in the style of Karl Rove, the news cycle got hijacked in the service of jihad. We are all poorer as a result.
But at least I got to use religion as a category tag for this, because that's what this is all about.
Update: Mark Kleiman very classily commented on my post, in a very non-frothy and measured way. Thanks, Mark. His point, that Will is entitled to err, but should correct mistakes when they are pointed out, is quite reasonable, and one that Will has had countless opportunities to ignore in the past.
Kleiman is also correct substantially on the measures he cites--scientific work in the 70s did use a geologic timescale when referring to the next Ice Age, and models did and do predict Arctic ice melting rapidly while Antarctic ice modelling is uncertain.
I'm happy to see and to say that Mark Kleiman is still the gracious writer that I have always seen on the Reality Based Community. Which is not to say that I agree with him 100% on the substance of this. I think we're training a microscope on Will's columns when we should be using a telescope to look at other things. I hope I'm wrong about Brad DeLong as well.
One symptom of the complicated nature of green technology can be seen in the fact that I assign four categories to this post--economic, environment, politics, and, only lastly technology.
Green technologies can be separated into the following categories:
Generative: Nuclear, biomass, biofuels, solar, wind, tide, and maybe more
Recuperative: Recycling, re-using, retrofitting for insulation, etc.
Distributive: Smart power grids, micro-generation, land-use policy, etc.
The stated goal of green technology is to displace fossil fuels. The politics is fraught. The economics is dubious. The technology needs work. And the environment is waiting.
Just some brief notes from the generative side of things:
This year, the US passed Germany and became the largest producer of wind power. Are people celebrating? Do people even know? Germany, meanwhile, is the largest subsidizer of solar power--in a land that is not famous for being sun-drenched. Do people know or care?
In 2005, the US used about 21% of all energy consumed, about 100 quadrillion BTUs. In 2007, about 7% of US energy production was renewable (mostly nuclear and hydroelectric). President Obama wants to double that in the next three years. This would involve either doubling the number of nuclear power plants, tripling the number of dams, increasing 100 fold the number of windmills and solar panels, or some combination thereof. It's a challenge.
The challenge got bigger when oil prices collapsed (and those who think they will bounce right back should be talking to Brazil's Petrobras about their production plans). And, as nuclear power plants and dams are both contentious and long-term in the planning, we are left contemplating the wind, the sun, biomass and, presumably, our navels.
It seems to me that it would take about the same effort as did gearing up military production for World War II. (This may not be a coincidence--many are writing about how WWII 'cured' the Great Depression).
Windmills cost several million dollars ($4.2 million in 2001, although prices may have declined. They may also have increased, as they are incorporating more technology.) Solar panels are cheaper. America has lots of sun. But any way you slice it, renewable energy doesn't double for $50 billion, the price I heard Obama give. Perhaps he wasn't including nuclear and hydroelectric in his initial calculations? I'll check for the next post.
Update: Well, the President didn't answer my questions in his speech, but here are the bullet points from the Obama-Biden Comprehensive New Energy Plan for America, published in August of 2008:
Provide short‐term relief to American families facing pain at the pump • Help create five million new jobs by strategically investing $150 billion over the next ten years to catalyze private efforts to build a clean energy future. • Within 10 years save more oil than we currently import from the Middle East and Venezuela combined • Put 1 million Plug‐In Hybrid cars – cars that can get up to 150 miles per gallon – on the road by 2015, cars that we will work to make sure are built here in America • Ensure 10 percent of our electricity comes from renewable sources by 2012, and 25 percent by 2025 • Implement an economy‐wide cap‐and‐trade program to reduce greenhouse gas emissions 80 percent by 2050
I need to do some more digging, apparently.
It's a testimony to something--I dunno, PR, fear, political distaste--that we pay so much attention to China. After 20 years of near double digit growth, their stated GDP is about $2.7 trillion U.S. dollars, compared to the U.S. figure of over $13 trillion. They produce about as many patents as the Netherlands, 19% of their population lives on less than $1 per day, and the average adult has 6.4 years of schooling. (These stats are from Nationmaster.)
If I were speaking to you face to face, I would now put on a very serious look and speak very slowly.
The next five years will see more innovation and invention than the past 12. That covers the entire life of Google, as well as the invention of Facebook, Twitter, etc., on the web, and the explosion of mobile telephony, the iPod, mobile software as services, etc., in telecommunications. We will see an extra zero on the number of products using nanotechnology, RayBan (or equivalent) head mounted devices that give full computer screen capabilities, an explosion in E-books, and much, much more. Your mobile in 5 years will be more powerful than the latest desktop PC is today.
