An "exceptional" economy, increasingly integrated cultures, and stepped-up action on environmental concerns are among the key trends that will shape the world of the next two decades and beyond. Veteran forecaster Marvin J. Cetron of Forecasting International Ltd. and science writer Owen Davies describe the implications of these trends for our long-term future.
For some four decades, Forecasting International Ltd. has conducted an ongoing study of the forces changing our world. About 10 years ago, Cetron and Davies condensed their observations into reports for THE FUTURIST covering key aspects of the economy, technology, business, and society.
Their expectations proved to be quite accurate: For instance, they believed that the economy of the developed world would be much more vibrant than most commentators imagined possible, and so it has been. In all, no fewer than 95% of their projections have proved correct.
Those early forecasts have often been updated and extended. In this article, the first of two excerpts from their latest report, the authors reconsider the trends from their previous work and focus on major trends that are now changing the world. For each trend, they also offer a succinct conclusion about its implications for the future and how it may affect individuals and organizations, including policy makers.
General Long-Term Economic and Societal Trends
* The economy of the developed world will remain "exceptional," as Fed chief Alan Greenspan described the United States, for at least the next five years. Widespread affluence, low interest rates, low inflation, and low unemployment will be the norm.
* Inflation-adjusted output in the United States grew by no less than 5.8% in the fourth quarter of 1999, and with more than 17 million new jobs created since 1991. With wages averaging $17.90 per hour, unemployment shrank to just 4%.
* The recession in Europe is nearing its end, and Asian economies are now being stabilized. This will improve global trade generally and should boost American exports in the next five to 10 years.
* National debts were brought under control throughout most of Europe, in preparation for the recent monetary unification.
* Real per capita income in the United States is rising at its strongest rate in decades. It should stabilize at a growth rate of about 1.45% per year through most of the next decade.
* At the same time, wages and benefits have remained under control throughout the industrialized world.
* Relaxation of borders within the European Union has brought new mobility to the labor force and is making for a more efficient business environment on the Continent.
* Japanese banks will finally write off their bad debts. Coupled with recent tax cuts and other reforms, this will set the stage for an economic recovery by 2002. Thereafter, Japan should provide a much healthier trading partner for the West. The three largest Japanese banks are combining into a $1.23 trillion institution. By reducing the number of branches and personnel and installing automatic teller machines, they expect to save $50 billion per year.
* Many nations of the former Soviet Union are bringing order to their economies. As they do so, they are proving to be viable markets for goods from western Europe. Whether Russia itself can stabilize its economy remains to be seen. This is one of the critical issues for the future of global prosperity, and perhaps for political stability throughout the world.
* Consumer inflation in the United States has just barely begun to be felt. The price of consumer goods other than food and energy was actually declining in the late 1990s.
* Long-term interest rates throughout most of the industrialized world are likely to remain relatively low for the foreseeable future.
* Improved manufacturing technology will continue to boost productivity and reduce the unit cost of goods. …