{"id":639528,"date":"2019-03-15T09:00:33","date_gmt":"2019-03-15T08:00:33","guid":{"rendered":"http:\/\/ieinsights.cherrypickpre.es\/?post_type=articles&p=639528"},"modified":"2019-03-15T09:25:01","modified_gmt":"2019-03-15T08:25:01","slug":"a-strategic-vision-for-the-economic-challenges-of-the-21st-century","status":"publish","type":"articles","link":"https:\/\/www.ie.edu\/insights\/articles\/a-strategic-vision-for-the-economic-challenges-of-the-21st-century\/","title":{"rendered":"A Strategic Vision for the Economic Challenges of the 21st Century"},"featured_media":642767,"template":"","meta":{"_has_post_settings":[]},"schools":[29,32],"areas":[16,19,24,26],"subjects":[],"class_list":["post-639528","articles","type-articles","status-publish","has-post-thumbnail","hentry","schools-business-school","schools-global-and-public-affairs","areas-competitiveness-growth","areas-global-affairs-law","areas-strategy","areas-technology"],"custom-fields":{"wpcf-article-leadin":["Phenomena such as globalization, demographic shifts, and even climate change are influencing the global economy, creating uncertainties regarding the future and demanding urgent attention. Rather than focusing on short-term concerns, we should attend to structural changes that will have a global impact and shape the economy in the long run."],"wpcf-article-body":["In the 1970s and 1980s, two issues\u2014oil and poverty\u2014dominated practically every macroeconomic analysis. Nowadays, multiple variables come into play, including the technological<\/a> revolution, globalization<\/a>-related phenomena, and demographic changes. On the demographic front, many countries are starting to feel the symptoms of an aging and shrinking workforce. At the same time, migration faces rising levels of social and political rejection, particularly in Europe and the United States, despite being necessary to compensate for population decline and falling birthrates. Meanwhile, Africa and, to a lesser extent, Asia and Latin America will see a demographic explosion over the next 50 years, driving even more migration towards the aging and increasingly xenophobic North. Host countries will find themselves swallowing ever larger doses of realism to address this intractable problem.\r\n\r\nThe aging of the population presents another complex issue: the sustainability of pay-as-you-go pension systems, which are verging on collapse in many countries. Governments must urgently start working to solve this rapidly approaching crisis.\r\n
The fruits of several decades\u2019 worth of economic growth and welfare-state policies have been wiped out by the financial crisis, imminent technological changes, and competition from the South.<\/blockquote>\r\nUnstoppable globalization<\/strong>\r\n\r\nMigratory phenomena have been exacerbated by globalization<\/a>\u2014a process that is here to stay and which, in economic terms, has created winners and losers. The winners include inhabitants of the regions that have managed to insert themselves into the flows of global commerce. In these regions, misery has abated and famine\u2014a regular occurrence not so long ago\u2014has all but disappeared. However, as offshoring has gained momentum and competition among workers has surged, large segments of the working and middle classes of the most highly industrialized nations have disappeared.\r\n\r\nAlthough globalization<\/a> has narrowed the North-South gap, it has also fueled the rise of inequality in the North. The fruits of several decades\u2019 worth of economic growth<\/a> and welfare-state policies have been wiped out by the financial<\/a> crisis, imminent technological<\/a> changes, and competition from the South.\r\n\r\nCapital gains have grown exponentially over the past three decades\u2014even during the crisis\u2014and these riches have accumulated in small segments of the population. Meanwhile, wages have stagnated or fallen, destroying the wealth of large swathes of the middle class, especially in Europe and the United States. These trends explain the various populist movements that have arisen over the past decade in response to social discontent.\r\n\r\nGlobalization<\/a> has also created a world that is increasingly homogeneous, both economically and culturally. The main shopping streets of Madrid, Rome, and London have been colonized by the same multinational brands, making them virtually indistinguishable from one another. The same thing is happening with culture and customs, which are becoming more uniform, more assimilated, and less locally specific.\r\n\r\nBut globalization<\/a> has done more than rewrite the social, cultural, and economic rules. Digitalization\u2014and the imminent technological<\/a> revolution it entails\u2014will reconfigure labor markets and production models as we know them today.\r\n