But the next five years will probably not see a silver bullet cure for cancer, Alzheimer's or heart disease. Nor will genetics provide a detailed future history of your medical outcomes.
Robotics will advance into your home, if not your office.
A child born in the next five years in the developed world will probably have a zero percent chance of ever being lost in his or her lifetime. He or she will at some point not be convinced that's a good thing.
This analysis is based on simple extrapolation of patent filings, and should be (still) considered conservative. The wild and crazy stuff is for another post.
Think back to the year 2000--the new millenium, the Y2K bug, the looming internet bust. Can you remember what you thought and how you felt back then?
If someone had asked you to predict what technology areas would grow the fastest over the next five years, what would you have predicted? (I'm glad I didn't publish my thoughts then...)
The World Intellectual Property Organisation has kindly catalogued and tabled international patent activity for the years 2001-2005, and has even charted average annual growth.
Perhaps because of the Y2K bug, 2001 saw the absolute peak in patents filed for IT methods for management. There was an annual 10% drop in patent filings in this area over the next 5 years. Most other IT-related patent filings grew by about 5% per year, which is quite robust.
Chemistry did badly. In 11 categories, 8 saw absolute declines, including biotechnology. Only pharmaceuticals saw growth, and it was a paltry 1.7% per year. (In case you're wondering why all the big pharmaceutical companies are eating each other, it's because the IP cupboard is bare...)
Mechanical engineering didn't do much better. Of 8 categories, three showed negative growth and the other 5 grew slowly, with the exception of transport, which managed 3.8%.
So what was the overall winner? The biggest growth? The scientific advances that should now be showing up in the products and services we are buying today?
Second was optics, with 5% annual growth, and 103,390 patent filings in 2005. First, predictably, was computer technology, with 5.3% growth and 144,594 patent filings.
What this tells me as a back-of-the-envelope analyst is that Moore's Law will continue, that there's a bit of hype in biotech, that I don't want to own stock in pharmaceuticals, but the next generation of transportation equipment might change, for the better and the greener. Hasten the day.
This post is the 'background' post, designed to set the stage for a 5-year forecast of technology trends worldwide. There may be other 'background' posts--remember I'm trying to show my work.
New scientific or technological progress is often measured in discrete packages known as patent applications or academic publications. These are easy to count and give an idea of progress. It isn't perfect, as backlogs in patent offices, copycat patenting and publishing, etc., can throw the stats off a bit, but as these practices aren't new, one hopes that the overall measure of progress is valid.
Growth in the number of patents has, over the past 50 years, been dramatic--but largely driven by the adoption of patent regimes by new countries, such as China. But let's turn the lecture over to the World Intellectual Property Organisation (WIPO) for a moment:
"Worldwide patent activity increased by 4.9% between 2005 and 2006, mostly due to increased filings by applicants from China, the Republic of Korea and the United States of America
The total number of applications filed across the world in 2006 is estimated to be 1.76 million, representing a 4.9% increase from the previous year. Between 2005 and 2006, the number of filings worldwide by applicants from China, the Republic of Korea and the United States of America increased by 32.1%, 6.6% and 6.7% respectively
Patent applicants tend to come from a relatively small number of countries of origin. For example, applicants from Japan, the United States of America, the Republic of Korea, Germany and China accounted for 76% of total patent filings in 2006. Chinese residents increased their share of total worldwide patent filings from 1.8% to 7.3% between 2000 and 2006, mostly due to increases in domestic patent filings.
Although the number of patent applications filed across the world has increased at a steady pace, the rate of increase is less than the rate of increase observed for other economic indicators such as GDP and trade."
Hence my previous post saying that a 1% increase in CAGR in patents would have a dramatic effect on a number of important living conditions.
The creators of 130 million creative works in 45 countries have chosen the Creative Commons license to protect and share their intellectual property since 2001. The non-profit organisation that runs CC has a lot to be proud of, not least their expansion into science and education.
One plank of President Obama's economic recovery plan involves investing in cleaner energy infrastructure and resources. It is good, common sense conservation that we should applaud vigorously. However, it is accompanied by serious discussion of targeting technologies and channeling investment into some things that are greener than they are good. This could be dangerous in a lot of ways--as our recent experience with ethanol subsidies shows, governments can mess things up when they decide to support a technology for political reasons.
