12 Trends post-Christmas (Part 1)

By Robert Hickson 21/12/2011

Here’s (part 1 of) my seasonal selection of some trends to keep an eye on, not just in the New Year but over the longer term. In 2012 I’ll spend more time on exploring implications of such trends rather than the easier job of just describing them.

A stagnating economy

Whether the Euro and/or the European Union shatter or shrink is only part of current economic uncertainty. China won’t be the same economic prop that it was in 2008. Its growth is slowing as the easy growth opportunities disappear. There are concerns of inflation and a housing bubble in China.

The OECD has warned that the unpredictable ‘animal spirits’ of the market threaten the stability of many governments (finally, the shamanistic nature of economics is acknowledged?). Brian Easton has noted that many of the economists of his acquaintance expect a long global stagnation and aren’t sure how long it will last.

Most of the global discussion at the moment is about austerity. The stimulus packages put in place in 2008 are largely gone, so how will economies grow? Some liberal economists (Stiglitz, Krugman, and Roubini) point to the need for additional stimuli, but politicians don’t appear enthusiastic.

Longer term, the growing middle classes of Asia are likely to re-stimulate economic growth. But why should we sit and wait for that to happen?

2 degrees of warming

International opinion widely concurs that insufficient action has been taken so far to contain greenhouse gas emissions to levels that would prevent an assumed ‘safe’ global temperature rise of 2o Celsius. The International Energy Agency’s 2011 Outlook notes that ‘the door is closing’ on the chance of keeping C02 emission levels below 450 ppm to meet this target.

The New Zealand Climate Change Centre has a helpful briefing on the challenge of limiting warming to 2 degrees. The impacts of such a temperature rise (or even a lesser one) are uncertain, but analyses are getting better at attributing extreme weather events to changing climate. However, more evidence won’t necessarily change the minds of those who don’t accept humans can change the climate.

3-D printing

The ability to print three dimensional objects is developing rapidly. It is no longer the realm of garage-based hobbyists, but is being applied to aircraft parts (as well as the whole plane), electronics, and medicine (bone and soft tissues).

It is too early to claim that it is the next industrial revolution, but it is opening up new design and manufacturing opportunities, both for established and new companies. And the larger issue it highlights is a growing interest in Do It Yourself technology development (be it biology or engineering) that may lead to new well springs of innovation, similar to what has occurred in the software sector, and what kick-started the first industrial revolution.

Four-ty four times more data

Avind Krishna from IBM predicts that in 2020 there will be 35 zettabytes of data (let’s just say that’s an awful lot), compared with 800,000 petabytes in 2009. (Of course all computer companies would say there will be more data, but we can see this in our daily lives too).

To help make that more imaginable – a smart phone user now may download about 15MB of data a day. In 2020 that may be 1 GB. The interesting issue is what we will be able to do with that information.

However, our ability to absorb and understand the information may limit this trajectory.

Update: — I’ve found that Avind Krishna’s prediction actually comes from IDC’s Digital Universe report

5 million folk

… in New Zealand by about 2025. Of these, around 1 million will be over 65. How many will (still) be working, and able to live well and healthily?

By 2031 around 2 million people may live in the Auckland region. That will still be small by international standards, but it’s a big chunk of our population in one place. What will that mean economically, socially, and culturally for New Zealand?

6 emerged economies

The World Bank projects that by 2025 half of global economic growth may come from Brazil, China, India, Indonesia, South Korea, and Russia. A multi-polar world.

As the McKinsey Global Institute point out, much of the future economic growth will reside in ‘middle-weight’ cities (ie those smaller than megacities), many of which are or will be in Asia. New Zealand would do well to cultivate closer relationships with ASEAN countries.

Another six in my next posting.