GlobalTrends 2040

A PUBLICATION OF THE NATIONAL INTELLIGENCE COUNCIL MARCH 2021 2040 GLOBAL TRENDS A MORE CONTESTED WORLD A MORE CONTESTED WORLD a

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“Intelligence does not claim infallibility for its prophecies. Intelligence merely holds that the answer which it gives is the most deeply and objectively based and carefully considered estimate.” Sherman Kent Founder of the O昀케ce of National Estimates Image / BigstockBastien Herve / Unsplash

ii GLOBAL TRENDS 2040 Pierre-Chatel-Innocenti / Unsplash

GLOBAL2040 TRENDS A MORE CONTESTED WORLD MARCH 2021 NIC 2021-02339 ISBN 978-1-929667-33-8 To view digital version: www.dni.gov/nic/globaltrends A PUBLICATION OF THE NATIONAL INTELLIGENCE COUNCIL Pierre-Chatel-Innocenti / Unsplash

TABLE OF CONTENTS v FOREWORD 1 INTRODUCTION 1 | KEY THEMES 6 | EXECUTIVE SUMMARY 11 | THE COVID-19 FACTOR: EXPANDING UNCERTAINTY 14 STRUCTURAL FORCES 16 | DEMOGRAPHICS AND HUMAN DEVELOPMENT 23 | Future Global Health Challenges 30 | ENVIRONMENT 42 | ECONOMICS 54 | TECHNOLOGY 66 EMERGING DYNAMICS 68 | SOCIETAL: DISILLUSIONED, INFORMED, AND DIVIDED 78 | STATE: TENSIONS, TURBULENCE, AND TRANSFORMATION 90 | INTERNATIONAL: MORE CONTESTED, UNCERTAIN, AND CONFLICT PRONE 107 | The Future of Terrorism: Diverse Actors, Fraying International Efforts 108 SCENARIOS FOR 2040 CHARTING THE FUTURE AMID UNCERTAINTY 110 | RENAISSANCE OF DEMOCRACIES 112 | A WORLD ADRIFT 114 | COMPETITIVE COEXISTENCE 116 | SEPARATE SILOS 118 | TRAGEDY AND MOBILIZATION 120 REGIONAL FORECASTS 141 TABLE OF GRAPHICS 142 ACKNOWLEDGEMENTS iv GLOBAL TRENDS 2040

FFOREOREWWORDORD elcome to the 7th edition of the National Intelligence Council’s Global Trends report. Published every four years since 1997, Global Trends assesses the key Wtrends and uncertainties that will shape the strategic environment for the United States during the next two decades. Global Trends is designed to provide an analytic framework for policymakers early in each administration as they craft national security strategy and navigate an uncertain future. The goal is not to offer a speci昀椀c prediction of the world in 2040; instead, our intent is to help policymakers and citizens see what may lie beyond the horizon and prepare for an array of possible futures. Each edition of Global Trends is a unique undertaking, as its authors on the National Intel- ligence Council develop a methodology and formulate the analysis. This process involved numerous steps: examining and evaluating previous editions of Global Trends for lessons learned; research and discovery involving widespread consultations, data collection, and commissioned research; synthesizing, outlining, and drafting; and soliciting internal and ex- ternal feedback to revise and sharpen the analysis. A central component of the project has been our conversations with the world outside our security gates. We bene昀椀ted greatly from ongoing conversations with esteemed academ- ics and researchers across a range of disciplines, anchoring our study in the latest theories and data. We also broadened our contacts to hear diverse perspectives, ranging from high school students in Washington DC, to civil society organizations in Africa, to business lead- ers in Asia, to foresight practitioners in Europe and Asia, to environmental groups in South America. These discussions offered us new ideas and expertise, challenged our assump- tions, and helped us to identify and understand our biases and blind spots. One of the key challenges with a project of this breadth and magnitude is how to organize all the analysis into a story that is coherent, integrated, and forward looking. We constructed this report around two central organizing principles: identifying and assessing broad forces that are shaping the future strategic environment, and then exploring how populations and leaders will act on and respond to the forces. Based on those organizing principles, we built the analysis in three general sections. First, we explore structural forces in four core areas: demographics, environment, economics, and technology. We selected these areas because they are foundational in shaping future A MORE CONTESTED WORLD v Image / Bigstock

dynamics and relatively universal in scope, and because we can offer projections with a reasonable degree of con昀椀dence based on available data and evidence. The second sec- tion examines how these structural forces interact and intersect with other factors to affect emerging dynamics at three levels of analysis: individuals and society, states, and the inter- national system. The analysis in this section involves a higher degree of uncertainty because of the variability of human choices that will be made in the future. We focus on identifying and describing the key emerging dynamics at each level, including what is driving them and how they might evolve over time. Finally, the third section identi昀椀es several key uncer- tainties and uses these to create 昀椀ve future scenarios for the world in 2040. These scenarios are not intended to be predictions but to widen the aperture as to the possibilities, exploring various combinations of how the structural forces, emerging dynamics, and key uncertain- ties could play out. When exploring the long-term future, another challenge is choosing which issues to cov- er and emphasize, and which ones to leave out. We focused on global, long-term trends and dynamics that are likely to shape communities, states, and the international system for decades and to present them in a broader context. Accordingly, there is less on other near- term issues and crises. We offer this analysis with humility, knowing that invariably the future will unfold in ways that we have not foreseen. Although Global Trends is necessarily more speculative than most intelligence assessments, we rely on the fundamentals of our analytic tradecraft: we construct arguments that are grounded in data and appropriately caveated; we show our work and explain what we know and do not know; we consider alternative hypotheses and how we could be wrong; and we do not advocate policy positions or preferences. Global Trends re昀氀ects the National Intelligence Council’s perspective on these future trends; it does not represent the of昀椀cial, coordinated view of the US Intelligence Community nor US policy. We are proud to publish this report publicly for audiences around the world to read and consider. We hope that it serves as a useful resource and provokes a conversation about our collective future. Finally, a note of gratitude to colleagues on the National Intelligence Council and the wider Intelligence Community who joined in this journey to understand our world, explore the future, and draft this report. The Strategic Futures Group National Intelligence Council March 2021 vi GLOBAL TRENDS 2040

INTRODUCTION Key Themes URING THE PAST YEAR, THE COVID-19 PANDEMIC HAS REMINDED THE WORLD OF ITS FRAGILITY AND DEMONSTRATED THE INHERENT RISKS OF HIGH LEVELS OF IN- DTERDEPENDENCE. IN COMING YEARS AND DECADES, THE WORLD WILL FACE MORE INTENSE AND CASCADING GLOBAL CHALLENGES RANGING FROM DISEASE TO CLIMATE CHANGE TO THE DISRUPTIONS FROM NEW TECHNOLOGIES AND FINANCIAL CRISES. These challenges will repeatedly test the resilience and adaptability of communities, states, and the international system, often exceeding the capacity of existing systems and models. This looming disequilibrium between existing and future challenges and the ability of institutions and systems to respond is likely to grow and produce greater contestation at every level. In this more contested world, communities are increasingly fractured as people seek security with like-minded groups based on established and newly prominent identities; states of all types and in all regions are struggling to meet the needs and expectations of more connected, more urban, and more empowered populations; and the international system is more competitive—shaped in part by challenges from a rising China—and at greater risk of con昀氀ict as states and nonstate actors exploit new sources of power and erode longstanding norms and institutions that have provided some stability in past decades. These dynamics are not 昀椀xed in perpetuity, however, and we envision a variety of plausible scenarios for the world of 2040—from a democratic renais- sance to a transformation in global cooperation spurred by shared tragedy—depending on how these dynamics interact and human choices along the way. A MORE CONTESTED WORLD 1 Image / Bigstock

FIVE THEMES APPEAR THROUGHOUT system. Paradoxically, as the world has grown THIS REPORT AND UNDERPIN THIS more connected through communications technology, trade, and the movement of OVERALL THESIS. people, that very connectivity has divided and fragmented people and countries. The hyper- GLOBAL CHALLENGES connected information environment, greater First, shared global challenges—in- urbanization, and interdependent economies cluding climate change, disease, 昀椀nancial mean that most aspects of daily life, including crises, and technology disruptions—are likely 昀椀nances, health, and housing, will be more to manifest more frequently and intensely connected all the time. The Internet of Things in almost every region and country. These encompassed 10 billion devices in 2018 and challenges—which often lack a direct human is projected to reach 64 billion by 2025 and agent or perpetrator—will produce wide- possibly many trillions by 2040, all monitored spread strains on states and societies as well in real time. In turn, this connectivity will help as shocks that could be catastrophic. The produce new e昀케ciencies, conveniences, and ongoing COVID-19 pandemic marks the most advances in living standards. However, it will signi昀椀cant, singular global disruption since also create and exacerbate tensions at all lev- World War II, with health, economic, political, els, from societies divided over core values and and security implications that will ripple for goals to regimes that employ digital repression years to come. The e昀昀ects of climate change to control populations. As these connections and environmental degradation are likely to deepen and spread, they are likely to grow in- exacerbate food and water insecurity for poor creasingly fragmented along national, cultural, countries, increase migration, precipitate new or political preferences. In addition, people are health challenges, and contribute to biodi- likely to gravitate to information silos of people versity losses. Novel technologies will appear who share similar views, reinforcing beliefs and di昀昀use faster and faster, disrupting jobs, and understanding of the truth. Meanwhile, industries, communities, the nature of power, globalization is likely to endure but transform and what it means to be human. Continued as economic and production networks shift pressure for global migration—as of 2020 and diversify. All together, these forces por- more than 270 million persons were living in tend a world that is both inextricably bound a country to which they have migrated, 100 by connectivity and fragmenting in di昀昀erent million more than in 2000—will strain both directions. origin and destination countries to manage the 昀氀ow and e昀昀ects. These challenges will intersect DISEQUILIBRIUM and cascade, including in ways that are di昀케cult The scale of transnational challenges, to anticipate. National security will require not and the emerging implications of fragmen- only defending against armies and arsenals but tation, are exceeding the capacity of existing also withstanding and adapting to these shared systems and structures, highlighting the third global challenges. theme: disequilibrium. There is an increasing mismatch at all levels between challenges and FRAGMENTATION needs with the systems and organizations to Second, the di昀케culty of addressing deal with them. The international system—in- these transnational challenges is compounded cluding the organizations, alliances, rules, and in part by increasing fragmentation within norms—is poorly set up to address the com- communities, states, and the international pounding global challenges facing populations. 2 GLOBAL TRENDS 2040 Images / Bigstock

The COVID-19 pandemic has provided a stark This contestation is playing out across domains example of the weaknesses in international co- from information and the media to trade and ordination on health crises and the mismatch technological innovations. between existing institutions, funding levels, and future health challenges. Within states and ADAPTATION societies, there is likely to be a persistent and Finally, adaptation will be both an growing gap between what people demand imperative and a key source of advantage for and what governments and corporations can all actors in this world. Climate change, for ex- deliver. From Beirut to Bogota to Brussels, ample, will force almost all states and societies people are increasingly taking to the streets to adapt to a warmer planet. Some measures to express their dissatisfaction with govern- are as inexpensive and simple as restoring ments’ ability to meet a wide range of needs, mangrove forests or increasing rainwater stor- agendas, and expectations. As a result of these age; others are as complex as building massive disequilibriums, old orders—from institutions sea walls and planning for the relocation of to norms to types of governance—are strained large populations. Demographic shifts will and in some cases, eroding. And actors at ev- also require widespread adaption. Countries ery level are struggling to agree on new models with highly aged populations like China, Japan, for how to structure civilization. and South Korea, as well as Europe, will face constraints on economic growth in the absence CONTESTATION of adaptive strategies, such as automation and A key consequence of greater imbal- increased immigration. Technology will be a ance is greater contestation within communi- key avenue for gaining advantages through ad- ties, states, and the international community. aptation. For example, countries that are able This encompasses rising tensions, division, to harness productivity boosts from arti昀椀cial and competition in societies, states, and at the intelligence (AI) will have expanded economic international level. Many societies are increas- opportunities that could allow governments ingly divided among identity a昀케liations and at to deliver more services, reduce national debt, risk of greater fracturing. Relationships be- 昀椀nance some of the costs of an aging popula- tween societies and governments will be under tion, and help some emerging countries avoid persistent strain as states struggle to meet the middle-income trap. The bene昀椀ts from rising demands from populations. As a result, technology like AI will be unevenly distributed politics within states are likely to grow more within and between states, and more broadly, volatile and contentious, and no region, ide- adaptation is likely to reveal and exacerbate ology, or governance system seems immune inequalities. The most e昀昀ective states are likely or to have the answers. At the international to be those that can build societal consensus level, the geopolitical environment will be more and trust toward collective action on adapta- competitive—shaped by China’s challenge to tion and harness the relative expertise, capa- the United States and Western-led interna- bilities, and relationships of nonstate actors to tional system. Major powers are jockeying to complement state capacity. establish and exploit new rules of the road. A MORE CONTESTED WORLD 3 Images / Bigstock

his edition of Global Trends STRUCTURAL FORCES Tconstructs its analysis of the future DEMOGRAPHICS AND HUMAN DEVELOPMENT in several stages. Slowing global population growth and a rising median age will help some devel- oping economies, but rapidly aging and First, we examine structural forces in contracting populations will weigh on many developed economies. Decades demographics, environment, economics, of progress in education, health, and poverty reduction will be di昀케cult to and technology that shape the contours build on or even sustain. Pressure for migration is likely to increase. of our future world. Second, we analyze how these structural forces and other factors—combined EMERGING DYNAMICS SOCIETAL with human responses—a昀昀ect emerging Many populations are increasingly pessi- dynamics in societies, states, and the mistic and distrustful as they struggle to deal with disruptive economic, techno- international system. logical, and demographic trends. Newly prominent identities, resurgent established allegiances, and a siloed information en- vironment are exposing fault lines within Third, we envision 昀椀ve plausible scenarios communities and states, undermining civic for the distant future in 2040. nationalism, and increasing volatility. Popu- lations are more informed and have greater The key themes discussed previously ability to express their demands. appear across these sections. SCENARIOS FOR 2040 RENAISSANCE OF DEMOCRACIES The world is in the midst of a resurgence of open democracies led by the United States and its allies. Rapid technological advancements fostered by public-private partnerships in the United States and other democratic societies are transform- ing the global economy, raising incomes, and improving the quality of life for millions around the globe. In contrast, years of increasing societal controls and monitoring in China and Russia have sti昀氀ed innovation. 4 GLOBAL TRENDS 2040

GLOBAL TRENDS OVERVIEW ENVIRONMENT ECONOMICS TECHNOLOGY Climate change will increasingly ex- Several global economic trends, The pace and reach of technolog- acerbate risks to human and national including rising national debt, a more ical developments will increase, security and force states to make hard complex and fragmented trading transforming human experiences choices and tradeo昀昀s. The burdens environment, the global spread of and capabilities while creating new will be unevenly distributed, height- trade in services, new employment tensions and disruptions for all ac- ening competition, contributing to disruptions, and the continued rise tors. Global competition for the core instability, straining military readiness, of powerful 昀椀rms, are shaping condi- elements of technology supremacy and encouraging political movements. tions within and between states. Calls will increase. Spin o昀昀 technolo- for more planning and regulation will gies and applications will enable intensify, particularly of large platform, rapid adoption. e-commerce corporations. STATE INTERNATIONAL Governments will face mounting pres- Power in the international system sures from the combination of economic will evolve to include a broader set of constraints; demographic, environmen- sources, but no single state is likely to tal, and other challenges; and more be positioned to dominate across all empowered populations. A growing gap regions or domains. The United States between public demands and what gov- and China will have the greatest in昀氀u- ernments can deliver will raise tensions, ence on global dynamics, forcing starker increase political volatility, and threaten choices on other actors, increasing democracy. The mismatch may also jockeying over global norms, rules, and spur new or shifting sources and models institutions, and heightening the risk of of governance. interstate con昀氀ict. A WORLD ADRIFT COMPETITIVE SEPARATE SILOS TRAGEDY AND COEXISTENCE MOBILIZATION The international system is The United States and China The world is fragmented A global coalition, led by the EU directionless, chaotic, and have prioritized economic into several economic and and China working with NGOs volatile as international rules growth and restored a robust security blocs of varying size and revitalized multilateral and institutions are largely trading relationship, but this and strength, centered on institutions, is implementing ignored. OECD countries are economic interdependence the United States, China, the far-reaching changes designed to plagued by slower economic exists alongside competition EU, Russia, and a few region- address climate change, resource growth, widening societal di- over political in昀氀uence, gover- al powers, and focused on depletion, and poverty following visions, and political paralysis. nance models, technological self-su昀케ciency, resiliency, and a global food catastrophe caused China is taking advantage of dominance, and strategic defense. Information 昀氀ows by climate events and environ- the West’s troubles to expand advantage. The risk of major within separate cyber-sover- mental degradation. Richer its international in昀氀uence. war is low, and international eign enclaves, supply chains countries shift to help poorer Many global challenges cooperation and technolog- are reoriented, and interna- ones manage the crisis and then are unaddressed. ical innovation make global tional trade is disrupted. Vul- transition to low carbon econ- problems manageable. nerable developing countries omies through broad aid pro- are caught in the middle. grams and transfers of advanced energy technologies. A MORE CONTESTED WORLD 5 Image / Bigstock | Bagir Bahana / Unsplash

INTRODUCTION Executive Summary STRUCTURAL FORCES SETTING America, South Asia, and the Middle East and THE PARAMETERS North Africa bene昀椀t from larger working-age Trends in demographics and human develop- populations, o昀昀ering opportunities for a de- ment, environment, economics, and technology mographic dividend if coupled with improve- are laying the foundation and constructing the ments in infrastructure and skills. Human bounds of our future world. In some areas, development, including health, education, these trends are becoming more intense, such and household prosperity, has made historic as changes in our climate, the concentration improvements in every region during the past of people in urban areas, and the emergence few decades. Many countries will struggle to of new technologies. Trends in other areas are build on and even sustain these successes. Past more uncertain—gains in human development improvements focused on the basics of health, and economic growth are likely to slow and may education, and poverty reduction, but the next even reverse in some areas, although a mix of levels of development are more di昀케cult and factors could change this trajectory. The conver- face headwinds from the COVID-19 pandem- ic, potentially slower global economic growth, gence of these trends will o昀昀er opportunities for innovation but also will leave some communities aging populations, and the e昀昀ects of con昀氀ict and states struggling to cope and adapt. Even and climate. These factors will challenge gov- apparent progress, such as new and advanced ernments seeking to provide the education and technologies, will be disruptive to many people’s infrastructure needed to improve the produc- lives and livelihoods, leaving them feeling inse- tivity of their growing urban middle classes in a cure and forcing adaptation. 21st century economy. As some countries rise to these challenges and others fall short, shifting The most certain trends during the next 20 global demographic trends almost certainly will years will be major demographic shifts as aggravate disparities in economic opportunity global population growth slows and the world within and between countries during the next rapidly ages. Some developed and emerging two decades as well as create more pressure for economies, including in Europe and East Asia, and disputes over migration. will grow older faster and face contracting In the environment, the physical e昀昀ects of populations, weighing on economic growth. In climate change are likely to intensify during the contrast, some developing countries in Latin next two decades, especially in the 2030s. More 6 GLOBAL TRENDS 2040

extreme storms, droughts, and 昀氀oods; melting many economic, human development, and glaciers and ice caps; and rising sea levels will other challenges. accompany rising temperatures. The impact Technology will o昀昀er the potential to mitigate will disproportionately fall on the developing problems, such as climate change and disease, world and poorer regions and intersect with environmental degradation to create new and to create new challenges, such as job vulnerabilities and exacerbate existing risks displacement. Technologies are being invent- to economic prosperity, food, water, health, ed, used, spread, and then discarded at ever and energy security. Governments, societies, increasing speeds around the world, and new and the private sector are likely to expand centers of innovation are emerging. During adaptation and resilience measures to man- the next two decades, the pace and reach age existing threats, but these measures are of technological developments are likely to unlikely to be evenly distributed, leaving some increase ever faster, transforming a range of populations behind. Debates will grow over human experiences and capabilities while also how and how quickly to reach net zero green- creating new tensions and disruptions within house gas emissions. and between societies, industries, and states. State and nonstate rivals will vie for leadership During the next two decades, several global and dominance in science and technology with economic trends, including rising national potentially cascading risks and implications for debt, a more complex and fragmented trading economic, military, and societal security. environment, a shift in trade, and new employ- ment disruptions are likely to shape conditions EMERGING DYNAMICS within and between states. Many governments These structural forces, along with other may 昀椀nd they have reduced 昀氀exibility as they factors, will intersect and interact at the levels navigate greater debt burdens, diverse trading of societies, states, and the international rules, and a broader array of powerful state system, creating opportunities as well as chal- and corporate actors exerting in昀氀uence. Large lenges for communities, institutions, corpo- platform corporations—which provide online rations, and governments. These interactions markets for large numbers of buyers and sell- are also likely to produce greater contestation er—could drive continued trade globalization at all levels than has been seen since the end and help smaller 昀椀rms grow and gain access of the Cold War, re昀氀ecting di昀昀ering ideolo- to international markets. These powerful 昀椀rms gies as well as contrasting views on the most are likely to try to exert in昀氀uence in political e昀昀ective way to organize society and tackle and social arenas, e昀昀orts that may lead gov- emerging challenges. ernments to impose new restrictions. Asian Within societies, there is increasing fragmen- economies appear poised to continue decades tation and contestation over economic, cultur- of growth through at least 2030, although po- al, and political issues. Decades of steady gains tentially slower. They are unlikely to reach the in prosperity and other aspects of human de- per capita gross domestic product (GDP) or velopment have improved lives in every region economic in昀氀uence of existing advanced econ- and raised peoples’ expectations for a better omies, including the United States and Europe. future. As these trends plateau and combine Productivity growth remains a key variable; an with rapid social and technological changes, increase in the rate of growth could alleviate A MORE CONTESTED WORLD 7 Image / Bigstock

large segments of the global population are economic growth, environmental conditions, becoming wary of institutions and govern- and technology, as well as hardening divisions ments that they see as unwilling or unable to over governance models, are likely to further address their needs. People are gravitating to ratchet up competition between China and familiar and like-minded groups for communi- a Western coalition led by the United States. ty and security, including ethnic, religious, and Rival powers will jockey to shape global norms, cultural identities as well as groupings around rules, and institutions, while regional powers interests and causes, such as environmental- and nonstate actors may exert more in昀氀uence ism. The combination of newly prominent and and lead on issues left unattended by the diverse identity allegiances and a more siloed major powers. These highly varied interactions information environment is exposing and ag- are likely to produce a more con昀氀ict-prone gravating fault lines within states, undermining and volatile geopolitical environment, under- civic nationalism, and increasing volatility. mine global multilateralism, and broaden the At the state level, the relationships between mismatch between transnational challenges societies and their governments in every and institutional arrangements to tackle them. region are likely to face persistent strains and ALTERNATIVE SCENARIOS FOR 2040 tensions because of a growing mismatch be- Human responses to these core drivers and tween what publics need and expect and what emerging dynamics will determine how the governments can and will deliver. Populations world evolves during the next two decades. Of in every region are increasingly equipped with the many uncertainties about the future, we the tools, capacity, and incentive to agitate explored three key questions around condi- for their preferred social and political goals and to place more demands on their govern- tions within speci昀椀c regions and countries and the policy choices of populations and leaders ments to 昀椀nd solutions. At the same time that that will shape the global environment. From populations are increasingly empowered and demanding more, governments are coming these questions, we constructed 昀椀ve scenarios under greater pressure from new challenges for alternative worlds in the year 2040. and more limited resources. This widening • How severe are the looming global gap portends more political volatility, erosion challenges? of democracy, and expanding roles for alter- • How do states and nonstate actors en- native providers of governance. Over time, gage in the world, including focus and these dynamics might open the door to more type of engagement? signi昀椀cant shifts in how people govern. • Finally, what do states prioritize for In the international system, no single state the future? is likely to be positioned to dominate across In Renaissance of Democracies, the world is all regions or domains, and a broader range of in the midst of a resurgence of open democ- actors will compete to shape the international racies led by the United States and its allies. system and achieve narrower goals. Acceler- Rapid technological advancements fostered ating shifts in military power, demographics, 8 GLOBAL TRENDS 2040

by public-private partnerships in the United tion and technological innovation make global States and other democratic societies are problems manageable over the near term for transforming the global economy, raising advanced economies, but longer term climate incomes, and improving the quality of life for challenges remain. millions around the globe. The rising tide of In Separate Silos, the world is fragmented economic growth and technological achieve- into several economic and security blocs of ment enables responses to global challenges, varying size and strength, centered on the eases societal divisions, and renews public United States, China, the European Union trust in democratic institutions. In contrast, (EU), Russia, and a couple of regional powers; years of increasing societal controls and these blocs are focused on self-su昀케ciency, monitoring in China and Russia have sti昀氀ed innovation as leading scientists and entrepre- resiliency, and defense. Information 昀氀ows neurs have sought asylum in the United States within separate cyber-sovereign enclaves, and Europe. supply chains are reoriented, and internation- al trade is disrupted. Vulnerable developing In A World Adrift, the international system countries are caught in the middle with some is directionless, chaotic, and volatile as in- on the verge of becoming failed states. Global ternational rules and institutions are largely problems, notably climate change, are spottily ignored by major powers like China, regional addressed, if at all. players, and nonstate actors. Organization In Tragedy and Mobilization, a global coa- for Economic Cooperation and Development lition, led by the EU and China working with (OECD) countries are plagued by slower eco- nongovernmental organizations and revital- nomic growth, widening societal divisions, and ized multilateral institutions, is implementing political paralysis. China is taking advantage of far-reaching changes designed to address cli- the West’s troubles to expand its international mate change, resource depletion, and poverty in昀氀uence, especially in Asia, but Beijing lacks following a global food catastrophe caused the will and military might to take on global by climate events and environmental degra- leadership, leaving many global challenges, dation. Richer countries shift to help poorer such as climate change and instability in devel- ones manage the crisis and then transition oping countries, largely unaddressed. to low carbon economies through broad aid In Competitive Coexistence, the United programs and transfers of advanced energy States and China have prioritized economic technologies, recognizing how rapidly these growth and restored a robust trading rela- global challenges spread across borders. tionship, but this economic interdependence exists alongside competition over political in昀氀uence, governance models, technological dominance, and strategic advantage. The risk of major war is low, and international coopera- A MORE CONTESTED WORLD 9

10 GLOBAL TRENDS 2040

The COVID-19 Factor: Expanding Uncertainty HE COVID-19 PANDEMIC EMERGED GLOBALLY IN 2020, WREAKING HAVOC ACROSS THE WORLD, KILLING MORE THAN 2.5 MILLION PEOPLE AS OF EARLY 2021, DEVAS- TTATING FAMILIES AND COMMUNITIES, AND DISRUPTING ECONOMIES AND POLITI- CAL DYNAMICS WITHIN AND BETWEEN COUNTRIES. PREVIOUS GLOBAL TRENDS EDITIONS FORECASTED THE POTENTIAL FOR NEW DISEASES AND EVEN IMAGINED SCENARIOS WITH A PANDEMIC, BUT WE LACKED A FULL PICTURE OF THE BREADTH AND DEPTH OF ITS disruptive potential. COVID-19 has shaken long-held assumptions about resilience and adaptation and created new uncertainties about the economy, governance, geopolitics, and technology. To understand and assess the impact of this crisis, we examined and debated a broad range of our assumptions and assessments related to key global trends. We asked a series of questions: Which existing trends will endure, which trends are accelerating or decelerating because of the pandemic, and where are we likely to experience fundamental, systemic shifts? Are the disrup- tions temporary or could the pandemic unleash new forces to shape the future? Much like the terrorist attacks of 11 September 2001, the COVID-19 pandemic is likely to produce some changes that will be felt for years to come and change the way we live, work, and govern domestically and internationally. How great these will be, however, is very much in question. ACCELERATING, SHARPENING SOME TRENDS The pandemic and corresponding national responses appear to be honing and accelerating several trends that were already underway before the outbreak. COVID-19 brought global health and healthcare issues into sharp relief, exposed and in some cases widened social 昀椀ssures, underscored vast disparities in healthcare access and infrastructure, and interrupted e昀昀orts to combat other diseases. The pandemic also highlighted weaknesses in the international coordina- tion on health crises and the mismatch between existing institutions, funding levels, and future health challenges. A MORE CONTESTED WORLD 11 Giacomo Carra / Unsplash

Catalyzing Economic Trends. Lockdowns, to more severely crack down on dissent and quarantines, and the closing of international restrict civic freedoms, conditions that may borders have catalyzed some pre-existing outlive the disease. economic trends, including diversi昀椀cation Highlighting Failed International Cooper- in global supply chains, increased national ation. The COVID-19 pandemic exposed the debt, and greater government intervention in weaknesses and political cleavages in interna- economies. Moving forward, the character of tional institutions, such as the World Health globalization may retain some of the changes Organization (WHO) and United Nations, and from this crisis period, and debt, particularly called into question countries’ ability and will- for developing economies, will strain national ingness to cooperate multilaterally to address capacities for many years. common challenges beyond infectious disease, Reinforcing Nationalism and Polarization. particularly climate change. The WHO, which Nationalism and polarization have been on has faced signi昀椀cant funding di昀케culties and the rise in many countries, especially exclu- resistance to mandatory surveillance regimes, sionary nationalism. E昀昀orts to contain and is facing its gravest shock in nearly two de- manage the virus have reinforced nationalist cades. The crisis, however, may ultimately lead trends globally as some states turned inward actors to make deeper reforms, standardize to protect their citizens and sometimes cast data collection and sharing, and forge new blame on marginalized groups. The response public-private partnerships. to the pandemic has fueled partisanship and Elevating the Role of Nonstate Actors. Non- polarization in many countries as groups argue state actors, ranging from the Gates Founda- over the best way to respond and seek scape- tion to private companies, have been crucial to goats to blame for spreading the virus and for slow responses. vaccine research or retro昀椀tting equipment to mass produce medical supplies and personal Deepening Inequality. The disproportionate protective equipment. Nonstate networks will economic impact of COVID-19 on low-income complement national and intergovernmental earners has caused them to fall further behind. action in future health crises, including early When COVID-19 is 昀椀nally controlled, many fam- warning, treatment, facilitation of data-sharing, ilies are likely to have experienced further set- and vaccine development. backs, especially those working in the service or informal sectors or who left the workforce WHILE OTHERS DECELERATE OR REVERSE to provide dependent care—predominantly COVID-19 is slowing and possibly reversing women. The pandemic has exposed the digital some longstanding trends in human develop- divide within and between countries while ment, especially the reduction of poverty and spurring e昀昀orts to improve Internet access. disease and closing gender inequality gaps. Straining Governance. The pandemic is The longest lasting reversals may be in poverty straining government capacity for services and reduction across Africa, Latin America, and contributing to already low levels of trust in South Asia, followed by losses in gender equal- institutions in countries that have not e昀昀ec- ity. The resources devoted to 昀椀ghting COVID-19 tively handled the response. The pandemic and social restrictions could reverse years of is exacerbating the confusing and polarized progress against malaria, measles, polio, and information environment that is undermining other infectious diseases by consuming key public con昀椀dence in health authorities, particu- 昀椀nancial, material, and personnel resources. larly in open societies. Illiberal regimes in some The COVID-19 emergency may bring regions countries are using the pandemic as a pretext together in ways that previous crises have not. 12 GLOBAL TRENDS 2040

Although European countries early in the crisis imposed restrictions on border tra昀케c and ex- ports of critical medical supplies, the European Union has rallied around an economic rescue package and other emergency measures that could bolster the European integration project going forward. COVID-19 could also lead to re- direction of national budgets toward pandemic response and economic recovery, diverting funds from defense expenditures, foreign aid, and infrastructure programs in some coun- tries, at least in the near term. MORE QUESTIONS THAN ANSWERS The unanticipated second- and third-order e昀昀ects of the COVID-19 pandemic have re- minded us how uncertain the future is—both in the long and short term. As researchers and analysts, we must be ever vigilant, asking better questions, frequently challenging our assumptions, checking our biases, and looking for weak signals of change. We need to expect the unexpected and apply the lessons of this pandemic to our craft in the future.   Photo / Bigstock A MORE CONTESTED WORLD 13

STRUCTURAL FORCES Setting the Parameters emographic, environmental, economic, and technological devel- opments will shape the contours of the world we will live in during Dcoming decades. These structural forces—both individually and col- lectively—will offer new bene昀椀ts and opportunities for individuals, communities, and governments in every region to improve how we live, work, and prosper. In addition, the acceleration and intersection of these trends are fostering new or more intense challenges, straining the capacity of societies and governments to manage and adapt. After several decades of extraordinary gains in human development, many countries are likely to struggle to build on and even sustain these successes be- cause moving beyond the basics in education and healthcare is harder, especial- ly with larger populations and tighter resources. In addition, the physical effects of more extreme weather events, hotter temperatures, changing precipitation patterns, and rising sea levels will touch all countries but disproportionately will hurt the developing world and poorer regions. The pace and reach of technolog- 14 Image / Bigstock

ical developments during this period are likely to increase and accelerate, transforming and improving a range of human experiences and capabilities while also creating new tensions and disruptions within and between societies, industries, and states. During the next two decades, several global economic trends, including rising sovereign debt, new employment disruptions, a more complex and fragmented trading environment, and the rise of power- ful companies, are likely to shape conditions within and DEMOGRAPHICS AND HUMAN DEVELOPMENT between states. These structural drivers may redound in unpredictable ENVIRONMENT ways, affording some coun- tries the opportunity to rise to these challenges and ECONOMICS even prosper, while others, burdened by a con昀氀uence of less supportive trends, will struggle. Shifting global de- TECHNOLOGY mographic trends almost cer- tainly will aggravate dispari- ties in economic and political opportunity within and between countries, strain governance, and fuel pressure for global migration during the next 20 years—a pressure that will increase friction between states. State and nonstate rivals will compete for dominance in science and technology with poten- tially cascading risks and implications globally for economic, military, diplomatic, and societal security. Many governments may 昀椀nd they have reduced 昀氀exibility as they navigate greater debt burdens, diverse trading rules, and a broader range of powerful state and corporate actors exerting in昀氀uence. Meanwhile, Asian economies appear poised to continue decades of growth, at least through 2030, and are looking to use their economic and population size to in昀氀uence international institutions and rules. A MORE CONTESTED WORLD 15 Image / BigstockPhotos | Bigstock | Pexels | Chuttersnap / Unslpash

Trending STRUCTURAL FORCES 2000-2020 POPULATION 2020-2040 DEMOGRAPHICS AND Growth HUMAN DEVELOPMENT AGE STRUCTURE Key Takeaways Median age Slowing population growth and a rising global median age are presenting poten- Working age tial economic opportunities for some developing economies, but rapidly aging share of population and contracting populations in some developed economies and China will weigh on economic growth. Share of population over 65 Relatively poor countries in Sub-Saharan Africa and South Asia will account for al- most all global population growth during the next two decades and will be rapidly urbanizing at the same time, most likely overwhelming their capacity to provide POOR the infrastructure and education systems necessary to fully harness their econom- ic growth potential. Poor share of population During the next two decades, demographic shifts and economic incentives are likely to increase pressure for migration out of developing countries, mostly from Sub-Saharan Africa, and primarily into aging, developed countries. Con昀氀ict and MIDDLE CLASS climate disruptions will compound these broader migration trends. These demographic and human development trends will put pressure on gov- Middle-class share of population ernments to increase public investment and control immigration, potentially fuel instability in some countries, contribute to a rising Asia, and add to the agenda of already strained international development institutions. URBANIZATION Urban share of population Share of urban population in poor countries 16 Photo / Bigstock

Trending 2000-2020 POPULATION 2020-2040 Growth AGE STRUCTURE Median age Working age share of population Share of population over 65 POOR Poor share of population MIDDLE CLASS Middle-class share of population URBANIZATION Urban share of population Share of urban population in poor countries A MORE CONTESTED WORLD 17

s birth rates remain low and Athe median age rises, most developed and many emerging improvements through an increased share of economies will see their working age adults in the population, more female participation in the workforce, and populations peak and then start increased social stability associated with older cohorts. However, shifting age structures will to shrink by 2040. challenge some governments, including some developing countries that are aging before reaching higher incomes, such as China and Eastern Europe, and poor countries with surg- ing youth cohorts that will struggle to build su昀케cient infrastructure. Older Populations. Rising old-age dependen- SLOWING POPULATION GROWTH, cy ratios—the population age 65 and older AGING POPULATIONS relative to the working-age population—can weigh on growth even with adaptive strate- During the next 20 years, the world’s popu- gies, such as automation and increased immi- lation will continue to increase every year, gration. In many older countries, including a adding approximately 1.4 billion people to number of advanced economies, the cohort reach an estimated 9.2 billion by 2040, but over 65 is likely to approach 25 percent of the rate of population growth will slow in all the total population by 2040, up from only 15 regions. Population growth in most of Asia will percent as recently as 2010. Japan and South decline quickly, and after 2040, the population Korea are likely to reach median ages of more will begin to contract. Although India’s pop- than 53 in 2040, up from 48 and 44 respec- ulation growth is slowing, it will still overtake tively. Europe is not far behind with a project- China as the world’s most populous country ed average median age of 47, and Greece, around 2027. As birthrates remain low and Italy, and Spain are likely to age faster. These the median age rises, most developed and a countries are likely to see further productivity handful of emerging economies will see their slowdown in the coming decades because populations peak and then start to shrink by older workers usually show fewer productivity 2040, including China, Japan, Russia, and many gains and a greater share of national income European countries. In contrast, Sub-Saha- will be diverted to pensions and health care ran Africa will account for around two-thirds for seniors. of global population growth and is poised to Working Age Populations. Countries with nearly double its current population by 2050, portending extensive strains on infrastructure, large working-age cohorts and relatively few education, and healthcare. young and old dependents have the potential for higher household savings that can be di- Aging: An Opportunity and a Burden rected to investment in human development. The combination of fewer children per woman During the next 20 years, South Asia, Latin and people living longer will see the global America, and the Middle East and North Africa population age rise from a median of about will be in this window of high working-age 31 years in 2020 to 35 in 2040. In middle-in- populations relative to below-working-age come countries, falling birthrates and older and retired dependents. Sixty-eight percent populations can facilitate human development of South Asia’s population will be of working 18 GLOBAL TRENDS 2040