As concerns about climate change lead to the replacement of fossil fuels with clean energy sources, certain countries and regions that have shaped the geopolitics of energy for the past five decades will be pushed into the background.<\/blockquote>\r\nMachines and algorithms<\/strong>\r\n\r\nWe are looking at a future in which algorithms and machines will replace millions of jobs all over the world, especially those involving the most routine tasks. At the same time, we will see rising demand for skill sets unlike anything required today. The big question of the coming decades is whether or not there will be work for everyone. If there is not enough work, we will need to figure out what to do with\u2014and how to support\u2014those who are left behind by this revolution because they lack the newly demanded skills.\r\n\r\nOn top of all that, there is no guarantee that today\u2019s successful production models will survive. Digitalization is enabling new players to knock down barriers to entry that have traditionally protected many sectors and industries. On this new playing field, communication technologies<\/a> are playing a key role by producing a previously unheard-of phenomenon: consumer empowerment. Armed with complete information and eager to share it with others, consumers are no longer passive subjects in their dealings with companies. Indeed, consumers have positioned themselves firmly at the center of the commercial relationship. This empowerment also has a political dimension: today\u2019s politicians use Twitter to communicate, but citizens can also exercise influence, join forces, make decisions, and topple governments with their tweets and texts.\r\n\r\nAnother aspect of today\u2019s global<\/a> scenario is the rise of emerging countries and the shifting of economic power to the Pacific Rim. Asian countries have benefited from this shift, and China in particular has risen from local actor to global power in just a few decades. Indeed, China is not satisfied with mere economic power; it also wants to be a leader in geopolitics, technology<\/a>, space exploration, and\u2014naturally\u2014military might.\r\n\r\nTo achieve these goals, China needs to guarantee its access to natural resources and its control<\/a> over supply chains. It secures these advantages by funding\u2014and driving into debt\u2014numerous African and Southeast Asian countries, drawing accusations of colonialism 2.0. But China\u2019s rise and expansion have also generated tensions with regional powers like Japan and the lone global<\/a> superpower: the United States. The so-called trade war is clearly a first step towards\u2014or a pretext for\u2014blocking China from supplying Western technology<\/a>.\r\n
Digitalization\u2014and the imminent technological revolution it entails\u2014will reconfigure labor markets and production models as we know them today.<\/blockquote>\r\nAt any rate, China is reshaping the landscape of power in the 21st<\/sup> century. As concerns about climate change lead to the replacement of fossil fuels with clean energy sources, certain countries and regions that have shaped the geopolitics of energy for the past five decades will be pushed into the background. With this replacement process already underway, the fracking revolution has irrevocably altered the status quo of the hydrocarbon market, making the United States once again the world\u2019s top oil and gas producer.\r\n\r\nThe imminent changes driven by technological<\/a> development, demographic shifts, climate change, and globalization<\/a> are getting little attention from the world\u2019s governments. The Western economies\u2019 prevailing short-term vision\u2014which disregards factors poised to shape the economy over the coming decades\u2014cannot help us address the great social and economic challenges of the future. The welfare-state model provides an instructive example: we know that the current situation is unsustainable, but government officials refuse to undertake reforms, for fear of the political cost.\r\n\r\nThe economy, firmly rooted in short-term political considerations, has been unable to offer real solutions to the challenges that lie ahead.\r\n\r\n \r\n\r\n\u00a9 IE Insights."],"wpcf-article-extract-enable":["1"],"wpcf-article-extract":["By Juan Carlos Mart\u00ednez L\u00e1zaro<\/strong>. Phenomena such as globalization, demographic shifts, and even climate change are influencing the global economy, creating uncertainties regarding the future and demanding urgent attention."],"wpcf-article-summary-enable":["1"],"wpcf-article-summary":["More than ever before, the global economy is being shaped by numerous variables associated with globalization and the technological revolution. The economic development of countries depends largely on these factors, but a strategic vision capable of addressing future challenges is sorely lacking. Climate change, migrant crises, the future job market, and the welfare-state model are just a few of the pressing issues that are generating uncertainty in societies all over the world. At the same time, China\u2019s growth and long-term strategy are creating geopolitical tensions that will affect the entire planet."]},"_links":{"self":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles\/639528","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/articles"}],"about":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/types\/articles"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media\/642767"}],"wp:attachment":[{"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/media?parent=639528"}],"wp:term":[{"taxonomy":"schools","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/schools?post=639528"},{"taxonomy":"areas","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/areas?post=639528"},{"taxonomy":"subjects","embeddable":true,"href":"https:\/\/www.ie.edu\/insights\/wp-json\/wp\/v2\/subjects?post=639528"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}