Source: Valdai Discussion Club Published: 2024-03-06

The future is always full of uncertainty, and only a handful of great people can accurately predict the future. As an academic, I have many worries about the future, wars, famines, climate disasters, viruses, economic decline, etc. However, I still hope that the world will be better in 2040. In 2040, the global economy will be even larger, capable of addressing the problem of world poverty, which now directly affects 1 billion people, writes Wang Wen, the Professor and Executive Dean of the Chongyang Institute for Financial Studies at Renmin University of China. This article was prepared for the Valdai Club Youth Conference.

The world in 2040

The achievement of the United Nations Sustainable Development Goals in 2030 is expected to be delayed, but should be achieved by 2040. Most importantly, I hope that international politics can end Western hegemony and yield a world that is more democratic, peaceful, and stable. However, I expect this endeavour to be quite difficult.

Western hegemony began to take shape in the 16th century, and has contributed to world growth at the technical and economic levels. Despite these benefits, the world has become more Western-centric, more unstable, and war-prone. Some scholars in the West have praised the role of war in resolving the conflicts of history, but I don’t like war. In the world of 2040, I hope there will be fewer wars. In this process, the rise of emerging economies is an important force for peace.

The issue of inequality

In human history, the problem of inequality has always existed, but in the 2040s, the problem of inequality will be alleviated as never before. This mainly stems from the digital revolution. The digital economy has greatly improved transaction efficiency, reduced labour costs, and promoted the equalisation of social services.

By the 2040s, urban residents in every country around the world will be able to order takeout, hail a taxi, and request services, making things as easy as if each home had its own dedicated chef, driver, and nanny. But on the other hand, new inequalities will emerge throughout the world. People with more data and information will be more powerful and dominate the world. This is a new uncertainty faced by mankind. Inequality in the digital age may present paradigmatic new problems, for which academic research has just begun.

The standard of living and life expectancy changes over the next two decades

Human beings 200 years ago had a life expectancy of only about 40 years. Humans born after 2000 could live to be 80 years old, on average. In the next twenty years, if there are no world wars, pandemics or climate catastrophes, human life expectancy will definitely increase significantly. With our current medical technology, humans could very well have a life expectancy of 90 years or even over 100 years by the 2040s.

According to Elon Musk’s vision, within the next twenty years, after the life science and technology problems of brain-computer interfaces and memory chips are solved, humans will even be able to achieve effective immortality. Humanity also faces the possibility of eternal digital life. From these perspectives, within the next twenty years, human existence and life will usher in an unprecedented revolutionary new paradigm shift, and a new era of civilization that transcend industrial civilization will arrive.

Has capitalism outlived its usefulness and is the world is transitioning towards a new system?

Capitalism is indeed coming to an end. The national system based on capital as the basis for social operation is facing unprecedented difficulties. If we look at the wealth gap, social chaos, and political polarisation in the United States and Europe, we can see that the path of capital-centrism has made contributions in history, but now its negative effects are even greater.

From this perspective, Karl Marx was right when he predicted the inevitable demise of capitalism. However, what the new world system should look like in the future may currently be beyond Marx’s imagination. All countries are exploring.

China’s experience is that integrating the power of the state and the market not only absorbs the advantages and contributions of capital, but also prevents the evil shortcomings of capital concentration. We call it the “path of socialism with Chinese characteristics.” The Chinese people have confidence in the country’s future path, but they may face huge conflicts over systems and paths in the future. From a certain perspective, the competition between China and the United States is not just a battle of national power, but also a battle for systems and pathways.

Could information become the new “capital” of the 21st century?

The future is already here. In recent years, information has become the new capital. Among the world’s top 500 companies, there are an increasing number centred around information technology and digital technology.

The “FAANG” IT companies, namely Facebook, apply, Amazon, Netflix, and Google, are the most popular stocks, accounting for more than 40% of the total market capitalization of the US stock market.

Information acquisition and production capabilities will determine the wealth distribution and governance methods over the next 20 years. If you look at internet celebrities, you will know that someone with 10 million followers is far more influential than someone with $10 million. Whether it is a country, institution or individual, if it can produce more high-quality information, it will play a greater role in the future.

The role of education in shaping the future economy

Education will see an unprecedented paradigm revolution in the future. The concept of universities and professors will become alienated. Traditionally, universities and professors have occupied the status of the first party in education because of their monopoly on knowledge and information.

However, this educational structure will soon disintegrate. In the next 20 years, many universities will go bankrupt and many education jobs will be lost. When information and knowledge become free and no longer monopolized, it will become possible for everyone to become an economic value creator in education by reorganising knowledge and creating new knowledge.

What’s more, while the cost of manufacturing ordinary goods continues to fall, the cost of creating high-quality education and knowledge is rising. Education and entertainment will merge. People want to enjoy a better educational experience just as they have pursued better food, better clothes, and bigger houses in the past. A good video, a good novel, or a good song will create greater economic growth.