SUB-SAHARAN AFRICA LIKELY TO DOMINATE POPULATION GROWTH IN COMING DECADES WORLD POPULATION: ANNUAL CHANGE BY REGION, 1951-2100 Million persons 120 UN estimate UN forecast Latin America and Caribbean 1988, peak year of (medium Europe, North America, 100 added population, scenario) and Russia/FSU 93 million East Asia, Southeast Asia, and Oceania 80 South Asia Sub-Sarahan Africa Middle East and North Africa 60 40 20 0 -20 1951 60 70 80 90 2000 10 20 30 40 50 60 70 80 90 2100 Source: United Nations Population Division. age in 2040, up from an already elevated 66 old of 30 which is often associated with higher percent in 2020. Latin America and the Middle levels of human development. More than East and North Africa probably will also bene昀椀t one-third of Sub-Saharan Africa’s population from peak working-age population propor- will be younger than 15 in 2040, compared tions of above 65 percent in the coming 20 with only 14 percent of the population in East years. These opportunities for higher poten- Asia. Other populous countries that most likely tial economic growth will occur only if those will still be below the median age threshold in workers are adequately trained and can 昀椀nd 2040 are Afghanistan, Egypt, and Pakistan. jobs. South Asia’s ongoing challenges in job creation, technology adoption, and skills train- URBANIZATION CHANGING DEVELOPMENT NEEDS ing suggest that it will have di昀케culties fully During the next 20 years, the success or failure leveraging its potential labor force. of cities will shape opportunities and quality of Youthful Populations. During the next two life for a growing share of the world’s popula- decades, most countries with large youth pop- tion. The urban population share is expected ulations will be challenged to meet the basic to rise from 56 percent in 2020 to nearly two- needs of their populations, particularly in light thirds by 2040, with nearly all of the growth of the social volatility often associated with in the developing world. Globally, large cities youth bulges. In Sub-Saharan Africa, the me- of more than 1 million residents have been dian age is likely to rise only slightly to 22 by growing at twice the rate of the overall pop- 2040, still well short of the median age thresh- ulation, and nearly 30 percent of the world’s A MORE CONTESTED WORLD 19

URBANIZATION BY COUNTRY INCOME LEVEL Urban centers in poor countries are expanding much more quickly than those in wealthier countries. In 1950, more than half of the world's lower payo昀昀 from this virtuous cycle of de- city-dwellers were in high-income countries; by velopment. Many developing country govern- 2050, nearly half will be in poor countries. ments—even working with the private sector SHARE OF TOTAL GLOBAL URBAN and nongovernmental organizations (NGOs)— POPULATION BY INCOME GROUP, 1950-2050 will be challenged to fund the necessary urban Percent share of global urban population transportation, public services, and educa- 100 tion infrastructure. A 2017 World Bank study High-income countries documented how urban areas in Sub-Saharan 80 Africa often become stuck in a poverty trap in which insu昀케cient worker skills and poor trans- portation networks have resulted in higher 60 costs but lower incomes for workers. In addi- Upper-middle-income countries tion, birth rates in Sub-Saharan Africa’s cities 40 are higher than in other developing regions, potentially aggravating unemployment over 20 Low and lower-middle-income time by increasing the labor supply in cities countries combined more quickly than jobs can be created. 0 1950 70 90 10 30 50 These low- and lower-middle-income countries 60 80 2000 20 40 will also be at greater risk for food insecuri- ty as they urbanize. They currently produce Source: United Nations. only one-third of the food per capita that upper-middle- and high-income countries produce, leaving many dependent on imports. Food distribution systems in these countries population will live in such a large city by 2035, are under greater strain and are less resilient up from 20 percent in 2020, according to the to shocks such as droughts or 昀氀oods, and United Nations’ (UN) projection. Some of the urban households lack access to subsistence world’s least developed countries will have the farming opportunities. world’s fastest growing urban populations. The number of urban residents in poor countries Environmental events are likely to have a greater human impact on newly urbanizing re- is likely to rise by 1 billion to more than 2.5 billion by 2040, according to UN Population gions where dense populations are located on coasts and in other vulnerable areas, but pro- Division projections. Sub-Saharan Africa and South Asia will contribute nearly half and tective infrastructure—most importantly 昀氀ood one-third respectively of the increase in poor control and storm-hardy housing—has not country urbanization. kept pace. Booming cities of middle-income Urbanization has historically been a key driver East, Southeast, and South Asia as well as the of economic development, as workers move low-income urban areas of eastern and south- ern Africa are already exposed to the highest into more productive jobs in cities and urban number of disasters per capita, based on sta- families bene昀椀t from better education and tistics from the Emergency Events Database. infrastructure. However, poorer countries that are rapidly urbanizing are likely to see a 20 GLOBAL TRENDS 2040

PROGRESS ON HUMAN DEVELOPMENT BIRTHS PER WOMAN OF CHILD- INFANT DEATHS IN THE SECONDARY EDUCATION BEARING AGE (TOTAL FERTILITY FIRST YEAR, 1960-2040 COMPLETION RATES, RATE), 1960-2040 1960-2040 Number Deaths as a percent Percent of of births Low and of live births all adults 7 middle income 20 100 Sub- Low and High Saharan middle income income 6 1 Africa 80 5 15 Sub-Saharan 1 Low and High Africa 4 60 middle income income 10 3 High 40 income 2 5 20 Sub-Saharan 1 1 Africa 0 1960 80 2000 20 40 0 1960 80 2000 20 40 0 1960 80 2000 20 40 Source: United Nations Population Division and Pardee Center Source: IHME and Pardee Center Source: Barro-Lee and Pardee University of Denver. University of Denver. Center University of Denver. 1Sub-Saharan Africa is also included in low- and middle-income countries’ data. ASSOCIATED HUMAN DEVELOPMENT CHALLENGES turn, the 昀椀scal capacity for households and Many countries will struggle to build on or governments to fund further improvements, even sustain decades of signi昀椀cant improve- especially in less developed countries. ments in education, health, and poverty re- However, sustained progress in some coun- duction. During the past 20 years, at least 1.2 tries is likely to be more di昀케cult during the billion people were lifted out of poverty—that coming two decades, particularly given the is their income surpassed $3.20 a day, which potential for slower and uneven economic is equivalent to the average poverty line in growth. Many of the next levels of human low-income countries. In addition, nearly 1.5 development, including secondary and billion reached the middle-class income level higher education and digital skills training, of at least $10 a day through a virtuous cycle networked and e昀케cient urban infrastructure, of economic growth and human develop- and improved opportunities for women and ment in every region. Basic improvements in minority groups, require overcoming social healthcare, education, and gender equality impediments, improving political stabili- generated rising per capita incomes and, in ty, and increasing government or private A MORE CONTESTED WORLD 21 Yannis H / Unsplash

investment in public services. In much of The patriarchal societies of the South Asia the developing world, initial gains in human region and the Arab states exhibit the greatest development focused on moving people out gaps in overall gender equality in the home, of subsistence farming into wage-earning jobs at the workplace, and for medical care, and and making basic progress on health, educa- this shortfall is likely to continue for the next tion, and gender equality. In middle-income 20 years. Although women are the primary countries, these easier targets have already producers of food globally, they have limited been achieved—infant mortality, for example, or no rights to land ownership in many parts is minimal and almost everyone receives pri- of the world. Subordination of women to men mary education—but complex new challeng- regardless of educational level is enshrined in es, such as pollution and noncommunicable family law in many parts of the Middle East, disease, are arising. Given the rapid expansion South Asia, and Sub-Saharan Africa. According of middle-income households during the past to a 2020 UN review, women held only 25 per- two decades, governments may struggle to cent of seats in national legislatures in 2020— meet the needs and expectations of a more although that is twice the level in 2000—held urbanized, connected, and vastly expanded one quarter of corporate managerial posi- global middle class. tions, and accounted for less than one-tenth of Progress for Women. The world has seen chief executive o昀케cers of major companies. remarkable progress in women’s basic health Improved Childhood Survival and Welfare. and education in recent decades as well as In many countries the past two decades saw an expansion of legal rights in many coun- rapid advances in reducing malnutrition and tries. Birthrates in most developing econo- infant mortality, which is mostly because of mies dropped to less than three children per decreases in preventable communicable dis- woman of child-bearing age by 2020, and ease; there is little room for further dramatic the age of 昀椀rst birth has risen, increasing the improvements on this front. Progress will be opportunities for education and work outside especially slow in areas where con昀氀ict and cri- the home. Sub-Saharan Africa continues to sis are on the rise. In the 1960s, 13 percent of be the greatest outlier on this metric: birth- infants died in the 昀椀rst year of life throughout rates have decreased in recent years but still the developing world; today it averages just averaged 4.9 in 2020 and are likely to remain over 3 percent in the developing world. The high. Maternal mortality has been reduced by region with the greatest continuing challeng- more than one-third during the past 20 years, es is Sub-Saharan Africa, where 5 percent of with South Asia accounting for most of the im- infants die within the 昀椀rst year, in large part provement. Most developing economies have because poverty and communicable disease rapidly reduced the gap in educational attain- rates remain high. ment for girls, although the average number Expanding Access to Education. Educa- of years of education for girls is still only 81 tional attainment is an extremely powerful, percent of the years for boys across Sub-Saha- slow-moving driver of human development, ran Africa, a gap between that region and the with expanding education contributing to rest of the developing world that is unlikely to lifetime expected earnings. Globally, the pro- close during the next two decades. 22 GLOBAL TRENDS 2040

FUTURE GLOBAL HEALTH CHALLENGES Advances in basic healthcare during the past few decades, such as wider availability of medicines and vac- cines and improvements in medical procedures, have reduced disease, improved overall health outcomes, and extended longevity for large numbers of people globally. During the next two decades, however, several health challenges are likely to persist and expand, in part because of population growth, urbanization, and antimicrobial resistance. Stalled Progress on Combating Infectious Disease International progress against tuberculosis and malaria has stalled in recent years. From 2015-19, the num- ber of cases of drug-resistant tuberculosis worldwide increased, and malaria cases declined just 2 percent, compared to 27 percent in the preceding 15 years, in part because of the leveling of international investments. Looking forward, longstanding, emerging, and re-emerging infectious diseases will continue to endanger individuals and communities. The incidence of new pandemics also is likely to grow due to increased risk of new animal pathogens infecting humans and factors that enable spread, such as human mobility and population density. Growing Antimicrobial Resistance Resistance to antibiotic treatment is rising globally, due in part to overuse and misuse of antibiotics in livestock and antimicrobials in human medicine. Drug-resistant infections cause more than half a million deaths annual- ly, and the cumulative economic cost could reach $100 trillion between 2020 and 2050 because of productivity loss and the high cost of extended hospital stays or treatment. Rising Levels of Noncommunicable Disease Noncommunicable diseases now cause the majority of deaths worldwide—principally because of diabetes, cardiovascular disease, cancer, and chronic respiratory conditions such as asthma. Health experts project that by 2040, noncommunicable diseases could cause 80 percent of deaths in low-income countries, up from 25 percent in 1990, due in part to longer life expectancies but also to poor nutrition, pollution, and tobacco use. In many countries, health systems are not adequately equipped to respond to this shift, which could increase human suffering. Periods of economic slowdown exacerbate those risks by straining public health systems and putting downward pressure on foreign assistance and private health investments. Increasing Strains on Mental Health, Especially Among Youth Mental health and substance abuse disorders increased 13 percent during the past decade, principally because of increases in population and life expectancy but also because of the disproportionate prevalence of mental illness among adolescents. Currently, between 10 and 20 percent of children and adolescents globally suffer from mental health disorders, and suicide is the third leading cause of death among people between 15 and 19 years old. Health experts project that the economic cost of mental illness worldwide could exceed $16 trillion during the next 20 years, with much of the economic burden resulting from lost income and productivity as a result of chronic disability and premature death. Preliminary research suggests that because of the pandemic, people in every region will experience increased rates of mental distress caused by economic losses and social isolation stress disorder. A MORE CONTESTED WORLD 23 Vera Davidova / Unsplash

portion of adults who have completed primary expectations for continued improvements. In education reached 81 percent in 2020, re昀氀ect- 2020, approximately 36 percent of the global ing a rapid increase across most regions and population was in the middle class with annual income groups since the 1960s. This level of incomes of $4,000-$40,000, up 13 percent- attainment varies across developing countries, age points from 2000, judging from a World from up to 92 percent of all adults in develop- Bank database of income surveys. The largest ing countries in Latin America, East Asia and growth in middle-class populations during Paci昀椀c, and Europe down to only 60 percent in 2000-18 (the latest survey data available) by Sub-Saharan Africa. percentage of population occurred in Russia, Expanding access to secondary education, Turkey, Thailand, Brazil, Iran, China, Mexico, however, is likely to be harder for developing and Vietnam, in descending order. countries because of its relatively higher costs, During the next two decades, the middle class higher dropout rates as some students choose is unlikely to grow at a similar pace, and devel- work over education, and cultural factors such oping-country middle-income cohorts could as early marriage that pull women away from well perceive that their progress is slowing. formal education. Educating a majority of Across many countries, the high per capita in- the workforce to the secondary school level come growth of the past 20 years is unlikely to has historically been a driver for countries to be repeated, as global productivity growth falls achieve upper-middle-income status. Cur- and the working-age population boom ends rently, this majority threshold is reached in in most regions. Global models of household developing countries in Europe and Central income suggest that, under a baseline scenar- Asia, East Asia and the Paci昀椀c, and Latin Amer- io, the middle class share of the global popula- ica, but only a quarter of the Sub-Saharan tion will largely remain stable during the next workforce has a secondary school education. twenty years, although this outcome will be Moreover, Sub-Saharan Africa is not likely to contingent on social and political dynamics. reach the threshold during the coming two East Asia, and to a lesser extent South Asia, decades because government, religious, and appear better positioned to achieve further in- other private sector investment will struggle to creases in per capita income relative to other keep up with population growth. This struggle regions, thereby reducing to some extent their will also dampen economic growth as workers, income, education, and life expectancy gap particularly those who choose early entry into with advanced economies. These regions ben- the workforce over education, will lack the e昀椀t from e昀昀ective education systems, general- skills for higher paying jobs. South Asia is mak- ly stable social networks, and competent gov- ing better progress than Sub-Saharan Africa ernance. On the other hand, some developing on this front and has the potential to reach the countries, including several in Latin America, key development threshold for secondary edu- are at high risk of falling into the middle-in- cation by around 2040. come trap in which in昀氀ation of take-home pay RISING, SHIFTING GLOBAL MIDDLE CLASSES outpaces worker productivity, leading to a Globally, the number of households falling stagnation of economic growth. The problems in Latin America’s outlook stem in part from into a broad de昀椀nition of the middle class poor infrastructure and technology adoption has soared in the past two decades, raising and inadequate education systems. 24 GLOBAL TRENDS 2040

MIDDLE CLASS AND HOUSEHOLD DEBT IN THE 30 MOST POPULOUS COUNTRIES, 2000 AND 2018 Many large developing economies have seen their middle classes expand rapidly during the past 20 years. However, households in most advanced and developing economies have taken on increasing levels of debt as they have been squeezed by a higher cost of living. 2000 MIDDLE CLASS AND HOUSEHOLD DEBT IN THE 30 LARGEST COUNTRIES, 2000 AND 2018 2018 Percent of population with $10/day-$110/day income Advanced economies Developing economies 100 80 60 40 20 0 1 1 1 1 1 1 1 1 1 France JapanGermanySpainItalyRussiaTurkeyThailandBrazilIranChinaMexicoColombiaVietnamIndonesiaMyanmarPakistanEgyptIndiaKenyaEthiopiaNigeria South Korea United States South AfricaPhilippinesBangladeshTanzaniaDR Congo 0 United Kingdom 20 40 60 80 100 Household debt as a percent of GDP 1 Household debt data is not available. Source: World Bank, IMF. In advanced economies, the middle class is has increased in 19 of 32 countries between contracting with many rising to higher in- 2007 and 2016, including in France, Germany, comes and a smaller portion dropping below Italy, and Spain, while the majority of those the poverty line. Moreover, the middle class that left the middle class across all advanced in many countries is strained by rising costs economies rose to higher income levels. This for housing, healthcare, and education. The re昀氀ects the trend towards income polarization, percent of the population falling below the in which the number of workers in low-income national poverty line in advanced economies jobs and the number in high-income expands A MORE CONTESTED WORLD 25

INCOME INEQUALITY BY COUNTRY Income inequality is highest in developing economies, as measured by the Gini coefficient, but in many it has been stable or improving. Income inequality is relatively low overall in advanced economies, but it has been increasing in many of the largest advanced economies. 2 1990 1 2 2 INCOME INEQUALITY TRENDS IN SELECTED LARGE COUNTRIES, 1990 AND 2018 2018 Gini coefficient (higher indicates greater inequality) Countries with increasing inequality Countries with decreasing inequality 70 60 50 2 37 = World average, 2018 40 30 20 10 0 Iran India EgyptChina SpainItaly Russia JapanFrance Brazil Kenya Turkey IndonesiaTanzania Vietnam Germany ColombiaMexico Nigeria Thailand PakistanEthiopia South Africa United States BangladeshSouth Korea Philippines United Kingdom 1Largest by size of population, 2020. Ranked by most recent estimate of income inequality. 21990, 2018, or nearest available data. Source: Standardized World Income Inequality Database. Economic Inequality Here to Stay The factors contributing to the slowing of progress on human development will also contribute to the persistence of within-country income inequality. Around half of all countries experienced a widening gap between the rich and the poor between 1990 and 2018, including the world’s most powerful states—China, India, Russia, and the United States. Mean- while, the large countries that experienced declines in inequality during these decades mostly remained above the global average for inequality. A number of structural causes combined to contribute to this growing inequality, including technologi- cal advancements that favored advanced educations and specialized skills while automating low-skill jobs; the outsourcing of many jobs and industries to developing economies; and an ideological shift toward market-driven solutions and away from redistributive, government policies. 26 GLOBAL TRENDS 2040

at the same time. Most high-skill workers half migrated to high income countries for probably will continue to bene昀椀t from work- higher pay and to send remittances home. The place technology, while middle-skill workers fastest growth in emigration begins at around doing repetitive tasks that can be automated $4,000 per capita GDP, the point at which peo- will face declining wages and job losses. Even ple have reached lower-middle-income and some workers in high paid professions may can a昀昀ord to travel, and then begins to slow see their earnings challenged by arti昀椀cial when per capita GDP reaches $10,000-$12,000 intelligence (AI) and machine learning. House- where people are nearing the World Bank’s hold debt has already soared across advanced de昀椀nition of high income, making employment economies in recent years because of these in- opportunities at home more attractive. come strains and higher costs for healthcare, Looking forward, rapid population growth al- housing, and education. most certainly will add to existing push factors MIGRATION: PEOPLE ON THE MOVE in Sub-Saharan Africa, while many other devel- Demographic trends and economic incentives oping countries are nearing the end of peak will continue to drive large-scale migration emigration. The population in the middle-in- during the next two decades. Although there come migration window of $4,000 to $10,000- is little certainty about the level of migration $12,000 peaked around 2010 for several regions, including Latin America, Central Asia, as government policies 昀氀uctuate, the push and and parts of Eastern Europe. East Asia, South- pull factors for cross-border movements of east Asia, and South Asia are also nearing or people will endure globally—feeding debates past the strongest period for this income push in destination countries over migration and factor, but the percent of the population in aggravating social divisions in some areas. Sub-Saharan Africa in this income window will The past 20 years saw a large increase in continue to rise during the next 20 years. cross-border migration, not only in absolute numbers but also as a percent of the global Greater need for workers in aging countries population. More than 270 million persons is a growing pull factor in European and Asian in 2020 were living in a country to which countries. European countries had the largest they had migrated, 100 million more than in total number of cross-border immigrants at 2000, representing an increase of more than the end of 2019 at nearly 70 million, according half a percent of the global population. Most to 2020 UN statistics. One-third came from migrants left their homes to pursue better Eastern Europe, which had a working-age economic prospects, but tens of millions were population that was peaking just as advanced 昀氀eeing con昀氀ict, crime, religious and social European economies were beginning to repression, and natural disasters. rapidly age. Aging European countries and Japan are expanding policies that provide visas For the vast majority of migrants who are for workers. workers, migration 昀氀ows clearly re昀氀ect wage di昀昀erentials between countries—the 昀氀ows During the coming 20 years, people 昀氀eeing di- are from smaller, middle-income economies sasters and con昀氀ict will continue to contribute to larger, high-income economies. Almost to migration 昀氀ows. UN and NGO data show two-thirds of migrants in 2019 originated from that domestic civil and political turmoil have middle-income economies, and more than pushed 80 million people out of their homes A MORE CONTESTED WORLD 27

as of yearend 2019, of which about a third of internal armed con昀氀ict. East Asia and Latin have migrated to other countries. America will have a median age above 30, sug- gesting a potential for greater social stability. BROADER IMPLICATIONS AND DISRUPTIONS Such populations also have strong preferenc- These demographic and human development es for democracy; where authoritarian re- trends will put pressure on governments to gimes remain, instability from so-called color increase public investment and manage immi- revolutions is likely to persist. In addition, gration, lead to instability in some countries, in in countries with fast growing and youthful some ways contribute to a rising Asia, and add populations, the growing gap between the ex- to the agenda of already strained international pectations of growing urban cohorts and their development institutions. governments’ ability to provide for their edu- Setbacks for Women, Children, and cation, healthcare, and job opportunities has Minorities. The current pandemic exempli- the potential to increase political instability. In such countries, recruitment to radical extrem- 昀椀es the fragility of progress against poverty in some regions and the potential for regres- ist movements will be a major risk as well. sion for women, minority groups, and others Increased Debate Over Migration. Immi- lower in economic, political, and social stat- grants can help developed economies miti- ure. Although so far mortality in low-income gate the downsides of an aging population by countries, outside Latin America, has been improving economic productivity, providing lower than in the advanced economies, the services, and expanding the tax base. How- economic impacts have been severe. Beyond ever, countervailing pressures such as strong overwhelmed healthcare systems and the cultural preferences for maintaining national negative impact on income for millions of the identity and ethnic homogeneity could con- near poor, broader disruptions include lack of tinue to fuel an antimigrant backlash in many or limited education and the diversion of med- developed countries and increasingly in some ical resources from other priorities, including developing and middle-income countries vaccinations and maternal health. with declining workforces, such as China. As a Growing Pressure For Public Investment. result, many are likely to choose technological Growing populations, especially middle classes innovation and automation and limit migration in developing countries, are putting increased to highly skilled labor. Within and between pressure on governments for the provision of countries, debates and division will continue public goods, such as a昀昀ordable housing, ed- over how much migration to allow and how to ucation, healthcare, and infrastructure. Poorly control 昀氀ows. governed urban areas, especially those with Some Shifts Could Bene昀椀t A Rising East. access to infrastructure such as international Many developing countries in Asia will either ports or airports, are also ideal habitats for gain potential advantages from demographic organized crime syndicates. trends or are relatively well positioned to over- Double-Edged Sword For Political Stability. come demographic headwinds. As a result per Older populations tend to be less violent and capita incomes and human development lev- ideologically extreme, thus reducing the risk els probably will rise more in Asia than in any other region. Most Asian countries will con- 28 GLOBAL TRENDS 2040

tinue to have large working-age populations, causes will divert international resources from high secondary-level graduation rates, and, for e昀昀orts to make systemic improvements in many, substantial investments in health and poverty and disease. The likely failure of many infrastructure that bolster levels of well-be- countries to meet the UN’s 2030 Sustainable ing. The greatest variable is likely to be how Development Goals will have the largest China handles the demographic crunch it will impact on middle-income societies where see during the next two decades—the deep populations that have recently emerged out decline in fertility from its one-child policy has of poverty are demanding progress toward already halted the growth of its labor force next levels of education, medical care, and and will saddle it with a doubling of its pop- environmental quality. Traditional providers of ulation over 65 during the next two decades development assistance might not be able to to nearly 350 million, the largest by far of any keep up with needs. Shortfalls in multilateral country. Even if the Chinese workforce is able development assistance could facilitate plans to rise closer to advanced-economy produc- by China and other countries to gain advan- tivity levels through improved training and tage from 昀椀nancing critical urban infrastruc- automation, China remains in danger of hitting ture in developing countries. a middle-income trap by the 2030s, which may challenge domestic stability. Strained International Development Institutions. International institutions fo- cused on human development will face a more complicated operating environment as de- mands for their coordination e昀昀orts grow. Any increase in humanitarian and refugee crises stemming from natural and human-created A MORE CONTESTED WORLD 29 Photo / Shutterstock

STRUCTURAL FORCES ENVIRONMENT Key Takeaways During the next 20 years, the physical effects from climate change of higher tem- peratures, sea level rise, and extreme weather events will impact every country. The costs and challenges will disproportionately fall on the developing world, in- tersecting with environmental degradation to intensify risks to food, water, health, and energy security. There will be increased emphasis on mitigating greenhouse gas emissions to achieve net zero with new energy technologies and carbon dioxide removal techniques to meet the Paris Agreement goal of limiting warming to 1.5 degrees Celsius. However, as the world gets closer to exceeding 1.5°C—probably within the next 20 years—calls will increase for geoengineering research and possible deploy- ment to cool the planet, despite possibly dire consequences. Debate will increase over how and how fast the world should reach net zero as countries face hard choices over how to implement drastic emissions cuts and adaptive measures. Neither the burdens nor the bene昀椀ts will be evenly distributed within or between countries, heightening competition, contributing to instability, straining military readiness, and encouraging political discord. 30 Photo / Pexels

SIMULTANEOUS DRIVERS CLIMATE ENVIRONMENTAL CHANGE DEGRADATION Higher temperatures Land degradation Melting Arctic Water misuse Extreme weather Pollution Sea level rise ERODING MITIGATION HUMAN SECURITY Food, water, energy security Human health More migration Loss of natural capital Societal and government change POLICY ACTIVITY ENERGY ADAPTATION TECHNOLOGIES KEY CHALLENGES / UNCERTAINTIES Pace Unequal Geoengineering burdens INSTABILITY CONFLICT A MORE CONTESTED WORLD 31 Photo / Pexels

he past ten years was the GLOBAL RISE IN CARBON DIOXIDE Thottest on record, and every AND AVERAGE TEMPERATURE This graph illustrates the decade since the 1960s has been Average surface temperature Atmospheric CO2 concentrations change in global carbon dioxide in degrees Celsius in parts per million concentrations in atmospheric hotter than the previous one. parts per million and in global surface temperature in degrees +1.2 420 Celsius relative to pre-Industrial average temperatures. Nineteen of the 20 warmest years have +1.0 400 occurred since 2001, and 2020 tied TEMPERATURE for the hottest year on record. +0.8 380 +0.6 CARBON 360 CLIMATE CHANGE HERE AND INTENSIFYING DIOXIDE We are living in a world already a昀昀ected by +0.4 340 climate change caused by growing human-in- duced concentrations of greenhouse gases in the atmosphere. The world has warmed on +0.2 320 average 1.1 degrees Celsius since the late 19th century, causing diminished glaciers and ice caps, higher sea levels, more intense storms 0 300 and heat waves, and a more acidic ocean, according to the Intergovernmental Panel on Climate Change. The past 10 years were the -0.2 280 hottest on record, and every decade since 1880 1900 1920 1940 1960 1980 2000 2020 the 1960s has been hotter than the previ- ous one. On the current path, it is probable Source: NASA GISS, NOAA NCEI, ESRL. https://medialibrary.climatecentral.org/ that within the next 20 years global warming resources/national-and-global-emissions-sources-2020. will surpass 1.5°C while heading toward 2°C possibly by mid-century. Cumulative emis- sions already in the atmosphere will drive ronmental degradation, but the impact will temperature increases in the next two de- vary—some regions will even see some mar- cades even if emissions were to reach net zero ginal bene昀椀ts in the form of longer growing immediately, according to the US National seasons. In general, developing countries will Climate Assessment. su昀昀er more as they lack the capacity to adapt to climate change and on average are more Physical E昀昀ects highly exposed to its e昀昀ects. The physical e昀昀ects of a changing climate are likely to gradually intensify during the next two Melting Arctic and Sea Level Rise. Tempera- decades compared to the catastrophic impacts tures are warming at three times the global modeled for the latter half of the century, average in the Arctic largely as a result of feed- should temperature rise continue unabated. back loops from melting ice and snow cover. No country or region will be immune from the This has caused mass loss from ice sheets and physical e昀昀ects of climate change and envi- glaciers as well as reductions in sea ice extent 32 GLOBAL TRENDS 2040

GLOBAL RISE IN CARBON DIOXIDE AND AVERAGE TEMPERATURE This graph illustrates the Average surface temperature Atmospheric CO2 concentrations change in global carbon dioxide in degrees Celsius in parts per million concentrations in atmospheric parts per million and in global surface temperature in degrees +1.2 420 Celsius relative to pre-Industrial average temperatures. Nineteen of the 20 warmest years have +1.0 400 occurred since 2001, and 2020 tied TEMPERATURE for the hottest year on record. +0.8 380 +0.6 CARBON 360 DIOXIDE +0.4 340 +0.2 320 0 300 -0.2 280 1880190019201940 1960 1980 2000 2020 Source: NASA GISS, NOAA NCEI, ESRL. https://medialibrary.climatecentral.org/ resources/national-and-global-emissions-sources-2020. A MORE CONTESTED WORLD 33 Willian Justen de Vasconcellos / Unsplash

More Intense Heat Waves. Outside the Arc- tic, the fastest warming is projected to occur NARROWING CLIMATE in central and eastern North America, central UNCERTAINTIES Europe, the Mediterranean region (including southern Europe, northern Africa and the Near Even though the Earth’s climate is an extremely complex, East), western and central Asia, and southern interconnected system that is sensitive to small chang- Africa. The tropics especially are expected to es, increased data collection, computing power, and experience widespread extreme heatwaves. sophisticated modeling means that our understanding of Extreme Weather and Weather Patterns. climate change has become increasingly strong. Several Warming temperatures are likely to create the areas of research are attempting to reduce uncertainty: atmospheric conditions for more intense and Attribution: Scientists are improving their ability to in some cases, more frequent natural disas- attribute specific events after the fact to climate change. ters, including stronger hurricane-strength This nascent field, known as extreme event attribution, storms, coastal 昀氀ooding, storm surges, and could change how publics perceive the growing threat droughts. Traditional weather patterns are also changing—for example, dry areas are ex- and provide a basis for developing countries or impact- pected to become drier, wet areas will become ed communities to claim damages from high emitting wetter, and precipitation will be less frequent countries or their government. but more intense in some areas. Feedback Loops: Scientists currently have a difficult ADDING TO ENVIRONMENTAL DEGRADATION time projecting when and to what extent positive During the next two decades, population feedback loops will drive further temperature increases growth, rapid urbanization, and poor land and risk runaway warming. For example, the loss of and resource management will increasingly reflective sea ice will reveal more of the ocean surface, intersect with and exacerbate climate change which is dark and absorbs heat faster, in turn causing even more sea ice to melt. Another concerning feedback e昀昀ects in many countries, particularly in the loop is methane, a powerful greenhouse gas that is developing world. With coastal cities growing, released from wetlands, permafrost, and ocean hydrates more people than ever will be threatened by a in response to increased temperatures. combination of storm surges and sea level rise that worsen existing coastal erosion. Land Degradation. The expansion and un- sustainable management of agriculture and forestry practices degrade land, and both con- and thickness. Globally, the sea level has risen tribute to and intensify the e昀昀ects of climate an average of 8 to 9 inches since the late 19th change. A 2019 study found that global defor- century; estimates of rise in the next 20 years estation and land degradation each contribut- range from another 3 to 14 inches, which ed to about 10 percent of all human-induced would create additional problems for low lying greenhouse gas emissions by releasing carbon coastal cities and islands. On land, thawing stored in the trees and the soil. permafrost is likely to cause increasing dam- Water Misuse. Poor water governance within age to infrastructure, including transportation and between states will remain the primary systems, pipelines, and power plants. 34 GLOBAL TRENDS 2040

driver of water stress during the next two Exacerbating Food and Water Insecurity. decades. As precipitation declines or becomes Changing precipitation patterns, rising tem- more erratic, population growth, economic peratures, increased extreme weather events, development, and continued ine昀케cient irri- and saltwater intrusion into soil and water gation and agricultural practices will increase systems from rising seas and storm surges are demand. In many river basins, upstream likely to exacerbate food and water insecu- countries are building dams and altering water rity in some countries during the next two sources with little or no consultation with their decades. Regions that remain dependent on downstream neighbors, such as the Grand rain-fed agriculture will be particularly vul- Ethiopian Renaissance Dam, increasing the nerable, such as Sub-Saharan Africa, Central risk of con昀氀ict. America, some areas of Argentina and Brazil, Pollution. Although air and water pollution parts of the Andean region, South Asia, and have decreased in many high-income coun- Australia. By contrast, some higher latitude tries since a peak in the 20th century, they regions such as Canada, northern Europe, and continue to grow globally as the number of Russia may bene昀椀t from global warming by middle-income countries has increased; for lengthened growing seasons. instance, 80 percent of industrial and munic- Fisheries are also under threat from severe ipal wastewaters are discharged untreated over昀椀shing that climate change will further into waterways. Similar to other environmen- stress through oxygen depletion, rapid warm- tal factors, air pollution and climate change ing, and ocean acidi昀椀cation. Fishermen have in昀氀uence each other through complex interac- to go further to catch fewer and smaller 昀椀sh, tions in the atmosphere. Climate change will potentially venturing into the territorial waters lead to more stagnation events—stationary of other countries. In addition, warming ocean domes of hot air that can cause air pollutants temperatures threaten to kill many more coral to get trapped and persist in the lower atmo- reefs—already they have declined by 30 to 50 sphere—and will worsen air quality by increas- percent, and at 1.5°C warming, they could de- ing the frequency of wild 昀椀res. cline by 70 to 90 percent—further threatening 昀椀shing and tourism industries. ERODING HUMAN SECURITY Threats to Human Health. Decreased water, The physical impacts of a warmer world, air, and food quality, along with changes in combined with environmental degradation, disease vectors and water-borne pathogens, are likely to lead to an array of human secu- all threaten human life. Death rates from rity challenges, primarily but not exclusively in developing countries in the near term. pollution vary signi昀椀cantly across the world— typically highest in middle-income countries According to a 2018 study, 36 percent of cities in East and South Asia. In addition, extreme globally face acute environmental stress from weather and disasters often kill people and droughts, 昀氀oods, and cyclones; climate change disrupt health infrastructure and prevent will add to these. These challenges will com- access to care. Climate change is expected pound one another in coming years; as ex- to change the geographic range and in some treme events become more intense and more frequent, societies may struggle to recover cases frequency of disease outbreaks a昀昀ecting from one event before the next one hits. humans, animals, and plants, including those A MORE CONTESTED WORLD 35

that are vector-borne (West Nile, malaria, Den- pledges to become carbon neutral—such as gue), waterborne (cholera), airborne (in昀氀uen- Chile, the European Union (EU), Japan, New za, hantavirus), and food-borne (salmonella). Zealand, and South Korea by 2050, and China Loss of Biodiversity. The variability among all by 2060. living organisms—known as biodiversity—is As climate modeling improves, divisions are declining faster than at any point in human likely to become more pronounced between history, risking food and health security and those who advocate reaching net zero emis- undermining global resilience. Warming sions over decades by transitioning to new temperatures are likely to lead to the extinc- technologies and those who argue that net tion of plants and animals that can no longer zero must be achieved more quickly to pre- survive in their traditional habitats or shift vent the worst outcomes. State pledges factor quickly to new locations as well as encourage in advancements in technologies to mitigate the spread of invasive species that choke out emissions while boosting economic growth native organisms. and assume that the worst e昀昀ects of climate Increased Migration. Extreme weather change can be avoided through a more events increase the risk of more environmen- gradual approach. Advocates of faster action tally-induced migration, which usually occurs argue that the window to avoid the cataclys- mic e昀昀ects is closing and that more dramatic, within states as a昀昀ected populations move immediate behavioral changes are required. to nearby communities, often temporarily. Limiting the global temperature increase to Climate change probably will exacerbate this as sea level rise or extreme heat makes certain 1.5°C will require unprecedented changes in locales permanently uninhabitable, although energy consumption and production to allow mainly after 2040, possibly causing permanent developing countries to grow their economies migration and movement to other states. while not o昀昀setting the carbon reductions from developed countries. MITIGATION GAINING TRACTION Energy Transition Underway E昀昀orts to set a path toward net zero green- A critical aspect of the global debate and the house gas emissions will intensify during the ability to mitigate climate change is the speed coming decade and spark increased debate of the transition from fossil fuels to renewable about how and how soon to achieve this goal. energy. Even though fossil fuels will continue The 2015 Paris Agreement set a global goal of to supply the majority of energy needs during limiting warming to less than 2°C, preferably the next 20 years, wind and solar are almost to 1.5°C, and resulted in countries volunteer- certain to grow faster than any other energy ing modest targets to reduce or establish a source because of technological advances and peak for their emissions. Although developed falling costs, and nuclear power production country emissions have continued to decline may grow, particularly if new, safer designs largely because of increased energy e昀케cien- emerge. Increasing energy e昀케ciencies proba- cy and use of natural gas, and the COVID-19 bly will also reduce the rate of energy demand pandemic also caused a brief drop in global growth and the carbon intensity per unit of en- emissions—overall emissions have continued ergy used. A range of current and future tech- to increase. This trend has led to a growing nological developments—as well as regulatory number of countries making more ambitious and investment choices by governments, 36 GLOBAL TRENDS 2040

ANNUAL TOTAL CO2 EMISSIONS, BY REGION This chart shows CO2 emissions from fossil fuels and cement production only— land use change is not included. Billion tons International transport 35 Oceania Asia (excl. China 30 and India) 25 China 20 India 15 Africa South America North America (excl. USA) 10 United States 5 Europe (excl. EU-28) EU-28 0 1751 1800 1850 1900 1950 2018 Source: Carbon Dioxide Information Analysis Center (CDIAC); Global Carbon Project (GCP). Note: ‘Statistical differences’ included in the GCP dataset is not included here. OurWorldInData.org/co2-and-other-greenhouse-gas-emissions • CC BY A MORE CONTESTED WORLD 37

