Five Macro Trends You Need to Watch

Each year my colleagues and I at the Global Business Policy Council identify five underappreciated macro trends we believe will play an outsize role in shaping the global business outlook and operating environment over the next five years. Likely none of these is new to you, but take the time to read a bit more deeply and I think you'll realize you may not quite have fully appreciated their potential impact.

• “Islandization” of the global economy. After a quarter century of rapid globalization, restrictions on immigration, trade, and other cross-border flows are now increasing. A new phase—which we call “islandization”—has begun, marked by growing levels of nationalism, protectionism, and parochialism. While the United States is at the center of this trend, many of the countries leading the globalization charge are also quietly islandizing, creating a dramatically different operating environment for global businesses and governments.
• Growing debt overhang. Driven up by historically low interest rates, debt levels around the world have risen dramatically and now stand at all-time highs. These debt obligations are on increasingly shaky ground as a result of both their sheer size and key policy shifts under way in the United States and China. An adjustment—orderly or more likely otherwise—will occur in the near to medium term.
• Dawning of a new urban transportation age. Hyper-urbanization is heightening congestion levels in cities around the world as urban areas become larger, denser, and more complex to manage. The age of the automobile may be ending as cities adopt innovative new technologies and use more traditional mass and individual transit methods to enable smarter and more sustainable urban transportation and growth.
• Tech metals supply crunch. As the global economy rapidly digitizes, dependency on a limited number of crucial minerals has grown proportionally. The result of this rapidly rising demand is a pronounced supply crunch. This shortage will persist in the short to medium term, creating supply chain risks and generating price volatility, but long-term production will grow as new sources come online.
• Rising threat of superbugs. Microorganisms that have become resistant to multiple antimicrobial drugs, the geographical expansion of disease zones, and the reemergence of previously dormant diseases are killing hundreds of thousands of people each year. This threat will continue to increase until public and private sector efforts under way to combat these microbes are ready for large-scale deployment.