Main directions of technological advancement

The process of the technological revolution over the past four hundred years shows that the main objective of technological progress has been to liberate people themselves. Over the past three to four hundred years, the logic of the mechanical revolution, electric revolution, and computer revolution has been to liberate human limbs and the five senses, allowing humans to travel faster, be more powerful, see further, and hear more clearly. For example, the invention of electric lights, cars, and mobile phones are all liberating our eyes, legs, hands, ears, etc.

Future technological progress will mainly be based on intelligent technology, and the direction is to liberate our brains. Now, when reading via mobile phones, shopping on websites, and driving on the street, the brain has partially given up the right to choose and handed it over to the digital push. The human brain and intelligence are integrated, and humans have become smarter. This is the direction that technological progress should take. Of course, the possibility of human alienation and our loss of dominance over the planet is another issue.

Technology’s impact on the job market in the coming years

Smart technology will definitely reshape the job market. In the future, people will be less and less engaged in agriculture, industry or manufacturing. A large number of jobs will be replaced by artificial intelligence (AI), including teaching. Human beings will be more engaged in the service industry, especially the service industry whose main goal is to facilitate the enjoyment of life.

At present, in developed countries, the service industry accounts for more than 80% of the total economy. The proportion of developing countries engaged in the service industry is still relatively low, but there will be structural improvements in the future.

Another change in employment is that, information skills will become essential skills for employment. Good programming skills, data analysis skills, etc. will all be skills that young people must learn. Just like today’s young people can excel if they master a foreign language and can drive, it will help them find better jobs; in the future, data capabilities will more easily help young people find employment.

Global population growth in 20 years

If there are no large-scale wars, climate disasters or virus crises, the global population will definitely grow in 2040, and may even exceed 10 billion. Now it is about 8.5 billion. However, it is obvious that the distribution structure of the population will change.

The proportion of the population living in what are now considered developed countries will decline, and the population of many developed countries will shrink rapidly in the future. For example, by 2043, Japan’s population may drop to less than 100 million, and South Korea’s may drop to less than 40 million. China is also currently facing the pressure of aging and recently lost its status as the country with the largest population. Both Africa and India are growing; it is very likely that within the next 20 years, the population of Africa and India will each exceed 2 billion.

Demographic trends and the global economy

According to many economists, the greater the population, the more consumption there is, and the more favourable economic development will be. This is an important reason why people believe that Africa and India are full of economic potential. But on the other hand, population drives economic development, at least in traditional societies. Unfortunately, if reforms are not implemented and labour productivity is not improved, the large population may become a burden.

From this perspective, the key for countries such as Africa and India, where the young population is increasing, is to promote social development, technological innovation, and high-quality urban governance, so as to promote economic growth.

So Africa and India still have very heavy tasks. Otherwise, population will become a pressure on economic growth. On the other hand, demographic trends will also change aspects such as the labour market, consumer demand, social security and innovation, thereby driving the next round of nations rising and falling.

How will advancements in healthcare impact economic developments?

I have always believed that life sciences has become the most popular career track in recent years. People’s cherishing of life drives great progress in medical care and has become a new variable that promotes economic development. In the United States, health care is one of the industries with the largest number of new jobs.

Medical care drives the growth of equipment, pharmaceuticals, materials and other industries, even the tourism and elderly care industry. In tourist resorts, housing prices are always higher than in ordinary cities.

Similarly, for countries facing an aging population, medical care is also changing the economic development structure. For example, the country is more inclined to support the elder care economy, community renovation, etc. In China, the elder care industry accounted for 8% of GDP in 2022. I estimate that it may increase to more than 20% in the next twenty years.

Will equal access to healthcare technologies be attainable for all in the future?

In the future, more countries will definitely implement free medical care for all. After all, for people in most countries, medical care may be the largest expense in the second half of their lives. At present, at least 1 billion people in the world do not have medical insurance. This will provide a huge benefit to mankind in the future. Free medical care for all.

But on the other hand, it is impossible for humans to achieve medical equality in the short term, at least not within 20 years. The rich can still have more resources to enjoy medical care, especially in terms of cosmetic surgery and fighting serious diseases.

The COVID-19 pandemic is an obvious case. According to global statistics, most of the people who died from the infection were poor. To some extent, it was a “crisis of the poor.”

Is resource scarcity a potential concern in the future?

“Scarcity of resources” was a problem in the past, but it will not be in the future. The predictions of the 1972 Club of Rome report may have failed. The logic of the industrial revolution in the past 400 years was the utilisation of underground resources, including coal, iron ore, oil, natural gas, etc.

Over the past half century, people have been saying that coal, oil, etc. can only be extracted for another 100 years. However, with technological advancement, human beings have replaced the use of these resources, such as solar and wind energy replacing thermal power. In another 20 years, humans are likely to further utilise space resources. From this point of view, we must believe in human wisdom and the spirit of space exploration.

How will humanity’s evolving relationship with the environment shape the economy?