KEY EMERGING ENERGY TECHNOLOGIES businesses, and consumers—will in昀氀uence The cost to build and operate new solar photovoltaic and energy use in buildings, transportation, and wind-powered plants is broadly cheaper than equivalent power, which together account for a majority fossil fuel–fired power plants. Even more efficient, lower cost of global emissions. Many of these technolo- renewable technologies, such as perovskite solar cells, are gies could also contribute to greater energy poised to transform and disrupt energy industries in the next resilience and self-su昀케ciency for states. two decades. Moreover, increasingly connected wind turbine Increased E昀昀orts To Remove technology is enabling massive and lower-cost offshore wind Carbon Dioxide projects worldwide. China is the world’s largest producer and The success of e昀昀orts to remove carbon diox- exporter of solar panels and wind turbines. ide from the atmosphere will also be critical. Advanced energy storage will be needed to enable more The Intergovernmental Panel on Climate renewables in grid systems and support broad deployment of Change estimates that mitigating emissions electric vehicles. Lithium-ion batteries have seen large cost re- alone almost certainly will not be enough to duction and performance improvements in recent years, and limit warming to 1.5°C, which increases the im- investments are also increasing in potentially safer, cheaper, portance of technologies that remove carbon more powerful, and longer duration alternatives. In the fu- dioxide from the atmosphere to use it or store ture, it is likely that advanced energy storage would allow for it underground. Most of the modeled path- the development of decentralized and autonomous electrical ways to limit warming to 1.5°C involve a sub- grids that integrate batteries, renewable power sources, and stantial expansion of carbon dioxide removal electric vehicles and that potentially have no need for backup (CDR) primarily through a昀昀orestation and from fossil fuels. bioenergy with carbon capture and storage (BECCS). Other technologies being researched Green hydrogen—produced through electrolysis with no include soil sequestration, ocean fertilization, by-products—has the potential to play a greater role in stor- and direct air capture. Research into and a ing excess solar and wind energy and helping to decarbonize push to deploy BECCS—still a nascent technol- heating, industry, and heavy transport. The industry is still ogy—almost certainly will increase because in its infancy, but costs are expected to come down because it is one of the few negative emissions tech- countries with cheap renewable energy sources are particular- nologies that exist because it uses carbon ly interested in it, such as Chile. dioxide to grow biomass that is converted to usable energy while storing the carbon dioxide Several companies are developing small modular nuclear underground. Currently about 25 commercial- reactors (SMRs), about one-third the size of traditional nu- ly operational CDR projects o昀昀set a negligible clear reactors, which could lead to broader acceptance from amount of yearly emissions, and e昀昀orts to countries traditionally opposed to nuclear projects because scale up CDR will face policy, technological, SMRs are smaller and safer. SMRs have the potential to and economic constraints absent market provide power generation to remote areas, such as in Africa, incentives. More countries may introduce a which could help developing countries electrify their popula- carbon tax, or a credit for removing carbon, in tions without increasing emissions. In addition, SMRs—when an e昀昀ort to speed up CDR as well as broaden combined with solar and wind power—could help solve the adoption of renewable energy technologies. problem of intermittency. Complementary Actions on Emissions Many more actors are likely to join internation- al and governmental e昀昀orts to address climate 38 GLOBAL TRENDS 2040

and environmental challenges. Action at the advance during the next 20 years, resilience local level has already increased, and a grow- mechanisms may become more sophisticated. ing number of companies have pledged to go Calls for Geoengineering carbon neutral. Some large asset managers As warming gets closer to exceeding the Paris have concluded that climate change threat- Agreement goals, it is increasingly likely that ens their long-term returns and are requiring states and nonstate actors will more aggres- carbon emissions disclosures from 昀椀rms in sively research, test, and possibly deploy geo- their portfolios or declining to invest in some engineering measures—deliberate large-scale fossil fuel projects. In 2018, nearly 10,000 cities interventions in the earth’s natural systems— and municipalities in 128 countries took some to try to counteract climate change. Current form of climate action, as did 6,225 companies research is largely focused on solar radiation headquartered in 120 countries, represent- management (SRM), an e昀昀ort to cool the ing $36.5 trillion in revenue, larger than the combined gross domestic product (GDP) of the planet by re昀氀ecting the suns energy back into United States and China. Public-private part- space. Stratospheric aerosol injection (SAI), a nerships are becoming a preferred operating form of SRM that sprays particles in the strato- framework, partly a recognition that nonstate sphere to cause global dimming, has attracted funding by those who fear the worst of climate e昀昀orts are most e昀昀ective when linked to change. Proponents argue that the needed state action. energy transformation will happen too slowly GROWTH OF RESILIENCE AND ADAPTATION and that SAI can buy the planet time because In addition to e昀昀orts to reach net zero emis- it is technologically feasible and less expensive sions, many countries and local communities than mitigation. will expand investment in adaptive infrastruc- Current research is almost entirely in comput- ture and resilience measures. Some measures er models with academia, nongovernmental are as inexpensive and simple as restoring organizations, and private companies playing mangrove forests or increasing rainwater stor- a leading role. However, there will be in- age; others are as complex as building mas- creased calls for countries to begin engaging sive sea walls and planning for the relocation in the dialogue and possibly take leadership to of large populations. A key challenge for these develop international agreements that could e昀昀orts will be funding for vulnerable commu- help set research standards, ensure transpar- nities—particularly as governments face com- ency in live tests, determine the legal frame- peting 昀椀scal and political challenges and have work around if, how, and when to deploy SRM to choose which communities to support. technologies, and monitor the e昀昀ects. The Public-private partnerships are innovating possibly catastrophic unintended side e昀昀ects new insurance approaches aimed at building are not well understood, and some scientists resilience to climate risks, such as insuring fear that SRM, while keeping temperatures down, would create unexpected and devastat- natural assets like the Mesoamerican reef o昀昀 ing changes in weather systems and rainfall Mexico or index-based weather insurance for patterns. Countries and nonstate actors de- local farmers in Kenya. These approaches rely on new data and machine learning technolo- ploying it alone will increase the risk of con昀氀ict gies—suggesting that as these technologies and blowback, especially when others blame A MORE CONTESTED WORLD 39

them for a disaster they believe was caused grow their economies and increase emissions by geoengineering. will more forcefully demand that developed countries provide them with advanced energy BROADER IMPLICATIONS AND DISRUPTIONS technologies to leapfrog their energy systems In addition to direct physical e昀昀ects of climate to a low carbon model. In addition, develop- change, states and societies are likely to be ing countries will increasingly demand that strained by hard choices and tradeo昀昀s given developed countries meet their commitments the di昀케culty and costs of drastic emissions to provide 昀椀nancing to help vulnerable popu- cuts and adaptive measures. The burden lations adapt. Greater demands will be made of these steps will not be evenly distributed on international 昀椀nancing vehicles such as the within or between states, and the long-term Green Climate Fund, which has approved $4 payo昀昀 of mitigation policies runs counter to billion worth of adaptation projects. political incentives, making it di昀케cult to sus- Heighten Competition. Climate change and tain controversial commitments. The second- environmental degradation will contribute to and third-order implications of climate change and re昀氀ect a more contested geopolitical envi- will a昀昀ect human and national security in ronment. Countries and other actors are likely several ways. to compete over food, mineral, water, and Drive Societal Cleavages and Political energy sources made more accessible, more Movements. Concerns about climate change valuable, or scarcer. Receding Arctic sea ice have grown across the globe with hundreds is opening new sea routes and opportunities of thousands of protesters—mostly young to access valuable resources there, including people—marching in the streets advocating natural gas and oil deposits, rare earth met- for faster change. Policy responses to mitigate als, and 昀椀sh stocks. Russia is building more or adapt to climate change also contribute icebreakers to patrol its northern coastline to political volatility—particularly when they and project power as an Arctic leader, and are linked to broader socio-political inter- even non-coastal states like China and India ests—such as the French protests against fuel are seeking to take advantage of shorter trade price hikes in 2018. In Europe, nationalist and routes and resources. In addition, China is try- populist parties have capitalized on public ing to boost its international image by claiming concerns about the economic hardships to be a leader on climate diplomacy despite associated with climate mitigation policies, its growing emissions—already the highest in and they have framed their opposition in the world. terms of equality and social justice for working Contribute to Instability and Con昀氀ict Risk. class populations. Rarely is climate change the sole or even pri- Increased Pressure for Global Action. mary driver of instability and con昀氀ict; however, As warming continues to rise, there will be certain socio-political and economic contexts more debate and tension among countries are more vulnerable to climate sparks that over transparency, cuts, and responsibility. ignite con昀氀ict. Countries of particular concern Developing countries that want the room to are those with ethnic or religious polariza- 40 GLOBAL TRENDS 2040

tion; livelihoods highly dependent on natural resources or agriculture; weak or illegitimate con昀氀ict resolution mechanisms; a history of ENERGY TRANSITION GEOPOLITICS violence; and low adaptive capacity. For exam- AND ECONOMICS ple, an increase in drought or extreme weath- er may reduce the opportunity cost of joining The transition from fossil fuels has the potential to signifi- armed groups for struggling farmers and herd- cantly reshape geopolitics and economics, depending on ers, while sectarian elites may advance their its speed and structure. Petro-states—currently accounting polarizing political goals by exploiting local for 8 percent of world GDP and nearly 900 million citi- grievances exacerbated by climate change. zens—would face major revenue losses in an aggressively Strain Military Readiness. While militaries decarbonizing scenario. Those that can more efficiently and will continue to adapt and 昀椀ght in the chang- cheaply extract oil or diversify their economies will better ing world, climate e昀昀ects will strain readiness weather the transition. and compound 昀椀scal pressures on many In addition, the transition will diminish countries’ ability militaries. Storm surges and sea level rise will to use energy as a tool of coercion or statecraft because force changes to the design and protection of naval bases and aircraft runways, prolonged energy systems will become more decentralized. Countries extreme heat will limit training days, and will have decreased leverage in energy markets because oil and renewables operate differently; the former is an major storms and 昀氀oods will force militaries to divert more resources to disaster relief at extracted resource that is traded, whereas the latter is home and abroad. harnessed by building out domestic infrastructure. As a Increase Pressure on Strained International result, it will be more difficult for any one country to affect Systems. Current international law and coop- others’ energy supply. For example, Chinese dominance of erative bodies are increasingly mismatched the clean energy equipment market does not allow Beijing to global climate challenges. For example, to threaten global energy supplies in the way that control of international refugee law does not account for the oil markets by the Organization of Petroleum Exporting Countries once did. people displaced by climate change e昀昀ects. Many existing organizations designed to help However, a shift to renewable energy will increase compe- manage shared resources, such as the Arctic tition over certain minerals, particularly cobalt and lithium Council or the Nile Basin Initiative, may be for batteries and rare earths for magnets in electric motors overwhelmed or sidelined, given their volun- and generators. As actors race to develop new renewable tary nature and lack of enforcement mecha- energy technology during the next two decades, they will nisms. Also, e昀昀orts to develop international focus on countries that supply these minerals, such as the standards or regulations for high-risk activities Democratic Republic of the Congo and Bolivia. like SRM lag behind the technology, increasing the possibility that countries or individuals will pursue unilateral action that risk blowback. Photo / Bigstock A MORE CONTESTED WORLD 41

STRUCTURAL FORCES ECONOMICS Key Takeaways During the next two decades, several global economic trends, including rising national debt, a more complex and fragmented trading environment, the global spread of trade in services, new employment disruptions, and the continued rise of powerful 昀椀rms, are likely to shape conditions within and between states. Many governments may 昀椀nd they have reduced 昀氀exibility as they navigate greater debt burdens, diverse trading rules, and public pressure to deal with challenges that range from demographic shifts to climate change. Asian economies appear poised to continue decades of growth, although poten- tially at a slower pace. Productivity growth will be a key variable globally; increased growth rates in the Organization for Economic Cooperation and Development (OECD) countries would help governments deal with economic, demographic, and other challenges; and increased growth rate in Asia could help countries avoid the middle-income trap. 42 CHUUTERSNAP / Unsplash

EMPLOYMENT DISRUPTIONS INCREASING GLOBAL COMPETITIVENESS TRADE ENVIRONMENT EVOLVING FRAGMENTING POWERFUL FIRMS NATIONAL DEBT EXPANDING RISING GLOBAL ECONOMY I M P N S LARGE FIRMS L I C A T I O SHAPING GLOBAL NEW LARGE CONNECTEDNESS ECONOMIES EXERTING INFLUENCE GLOBALIZATION ECONOMIC DIVERSIFYING ACTIVITY GOVERNMENTS TILTING TO ASIA CONSTRAINED EVOLVING INTERNATIONAL ECONOMIC ORDER A MORE CONTESTED WORLD 43

NATIONAL DEBT AS A ver the next few decades, PERCENTAGE OF GDP Othe economic costs of Percent of GDP 160 2007 Prefinancial crisis 2010 Post-financial crisis aging will strain public 昀椀nances 140 2019 Pre-COVID-19 2020 Immediate aftermath in all G20 economies, unless 120 of COVID-19 100 di昀케cult decisions are made to 80 either reduce bene昀椀ts and/or raise taxes. 60 40 20 Economic trends during the next two decades 0 G7 Emerging Middle probably will vary more than trends in de- Economies and East and Developing Central mography and climate. Economic forecasting Other Asia Latin Asia Sub- Advanced America Saharan is inherently uncertain and highly connected Economies and the Africa to other key trends, including technology, as Caribbean well as government policies. In this section, we Source: WEO 2020 Database. focus on several longer term economic trajec- tories that are creating both opportunities and challenges for states and nonstate actors. that approximately two-昀椀fths of low-income developing countries were at high risk of, or HIGH NATIONAL DEBT ENDURING, RISING in, debt distress. During the next few decades, National debt levels have risen in almost every the economic costs of aging will strain public 昀椀nances in all G20 economies, unless di昀케cult country since the 2007-08 global 昀椀nancial crisis and are likely to continue to face up- decisions are made to reduce bene昀椀ts or ward pressure through at least 2040. Strong raise taxes. borrowing in response to the COVID-19 pan- Reducing national debt ratios during the next demic, rising old-age dependency burdens in 20 years is likely to be even more challeng- most of the largest economies, and increased ing than during the decade that followed the demands on governments to spur economic 昀椀nancial crisis. The cost of providing health- growth as well as respond to other global chal- care and pensions in most of the largest lenges have all contributed to the debt levels. economies, as well as paying for other social National debt to gross domestic product (GDP) programs, will remain a drag on discretionary ratios were higher in 2019 than in 2008 in spending without major productivity gains almost 90 percent of advanced economies, in- or a reduction in the cost of these services. cluding the United States and Japan, and leapt Slow economic growth in some economies upward in 2020 because of the pandemic and could reduce tax revenues and impair govern- government responses. Average debt ratios in ments’ ability to reduce spending because of emerging markets in 2019 were comparable the need to invest in economic recovery and to those that prevailed during the debt crisis infrastructure or respond to the e昀昀ects of wave of the mid-1980s and 1990s. In 2019, the climate change. International Monetary Fund (IMF) assessed 44 GLOBAL TRENDS 2040

NATIONAL DEBT AS A PERCENTAGE OF GDP 2007 | PRE-GLOBAL FINANCIAL CRISIS 100% or more 75% - 100% 50% - 75% 25% - 50% Less than 25% Not in FM sample 2020 | COVID-19 100% or more 75% - 100% 50% - 75% 25% - 50% Less than 25% Not in FM sample Source: International Monetary Fund. A MORE CONTESTED WORLD 45

Sustainable for Some, But Others at Height- already automated or potentially amenable ened Risk of Default. A prolonged period of to automation in the next decade. Studies low interest rates, similar to the post-昀椀nancial have estimated that automation could elim- crisis period, would increase the a昀昀ordability inate 9 percent of existing jobs and radical- of debt for some economies, including ad- ly change approximately one-third in the vanced economies in Asia, Europe, and North next 15 to 20 years. Emerging technologies America, allowing them to sustain higher will also create jobs and will enable greater national debt ratios. The world’s major central virtual labor mobility through Internet-based banks, including the European Central Bank, freelance platforms that match customers the Federal Reserve, and the Bank of Japan, with self-employed service providers as have pursued an ultra-low interest rate policy well as speed-of-light commercial data and for at least the past decade, and most econ- software transmission. omists expect these countries to be able to sustain high debt ratios because they have Demographics, speci昀椀cally aging populations, borrowed in their own currency. Departures will promote faster adoption of automation, from this policy could increase debt servicing even with increases in the retirement age. costs and increase the risks associated with Most of today’s largest economies will see high debt ratios. their workforces shrink over the coming two decades as aging workers retire. South Korea Emerging and developing economies that is projected to lose 23 percent of its work- have 昀椀nanced at least some of their debt with ing-age population (age 15-64), Japan 19 per- external borrowing are at increased risk of cent, southern Europe 17 percent, Germany 13 debt distress and could face a debt crisis, even percent, and China 11 percent during this peri- if global interest rates remain low, because od, if the retirement age remains unchanged. local currency depreciation and increased Automation—traditional industrial robots and risk premiums could increase servicing AI-powered task automation—almost certainly costs. Some governments are likely to face will spread quickly as companies look for ways the choice of reining in public spending and to replace and augment aging workforces risking public discontent, or maintaining public in these economies. Automation is likely to spending, which would further increase debt spread more slowly in other countries, with burdens and borrowing costs and risk local the key being whether it o昀昀ers cost advantag- currency depreciation. Facing these choices, es, including over low-skilled labor. some governments are likely to prioritize The number of jobs created by new technolo- spending on domestic issues rather than the gies is likely to surpass those destroyed during global commons. the next 20 years, judging from past episodes. DISRUPTIONS IN EMPLOYMENT One study by the World Economic Forum The global employment landscape will con- estimates that by 2025, automation will have tinue to shift because of new technologies, created 97 million new jobs and displaced 85 notably automation, online collaboration tools, million existing jobs. Several factors, including arti昀椀cial intelligence (AI), and perhaps addi- skills, 昀氀exibility, demographic factors, underly- tive manufacturing. Tasks that once seemed ing wages, the share of jobs susceptible to au- uniquely suited to human abilities, such as tomation, and access to continuing education driving a car or diagnosing a disease, are could in昀氀uence how well individual countries 46 GLOBAL TRENDS 2040

are able to adapt to automation. For example, countries with growing working-age cohorts are likely to experience more employment COULD 2040 BE JOBLESS? dislocations or downward pressure on wages than countries with older populations at com- The breadth and speed at which AI could replace current parable levels of automation. jobs raises questions as to whether economies will have the capacity to generate sufficient new jobs and whether workers Automation may a昀昀ect a growing share of the workforce. During the past two decades, it has will have the requisite skills for the new jobs created. replaced mostly middle-skill job professions, During the next few decades, AI appears likely to follow the such as machine operators, metal workers, trend of previous waves of innovation, resulting in net job cre- and o昀케ce clerks. Automation may increasingly ation over time, but it may lead initially to an overall decline if a昀昀ect more high-income professions, such jobs disappear faster than new ones are created. as doctors, lawyers, engineers, and university faculty. Although new jobs will emerge, there Alternatively, some economists question whether AI could is likely to be a skills mismatch between jobs lead to more continuous disruption to labor markets, as lost and jobs created. This mismatch could machines rapidly gain in sophistication, resulting in more lengthen the period of unemployment for persistent job losses. many workers as they attempt to gain the skills required for newly created jobs, and it could further skew the distribution of gains. More youthful economies might be more agile if they are able to provide the education rules are inadequate for new types of 昀氀ows, needed to properly train new entrants into including e-commerce and other services. the workforce. However, barriers to trade in global services, such as data localization rules, and the contin- MORE FRAGMENTED TRADING ENVIRONMENT ued desire to protect domestic agriculture are The global trading system is likely to become likely to make future agreements to update even more fragmented during the next two the WTO even more di昀케cult. decades. Since the creation of the World As WTO rules become increasingly antiquat- Trade Organization (WTO) in 1995, little or ed, future regional agreements are likely to no progress has been made toward addi- establish new rules and standards, especially tional global trade agreements. Regional and for new types of commercial transactions, bilateral trade agreements have proliferated, resulting in further fragmentation of global further fragmenting the global trading envi- trade rules. There has been a large increase ronment. Only a single multilateral agreement, in the number of bilateral and regional trade the Trade Facilitation Agreement, has been arrangements since the formation of the WTO, completed since the WTO’s inception. Progress and more limited progress in sector-speci昀椀c has been limited by fundamental di昀昀erences agreements. Some of these agreements not over agricultural trade and related subsidies only cover tari昀昀s and market access but also and protection of intellectual property rights establish rules and standards in areas not cov- among member countries as well as by a wid- ered by the WTO or other global multilateral ening divide between developed and develop- agreements, such as the digital trade rules in ing countries. Lacking updates, current trade A MORE CONTESTED WORLD 47

REGIONAL TRADE AGREEMENTS IN FORCE Europe Eurasia North 48 America 101 48 East Asia 30 Middle East Central America 92 40 10 Caribbean 23 35 West Asia South America Africa 66 27 Oceania Source: World Trade Organization. Information as of June 2020. the United States–Mexico-Canada Agreement. Asia Paci昀椀c region, for example, non-tari昀昀s Larger agreements, including the Asia-focused measures have increased even as applied tar- Regional Comprehensive Economic Partner- i昀昀s have fallen. With a record number of new ship (2020), the Comprehensive and Progres- trade barriers in 2019, trade restrictions are sive Agreement for Trans Paci昀椀c Partnership becoming structurally ingrained in the Europe- (2018), and the Africa Continental Free Trade an Union’s (EU) trade relations. Area (2020), are likely to boost regional trade and could attract more foreign direct invest- A combination of the desire to protect jobs ment to these regions. in the manufacturing sector, concerns about capturing gains from winner-take-all techno- Expanding unilateral, often non-tari昀昀 trade logical progress, and a focus on critical inputs, restrictions, are likely to further complicate such as medical equipment and pharmaceu- international trade for governments and the tical feedstocks, is likely to further accelerate private sector, limit trade-driven economic the use of protectionist trade policies. The growth, and weaken overall growth. Although anticipated increase in job losses in manufac- the US-China trade war has garnered head- turing during the next two decades is likely to lines, many countries have increased their use place pressure on governments, particularly of restrictive trade measures during the past those in advanced and manufacturing-depen- 12 years. Between 2008 and 2018, the number dent emerging economies, to take protective of restrictive trade-related policy measures actions. In addition, a recognition that technol- implemented globally increased by more than ogies, such as AI, could lead to sustainable 昀椀rst 200 percent compared to the previous decade, mover advantages—in which being the 昀椀rst to with Latin America and Asia accounting for 30 market a new product provides a competitive percent and 40 percent respectively. In the advantage—might lead some governments to 48 GLOBAL TRENDS 2040

UNCERTAIN FUTURE OF MONEY intensify their use of trade restrictions as they The financial sector is not immune from the technological jockey for global position. Finally, protecting changes that are transforming other industries. Digital critical inputs and strategic supplies, especially currencies are likely to gain wider acceptance during the pharmaceuticals in the wake of the pandem- next two decades as the number of central bank digital ic, could lead to greater trade restrictions for currencies increase. China’s central bank launched its these industries. digital currency in 2020, and a consortium of central banks, China, the EU, Japan, and other economic working in conjunction with the Bank of International Set- powers will also use their leverage to advance tlements, is exploring foundational principles for sovereign national security goals, further distorting mar- digital currencies. kets. Since 2008, they already have intensi昀椀ed their use of trade restrictions and domestic The introduction of privately issued digital currencies, such as Facebook’s proposed Libra, would further drive accep- market regulations for strategic in昀氀uence. Looking forward, concerns about privacy and tance of digital currencies. The extent to which privately control of data streams as well as trade in issued digital currencies will provide a substitute for the industrial goods and other technologies are use of national or regional fiat currencies, including the US likely to lead to even more activist trade poli- dollar and the euro, to settle transactions will depend on cies for broader national security interests. the regulatory rules that are established. ECONOMIC CONNECTEDNESS The US dollar and the euro are also likely to face threats EVOLVING, DIVERSIFYING from other fiat currencies, the potency of which will depend In addition to trade policies, demand for and on changes in the current international financial architecture the increased ability to deliver services across and the global importance of international linkages. Pri- borders and the use of e-commerce platform vately issued digital currencies could add complexity to the technologies are likely to further transform conduct of monetary policy by reducing countries’ control economic connectedness, including the shape over their exchange rates and money supply. of global value chains, the location of foreign direct investment, and the composition and direction of trade. Despite the fragmenta- tion of the global trading system, trade in a 2030 if countries adopted digital technologies, broad range of services, including 昀椀nancial, which would facilitate expansion of services telecommunications, information, tourism, trade and provide a further boost to continued and others, is poised to increase during the growth in economic connectedness. next two decades. In OECD countries, services account for roughly 75 percent of GDP and 80 New Manufacturing Technologies Shifting percent of employment, but the current value Trade. The con昀椀guration of global supply of services trade globally is only one-third chains in 2020 largely re昀氀ected the importance of that of manufactured goods, suggesting of economies of scale and labor as a source that there is signi昀椀cant room for growth. The of value creation in the manufacturing sector, WTO’s Global Trade Model estimates that leading to the centralization of production in a global trade would grow by around 2 percent- few lower wage locations, especially China. A age points more than baseline growth through large increase in the use of digital technologies A MORE CONTESTED WORLD 49

and additive manufacturing might reduce the in global superstar or “winner-take-all” 昀椀rms. importance of economies of scale and labor Global superstar 昀椀rms are the world’s larg- as an input and encourage 昀椀rms to move est and most pro昀椀table across all industries, more production closer to markets. These new including pharmaceuticals, consumer goods, production technologies could diminish the and information technology. These 昀椀rms cap- attractiveness of locating production in China tured approximately 80 percent of economic and accelerate the rate at which companies pro昀椀t among companies with annual revenues reorient their supply chains. greater than $1 billion in 2017 and earned E-Commerce Platform Economy Firms approximately 1.6 times more economic pro昀椀t Enabling Global Trade. Cloud computing, than they did in 1997. Superstar 昀椀rms, while automation, big data analytics, AI, and other domiciled in a single country, have sales that information technologies are enabling new are global, and growth in the size and reach distribution modes that expand access to in- of these 昀椀rms is likely to translate into an ternational markets for all sellers but especial- increase in economic globalization. The eco- ly for small and medium-sized enterprises that nomic factors that support the rise of global have historically faced high foreign market superstar 昀椀rms, including high 昀椀xed costs, low marginal costs, network and platform e昀昀ects, entry costs. E-commerce platform 昀椀rms, which and machine learning, are likely to persist in 2020 included the Chinese 昀椀rm Alibaba and through the next two decades. America’s Amazon, are creating a marketplace that matches buyers and sellers independent Further, as technology, including big data and of geographic location, providing a compar- machine learning, and intangibles, such as atively low-cost and low-risk way for 昀椀rms to brand, become increasingly important drivers enter foreign markets, and increasing interna- of value creation during the next two decades, tional trade 昀氀ows. the market dominance of superstar 昀椀rms is E-commerce sales in 2018 were equivalent to likely to increase. Growth in superstar 昀椀rms 30 percent of global GDP that year, according is also likely to a昀昀ect the division of economic to data released in 2020. International e-com- gains between and within countries, poten- merce spanned business-to-business and tially leading to friction and uneven regulation as host economies try to capture some of business-to-consumer sales; approximately 25 percent of all online shoppers made cross-bor- the value created by these 昀椀rms. The power der purchases in 2018. Looking forward, of these 昀椀rms beyond business—including increased access to the Internet, falling data control of data and information 昀氀ows—will en- costs, growth in smartphone ownership, and courage government e昀昀orts to regulate them, a shift to online purchases post-pandemic essentially as public utilities, or possibly break are likely to result in more e-commerce sales, them up. with many of these sales taking place on large State Owned Multinationals Continue to global e-commerce platforms. Expand. State-owned multinationals (SOM- Multinational “Superstar” Firms Perpetuate NCs), most of which originated in China, India, Economic Globalization. Technology and dig- Russia, Saudi Arabia, United Arab Emirates itization are also transforming the structure of (UAE), and some EU member countries, almost some industries, increasing the prevalence of certainly will continue to be active participants oligopolies and near monopolies and resulting in international commerce. Some SOMNCs 50 GLOBAL TRENDS 2040

ECONOMIC WEIGHT SHIFTING FORECAST SHARE OF WORLD GDP TO ASIA Percent of world GDP Percent 80 2000 2020 2020 70 2040 Rest of EU and UK, 20.5 world, United States, 24.0 30.3 China, 17.9 60 India, 3.1 50 Other emerging Asia, 4.2 40 2040 30 Rest of EU and UK, 16.4 world, United States, 20.8 20 27.7 China, 22.8 10 India, 6.1 Other emerging Asia, 6.2 0 Advanced Economies Emerging Asia Source: Oxford Economics. Source: Oxford Economics. ECONOMIC ACTIVITY FORECAST TO TILT TO ASIA 2040 Population 2020 2040 Rank GDP Rank GDP Rank 1 | INDIA 6 3 2 | CHINA 2 1 5 | INDONESIA 16 8 6 | PAKISTAN 39 23 8 | BANGLADESH 44 28 14 | PHILIPPINES 34 20 15 | JAPAN 3 4 16 | VIETNAM 40 24 Source: Oxford Economics. A MORE CONTESTED WORLD 51 Photo / Bigstock

COULD AI BOOST PRODUCTIVITY? Labor productivity growth has fallen in most economies during through 2040. Some of the most populous the past two decades even as there have been large advances countries in Asia are positioned to be among the world’s largest economies by 2040, even in technology. The next wave of technological improvements, as their per capita income lag behind that of including AI could reverse this trend. advanced economies. AI might have large effects on productivity during the next Asia’s record growth during the past 40 years two decades, in line with the delayed nature of productivity has resulted in a convergence between Asian gains from electricity and information technology. The pace of standards of living and those of middle- and adoption could also affect productivity gains. According to one even high-income economies. In 2020, China study, AI could boost global GDP by 1.2 percent per year if 70 and other developing Asia countries contrib- percent of companies adopted some form of AI by 2030. uted 18 percent and 7 percent respectively to Although any gains are likely to be unequally distributed, both global GDP. If these trends continue, by 2040 between and within countries, countries that are net gainers developing countries in Asia are projected from an AI-induced productivity boost would have expanded to account for approximately 35 percent of economic opportunities that could allow them to deliver more global GDP, with India and China as the largest services, reduce national debt levels, and finance some of the contributors at 29 percent of global GDP, ac- costs of an aging population. cording to Oxford Economics. The faster economic growth in Asia could lead to some of the most populous countries being among the world’s largest economies by 2040. may distort the global competitive landscape For example, faster economic growth in In- because of the state support that they receive. dia—on track to be the most populous country As the competition for technology leadership by 2027—could propel India into the ranks of the world’s three largest economies. Similarly, intensi昀椀es, SOMNCs, including those from faster growth in Indonesia, the world’s fourth China, could increase their reliance on state most populous country, could allow it to break support to capture and lock-in 昀椀rst mover into the ranks of the top 10 economies by advantages, prompting private companies 2040. However, their standards of living or to lobby their governments to intervene on per capita GDP are likely to remain well below their behalf. those of advanced economies. CONTINUED TILT TOWARD ASIA BROADER IMPLICATIONS AND DISRUPTIONS Global economic activity has been tilting The economic environment of the future, toward Asia during the past 40 years, re- characterized by increasing national debt, a 昀氀ecting its higher rate of economic growth more complex trading environment, diver- in comparison with the rest of the world, large population, and reduction in grinding si昀椀ed global connections, and employment poverty—a trend that almost certainly will disruptions, will increase strains on govern- continue through at least 2030 and perhaps ments. Taken together, these trends are likely 52 GLOBAL TRENDS 2040 Photo / Bigstock

to shift economic in昀氀uence to a broader range face funding constraints, but e-commerce plat- of players, including private corporations and form 昀椀rms o昀昀er lower customer acquisition less open economies, led by China. costs and potentially greater market reach Straining Contributions to Global that could reduce costs, increase 昀椀nancing, Challenges. High national debt, and associ- and enable faster growth. In developing and ated debt servicing costs, could restrict the emerging markets, these platform 昀椀rms could lower the barriers to entry, help unlock 昀椀nanc- 昀椀nancial contribution that governments are ing, and provide an avenue to formalization able and willing to make toward global public of the underground economy. Greater regula- goods and to address shared challenges, tion of platform 昀椀rms—particularly by coun- including global health and climate change. tries trying to impose trade barriers—might Wealthy countries might cut back on health reduce gains. assistance programs—or be unable to expand them to match population increases in poor Increasing Challenges to International countries. Less investment could delay emis- Economic Governance. The number of large sions mitigation measures, and developed but still developing economies and their countries could backtrack on commitments to relative economic weight are likely to increase provide adaptation 昀椀nancing to the develop- during the next 20 years. These economies, ing world. Slower growth and high debt could led by China, could increasingly demand more also limit the ability of some governments, in- in昀氀uence over the direction of economically cluding those in developing countries most at focused international organizations, altering risk from the adverse e昀昀ects of climate, from standards and norms to re昀氀ect their economic investing in adaptation measures to protect interests, some of which may be incompati- their infrastructure and communities from ble with the interest of advanced economies. extreme weather. Other frictions might emerge because these Platformization Spurring Economic Growth. economies are large in aggregate but still considered developing based on per capita E-commerce platform 昀椀rms will not only GDP, giving them access to concessions from sustain globalization by matching customers the IMF, World Bank, and WTO. These ten- and businesses across borders, but they can sions could shape the future orientation and also facilitate growth in domestic business by undermine the e昀昀ectiveness of these orga- o昀昀ering a marketplace for domestic 昀椀rms and nizations, as well as result in the creation of customers to meet. The rise of e-commerce more parallel organizations and increase the platform 昀椀rms could help spur the growth of small and medium-sized enterprises, which in昀氀uence of developing economies on global have historically made a signi昀椀cant contri- economic rules. bution to economic growth and job creation. These small and medium-sized 昀椀rms often Photo / Bigstock A MORE CONTESTED WORLD 53 Photo / Bigstock

STRUCTURAL FORCES TECHNOLOGY Key Takeaways During the next two decades, the pace and impact of technological developments are likely to increase, transforming and improving human experiences and ca- pabilities and offering the potential to tackle challenges such as aging, climate change, and low productivity growth, while creating new tensions and disruptions within and between societies, industries, and states. The next decades will see increasing global competition for the core elements of technology supremacy, such as talent, knowledge, and markets, potentially resulting in new technological leaders or hegemonies. The race for technological dominance is inextricably intertwined with evolving geopolitics and the broader US-China rivalry, but at the same time, technolog- ical advantage will be augmented by companies that have a long-term focus, resources, and global reach. Spin off technologies and applications will be available for rapid adoption, en- abling developing countries to take advantage of the latest core advances, develop global applications in niche areas, and contribute to global supply chains. 54 Photo / Bigstock

NEW MATERIALS HUMAN-MACHINE INTERFACE ADVANCED COMPUTING COMMUNICATION NETWORKS HYPERCONNECTED WORLD VIRTUAL REALITY ROBOTICS ARTIFICIAL INTELLIGENCE INTERNET OF THINGS A MORE CONTESTED WORLD 55 Photo / Bigstock

he increasing convergence Tof seemingly unrelated Scienti昀椀c Convergence Sparking Innova- 昀椀elds and the rise of global tion. The convergence of seemingly unrelated competition to generate areas of scienti昀椀c research and technological applications is making the rapid development and lock in advantage are of novel applications possible, practical, and accelerating the emergence useful. For example, the smartphone was enabled by decades of basic research and of cutting-edge technologies. development in electronics, antennas, materi- als, batteries, telecommunications networks, and user interfaces. By 2040, the increasing convergence of technologies, such as arti昀椀cial intelligence (AI), high-speed telecommunica- tions, and biotechnology, will be augmented Assessing technological trends and their by increased understanding of the social and broader implications is challenging because behavioral sciences to enable rapid break- timelines remain uncertain, the path from throughs and user customized applications foundational science to a transformational that are far more than the sum of their parts. application can be di昀케cult to discern, and the Taken together, these technology platforms connections between a technology and its can then provide a foundation for rapid potential broader implications can be indirect innovation while lowering the barriers to and complex. Emerging technologies also raise market entrance. myriad ethical, societal, and security ques- tions—ranging, for example, from who we are Growing Competition for Dominance. The as humans, to our impact on the environment, race for technological dominance is inextrica- to the bounds of acceptable warfare. bly intertwined with evolving geopolitics and is increasingly shaped by broader political, TRENDS ACROSS EMERGING TECHNOLOGIES economic, and societal rivalries, particularly Multiple trends are shaping the technology those associated with China’s rise. Amassing landscape of the next two decades, and while the resources to sustain broad technology new technologies will not emerge uniformly leadership, including the concentration of or predictably, they are likely to share some human talent, foundational knowledge, and common drivers and dynamics. The increasing supply chains, requires decades of long-term investment and visionary leadership. Those convergence of seemingly unrelated 昀椀elds and the rise of global competition to gener- focusing their resources today are likely to be ate and lock-in advantage are accelerating the technology leaders of 2040. In open econ- the emergence of cutting-edge technologies. omies, a mix of private e昀昀orts and partner- ships between governments, private corpo- The di昀昀usion of technological knowledge, the aggressive setting of standards to favor rations, and research programs will compete one technology solution over another, and with state-led economies, which may have ever shorter product development timelines an advantage in directing and concentrating will incentivize long-term strategy and rapid decisionmaking to avoid missteps and falling behind competitors. 56 GLOBAL TRENDS 2040

resources, including data access, but may lack the bene昀椀ts of more open, creative, and competitive environments. Technologies Di昀昀using Globally. Spin o昀昀 technologies and applications are often available for rapid adoption in nearly every region of the world, enabling even developing countries to take advantage of the latest core advances, develop global applications in niche areas, or contribute to the supply chains of more advanced economies. Many states will seek to accelerate and harness this process, sponsoring focused e昀昀orts, such as regional alternatives to Silicon Valley or biotechnol- ogy incubators that will increase the risk of surprise from novel applications arising from unexpected locations. Timelines Shrinking. The time to develop, deploy, mature, and then retire technologies is moving from decades to years and sometimes faster. Multiple actors, including corporations and states, at the forefront of emerging tech- nology may deploy and exploit a new technol- ogy before others get o昀昀 the starting blocks. Those trying to catch up, especially in devel- oping countries, may be increasingly forced to choose technologies before the implications of those choices are fully understood, risking in- vestment in technological dead ends or falling hopelessly behind. Planned economies may be able to react faster to emerging technology de- velopments, potentially at the cost of reduced technological diversity and e昀케ciency. TECHNOLOGIES DRIVING TRANSFORMATION Although technology advances in unpredict- able ways, shaped by unexpected di昀케culties and unanticipated breakthroughs, some technological areas appear to o昀昀er the po- A MORE CONTESTED WORLD 57 Photo / Bigstock

