The world of today through the lens of 2020

Foresight 2020--Economic, Industry and Corporate Trends is a 99-page study, released this month by the Economist Intelligence Unit (EIU). This is the result of EIU's surveying 1,656 executives in 100 countries and in-depth interviews with executives, analysts and policy makers in late 2005. About a third of the subjects were CEO's. The respondents were from: Asia-Pac (30%), Europe (34%) and North America (27%).

According to a press release by Cisco, the sponsor of the study, the key findings of the study include:

  • Economic growth is expected to remain robust over the next 15 years with the United States, China and India accounting for more than 50 percent of all new growth. Overall, global gross domestic product (GDP) will grow at an annualized rate of 3.5 percent.
  • The U.S., which will account for 16 percent of the world's economic growth, will continue to outpace other major developed economies between now and 2020. U.S. growth will be driven by its ability to continue to add knowledge workers to its workforce that are strong in skills such as collaboration, communication, decision-making and leadership. In addition, the U.S. will benefit from interaction-based productivity from continued investment and use of information technologies.
  • By 2020, China's economy measured at purchasing power parity (PPP) exchange rates will be on par with the United States and Asia's overall share of the global economy will rise to 43 percent from 35 percent currently. During this growth period, China is set to have the second largest consumer market and will have the largest tech sector.
  • 471 million net new workers will enter the global workforce, with India accounting for a remarkable 30 percent (142.4 million). China will account for 65 million, with the United States the third-largest contributor with 12.5 million new workers. The EU will experience a growth of 8.4 million workers. The overwhelming majority of new U.S. and EU jobs will be in the service industry.
  • While price and quality will continue to matter, more than 90 percent of those surveyed believe the importance of the personalization of services will increase dramatically as interactions and customization become vital components of both customer service and worker behavior.
  • As automation of process becomes more prevalent, companies will increasingly seek competitive advantage by enhancing the productivity and growth of knowledge workers. Among survey respondents, the greatest area for productivity gains is knowledge management. Technology spending will shift to enable knowledge workers to do their jobs better.
  • The nature of the workforce will continue to change. Two-thirds of executives expect flatter organizations in which independent decision-making and collaborative environments will be the norm. These changes will require a new approach to organizational management and human relations. Customers and suppliers will become more involved in product development, cross-functional and cross border teams will work together more frequently and partnerships with other organizations will proliferate.
  • While its income per head will lag behind, by 2020 China will be on par with the United States as the leading consumer market. China's share of global consumer spending will nearly triple in the next 15 years. Asia overall will be the largest consumer region. For example, by 2020 Asia is projected to account for 38 percent of all car sales, nearly double current levels.
It is known that people overestimate the speed of change, while underestimating the amount of change, when asked to describe it into the future. From the very perspective of 2020, I would personally be inclined to look at the results of this study more in terms of the chatter occurring during a Freudian session. They may well be the result of too much googlism combined with the effects of delayed diffusion of western fads into the rest of the world. Provided that history flows linearly from here, they look more like buoys for where the minds of the world's economic leaders will be over the next 5 years: collaboration, personalization, organizational flattening, knowledge management, etc. Otherwise, there is little attention given to environment or the negative externalities of doubling the current levels of, say, cars. Oh well, absent surprise, who can say optimism isn't better?

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