THE FUTURE? My predictions of what might await us in the 2020’s

We are closing another decade and starting a new one, and as always, we wonder what’s in store for the future. In this article I take out my broken crystal ball and look at what I think could be possible futures in the coming 10 years. I have lived through the 70’s, 80’s, 90’s, 00’s, and now the 10’s. If this journey has taught me anything, it is that change is slow until it’s not. Let’s see how well I do. BTW, this is for fun and to generate discussion and thought. Please let me know what you think the future holds.

THE NEXT 10 YEARS: Chasing the Biggest Macro-trends

Macro-trend 1: Global Climate Change Gets Real

Perhaps the biggest global problem we face today is curbing, coping with, and mitigating global climate change. To prevent the worst effects of global warming, the world needed to act at least two decades ago, and today we are in dire straits. I guess most humans are procrastinators and we may ultimately need the crisis of the last minute to do anything with conviction. So, here we are looking at the next ten years (last second if you ask me) and how this mess might pan out.

I foresee a real disparity in reactions to global climate change. The true story of future Climate Change is really the story of China and the US. Between the two countries we represent 41.8% of global Green House Gas (GHG) emissions. However, China’s per capita CO2 emissions is just 6.98 tons/yr/per person, while the US is 16.24 tons/yr/per person. China has developed a much more efficient economy than the US, but that is because the country is still on a path of development, with a large population with living standards that are much lower than those in most parts of the US.

Another important framework in the discussion of Global Climate Change is who is responsible for doing something about it. Although currently China is the largest annual GHG emitter, the accumulated GHG in the atmosphere, the one that is causing today’s and tomorrow’s, was mostly emitted by industrialized western nations. In numbers, the US has contributed 25% and Europe 33% of the GHG in the atmosphere right now, while China has historically contributed 12.7%.

These figures show that the questions of who is ultimately responsible to pay the costs of cleaning up the GHGs is complicated by the dynamics of economic growth and history.

In the 2020’s it is almost inevitable that we will see terrifying flooding, horrendous storms, brutal summers, and unusually cold winters. We will also see the spread of unusual diseases as vectors such as ticks, rats, deer, birds, insects, etc. have their populations crash or flourish under the new climate conditions. This will cause fear and demand for action. Lack of action will be seen as callous and immoral.

OUTCOMES:

• Children, teens and young professionals will start to look at the future bleakly and with desperate concern. This concern will spill into anger towards what is perceived as the callous impasse of government officials and large corporations that are unable to make changes fast enough without risking financial ruin. Politics will be positioned in the stark terms of survival or death, which can lead to violent conflicts. These conflicts will have different flavors depending on region and economic prospects. Traditionally rich and highly egalitarian countries with low poverty rates, will push for not just reducing, but reversing Global Climate Change. The idea of “terraforming” (changing the Earth's natural processes in order to make it more livable through the use of technology) will become more and more accepted and it could become a burgeoning multi-billion-dollar market by the end of the 20’s.
• In the developing world, the trade-off between escaping poverty, economic growth and the environment will lead to questions of responsibility for investments into climate mitigation, efficiency, resiliency, and reductions in GHGs. China, in particular will continue to transform its economy away from energy intensive manufacturing and towards Artificial Intelligence (A.I.) and the marketing of digitally cognitive services (both higher margin products). India will follow suit, leap frogging manufacturing altogether in their development path. This could result in maintaining emissions per capita relatively low. However, as people move into the middle class, their expectations of comfort and services will require more energy than today’s consumption and this will result in increasing GHG emissions. China and India will see their capacity to emit as a right. I expect China will lead the developing nations to push the US and Europe to invest in reabsorbing the GHG they have already emitted in order to make way for the GHG increases of the developing economies, including their own. This discussion of fault of the climate catastrophe is potentially dangerous and could result in wars, trade conflicts, and disruptive rivalries between the developing economies and the traditionally rich ones. A sequence of climate change related natural disasters could start being considered direct attacks tied to the lack of action by rival nations.  
• The US, a waning superpower, may find it hard to forego the seemingly economically convenient use of fossil fuels and forego appropriate level of investments in clean power generation technologies to prevent the increase in the country’s contribution to global climate change. This is a trend that is well on its way already. This trend could be reversed with the election of liberal candidates supported by entrepreneurs that see the global opportunity to un-seat established infrastructure and replace it with more efficient ones on a global scale. However, there is a lot of uncertainty here. Even if a liberal candidate is elected President, he/she will be hampered by the toxic and highly divisive political atmosphere in the US. An uncertain US market for Cleantech could result in technology paralysis, which could cause the US sector to develop more slowly than in China and Europe. If this happens, combating GHG in the US may no longer be viewed as an economic, job-creating bonanza, but rather a cost, leading to lower political support for it.
• Data enabled Cleantech devices (these are ultra-efficient and/or capable of controlling when electricity is going to be consumed) and the lower cost of using a virtual power plant, rather than a real one, will change how we interact with the electrical grid. In developing nations, these devices will open up markets for modern conveniences while reducing the pressure to build out the grid infrastructure to support it. In the developed countries, these devices will reduce the cost of renewable energy penetration in the grid and in buildings.
• Culturally, individuals will look to reduce their carbon footprint as a symbol of good citizenship. This, coupled with reduced battery costs, will drive increased adoption of electric vehicle (EV) technology, but by end-of-decade EVs will stop being symbols of low carbon lifestyle. Instead, reduction in meat consumption, local production of food, city living, use and support for public transportation, and elimination of plastic will take over as the principal symbols of environmental citizenship. Per capita vehicle ownership itself will decline as city populations increase, parking becomes expensive, and the land required for parking is considered wasteful. Additionally, there will be a bitter debate between combining public parking areas with vehicle charging areas. As land in cities becomes dearer, and parking scarce, the special parking accommodation for electric vehicles will start to look elitist and unpopular, as electric vehicle ownership loses its "green" luster.