TRAJECTORY OF ARTIFICIAL INTELLIGENCE Artificial intelligence (AI) is the demonstration of cognition and creative problem solving by machines rather than humans or animals, ranging from narrow AI, designed to solve specific problems, to Artificial General Intelligence MATCH OR (AGI), a system that in the future may match a human EXCEED HUMAN being’s understanding and learning capacity. CAPABILITY AND INTELLIGENCE ARTIFICIAL NARROW ARTIFICIAL GENERAL INTELLIGENCE INTELLIGENCE PERFORM ONE SPECIFIC TASK Voice Facial Autonomous MACHINE INTELLIGENCE Email spam recognition recognition vehicles AGI emergence and Airplane Antilock autopilot brakes filter capability are unclear 1970 80 90 2000 10 20 30 40 50 60 tential for transformative change and provide designed to solve speci昀椀c problems, to Arti昀椀- examples of the potential consequences of cial General Intelligence, a system that in the new technologies in the coming decades. The future may match or exceed a human being’s following sections on AI, biotechnology, and understanding and learning capacity. By 2040, materials and manufacturing—selected after AI applications, in combination with other consultation with technology leaders—high- technologies, will bene昀椀t almost every aspect light the potential bene昀椀ts and risks of new of life, including improved healthcare, safer technologies individually and collectively in and more e昀케cient transportation, personal- creating a future hyperconnected world. Ad- ized education, improved software for ev- vances in these areas will combine with other eryday tasks, and increased agricultural crop technologies, such as energy storage, to shape yields. Political and business leaders world- societies, economies, and perhaps the nature wide are seeking global talent and are pouring of power. resources into developing AI, hoping to be Arti昀椀cial Intelligence among the 昀椀rst to use it to reshape societies, economies, and even war. Enabled by concur- Becoming Mainstream rent increases in high-quality data, computing AI is the demonstration of cognition and cre- capability, and high-speed communication ative problem solving by machines rather than links, AI will challenge leaders to keep pace humans or animals, ranging from narrow AI, 58 GLOBAL TRENDS 2040

and reap the bene昀椀ts while mitigating harmful nizations will also have powerful tools such as e昀昀ects, such as threats to privacy and liberty. video manipulation, or deep fakes, to improve Although many new AI developments will be tailored marketing or advance a particular available globally, there are disproportion- narrative. Emerging AI applications may also become potential targets for data manipula- ate advantages for nations that can a昀昀ord to tion to skew their output. support, develop, and adopt AI now. Wide- spread adoption of AI, particularly in warfare, Ethics of Autonomy. AI’s development and also increases the risk of intentional misuse or the level of human involvement in decision- unintended engagement or escalation. making, if any, will continue to raise ethical Industry and Labor Transformed. AI will concerns, and perspectives on ethical obliga- transform almost all industries and disrupt tions are likely to be di昀昀er globally. In addi- tion, the opaque nature of AI decisionmaking the global labor force, creating new job 昀椀elds, increases the possibility of unintentional eliminating others, and driving signi昀椀cant eco- bias, discrimination, unexpected outcomes, nomic and social redistributions. Human-ma- or intentional misdirection. Cooperation to chine teaming will be common for many advance trustworthy AI, with transparent and future jobs. To harness the advantages of AI clear decisionmaking processes, may improve while mitigating unemployment, countries and corporations will need to focus on education trust and con昀椀dence for all parties. Although and retraining their workforce. many countries will develop strict rules on the use of personal data, there will be debate on Data Will Be King. AI dependent industries whether these rules can coexist with the full and organizations of the future will require realization of AI capabilities. massive quantities of data to operate e昀케cient- AI Enhanced Warfare. AI will confer strong ly and competitively. Institutions, companies, advantages to countries that incorporate AI and countries already investing in ways to into their military systems. AI will enhance the acquire, classify, store, and monetize data performance of existing weapons, defenses, will have advantages. The unprecedented and security systems, both physical and cyber, amounts of data available in 2040 will provide while counter-AI techniques, designed to valuable insights and capabilities but also negate or confuse AI decision making, also are open up access, privacy, ownership, and con- likely to emerge. trol of data as areas of increasing competition and con昀氀ict. Smart Materials and Manufacturing Security and Privacy Reimagined. Current Are Building a New World notions of privacy will continue to evolve, with By 2040, advances in novel materials, cou- individuals needing to share more personal pled with smart manufacturing, will reshape information for access to applications, and the production of everything from consumer tracking becoming ubiquitous. Authoritarian goods to high-end military systems, reducing governments are likely to exploit increased costs, extending capabilities, shifting supply data to monitor and even control their popula- chains, and enabling entirely new design tions. Moreover, many companies and orga- options. The period of rapid change we are entering is often referred to as a Fourth A MORE CONTESTED WORLD 59

Industrial Revolution because of its potential Design What You Need. Materials today are to improve standards of living while possibly undergoing a revolutionary transformation, disrupting traditional industries, jobs, supply shifting from o昀昀-the-shelf materials to opti- chains, and business models. mized materials and processes designed for Materials and manufacturing are inextrica- custom products. Combined with additive bly linked in a long-standing virtuous cycle, manufacturing, materials-by-design will en- where advances in one drive advances in the able great strides in making everything from other. Although this cycle alone could contin- airplanes to cell phones stronger, lighter, and ue to drive progress for decades to come, it more durable. most likely will be accelerated by convergent Assemble What You Need. The coming advances in high performance computing, decades will see advances in the development materials modeling, AI, and bio-materials. of new materials with previously unobtainable Increased connectivity will complement this properties, enabling previously unreachable growth by allowing advances to be distributed levels of performance for many applications. and accessible across the globe. Two-dimensional materials, metamaterials, Increased Design Options. Additive man- and programmable matter will have unusu- ufacturing (AM), more commonly known as al strength, 昀氀exibility, conductivity, or other 3D printing, is being used to fabricate an properties that enable new applications. increasing variety of materials, from titanium Biotechnology Enabling Rapid Innovation to explosives, in smaller facilities and with less Improved capability to predictably manipulate expertise, bringing advanced manufacturing biological systems, augmented by advances capabilities to small companies and individu- in automation, information, and materials als worldwide. Despite some technical hurdles sciences, is spurring unprecedented innova- and questions of reliability, AM is driving a rev- tion in health, agriculture, manufacturing, and olution in modern manufacturing by enabling cognitive sciences. By 2040, biotechnology rapid prototyping, highly customized parts, on- innovations most likely will enable societies site production, and the fabrication of shapes to reduce disease, hunger, and petrochem- that would otherwise be impossible. ical dependence and will transform how we Adapting On The Fly. Advances in informa- interact with the environment and each other. tion systems, including computational mod- Societies will be challenged to harness these eling and machine learning, combined with bene昀椀cial advancements while addressing the advanced physical systems, such as a robust market, regulatory, safety, and ethical con- industrial Internet of Things and advanced cerns surrounding these technologies—for ex- robotics, are likely to enable fully integrated, ample, genetically modi昀椀ed crops and foods. collaborative manufacturing systems that Biotechnology is likely to make signi昀椀cant con- respond in real time to meet changing condi- tributions to economic growth during the next tions in the factory, in the supply network, and two decades, potentially a昀昀ecting 20 percent in demand. of global economic activity by 2040, notably in agriculture and manufacturing, based on 60 GLOBAL TRENDS 2040

BENEFITS AND RISKS OF ADVANCED BIOTECHNOLOGY APPLICATIONS BENEFITS APPLICATION RISKS Misdiagnoses plummet and healthcare DIGITAL HEALTH / Access disparities due to costs or outcomes improve. PERSONALIZED MEDICINE location. Personal health data misuse Tailored medical treatments using AI to or manipulation. combine data from genetic sequencing, diagnostics, and biomonitoring. Rapid, more effective ON DEMAND MEDICINE PRODUCTION Disputes over R&D prioritization in medical treatments. developed vs. developing countries. Cell-and gene-based therapies, combined with improvements in drug design and production, for faster disease response. Reduce delays and rejections of organ BIOPRINTING AND Access disparities due to the transplants and repairs. XENOTRANSPLANTATION high up-front costs. Additive manufacturing to “print” biological parts for medical testing or tissue replacement, grow human- compatible organs in animals for transplantation. Major reduction in inherited REPRODUCTIVE ENGINEERING Ethical and social divides over genetic diseases. applications. Unequal access. Using genomic technologies to select and modify human embryos for broad range of traits and abilities. Novel treatments for neurological Tensions between augmented and disorders. Enhanced cognition and COMPUTER-HUMAN INTERFACES non-augmented individuals. New expanded perception. cyber/bio vulnerabilities. Machine augmentation of human cognitive processes. Improved speed and reliability in Increased potential for misuse and designing and making novel BIO-MANUFACTURING workforce restructuring. materials, medicines. Bio-design and production of enhanced or highly specified materials, medicines and foods. Ready production of new and novel Potential for weapons applications or molecules, materials and treatments. SYNTHETIC ORGANISMS accidental misuse. Unknown environmental impacts. Genetically modified organisms and biological processes create new materials and medicines. Make barren or depleted lands Unintended, potentially global productive. Mitigate human-induced ENVIRONMENTAL RESTORATION environmental or public and natural threats to the environment. health consequences. Large-scale ecological intervention, through biotechnology, reforestation, or ocean engineering creates, manipulates, or rescues damaged environments. Practically unlimited capacity for DNA-BASED DATA STORAGE Increased potential for long-term long-term data storage. social monitoring. DNA used to encode and store data. Increased variety of cheaper, more TRANSFORMED AGRICULTURE AND Reduced biodiversity, social tensions nutritious foods created with lower FOOD PRODUCTION over genetic modification, workforce environmental impact. and supply chain disruptions. Automated precision production processes and integrated crop-livestock systems use genetically altered organisms. A MORE CONTESTED WORLD 61

NEW TECHNOLOGIES FUELING SPACE COMMERCE AND SPARKING COMPETITION The space landscape in 2040 will combine emerging technology with a maturation of today’s capabili- ties to help drive commercialization and introduce new applications. Services, such as communications, navigation, and satellite imagery, will become ubiquitous offering improved capabilities, lower costs, and increasing efficiencies. The efforts of both government and commercial actors will establish new domains of space competition, particularly between the United States and China. Space Exploration Expands By 2040, an increasing number of countries will be participating in space exploration as part of internation- al cooperative efforts. By doing so, these countries will acquire national prestige, opportunities for scientific and technical advancement, and potential economic benefits. Although governments will remain the primary source of funding to support large-scale space exploration activities, the role of commercial entities will expand dramatically in most aspects of space activities. Commercial efforts will coexist, and probably cooperate, with government-funded space programs, advancing space technologies. China As A Space Power By 2040, China will be the most significant rival to the United States in space, competing on commercial, civil, and military fronts. China will continue to pursue a path of space technology development indepen- dent of that involving the United States and Europe and will have its own set of foreign partners participat- ing in Chinese-led space activities. Chinese space services, such as the Beidou satellite navigation system, will be in use around the world as an alternative to Western options. Space Supporting Government and Military Needs Enhanced space services and new technology will be available for military applications as well as civil government and commercial use. National space assets will be particularly coveted as governments remain concerned about the possibility that commercial or foreign government space services could be denied in conflict. On-Orbit Activities Become Routine By 2040, governments probably will conduct routine on-orbit servicing, assembly, and manufacturing activ- ities, enabled by advanced autonomy and additive manufacturing, to support national space systems and international efforts. Commercial companies probably will offer on-orbit services, such as repair, remote survey, relocation, refueling, and debris removal. On-orbit services will be used to upgrade satellites, ex- tend their functional lives, and allow for new types of space structures, such as extremely large or complex instruments, but they may need government support to establish the industry. AI Goes to Space AI will allow innovative use of space services by assisting with operation of large satellite constellations and space situational awareness capabilities. AI will also support the fusion and analysis of enormous volumes of high-quality, continuously collected data, driven partly by hyperconnected space and ground systems. 62 GLOBAL TRENDS 2040

bioeconomy growth rates relative to gross based services, it is projected that hundreds of domestic product (GDP). In 2019, the United billions and eventually trillions of devices may States estimated its bioeconomy at nearly $1 be connected globally. trillion dollars annually, or approximately 5.1 Accelerated Societal Change. Privacy and percent of its total economy, while European Union and UN estimates from 2017-19, which anonymity may e昀昀ectively disappear by choice or government mandate, as all aspects of apply a broader de昀椀nition of bioeconomic personal and professional lives are tracked activities, show biotech contributing as much by global networks. Real-time, manufactured as 10 percent to Europe’s economy. or synthetic media could further distort truth Hyperconnectivity Uniting and and reality, destabilizing societies at a scale Separating Societies and speed that dwarfs current disinformation By 2040, the world will have orders-of-mag- challenges. Many types of crimes, particularly nitude more devices, data, and interactions, those that can be monitored and attributed linking together all aspects of modern life and with digital surveillance, will become less com- crossing political and societal boundaries. In- mon while new crimes, and potentially new creasing speed and global access will provide forms of discrimination, could arise. nations, corporations, and even individuals New Cybersecurity Paradigms. Greater with services and resources once limited to connectivity almost certainly will increase the prosperous countries. This hyperconnected vulnerability of connected individuals, insti- world is a future already beginning to emerge; tutions and governments as the presence of next generation networks, persistent sensors, hundreds of billions of connected devices vast- and myriad technologies will fuse together ly increases the cyber-physical attack surface. in a global system with billions of connected In addition, cyber security enforcement based devices. Today’s ubiquitous public cameras, on geographic borders is likely to become less for example, will lead to tomorrow’s smart relevant in an increasingly global web. cities, where optical and other sensors com- bine with AI to monitor people, vehicles, and BROADER IMPLICATIONS OF infrastructure globally. TECHNOLOGY EVOLUTION By some estimates, the current Internet of Emerging technologies are rapidly improving Things, a precursor to a hyperconnected a broad range of human experiences and ca- future, will reach 64 billion objects by 2025, pabilities, but at least in the short term, these up from 10 billion in 2018—all monitored in same technologies may disrupt longstanding real time. Looking forward, a hyperconnected systems and societal dynamics, forcing individ- world could support up to 1 million devices uals, communities, and governments to adjust per square kilometer with next generation and 昀椀nd new ways of living, working, and man- cell phone systems (5G), compared with the aging. As with any disruption, some will thrive 60,000 devices currently possible with current whereas others will struggle, potentially facing cell networks, with even faster networks on increasing inequalities and imbalances. Emerg- the horizon. Networked sensors will become ing technologies are not solely responsible for ubiquitous; more than 20 billion devices were the following developments, but they are likely operative in 2020, and with new terrestrial to aggravate and amplify them. networks combined with an increase in space- A MORE CONTESTED WORLD 63 NASA / Unsplash

Solving Problems Fast. As the global COVID-19 vaccine development e昀昀ort has showcased, technologies—often integrated in new and imaginative ways—can be quickly reapplied from their original use to solve crisis needs. The research that enabled the unprec- edented and rapid development of e昀昀ective COVID-19 vaccines built on decades of foun- dational investments in the health sciences. Similarly, challenges decades in the making, such as climate change, may be moderated by bringing together suites of technological solutions that each address one element of a much larger issue. Technology as Geopolitical Power. Technol- ogy is a tool of national power that the United States has long led through investments in re- search, innovation, and development. The next decades will see increasing global competition for the core elements of technology suprem- acy, such as talent, knowledge, and markets, potentially resulting in new technological leaders or hegemonies in the 2030s. Complex international supply chains, the global di昀昀u- sion of innovation, and investments by geopo- litical rivals could further impede the unilateral use of technology by nations to achieve their goals. Conditions are ripe for both greater international cooperation as well as new types of multifaceted competition and con昀氀ict that could de昀椀ne the coming era. Aggravating Social Tensions. The pace of technological change could increase societal tensions between those with the access, abili- ty, and will to adapt and those who are unable or unwilling to change. With the rapid spread and adoption of technologies, some individu- als, communities, and countries could make rapid advancements while others may be left behind with little hope of catching up, exacer- bating inequalities within and between states. 64 GLOBAL TRENDS 2040 Images / Bigstock

Technological adoption also may outpace monitor their health are providing increasing ethical maturity and regulation, creating per- amounts of data to governments and the sistent and potentially corrosive social anxiety private sector. Governments, especially au- and political divisions. These tensions could be thoritarian governments, will exercise unprec- further in昀氀amed by the use of manufactured edented surveillance capabilities to enforce or AI targeted messaging such as deep fakes. laws and provide security while tracking and Complicating Government-Corporate Re- de-anonymizing citizens and potentially target- lationships. Public-private partnerships for ing individuals. investment, research, and development have Stimulating Debates Over Openness. The been critical for attaining many technological prospects of a hyperconnected world will breakthroughs and advantages, but core cor- stimulate debates and divisions within and porate and national interests do not naturally between states about the bene昀椀ts and risks of align. Large technology companies increasing- open, connected networks. As global networks ly have resources, reach, and in昀氀uence that ri- become increasingly interconnected, it may vals and even surpasses some states. National be more di昀케cult to maintain a segregated or interests in maintaining technological control closed system, and e昀昀orts to block the broad- and advantage as well as protecting national er Internet potentially could irreparably cut o昀昀 security can be at odds with corporate inter- closed systems from the global economy. ests in expanding global market share and Existential Risks. Technological advanc- increasing pro昀椀ts. es may increase the number of existential Disrupting Industries and Jobs. The pace of threats; threats that could damage life on a technological change, notably developments global scale challenge our ability to imagine in advanced manufacturing, AI, and biotech- and comprehend their potential scope and nology, may hasten disruptions to manufac- scale, and they require the development of re- turing and global supply chains, eliminating silient strategies to survive. Technology plays a some modes of production and jobs and role in both generating these existential risks bringing supply chains closer to markets. and in mitigating them. Anthropomorphic Shifting supply chains could disproportionate- risks include runaway AI, engineered pandem- ly a昀昀ect less advanced economies, while many ics, nanotechnology weapons, or nuclear war. new jobs will require workers with improved Such low-probability, high-impact events are or retooled skills. di昀케cult to forecast and expensive to prepare Enabling Governance, Threatening Free- for but identifying potential risks and devel- dom and Privacy. The technology-saturated oping mitigation strategies in advance can provide some resilience to exogenous shocks. and hyperconnected future will o昀昀er leaders and governments new tools to monitor their populations, enabling better service provision and security but also o昀昀ering greater means of control. The same technologies that em- power citizens to communicate, organize, and A MORE CONTESTED WORLD 65 Images / Bigstock

EMERGING DYNAMICS hile these demographic, environmental, economic, and tech- nological trends are setting the stage, the story of the next 20 Wyears will be written primarily by the choices made at societal, state, and international levels. Emerging dynamics at all levels point to greater debate and contestation. Personal and policy choices will determine the co- hesiveness of societies, the resilience of states in all regions, and the types of interactions between states. In many countries, people are pessimistic about the future and growing more distrustful of leaders and institutions that they see as unable or unwilling to deal with disruptive economic, technological, and demographic trends. In response, people are gravitating to familiar and like-minded groups for community and security, including ethnic, religious, and cultural identities as well as groupings around interests and causes. Communities are more fragmented and in con昀氀ict; a cacophony of competing visions, goals, and beliefs are placing greater de- mands on governments. 66 Image / Bigstock

At the same time, governments are struggling under mounting pressures and tighter re- sources, and they are 昀椀nding it dif昀椀cult to meet the challenges of a globally interconnected, technologically advanced, and diverse world. The result is a growing disequilibrium between public demands and governments’ ability to deliver welfare and security, portending greater political volatility and increasing risks for democracy. Unmet needs and expectations are en- couraging a 昀氀ourishing mar- ketplace of additional actors SOCIETAL providing governance, secu- rity, and services, including nongovernmental organiza- STATE tions, churches, corporations, and even criminal organiza- tions. States that adapt to the mounting governance chal- INTERNATIONAL lenges probably will be better positioned to rebuild trust and legitimacy. During the next two decades, power in the international system will evolve to include a broader set of sources and features with expanding technological, network, and information power complementing more traditional military and economic power. The rivalry between the United States and China is likely to set the broad parameters for the geopolitical environment during the coming decades, forcing starker choices on other actors. States will leverage these diverse sources of power to jockey over global norms, rules, and institutions, with regional powers and nonstate actors exerting more in昀氀uence within individual regions and leading on issues left unattended by the major powers. The increased competition over internation- al rules and norms, together with untested technological military advancements, is likely to undermine global multilateralism, broaden the mismatch between transnational challenges and institutional arrangements to tackle them, and increase the risk of con昀氀ict. A MORE CONTESTED WORLD 67 Image / BigstockPhotos | Mauro Mora / Unsplash | Bigstock

EMERGING DYNAMICS SOCIETAL: DISILLUSIONED, INFORMED, AND DIVIDED Key Takeaways Slowing economic growth and gains in human development, coupled with rapid societal changes, have left large segments of the global population feeling inse- cure, uncertain about the future, and distrustful of institutions and governments they view as corrupt or ineffective. Many people are gravitating toward familiar and like-minded groups for com- munity and security, including ethnic, religious, and cultural identities as well as groupings around interests and causes. These groups are more prominent and in con昀氀ict, creating a cacophony of competing visions, goals, and beliefs. The combination of newly prominent transnational identities, the resurgence of established allegiances, and a siloed information environment is creat- ing and exposing fault lines within states, undermining civic nationalism, and increasing volatility. Populations in every region are becoming better equipped with the tools, capacity, and incentive to agitate for social and political change and to demand resources, services, and recognition from their governments. 68 Mauro Mora / Unsplash

DISLOCATION ECONOMIC SLOWDOWN INEQUALITY INSECURITY CORRUPTION UNCERTAINTY DISTRUST SOCIETAL PESSIMISM OUTLOOK M R O A F T N I I O N D E T E C N E V N I N R O O C N R M E E P N Y T H IDENTITIES IN National identities TENSIONS under strain EXCLUSIONARY V. CIVIC NATIONALISM SOCIAL National identities FRAGMENTATION Transnational identities PUB NT LIC EMPOWERME A MORE CONTESTED WORLD 69 Mauro Mora / Unsplash

otentially slower economic Pgrowth in coming years and smaller gains in human in 15 of 28 countries polled are pessimistic that they and their families will be better o昀昀 development in many countries in 昀椀ve years, an average increase of 5 percent from the previous year. Less than a quarter of are likely to exacerbate distrust those polled in France, Germany, and Japan, of institutions and formal for example, believe they will be better o昀昀 in 2025. In coming years, this pessimism is sources of authority for some likely to spread in developing countries with large youthful populations but with slowing members of the public. progress in eradicating poverty and meet- ing human development needs, particularly Sub-Saharan Africa. RISING PESSIMISM, WAVERING TRUST Potentially slower economic growth in coming Global and local challenges, including econom- years and smaller gains in human develop- ic strains, demographic shifts, extreme weath- ment in many countries are likely to exacer- er events, and rapid technological change, are bate distrust of institutions and formal sources increasing perceptions of physical and social of authority for some members of the public. insecurity for much of the world’s population. Trust in governments and institutions, which The COVID-19 pandemic is intensifying these is highly dependent on perceptions of fairness economic and social challenges. Many people, and e昀昀ectiveness, has been consistently low for the past decade, particularly in middle- to particularly those who are bene昀椀ting less than others in their societies, are increasingly pes- high-income countries. In a 2020 study of 16 simistic about their own prospects, frustrated developed countries by Edelman, the portion with government performance, and believe of the mass public trusting government since governments are favoring elites or pursuing 2012 never exceeded 45 percent, and among the wrong policies. The economic growth and Organization for Economic Cooperation and rapid improvements in health, education, and Development (OECD) economies, public trust human development of the past few decades in government fell in more than half of coun- tries between 2006 and 2016, according to have begun to level o昀昀 in some regions, and separate public opinion polling by Gallup. Of people are sensitive to the increasing gap 11 geographically diverse countries analyzed between winners and losers in the globalized by Edelman during the COVID-19 pandemic, economy and are seeking redress from their pub-lic trust in government increased an governments. Approximately 1.5 billion people average of 6 percentage points between moved up into the middle class in the past few January and May 2020, and then it declined an decades, but some are beginning to fall back, average of 5 percentage points between May including in advanced economies. 2020 and January 2021 as governments failed Public opinion polls repeatedly have shown to contain the coronavirus. increasing pessimism about the future in Trust is not uniform across societies. Globally, countries of all types around the world, but trust in institutions among the informed pub- especially in advanced and middle-income lic—de昀椀ned as people who are college edu- economies. According to the 2020 Edelman cated, are in the top 25 percent of household Trust Barometer, the majority of respondents 70 GLOBAL TRENDS 2040

TRUST GAP, 2012-21 Average trust gap between informed public and mass public in four key institutions: business, media, government, and non-governmental organizations. Percent trust gap 20 Informed Public: College-educated 35-64 year-olds in the top 25 percent of household income and report significant media consumption and public engagement. 15 Mass Public: All population not including informed public. 10 5 Source: Richard Edelman, Twenty Years of Trust, 2020. 0 2012 13 14 2015 16 17 18 19 2020 21 income in each market, and exhibit signi昀椀cant dence in government, and people tend media consumption—has risen during the to trust informal institutions more than past 20 years whereas more than half of the government where political power is mass public during the past decade repeat- concentrated among the wealthy elite. edly say the “system” is failing them. The gap Corruption is now one of the most dom- in trust in institutions between the informed inant factors driving demand for politi- public and the mass public has increased cal change. According to 2019 polling by during the past decade, according to the Transparency International, a majority Edelman surveys, showing a gap of 5 percent- of respondents across Latin America age points in 2012 and 16 points in the 2021 (53 percent), the Middle East and North report. Similarly, the gap in trust in business Africa (65 percent), and Sub-Saharan quadrupled during this period. Africa (55 percent) said that corruption • Increasing actual or perceived inequality is increasing in their region. within countries, particularly in those in • In coming years, advancements in arti- which overall economic growth is slow- 昀椀cial intelligence (AI), machine learning, ing, often coincides with declining trust 5G, and other technologies that will and rising public dissatisfaction with the expand access to the Internet could political system. In less-developed coun- further diminish public trust as people tries, corruption is undermining con昀椀- struggle to determine what is real and A MORE CONTESTED WORLD 71

SELECTED WORLDWIDE RELIGIOUS COMMITMENT: PRAYER AND WEALTH The data reveals an inverse correlation between religiosity, as measured by the percent of adults who say they pray daily, and per capita GDP. Percent of adults who say they pray daily 100 Nigeria 90 Iran Indonesia 80 Honduras 70 India Uganda Egypt Pakistan Ethiopia 60 Brazil Turkey United States 50 South Africa Mexico 40 Chile Japan 30 Uruguay Greece Israel Spain 20 Canada Norway Russia Australia 10 Sweden Germany China UK 0 $0K 10K 20K 30K 40K 50K 60K 70K 2015 per capita GDP (adjusted for purchasing power parity) Source: Pew Research Center surveys 2008-2017. The Age Gap in Religion Around the World. 72 GLOBAL TRENDS 2040 Photo / Bigstock

what is rumor or manipulation. In addi- tion, populations fear the increasingly pervasive surveillance and monitoring by governments and fear private cor- porations seeking control or pro昀椀t from their personal information. Buddhist monks advocating for democracy near Mandalay, Burma. Religion plays a key organizing IDENTITIES MORE PROMINENT role in some parts of the world, serving as an As trust in governments, elites, and other important source of legitimacy and authority. established institutions erodes, societies are likely to fragment further based on identities and parts of Latin America, publics report and beliefs. People in every region are turn- greater participation in religious practices, ing to familiar and like-minded groups for pointing to the sense of purpose religion pro- community and a sense of security, including vides. Perceptions of existential threats from cultural and other subnational identities as con昀氀ict, disease, or other factors also contrib- well as transnational groupings and interests. ute to higher levels of religiosity. Identities and a昀케liations are simultaneously proliferating and becoming more pronounced. Many people are emphasizing and organizing around di昀昀erent aspects of their identities, In turn, this is leading to more in昀氀uential roles for identity groups in societal and politi- including race, gender, and sexual orientation, cal dynamics but also generating divisions as well as around causes and issues, such and contention. as climate change and religious freedom. The forces of globalization, including greater Many people are gravitating to more estab- mobility, urbanization, and connectivity, are in- lished identities, such as ethnicity and nation- creasing awareness and prominence of a wide alism. In some countries, slowing population array of constituencies that transcend national growth, increasing migration, and other demo- boundaries and are making it easier for peo- graphic shifts are intensifying perceptions of ple to organize around common interests and vulnerability, including a sense of cultural loss. values. These identities are playing greater Many people who feel displaced by rapid so- roles within and between countries as groups cial and economic changes resent violations of agitate for recognition and speci昀椀c goals. For age-old traditions and perceive that others are example, a broad global coalition has success- bene昀椀ting from the system at their expense. fully lobbied for public acceptance of and legal These perceptions also fuel beliefs that eco- protections for homosexuality worldwide, nomic and social change is damaging and that including organizing online campaigns and some leaders are pursuing misguided goals. public events even in socially conservative Consistent with the growing salience of es- countries, such as Iran. Between 2013 and tablished identities, religion continues to play 2019, the percentage of people indicating that important roles in people’s lives, shaping what homosexuality should be accepted in society they believe, whom they trust, with whom they increased in 21 of 27 geographically diverse congregate, and how they engage publicly. countries, according to the Pew Research Cen- In developing regions where populations are ter, and 30 countries have legalized same-sex growing fastest, including Africa, South Asia, marriage since 1989. A MORE CONTESTED WORLD 73 Photo / Bigstock

have reduced protections for women, . . . And in Con昀氀ict The expansion and increasing prominence including decriminalizing domestic and of identity groups demanding recognition sexual violence. and rights are forcing an increase in debate about the social and economic foundations of INFORMATION ENVIRONMENT CONNECTING, societies. Intensifying and competing identity CONFUSING, AND DIVIDING dynamics are likely to provoke increasing polit- The exponential growth of the hypercon- ical debate and polarization, societal divisions, nected information environment is likely to and in some cases, unrest and violence. strengthen and further complicate identity • Increasing numbers of immigrants, allegiance and societal dynamics. Social media, refugees, and guest workers in many in particular, makes it easier for people to af- countries, such as middle-income 昀椀liate with others around the world who share countries in Southeast and Central common characteristics, views, and beliefs. Europe, are prompting heated debates Moreover, social media can create echo cham- about national identity and citizenship bers of like-minded users who share informa- and leading to the emergence of ethnic tion that con昀椀rms their existing worldviews nationalist political parties, greater de- and limits their understanding of alternative mands for assimilationist policies, and a perspectives. decline in support for migrants globally. Over time, this dynamic is increasing aware- • The growing recognition and support ness of and building new connections between for LGBTQ rights are prompting re- previously isolated groups, while also polar- sponses from people in countries in ev- izing people’s perceptions of policies, public ery region, such as Brazil, Iran, Nigeria, institutions, events, moral issues, and societal and Poland, where some people per- trends. Such polarization will lead to a prolifer- ation of competing, entrenched perspectives, ceive such movements as an a昀昀ront to limiting opportunities for compromise and their deeply held beliefs and corrosive to their societies. Political and religious decreasing societal cohesion. leaders in some countries are advocat- During the next 20 years, the algorithms and ing laws restricting LGBTQ rights and social media platforms that curate and distill criminalizing homosexuality. massive amounts of data will produce content • In most countries, progress toward that could overtake expertise in shaping the gender equality has been substantial, political and social e昀昀ects engendered by a including improving education, health- hyperconnected information environment. Power increasingly will be wielded by the care, job opportunities, and leadership roles, but even in longstanding de- generators of content as well as the arbiters mocracies, resentment and pushback of who gets to see it. Social media platforms remain. The global #MeToo movement will reinforce identity groups, or foster new shed light on the breadth of sexual and unanticipated groupings, and accelerate harassment and sexual assault that and amplify natural tendencies to associate occurs across the world, but still several with people who share the same views, often countries, such as Hungary and Russia, engendering competing visions of the truth 74 GLOBAL TRENDS 2040 Photo / Bigstock

GROWTH IN MOBILE DIGITAL COMMUNICATION about an issue. The platforms will make it eas- ier for competing opinion leaders—including from marginalized groups—to publish their 2025 views and debate among themselves, honing the cohesiveness and “market appeal” of their 5.8B 5.0B messages. This e昀昀ect is magni昀椀ed because people rely on their own identity communities for information and piggyback on the knowl- edge of others. People will also use social identities such as 2019 culture, ethnicity, nationality, and religion as 5.2B 3.8B critical 昀椀lters for managing information over- load, potentially further fragmenting national identities and undermining trust in govern- ment. These identities provide a sense of be- longing and reinforce norms about how group 2016 4.8B 2.0B members should behave, rules about whom to trust, and beliefs about complex issues. Identity-based violence, including hate and po- UNIQUE MOBILE litical crimes, may increasingly be facilitated by MOBILE INTERNET social media. In India, social media and mobile SUBSCRIBERS USERS messaging platforms have become a key force behind viral falsehoods, such as rumors that Source: Global System for Mobile Communications Association. quickly spread among some Hindus regarding Muslims’ alleged slaughter of cows or posses- sion of beef, which led to the “cow vigilante” lynching of Muslims. Publics increasingly will depend on their favorite gatekeepers—such as news media outlets, social media platforms, and trusted voices of authority—to sift truth from 昀椀ction. E昀昀orts to arbitrate controversial content, such as 昀氀agging or removing demonstrably false claims, are unlikely to be e昀昀ective in changing beliefs and values aligned with one’s closely held identities, however. Identity-based beliefs tend to eclipse truth-seeking because of the overriding need to belong, obtain status, understand the social world, maintain dignity, and feel morally justi昀椀ed. A MORE CONTESTED WORLD 75 Photo / Bigstock

• In other cases, cultural and economic insecurity stemming from globaliza- tion has fueled nationalist forces. For example, British supporters of Brexit cited a range of longstanding British complaints about the European Union, but most polling indicated that concern Nighttime traffic in Jakarta. Urbanization will with migration was a key factor driving create greater concentrations of people able to mobilize around shared grievances. the Brexit vote. The migrant crisis in 2015 also prompted a surge in nation- alist forces in several other European NATIONAL IDENTITIES UNDER STRAIN countries, including France, Germany, In some countries, the contestation among and the Netherlands, where majority identities is challenging conceptions of na- populations fear cultural change and tional identity, which historically have been a economic competition. source of state cohesion and national pur- • Some government regimes seek to use pose. Nationalism overall has gained strength, religious and ethnic themes in other but in some cases, exclusionary forms of countries to mobilize foreign popular nationalism are gaining prominence and support for their foreign policy objec- weakening ideals of civic nationalism. Societies tives. India’s attempts to export Hindu that are ethnically and culturally diverse may nationalism, Turkey’s e昀昀ort to mobi- be more susceptible to challenge. Exclusionary lize the Turkish diaspora in Europe to forms of nationalism have been ascendant in amplify Turkey’s in昀氀uence, and Russia’s many regions, especially those experiencing support of Russian Orthodox minori- demographic changes, with slow or stagnant ties outside Russia demonstrate ways economic growth and people who fear losing in which leaders exploit identities to special status. achieve foreign policy goals. • Some leaders and regimes are fanning PUBLICS MORE EMPOWERED, MORE DEMANDING exclusionary nationalism to promote During the past few decades, steady economic their rule and policies. In Burma, improvements and access to technology have for example, the halting democratic equipped populations in every region with transition during the past decade and the resources, time, and tools to channel their countrywide poverty increased insecuri- needs and interests into action and to engage ties, which helped to intensify Buddhist o昀케cials and other elites with greater intensity, nationalism and foster anti-Muslim frequency, and e昀昀ectiveness. Populations in sentiments and even violence. Like- advanced economies already are well posi- wise, Chinese leaders have tapped tioned, and those in developing countries widespread, often xenophobic nation- are becoming better equipped to agitate for alism to build support for policies, such change. For example, China’s middle class, de- as an aggressive Chinese posture in 昀椀ned as those earning between $10 and $110 territorial disputes. per day, has grown rapidly from 3.1 percent 76 GLOBAL TRENDS 2040 Markus Spiske / Unsplash

of the population in 2000 to 52.1 percent in messages. Between 2014 and 2020, 2018—equivalent to approximately 686 million the number of people worldwide using people who are better positioned to make the Internet grew from 3 billion to 4.54 demands on their government. billion. Mobile Internet penetration is • Publics in most of the world have projected to increase from 49 percent in grown more prosperous and educated 2019 to 60.5 percent globally by 2025. during the past several decades, and An estimated 800 million more people the corresponding reduction in peo- will begin using social media platforms ple’s preoccupation with immediate during the next 昀椀ve years, up from 3.6 needs has facilitated a wider scope of billion people in 2020. awareness and ambition. With greater As people become better equipped and prosperity, people will have more free connected, the intensity of their demands on time, higher expectations, and better governments is likely to grow in every region. access to the tools for participation, as With higher expectations but more vulnerable well as increasing concerns about losing conditions, people’s demands on governments what they have achieved, which is likely for solutions to growing challenges could be- to increase the intensity of political par- come more varied, contradictory, and di昀케cult ticipation during the next two decades. to address. These demands are likely to range • Additionally, the growth in urban across economic, political, and social issues, populations in the coming decades will with various groups pressing for con昀氀icting be most pronounced in parts of the policies—such as protecting key industries developing world that also struggle versus reducing greenhouse gas emissions. with the capacity to deliver services and Even in countries with strong democracies, are host to high percentages of young people are likely to turn to mass protests, people, including Africa and South Asia. boycotts, civil disobedience, and even violence Urbanization is creating concentrated with increasing frequency, judging from the populations with shared interests and rise in public protests during the past decade. grievances—the raw ingredients fueling Along with social media, these also will be social movements that can quickly spiral the preferred ways to make voices heard in into protests. authoritarian countries. During the next two • The proliferation of communication decades, these multiple paths for channeling technologies is raising real-time aware- discontent are likely to present an increasing- ness of international trends and events ly potent force with a mix of implications for social cohesion. on the ground and o昀昀ering people the tools to organize and spread their A MORE CONTESTED WORLD 77 Markus Spiske / Unsplash

