One of the great megatrends of our era is the phenomenon of globalisation and deepening interconnectedness. Unfortunately, it is quite paradoxical that some people really want to pull back the hand of the clock. It has become a virtual cliché that our world has truly become a “global neighbourhood”. The current administration of Donald Trump has taken measures that look like a retreat from globalisation, notably the revocation of the Atlantic Trade Agreement with Asia and Europe. The Brexit misadventure is another test-case of whether European integration and the tendency towards regionalism will survive. But we believe that the forces of globalisation will survive. This is because global capital will always need access to bigger markets and global finance will always be attracted to cross-border locations that offer better returns on investments.
New ICT technologies have the capacity to spur new entrepreneurial and business opportunities in unprecedented ways. According to Ernst & Young: “Fuelled by the convergence of social, mobile, cloud, big data and growing demand for anytime anywhere access to information, technology is disrupting all areas of the business enterprise. Disruption is taking place across all industries and in all geographies. Enormous opportunities exist for enterprises to take advantage of connected devices enabled by the ‘Internet of Things’ to capture vast amounts of information, enter new markets, transform existing products, and introduce new business and delivery models”.
This will also mean that the threat of cyber wars will increase. Indeed, cloud-based services and third-party management and storage is heightening risks for firms and nations. Competition is driving digital espionage as rivals struggle to know what their opponents are doing. China, we understand, has thousands of experts working on digital espionage alone. They aim to spy on foreign companies and to steal technology in order to gain competitive advantage.
Linked to this is the erosion of privacy. The idea of liberty since John Locke and John Stuart Mill is premised on the notion of respect for the privacy of the individual. In our 21st digital industrial civilisation, this right will come increasingly under threat. To all intents and purposes, we are entering a new Orwellian Age when individuals and families will have no secrets to hide from prying states and firms.
Technology also plays its own overwhelming role in bringing people together across regions and oceans. Global interconnectedness is likely to deepen in the years ahead. More recently, the bulk of African countries have signed up to the African Continental Free Trade Area, with potential to become the largest free-trade area in the world, generating an additional $1 trillion to the African economy. Fast-racking African integration will require deployment of new technologies that link individuals, firms and markets.
The reality of our interconnected world has its good as well as negative fallouts. On the positive side, it brings different communities closer together while opening up opportunities for new ideas as well as new networks and opportunities. It will further reduce barriers to trade while encouraging increasingly sophisticated cross-border investment instruments. What these changes will also portend is more choice for “prosumers” in terms of lifestyles, entertainment and consumption. The primacy of the individual in mass consumer society will become even more pronounced.
But there are risks. Just as in the past globalisation, has pushed some sections of the world into greater poverty and inequality Nations that fail to realign their national systems to hook on to global networks of economic opportunity will regress while the life-chances of their people will diminish. In addition, financial and banking contagion effects will become more difficult to contain in future. Radical terrorists, for example, can recruit followers using social media and other forms of electronic communications. Policing borders, patrolling cyber criminals and keeping out radical extremist ideas will become a nightmare for national regulators and governments alike.
At the heart of the new global economy will be the primacy of knowledge capital. Those nations that will be ahead of the competition will be those that invest in human capital and in research and innovation. People are the foundation for the new wealth of nations. Countries that invest in training and skills, particularly in science, technology, engineering and mathematics – the STEM disciplines — will be ahead of the curve. At the same time, there will be increasing competition for talents. In an increasingly mobile world, those with skills will move to those eco-systems where talent is rewarded. In the words of the global consulting firm Ernst & Young, “In the global marketplace, the war for talent will become increasingly fierce, necessitating greater workforce diversity to secure competitive advantage”.
What all this calls for is for developing countries such as ours to craft new development strategies anchored on a diversified economy, economic institutions that align with global norms and resilient financial and banking systems that can resist the pressures of global financial contagion. We will also have to be strong on cyber-warfare and cyber-security to ensure that radical extremist ideas are frozen out and cyber criminals are easily detected, thwarted and prosecuted.
By 2030 the global information revolution would have reached the mature stage of consolidation. The so-called “digital divide” would have been reduced. Rudimentary technologies such as robotics, nanotechnology and sustainable energy systems would have begun to flower. Intercontinental maglev trains traversing oceans should be possible. Supersonic flights will be back after the disappearance of the French Concorde. Electric cars would have become more dominant even as hydrocarbon fuelled vehicles would be in their way out. The Age of Big Data would reign supreme, including use of blockchain in business, finance and public communications. Unless governmental authorities take measures to curtail it, electronic money will threaten the survival of some national currencies.
At the heart of the new global economy will be the primacy of knowledge capital. Those nations that will be ahead of the competition will be those that invest in human capital and in research and innovation
Linked to this would be expansion of the worldwide web and the global information highway. According to one report: “The exponential growth in the volume and speed of access to information and communication has numerous effects. It can generate new markets and challenge existing institutions. Unlike some other trends, there are no clear indications of enabling technologies shaping the future of government more so in one region than another. While developed countries may have greater access to many of these technologies at present, many technological innovations provide ‘leapfrog’ opportunities for less developed countries to capitalize on new and changing markets. For example, regions with no previous dense telecommunications networks, such as Africa, have benefited more than those countries which already had fixed-line telecommunications.”
The technologies of the future will shape transport, communication and energy systems. Manufacturing will also be greatly influenced by robotics, with all the implications for labour and employment. Increasing sophistication in financial technology will increase risks for cyber security particularly in the banking and investment world. There will be further advances in biotechnology by way of manipulation of DNA to produce new organisms will novel features. There will also be production of artificial tissue and advanced nanotechnology for surgery and remote monitoring of patients.
Governments that care about their people will accelerate policies to manage the demands and expectations of youth. Prudent policies to care for the elderly and for pensioners will also have to be designed. Creative and effective delivery solutions will have to be structured to ensure that the needs of the youth, the middle class and the elderly are effectively addressed.
More vigilance will also have to be given to cyber-security to ensure that banking systems are safe and technology-based digital money transfers are secure. Just as new jobs will emerge in technology and communications, many more will be lost. Governments must therefore invest in human capital and skills while updating the technical competencies of their people to ensure that they are well placed to enjoy gainful employment in our emerging global competitive economy.
Since 1970, our economy has been driven by oil. Petroleum, unfortunately, has proven to be more of a curse than a blessing; a corrupt petrodollar rentier state that is unproductive and uncompetitive. Although oil makes up only 10 percent of our GDP, it still accounts for 50 percent of revenues and 94 percent of total foreign earnings. But oil is not only a finite, exhaustible commodity; the advanced industrial economies have given orders to their auto manufacturers to manufacture only electrical vehicles. We must embrace the new knowledge economy while building a post-oil economy.