And it's not just governments. General Electric, a hard-headed, intelligent organisation that has made profits in almost every way possible, made the decision a few years back to target the green market. If you look at their stock price over the time period since they made that decision, you have to wonder what prompted their decision. To be fair, the recession hammered their stock price along with everybody else's, and the green market may require patience--GE may yet be rewarded for this decision. As a stockholder, I certainly hope so. But I hope they won't be rewarded by misallocated government spending that is targeted by wrong assumptions. In the long run, that will benefit no-one.
We don't yet know what the best way to produce electricity will be in five years' time. It may be nuclear, wind, solar, natural gas, tidal... most likely some combination, which will require serious thought and good planning. We don't yet know the best way to power personal transportation five years out.
We do know how to insulate houses and reduce energy consumption in large buildings.
We do know how to stimulate and finance effective research into best practice regarding energy.
We do know how to reduce energy consumption.
We should start there and wait for science (and yes, market decisions) to lead government investment decisions down the road.
In 1809 few would have predicted American dominance at any point in that century. The British and the French were battling for supremacy, and the Portugese and the Spanish were, too. It would be only five years before the Brits took time out from their continental struggles to burn the White House, something conveniently papered over by our celebration of the Battle of New Orleans, fought after we surrendered. America had a population of 7.2 million, a GDP of $700 million ($97 per capita--wow--equivalent to $1,303 in year 2000 dollars). We still had a lot of basic history and development in front of us.
The Founding Fathers had already predicted our future, and had pledged their lives, fortunes and sacred honor to achieve it. Not really sure how many people just nodded pleasantly at the notion. 55 years later the American era began.
All of which is to say that picking the owner of this century isn't as obvious as it may seem.
But, if healthcare really does grow to 13% of U.S. GDP by 2050, than the best technology providers will get a good chunk of that. That seems like a big win for American companies to me, and should lead to Americans providing solutions for the rest of the world--exporting added information value, which is what we do pretty well.
Don't know if you're reading it here first, but nanotechnology will change the world in this century more than electricity did in the last. Here again, America is front-running, leading in patent applications and with more than 1500 commercial products already using nanotech. Another big win for us--the Japanese in second and Chinese in third, may have difficulties exploiting this sector.
Genetics will mostly contribute to the healthcare sector cited above, and American companies (that aren't acquired by foreign pharma) will grow rapidly.
Robotics is the other sector that I predict will contribute mightily to human progress this century, and the country that leads here (as with the other sectors) will have a good chance to own this century. The Japanese currently claim the lead--but so do the South Koreans. And in the last linked article, it makes it clear that "
I think we'll need a series of posts on this--let's see how much I can get through on a Friday night.
Nationmaster lists 22 countries with over 60 million people. I arbitrarily declare that the minimum for owning a century. Let's rank them on how they score on a set of criteria that I also arbitrarily declare to be the only, the crucial things that will matter (please tell me you understand that I am being ironic...)
Saturday morning. Well, this involved some preparation. The criteria I've chosen include some that are chosen to measure the physical base from which our eager contestants start this contest--population, GDP, etc. It also includes some that try to see which way they are facing--towards the future, the present or the past? Things like corruption and military spending help here. Then we try and look at capabilities for the future--life expectancy at birth, which measures so many different things that it should be a shrine at which we all worship regularly, university enrollment and graduation, etc.
This is specifically what I measured: Ranking on Nationmaster in population, GDP, life expectancy at birth, corruption index, military spending as percentage of GDP, enrollment in tertiary education as percentage of age eligible population, births per 1000 population.
These things are all measured and ranked on Nationmaster. I then perform the magic PESTLE calculations which contain the secret algorhythms designed to divine the destiny of organisations and companies the world over (ed. You mean you count their scores and low score wins? tf. er, yes).
Here are the countries of the future, ranked by potential to lead. Your actual mileage may vary.
1. United States: 240
2. France: 281
3. United Kingdom: 312
4. Japan: 415
5. Germany: 424
6. Turkey: 457
7. India: 464
8. Brazil: 474
9. Mexico: 497
10. China: 512
11. Russia: 522
12. Egypt: 536
13. Thailand: 541
14. Philippines: 568
15. Iran: 571
16. Vietnam: 587
17. Pakistan: 604
18. Ethiopia: 623
19. Indonesia: 627
20. Bangladesh: 669
21. Dem Rep Congo: 701
22. Nigeria: 702
Notice the mathematical precision and uniformity of the columns. Note also that in my previous post on this subject, I wasn't too far out when I just eyeballed the subject, but note also that my cultural point of view probably obscured the potential of Turkey and Mexico. That's why we do this.