EMERGING DYNAMICS STATE: TENSIONS, TURBULENCE, AND TRANSFORMATION Key Takeaways Governments in all regions will face mounting pressures from economic constraints and a mix of demographic, environmental, and other challenges. Meanwhile, populations will demand more, and they are empowered to push for their con昀氀icting goals and priorities. The relationships between societies and their governments are likely to face persistent tensions because of a growing mismatch between what publics expect and what governments deliver. This widening gap portends more political volatility, risks for democracy, and expanding roles for alternative sources of governance. Growing public discontent, if accompanied by a catalyzing crisis and inspired leadership, could spur signi昀椀cant shifts or transformations in how people govern. 78 Photo / Bigstock

PROTESTS POPULISM INTERNAL CONFLICT POLARIZATION STATE COLLAPSE AL VOLA EXTR ITIC TIL EM OL ITY E P PUBLIC DISEQUILIBRIUM GOVERNMENT DEMANDS CAPABILITIES • Demanding more • Governments strained from governments by limited resources • More potent and compounding public voice pressures from: — Demographics — Environment — Technology — Economics DEMOCRACY RIPE FOR NEW OR AT RISK SHIFTING MODELS? • Democratic • Disequilibrium could spur governance eroding shifts or transformations • Authoritarian regimes ADAPTIVE in how people govern vulnerable as well GOVERNANCE • Additional nonstate providers of governance • Complement and compete with the state • Local governance more consequential A MORE CONTESTED WORLD 79 Photo / Bigstock

hile populations are Wexercising more potent public voices, governments tively, these pressures will test states’ capacity and resilience, deplete budgets, and add to will experience mounting the complexity of governing. pressure from economic Demographics and Human Development. Many countries will struggle to build on or constraints and a mix of even sustain the human development suc- cesses achieved in the past several decades demographic, environmental, because of setbacks from the ongoing global pandemic, slower global economic growth, and other challenges. the e昀昀ects of con昀氀ict and climate, and more di昀케cult steps required to meet higher de- velopment goals. Meanwhile, countries with GROWING MISMATCH BETWEEN PUBLIC DEMANDS aging populations and those with youthful and AND GOVERNMENT CAPABILITIES growing populations will each face unique sets Over the next two decades, the relationships of challenges associated with those demo- between states and their societies in every graphics. Migration is likely to increase the region are likely to face persistent tensions salience of identity issues that divide societies because of a growing mismatch between what in receiving countries and may fuel ethnic con- publics need or expect and what governments 昀氀icts. Rapid urbanization—occurring mostly in can or are willing to deliver. In many countries, Africa and Asia—will stress governments’ abili- populations with expectations heightened by ty to provide adequate infrastructure, security, previous prosperity are likely to face greater and resources for these growing cities. strains and disruptions from slowing eco- Responding to Climate Change and Environ- nomic growth, uncertain job opportunities, mental Degradation will strain governments and changing demographics. These popula- in every region. The impact will be partic- tions also will be better equipped to advocate ularly acute in Africa, Asia, and the Middle for their interests after decades of steady East, where governments are already weak, improvements in education and access to stressed, or fragile. Wealthy countries will also communication technologies as well as the increasingly face environmental costs and greater coherence of like-minded groups. even disasters that challenge governments’ Although trust in government institutions is responsiveness and resources, potentially low among the mass public, people are likely undermining public trust. to continue to view the state as ultimately Economic Constraints. The expected trend responsible for addressing their challenges, of slowing economic growth is likely to strain and to demand more from their governments the resources and capacity of governments to deliver solutions. to provide services. Governments are already While populations are exercising more potent saddled with debt on an unprecedented scale. public voices, governments will experience In addition, rising or persistent inequality mounting pressure from economic constraints within many states, coupled with corruption, and a mix of demographic, environmental, will threaten people’s faith in government and and other challenges. Individually and collec- trust in one another. 80 GLOBAL TRENDS 2040

Technological Change. Governments will be hard pressed to keep up with the pace of tech- nological change and implement policies that harness the bene昀椀ts and mitigate the risks and disruptions. Technological advances will also empower individuals and nonstate actors to challenge the role of the state in new ways. In the face of these challenges, existing sys- tems and models of governance are proving inadequate to meet the expectations of popu- lations. The result is a growing disequilibrium Informal settlements in Mumbai, India. Inequality between public demands and governments’ in many countries will be a key challenge for ability to deliver economic opportunity and governments and a source of discontent security. This public pessimism cuts across among populations. rightwing, leftwing, and centrist governments, democratic and authoritarian states, and Alfarnas Solkar / Unsplash populist and technocratic administrations. For instance, in Latin America and the Caribbean, rural-urban divides, and possibly increasing public opinion surveys in 18 countries showed inequality as well as fractured politics and debates over economic and 昀椀scal policies at a signi昀椀cant decline in satisfaction with how democracy is performing in their countries the national level and in the EU. In China, the central tension is whether the Chinese Com- from an average of 59 percent of respondents in 2010 to 40 percent in 2018. As publics grow munist Party can maintain control by deliv- skeptical of existing government systems, gov- ering a growing economy, public health, and ernments and societies are likely to struggle safety, while repressing dissent. The massive to agree on how to adapt or transform to ad- middle class in China is largely quiescent now; dress key goals, including advancing economic an economic slowdown could change this. opportunities, addressing inequalities, and Many states are likely to remain stuck in an reducing crime and corruption. uneasy disequilibrium in which populations The nature of these challenges and the gov- are unsatis昀椀ed with the existing system but ernment responses will vary across regions unable to reach consensus on a path for- and countries. In South Asia, for instance, ward. A decade ago, the Arab Spring exposed some countries will face a combination of slow serious shortcomings in the prevailing political economic growth that is likely to be insu昀케- orders, but in most countries in the region, a cient to employ their expanding workforces, new social contract between state and soci- the e昀昀ects of severe environmental degrada- ety has yet to emerge. Similar to the Middle tion and climate change, and rising polariza- East, other regions could be headed toward tion. Meanwhile European countries are likely a protracted and tumultuous process in part to contend with mounting debt, low produc- because citizens have lost faith in the ability tivity growth, aging and shrinking workforces, of government institutions to solve problems. A MORE CONTESTED WORLD 81 Photo / Bigstock

most extreme cases, violence, internal con- 昀氀ict, or even state collapse. Variations in state capacity, ideology, and prior histories with mobilization will shape how and when public discontent translates into political volatility in each country. Polarization and Populism. Polarization along ethnic, religious, and ideological lines is likely to remain strong, as political leaders and well-organized groups push a wide variety of broad goals and approaches that cut across economic, governance, social, identity, and international issues. In some countries, such Protests—seen here in Algeria—have surged polarization is likely to increase and reinforce political dysfunction and gridlock and heighten worldwide in the past decade, reflecting public risks of political instability. Once established, dissatisfaction on a range of topics including inequalities, political repression, corruption, and severe polarization is di昀케cult to reverse. Pub- climate change. lic dissatisfaction with mainstream politics for Amine M'Siouri / Pexels failing to address economic or social grievanc- es has also led to the global rise in populism during the past several decades—measured in Even if states improve security and welfare in both the number of populist leaders in power the aggregate, these gains and opportunities and populist party vote shares worldwide. may be unevenly distributed, fueling discon- Although some populists will falter in o昀케ce, tent in seemingly more prosperous societies. the populist appeal is likely to endure as long For instance, from 2000-2018, Organization as dissatisfaction, polarization, and fractured for Economic Cooperation and Development information landscapes persist. In addition, (OECD) countries experienced overall growth populism tends to surge after economic crises in employment, but jobs were divided be- or changes in the ethnic or religious composi- tween high and low wages with little in the tion of a society from migration. middle, many jobs became increasingly tenu- Protests. Anti-government protests have ous, and job growth varied signi昀椀cantly across regions and demographic groups. increased globally since 2010, a昀昀ecting every regime and government type. Although pro- POLITICAL VOLATILITY RISING tests are a signal of political turbulence, they In coming years, this mismatch between gov- can also be a sign of democratic health and a ernments’ abilities and publics’ expectations force for democratization by pressing for ac- is likely to expand and lead to more political countability and political change. The protest volatility, including growing polarization and phenomenon is likely to persist in cycles and populism within political systems, waves of waves because of the enduring nature of the activism and protest movements, and, in the underlying drivers, including ongoing public dissatisfaction and desire for systemic change, 82 GLOBAL TRENDS 2040

insu昀케cient government responses, and perva- whereas those that fail will inspire competitors sive technology to organize protests rapidly. or demands for alternative models. Democra- cies will also have the advantage of drawing Political Violence, Internal Con昀氀ict, and legitimacy from the fairness and inclusivity of State Collapse. During the next two decades, their political systems—attributes harder to increased volatility is likely to lead to the achieve in authoritarian systems. breakdown of political order and outbreak of political violence in numerous countries, par- Democracy Eroding ticularly in the developing world. As of 2020, The challenges governments face suggest 1.8 billion people—or 23 percent of the world’s there is a high risk that an ongoing trend in population—lived in fragile contexts with weak erosion of democratic governance will con- governance, security, social, environmental, tinue during at least the next decade and and economic conditions, according to an perhaps longer. This trend has been wide- OECD estimate. This number is projected spread—seen in established, wealthy, liberal to grow to 2.2 billion—or 26 percent of the democracies as well as less mature partial world’s population—by 2030. These states are democracies. Key democratic traits, including mostly concentrated in Sub-Saharan Africa, freedom of expression and the press, judicial followed by the Middle East and North Africa, independence, and protections for minori- Asia, and Latin America. These areas will also ties, are deteriorating globally with countries face an increasing combination of conditions, sliding in the direction of greater authoritari- including climate change, food insecurity, anism. The democracy promotion non-govern- youthful and growing populations (in Africa), mental organization (NGO) Freedom House and rapid urbanization, that will exacerbate reported that 2020 was the 15th consecutive state fragility. Outbreaks of political violence year of decline in political rights and civil liber- ties. Another respected measure of democracy or internal con昀氀ict are not limited to these fragile states, however, and are likely to ap- worldwide, Varieties of Democracy, indicates pear even in historically more stable countries that as of 2020, 34 percent of the world’s pop- when political volatility grows severe. ulation were living in countries where dem- ocratic governance was declining, compared DEMOCRACY UNDER PRESSURE AND with 4 percent who were living in countries AUTHORITARIAN REGIMES ALSO VULNERABLE that were becoming more democratic. This volatile political climate creates vulner- Several internal and external forces are driving abilities for all types of governments, from this democratic erosion. In some Western established liberal democracies to closed democracies, public distrust of the capabil- authoritarian systems. Adaptability and per- ities and policies of established parties and formance are likely to be key factors in the elites, as well as anxieties about economic relative rise and fall of democratic and author- dislocations, status reversals, and immigra- itarian governance during the next 20 years. tion, have fueled the rise of illiberal leaders Governments that harness new opportunities, who are undermining democratic norms and adapt to rising pressures, manage growing institutions and civil liberties. In newer democ- social fragmentation, and deliver security and racies—mostly in the developing world—that economic prosperity for their populations transitioned from authoritarian rule in the will preserve or strengthen their legitimacy, A MORE CONTESTED WORLD 83

DEMOCRATIC GOVERNANCE DECLINING GLOBALLY LIBERAL DEMOCRACY INDEX The wave of 0.5 democratization that surged around the world after the end of the Cold 0.4 War has crested, and aggregate global levels of democracy have 0.3 World average begun to decline in (population weighted) recent years. World average 0.2 0.1 0 1980 85 90 95 2000 05 10 15 20 Source: Varieties of Democracy’s Liberal Democracy Index measures electoral freedoms, civil liberties, rule of law, and constraints on the executive branch. 1980s and 1990s, a mix of factors has led to Looking forward, many democracies are likely democratic stagnation or backsliding, includ- to be vulnerable to further erosion and even ing weak state capacity, tenuous rule of law, collapse. An academic study of 75 democra- fragile traditions of tolerance for opposition, cies that experienced substantial democratic high inequality, corruption, and militaries decline since 1994 found that 60 of them (or with a strong role in politics. Externally, China, 80 percent) eventually became autocracies. Russia and other actors, in varying ways, are However, the decline is not inexorable, and undermining democracies and supporting it may ultimately re昀氀ect a bad patch in a long illiberal regimes. This support includes sharing cycle that has seen democracy advance and technology and expertise for digital repres- retreat, with an overarching trend to more sion. In particular, some foreign actors are democracy during the past century. The long- attempting to undermine public trust in elec- term legitimacy of democratic systems hinges tions, threatening the viability of democratic on two general conditions: maintaining a fair, systems. Both internal and external actors are inclusive, and equitable political process and increasingly manipulating digital information delivering positive outcomes for populations. and spreading disinformation to shape public Addressing public concerns about corruption, views and achieve political objectives. elite capture, and inequality can help restore public trust and strengthen institutional legiti- 84 GLOBAL TRENDS 2040

Middle East have demonstrated staying power, they have sig- ni昀椀cant structural weaknesses, including widespread corruption, overreliance on commodities, and highly personalist leader- ship. Public protests are posing increasing threats to authoritari- an regimes, toppling 10 regimes between 2010 and 2017; another Ugandan officials operating a facial recognition surveillance system provided by a Chinese 19 regimes were removed in company. elections, often held in response to mass protests. Corruption (@KagutaMuseveni / Twitter) was a primary motivation behind many protests, and authoritar- macy. In addition, providing e昀昀ective services, ian regimes tend to be more corrupt than economic stability, and personal security— democracies. Authoritarian regimes that rely historically advantages for democracies—in- on raw commodities to 昀椀nance their patron- creases public satisfaction. Beyond these basic age networks and fuel their economies will governance benchmarks, demonstrating resil- be vulnerable to 昀氀uctuations in commodity ience to emerging global challenges will help prices, especially if energy transitions depress restore and maintain public con昀椀dence. oil prices. Personalist authoritarian regimes— Over the long term, the advance or retreat of in which power is consolidated in one person democracy will depend in part on the rela- or a small group—tend to be the most corrupt and erratic in decisionmaking, the least likely tive power balance among major powers. to plan for succession, and the most likely to Geopolitical competition, including e昀昀orts start wars and escalate con昀氀icts. Today the to in昀氀uence or support political outcomes in most common form of authoritarian regime is other countries, relative success in delivering personalist—rising from 23 percent of dicta- economic growth and public goods, and the extent of ideological contest between the torships in 1988 to 40 percent in 2016—and Western democratic model and China’s tech- other regimes, including in China and Saudi no-authoritarian system, will shape democrat- Arabia, are moving in that direction. ic trends around the world. To try to quell, withstand, or address public discontent, authoritarian regimes are using Authoritarian Regimes Will new and traditional forms of coercion, coopta- Face Vulnerabilities tion, and legitimation. Technology has helped Authoritarian regimes will face many of the make authoritarian regimes more durable in same risks as democracies and many may recent years, in part because digitization and be less adaptable, making a sudden, violent communication technologies make surveil- change of government after a period of ap- parent stability more likely. Although authori- lance more pervasive and less costly. The 昀氀ip tarian regimes in countries from China to the side of these technological trends is that they A MORE CONTESTED WORLD 85

have given populations the tools to circum- and growing pains within states, as exempli- vent digital repression and mobilize dissent. 昀椀ed by illiberal regimes cracking down on civil In addition to repression, regimes will rely on society organizations or democracies seeking cooptation to convince critical allies to stay to regulate social media and operations of loyal, but this dynamic depends on more ten- some nonstate actors. uous 昀氀ows of resources. Many authoritarian Depending on the context and activity, non- governments will seek to build popular legit- state actors will complement, compete with, imacy through e昀昀ective government perfor- and in some cases replace the state. The mance and compelling ideologies. With their provision of governance outside state insti- centralized power, some authoritarian regimes tutions does not necessarily pose a threat to have demonstrated faster and more 昀氀exible central governments, nor does it diminish the responses to emerging challenges, but histori- overall quality of governance for the popu- cally authoritarian governments have su昀昀ered lation. The roles and relationships between from lack of innovation caused by misalloca- state and nonstate actors will depend on their tion of resources. Authoritarian regimes that relative capacity, penetration, and alignment deliver economic opportunities and maintain with population expectations. From the Middle security may convince their publics that their East to Africa and Latin America, insurgent system is better suited to dealing with the complexity and speed of tomorrow’s world. groups and criminal organizations are 昀椀lling in the governance gap and at times exploiting ADAPTIVE APPROACHES TO GOVERNANCE: MORE weak governments to expand their in昀氀uence ACTORS PROVIDING A WIDER RANGE OF SERVICES by providing employment and social services, As public needs and expectations mount, ranging from healthcare and education to there is likely to be a growing shift toward security and trash collection. In other cases adaptive approaches to governance that particularly in Africa, international NGOs, involve a broader set of actors outside state some religiously based, augment the role of institutions delivering welfare and security. the state by providing health and education Nonstate actors, including private sector com- services. During the COVID-19 pandemic, panies, NGOs, civil society groups, religious numerous examples of adaptive governance organizations, and insurgent and criminal have appeared. Corporations, philanthropies, networks, have long provided governance in technology companies, and research and all types of states. These roles are likely to ex- academic institutions have worked in concert pand to a wider range of actors and functions with governments to produce breakthroughs because of a combination of factors including: at record speeds. Elsewhere, civil society or- the failure of states to provide adequate gov- ganizations all over the world have 昀椀lled gaps ernance; the increasing resources and reach in government responses, providing humani- of the private sector, NGOs, and individuals tarian relief and welfare services. This role of because of technology; and the growing com- nonstate actors in governance extends beyond plexity and number of public policy challenges providing services; for example, technology that require multiple stakeholders to address. companies wield signi昀椀cant power in their This shift is likely to produce some tensions control over information 昀氀ows and networks with the ability to shape political discourse. 86 GLOBAL TRENDS 2040

INNOVATION IN GOVERNANCE States and nonstate actors will look for ways to adapt to mounting governance challenges, experimenting with novel GOVERNMENT USE OF tools and techniques for providing security and welfare that DIGITAL TECHNOLOGY could in turn be adopted around the world. Although trends Governments in almost in governance innovation are difficult to discern or forecast, every region increased one clear area of innovation will be in the development and UN Online the scope and quality application of technologies to improve the speed, efficiency, Services Index of online governance and precision of governance. services between 1.0 2010 2010-2020, according • Governments worldwide have increased their use of 2020 to UN data. technology for service provision and citizen engagement during the past two decades. While the most proficient 0.8 countries for digital governance are largely high-income countries, the general trend in digital governance extends across all countries and regions. 0.6 • The increasing availability of data about all aspects of people’s lives—coupled with the artificial intelligence (AI) 0.4 technology to analyze it—is making governments more agile in directing services and providing security. This is a double-edged sword: the same AI-enabled surveillance 0.2 technology that allows governments to diminish crime also enables them to monitor and repress their populations. • Given the roles of public and private sectors in technology 0.0 North Eastern South & Asia development and application, key innovations are likely to America Europe Central Asia Pacific involve both state and nonstate actors. For instance, the Western Latin Middle Sub-Saharan Europe America & East & Africa advent of mobile payments and banking systems in Africa Caribbean North Africa has allowed governments to implement cash transfers and pay employees more efficiently and reliably. • Once established, innovative governance approaches are countries have implemented conditional cash transfer likely to spread around the world. For example, AI-enabled surveillance technology has proliferated around the programs as a development tool, inspired in part by the globe—adopted by at least 74 countries as of 2018—and is success of Brazil’s Bolsa Familia program in the 2000’s in provided by both Chinese and Western companies. Likewise, reducing poverty. successful models gain adherents quickly: at least 40 A MORE CONTESTED WORLD 87 Frederic Köberl / Unsplash

Local Governance More Consequential Local governments are also likely to become increasingly important sources of governance innovation because of their ability to solve problems for their populations. Local governments generally have the advantage of proximity to the problems of their constituents, Bangkok, Thailand accounts for almost legitimacy, accountability, and the half of the country’s economic output. 昀氀exibility to customize responses; allPhoto Bangkok / Pexels they also have less partisanship. Cities and subnational govern- ments have greater ability than national gov- governance is likely to be a locus for problem ernments to create and lead multisectoral net- solving, but with di昀昀erent constraints. works involving various levels of government, Like national governments, local governments private sector, and civil society; these partner- are likely to face budgetary constraints, par- ships have helped to revitalize some former ticularly after the COVID-19 crisis. Cities in the industrial cities in the West. Local and city developing world are likely to face signi昀椀cant governments—increasingly organized into net- 昀椀nancing gaps for infrastructure development works—will take action on international issues and climate change adaptation. In addition, such as climate change and migration, getting urbanization is likely to exacerbate urban-ru- ahead of national governments in some cases. ral societal divides, while the expanding role As urban areas grow in population and as for local and city governance may undermine hubs for economic activity, technology, and policy coherence when local and national innovation, these local governments are likely strategies for problem solving diverge. to gain increasing clout vis-a-vis national gov- ernments. Even in authoritarian regimes, local 88 GLOBAL TRENDS 2040 Image / Bigstock

RIPE FOR NEW OR SHIFTING MODELS? tal consensus. Short of a new ideology, new The combination of widespread public discon- approaches—or even more combinations or blends of systems—could occur along several tent and major crises or shocks could create axes, from centralized to localized governance, conditions that are ripe for signi昀椀cant shifts from a strong state role to a strong nonstate or transformations in the models, ideologies, role, from democratic to authoritarian, from or ways of governing. Historically, ideologi- secular to religious, or from nationalist to in- cal shifts across regions have taken place at ternationalist. These shifts or transformations moments of catastrophic crisis, such as in the would spur inevitable contestation between wake of a major war or economic collapse, the constituencies holding onto the old orders because people are more willing to embrace and those embracing the new ones. bold systemic changes to address overarching problems. However, the emergence of a new The precise nature of these shifts, transforma- unifying ideology or system—on the scale of tions, or new models is uncertain and di昀케cult communism or economic liberalism—is rare. to foresee. Some potential outcomes include: Other stresses, such as another pandemic or cities or subnational regions emerging as the a major environmental catastrophe, that ex- focal point for governance if populations see pose governance shortcomings might create local governments as more trustworthy and conditions ripe for new or alternative models capable of solving problems than national to gain traction if widespread dysfunction governments; the private sector and other is sustained. nonstate actors overtaking and displacing gov- Pervasive discontent and major crises proba- ernments as the primary providers of welfare bly are necessary forcing functions for trans- and security; democracy experiencing a revival if it proves more adaptive to the coming global formations but not su昀케cient. Transforming challenges; or the world succumbing to an discontent into something new also requires authoritarian wave partially inspired by Chi- the combination of inspiring and unifying na’s model of technology-driven authoritarian leadership with compelling ideas or ideology capitalism. Moreover, compelling new gover- to build political coalitions and garner socie- nance models or ideologies that have not yet been envisioned or identi昀椀ed could emerge and take hold. A MORE CONTESTED WORLD 89 Image / Bigstock

EMERGING DYNAMICS INTERNATIONAL: MORE CONTESTED, UNCERTAIN, AND CONFLICT-PRONE Key Takeaways During the next two decades, power in the international system will evolve to include a broader set of sources and features with expanding technological, net- work, and information power complementing more traditional military, econom- ic, and cultural soft power. No single state is likely to be positioned to dominate across all regions or domains, opening the door for a broader range of actors to advance their interests. The United States and China will have the greatest in昀氀uence on global dynamics, supporting competing visions of the international system and governance that re昀氀ect their core interests and ideologies. This rivalry will affect most domains, straining and in some cases reshaping existing alliances, international organiza- tions, and the norms and rules that have underpinned the international order. In this more competitive global environment, the risk of interstate con昀氀ict is likely to rise because of advances in technology and an expanding range of targets, new frontiers for con昀氀ict and a greater variety of actors, more dif昀椀cult deterrence, and a weakening or a lack of treaties and norms on acceptable use. 90 Photo / Bigstock

SOURCES OF POWER US CHINA REGIONAL POWERS CHANGING CONSTELLATION OF POWERFUL ACTORS EU INDIA NONSTATE RUSSIA ACTORS INTERNATIONAL ORDER LAGGING BEHIND Treaties Alliances WTO Norms Standards Global Intergovernmental Organizations VO H E I G H T E N I N G LATILIT NFLICT Y DISEQ NTY CO UILIB UNCERTAI RIUM A MORE CONTESTED WORLD 91 Photo / Bigstock

hese power dynamics are Tlikely to produce a more volatile and confrontational and international organizations that have un- geopolitical environment, reshape derpinned the international order for decades. Accelerating power shifts—as well as hard- multilateralism, and widen the gap ening ideological di昀昀erences and divisions over governance models—are likely to further between transnational challenges ratchet up competition. The rivalry is unlikely to resemble the US-Soviet rivalry of the Cold and cooperative arrangements to War, however, because of the greater variety of actors in the international system that can address them. shape outcomes, interdependence in various domains, and fewer exclusive ideological divid- ing lines. The lack of a preponderant power During the next two decades, the intensity or global consensus on some key areas will of competition for global in昀氀uence is likely o昀昀er opportunities for other actors to lead or to reach its highest level since the Cold War. pursue their own interests, especially within No single state is likely to be positioned to their regions. The European Union (EU), India, dominate across all regions or domains, and Japan, Russia, and the United Kingdom most a broader range of actors will compete to likely will also be consequential in shaping advance their ideologies, goals, and inter- geopolitical and economic outcomes. ests. Expanding technological, network, and This more competitive environment with information power will complement more rapidly emerging technologies is likely to be traditional military, economic, and soft power aspects in the international system. These more volatile with a heightened risk of con昀氀ict, power elements, which will be more accessi- at least until states establish new rules, norms, ble to a broader range of actors, are likely to and boundaries for the more disruptive areas be concentrated among leaders that develop of competition. States will face a combination these technologies. of highly destructive and precise conventional and strategic weapons, cyber activity targeting These power dynamics are likely to produce a civilian and military infrastructure, and a con- more volatile and confrontational geopolitical fusing disinformation environment. Regional environment, reshape multilateralism, and actors, including spoilers such as Iran and widen the gap between transnational chal- North Korea, will jockey to advance their goals lenges and cooperative arrangements to ad- and interests, bringing more volatility and dress them. Rival powers will jockey to shape uncertainty to the system. At the same time, global norms, rules, and institutions. The Unit- states may struggle to establish stable deter- ed States, along with its longstanding allies, rence with these new systems, particularly if and China will have the greatest in昀氀uence on the rules and treaties governing them contin- global dynamics, supporting competing visions ue to erode or lag. of the international system and governance that re昀氀ect their core interests and ideologies. CHANGING SOURCES AND Their rivalry will a昀昀ect most domains, straining COMPOSITION OF POWER and in some cases reshaping existing alliances During the next 20 years, sources of power in the international system are likely to expand 92 GLOBAL TRENDS 2040

and redistribute. Material power, measured by be central to a country’s security and global the size of a nation’s economy, military, and in昀氀uence, but going forward, cutting edge population, and its technological development arti昀椀cial intelligence (AI), biotechnology, and level, will provide the necessary foundation for data-driven decisionmaking will provide states exercising power, but will be insu昀케cient for with a range of advantages for econom- securing and maintaining favorable outcomes. ic growth, manufacturing, healthcare, and In an even more hyperconnected world, pow- societal resiliency. With these technologies, er will include applying technology, human there will be a 昀椀rst mover advantage, enabling capital, information, and network position states and nonstate actors to shape the views to modify and shape the behavior of other and decisionmaking of populations, to gain actors, including states, corporations, and information advantages over competitors, and populations. The attractiveness of a country’s to better prepare for future shocks. entertainment, sports, tourism, and educa- Human Capital. Favorable demographics, tional institutions will also remain important including a strong working-age population, drivers of its in昀氀uence. As global challenges universal basic education, and a concentra- such as extreme weather events and human- tion of science, engineering, math, and critical itarian crises intensify, building domestic thinking skills, will provide large advantages resiliency to shocks and systemic changes will for innovation, technological advancement, become a more important element of national economic growth, and resiliency. Regions power, as will a state’s ability and willingness with large working-age populations, including to help other countries. In coming years, the in Latin America and South Asia, will have countries and nonstate actors that are best new sources of potential economic strength able to harness and integrate material capabil- if they can improve education, skillsets, and ities with relationships, network centrality, and infrastructure; aging and contracting societies resiliency will have the most meaningful and in Europe and Asia will need to 昀椀nd ways to sustainable in昀氀uence globally. augment their workforce to avoid seeing this Material Power. Military capabilities and element of power weakened. economic size will remain the foundation of Networks and Nodes. Control of key sites state capacity and power projection, compel- of exchange, including telecommunications, ling other countries to take a state’s interests and policies into account. These two areas of 昀椀nance, data 昀氀ows, and manufacturing supply power allow states to maintain their security chains, will give countries and corporations and to amass resources that enable other the ability to gain valuable information, deny elements of power. access to rivals, and even coerce behavior. Many of these networks, which are dispropor- Technology Power. Technology, particu- tionately concentrated in the United States, larly military technologies, will continue to Europe, and China, have become entrenched A MORE CONTESTED WORLD 93 Photo / Bigstock

over decades and probably will be di昀케cult to power and in昀氀uence abroad. Building resilien- recon昀椀gure. If China’s technology companies cy, however, depends on a reservoir of trust become co-dominant with US or European within societies and between populations and counterparts in some regions or dominate leaders, and is likely to be more di昀케cult to global 5G telecommunications networks, for muster as societies become more fractured. example, Beijing could exploit its privileged position to access communications or con- MORE ACTORS ASSERTING AGENCY trol data 昀氀ows. Exercising this form of power As sources of power expand and shift globally, coercively, however, risks triggering a backlash the actors and the roles they play in shaping from other countries, and could diminish the global dynamics will also change. No single e昀昀ectiveness over time. actor will be positioned to dominate across all Information and In昀氀uence. Compelling ideas regions and in all domains, o昀昀ering opportuni- and narratives can shape the attitudes and ties for a broader array of actors and increas- priorities of other actors in the international ing competition across all issues. The growing system, and they can legitimize the exercise of contest between China and the United States other types of power. The soft power attrac- and its close allies is likely to have the broad- tiveness of a society, including its culture, est and deepest impact on global dynamics, in- entertainment exports, sports, lifestyles, and cluding global trade and information 昀氀ows, the technology innovations, can also capture the pace and direction of technological change, imagination of other populations. Tourism and the likelihood and outcome of interstate con- education abroad—particularly higher educa- 昀氀icts, and environmental sustainability. Even tion—can increase the attractiveness. From under the most modest estimates, Beijing is public diplomacy and media to more covert poised to continue to make military, economic, in昀氀uence operations, information technolo- and technological advancements that shift the gies will give governments and other actors geopolitical balance, particularly in Asia. unprecedented abilities to reach directly to China Reclaiming Global Power Role foreign publics and elites to in昀氀uence opinions In the next two decades, China almost certain- and policies. China and Russia probably will try ly will look to assert dominance in Asia and to continue targeting domestic audiences in greater in昀氀uence globally, while trying to avoid the United States and Europe, promoting nar- what it views as excessive liabilities in strategi- ratives about Western decline and overreach. cally marginal regions. In Asia, China expects They also are likely to expand in other regions, deference from neighbors on trade, resource for example Africa, where both have already exploitation, and territorial disputes. China is been active. likely to 昀椀eld military capabilities that put US Resiliency. As the world has become more and allied forces in the region at heightened deeply interconnected, systemic shocks are risk and to press US allies and partners to becoming more common and more intense, restrict US basing access. Beijing probably will spawning many second-order e昀昀ects. Govern- tout the bene昀椀ts of engagement while warning ments that are able to withstand, manage, and of severe consequences of de昀椀ance. China’s recover from shocks and that have domestic leaders almost certainly expect Taiwan to move closer to reuni昀椀cation by 2040, possibly legitimacy will have better capacity to project through sustained and intensive coercion. 94 GLOBAL TRENDS 2040 Photos / Bigstock

China will work to solidify its own physical environmental pressures, and rising labor infrastructure networks, software platforms, costs could challenge the Chinese Communist and trade rules, sharpening the global lines of Party and undercut its ability to achieve its techno-economic competition and potentially goals. China’s aggressive diplomacy and hu- creating more balkanized systems in some man rights violations, including suppression of regions. China is likely to use its infrastructure Muslim and Christian communities, could limit and technology-led development programs its in昀氀uence, particularly its soft power. to tie countries closer and ensure elites align with its interests. China probably will continue Other Major Powers to seek to strengthen economic integration Other major powers, including Russia, the EU, with partners in the Middle East and Indian Japan, the United Kingdom, and potentially In- Ocean region, expand its economic penetra- dia, could have more maneuvering room to ex- tion in Central Asia and the Arctic, and work ercise in昀氀uence during the next two decades, to prevent countervailing coalitions from and they are likely to be consequential in emerging. China is looking to expand exports shaping geopolitical and economic outcomes of sophisticated domestic surveillance tech- as well as evolving norms and rules. nologies to shore up friendly governments Russia is likely to remain a disruptive power and create commercial and data-generating for much or all of the next two decades even opportunities as well as leverage with client as its material capabilities decline relative regimes. China is likely to use its technological to other major players. Russia’s advantages, advancements to 昀椀eld a formidable military including a sizeable conventional military, in East Asia and other regions but prefers weapons of mass destruction, energy and min- tailored deployments—mostly in the form of eral resources, an expansive geography, and a naval bases—rather than large troop deploy- willingness to use force overseas, will enable ments. At the same time, Beijing probably will it to continue playing the role of spoiler and seek to retain some important linkages to US power broker in the post-Soviet space, and at and Western-led networks, especially in areas times farther a昀椀eld. Moscow most likely will of greater interdependence such as 昀椀nance continue trying to amplify divisions in the West and manufacturing. and to build relationships in Africa, across the China is likely to play a greater role in leading Middle East, and elsewhere. Russia probably responses to confronting global challenges will look for economic opportunity and to es- commensurate with its increasing power and tablish a dominant military position in the Arc- tic as more countries step up their presence in in昀氀uence, but Beijing will also expect to have the region. However, with a poor investment a greater say in prioritizing and shaping those climate, high reliance on commodities with responses in line with its interests. China potentially volatile prices, and a small econo- probably will look to other countries to o昀昀set the costs of tackling transnational challenges my—projected to be approximately 2 percent of global gross domestic product (GDP) for in part because Beijing faces growing domestic the next two decades—Russia may struggle to problems that will compete for attention and project and maintain in昀氀uence globally. Pres- resources. Potential 昀椀nancial crises, a rapidly ident Vladimir Putin’s departure from power, aging workforce, slowing productivity growth, either at the end of his current term in 2024 A MORE CONTESTED WORLD 95 Photos / Bigstock

or later, could more quickly erode Russia’s country’s key challenge; failure could lead to a geopolitical position, especially if internal splintering of the United Kingdom and leave it instability ensues. Similarly, a decrease in struggling to maintain its global power. Europe’s energy dependence on Russia, either Japan’s highly educated population, techno- through renewables or diversifying to other logically innovative economy, and integral gas suppliers, would undercut the Kremlin’s position in trade and supply chain networks revenue generation and overall capacity, es- position it to remain a strong power in Asia pecially if those decreases could not be o昀昀set and beyond. Japan is likely to remain highly with exports to customers in Asia. economically dependent on its largest trading The EU’s large market and longstanding lead- partner and main regional rival China and a ership on international norms will enable it to close ally of the United States while working retain signi昀椀cant in昀氀uence in coming decades, to further diversify security and economic especially if it can prevent additional mem- relationships, particularly with Australia, India, bers from departing and can reach consensus Taiwan, and Vietnam. Japan will also face on a common strategy for navigating global mounting demographic and macroeconomic competition and transnational challenges. The challenges, including a shrinking labor force— economic weight of the EU’s single market the oldest of any developed country—with in- almost certainly will continue to give it global 昀氀exible immigration policies, low demand and geopolitical clout on trade, sanctions, tech- economic growth, de昀氀ation, declining savings nology regulations, and environmental and rates, and increased government debt. investment policies. Countries outside the EU India’s population size—projected to become often model their standards and regulations the largest in the world by 2027—geography, on EU policies. European military strength strategic arsenal, and economic and techno- is likely to fall short of some members’ am- logical potential position it as a potential glob- bitions because of competing priorities and al power, but it remains to be seen whether long-term underinvestment in key capabilities. New Delhi will achieve domestic development European defense expenditures will compete goals to allow it to project in昀氀uence beyond with other post–COVID-19 昀椀scal priorities, and South Asia. As China and the United States its security initiatives are unlikely to produce compete, India is likely to try to carve out a a military capability separate from the North more independent role. However, India may Atlantic Treaty Organization that can defend struggle to balance its long-term commit- against Russia. ment to strategic autonomy from Western The United Kingdom is likely to continue to powers with the need to embed itself more punch above its weight internationally given deeply into multilateral security architectures its strong military and 昀椀nancial sector and its to counter a rising China. India faces serious global focus. The United Kingdom’s nuclear ca- governance, societal, environmental, and pabilities and permanent UN Security Council defense challenges that constrain how much membership add to its global in昀氀uence. Man- it can invest in the military and diplomatic aging the economic and political challenges capabilities needed for a more assertive global posed by its departure from the EU will be the foreign policy. 96 GLOBAL TRENDS 2040

