What trends are likely to shape the year ahead?

Inform your discussions and decisions this week.?Hello - and happy new year to our friends and colleagues.

In our first edition of 2025, we explore some of the trends expected to shape the year ahead.

The 60th Presidential inauguration in Washington, DC will take place next week. Business leaders are watching several aspects of what is to come, including whether Trump’s tariff-raising plans become reality. They are keen to know - will wide-ranging tariffs deliver another setback for globalisation,?or will Trump’s art of the deal create opportunities for diplomacy? With his sights set, apparently, on the Panama Canal, Greenland and Canada, Mr Trump could become America’s most expansionist President since William McKinley, who was a fan of both tariffs and territorial gains.

Scenes from an LA engulfed in flames are prompting discussion of the multiple contributing factors. The costly disaster may focus attention on a future shaped by climate change. Mr Trump’s approach to climate commitments and renewable energy will dominate the year’s policy and business climate agenda. Expect companies to make fewer public and high-profile commitments on combatting climate change. But many will remain active below the radar.

If the news agenda gets overwhelming in 2025 you can always confide in your friendly AI agent. Sam Altman, chief executive of OpenAI, recently claimed that artificial general intelligence is within his company’s reach. Could 2025 be the anno domini of a future AGI overlord? Mr Altman’s announcement was met with some scepticism. We believe some of the hype around AI will recede this year, but at the same time, the technology will start to deliver value as enterprises implement AI models at scale and in more tailored ways.

AI’s impact in science, health and innovation,?meanwhile, will continue to deepen and impress. New, research-focused, LLMs like DeepVariant and PaperQA are already transforming the process of science, and hastening discoveries, including of new materials and drugs. A handful of AI-developed drugs will move to phase-three trials in 2025. While problems like antimicrobial resistance, healthcare workforce burnout and spiralling costs will continue to confront policymakers, the promise, risks and cost of weight-loss wonder drugs will continue to dominate the health agenda.

Last year we launched three new initiatives: Progress 2030, Urban Futures and?The Food Imperative. Each focuses on advancing solutions to critical global challenges through original research, analysis and events. On food, our new initiative aims at advancing solutions towards a more sustainable and secure global food system. The big picture, of course, is daunting: higher temperatures resulting from global warming will mean more areas of drought. Global conflict and protectionist trade policies will also continue to put pressure on the availability and cost of food. Nonetheless, AI and new AgTech gadgets - such as microscopic sensors and targeted spraying systems - are helping to make farming more efficient and regenerative.

In times of rapid change and uncertainty, Economist Impact provides data and insights to help policymakers and business leaders make informed decisions. Please get in touch if you’d like to find out more about our three new initiatives or our work across the themes of sustainability, new globalisation and health.

Best wishes,

Jonathan Birdwell, Global Head, Policy & Insights, Economist Impact

2025 is set to be a decisive year for AI, as model-makers are under growing pressure to demonstrate its value while grappling with constraints on energy and infrastructure. The term technology, of course, means more than information technology. Beyond all the hype about genAI, important advances are being made in fields ranging from climate tech to weight-loss wonder drugs to quantum computing. Here are the key developments to watch for this year.

Do you have an innovative solution that will aid progress towards a sustainable ocean economy? Enter the 2025 Ocean Changemakers Challenge by Friday, 17th January 2025 for the chance to present your project on a global stage at Economist Impact’s 2025 World Ocean Summit.