If you want me to include other criteria, go to Nationmaster and look up a category and email me and I'll add it in and re-run the total. Or, if you want to check my work and do some of your own from scratch, here's the Excel worksheet I used: Download Who Will Own This Century
Analysis and interpretation in a later post.
The previous post argues that countries don't really have to play the hand they are dealt in terms of the workforce and social composition of their bodies politic, as they can shape the make-up of their citizenry through immigration policy.
There are other tools at their disposal. The most commonly used tool is incentives for having children, either positive (e.g., France) or negative (China). Both were successful, and both result in unintended consequences.
If a Pestle analyst wants to look at long-term GDP potential, the first place to look is at population trends, looking for bulges in the working age population (Turkey, Iran) which clearly indicate growth potential. Bulges in the over-40s (Europe) are harbingers of decline. Multiple bulges (U.S.) make you have to think. It is easy enough to find the 'average' age of a population, a bit harder to find out what it was for the past decade or so, and see the direction that the national economy wants to head in. Sites like the CIA World Factbook or Nationmaster are helfpul with this kind of thing.
Or does anybody else think it's a bit funny that our current economic situation blew up in the same year that the Baby Boomers started to reach retirement age and almost simultaneously made major decisions about investment/savings/spending priorities? Nah--just me?
At least it no longer is. I remember reading in a novel once that the vast majority of the human race had never traveled more than 200 miles from their home. I have no idea if that was ever the truth, but it certainly is not today. I commend this site, called Global Issues, to your attention for the ensuing discussion. The demographic composition of some countries is changing--in some countries, quite dramatically.
In many developed countries today, citizens are likely to name immigration as one of the top concerns they have. Although it seems fairly obvious that immigration is a proxy for fears relating to crime, unemployment and large public expenditures, those concerns are neatly encapsulated in high profile news stories about immigrants. It also piggy-backs quite nicely on the atavistic 'fear of the other' that has characterized the folly of our race for so long.
It is claimed that there are 191 million immigrants today, or 3% of the world's population. I think it might be higher, but I also think it is unlikely to be above 4%. If this percentage was spread evenly across the map, I don't think it would be possible to keep the issue alive as a source of political and social discontent. Obviously, however, immigration is lumpy. But these bullet points from the weblog cited above are a bit telling:
In talking about the next five years, there are two important points to remember about immigration: First, most immigrants don't pick up stakes because life is easy where they are. As someone who has lived the past decade in Italy and Great Britain, I can tell you immigration is tough, even for a white American. It is much tougher for a non-white person from a developing country. (Which is why more than a third of immigrants eventually, like me, return to their country of origin). Second, if you cannot feed yourself and your family, at some point failure to immigrate feels like slow suicide and criminally irresponsible behaviour. So people choose an economically viable destination and go there. People move heaven and earth to get to places like the U.S., UK and France because of economic opportunity--i.e., the chance to avoid starvation. It is rarely a political choice. It does have political effects, however, usually in the form of providing ammunition for race-baiting, fear-provoking idiots, mostly on the right.
The next five years are likely to provide more such ammunition for these idiots, as there are two rules concerning immigration. First, poverty drives immigration. Second, recessions and depressions hit the poor more than the rich, and poor countries more than rich countries. Immigration will tend to increase, and move towards countries that have been least affected by the coming Hard Times. Canada and Australia look like prime destinations. Canada, at least, seems prepared to welcome this. Canada is full of people with good sense.
5 year prediction: Immigration will increase from 3% to 5% of the world's population. It will still be lumpy.
A quick look around should convince you that we are not created equal, and that we have not been endowed by our creator with certain inalienable rights, e.g., life, liberty and the pursuit of happiness. These magnificent fictions constitute a challenge to whatever gods there be, and are testimony to the great hearts of the founders of the American revolution. Salute.
Although Henry Luce called the 20th Century the American Century back in the '40s, my dilettantish recollection of history places the actual ascension to world power at around 1865, when Prussian military observers realised that the North's industrial military strategy had geo-political implications. America has certainly had a good run, but a lot of writers and commentators have called an end to it. There's even a neo-conservative movement for a new American century, although it seems clear they have absolutely no idea what made America predominant to date. Sigh.