GEOPOLITICAL COMPETITION INTENSIFYING AI-POWERED PROPAGANDA Regional Powers Seeking The growth in global digital connectivity, immersive information Greater In昀氀uence In this competitive environment, regional pow- technology, and widely accessible digital marketing techniques ers, such as Australia, Brazil, Indonesia, Iran, opens the potential for greater information influence activities Nigeria, Saudi Arabia, Turkey, and the United against almost all societies. Arab Emirates (UAE), probably will seek to take Both states and nonstate actors almost certainly will be able to advantage of new opportunities and to take use these tools to influence populations, including by ratch- on roles previously 昀椀lled by a major power to eting up cognitive manipulation and societal polarization to shore up regional stability or gain in昀氀uence. shape how people receive, interpret, and act on information. This mix of regional powers seeking greater Countries, including China and Russia, are likely to apply roles and in昀氀uence is likely to change during technological innovations to make their information campaigns the next two decades, re昀氀ecting opportunities more agile, difficult to detect, and harder to combat, as they as well as the changing capabilities and leader- work to gain greater control over media content and means ship goals of various states. Regional powers of dissemination. probably will try to play major powers o昀昀 each other to maximize rewards while attempting Governments and nonstate actors are increasingly able to exploit consumer behavior data and marketing techniques to to avoid being drawn into unwanted con昀氀icts. They may seek to build their own coalitions microtarget messages to small audience segments. Propagan- or strengthen regional blocs to project in昀氀u- dists could leverage AI, the Internet of Things, and other tools ence and in some cases, collaborate on global to tailor communications to large audiences, anticipate their challenges, but in other cases they may act reactions, and adapt messaging in near real time. more aggressively in con昀氀icts in their region. Behavioral big data, which captures statistical patterns in Overcoming domestic governance challeng- human psychology and action, may also enable significant es, recovering quickly from the COVID-19 predictive power and capacity for personalized influence. If pandemic and other shocks, and managing meaningful regulation does not exist, public relations firms relationships with neighbors will be crucial for and political consultants can offer disinformation as a regular converting their key strengths into increased service, increasing public distrust in political institutions. in昀氀uence. Some probably will play crucial roles in tackling challenges at the regional level including nonstate actor security threats, ter- rorism, mass migration, and digital privacy. can shape or constrain state actions through Nonstate Actors Powerful, In昀氀uential lobbying leaders and mobilizing citizens. The Nonstate actors, such as NGOs, religious in昀氀uence of nonstate actors will vary and be groups, and technology superstar 昀椀rms, will subject to government intervention. China, the have the resources and global reach to build EU, and others are already moving to regu- and promote alternative networks that com- late or break up superstar 昀椀rms, while Beijing plement, compete with, or possibly bypass is trying to control or suppress NGOs and states. In the past several decades, nonstate religious organizations. Many nonstate actors actors and transnational movements have are likely to try to push back on state e昀昀orts used growing international connections for to consolidate sovereignty in newer frontiers, collective action or to in昀氀uence populations including cyberspace and space. around the world. In some cases, these actors A MORE CONTESTED WORLD 97

CONTESTED AND TRANSFORMING Although the evolving geopolitical competi- INTERNATIONAL ORDER tion is unlikely to exhibit the same ideological As global power continues to shift, many of intensity as the Cold War, China’s leadership the relationships, institutions, and norms that already perceives it is engaged in a long-term have largely governed and guided behavior ideological struggle with the United States. across issues since the end of the Cold War Ideological contests most often play out in are likely to face increasing challenges. Com- international organizations, standard-setting petition in these areas has been on the rise for forums, regional development initiatives, and years with China, Russia, and other countries public diplomacy narratives. demanding a greater say. Disagreements are Western democratic governments probably likely to intensify over the mission and conduct will contend with more assertive challenges to of these institutions and alliances, raising un- the Western-led political order from China and certainty about how well-equipped they will be Russia. Neither has felt secure in an interna- to respond to traditional and emerging issues. tional order designed for and dominated by Over time, states may even abandon some democratic powers, and they have promoted aspects of this international order. a sovereignty-based international order that Rising and revisionist powers, led by China and protects their absolute authority within their Russia, are seeking to reshape the internation- borders and geographic areas of in昀氀uence. China and Russia view the ideas and ideology al order to be more re昀氀ective of their interests space as opportunities to shape the compe- and tolerant of their governing systems. China tition without the need to use military force. and Russia continue to advocate for an order Russia aims to engender cynicism among devoid of Western-origin norms that allows foreign audiences, diminish trust in institu- them to act with impunity at home and in tions, promote conspiracy theories, and drive their perceived spheres of in昀氀uence. They are wedges in societies. As countries and nonstate advocating for alternative visions of the role of actors jockey for ideological and narrative su- the state and human rights and are seeking to premacy, control over digital communications roll back Western in昀氀uence, but their alter- platforms and other vehicles for dissemination native models di昀昀er signi昀椀cantly from each of information will become more critical. other. Russia is promoting traditional values and desires a Russian-dominated protectorate Relationships Facing More Tradeo昀昀s covering much of Eurasia. China seeks growing In this more competitive geopolitical environ- global acceptance of its current social sys- ment, many countries would prefer to main- tem—namely the Chinese Communist Party’s tain diverse relationships, particularly econom- monopoly on power and control over society— ic ties, but over time, actions by China, Russia, socialist market economy, and preferential and others may present starker choices over trading system. political, economic, and security priorities and relationships. Some countries may gravitate Increasing Ideological Competition toward looser, more ad hoc arrangements and The multidimensional rivalry with its contrast- ing governing systems has the potential to add partnerships that provide greater 昀氀exibility ideological dimensions to the power struggle. to balance security concerns with trade and 98 GLOBAL TRENDS 2040

economic interests. Longstanding security climate change, migration, and economic alliances in Europe and Asia are facing growing crises. In many cases, these challenges exceed strains from a con昀氀uence of domestic per- the institutions’ original mandates. Mem- ceptions of security threats, concerns about bers’ rising 昀椀scal challenges could translate partner reliability, and economic coercion. into diminished contributions, and sclerotic That said, if China and Russia continue to decisionmaking structures and entrenched ratchet up pressure, their actions may re-solid- interests will limit the ability to reform and ify or spawn new security relationships among adapt institutions. These institutions probably democratic and like-minded allies, enabling will work with and in some cases in parallel them to put aside di昀昀erences. with regional initiatives and other governance China and Russia probably will continue to arrangements, such as the epidemic response shun formal alliances with each other and in Sub-Saharan Africa, infrastructure 昀椀nanc- most other countries in favor of transac- ing in Asia, and arti昀椀cial intelligence (AI) and tional relationships that allow them to exert biotechnology governance. The future focus and e昀昀ectiveness of established international in昀氀uence and selectively employ economic organizations depend on the political will of and military coercion while avoiding mutual members to reform and resource the institu- security entanglements. China and Russia are tions and on the extent to which established likely to remain strongly aligned as long as Xi powers accommodate rising powers, particu- and Putin remain in power, but disagreements larly China and India. The WTO probably will over the Arctic and parts of Central Asia may face considerable uncertainty about its future increase friction as power disparities widen in role and capacity to foster greater coopera- coming years. tion and open trade as states become more Contestation Weakening Institutions protectionist and rival blocs square o昀昀 against Many of the global intergovernmental orga- each other. In contrast, the unique role of the nizations that have underpinned the West- International Monetary Fund (IMF) and high ern-led international order for decades, demand for IMF conditionality and assistance including the UN, World Bank, and World in debt restructuring most likely will make it Trade Organization (WTO), are bogged down central to the international system, although by political deadlock, decreasing capacity the growth of sovereign debt outside IMF relative to worsening transnational challenges, purview will be a challenge. Similarly, mul- and increasing country preferences for ad hoc tistakeholder agreements and organizations coalitions and regional organizations. Most of that regulate the global 昀椀nancial, insurance, or these organizations are likely to remain diplo- technical systems such as the Basel Accords matic battlegrounds and to become hollowed and Internet Engineering Task Force are likely out or sidelined by rival powers. to remain in high demand. Looking forward, these global institutions are Western leadership of the intergovernmental likely to continue to lack the capacity, mem- organizations may further decline as China ber buy-in, and resources to help e昀昀ectively and Russia obstruct Western-led initiatives manage transnational challenges, including and press their own goals. China is working to A MORE CONTESTED WORLD 99

re-mold existing international institutions to how and which technologies enter the market, re昀氀ect its development and digital governance and thereby, which technology producers gain goals and mitigate criticism on human rights advantage. Long dominated by the United and infrastructure lending while simultane- States and its allies, China is now moving ously building its own alternative arrange- aggressively to play a bigger role in establish- ments to push development, infrastructure ing standards on technologies that are likely 昀椀nance, and regional integration, including to de昀椀ne the next decade and beyond. For the Belt and Road Initiative, New Development example, international standard-setting bod- Bank, the Shanghai Cooperation Organization, ies will play critical roles in determining future and the Regional Comprehensive Economic ethical standards in biotechnology research Partnership. In the past 昀椀ve years, Moscow and applications, the interface standards for has tried to undermine international e昀昀orts to global communication, and the standards for strengthen safeguards and monitor for chem- intellectual property control. ical weapons and has used the International Criminal Police Organization (INTERPOL) to Competition Over Global Norms pursue opponents. A broad set of actors will increasingly compete to promote and shape widely shared global Continued underperformance of many of the norms ranging from respect for human rights global multilateral institutions is likely to shift and democratic institutions to conduct in war- some focus to alternative informal, multi-ac- fare. Some democracies that experienced pop- tor arrangements, such as the G5 Sahel Joint ulist backlashes have backed away from their Force to counter extremists in the Sahel, the longstanding roles as champions of norms global vaccine alliance, and the global initiative protecting civil liberties and individual rights. to bring greater transparency to extractive At the same time, authoritarian powers, led by industries. Some of these show promise in China and Russia, have gained traction as they 昀椀lling crucial capacity gaps, but their long-term continue to emphasize their values and push impact will depend on marshalling the re- back on norms they view as Western-centric— sources, political buy-in, and leadership from particularly those that gained currency after major and regional powers. Some regions, the end of the Cold War, such as exceptions particularly Sub-Saharan Africa, Europe, and that allow for interfering in the internal a昀昀airs Southeast Asia, are likely to continue moves of member states to defend human rights. to strengthen regional organizations and During the next 20 years, this competition integration, whereas other regions are likely probably will make it harder to maintain com- to struggle to cooperate because of lingering mitment to many established norms and to inter-state divisions. develop new ones to govern behavior in new Standards as a Battlespace domains, including cyber, space, sea beds, International standards agreements sup- and the Arctic. Existing institutions and norms port the emergence of new technologies by are not well designed for evolving areas such reducing market uncertainty and establish- as biotechnology, cyber, and environmental ing norms. Membership on standard-setting response and for the growing number of new bodies is increasingly competitive, largely actors operating in space. Many norm-setting because of the in昀氀uence these bodies have on e昀昀orts may shift from consensus-based, uni- 100 GLOBAL TRENDS 2040

OUTLOOK FOR INTERNATIONAL NORMS Norms least likely Norms likely Norms at highest Norms in early to be contested to experience the risk of weakening development most regional globally in the variation next decade Description: Description: Description: Description: Broadly accepted Disparate acceptance Contravened by at Not formally by states; across different least one codified or widely violations widely regions major power; stalled or agreed; future condemned curtailed agreement unclear implementation • National • Freedom of • Arms control and • Biotechnology sovereignty navigation nonproliferation • Artificial • Territorial integrity • Intellectual • Civil and political Intelligence • International property rights human rights • Cyber security criminal • Digital privacy • Refugee non- and conflict accountability • Responsibility to refoulment and • Arctic access and for mass atrocities Protect resettlement resource extraction • Prohibition of • LGBTQ protections • Women’s rights and military coups reproductive rights • Prohibition of • Space traffic • Open commerce genocide management and satellite deorbiting • Rule of law • Prohibition of • Environmental • Democratic torture protections institutions • Right of • Conduct in armed self-defense conflict • Child soldiers • Child marriage A MORE CONTESTED WORLD 101 Photo / Bigstock

versal membership institutions to non-global states to establish supremacy at each level of formats, including smaller and regionally-led the escalation ladder. initiatives. Alternatively, new norms might Better sensors, automation, AI, hypersonic gain momentum if states collectively perceive capabilities, and other advanced technologies growing risks of unilateral action or if increas- will produce weapons with greater accuracy, ingly powerful nonstate actors throw their speed, range, and destructive power, changing weight behind new guidelines, particularly regarding the use of emerging technologies. the character of con昀氀ict during the next 20 years. Although advanced militaries will have INCREASING RISK OF INTERSTATE CONFLICT greater access to these advanced capabilities, In this more competitive global environment, some weapons are likely to come within reach of smaller states and nonstate actors. The the risk of interstate con昀氀ict is likely to rise because of advances in technology and an ex- proliferation and di昀昀usion of these systems panding range of targets, a greater variety of over time are likely to make more civilian and military systems vulnerable, heighten the risk actors, more di昀케cult dynamics of deterrence, of escalation, potentially weaken deterrence, and weakening or gaps in treaties and norms and make combat potentially more deadly, on acceptable use. Major power militaries are although not necessarily more decisive. In a likely to seek to avoid high-intensity con昀氀ict and particularly full-scale war because of the prolonged, large-scale con昀氀ict between major prohibitive cost in resources and lives, but powers, some advanced military technologies may begin to have a diminishing impact on the the risk of such con昀氀icts breaking out through miscalculation or unwillingness to compro- battle昀椀eld as expensive and di昀케cult to quickly mise on core issues is likely to increase. replace high-end systems are damaged or de- stroyed or, in the case of munitions, expended Changing Character of Con昀氀ict in combat. Advanced sensors and weapons Rapidly advancing technologies, including will aid in counterinsurgency e昀昀orts to identify hypersonics and AI, are creating new or and target insurgent forces, but these sys- enhanced types of weapons systems while of- tems may not be su昀케cient to achieve decisive fering a wider array of potential targets, across results given the already asymmetric nature of military and civilian capabilities and including such con昀氀icts. domestic infrastructure, 昀椀nancial systems, cyber, and computer networks. These technol- Dominance in major power competition ogies will give states a broader spectrum of and more speci昀椀cally on the battle昀椀eld may coercive tools that fall below the level of kinet- increasingly depend on harnessing and pro- ic attacks, which many states may be likely to tecting information and connecting military forces. Belligerents are increasingly likely to favor as a means of achieving strategic e昀昀ects target their adversaries’ computer networks, while avoiding the political, economic, and critical infrastructure, electromagnetic spec- human costs of direct violence and declaring hostilities. The result may be further muddied trum, 昀椀nancial systems, and assets in space, distinctions between sharpened competition threatening communications and undermining warning functions. The number and quality of and con昀氀ict, increasing the motivations for sensors for observation will increase, as will 102 GLOBAL TRENDS 2040

MAJOR POWER COMPETITION INCREASING THE LIKELIHOOD OF KINETIC CONFLICT Geopolitical trends and technology changes are increasing the risk of major power kinetic conflict through 2040. Non-kinetic actions could escalate—possibly unintentionally—to active shooting wars among major powers because of weaker rules, greater speed of engagement, murkier information environment, and new technologies. FACTORS THAT INCREASE THE LIKELIHOOD OF MAJOR POWER CONFLICT > Eroding arms control Unclear rules frameworks and norms FACTORS THAT COULD REDUCE THE > Weakening LIKELIHOOD OF CONFLICT institutions Some countervailing factors Declining may restrain full-scale conflict deterrence in this period. > Cyber attacks, information > Declining hegemonic Heightened operations, economic coercion, and precision use of security and economic geopolitical Alternative interdependence competition non-kinetic force can produce strategic > Growing nationalism options effects while avoiding costs of traditional armed conflict > Decline in democratic Centralized > Leaders fear prohibitive governance and decisionmaking economic, humanitarian, and political damage or disruption increased authoritarian Leaders’ fears and personalist rule > Leaders fear uncontrollable escalation dynamics and lack confidence they can deter > Technological change Long-range retaliation and accelerated pace weapons of warfare advancements > Absent major technological > AI decisionmaking Survivable 2nd change, potent nuclear strike capability arsenals will leave deterrence intact; nuclear war will remain unwinnable > Misinformation and Murkier and prohibitively costly disinformation information overtakes or distorts environment objective truth A MORE CONTESTED WORLD 103

SPECTRUM OF CONFLICT This graphic displays increasing levels of conflict from non-violent to strategic weapons. NON-KINETIC HYBRID / CONVENTIONAL / INTERMEDIATE STRATEGIC Regular forces Information operations Irregular forces (insurgents, proxies, Embargo/blockade Cyber operations terrorists, private (non-critical military companies, Attributable weapons infrastructure) maritime militia) platforms Economic coercion Kinetic sabotage EXAMPLES Catastrophic cyber attacks (i.e. crippling Exercises/tests Cyber attacks (some OF ACTIVITIES strategic command critical infrastructure) Blackmail/bribery and control, financial systems, etc.) Electromagnetic Intelligence collection spectrum interference Nuclear weapons and other WMD Assassination the challenges for making sense of and using one participant su昀昀ers substantial casualties information. Some governments will be able or damage—are likely to escalate faster and to manipulate information against their rivals with less warning than before, compressing with more precision at scale. response times and increasing pressure to Increasing sensors and connectivity will also delegate or even automate certain decision- make militaries and governments more making. Inexpensive sensors and data analyt- vulnerable to cyber and electromagnetic ics could revolutionize real-time detection and attacks. The development of cyber weapons, processing by 2040, but many militaries most likely will still struggle to distill meanings and doctrine, and procedures in conjunction with compile options for policymakers without AI other weapons is likely to mature signi昀椀cant- and other algorithmic decisionmaking aids. ly during the next 20 years, increasing the This increased speed is likely to heighten the consequences of cyber con昀氀ict. Countries that risk of miscalculation or inadvertent escalation can disperse their networks and important to full-scale war. war昀椀ghting assets, shorten decisionmaking processes, and build in redundancy at every Additional Players level are likely to be better positioned for Some state-to-state con昀氀icts and internation- future con昀氀icts. al interventions in local con昀氀icts are likely to involve more armed proxies, private military Interstate kinetic con昀氀icts—de昀椀ned as direct companies, hackers, and terrorist organiza- engagement between the military forces of tions as governments seek to reduce risks and two or more adversaries in which at least 104 GLOBAL TRENDS 2040

INTRASTATE VERSUS INTERSTATE CONFLICT TRENDS After several decades of low frequency of interstate conflict, internal conflicts and civil wars increasingly are taking on international dimensions, as regional and international powers back different sides and directly contribute troops and materiel. These conflicts could begin to spill over into more direct, major power conflict, especially as combatants employ new technologies or techniques. This graphic separates intrastate conflicts, in which there is no interference from other countries, from internationalized intrastate conflicts—in which at least one side receives direct support from other governments that actively participate in the conflict. NUMBER OF CONFLICTS, 1946-2019 50 Intrastate 40 30 20 Internationalized intrastate 10 Source: Uppsala Interstate Conflict Data Program, 2020. 0 1946 50 60 70 80 90 2000 10 19 costs for conducting attacks. Proxies and pri- in a speci昀椀ed behavior. These strategies have vate companies can reduce the cost of train- always been di昀케cult to sustain outside of nu- ing, equipping, and retaining specialized units clear warfare, and new forms of attack—cyber and provide manpower for countries with and information operations, for example— declining populations. Some groups can more will add to the challenge. Compounding the quickly achieve objectives with smaller foot- challenge, many countries lack clear doctrines prints and asymmetric techniques. Russia and for new military capabilities—including con- Turkey have used private and proxy groups in ventional, weapons of mass destruction, and con昀氀icts in Libya and Syria, and private 昀椀rms asymmetric—to guide their use and develop have provided a wide range of logistical and shared understandings for deterrence. Ad- other services for coalition forces in Afghani- vancements in conventional and hypersonic stan, Iraq, and other countries. weapons; ballistic missile defense; robotics and automated systems; intelligence, surveil- More Di昀케cult Deterrence lance, and reconnaissance networks; and long- The introduction of non-kinetic and non-tra- range antiship missiles almost certainly will ditional weapons, new frontiers, and more further complicate deterrence calculations and players is likely to complicate deterrence could lead to asymmetric retaliation. Leaders paradigms and blur escalation red lines. Deterrence strategies rely on the prospect of might calculate that they need to strike 昀椀rst in harm to persuade an opponent to not engage a crisis to avoid losing advanced weapons to a surprise attack. A MORE CONTESTED WORLD 105

Arms Control and Treaties on the Brink Existing norms and treaties governing the GROWING CHANCE OF NUCLEAR use of arms and conduct of war are increas- PROLIFERATION OR EVEN ingly contested, and new understandings are NUCLEAR USE lagging behind technological innovations. Repeated and unpunished violations of rules and norms on nonviolability of borders, assas- Nuclear proliferation and potentially nuclear use are sination, and use of certain prohibited weap- more likely in this competitive geopolitical environ- ons, like chemical weapons, are shifting actors’ ment. Advances in technology and diversification of de- livery systems, arms control uncertainties, and spread cost-bene昀椀t analysis in favor of their use. Renewed competition, accusations of cheating, of knowledge and skills related to nuclear technology and the suspension or non-renewal of several add to the higher risk. major agreements are likely to weaken stra- Countries that have declared their nuclear weapons tegic arms control structures and undermine are adding to or upgrading their arsenals; China and nonproliferation. Russia are investing in new delivery vehicles includ- Reaching agreement on new treaties and ing missiles, submarines, bombers, and hypersonic norms for certain weapons most likely will be weapons. These states are likely to continue to field increasingly accurate, lower yield nuclear weapons on more di昀케cult for these reasons and because of the increasing number of actors possessing platforms intended for battlefield use, which could en- these weapons. Weapons considered to have courage states to consider nuclear use in more instanc- strategic impact probably will no longer be es with doctrines that differentiate between large-scale nuclear exchanges and “limited use” scenarios. con昀椀ned to nuclear weapons as conventional weapon capabilities improve and new capa- Perceived external security threats are increasing in bilities, such as long-range precision strike many regions, particularly the Middle East and Asia, that could put at risk national leadership, o昀昀er which is a key factor in states’ decision to develop powerful e昀昀ects. Countries may struggle to nuclear weapons, according to academic research. reach agreement on limiting the disruptive or Growing questions about security guarantees, extend- security aspects of AI and other technology ed deterrence, and heightened regional pressures because of de昀椀nitional di昀昀erences, dual-use could lead some advanced economies to acquire or commercial applications, and reliance on build their own programs. commercial and often international entities to develop new systems. Incentives for such rules and enforcement mechanisms could emerge over time, especially if crises unfold that show- case the big risks and costs of unrestrained arms development. 106 GLOBAL TRENDS 2040

THE FUTURE OF TERRORISM: DIVERSE ACTORS, FRAYING INTERNATIONAL EFFORTS errorist groups will continue to exploit societal fragmen- cause these are generally sufficient, accessible, and reliable. tation and weak governance to push their ideologies and However, technological advances, including AI, biotechnology, Tgain power through violence. During the next 20 years, and the Internet of Things, may offer opportunities for terror- regional and intrastate conflicts, demographic pressures, ists to conduct high-profile attacks by developing new, more environmental degradation, and democratic retrenchment remote attack methods and to collaborate across borders. are likely to exacerbate the political, economic, and social Terrorists will also seek weapons of mass destruction and oth- grievances terrorists have long exploited to gain supporters er weapons and approaches that will allow them to conduct as well as safe havens to organize, train, and plot. These spectacular mass casualty attacks. For example, Islamic State accelerants, the intensity and effects of which are likely to of Iraq and Syria (ISIS) has already launched mustard gas be uneven across different regions and countries, probably attacks and uses unmanned aerial vehicles extensively—as will also foster rural to urban international migration, further do Iranian-supported Shia militants. Autonomous delivery straining state resources and diminishing global and local vehicles guided with the help of AI systems could enable a counterterrorism efforts. single terrorist to strike dozens of targets in the same inci- • Global jihadist groups are likely to be the largest, most dent. Augmented reality environments could also enable vir- persistent transnational threat as well as a threat in their tual terrorist training camps, connecting experienced plotters home regions. They benefit from a coherent ideology that protected by distant sanctuaries with potential operatives. promises to deliver a millenarian future, from strong orga- Technological innovations that expand surveillance capacity nizational structures, and from the ability to exploit large may help governments to combat terrorists despite chal- areas of ungoverned or poorly governed territory, notably lenges posed by poor governance. Governments are likely in Africa, the Middle East, and South Asia. to continue dramatically expanding the amount and types • Extreme “rightwing” and “leftwing” terrorists promoting a of information they collect as well as the tools to sort and range of issues—racism, environmentalism, and anti-gov- organize that data. Advances in biometric identification, data ernment extremism, for example—may revive in Europe, mining, full-motion video analysis, and metadata analysis will Latin America, North America, and perhaps other regions. provide governments with improved capabilities to identify • Insurgent groups and sectarian conflicts—increasingly terrorists and plotting. Development of precision long-range around ethno-nationalist and communal causes—will also strike capabilities might undermine terrorist safe havens that continue to foster terrorism. The specific groups will wax are inaccessible to police or infantry forces. and wane as some are defeated and others gain power. Geopolitics Reshaping Counterterrorism Landscape Although some groups will aspire to conduct transnational Shifting international power dynamics—in particular, the attacks and maintain cross border connections, most at- rise of China and major power competition—are likely to tacks will continue to be perpetrated by local actors against challenge US-led counterterrorism efforts and may make local targets aimed at achieving local objectives. it increasingly difficult to forge bilateral partnerships or • Iran’s and Lebanese Hizballah’s efforts to solidify a Shia multilateral cooperation on traveler data collection and in- “axis of resistance” also might increase the threat of asym- formation-sharing efforts that are key to preventing terrorists metric attacks on US, Israeli, Saudi, and others’ interests in from crossing borders and entering new conflict zones. Poor the Middle East. countries probably will struggle with homegrown threats, particularly if international counterterrorism assistance is Technology Evolving Tactics for Terrorists more limited. Some countries facing existential threats, such and Counterterrorism Forces as insurgencies in which terrorists are active, may choose Most terrorist attacks during the next 20 years probably will to forge non-aggression pacts that leave terrorists free to continue to use weapons similar to those currently avail- organize within their borders and others compelled to submit able—such as small arms and improvised explosives—be- to terrorist rule over significant parts of their territory. A MORE CONTESTED WORLD 107 Photo / Bigstock

SCENARIOS FOR 2040 CHARTING THE FUTURE AMID UNCERTAINTY he previous chapters of Global Trends 2040 described how key structural forces are laying the foundations for our future world, including demo- Tgraphics, environment, economics, and technology, and then explored the dynamics emerging within societies, states, and the international system as communities and leaders respond to and engage with these forces. These sections point to a world that is increasingly out of balance and contested at every level, but this trajectory is not set in stone. To better understand how these conditions might play out differently during the next 20 years, we developed scenarios describing a range of possible global futures. Three key questions or uncertainties helped to shape these scenarios. • How severe are the looming global challenges? • How do states and nonstate actors engage in the world, including focus and type of engagement? • Finally, what do states prioritize for the future? 108 Image / Bigstock

Using these questions, we have identi昀椀ed 昀椀ve plausible, distinctive, and illustrative stories of the future. Each re昀氀ects the key themes of shared global challenges, fragmentation, disequi- librium, adaptation, and greater contestation. Three of the scenarios portray futures RENAISSANCE OF DEMOCRACIES in which international challenges become incrementally more severe, A WORLD ADRIFT and interactions are largely de昀椀ned by the US-China rivalry. In Renaissance of Democracies, the United States leads a COMPETITIVE COEXISTENCE resurgence of democracies. In A World Adrift, China is the leading but not SEPARATE SILOS globally dominant state, and in Com- petitive Coexistence, the United States and China prosper and compete for TRAGEDY AND MOBILIZATION leadership in a bifurcated world. Two other scenarios depict more radical change. Both arise from particularly severe global discontinuities, and both defy assumptions about the global system. The US-China rivalry is less central in these scenarios because both states are forced to contend with larger, more severe global challenges and 昀椀nd that current structures are not matched to these challenges. Separate Silos portrays a world in which glo- balization has broken down, and economic and security blocs emerge to protect states from mounting threats. Tragedy and Mobilization is a story of bottom-up, revolutionary change on the heels of devastating global environmental crises. A MORE CONTESTED WORLD 109 Image / Bigstock

SCENARIO 1 RENAISSANCE OF DEMOCRACIES n 2040, the world is in the midst of a HOW WE GOT THERE resurgence of open democracies led by The successful development and worldwide Ithe United States and its allies. Rapid distribution of the COVID-19 vaccine in 2020-21 technological advancements fostered by focused global attention on the importance of scienti昀椀c research, innovation, and technolog- public-private partnerships in the United ical development to address emerging global States and other democratic societies are challenges. Networks of research institutes, transforming the global economy, raising governmental agencies, nongovernmental organizations, and private corporations operat- incomes, and improving the quality of life ing in Organization for Economic Cooperation for millions around the globe. The rising and Development countries ramped up infor- tide of economic growth and technological mation-sharing and developed coordinated achievement enables responses to global approaches for research and development focused on arti昀椀cial intelligence, biotech, and challenges, eases societal divisions, other technologies critical to revitalizing econo- and renews public trust in democratic mies and addressing societal needs. During the institutions. In contrast, years of increasing succeeding 10 years, these e昀昀orts produced a series of groundbreaking advances, enhancing societal controls and monitoring in China productivity and leading to an economic boom. Technological advances and economic growth and Russia have sti昀氀ed innovation as leading scientists and entrepreneurs combined to improve government capacity, have sought asylum in the United States enabling democratic governments to deliver services and provide security more e昀昀ectively. and Europe. With greater resources and improving services, these democracies launched initiatives to crack down on corruption, increase transparency, and improve accountability worldwide, boosting pub- lic trust. These e昀昀orts helped to reverse years of social fragmentation and to restore a sense of civic nationalism. The combination of rapid innovation, a stronger economy, and greater societal cohesion enabled steady progress on climate and other challenges. Democratic soci- eties became more resilient to disinformation because of greater public awareness and educa- 110 GLOBAL TRENDS 2040 Photo / Bigstock

tion initiatives and new technologies that quickly platforms developed during the pandemic. identify and debunk erroneous information. This With China’s rise no longer seen as inevitable, environment restored a culture of vigorous but leading states and investors turned to more civil debate over values, goals, and policies. rapidly growing economies with robust private In contrast to the culture of collaboration sectors and innovation systems. prevailing in open societies, Russia and China Autocratic regimes tried but failed to push failed to cultivate the high-tech talent, invest- back against the growing strength of demo- ment, and environment necessary to sustain cratic allies. Russia threatened to intervene on continuous innovation. For China, the complete behalf of ethnic Russian minorities in several crackdown on Hong Kong in 2022 launched of the non-North Atlantic Treaty Organization a decade of even greater digital repression, (NATO) post-Soviet states, a move widely seen limiting any semblance of free expression. While as a desperate last attempt by Moscow to they remained strategic military powers, both divert attention from its domestic problems. China and Russia were bogged down by domes- China took threatening steps in the South tic strains. China’s aging population, high public China Sea. Both invested in asymmetric weap- and private debt, and ine昀케cient state-directed ons systems and disinformation technologies economic model blocked the country’s transition to counter US advantages while avoiding the to a consumer economy, and by 2029 China was costs of direct violence. stuck in the middle-income trap and had alien- ated populations in developing countries. Russia declined because of a stagnating workforce, KEY TAKEAWAYS overreliance on energy exports, and post-Putin elite in昀椀ghting. By the mid-2030s, the United States and its Open, democratic systems proved better able to foster allies in Europe and Asia were the established scientific research and technological innovation, catalyzing an global leaders in several technologies, includ- economic boom. Strong economic growth, in turn, enabled ing AI, robotics, the Internet of Things, biotech, democracies to meet many domestic needs, address global energy storage, and additive manufacturing. challenges, and counter rivals. Democracies joined forces to set international standards to limit the negative consequences of The combination of better service provision and anticorruption technologies, including disinformation that had efforts helped restore public trust in institutions and eventually previously been so divisive in open societies. mended many fractured societies. Strong differences in public Multilateral cooperation spilled over into other preferences and beliefs remained but these were worked areas, including cyber security, climate change mitigation, and rules for managing the seabed, out democratically. the Arctic, and space. US leadership proved central to multilateral coordination and Technological success fostered a widely per- focus on global challenges, building on established alliances ceived view among emerging and developing and international institutions. A revival in the EU and Unit- countries that democracies were more adapt- ed Kingdom, spurred on by technological innovation and able and resilient and better able to cope with economic growth, was key to broader success. growing global challenges. Years of unful昀椀lled Chinese promises also pushed some of the most populous countries, including Brazil, Indonesia, Over time, the combination of severe repression, stalled India, and Nigeria, to fully embrace transparent economic growth, and mounting demographic pressures democracy. The rapid di昀昀usion of advanced undermined established authoritarian regimes in China and technologies to developing economies enabled Russia, making them less predictable and more aggressive in faster than expected improvements in educa- their neighborhoods. tion and job skills, building on remote learning Photo / Bigstock A MORE CONTESTED WORLD 111

SCENARIO 2 A WORLD ADRIFT n 2040, the international system is HOW WE GOT THERE directionless, chaotic, and volatile as Many of the world’s advanced and emerging Iinternational rules and institutions are market economies never fully recovered from the largely ignored by major powers such COVID-19 pandemic, which was prolonged by a slow and ine昀케cient vaccine rollout. By the late- as China, regional players, and nonstate 2020s, high national debt, the costs of caring for actors. Organization for Economic aging populations, and repeated climate events Cooperation and Development (OECD) strained government budgets and crowded out other spending priorities, like education, infra- countries are plagued by slower structure, and scienti昀椀c research and develop- economic growth, widening societal ment. Environmental, health, and economic crises divisions, and political paralysis. China had emerged gradually and sporadically over the is taking advantage of the West’s decade, limiting political support and resources for governments to take action beyond emer- troubles to expand its international gency relief and short-term economic stimulus. Economic hardships widened societal divisions in昀氀uence, especially in Asia, but lacks the will and military might to take on and made it harder to reach political compromise on domestic and national security priorities. global leadership, leaving many global challenges, such as climate change Public frustrations and protests grew in many countries, but fragmented and competing oppo- and instability in developing countries, sition movements were unable to agree on clear largely unaddressed. demands and goals. Polarized societies, shaped by social media, led to more political deadlock and wild policy swings. These factionalized com- munities, primarily in democratic countries, were unable to take e昀昀ective action on the economy, the environment, migration, and foreign policy. Uncertainty surrounding crises and erratic gov- ernment responses suppressed investment and job creation, plunging North America and Europe into a period of sluggish growth that many lik- ened to Japan’s “lost decade” in the 1990s. Devel- oping countries stagnated, with some turning to China and several su昀昀ering state failure, particu- 112 GLOBAL TRENDS 2040 Photo / Bigstock

larly in Africa and the Middle East. International talks on uni昀椀cation. The triumph of China’s eco- challenges festered, ranging from terrorism to nomic and military coercive power was a turning declining human development. Waves of mi- point for the region, signaling Beijing’s ability to grants 昀氀ed con昀氀ict, environmental disaster, and intimidate a close US partner and forcing China’s economic decline and sought entry to wealthier neighbors to worry that the Chinese People’s countries in Europe, Asia, and North America. Liberation Army would turn its focus to settling During this period, China experienced many of other regional scores. No other states put them- the same environmental and societal problems selves in a position to challenge China’s rise in the but was better able to adapt because of stronger region. Russia generally aligned with China but social cohesion and trust; agile direction from became a lesser partner with each passing year. centralized authority; a proven ability to deliver Although India bene昀椀ted from growth in Asia, it could take years for it to be able to take on, much jobs, goods, and services; and a political system less contain, its more powerful neighbor. that repressed competing voices. Although to a lesser degree than the growth in the boom years of the 1990s and 2000s, domestic demand generated gross domestic product (GDP) growth KEY TAKEAWAYS su昀케cient to allow China to surpass the United States to become the world’s largest economy by 2030. Huge infrastructure projects aimed at man- This is a directionless world in which international rules of behavior are no longer followed, global cooperation is limited, aging the e昀昀ects of climate change, like the great Shanghai sea wall, became the envy of the world. and technology fails to provide solutions. Similar infrastructure development programs and steady foreign investment and assistance helped China’s increasingly aggressive moves in Asia elevates the risk China gain in昀氀uence in the developing world. of armed conflict with other regional powers, especially over Despite these gains, China continued to focus on critical resources. In contrast, developing countries with large countering perceived security threats around its unemployed youthful populations feel compelled to appease periphery and at home. Beijing remained wary Chinese demands in hopes of securing much needed invest- of international entanglements and leadership ment and aid. roles outside its immediate region. Rather than attempting to fashion a new global order, China Regional powers and nonstate actors, including corporations, concentrated on promoting industries and setting have more influence over domains like cyber, space, and other technology standards that advanced its develop- technologies, but they lack the power to dominate the system. ment goals. Many governments were content to pro昀椀t from Weakened rules and lack of multilateral cooperation leave the China’s large market and to pocket other bene昀椀ts, world more vulnerable to individual hackers, terrorists, and like Chinese assistance with domestic surveillance criminal groups. Belligerents feel emboldened to pursue their and security systems, but few wanted to live goals with force, particularly in the Middle East and Africa. under a China-led international order. The United States attempted to preserve ties to remaining Large global problems, particularly climate change and health allies in the region, but Japan and South Korea pursued increasingly independent military mod- challenges, fester as states lack incentives to pursue collec- ernization programs and even their own nuclear tive actions and instead apply a patchwork of mismatched weapons programs, in part out of concern about approaches. Nonetheless, some states, companies, and the reliability of the US security umbrella against private organizations use the freedom to discover novel ways China and North Korea. to enhance human health and worker productivity and to By 2035, China’s position in Asia became unassail- experiment with new approaches to economic development able, especially after it successfully compelled the and governance. Government of Taiwan to come to the table for Photo / Bigstock A MORE CONTESTED WORLD 113

