Which company is going to dominate the world in the next 50 years?
It's hard to say, and it probably doesn't matter. The question should rather be which megatrends will rule the 21st century. Companies are subject to the volatile nature of markets, while trends and megatrends will be these that will shape the future path of humanity. Knowing which way humanity is heading and tapping into the megatrends is vital because these changes in politics, industry, technology and climate will reshape our society. We should exercise futures thinking to explore the possible futures, opportunities, and challenges by understanding the megatrends that will change how we live and do business.
The overall factor will be climate change. It will be the element that will change everything. As the demands of the population are increasing, Earth is running out of space, food, and energy. Our planet cannot support us at the pace we are developing and consuming. According to the UN, the global population is expected to reach 9.8 billion by 2050 [1]. Add to that the decreasing quantity of water due to the anticipated global temperature rise by 2 degrees Celsius by 2050. All this argues that economies must change, and production must radically shift with the help of technology and the expected dematerialization of our economy. Hopefully, governments and the private sector are already acting in this direction. Everything else depends on it.
So, what are the three megatrends, in addition to climate change, that will most likely reshape the world in the 21st century:
It's probably safe to say that our future will be urban. Rapid urbanization will concentrate most of the population in developing megacities. This process will place enormous demands on infrastructure, the service sector, educational needs, jobs, and climate. Rapid urbanization will lead to fast economic growth in developing countries, which will lead to an economic shift on a global scale. This will require new business models, investments, technologies, planning approaches, and a transition towards smart and green cities. Cities occupy 1 % of the land, yet they are home to 55% of the population. These figures are expected to grow even more - by 2050, 68% of the population will be urban [2]. Yet, one downside of urbanization is the economic divide between the middle and upper class and the poor. Even more and more people will be homeless, which brings other problems regarding social systems, public health, sanitation, and ensuring normal living conditions for this group. In the next 20-30 years, cities will increase this division, and we'll need adequate public policy to tackle the situation and lessen the chasm. Otherwise, the growing tension between the groups could lead to unfortunate situations.
In addition, concentrating so many people on such a finite territory will inevitably lead to a water shortage. Water distribution will become one of the most important economic and political issues of the decades to come. The OECD estimates that by 2050 more than 40% of the world's population will live in water-stressed areas [3]. According to a World Bank report, we'll need to cover a significant amount of costs to reach the UN Sustainable Development Goals (SDGs) on clean water – the capital investments required to achieve water supply, sanitation, and hygiene goals will amount to about three times the current investment levels [4].
The aging population & migration will bring a myriad of changes across the globe. By 2050 most of the world's population will be in less developed regions. For example, Africa's population will double by 2050, and India will be the most populated country, followed by China. With the rapid increase of life expectancy in Africa, it is expected by the year 2100, sub-Saharan Africa's population to reach 3.44 billion out of 10.4 billion worldwide. It is to become the most populous region in the late 2060s, as projected by the UN medium scenario [5]. Central and Southern Asia will be in second place.
All this means that the production of goods and services will shift toward these regions. A new age of African-Asian centrism will begin. And let's not forget that Africa has the largest amount of fertile and yet underdeveloped land for agricultural development, which means that besides the increased birthrate, Africa's population will increase with migration as well. Even more if due to climate change, agricultural land is lost elsewhere. The rise of the agricultural sector in Africa will naturally lead to more jobs and actual industrialization so that humanity can witness an agricultural and industrial revolution again.
Migration will also increase, driven by pursuing a better life, whether dictated by economic reasons, a flight from violent regions, or where disasters happened. Again, this will lead to a shift in the economic and social order. Aging is another factor that will change the economic development of the West. The decline of the working population in Europe will be particularly acute.
The technological revolution will cause a tectonic shift in how society and economies are built. Tech is already progressively outpacing us. We live in exponential times, and humanity has to catch up. Automation and AI will change the future of work and education. We are on the brink of a technological revolution. AI will breach the realms of science fiction.
The maturing technologies will alter many industries. Technologies like: AI, Blockchain, Augmented reality, the Internet of Things, Robots, Virtual reality, etc., will change the current paradigms, and we will need to adapt to them.
One of the key problems that developing technology will bring is the displacement of jobs. The process of automation is already entering industries and displacing jobs. We will continue to experience this trend in the next decade, and by 2030 most of the jobs existing today will be displaced or profoundly changed. If anything, COVID-19 has even accelerated automation and technological disruption of industries. According to different strategy reports, technological adoption will increase in recent years. Automation will reduce the workforce in some industries, and it is expected that by 2025 in some sectors, the time spent on tasks by humans and machines will be almost equal. This, in consequence, will lead to a change in working conditions, locations, value chains, etc.
But the picture is not all black. There is a future for human workers. The total number of jobs destroyed is expected to be surpassed by the newly created positions of the future. According to the WEF, in recent years, the decline of redundant roles will be 6.4% (from 15.4% to 9%), and job creation will reach an increase of 5.7% (from 7.8% to 13.5%). This means that the shift of division of labor between humans and machines will displace about 85 million jobs. At the same time, 97 million new roles are expected to emerge [6].
Unfortunately, one drawback of this job creation will be the need for more skills and knowledge in workers. The lost positions will be low-skilled, repetitive, boring, and dangerous. This shift will lead to increased inequality if not adequately addressed. If societies don't start to reshape the workforce for tomorrow, we will experience a tremendous vacuum in the labor market that could have gross economic consequences. And to avoid that, we ought to reskill people starting now. Both employers and workers have to prepare for the change. Governments must also land a hand and do it on a massive scale or risk leaving countries behind in the technological shift. Public funding needs to be invested in tomorrow's markets and jobs and provide safety nets for displaced workers to foster and ease their transition.
So, in the end, technology will create more jobs (just like industrialization at the beginning of the 20th century). Still, to catch up, we should invest fast in a massive increase of skills of the population and reforming educational systems to prepare for tomorrow's job market. We need new skills. The future coexistence with robots and AI will demand us to acquire skills like critical thinking, analysis, problem-solving, resilience, flexibility, and the ability to embrace change.
Another trend we're witnessing with the rise of technology usage is that people lose trust in governments. That said, we should be careful with the rising powers of tech giants because otherwise, they may become the next governments of the world. If traditional governments lose relevance in the digital world, some tech companies could become "too big to ban." Governments need to shift their structure and adapt. Otherwise, they will crumble. If trust is not regained, someone else will take their place. And that is not necessarily a good idea.
Don't get me wrong. I am a keen believer that the advancement of technology is the way to a better world. Still, we should be careful with the ultra-utopian expectations. Adapting to the upcoming technological change will be a challenging task. Changing the paradigms of society and economy is no easy business, and we'll need to exhibit lots of lateral thinking to "fix the future" [7].
5. United Nations Department of Economic and Social Affairs, Population Division (2022). World Population Prospects 2022: Summary of Results. UN DESA/POP/2022/TR/NO. 3.
7. Andrew Keen, How to fix the Future (Atlantic Books, 2018)