I addressed this question in one of my recent academic papers, which notes is that the emergence of carbon neutrality goals is changing the operational planning of the international political economy. As everyone knows, achieving the goal of carbon neutrality became the core measure of the global response to climate change and the central issue of international politics in the second decade of the 21st century. More than 170 countries have pledged to become carbon neutral by the mid-21st century.

Responding to the impact of climate change on international political rules presents a new path for production transformation and changes in the international order in achieving carbon neutrality.

Under the constraints of the incremental curtailing of carbon emissions, a country’s national strength increasingly depends on its ability to engage in the parsimonious allocation of emissions. Under the international consensus on climate governance, carbon neutrality triggers a “decarbonization” transformation of the rules of the game in trade, finance, energy and other fields, which in turn triggers changes and a reshaping of the international order.

Under the new path, climate discourse has quickly become the core of the discourse of major powers.

Faced with the complexity of the climate governance landscape, China, as an important participant in the game of great powers, should explore transformation opportunities in facing the international challenges and competition brought about by carbon neutrality, handle the complex relationship between economic development and environmental governance, and explore green and low-carbon development by fitting it to its current path with Chinese characteristics.

Predictions regarding the impact of artificial intelligence on society and the economy over the next two decades

Artificial intelligence (AI) technology innovation based on data algorithms has greatly improved the overall development efficiency of social operations, but it also presents a huge, unpredictable technical risk, like a “double-edged sword”, generating wariness just like food shortages, financial fluctuations, economic crises, and military conflicts, and becoming a new variable that reshapes the underlying logic of future social operations.

This will promote unprecedented debates and stalemates on the ethics of technology. Intelligent technology expands the time and space of human activities, but at the same time, there is a new risk that human labour will be gradually replaced, and humans may lose control of the world and their dominant status. On this point, I agree with Musk’s thinking. How we regulate the development of artificial intelligence will become an extremely important issue over the next 20 years.

The role of the individual across different spheres, including culture, economics, and politics

Human roles are experiencing hierarchical differentiation. Most people still live and work at the bottom, but a few people have become new leaders in various industries throughout the planet. In the past, a country had only one king, and the world was controlled by only a few empires and kings.

Now, every field has its own king. Whether it is a cultural field that can be divided into several sub-fields, such as movies, novels, art, sports, or manufacturing, which can be divided into at least 500 industries, there will be people who can be a “king” who dominates the world in a certain field.

The role of politics is still large, but not as important as in traditional societies. International organisations, multinational corporations, opinion leaders, etc., all share power in the political field. The world will become more complex, and the role of individuals will become more multi-layered and their positions in the hierarchy of international society are more obvious.

What aspects will hold value in the future for both rich and disadvantaged people?

Technology is still the most valuable aspect of the changes we face, whether we are rich or disadvantaged. Whoever makes better use of smart technology is likely to occupy a more favourable social position. Rich people will also be eliminated if they are not good at learning.

Over the years, we have seen many wealthy people go bankrupt because they did not keep up with the trends of the times. However, if some disadvantaged groups can make good use of technology, they can turn their lives around. Many grassroots Internet celebrities have completely changed their destiny in just a few years or even a few months. This is the power of technology.

Further globalisation or the economic fragmentation in the world

Globalisation will definitely not stop. However, there will be new changes in the dynamics and characteristics of globalisation in the future. From a driving perspective, China and other emerging economies will become the locomotive, driving the next wave of globalisation. In contrast, Western countries have become more closed and conservative.

From a characteristic point of view, future globalisation may lead to the phenomenon of “parallel worlds”. Western countries may use “small courtyards and high walls” to restrict the export of their own high-tech products, which would otherwise lead to the acceleration of market integration in the non-Western world. In the next 20 years, it is likely that two types of globalisation will occur simultaneously. One category is Western-centric; the other is non-Western-centric.

The primary threats to the global economy in the next 20 years

The current global economy is suffering through the largest recession since the end of World War II, one worse than the 2008 international financial crisis. The average global economic growth in the first decade of the 21st century was 4%-4.5%; in the second decade it dropped to 3-3.5%; and the average global economic growth in the three years since 2020 has only been about 2%, in 2023 it failed to rise again.

This shows that the global economy has fallen into long-term stagnation. This is mainly due to three reasons: First, aging has led to the weakening of economic momentum; second, the bottleneck of the technological revolution has failed to greatly stimulate global economic growth as it did in the past.

The third reason is the uncoordinated economic and financial policies of various countries. The global economy needs to be revitalized and major countries need to play their role; the G20 is a critical platform. Unfortunately, the current G20 seems to be somewhat ineffective.

The major threats humanity is likely to face in the next two decades

Mankind faces many threats, including disasters caused by climate change, the next round of virus crises, and regional wars. But for me, I still have to remind that the biggest threat we may face is smart technology. Artificial intelligence is replacing humans, and the 21st century may be the last century in which humans dominate the Earth’s operations. From this perspective, mankind is currently trapped in ideological poverty and, needs more ideological and thought revolutions.