SCENARIO 3 COMPETITIVE COEXISTENCE n 2040, the United States and China have HOW WE GOT THERE prioritized economic growth and restored After a slow recovery from the COVID-19 crisis Ia robust trading relationship, but this and an extended US-China trade war, by the economic interdependence exists alongside late 2020s, pent-up demand and widespread popular frustration with underperforming competition over political in昀氀uence, economies led to a revival in the Organization governance models, technological for Economic Cooperation and Development dominance, and strategic advantage. The (OECD) countries of market-driven economic policies to stimulate growth. Meeting in Cana- risk of major war is low, and international da in 2031, the G7 endorsed plans for econom- cooperation and technological innovation ic stimulus payments, liberalized trade and make global problems manageable over investment, streamlined taxes, and decreased the near term for advanced economies, but regulations. Memories of an overbearing European Union (EU) having faded, Europeans longer term climate challenges remain. agreed to a new round of trade liberalization, somewhat paradoxically under strengthened EU institutions. Weakened by years of de- pressed oil prices, post-Putin Russia supported the new G7 economic consensus, and emerg- ing economies, including Brazil and India, joined with important economic reforms. China rejected the OECD model and adhered to its closed state-directed system but priori- tized economic growth and trade. Beijing and Washington took steps to stabilize economic relations, despite their mutual suspicion and contrasting political-economic models. The relationship has been fraught with disagree- ments on core security issues and values, but seeking relief from the tight trade and investment restrictions of the 2020s led each side to conclude that they need each oth- 114 GLOBAL TRENDS 2040 James Kenny / Unsplash | Macau Photo Agency / Unsplash

er to prosper; the two sides agreed in the fast enough to prevent some catastrophic 2030s to protect their most vital common impacts. Wealthy countries were able to economic interests. invest in adaptation measures at home to China and the United States formed rival “com- protect at risk populations, but developing munities of common values” that compete countries lagged behind and su昀昀ered the for markets and resources under opposing most from increased disasters, presenting domestic systems, one based on state direc- second-order security challenges. tion, autocratic control, and public surveillance technologies and the other on private enter- prise, democracy, personal freedom, and open KEY TAKEAWAYS information 昀氀ows. The competition somewhat dampened fragmentation within countries as populations rallied to support their countries The US-China rivalry and other state-to-state relations are and leaders. Much of the work of managing channeled into competition for markets, resources, and brand the 昀氀ow of trade and information was done by reputation within mutually accepted rules in these areas. large corporations doing business globally. The Publics rally around their governments in the competition, United States, China, and like-minded states tempering societal fragmentation. belonging to their respective camps intervened to prevent small con昀氀icts from escalating to Strengthened economic interdependence lowers the risk the point that they would threaten global of the major powers pursuing armed conflict; most of them economic progress and stability. Nevertheless, engage in influence operations, corporate espionage, and geopolitical competition, such as in the South China Sea, remained a persistent threat to eco- cyber attacks that allow them to achieve goals without risking destructive wars. nomic relations, and many internal con昀氀icts in poor countries festered with little international The central security challenge is how to keep the geopolitical e昀昀ort to intervene. Rising commodity prices and demand for for- competition between the United States and China from under- eign workers stimulated an economic recovery mining the economic cooperation upon which their prosperity that improved prospects for growing middle and the global economy depends. classes in some developing countries. Several advanced economies with aging populations Long-term stability remains at risk from growing climate chal- set up guest worker programs, 昀椀lling import- lenges that were ignored in favor of near-term economic gains; ant service jobs while reducing uncontrolled technological innovations and economic prosperity have lulled migration using biometric tracking programs. leaders into believing that they can put off making hard choices Rising wages in China led to outsourcing and on climate change. income gains in India, Southeast Asia, and parts of Africa. Nonetheless, large youthful populations in the developing world, especial- ly in Africa, did not bene昀椀t from the reviving global economy. Advances in renewable energy generation and storage and in carbon capture technologies dampened the growth of emissions, but not James Kenny / Unsplash | Macau Photo Agency / Unsplash A MORE CONTESTED WORLD 115

SCENARIO 4 SEPARATE SILOS n 2040, the world is fragmented into HOW WE GOT THERE several economic and security blocs of By the early 2030s, cascading global challenges Ivarying size and strength, centered on from decades of job losses in some countries the United States, China, the European in part because of globalization, heated trade disputes, and health and terrorist threats Union (EU), Russia, and a few regional crossing borders prompted states to raise barriers and impose trade restrictions to powers, and focused on self-suf昀椀ciency, resiliency, and defense. Information conserve resources, protect citizens, and pre- serve domestic industries. Many economists 昀氀ows within separate cyber-sovereign thought that economic decoupling or separa- enclaves, supply chains are reoriented, tion could not really happen because of the and international trade is disrupted. extensive interdependence of supply chains, Vulnerable developing countries are caught economies, and technology, but security con- cerns and governance disputes helped drive in the middle with some on the verge of countries to do the unthinkable, despite the becoming failed states. Global problems, extraordinary costs. notably climate change, are spottily Countries with large domestic markets or addressed, if at all. sizeable neighbors successfully redirected their economies, but many developing econo- mies with limited resources and market access were hit hard as both import and export markets dried up. Economic stagnation fos- tered widespread insecurity across Africa, the Middle East, and South Asia, fueling a retreat to subnational ethnic and religious identities, strained societies, fragmented states, and spreading instability. New waves of migrants headed to the developed world hoping to escape poverty, poor governance, and increas- ingly harsh environmental conditions. Their hopes were dashed when political pushback prompted destination countries to block most migration. 116 GLOBAL TRENDS 2040

As physical barriers went up, dependence on digital commerce and communications soared, KEY TAKEAWAYS but a combination of information manage- ment challenges and repeated data security breaches led those states with strong cyber Separating economies has dire consequences, including mas- controls, like China and Iran, to reinforce their sive financial losses for countries and corporations, as supply cyber barricades. Then states that once advo- chains fracture, markets are lost, and once lucrative sectors, cated for an open Internet set up new closed, like travel and tourism, decline. The resulting economies are protected networks to limit threats and screen less vulnerable to future supply chain disruptions but also out unwanted ideas. By 2040, only the United States and a few of its closest allies maintained less efficient. the semblance of an open Internet while most Larger countries with abundant resources, few nearby ene- of the world operated behind strong 昀椀rewalls. mies, and defensible borders, such as the United States and With the trade and 昀椀nancial connections that Canada, are better able to adapt than most others. The focus de昀椀ned the prior era of globalization dis- on self-sufficiency makes some states more resilient even as rupted, economic and security blocs formed around the United States, China, the EU, others founder. Russia, and India. Smaller powers and other To maintain domestic stability in this world, states adopt mixed states joined these blocs for protection, to pool resources, and to maintain at least some political models combining elements of democracy and author- economic e昀케ciencies. Advances in AI, ener- itarianism, increasing surveillance and potentially repression. gy technologies, and additive manufacturing Many states turn to exclusionary forms of nationalism to unify helped some states adapt and make the blocs majority populations against perceived foreign enemies. economically viable, but prices for consumer goods rose dramatically. States unable to join Unable to attract talent globally or sustain international a bloc were left behind and cut o昀昀. collaboration, technological innovation atrophies. Wealthy Security links did not disappear completely. countries begin to compensate by shifting resources to States threatened by powerful neighbors domestic education. sought out security links with other powers for their own protection or accelerated their own International organizations and collective action to tackle programs to develop nuclear weapons, as the climate change, healthcare disparities, and poverty falter. ultimate guarantor of their security. Small con- Countries independently adapt to the catastrophic impacts, 昀氀icts occurred at the edges of these new blocs, particularly over scarce resources or emerging significantly increasing the incentive for risky solutions. opportunities, like the Arctic and space. Poorer countries became increasingly unstable, Focused on internal security, the world’s larger militaries avoid and with no interest by major powers or the direct armed conflict. Rival blocs compete for control over United Nations in intervening to help restore scarce resources, leading to smaller wars or other means of order, con昀氀icts became endemic, exacerbat- diverting attention from domestic problems and rallying public ing other problems. Lacking coordinated, support against foreign enemies. Nuclear weapons proliferate. multilateral e昀昀orts to mitigate emissions and address climate changes, little was done to slow greenhouse gas emissions, and some states experimented with geoengineering with disastrous consequences. A MORE CONTESTED WORLD 117

SCENARIO 5 TRAGEDY AND MOBILIZATION n 2040, a global coalition, led by the HOW WE GOT THERE European Union (EU) and China working In the early 2030s, the world was in the midst Iwith nongovernmental organizations of a global catastrophe. Rising ocean tempera- (NGOs) and revitalized multilateral tures and acidity devastated major 昀椀sheries already stressed by years of over昀椀shing. At the institutions, is implementing far-reaching same time, changes in precipitation patterns changes designed to address climate depressed harvests in key grain producing change, resource depletion, and poverty areas around the world, driving up food prices, triggering widespread hoarding, and disrupt- following a global food catastrophe caused ing the distribution of food supplies, leading to by climate events and environmental global famine. A wave of unrest spread across degradation. Richer countries shift to help the globe, protesting governments’ inability poorer ones manage the crisis and then to meet basic human needs and bringing down leaders and regimes. In one of many transition to low carbon economies through incidents in the Western world, thousands of broad aid programs and transfers of people were killed in three days of violence in advanced energy technologies, recognizing Philadelphia triggered by social media rumors about bread shortages. how rapidly these global challenges spread across borders. The ongoing famines catalyzed a global move- ment that advocated bold systemic change to address environmental problems. Across the world, younger generations, shaped by the COVID-19 pandemic and traumatized by the threat of running out of food, joined together across borders to overcome resistance to re- form, blaming older generations for destroying their planet. They threw their support behind NGOs and civil society organizations that were involved in relief e昀昀orts and developed a larg- er global following than those governments that were perceived to have failed their popu- lations. As the movement grew, it took on oth- er issues including global health and poverty. 118 GLOBAL TRENDS 2040 Image / Bigstock

After Green parties swept democratic elections including customers, employees, suppliers, in several European countries between 2034 and communities. and 2036, the EU launched a campaign within Not everyone has come on board. Russia and the United Nations (UN) to greatly expand some states in the Organization of Petro- international aid programs and to set a new leum Exporting Countries resisted change, target date for meeting the UN’s Sustainable and some communities found the new global Development Goals by 2050. Hurt badly by the ethos threatening to traditional values and famine and hoping to quell unrest in its major patronage systems. Extremists resorted to cities, China announced its support for the EU cyber attacks and terrorism to draw attention e昀昀ort, which the Chinese Communist Party to their causes. States with powerful energy portrayed as a new national patriotic mission interests, such as Iran, Russia, and some Gulf and the kind of global restructuring it had long Arab states, faced disruptive political move- advocated. Others, including Australia, Can- ments that threaten to lead to a prolonged ada, and the United States, slowly joined the movement as environmentally focused parties period of political and social con昀氀ict. gained political strength, winning several elections, despite strong continued resistance KEY TAKEAWAYS from some domestic groups arguing that their countries were better positioned to adapt to a changing climate and should prioritize domes- An existential threat catalyzes a bottom-up social movement tic industries and constituencies. that transforms multilateral cooperation, disrupts economic The EU initiative resulted in the creation of a incentives, and offers nonstate actors greater influence. new international organization, the Human Security Council, in cooperation with develop- Major power competition among individual states is rechan- ing countries, which focused on 21st Century neled to address more pressing global challenges; the geopo- transnational security challenges. Open to litical hierarchy is reshuffled, creating once unlikely partner- both states and nonstate actors, membership ships between progressive European political parties and the required a commitment to veri昀椀able actions to Chinese Communist Party. Europe takes the lead in promoting improve food, health, and environmental secu- sustainable development, while China adopts and promotes rity, even if these were perceived as painful for wealthier states and groups. Members could new energy technologies. easily be expelled for noncompliance, and face grassroots, popular backlashes and boycotts, Countries beholden to fossil fuel industries are the slowest to similar to the Anti-Apartheid Movement of the get on board with the global revolution, creating a global back- last century. By 2038, global attitudes about lash to their leadership, products, and brands. The second- the environment and human security were and third-order implications of the new political movements being transformed by growing recognition of create long-term challenges for their economies. the unsustainability of past practices. States and large corporations concentrated With broad popular support, NGOs, multilateral organizations, investments to advance technological solu- and activist groups have unprecedented ability to influence tions to food, climate, and health challenges standards, marshal resources, hold violators accountable, and and to provide essential aid to the hardest hit prod states to act. In some cases, global priorities take prece- populations. Corporate goals expanded to em- dence over national interests. brace serving a wider range of stakeholders, A MORE CONTESTED WORLD 119 Image / Bigstock

GLOBAL TRENDS2040 A MORE CONTESTED WORLD COMPARING SELECTED REGIONAL DEMOGRAPHICS TOTAL POPULATION 2020 a 2040 AND URBANIZATION 2,199 Million Urban (percent) 1,814 1,856 1,678 1,676 1,138 78.0 46.0 64.8 739 53.1 769 651 630 633 602 669 87.4 463 34.8 82.4 75.3 81.9 295 300 71.7 41.6 61.1 66.1 50.0 42 53 REGIONAL FORECASTS 65.4 69.3 68.2 70.2 LIFE EXPECTANCY AND MEDIAN AGEa Years Median age (years) 83.9 75.8 79.3 80.9 75.2 74.4 77.5 78.2 81.0 76.0 78.6 80.8 72.5 66.9 69.8 73.4 72.9 his section of the Global Trends report provides 20-year projections of 61.9 key demographic trends in nine regions: Latin America and Caribbean; Europe; Russia and Eurasia; Middle East and North Africa; Sub-Saharan 41.9 46.5 47.0 Africa; South Asia; Northeast Asia; Southeast Asia; and Oceania. The 20-year 37.9 36.5 40.2 39.4 36.0 36.9 31.0 31.9 33.8 30.2 33.7 projections include such demographic trends as population growth, rates of 27.5 22.1 27.5 18.9 urbanization, median age, gross domestic product (GDP) per capita, non-communicable disease incidence, and religious affiliation. The graphics NON-COMMUNICABLE b also highlight the state of democracy in each region, its readiness for the DISEASE INCIDENCE digital economy, and the potential physical effects of climate change over NCD incidence per 1,000 11.5 10.9 9.8 10.8 9.0 the next 20 years. We have moderate confidence in our 20-year outlooks for 7.2 7.1 population growth, age structure, and median age because these measures 6.8 5.6 6.3 5.6 4.7 3.7 3.2 4.8 4.9 3.7 are extrapolated directly from existing fertility and mortality rates, as well as 2.9 decades of observed population trends. We have a lower degree of confi- dence in the outlooks for urbanization, GDP per capita, climate change, digital readiness, and the rise of noncommunicable disease, which can vary Latin Europe Russia and Middle East Sub-Saharan South Asia East Asia East Asia East Asia depending on human choices, introducing a greater potential for error. America and Eurasia and North Africa and Pacific: and Pacific: and Pacific: Caribbean Africa Northeast Southeast Oceania Asia Asia 120 a United Nations Population Division. | b IHME and Pardee Center University of Denver. Image | Chuttersnap / Unsplash

GLOBAL TRENDS2040 A MORE CONTESTED WORLD COMPARING SELECTED REGIONAL DEMOGRAPHICS TOTAL POPULATION 2020 a 2040 AND URBANIZATION 2,199 Million Urban (percent) 1,814 1,856 1,678 1,676 1,138 78.0 46.0 64.8 739 53.1 769 651 630 633 602 669 87.4 463 34.8 82.4 75.3 81.9 295 300 71.7 41.6 61.1 66.1 50.0 42 53 REGIONAL FORECASTS 65.4 69.3 68.2 70.2 LIFE EXPECTANCY AND MEDIAN AGEa Years Median age (years) 83.9 75.8 79.3 80.9 75.2 74.4 77.5 78.2 81.0 76.0 78.6 80.8 72.5 66.9 69.8 73.4 72.9 his section of the Global Trends report provides 20-year projections of 61.9 key demographic trends in nine regions: Latin America and Caribbean; Europe; Russia and Eurasia; Middle East and North Africa; Sub-Saharan 41.946.5 47.0 Africa; South Asia; Northeast Asia; Southeast Asia; and Oceania. The 20-year 37.936.540.2 39.4 36.0 36.9 31.0 31.9 33.8 30.2 33.7 projections include such demographic trends as population growth, rates of 27.5 22.1 27.5 18.9 urbanization, median age, gross domestic product (GDP) per capita, non-communicable disease incidence, and religious affiliation. The graphics NON-COMMUNICABLE b also highlight the state of democracy in each region, its readiness for the DISEASE INCIDENCE digital economy, and the potential physical effects of climate change over NCD incidence per 1,00011.5 10.9 9.8 10.8 9.0 the next 20 years. We have moderate confidence in our 20-year outlooks for 7.2 7.1 population growth, age structure, and median age because these measures 6.8 5.6 6.3 5.6 4.7 3.7 3.2 4.8 4.9 3.7 are extrapolated directly from existing fertility and mortality rates, as well as 2.9 decades of observed population trends. We have a lower degree of confi- dence in the outlooks for urbanization, GDP per capita, climate change, digital readiness, and the rise of noncommunicable disease, which can vary LatinEuropeRussia andMiddle EastSub-SaharanSouth AsiaEast Asia East Asia East Asia depending on human choices, introducing a greater potential for error.America andEurasiaand NorthAfrica and Pacific: and Pacific: and Pacific: Caribbean Africa Northeast Southeast Oceania Asia Asia a United Nations Population Division. | b IHME and Pardee Center University of Denver. 121 Image | Chuttersnap / Unsplash

GLOBAL TRENDS2040 A MORE CONTESTED WORLD LATIN AMERICAAND CARIBBEAN Internet Users (of population)c a FIVE LARGEST CITIES 55.2% By population in 2035 (million) b 0 100 GDP PER CAPITA US$ at purchasing 2020 2040 Digital skills of workforce ratingd 2020 b 1 MEXICO CITY, MEXICO 25.4 power parity 2019 3.4 $13.4K $18.9K TYPES OF READINESS FOR 1 = not at all to a great extent = 7 a 2 GOVERNMENTS DIGITAL ECONOMY SAO PAULO, BRAZIL 24.5 Number of countries Information globalization ratinge 83.7 3 BUENOS AIRES, ARGENTINA 17.1 RELIGIONc 3 1 = low high = 100 Liberal Democracies b 4 RIO DE JANIERO, BRAZIL 14.8 2020 % % % 2019 or latest available data. 92.1 4.1 3.8 Hold free and fair multiparty elections c International Telecommunication Union. and guarantee freedom of speech and d World Economic Forum. 5 LIMA, PERU 13.0 2040 % % % expression. Liberal democracies also e KOF Globalization Index. 90.9 5.3 3.7 uphold the rule of law and have Catholic Agnostic/ Other constraints on the executive. Atheist f This map illustrates likely changes in maximum temperature, Electoral Democracies 16 drought, and hurricane/cyclone activity in 2040—compared to 2020 2040 the 1980-2005 baseline—given conditions specified by the a a Hold free and fair multiparty elections United Nations’ Intergovernmental Panel on Climate Change AGE STRUCTURE AGE STRUCTURE and guarantee freedom of speech (IPCC) under Representative Concentration Pathway (RCP) 4.5. and expression, but do not uphold While several different temperature measures could have been Under 15 15-64 65+ Under 15 15-64 65+ the rule of law and/or do not have 2040 used, maximum temperature on the hottest day of the year was % % % % % % constraints on the executive. chosen given the severe human, agricultural, and economic costs 23.9 67.2 8.9 18.8 65.9 15.2 TEMPERATURE, associated with heat waves. When combined with longer DROUGHT, AND droughts, these effects are multiplied. MALE Age FEMALE Electoral Autocracies 5 HURRICANE MALE Age FEMALE ACTIVITY 80+ 80+ Hold elections but they are not free, fair, 75-79 75-79 and multiparty, and/or the government 70-74 70-74 does not guarantee freedom of speech 0 2.5 65-69 65-69 and expression. Increase in the hottest day 60-64 60-64 55-59 55-59 temperature, Celsius 50-54 50-54 1 45-49 45-49 Closed Autocracies 40-44 40-44 Do not even hold multiparty Increase in the longest annual 35-39 35-39 elections for the chief executive. drought by 2.5 days or more 30-34 30-34 25-29 25-29 20-24 20-24 a Varieties of Democracy, 2020. The 15-19 15-19 number of countries included in this Increase in major 10-14 10-14 study may not equal the number listed 5-9 5-9 separately under “Selected Regions hurricane activity 0-4 0-4 and Countries. 30 20 10 0 0 10 20 30 30 20 10 0 0 10 20 30 Million Million f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for International Climate and Environmental Research. 122 a United Nations Population Division. | b Oxford Economics. | c World Religion Database. Graphic: Pardee Center University of Denver.

GLOBAL TRENDS2040 A MORE CONTESTED WORLD LATIN AMERICAAND CARIBBEAN Internet Users (of population)c a FIVE LARGEST CITIES 55.2% By population in 2035 (million)b 0 100 GDP PER CAPITA US$ at purchasing20202040 Digital skills of workforce ratingd 2020 b 1MEXICO CITY, MEXICO25.4power parity 2019 3.4 $13.4K$18.9K TYPES OF READINESS FOR 1 = not at all to a great extent = 7 a 2 GOVERNMENTS DIGITAL ECONOMY SAO PAULO, BRAZIL24.5Number of countries Information globalization ratinge 83.7 3BUENOS AIRES, ARGENTINA17.1RELIGIONc 3 1 = low high = 100 Liberal Democracies b 4RIO DE JANIERO, BRAZIL14.82020%%% 2019 or latest available data. 92.14.13.8 Hold free and fair multiparty elections c International Telecommunication Union. and guarantee freedom of speech and d World Economic Forum. 5LIMA, PERU13.02040%%%expression. Liberal democracies also e KOF Globalization Index. 90.95.33.7 uphold the rule of law and have CatholicAgnostic/Otherconstraints on the executive. Atheist f This map illustrates likely changes in maximum temperature, Electoral Democracies 16 drought, and hurricane/cyclone activity in 2040—compared to 20202040 the 1980-2005 baseline—given conditions specified by the aa Hold free and fair multiparty elections United Nations’ Intergovernmental Panel on Climate Change AGE STRUCTUREAGE STRUCTUREand guarantee freedom of speech (IPCC) under Representative Concentration Pathway (RCP) 4.5. and expression, but do not uphold While several different temperature measures could have been Under 1515-6465+Under 1515-6465+the rule of law and/or do not have 2040 used, maximum temperature on the hottest day of the year was %%%%%% constraints on the executive. chosen given the severe human, agricultural, and economic costs 23.967.28.918.865.9 15.2 TEMPERATURE, associated with heat waves. When combined with longer DROUGHT, AND droughts, these effects are multiplied. MALE AgeFEMALE Electoral Autocracies 5 HURRICANE MALE Age FEMALE ACTIVITY 80+80+ Hold elections but they are not free, fair, 75-7975-79 and multiparty, and/or the government 70-7470-74 does not guarantee freedom of speech 0 2.5 65-6965-69 and expression. Increase in the hottest day 60-6460-64 55-5955-59 temperature, Celsius 50-5450-54 1 45-4945-49 Closed Autocracies 40-4440-44 Do not even hold multiparty Increase in the longest annual 35-3935-39 elections for the chief executive. drought by 2.5 days or more 30-3430-34 25-2925-29 20-2420-24 a Varieties of Democracy, 2020. The 15-1915-19 number of countries included in this Increase in major 10-1410-14 study may not equal the number listed 5-95-9 separately under “Selected Regions hurricane activity 0-40-4 and Countries. 3020100010203030201000102030 MillionMillion f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for International Climate and Environmental Research. a United Nations Population Division. | b Oxford Economics. | c World Religion Database. Graphic: Pardee Center University of Denver. 123

GLOBAL TRENDS2040 A MORE CONTESTED WORLD EUROPE a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million) b % GDP PER CAPITA 0 78.0 100 US$ at purchasing 2020 2040 2020 b 1 ISTANBUL, TURKEY 18.0 power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $37.2K $51.0K a 4.5 2 PARIS, FRANCE 12.1 GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3 LONDON, UNITED KINGDOM 10.6 c Information globalization ratinge RELIGION 19 83.1 Liberal Democracies 1 = low high = 100 4 MADRID, SPAIN 7.0 2020 % % % 63.7 18.8 16.5 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5 ANKARA, TURKEY 6.2 2040 % % % expression. Liberal democracies also c International Telecommunication Union. 58.5 21.6 18.7 uphold the rule of law and have d World Economic Forum. Christian Muslim Agnostic/ constraints on the executive. e KOF Globalization Index. Atheist 13 Electoral Democracies f 2020 2040 This map illustrates likely changes in maximum temperature, a a Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTURE AGE STRUCTURE and guarantee freedom of speech the 1980-2005 baseline—given conditions specified by the and expression, but do not uphold United Nations’ Intergovernmental Panel on Climate Change Under 15 15-64 65+ Under 15 15-64 65+ the rule of law and/or do not have (IPCC) under Representative Concentration Pathway (RCP) 4.5. constraints on the executive. % % % % % % While several different temperature measures could have been 16.6 64.6 18.8 14.5 59.5 26.0 2040 used, maximum temperature on the hottest day of the year was TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALE Age FEMALE MALE Age FEMALE Electoral Autocracies 3 DROUGHT, AND associated with heat waves. When combined with longer 80+ 80+ HURRICANE droughts, these effects are multiplied. 75-79 75-79 Hold elections but they are not free, fair, 70-74 and multiparty, and/or the government ACTIVITY 70-74 does not guarantee freedom of speech 65-69 65-69 and expression. 60-64 60-64 0 2.5 55-59 55-59 Increase in the hottest day 50-54 50-54 0 temperature, Celsius 45-49 45-49 Closed Autocracies 40-44 40-44 Do not even hold multiparty 35-39 35-39 elections for the chief executive. 30-34 30-34 Increase in the longest annual 25-29 25-29 drought by 2.5 days or more 20-24 20-24 a Varieties of Democracy, 2020. The 15-19 15-19 number of countries included in this 10-14 10-14 study may not equal the number listed 5-9 5-9 separately under “Selected Regions Increase in major 0-4 0-4 hurricane activity f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 30 20 10 0 0 10 20 30 30 20 10 0 0 10 20 30 and Countries. International Climate and Environmental Research. Million Million Graphic: Pardee Center University of Denver. 124 a United Nations Population Division. | b Oxford Economics. | c World Religion Database.

GLOBAL TRENDS2040 A MORE CONTESTED WORLD EUROPE a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million)b % GDP PER CAPITA 0 78.0 100 US$ at purchasing202020402020 b 1ISTANBUL, TURKEY18.0power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $37.2K $51.0K a 4.5 2PARIS, FRANCE12.1GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3LONDON, UNITED KINGDOM10.6c Information globalization ratinge RELIGION 19 83.1 Liberal Democracies 1 = low high = 100 4MADRID, SPAIN7.02020%%% 63.718.816.5 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5ANKARA, TURKEY6.22040%%%expression. Liberal democracies also c International Telecommunication Union. 58.521.618.7 uphold the rule of law and have d World Economic Forum. ChristianMuslimAgnostic/constraints on the executive. e KOF Globalization Index. Atheist 13 Electoral Democracies f 20202040 This map illustrates likely changes in maximum temperature, aa Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTUREAGE STRUCTURE and guarantee freedom of speech the 1980-2005 baseline—given conditions specified by the and expression, but do not uphold United Nations’ Intergovernmental Panel on Climate Change Under 1515-6465+Under 1515-6465+the rule of law and/or do not have (IPCC) under Representative Concentration Pathway (RCP) 4.5. constraints on the executive. %%%%%% While several different temperature measures could have been 16.664.6 18.814.559.526.0 2040 used, maximum temperature on the hottest day of the year was TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALEAge FEMALEMALE Age FEMALEElectoral Autocracies3 DROUGHT, AND associated with heat waves. When combined with longer 80+80+ HURRICANE droughts, these effects are multiplied. 75-7975-79 Hold elections but they are not free, fair, 70-74 and multiparty, and/or the government ACTIVITY 70-74 does not guarantee freedom of speech 65-6965-69 and expression. 60-6460-64 0 2.5 55-5955-59 Increase in the hottest day 50-5450-54 0 temperature, Celsius 45-4945-49 Closed Autocracies 40-4440-44 Do not even hold multiparty 35-3935-39 elections for the chief executive. 30-3430-34 Increase in the longest annual 25-2925-29 drought by 2.5 days or more 20-2420-24 a Varieties of Democracy, 2020. The 15-1915-19 number of countries included in this 10-1410-14 study may not equal the number listed 5-95-9 separately under “Selected Regions Increase in major 0-40-4 hurricane activity f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 3020100010203030201000102030and Countries. International Climate and Environmental Research. MillionMillion Graphic: Pardee Center University of Denver. a United Nations Population Division. | b Oxford Economics. | c World Religion Database. 125

GLOBAL TRENDS2040 A MORE CONTESTED WORLD RUSSIA AND EURASIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million) b % GDP PER CAPITA 0 54.7 100 US$ at purchasing 2020 2040 2020 b 1 MOSCOW, RUSSIA 12.8 power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $18.4K $30.4K a 3.9 2 SAINT PETERSBURG, RUSSIA 5.6 GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3 TASHKENT, UZBEKISTAN 3.0 c Information globalization ratinge RELIGION 0 79.2 Liberal Democracies 1 = low high = 100 4 KYIV, UKRAINE 3.0 2020 61.3% 32.5% 5.5% Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5 BAKU, AZERBAIJAN 2.8 2040 % % % expression. Liberal democracies also c International Telecommunication Union. 57.6 38.1 3.6 uphold the rule of law and have d World Economic Forum. Christian Muslim Agnostic/ constraints on the executive. e KOF Globalization Index. Atheist 3 Electoral Democracies f 2020 2040 This map illustrates likely changes in maximum temperature, a a Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTURE AGE STRUCTURE and guarantee freedom of speech and expression, but do not uphold the 1980-2005 baseline—given conditions specified by the Under 15 15-64 65+ Under 15 15-64 65+ the rule of law and/or do not have United Nations’ Intergovernmental Panel on Climate Change constraints on the executive. (IPCC) under Representative Concentration Pathway (RCP) 4.5. 21.2% 66.0% 12.8% 18.0% 64.9% 17.1% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 8 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALE Age FEMALE MALE Age FEMALE Electoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+ 80+ Hold elections but they are not free, fair, HURRICANE droughts, these effects are multiplied. 75-79 75-79 and multiparty, and/or the government ACTIVITY 70-74 70-74 does not guarantee freedom of speech 65-69 65-69 and expression. 60-64 60-64 0 2.5 55-59 55-59 Increase in the hottest day 50-54 50-54 1 temperature, Celsius 45-49 45-49 Closed Autocracies 40-44 40-44 Do not even hold multiparty 35-39 35-39 elections for the chief executive. 30-34 30-34 Increase in the longest annual 25-29 25-29 drought by 2.5 days or more 20-24 20-24 a Varieties of Democracy, 2020. The 15-19 15-19 number of countries included in this 10-14 10-14 study may not equal the number listed f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 5-9 5-9 separately under “Selected Regions Increase in major International Climate and Environmental Research. 0-4 0-4 and Countries. hurricane activity Graphic: Pardee Center University of Denver. 15 10 5 0 0 5 10 15 15 10 5 0 0 5 10 15 Million Million a b c 126 United Nations Population Division. | Oxford Economics. | World Religion Database.

GLOBAL TRENDS2040 A MORE CONTESTED WORLD RUSSIA AND EURASIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million)b % GDP PER CAPITA 0 54.7 100 US$ at purchasing202020402020 b 1MOSCOW, RUSSIA12.8power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $18.4K$30.4K a 3.9 2SAINT PETERSBURG, RUSSIA5.6GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3TASHKENT, UZBEKISTAN3.0c Information globalization ratinge RELIGION 0 79.2 Liberal Democracies 1 = low high = 100 4KYIV, UKRAINE3.0202061.3%32.5%5.5%Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5BAKU, AZERBAIJAN2.82040%%%expression. Liberal democracies also c International Telecommunication Union. 57.638.13.6 uphold the rule of law and have d World Economic Forum. ChristianMuslimAgnostic/constraints on the executive. e KOF Globalization Index. Atheist 3 Electoral Democracies f 20202040 This map illustrates likely changes in maximum temperature, aa Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTUREAGE STRUCTUREand guarantee freedom of speech and expression, but do not uphold the 1980-2005 baseline—given conditions specified by the Under 1515-6465+Under 1515-6465+the rule of law and/or do not have United Nations’ Intergovernmental Panel on Climate Change constraints on the executive. (IPCC) under Representative Concentration Pathway (RCP) 4.5. 21.2% 66.0% 12.8%18.0% 64.9% 17.1% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 8 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALEAge FEMALEMALE AgeFEMALEElectoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+80+ Hold elections but they are not free, fair, HURRICANE droughts, these effects are multiplied. 75-7975-79 and multiparty, and/or the government ACTIVITY 70-7470-74 does not guarantee freedom of speech 65-6965-69 and expression. 60-6460-64 0 2.5 55-5955-59 Increase in the hottest day 50-5450-54 1 temperature, Celsius 45-4945-49 Closed Autocracies 40-4440-44 Do not even hold multiparty 35-3935-39 elections for the chief executive. 30-3430-34 Increase in the longest annual 25-2925-29 drought by 2.5 days or more 20-2420-24 a Varieties of Democracy, 2020. The 15-1915-19 number of countries included in this 10-1410-14 study may not equal the number listed f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 5-95-9 separately under “Selected Regions Increase in major International Climate and Environmental Research. 0-40-4 and Countries. hurricane activity Graphic: Pardee Center University of Denver. 151050051015151050051015 MillionMillion abc United Nations Population Division. | Oxford Economics. | World Religion Database. 127

GLOBAL TRENDS2040 A MORE CONTESTED WORLD MIDDLE EAST & NORTH AFRICA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million) b % GDP PER CAPITA 0 42.9 100 US$ at purchasing 2020 2040 2020 b 1 CAIRO, EGYPT 28.5 power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $15.3K $19.9K a 3.6 2 BAGHDAD, IRAQ 10.8 GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3 TEHRAN, IRAN 10.7 c Information globalization ratinge RELIGION 2 69.8 Liberal Democracies 1 = low high = 100 4 RIYADH, SAUDI ARABIA 9.1 2020 % % % 92.9 3.9 1.5 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5 ALEXANDRIA, EGYPT 7.2 2040 % % % expression. Liberal democracies also c International Telecommunication Union. 93.2 3.6 1.5 uphold the rule of law and have d World Economic Forum. Muslim Christian Jewish constraints on the executive. e KOF Globalization Index. Electoral Democracies 0 f 2020 2040 This map illustrates likely changes in maximum temperature, a a Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTURE AGE STRUCTURE and guarantee freedom of speech and expression, but do not uphold the 1980-2005 baseline—given conditions specified by the Under 15 15-64 65+ Under 15 15-64 65+ the rule of law and/or do not have United Nations’ Intergovernmental Panel on Climate Change % % % % % % constraints on the executive. (IPCC) under Representative Concentration Pathway (RCP) 4.5. 29.8 64.8 5.4 23.6 66.5 9.9 While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 5 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALE Age FEMALE MALE Age FEMALE Electoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+ 80+ Hold elections but they are not free, fair, HURRICANE droughts, these effects are multiplied. 75-79 75-79 and multiparty, and/or the government ACTIVITY 70-74 70-74 does not guarantee freedom of speech 65-69 65-69 and expression. 60-64 60-64 0 2.5 55-59 55-59 Increase in the hottest day 50-54 50-54 12 temperature, Celsius 45-49 45-49 Closed Autocracies 40-44 40-44 Do not even hold multiparty 35-39 35-39 elections for the chief executive. 30-34 30-34 Increase in the longest annual 25-29 25-29 drought by 2.5 days or more 20-24 20-24 a Varieties of Democracy, 2020. The f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 15-19 15-19 number of countries included in this 10-14 10-14 study may not equal the number listed International Climate and Environmental Research. 5-9 5-9 separately under “Selected Regions Increase in major Graphic: Pardee Center University of Denver. 0-4 0-4 and Countries. hurricane activity 30 20 10 0 0 10 20 30 30 20 10 0 0 10 20 30 Million Million a b c 128 United Nations Population Division. | Oxford Economics. | World Religion Database.