At any rate, this post is about who will own the next century. And by own, I mean be the iconic image, the driving force, the society that will shape events to meet its own goals, the dominant power.
There are almost 300 countries on the modern map, so to pursue this topic it is helpful to exclude societies that, for one reason or another, have disqualified themselves from playing the game, so we can then focus on the remaining societies. So, for demographic reasons we start off by eliminating countries that are too small to actually dominate, such as Norway (which seems a pity--they're doing so much so well), but also Russia and Japan. Countries with declining populations will not dominate this century (perhaps the following one). I think realistically we end up with a list of usual suspects plus the BRICs. I think China will self-exclude due to a severe implosion, probably not too far in the future (in fact, it will be within the 5-year horizon of this weblog and I'll discuss it in another post), and we just tossed Russia for the unforgiveable sin of being in decline during a discussion of ascension. So, on the back of my envelope are the following countries:
I include France and the UK because, in addition to being powerful developed economies, they also have relationships stemming from prior empires that could theoretically be useful should they decide to get back in the game and strive for dominance. In fact, it would not be too difficult to convince me that France never left the game, but has been keeping a low profile while it rebuilt after the two world wars.
I will exclude India for reasons to do with geography and demographic composition--being surrounded by Pakistan, China, Bangladesh, having regional conflicts and disparities within the country, these will prove too much of a challenge for India. In addition, like China, they are growing their education and research capabilities only at the same pace as domestic GDP, which means that their technology base will be overly occupied with getting their infrastructure up to snuff, and not occupied enough with the needs of the future.
I will exclude the UK because I do not believe they want to play the game. So, we are left with France, Brazil and the United States.
France and Brazil have the enviable status of energy independent nations, with the edge to France being that nuclear energy requires technology growth, satisfies green concerns (well, some of them), and translates quickly into military capability. Brazil counters with the ability to export both oil and ethanol. Demographics gives a clear edge to Brazil, young and hungry, inventive and ambitious. And France loses primarily because its treatment of the DomToms has been callous enough that they cannot rally their former colonies to actively support French initiatives.
So we're back in the New World. Brazil has been derisorily labelled as the "country of the future--and always will be." But eventually that translates into the present. And America is the hegemon, wounded after a decade of mismanagement and wasteful, almost extravagant misuse of resources, but still the most powerful political entity that has ever existed. Brazil is very much where America was in 1865, and if they rise to dominance it won't exactly surprise me, and probably won't shock other commentators--it's pretty much a vanilla choice, the triumph of conventional wisdom.
But, after a decade in Italy and the UK, looking at America with what I hope are clear eyes, I think the next century will belong to America--even more so than the past 140 years. And I believe so because I think that America is best positioned to respond to the major challenges of this century, which fall conveniently under the headings addressed by the title of this weblog.
Political--America has the oldest representative political system in the world, a huge advantage in terms of allocation of social resources. It doesn't need to invent or reinvent representation, and it has substantial internal legitimacy (perhaps never as much as now, after Obama's election).
Economic--America is the largest economy in the world, and the richest of the populous nations. They can get it wrong a hundred times (as they may well do with their response to the recession) and still be a mile ahead of countries like Brazil. If Brazil makes one strategic mistake they fall by the wayside for decades.
Social--America is growing in population, has high levels of education, literacy, labor mobility, and may soon reach Brazil's level of tolerance for each other.
Technology--this is the key. The key technologies for the 21st Century will be genetics, nanotechnology and robotics. Although America only leads in nano right now, it is easily a close second in the other two. Although Brazil is working in these areas and their leading lights are on a par with the best in other countries, they don't have the depth of field to sustain growth at the same level.
Legal--Another key advantage for America. Although they are no more honest than Brazilians, America's legal system is better at dealing with corruption and organised crime, which are the key issues for development and dominance.
Environment--Both are large countries with abundant natural resources, and are large exporters of these resources. Both face challenges in conservation and husbandry, but both are devoting time and energy to that right now, which should serve them well in future.
So, on the whole, I think this century will belong once again to the Yanks, for good or ill. Not surprising that a Yank should pick his own country, and in a formal Pestle analysis there would be a counterparty picking holes in my analysis. But that's why we have a comments section here...
It seems to me that the green machine will fade over the next five years. I don't want (on this weblog, at least) to get overly involved in the debate over global warming--there are plenty of forums discussing that, such as Real Climate and Gristmill taking the pro position, and Climate Audit and Watts Up With That taking the con.