Megathreats or prosperity?

It is impossible to predict the future. But you can anticipate multiple, plausible futures (scenarios) based on megatrends that run for decades and cyclical developments in many complex systems. Based on informed expert speculations, what might we expect of the decades ahead? It depends on the expert. Let’s see what Nouriel Roubini (professor emeritus of economics at New York University's Stern School of Business) and Hamish McRae expect (economic journalist).

For this look into possible futures, I used Roubini’s book Megathreats (published 2022) and McRae’s book The World in 2050 (published 2023). McRae wrote his previous book The World in 2020 about thirty years ago, and seems not unsatisfied with his predictions. But can he do it again…?

According to Roubini: “The past 75 years we lived with relative stability. Unfortunately, this prosperity is not likely to continue much longer. We are facing an era of severe instability, conflict, and chaos. We are facing megathreats unlike anything we have faced before - and they are interconnected.

Megathreats

We must learn to live on high alert. Economic and geopolitical certainties - from job security, to a sustainable planet with most infectious diseases conquered and to peace among rival great powers - are disappearing.

We are the authors of our own fate. Many megathreats arose from actions that looked like solutions back in the day: financial deregulation and unconventional macroeconomic policies, carbon-emitting industrialization, the offshoring of manufacturing jobs, the development of artificial intelligence, and empowering China to compete globally, among others.”

The megathreats that Roubini warns about are a severe debt crisis, dangerous policies that make things worse, the demographic time bomb, the boom-bust-cycle, stagflation, currency meltdowns and financial instability, the end of globalization, Artificial Intelligence, a new cold war (that might become hot/nuclear?), and an unlivable planet due to climate change.

It’s clear that he thinks that a dark destiny is the most plausible outcome, as it looks impossible to avoid or solve the threats that he discusses. That’s why Roubini is also known as Dr. Doom.
“Fasten your seatbelt. It's going to be a bumpy ride through a very dark night.”

Prosperity for many

According to McRae: “The big judgement is that the world will continue to become more prosperous, as well as healthier, better educated, and I hope more peaceful. But there are enormous challenges, of which perhaps the most important will be those of the environment.”

If it becomes clear by the mid-2020s that the likely rise in temperature will be 2 degrees or more, then a massive shift in policy will take place. We will realize we are not doing enough. The world will throw everything it has at the problem to reverse it. (…) Ultimately, to be despondent is to ignore the ingenuity and adaptability of humankind. (Which also means that he counts on technology).

McRae starts with the current situation by country (anno 2020) and discusses five forces for change: demography, resources and the environment, trade, finance and globalization, technology, and governance. Next, he offers his views on the world in 2050 by country. It is an optimistic perspective: a world of 10 billion people, an older population, where two-thirds will be middle class. There are many things that could go wrong, so he’s not blind to the challenges. He assumes there will not be a war - that would make all foreseeable speculations meaningless.

Five forces for change

Change drivers are a great way to look at the dynamics of the world. Let’s work with McRae’s list. This is super relevant for organizations: how to prepare for possible changes?

1. Demography entails three trends. One is the aging of the developed world, with in some countries a decline in population. Second, there is the shift within Asia from China to India as the biggest population. And third is the rising population of Africa. Interesting issues are how Europe, China, and Russia will deal with an aging and shrinking population and how India, Africa, and the Middle East will deal with their growing, youthful populations. Will the USA keep growing, and how will countries in general manage immigration?

2. Resources and the Environment: Growing to 10 billion people (plus urbanization) means more pressure on resources and the environment. To offer middle-class lifestyles to a majority of the world's population will require technologies that have yet to be developed. There needs to be advances in crop yields, new forms of energy generation and storage, better construction of homes, more efficient transport - the list is almost endless.

Eliminating poverty means people using more energy, having larger homes, consuming more calories, being able to travel, living longer, and enjoying all the other benefits of economic development. (My question: we could redefine what a higher standard of living means. Are we happier with more stuff and travel? Or can we raise our standards in a non-material/non-spending way?)

