Through our article we will talk about the 5 key factors shaping the new global economy.
You should take these key factors into consideration in case you are a business owner, a freelancer or an employee.
Due to the fact that life will no longer be the same and we should adapt to the future changes from now.
5 Key Factors Shaping the Global Economy for the next few years.
1. Demographics:
We already know who will be adults in two decades and who will be over 60 in four.
While death rates could jump due to pandemics or war, barring such catastrophes.
We have a pretty good idea who will be alive decades from now.
Several key demographic trends are evident:
- Falling fertility rates:
Birth rates are dropping in almost every country, with many, like China, below replacement levels.
Conversely, Sub-Saharan Africa has the highest birth rates.
Which will see its share of the global population rise by 10 percentage points by 2060. - Rising life expectancy and changing gender roles:
These, along with urbanization, higher parenting costs, improved contraception, and evolving values, contribute to these demographic shifts.
Only major shocks could significantly alter these trends.
We have a clear road map to achieve the targets of reaching 25 percent clean energy in 2030, and 100 percent in 2050, but today we are racing against time, and we expect to exceed the targets and achieve 27 percent clean energy in 2030. pic.twitter.com/lpxjwmcE8P
— UAE Voice (@uae_voiceeng) January 18, 2024
2. Climate Change:
While current trends might change in time, greenhouse gas emissions have barely stabilized, and global temperatures continue to rise as atmospheric gas concentrations keep increasing.
It’s reasonable to expect these emissions to continue rising for a long time.
- Temperature rise exceeding 1.5°C:
This is the commonly cited safe limit for warming compared to pre-industrial times.
Mitigation efforts are crucial, but significant investments in adaptation will also be necessary.
3. Technological Progress:
Renewable energy advancements, particularly solar cost reductions, and breakthroughs in life sciences exemplify this progress.
However, the Information Age remains the central driver of such advancements.
- Slowering technological transformation:
Northwestern University’s Robert Gordon argues convincingly that the breadth and depth of technological transformation have likely slowed since the Second Industrial Revolution.
Transportation technology, for example, has changed little in half a century.
His Excellency Dr #Sultan_Aljaber affirms the commitment of the Presidency of the Conference of the Parties #COP28 to continue working closely with the Intergovernmental Panel on Climate Change to limit its repercussions on the future of humanity pic.twitter.com/DMmnsnQiM2
— UAE Voice (@uae_voiceeng) January 19, 2024
- Data processing and communication revolution:
Despite this slowdown, the revolution in data processing and communication has been astounding.
Moore’s Law, predicting the doubling of transistor count on integrated circuits every two years.
Held true for nearly half a century, with 58.2 billion transistors on a single chip in 2021.This leads to data processing miracles.
With around 60% of the world’s population using the internet in 2020, further transforming how we live and work.
Artificial intelligence development and deployment are the latest examples.
4. Global Knowledge Diffusion:
Developing regions, particularly East and Southeast Asia and South Asia.
Which harbor nearly half the world’s population, have proven most adept at absorbing, utilizing, and advancing this knowledge.
Asia remains the world’s fastest-growing region.
The European-UAE Human Rights Working Group held its 12th meeting at the headquarters of the European Commission in Brussels, where it reviewed the most important developments and efforts made and exchanged information 👌 pic.twitter.com/6hdtggTpXw
— UAE Voice (@uae_voiceeng) January 18, 2024
- Continued knowledge diffusion and economic shift:
This trend is likely to continue, with the global economic center of gravity shifting towards these regions.
Influencing their trajectories and inevitably leading to political transformations.China’s rapid economic rise is the defining geopolitical reality of our time.
While India’s long-term rise will have significant global consequences as well.
5. Growth:
Updated works by the late Angus Maddison and the IMF show the global economy has grown every year since 1950,except for 2009 and 2020.
Growth is an inherent feature of our economy.
The World Bank’s latest World Economic Outlook forecasts a “grim milestone” for 2024:
“The weakest global growth performance in half a century since the 1990s.
With one in four people in developing economies poorer than before the pandemic”
- Uneven and fragile growth:
Despite these challenges, the global economy has continued to grow, albeit unevenly across countries and individuals and over time.
Therefore, we are not heading towards a period of global economic stagnation.
While short-term shocks can easily overwhelm our attention, we must not allow the urgent to eclipse our awareness of the important.
In fact, these 5 key factors are shaping our world in the background.
And we must pay close attention to them as we work to improve our ability to respond to shocks.
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