Macro-trend 2: The Evolution of the 4th Industrial Revolution into a new form of Capitalism

We are in the midst of a major inflection in the history of trade and capitalism. The 1st Capitalist Framework was associated with creating a market for individuals to exchange and trade natural resources. These natural resources were principally minerals, hydrocarbons, water resources, and land. The result was the privatization and trade of previously common resources, which generated the legal concepts of property and also many of the upheavals that we are still ironing out today. The next framework (2nd) in Capitalism was the privatization of intellectual property coupled with the replacement of animal and human labor for machine labor. This is what we normally call the Industrial Revolution. Before this, individual free people owned their own capacity to work, and the quality of that work was determined by the individual′s health and skill. With the Industrial Revolution, this shifted, so that people′s capacity to accomplish a task was now dependent on machines that were owned by those that could afford them and in part by those that held the patents for the machines. The dawn of computers, the internet, the cloud, Internet of Things (IoT), cloud computing, machine learning and A.I., form a continuum of major changes lead to what is popularly called the 4th Industrial Revolution (there’s some debate as to how to cut the cycles of computer technology into their own revolutions, but somehow we all agree we have arrived at 4).

While technology is associated with revolutions, true changes only take hold when societies organize themselves to make use of these new tools. The 4th Industrial Revolution created a 2nd Capitalist Framework that consists in the creation of a market that trades in information and its usage. Those that own the information collection, storage, and processing systems have been the biggest winners until now. For example, the top 5 publicly traded companies today are Microsoft, Apple, Amazon, Alphabet, and Berkshire Hathaway (in order). Four of the 5 are in the business of collecting, storing, processing, and using information to provide services better, faster and cheaper than those companies that don’t own this infrastructure and capabilities. Note that just 10 years ago, the 5 companies with the highest market cap were mostly associated with resource extraction industries and the growth of China: Exxon Mobil, PetroChina, Walmart, ICBC, China Mobile. 

While technology is associated with revolutions, the true changes occurs in the way that societies organize themselves to make use of these new tools. 

So what’s next? Artificial Intelligence (A.I.). This will bring us to a 3rd Capitalist Framework, which creates a market for artificial cognitive response to data.

OUTCOMES:

• At the end of 2029, we will identify companies that trade in artificial cognitive services as those with the largest market capitalization. Most people will pay subscriptions or will utilize devices and applications that solve problems, are able to process complex inputs, and provide seemingly creative and very clever solutions to problems. This will change the world of engineering, medicine, product design, banking, insurance, security, manufacturing, retail, and politics.
• As with the previous Capitalist Frameworks, there will be enormous economic dislocations associated with artificial cognitive services. Human productivity will be enormously enhanced by machines and systems that intelligently adapt to their owners, are able to suggest solutions to complex problems, and that are able to interact with people using intuition. This opens the door to reliance and increased trust in machine derived results over human derived solutions or results. The change will have enormous implications on the trust people will have on their capacity to generate ideas on their own. This will also give enormous power to corporations that control the A.I. services. Embedded biases in the cognitive system will be able to sway people to act in ways that are convenient to the corporations that control the cognitive engine. This will revolutionize marketing and will make products part of our culture and social fabric. This could pose an enormous risk to democracies and increases the relative value of A.I. corporations to politicians. Since the A.I. can sway people, politicians can view the A.I. company as its constituent since it delivers votes more effectively than convincing people based on policy.

Embedded biases in the cognitive system will be able to sway people to act in ways that are convenient to the corporations that control the cognitive engine. This will revolutionize marketing and will make products part of our culture and social fabric.