More people with a higher standard will use more energy, in spite of the efforts of the developed world to curb energy use. Will we do it fast enough? It may take until 2050 to ban fossil fuels completely, as renewable energy must become more efficient and circular (regarding the rare earth minerals needed). In the meantime, the climate changes

3. Trade, Finance, and Globalization. The questions for finance are how much damage has been done by the crash of 2008 and the ultra-loose monetary policies of the central banks over the past decade. Though the banks were saved, the world plunged into the deepest recession since the 1930s, and the recovery was sustained by very low interest rates. Cheap money led to asset inflation. Homes became two to three times more expensive.
McRae expects a financial crisis sometime in the 2020s. What will happen next? The answer is that we don't know. What we do know is that the capitalist system is under strain.

And will globalization continue, or are we facing decades of trade barriers? McRae sees that the nature of trade changes from goods to the trade of ideas and capital. We won’t ship or fly so many goods around the world. Instead, the emphasis will shift to local production. But we can export expertise and (online) services, such as design, IT, marketing, etc.

So, Finance faces three uncertainties. Will financial flows remain free, or will barriers be put up? Will the industry structure of banks, stock markets, foreign exchanges, etc., be retained in a world where China is the world's largest economy and India is number three? And will national currencies, issued by central banks and guaranteed by governments, remain dominant or will digital currencies take over?
McRae has his doubts, Roubini expects the worst (more on that later).

4. Technology, a major and unpredictable change driver. We need technology for incremental change: advances to make public transport non-polluting, and to lift the efficiency of health and education services. As for housing, technology might help lower both building and maintenance costs.

Regarding work, the demand for highly skilled labour will increase. All working people will need to become more resilient: they have to keep learning and adjusting.

Then there is transformational change caused by technology. Developments in AI lead to many wildcards. It can help us design useful and biodegradable materials or develop vaccines, but also make decisions on its own about human beings. Other technology wildcards include the industries of Energy storage and efficiency, Healthcare - can we beat the next viruses, Biotechnology - will we edit our genes, Agriculture - how we transform our food production, and Manufacturing - to bio-engineered materials?

5. Governance. As many professionals point out, the social contract is cracking. First, there’s a lack of success of the developed world since the financial crash of 2008. GDP growth was slow even in reasonably successful economies, productivity growth was poor, median incomes stagnated, income and wealth inequality rose, and, in much of Europe, unemployment remained high and opportunities for the young remained dismal.

Also, if a shrinking workforce has to support a growing number of non-working pensioners, that will require higher taxes and hence depress the real wages of those at work. Citizens will pay more tax to maintain the present level of government service. A lot of research shows that people trust institutions and companies less and less, and that populism (promising painless, quick fixes to our problems and uncertainties) is on the rise.

Democracies take a lot of time and effort and respond slowly. Autocracies are quick to respond, and uncertain people seem to want father-figures like leaders with a magic wand.

In conclusion, the five forces of change proffer many questions, thus uncertainties. These developments will drive change, but the direction is not clear yet. They represent crucial-to-follow topics for all leaders, professionals, organizations, and people if we want to make sense of our future options…

If you want to learn more, buy and read The World in 2050 by Hamish McRae

In the next blog post, we'll look at Roubini’s megathreats: debt crisis, boom-bust policies, demography, deglobalization, new cold war, AI, and an uninhabitable planet. And compare those with McRae’s change drivers and hopefulness.

For now, consider the five change drivers:

• How will they impact your organization?
• Can you start to follow some of these topics to keep yourself updated?
• When can you convene your team to talk about future opportunities and threats?
   

Doing nothing with this information is the riskiest strategy we can choose. Let’s think about it, let’s have a dialogue, let’s brainstorm possibilities, let’s do what we can.

© Marcella Bremer, 2025

Do you want to be Ready for What's Coming Next? Get 4 insightful videos on Strategic Foresight and how to anticipate Change.