7 forces that will change the future of the economy



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The arrival of the Internet in the early 1990s is one of the latest paradigm shifts that has profoundly transformed the economy and people's lives.

The Internet was a change with such a radical (or almost as radical) impact, argues Jeff Desjardins, editor of the book "Visualizing Change: A Snapshot of Our Data-Based World," such as the creation of Nicolaus Copernicus's heliocentric model. of Albert Einstein's relativity.

In the business world, adds the founder of the Visual Capitalist website, Technological change is the most obvious way to drive change in markets.

But also the new consensus in this area can be driven by people (such as Steve Jobs, Warren or Jeff Bezos); by innovative models (such as SpaceX, Uber or Spotify); by changes in the mentality of consumers (such as the inclination towards renewable energies); or by changes in the balance of economic influence in the world (such as the rise of China).

"This means that great opportunities they can come from anywhere, "says Desjardins.

"Tomorrow's paradigm shift is happening somewhere today," he adds.

And it can come hand in hand with Africa's economic growth, the explosion of crypto-coins, the omnipresence of artificial intelligence, the green revolution, or any other site, notes the editor.

In this article, we have selected some of the forces that will change the future of the economy, according to the information in the book.

1. The invasion of technological giants

For decades, the world's leading companies had an industrial focus on large-scale mass production or the extraction and processing of natural resources.

This is the case of companies such as Ford, General Electric, Exxon or Mobil.

Over time, companies engaged in financing, telecom or product sales in the industry entered the top ten of the companies with the highest market value. retail.

But now technology and commerce have come together in such a way that information has become more valuable than physical assets.

The paradigm shift has accelerated so rapidly that in the last five years the list of the largest trading companies has changed radically, as the chart shows.

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2. Increasing the speed of Chinese growth

Although not something new, what stands out is the speed with which the Chinese economy and technological development advances.

China currently has cities whose economic productivity is greater than that of entire countries.

In fact, the country has more than 100 cities with more than one million inhabitants. They were developed based on the creation of factories, the extraction of natural resources or the handling of data.

One example is the development of cities around the Yangtze River, where are located Shanghai, Suzhou, Hangzhou, Wuxi, Nantong, Ningbo, Nanjing and Changzhou.

The latter, with a Gross Domestic Product (GDP) of US $ 2.6 billion, higher than Italy.

For the time being, calculations indicate that between 2017 and 2019, China will be the fastest growing economy (35.2%) and, by 2030, will surpass the United States as the world's leading economy.

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3. The increase in megacities

In the coming decades, the population growth of cities will transform the global economy.

Projections suggest that Western countries and China will see birth rates stabilized, while African countries and those in the rest of Asia will experience a boom demographic and rapid urbanization.

This phenomenon, much studied, is known as the emergence of megacities.

By the end of this century, Africa will be at least 13 megacities larger than New York.

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<h2 class=4. The increase in indebtedness

It is estimated that in the world there is an accumulated debt of over $ 240 billion, of which $ 63 billion is owed by governments.

The United States, Europe and some emerging economies have increased their level of indebtedness in recent years, taking advantage of the cycle of low interest rates.

Recently, the US Its level of indebtedness has increased, while the country's fiscal deficit continues to grow rapidly.

As a percentage of Gross Domestic Product (GDP), Japan has a debt of 253%; United States of 105%; Spain 98%, United Kingdom 85%, Brazil 74% and Mexico 46%, to name but a few.

And globally, the countries that accumulate more debt in relation to the others are the United States, Japan and China.

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5. The speed of technological change

Major technological innovations in modern history were, for example, the creation of electricity, the telephone, the car, or the airplane.

The massification of these products has, in some cases, delayed several decades, considering the time elapsed between the first prototype and widespread adoption of the product by consumers.

It is estimated that in the car case were about six decades; of the phone, five; and credit cards, more than 20 years.

Today, however, the time when the market adopts a new technology can take only a few months.

6. Barriers to trade

After World War II, the world tended to phase out trade barriers between countries.

However, this trend has recently been challenged by countries such as the United States which in 2018 applied tariffs to various Chinese products, triggering a multi-dollar trade war between Washington and Beijing.

The question is whether the world will continue to move towards free trade or whether new rules of the game will emerge in trade relations between countries, a phenomenon the book describes as the "trade paradox."

7. The Green Revolution

The increasing use of renewable energy has accelerated in recent years, as production costs have fallen and technologies have advanced.

Some projections indicate that in two decades, solar and wind power will occupy almost half of the installed electrical capacity in the world.

Others point out that by the year 2047 there will be about 1,000 million electric cars in transit around the world.

And cleaner energy investment globally could reach $ 10.2 billion by 2040, according to the figures in the book.

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