GLOBAL TRENDS2040 A MORE CONTESTED WORLD MIDDLE EAST & NORTH AFRICA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million)b % GDP PER CAPITA 0 42.9 100 US$ at purchasing202020402020 b 1CAIRO, EGYPT28.5power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $15.3K$19.9K a 3.6 2BAGHDAD, IRAQ10.8GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3TEHRAN, IRAN10.7c Information globalization ratinge RELIGION 2 69.8 Liberal Democracies 1 = low high = 100 4RIYADH, SAUDI ARABIA9.12020%%% 92.93.91.5 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5ALEXANDRIA, EGYPT7.22040%%%expression. Liberal democracies also c International Telecommunication Union. 93.23.61.5 uphold the rule of law and have d World Economic Forum. MuslimChristianJewishconstraints on the executive. e KOF Globalization Index. Electoral Democracies 0 f 20202040 This map illustrates likely changes in maximum temperature, aa Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTUREAGE STRUCTUREand guarantee freedom of speech and expression, but do not uphold the 1980-2005 baseline—given conditions specified by the Under 1515-6465+Under 1515-6465+the rule of law and/or do not have United Nations’ Intergovernmental Panel on Climate Change %%%%%% constraints on the executive. (IPCC) under Representative Concentration Pathway (RCP) 4.5. 29.864.85.423.666.59.9 While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 5 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALEAge FEMALEMALE Age FEMALEElectoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+80+ Hold elections but they are not free, fair, HURRICANE droughts, these effects are multiplied. 75-7975-79 and multiparty, and/or the government ACTIVITY 70-7470-74 does not guarantee freedom of speech 65-6965-69 and expression. 60-6460-64 0 2.5 55-5955-59 Increase in the hottest day 50-5450-54 12 temperature, Celsius 45-4945-49 Closed Autocracies 40-4440-44 Do not even hold multiparty 35-3935-39 elections for the chief executive. 30-3430-34 Increase in the longest annual 25-2925-29 drought by 2.5 days or more 20-2420-24 a Varieties of Democracy, 2020. The f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 15-1915-19 number of countries included in this 10-1410-14 study may not equal the number listed International Climate and Environmental Research. 5-95-9 separately under “Selected Regions Increase in major Graphic: Pardee Center University of Denver. 0-40-4 and Countries. hurricane activity 3020100010203030201000102030 MillionMillion abc United Nations Population Division. | Oxford Economics. | World Religion Database. 129

GLOBAL TRENDS2040 A MORE CONTESTED WORLD SUB-SAHARAN AFRICA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million) b % GDP PER CAPITA 0 17.6 100 US$ at purchasing 2020 2040 2020 b 1 KINSHASA, DRC 26.7 power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $3.6K $4.7K a 2.7 2 LAGOS, NIGERIA 24.4 GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3 LUANDA, ANGOLA 14.5 c Information globalization ratinge RELIGION 1 61.0 Liberal Democracies 1 = low high = 100 4 DAR ES SALAAM, TANZANIA 13.4 2020 % % % 57.2 32.2 9.3 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5 KHARTOUM, SUDAN 9.6 2040 % % % expression. Liberal democracies also c International Telecommunication Union. 58.1 33.7 7.1 uphold the rule of law and have d World Economic Forum. Christian Muslim Ethnic constraints on the executive. e KOF Globalization Index. Religion 17 Electoral Democracies f 2020 2040 This map illustrates likely changes in maximum temperature, a a Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTURE AGE STRUCTURE and guarantee freedom of speech the 1980-2005 baseline—given conditions specified by the and expression, but do not uphold United Nations’ Intergovernmental Panel on Climate Change Under 15 15-64 65+ Under 15 15-64 65+ the rule of law and/or do not have (IPCC) under Representative Concentration Pathway (RCP) 4.5. constraints on the executive. 42.0% 55.0% 3.0% 36.0% 60.0% 3.9% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALE Age FEMALE MALE Age FEMALE Electoral Autocracies 27 DROUGHT, AND associated with heat waves. When combined with longer 80+ 80+ HURRICANE droughts, these effects are multiplied. 75-79 Hold elections but they are not free, fair, 75-79 and multiparty, and/or the government ACTIVITY 70-74 70-74 does not guarantee freedom of speech 65-69 65-69 and expression. 60-64 60-64 0 2.5 55-59 55-59 Increase in the hottest day 50-54 50-54 5 temperature, Celsius 45-49 45-49 Closed Autocracies 40-44 40-44 Do not even hold multiparty 35-39 35-39 elections for the chief executive. 30-34 30-34 Increase in the longest annual 25-29 25-29 drought by 2.5 days or more 20-24 20-24 a Varieties of Democracy, 2020. The 15-19 15-19 number of countries included in this 10-14 10-14 study may not equal the number listed 5-9 5-9 separately under “Selected Regions Increase in major 0-4 0-4 and Countries. hurricane activity 120 80 40 0 0 40 80 120 120 80 40 0 0 40 80 120 f Million Million Data: Clemens Schwingshackl, Jana Sillman, and the Centre for International Climate and Environmental Research. Graphic: Pardee Center University of Denver. a b c 130 United Nations Population Division. | Oxford Economics. | World Religion Database.

GLOBAL TRENDS2040 A MORE CONTESTED WORLD SUB-SAHARAN AFRICA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million)b % GDP PER CAPITA 0 17.6 100 US$ at purchasing202020402020 b 1KINSHASA, DRC26.7power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $3.6K$4.7K a 2.7 2LAGOS, NIGERIA24.4GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3LUANDA, ANGOLA14.5c Information globalization ratinge RELIGION 1 61.0 Liberal Democracies 1 = low high = 100 4DAR ES SALAAM, TANZANIA13.42020%%% 57.232.29.3 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5KHARTOUM, SUDAN9.62040%%%expression. Liberal democracies also c International Telecommunication Union. 58.133.77.1 uphold the rule of law and have d World Economic Forum. ChristianMuslimEthnicconstraints on the executive. e KOF Globalization Index. Religion 17 Electoral Democracies f 20202040 This map illustrates likely changes in maximum temperature, aa Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTUREAGE STRUCTURE and guarantee freedom of speech the 1980-2005 baseline—given conditions specified by the and expression, but do not uphold United Nations’ Intergovernmental Panel on Climate Change Under 1515-6465+Under 1515-6465+the rule of law and/or do not have (IPCC) under Representative Concentration Pathway (RCP) 4.5. constraints on the executive. 42.0% 55.0% 3.0%36.0% 60.0% 3.9% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALEAge FEMALEMALE Age FEMALEElectoral Autocracies 27 DROUGHT, AND associated with heat waves. When combined with longer 80+80+ HURRICANE droughts, these effects are multiplied. 75-79 Hold elections but they are not free, fair, 75-79 and multiparty, and/or the government ACTIVITY 70-7470-74 does not guarantee freedom of speech 65-6965-69 and expression. 60-6460-64 0 2.5 55-5955-59 Increase in the hottest day 50-5450-54 5 temperature, Celsius 45-4945-49 Closed Autocracies 40-4440-44 Do not even hold multiparty 35-3935-39 elections for the chief executive. 30-3430-34 Increase in the longest annual 25-2925-29 drought by 2.5 days or more 20-2420-24 a Varieties of Democracy, 2020. The 15-1915-19 number of countries included in this 10-1410-14 study may not equal the number listed 5-95-9 separately under “Selected Regions Increase in major 0-40-4 and Countries. hurricane activity 12080400040801201208040004080120 f MillionMillion Data: Clemens Schwingshackl, Jana Sillman, and the Centre for International Climate and Environmental Research. Graphic: Pardee Center University of Denver. abc United Nations Population Division. | Oxford Economics. | World Religion Database. 131

GLOBAL TRENDS2040 A MORE CONTESTED WORLD SOUTH ASIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million) b % GDP PER CAPITA 0 25.8 100 US$ at purchasing 2020 2040 2020 b 1 NEW DELHI, INDIA 43.3 power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $5.9K $15.7K a 4.2 2 DHAKA, BANGLADESH 31.2 GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3 MUMBAI, INDIA 27.3 c Information globalization ratinge RELIGION 0 72.2 Liberal Democracies 1 = low high = 100 4 KARACHI, PAKISTAN 23.1 2020 % % % % 56.4 32.1 4.1 3.0 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5 CALCUTTA, INDIA 19.6 2040 % % % % expression. Liberal democracies also c International Telecommunication Union. 53.9 34.3 4.8 2.4 uphold the rule of law and have d World Economic Forum. Hindu Muslim Christian Ethnic constraints on the executive. e KOF Globalization Index. Religion 4 Electoral Democracies f 2020 2040 This map illustrates likely changes in maximum temperature, a a Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTURE AGE STRUCTURE and guarantee freedom of speech the 1980-2005 baseline—given conditions specified by the and expression, but do not uphold United Nations’ Intergovernmental Panel on Climate Change Under 15 15-64 65+ Under 15 15-64 65+ the rule of law and/or do not have (IPCC) under Representative Concentration Pathway (RCP) 4.5. constraints on the executive. 27.6% 66.3% 6.1% 21.8% 68.1% 10.1% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 4 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALE Age FEMALE MALE Age FEMALE Electoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+ 80+ HURRICANE droughts, these effects are multiplied. 75-79 Hold elections but they are not free, fair, 75-79 and multiparty, and/or the government ACTIVITY 70-74 70-74 does not guarantee freedom of speech 65-69 65-69 and expression. 60-64 60-64 0 2.5 55-59 55-59 Increase in the hottest day 50-54 50-54 0 temperature, Celsius 45-49 45-49 Closed Autocracies 40-44 40-44 Do not even hold multiparty 35-39 35-39 elections for the chief executive. 30-34 30-34 Increase in the longest annual 25-29 25-29 drought by 2.5 days or more 20-24 20-24 a Varieties of Democracy, 2020. The 15-19 15-19 number of countries included in this 10-14 10-14 study may not equal the number listed 5-9 5-9 separately under “Selected Regions Increase in major 0-4 0-4 and Countries. hurricane activity 100 80 60 40 20 0 0 20 40 60 80 100 100 80 60 40 20 0 0 20 40 60 80 100 Million Million f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for International Climate and Environmental Research. Graphic: Pardee Center University of Denver. a b c 132 United Nations Population Division. | Oxford Economics. | World Religion Database.

GLOBAL TRENDS2040 A MORE CONTESTED WORLD SOUTH ASIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million)b % GDP PER CAPITA 0 25.8 100 US$ at purchasing202020402020 b 1NEW DELHI, INDIA43.3power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $5.9K$15.7K a 4.2 2DHAKA, BANGLADESH31.2GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3MUMBAI, INDIA27.3c Information globalization ratinge RELIGION 0 72.2 Liberal Democracies 1 = low high = 100 4KARACHI, PAKISTAN23.12020%%%% 56.432.14.13.0Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5CALCUTTA, INDIA19.62040%%%%expression. Liberal democracies also c International Telecommunication Union. 53.934.34.82.4uphold the rule of law and have d World Economic Forum. HinduMuslimChristianEthnicconstraints on the executive. e KOF Globalization Index. Religion 4 Electoral Democracies f 20202040 This map illustrates likely changes in maximum temperature, aa Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTUREAGE STRUCTUREand guarantee freedom of speech the 1980-2005 baseline—given conditions specified by the and expression, but do not uphold United Nations’ Intergovernmental Panel on Climate Change Under 1515-6465+Under 1515-6465+the rule of law and/or do not have (IPCC) under Representative Concentration Pathway (RCP) 4.5. constraints on the executive. 27.6% 66.3% 6.1%21.8% 68.1% 10.1% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 4 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALEAge FEMALEMALEAgeFEMALEElectoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+80+ HURRICANE droughts, these effects are multiplied. 75-79 Hold elections but they are not free, fair, 75-79 and multiparty, and/or the government ACTIVITY 70-7470-74 does not guarantee freedom of speech 65-6965-69 and expression. 60-6460-64 0 2.5 55-5955-59 Increase in the hottest day 50-5450-54 0 temperature, Celsius 45-4945-49 Closed Autocracies 40-4440-44 Do not even hold multiparty 35-3935-39 elections for the chief executive. 30-3430-34 Increase in the longest annual 25-2925-29 drought by 2.5 days or more 20-2420-24 a Varieties of Democracy, 2020. The 15-1915-19 number of countries included in this 10-1410-14 study may not equal the number listed 5-95-9 separately under “Selected Regions Increase in major 0-40-4 and Countries. hurricane activity 100 80 60 40 20002040 60 80 100100 80 60 40 20002040 60 80 100 MillionMillion f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for International Climate and Environmental Research. Graphic: Pardee Center University of Denver. abc United Nations Population Division. | Oxford Economics. | World Religion Database. 133

GLOBAL TRENDS2040 A MORE CONTESTED WORLD EAST ASIA AND PACIFIC NORTHEAST ASIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million) b % GDP PER CAPITA 0 55.5 100 US$ at purchasing 2020 2040 2020 b 1 TOKYO, JAPAN 36.0 power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $19.4K $36.7K a 4.6 2 SHANGHAI, CHINA 34.3 GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3 BEIJING, CHINA 25.4 c Information globalization ratinge RELIGION 3 Liberal Democracies 86.3 4 CHONGQING, CHINA 20.5 2020 % % % % 1 = low high = 100 35.4 27.2 19.9 7.7 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5 OSAKA METROPOLITAN AREA 18.3 2040 % % % % expression. Liberal democracies also c International Telecommunication Union. 31.1 25.9 21.4 11.6 uphold the rule of law and have d World Economic Forum. Agnostic/ Chinese Folk Buddhist Christian constraints on the executive. e KOF Globalization Index. Atheist Religion 1 Electoral Democracies f 2020 2040 This map illustrates likely changes in maximum temperature, a a Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTURE AGE STRUCTURE and guarantee freedom of speech and expression, but do not uphold the 1980-2005 baseline—given conditions specified by the Under 15 15-64 65+ Under 15 15-64 65+ the rule of law and/or do not have United Nations’ Intergovernmental Panel on Climate Change constraints on the executive. (IPCC) under Representative Concentration Pathway (RCP) 4.5. 17.1% 69.5% 13.4% 14.0% 61.3% 24.8% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 0 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALE Age FEMALE MALE Age FEMALE Electoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+ 80+ Hold elections but they are not free, fair, HURRICANE droughts, these effects are multiplied. 75-79 75-79 and multiparty, and/or the government ACTIVITY 70-74 70-74 does not guarantee freedom of speech 65-69 65-69 and expression. 60-64 60-64 0 2.5 55-59 55-59 Increase in the hottest day 50-54 50-54 2 temperature, Celsius 45-49 45-49 Closed Autocracies 40-44 40-44 Do not even hold multiparty 35-39 35-39 elections for the chief executive. 30-34 30-34 Increase in the longest annual 25-29 25-29 drought by 2.5 days or more 20-24 20-24 a Varieties of Democracy, 2020. The 15-19 15-19 number of countries included in this 10-14 10-14 study may not equal the number listed f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 5-9 5-9 separately under “Selected Regions Increase in major International Climate and Environmental Research. 0-4 0-4 and Countries. hurricane activity Graphic: Pardee Center University of Denver. 80 60 40 20 0 0 20 40 60 80 80 60 40 20 0 0 20 40 60 80 Million Million a b c 134 United Nations Population Division. | Oxford Economics. | World Religion Database.

GLOBAL TRENDS2040 A MORE CONTESTED WORLD EAST ASIA AND PACIFICNORTHEAST ASIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million)b % GDP PER CAPITA 0 55.5 100 US$ at purchasing202020402020 b 1TOKYO, JAPAN36.0power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $19.4K$36.7K a 4.6 2SHANGHAI, CHINA34.3GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3BEIJING, CHINA25.4c Information globalization ratinge RELIGION 3 Liberal Democracies 86.3 4CHONGQING, CHINA20.52020%%%% 1 = low high = 100 35.427.219.97.7Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5OSAKA METROPOLITAN AREA18.32040%%%%expression. Liberal democracies also c International Telecommunication Union. 31.125.921.411.6uphold the rule of law and have d World Economic Forum. Agnostic/Chinese FolkBuddhistChristianconstraints on the executive. e KOF Globalization Index. AtheistReligion 1 Electoral Democracies f 20202040 This map illustrates likely changes in maximum temperature, aa Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTUREAGE STRUCTUREand guarantee freedom of speech and expression, but do not uphold the 1980-2005 baseline—given conditions specified by the Under 1515-6465+Under 1515-6465+the rule of law and/or do not have United Nations’ Intergovernmental Panel on Climate Change constraints on the executive. (IPCC) under Representative Concentration Pathway (RCP) 4.5. 17.1% 69.5% 13.4%14.0% 61.3% 24.8% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 0 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALEAge FEMALEMALE Age FEMALEElectoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+80+ Hold elections but they are not free, fair, HURRICANE droughts, these effects are multiplied. 75-7975-79 and multiparty, and/or the government ACTIVITY 70-7470-74 does not guarantee freedom of speech 65-6965-69 and expression. 60-6460-64 0 2.5 55-5955-59 Increase in the hottest day 50-5450-54 2 temperature, Celsius 45-4945-49 Closed Autocracies 40-4440-44 Do not even hold multiparty 35-3935-39 elections for the chief executive. 30-3430-34 Increase in the longest annual 25-2925-29 drought by 2.5 days or more 20-2420-24 a Varieties of Democracy, 2020. The 15-1915-19 number of countries included in this 10-1410-14 study may not equal the number listed f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 5-95-9 separately under “Selected Regions Increase in major International Climate and Environmental Research. 0-40-4 and Countries. hurricane activity Graphic: Pardee Center University of Denver. 806040200020406080806040200020406080 MillionMillion abc United Nations Population Division. | Oxford Economics. | World Religion Database. 135

GLOBAL TRENDS2040 A MORE CONTESTED WORLD EAST ASIA AND PACIFIC SOUTHEAST ASIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million) b % GDP PER CAPITA 0 36.9 100 US$ at purchasing 2020 2040 2020 b 1 MANILA, PHILIPPINES 18.6 power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $11.8K $24.5K a 4.1 2 JAKARTA, INDONESIA 13.7 GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3 BANGKOK, THAILAND 12.7 c Information globalization ratinge RELIGION 0 82.9 Liberal Democracies 1 = low high = 100 4 HO CHI MINH CITY, VIETNAM 12.2 2020 % % % % 37.2 26.1 22.9 4.4 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5 KUALA LUMPUR, MALAYSIA 10.5 2040 % % % % expression. Liberal democracies also c International Telecommunication Union. 37.0 25.0 24.8 3.8 uphold the rule of law and have d World Economic Forum. Muslim Buddhist Christian Ethnic constraints on the executive. e KOF Globalization Index. Religion 2 Electoral Democracies f 2020 2040 This map illustrates likely changes in maximum temperature, a a Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTURE AGE STRUCTURE and guarantee freedom of speech and expression, but do not uphold the 1980-2005 baseline—given conditions specified by the Under 15 15-64 65+ Under 15 15-64 65+ the rule of law and/or do not have United Nations’ Intergovernmental Panel on Climate Change constraints on the executive. (IPCC) under Representative Concentration Pathway (RCP) 4.5. 25.2% 67.7% 7.1% 20.3% 66.0% 13.7% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 5 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALE Age FEMALE MALE Age FEMALE Electoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+ 80+ Hold elections but they are not free, fair, HURRICANE droughts, these effects are multiplied. 75-79 75-79 and multiparty, and/or the government ACTIVITY 70-74 70-74 does not guarantee freedom of speech 65-69 65-69 and expression. 60-64 60-64 0 2.5 55-59 55-59 Increase in the hottest day 50-54 50-54 3 temperature, Celsius 45-49 45-49 Closed Autocracies 40-44 40-44 Do not even hold multiparty 35-39 35-39 elections for the chief executive. 30-34 30-34 Increase in the longest annual 25-29 25-29 drought by 2.5 days or more 20-24 20-24 a Varieties of Democracy, 2020. The 15-19 15-19 number of countries included in this 10-14 10-14 study may not equal the number listed 5-9 5-9 separately under “Selected Regions Increase in major 0-4 0-4 and Countries. hurricane activity 30 20 10 0 0 10 20 30 30 20 10 0 0 10 20 30 f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for Million Million International Climate and Environmental Research. Graphic: Pardee Center University of Denver. a b c 136 United Nations Population Division. | Oxford Economics. | World Religion Database.

GLOBAL TRENDS2040 A MORE CONTESTED WORLD EAST ASIA AND PACIFICSOUTHEAST ASIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million)b % GDP PER CAPITA 0 36.9 100 US$ at purchasing202020402020 b 1MANILA, PHILIPPINES18.6power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $11.8K$24.5K a 4.1 2JAKARTA, INDONESIA13.7GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3BANGKOK, THAILAND12.7c Information globalization ratinge RELIGION 0 82.9 Liberal Democracies 1 = low high = 100 4HO CHI MINH CITY, VIETNAM12.22020%%%% 37.226.122.94.4Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5KUALA LUMPUR, MALAYSIA10.52040%%%%expression. Liberal democracies also c International Telecommunication Union. 37.025.024.83.8uphold the rule of law and have d World Economic Forum. MuslimBuddhistChristianEthnicconstraints on the executive. e KOF Globalization Index. Religion 2 Electoral Democracies f 20202040 This map illustrates likely changes in maximum temperature, aa Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTUREAGE STRUCTUREand guarantee freedom of speech and expression, but do not uphold the 1980-2005 baseline—given conditions specified by the Under 1515-6465+Under 1515-6465+the rule of law and/or do not have United Nations’ Intergovernmental Panel on Climate Change constraints on the executive. (IPCC) under Representative Concentration Pathway (RCP) 4.5. 25.2% 67.7% 7.1%20.3% 66.0% 13.7% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was 5 TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALEAge FEMALEMALE AgeFEMALEElectoral Autocracies DROUGHT, AND associated with heat waves. When combined with longer 80+80+ Hold elections but they are not free, fair, HURRICANE droughts, these effects are multiplied. 75-7975-79 and multiparty, and/or the government ACTIVITY 70-7470-74 does not guarantee freedom of speech 65-6965-69 and expression. 60-6460-64 0 2.5 55-5955-59 Increase in the hottest day 50-5450-54 3 temperature, Celsius 45-4945-49 Closed Autocracies 40-4440-44 Do not even hold multiparty 35-3935-39 elections for the chief executive. 30-3430-34 Increase in the longest annual 25-2925-29 drought by 2.5 days or more 20-2420-24 a Varieties of Democracy, 2020. The 15-1915-19 number of countries included in this 10-1410-14 study may not equal the number listed 5-95-9 separately under “Selected Regions Increase in major 0-40-4 and Countries. hurricane activity 3020100010203030201000102030 f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for MillionMillion International Climate and Environmental Research. Graphic: Pardee Center University of Denver. abc United Nations Population Division. | Oxford Economics. | World Religion Database. 137

GLOBAL TRENDS2040 A MORE CONTESTED WORLD EAST ASIA AND PACIFIC OCEANIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million) b % GDP PER CAPITA 0 60.2 100 US$ at purchasing 2020 2040 2020 b 1 MELBOURNE, AUSTRALIA 6.1 power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $34.0K $43.3K a 3.4 2 SYDNEY, AUSTRALIA 5.9 GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3 BRISBANE, AUSTRALIA 2.9 c Information globalization ratinge RELIGION 2 87.5 Liberal Democracies 1 = low high = 100 4 PERTH, AUSTRALIA 2.4 2020 % % % % 65.1 25.3 2.4 2.2 Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5 AUCKLAND, NEW ZEALAND 1.9 2040 % % % % expression. Liberal democracies also c International Telecommunication Union. 62.1 27.8 2.5 2.4 uphold the rule of law and have d World Economic Forum. Christian Agnostic/ Buddhist Muslim constraints on the executive. e KOF Globalization Index. Atheist 2 Electoral Democracies f 2020 2040 This map illustrates likely changes in maximum temperature, a a Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTURE AGE STRUCTURE and guarantee freedom of speech the 1980-2005 baseline—given conditions specified by the and expression, but do not uphold United Nations’ Intergovernmental Panel on Climate Change Under 15 15-64 65+ Under 15 15-64 65+ the rule of law and/or do not have (IPCC) under Representative Concentration Pathway (RCP) 4.5. constraints on the executive. 23.6% 63.6% 12.8% 20.9% 62.3% 16.8% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALE Age FEMALE MALE Age FEMALE Electoral Autocracies 2 DROUGHT, AND associated with heat waves. When combined with longer 80+ 80+ HURRICANE droughts, these effects are multiplied. 75-79 Hold elections but they are not free, fair, 75-79 and multiparty, and/or the government ACTIVITY 70-74 70-74 does not guarantee freedom of speech 65-69 65-69 and expression. 60-64 60-64 0 2.5 55-59 55-59 Increase in the hottest day 50-54 50-54 0 temperature, Celsius 45-49 45-49 Closed Autocracies 40-44 40-44 Do not even hold multiparty 35-39 35-39 elections for the chief executive. 30-34 30-34 Increase in the longest annual 25-29 25-29 drought by 2.5 days or more 20-24 20-24 a Varieties of Democracy, 2020. The 15-19 15-19 number of countries included in this 10-14 10-14 study may not equal the number listed f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 5-9 5-9 separately under “Selected Regions Increase in major International Climate and Environmental Research. 0-4 0-4 and Countries. hurricane activity Graphic: Pardee Center University of Denver. 2 1 0 0 1 2 2 1 0 0 1 2 Million Million a b c 138 United Nations Population Division. | Oxford Economics. | World Religion Database.

GLOBAL TRENDS2040 A MORE CONTESTED WORLD EAST ASIA AND PACIFICOCEANIA a Internet Users (of population)c FIVE LARGEST CITIES By population in 2035 (million)b % GDP PER CAPITA 0 60.2 100 US$ at purchasing202020402020 b 1MELBOURNE, AUSTRALIA6.1power parity 2019 Digital skills of workforce ratingd TYPES OF READINESS FOR $34.0K $43.3K a 3.4 2SYDNEY, AUSTRALIA5.9GOVERNMENTS DIGITAL ECONOMY 1 = not at all to a great extent = 7 Number of countries 3BRISBANE, AUSTRALIA2.9c Information globalization ratinge RELIGION 2 87.5 Liberal Democracies 1 = low high = 100 4PERTH, AUSTRALIA2.42020%%%% 65.125.32.42.2Hold free and fair multiparty elections and guarantee freedom of speech and b 2019 or latest available data. 5AUCKLAND, NEW ZEALAND1.92040%%%%expression. Liberal democracies also c International Telecommunication Union. 62.127.82.52.4uphold the rule of law and have d World Economic Forum. ChristianAgnostic/BuddhistMuslimconstraints on the executive. e KOF Globalization Index. Atheist 2 Electoral Democracies f 20202040 This map illustrates likely changes in maximum temperature, aa Hold free and fair multiparty elections drought, and hurricane/cyclone activity in 2040—compared to AGE STRUCTUREAGE STRUCTURE and guarantee freedom of speech the 1980-2005 baseline—given conditions specified by the and expression, but do not uphold United Nations’ Intergovernmental Panel on Climate Change Under 1515-6465+Under 1515-6465+the rule of law and/or do not have (IPCC) under Representative Concentration Pathway (RCP) 4.5. constraints on the executive. 23.6% 63.6% 12.8%20.9% 62.3% 16.8% While several different temperature measures could have been 2040 used, maximum temperature on the hottest day of the year was TEMPERATURE, chosen given the severe human, agricultural, and economic costs MALEAge FEMALEMALE AgeFEMALEElectoral Autocracies2 DROUGHT, AND associated with heat waves. When combined with longer 80+80+ HURRICANE droughts, these effects are multiplied. 75-79 Hold elections but they are not free, fair, 75-79 and multiparty, and/or the government ACTIVITY 70-7470-74 does not guarantee freedom of speech 65-6965-69 and expression. 60-6460-64 0 2.5 55-5955-59 Increase in the hottest day 50-5450-54 0 temperature, Celsius 45-4945-49 Closed Autocracies 40-4440-44 Do not even hold multiparty 35-3935-39 elections for the chief executive. 30-3430-34 Increase in the longest annual 25-2925-29 drought by 2.5 days or more 20-2420-24 a Varieties of Democracy, 2020. The 15-1915-19 number of countries included in this 10-1410-14 study may not equal the number listed f Data: Clemens Schwingshackl, Jana Sillman, and the Centre for 5-95-9 separately under “Selected Regions Increase in major International Climate and Environmental Research. 0-40-4 and Countries. hurricane activity Graphic: Pardee Center University of Denver. 210012210012 MillionMillion abc United Nations Population Division. | Oxford Economics. | World Religion Database. 139

SELECTED REGIONS AND COUNTRIES Latin America and Caribbean Sub-Saharan Africa Antigua and Dominican Paraguay Angola Eritrea Niger Barbuda Republic Peru Benin Eswatini Nigeria Argentina Ecuador Saint Kitts and Nevis Botswana Ethiopia Rwanda Bahamas, the El Salvador Saint Lucia Burkina Faso Gabon Sao Tome Barbados Grenada Saint Vincent and Burundi Gambia, the and Principe Belize Guatemala the Grenadines Cabo Verde Ghana Senegal Bolivia Guyana Suriname Cameroon Guinea Seychelles Brazil Haiti Trinidad and Tobago Central African Guinea-Bissau Sierra Leone Chile Honduras Uruguay Republic Kenya Somalia Colombia Jamaica Venezuela Chad Lesotho South Africa Costa Rica Mexico Comoros Liberia South Sudan Cuba Nicaragua Cote d’Ivoire Madagascar Sudan Dominica Panama Congo, Democratic Malawi Tanzania Republic of the Mali Togo Congo, Republic Mauritania Uganda Europe of the Mauritius Zambia Djibouti Mozambique Zimbabwe Albania Greece Poland Equatorial Guinea Namibia Austria Hungary Portugal Belgium Iceland Romania South Asia Bosnia and Ireland Serbia Herzegovina Italy Slovakia Afghanistan Maldives Bulgaria Kosovo Slovenia Bangladesh Nepal Croatia Latvia Spain Bhutan Pakistan Cyprus Lithuania Sweden India Sri Lanka Czechia Luxembourg Switzerland Denmark North Macedonia Turkey Estonia Malta United Kingdom Finland Montenegro East Asia and Pacific France Netherlands Northeast Asia Germany Norway China North Korea Japan Republic of Korea Russia and Eurasia Mongolia Taiwan Armenia Kazakhstan Tajikistan Southeast Asia Azerbaijan Kyrgyzstan Turkmenistan Belarus Moldova Ukraine Brunei Laos Thailand Georgia Russia Uzbekistan Burma Malaysia Timor-Leste Cambodia Philippines Vietnam Middle East and North Africa Indonesia Singapore Algeria Kuwait Qatar Oceania Bahrain Lebanon Saudi Arabia Australia Micronesia, Papua New Guinea Egypt Libya Syria Cook Islands Federated Samoa Iran Morocco Tunisia Fiji States of Solomon Islands Iraq Oman United Arab Emirates Kiribati Nauru Tonga Israel Palestinian Yemen Marshall Islands New Zealand Tuvalu Jordan territories Niue Vanuatu Palau 140 GLOBAL TRENDS 2040

TABLE OF GRAPHICS STRUCTURAL FORCES Demographics and Human Development Overview Graphic .............................................................................................................................. 17 Sub-Saharan Africa Likely to Dominate Population Growth in Coming Decades ..................... 19 Urbanization by Country Income Level ......................................................................................... 20 Progress on Human Development ................................................................................................. 21 Middle Class and Household Debt in the 30 Most Populous Countries, 2000 and 2018 ........25 Income Inequality by Country ......................................................................................................... 26 Environment Overview Graphic ............................................................................................................................. 31 Global Rise in Carbon Dioxide and Average Temperature .......................................................... 32 Annual Total CO2 Emissions by Region .......................................................................................... 37 Economics Overview Graphic ............................................................................................................................. 43 National Debt as a Percentage of Gross Domestic Product (GDP) (two charts) ..................44-45 Regional Trade Agreements in Force ............................................................................................. 48 Economic Weight Shifting to Asia ................................................................................................... 51 Forecast Share of World GDP ......................................................................................................... 51 Economic Activity Forecast to Tilt to Asia ...................................................................................... 51 Technology Overview Graphic ............................................................................................................................. 55 Trajectory of Arti昀椀cial Intelligence .................................................................................................. 58 Bene昀椀ts and Risks of Advanced Biotechnology Applications ...................................................... 61 EMERGING DYNAMICS Societal Dynamics: Disillusioned, Informed, and Divided Overview Graphic ............................................................................................................................. 69 Trust Gap, 2012-21 ........................................................................................................................... 71 Selected Worldwide Religious Commitment: Prayer and Wealth ............................................... 72 Growth in Mobile Digital Communication ..................................................................................... 75 State Dynamics: Tensions, Turbulence, and Transformation Overview Graphic ............................................................................................................................. 79 Democratic Governance Declining Globally .................................................................................. 84 Government Use of Digital Technology ......................................................................................... 87 International Dynamics: Growing More Contested, Uncertain, and Con昀氀ict Prone Overview Graphic ............................................................................................................................. 91 Outlook for International Norms ................................................................................................. 101 Major Power Competition Increasing the Likelihood of Kinetic Con昀氀ict .................................103 Spectrum of Con昀氀ict ...................................................................................................................... 104 Intrastate Versus Interstate Con昀氀ict Trends ............................................................................... 105 A MORE CONTESTED WORLD 141

GT 2040 ACKNOWLEDGEMENTS In researching and drafting Global Trends, the provided throughout this project. Their National Intelligence Council (NIC) received contributions ranged from participation invaluable support from a broad and diverse in expert workshops to reviewing drafts list of contributors, including think tanks, to drafting speci昀椀c content for regional universities, consultants, business leaders, papers, building block research papers, and individual scholars and experts, students, and Global Trends. The Department of State’s colleagues inside and outside government. Bureau of Intelligence and Research played a While we cannot thank every contributor, particularly prominent role in hosting dozens we would like to acknowledge below of workshops and exchanges with outside those organizations and individuals whose experts, a collaboration that substantially contributions were particularly important for improved the Global Trends process. We also helping shape and re昀椀ne Global Trends. deeply appreciate the guidance and support Many people contributed to the research of Embassy country teams, which provided and production of Global Trends. We thank their own local and national expertise and Terree Haidet for leading our scenarios ensured we met with the widest possible development process. SFG is heavily range of informed experts. The NIC is grateful indebted to the outreach support and can- for many partners, including SAIC, Leidos, do attitude of the NIC’s analytic program and Centra Technologies for providing key managers from Booz Allen Hamilton. Graphics conference support and convening a series of maestro Mark Hernandez led the design of analytic simulations, scenario exercises, and Global Trends cover to cover and patiently workshops that tackled key uncertainties in worked with the NIC to produce creative, Global Trends. detailed, and illustrative graphics and We wish to thank the Brookings Institution, supplementary materials. Center for a New American Security, Center for We are indebted to our partners throughout Strategic and International Studies, Council on the US Government, including but not limited Foreign Relations, The Economist Intelligence Unit, Institute for the Future, International to o昀케cers at the Central Intelligence Agency, Institute for Strategic Studies, National Department of State, Department of Energy, Science Foundation, Oxford Economics, US Agency for International Development, Pardee Center for International Futures, RAND Department of Treasury, Department of Corporation, Royal Institute of International Defense, National Security Agency, and O昀케ce of the Director of National Intelligence for A昀昀airs, Strategic Business Insights, and The the time and expertise that they generously Conference Board for conducting research and 142 GLOBAL TRENDS 2040 Images / Bigstock

delivering commissioned assessments on key An essential component of this project was functional trends and scenarios development. our conversations with audiences all around the world. We are grateful to the academics, The NIC bene昀椀ted from invaluable discussions with faculty and students at a range of business leaders, government o昀케cials, civil universities, including Georgetown University, society organizations, journalists, and futurists Johns Hopkins University, Harvard University, in various corners of the globe who took the Notre Dame, Stanford University, Tufts time to share their ideas and perspectives University, the University of Pennsylvania, with us. the University of Denver, University of Texas We also would like to individually recognize at Austin, and the University of Virginia. We and thank the following contributors: also received key feedback and insights in Professor John Ikenberry of Princeton our virtual discussion with students from University co-led workshops with SFG on key universities a昀케liated with the Intelligence questions and provided critical feedback and Community’s Centers for Academic Excellence. support throughout three years of research, We would also like to thank the Columbia as did fellow scholars in their personal Heights Educational Campus in Washington, capacity: Amitav Acharya, Robert Art, Sheri DC for hosting a conversation with students Berman, Bear Braumoeller, Zach Cooper, Dale about the project early in the process. Copeland, Matt Daniels, Henry Farrell, Tanisha Global Trends bene昀椀ted tremendously from Fazal, Martha Finnemore, Harold James, Robert exchanges with our international foresight Jervis, Miles Kahler, David Kang, Jonathan partners, including Canada’s Policy Horizons, Kirchner, Jacob Kirkegaard, Charles Kupchan, the European Strategy and Policy Analysis Je昀昀 Legro, Mike Mastanduno, Kate McNamara, System, Finnish Innovation Fund (SITRA), the John Mearsheimer, Jonathan Moreno, Finnish Prime Minister’s O昀케ce and Foreign Abraham Newman, John Owen, Barry Posen, Ministry, the Organization for Economic Co- Mira Rapp-Hooper, Douglas Rediker, Elizabeth operation and Development (OECD) Strategic Saunders, Randy Schweller, Jack Snyder, Foresight Unit, the Swedish Foreign Ministry Manfred Steger, Constanze Stelzenmueller, and National Defense College, the Singapore Monica Toft, Jessica Chen Weiss, William Centre for Strategic Futures, and the UK Wohlforth, Tom Wright, Ali Wyne, and Keren Ministry of Defense Development, Concepts, Yarhi-Milo. and Doctrine Centre. A MORE CONTESTED WORLD 143 Images / Bigstock

Many scholars and other experts provided Jack Goldstone, Anna Grzymala-Busse, Peter critical inputs and reviews of early drafts and Huybers, Will Inboden, Azza Karam, Rima outlines, including: Je昀昀 Alsott, Daniel Byman, Kawas, Jason Klocek, Peter Mandaville, Doug Thomas Carothers, Gerald Cohen, David Mandell, James Manyika, Elizabeth Moore, Dollar, Roz Engel, Steven Feldstein, Martha DJ Patil, Elizabeth Prodromou, Heidi Crebo- Finnemore, Frank Gavin, Jack Goldstone, David Rediker, Jennifer Sciubba, Rogers Smith, Gordon, Cullen Hendrix, John Ikenberry, Chris Shannon Smith, Kristina Stöeckl, Adam Kircho昀昀, Linc Krause, Kristin Lord, Michael Wasserman, Erin Wilson, Andreas Wimmer, Mastanduno, Jason Matheny, John McLaughlin, Tamara Wittes, and Erol Yayboke. Kevin Nealer, Tara O’Toole, Julia Philipps, Sumit Ganguly at the University of Indiana Monica Toft, Adam Wasserman, Steve Weber, assembled a team of regional experts who and Tom Wright. provided 昀椀ve and 20-year outlooks for Global Other scholars wrote key papers, organized Trends: Amitav Acharya, Cornelius Adebahr, workshops, or presented in their individual Clement Adibe, Claudia Avellaneda, Neil capacity on a range of crucial topics, including DeVotta, Michelle Dunne, Eric Farnsworth, Robert Bentley, Sheri Berman, Evan Berry, Timothy Hellwig, Steven Heydemann, Feisal Sam Brannan, Hal Brands, Matt Carnes, José Amin Istrabadi, Sameer Lalwani, Raúl Madrid, Casanova, Richard Cincotta, Jack Chow, Alan Saadia Pekkanen, William Reno, Ali Riaz, David Cooperman, Keith Darden, Peter Feaver, Erica Shambaugh, and Elizabeth Threlkeld. Frantz, Francis Fukuyama, Bonnie Glaser, 144 GLOBAL TRENDS 2040 Images / Bigstock

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