• Governments and countries that do not control the A.I. machine and its associated services will face a new form of colonial status, where most economic output depends on the A.I. corporations and thus exact a toll in money and political power for the economy to run. Not paying the toll relegates the individuals and the nation to being uncompetitive and, in some cases, relegates them to economic exile, unable to trade freely. Watch out for certifications associated with A.I. checked or developed results of analysis, designs, and products.
• China as a nation has invested heavily in the A.I. and cognitive services industry. Although a highly repressive country, China has allowed innovation to flourish by relinquishing control on the permitted thoughts and communications among its engineers and the innovator-class. This has allowed technology to evolve fast. However, it is still a question in my mind, whether continued innovation can coexist with repression of thought, philosophy, and art. Without free thought truly revolutionary innovations and solutions to problems cannot be generated. Also, innovation requires disruption, which means that the state must allow for chaos and the unseating of existing favorites. There are also fundamental limits to the technology. A.I. will be good at optimizing solutions based on the goals established and the rules formulated by their developers. Questions regarding fairness of the rules, new forms to organize society, right or wrong, morality, and human fulfillment will remain mostly unaddressed by A.I. companies that evolve in repressive rule-following ecosystems. I believe that by the end of 2029 the world and China will be wrestling with fundamental philosophical questions about our role in the planet and our own value. This discussion will be seen as critical to guiding the A.I. machine’s goals. Just as the exploitation of natural resources revolutionized society in the 1st Capitalist Framework, and society reacted by questioning slavery, the role of kingdoms and empires, colonial rule vs self-government, and the validity of class or caste systems, similarly, the 3rd Capitalist Framework will raise questions about the welfare state, socialism, capitalism, representative democracy, and digital-colonialism. We can expect that novel and impactful ideas will be engendered by the upcoming transformation brought about by A.I.

the 3rd Capitalist Framework will raise questions about the welfare state, socialism, capitalism, representative democracy, and digital-colonialism.

Macro-trend 3: Disparity Aggravated

Macro-trend 1 and Macro-trend 2 will aggravate income disparity. This will cause major social and political unrest; will generate a lot of human suffering; will drive fundamental changes in attitudes towards religion, political structures, and economic frameworks; and will create at least one major market crash in the decade.

The combined concern over global climate change and its effects will drive decreased consumption and increased efficiency. Thus, demand for almost every physical product will fall. The answer to decreased demand will be for companies to sell services. Hardware and equipment will become platforms for the services provided. For example, today people buy TVs and own them. However, if most TV programming is obtained through subscription services or paid for by giving up our own personal data to companies that transact in information, the TV becomes a means to an end, rather than the end itself. So TV costs could plummet or become free to the consumer, since the business model has fundamentally changed from hardware to services and data. Cellphones, cars, stoves, lights, air conditioners, washing machines, etc. will all become a means to obtain data, provide subscription services, and eventually sell cognitive services. This trend will push products to be longer lasting, higher quality, and interactive (voice control, gesture controlled, interconnected, and highly adaptable).

While the trend towards services will decrease per capita GHG emissions, increase individual productivity, and increase the quality of products, it will also fundamentally shift the economy away from traditional jobs, and it will reduce the value of human generated work, skill, and cognitive capabilities. Additionally, the importance of geography will be reduced. For example, a lawyer does not have to be local to provide legal services. This coupled with the enhancement of A.I. and digital platforms, will enable a single lawyer to handle multiple cases and clients at once. This would reduce the amount of jobs for lawyers, and these lawyers will not need to be geographically close to their clients. In fact, geographic proximity will seem impractical in many cases.

As A.I., digital services, and artificial cognitive services start to dominate the economy, the power of labor will wane and the quality of work will decrease (in terms of overall compensation and stability). Part of this will be driven by global competition for fewer good jobs as geographic location loses importance and A.I. reduces reliance on human cognitive capabilities. Good jobs will require skills that enhance the A.I. framework. Thus, highly creative, insightful, broadly educated, and highly skilled individuals will be sought after. The value of quality higher education will increase. Demand for education will drive up the costs of providing it. However, these costs will decrease as education is imparted in a distributed and continuous manner within and outside of schools. In other words, it is less expensive to educate a child that has parents that supplement the education at home, than one that only has contact with the material in the classroom. Therefore, the best workforce will be found in places where the majority of the population is already highly educated and capable of educating the next-generation. This will be coupled with popular understanding of the value of higher education, which in turn will create the political will to provide widespread access to high quality education to children and young adults. The virtuous cycle will create geographic pockets of wealth and well-being that will attract educated professionals and their families.

However, high real estate costs and limited infrastructure will create a financial moat that will be difficult to cross by the under-employed and the under-educated. The contrast between the lifestyles of different classes will appear in countries that do not actively strive to reduce inequalities in education and basic services. These basic services will include access to cognitive services and data as a fundamental human right.

The overall effect is that upward mobility will initially seem to speed up as efficiency, productivity, and hyper competition will drop costs; and as investments in Global Climate Change mitigation create new infrastructure. However, market bubbles will undoubtedly be generated (probably in China this time), which will explode as infrastructure requirements are reduced and the winners of the A.I. space bankrupt and consolidate competitors. At the end of the decade I expect we will be grappling with the effects of huge and seemingly insurmountable inequalities. Some will argue for stability and solidifying a class system. Others will argue for egalitarianism, which will require a fight. Some countries will have already seen the future and would have prepared for it.

FINAL WORD

The next 10 years will be challenging. “May you live in interesting times.” Well, I can guarantee one thing: We will.

Please let me know your thoughts. Also, if you have your own predictions, please write them in the comments section. I think these types of discussions can be a lot of fun, and could actually uncover interesting thoughts and ideas that we should all keep in mind. In 10 years we’ll look back and notice how insightful and how naive we were.

Welcome to the 20’s!