In the Photo above is Professor Nuria Mas presenting the Global Economic Outlook for the next 30 years during the IESE EMBA Alumni reunion at IESE Business School. Nuria is a wonderful Economics professor at IESE Business School and is also a key member of the Advisory Board of the Bank of Spain.
I wrote down my summary points as she shared the economic data and outlook.
The 3 Safest Places to Be in the West…
The 3 “least likely to disappear” high income jobs are: Doctor, Dentist and CEO. The key lesson for each individual reading this is to develop in 2 specific areas to improve your quality of life:
- Your Technical Skills (be good at something digital) and
- Your Adaptability to Change (change yourself before it becomes necessary)
Globalisation is not the cause of job insecurity.
Technology and automation are the major causes of job losses and job insecurity.
Lets look at how the world economy is in 2018 and what changes we will see over the next three decades.
All Significant Economic Growth will be in China and India over next 30 years
US and Europe are going from half of world GDP today to quarter by 2045; China and India will grow to represent almost 50% of World GDP by 2045.
There are 9000 “net new babies” born every hour (I think the actual figures were 15K births and 6K deaths per hour). Most net population growth is in Asia.
The World GDP “center of gravity” is moving East… it will be located between India and China by 2045.
World Leaders are Scared of Two Things
The biggest likelihood & impact (can damage people & institutions) major events are climate events, and cyberattacks. This data is based on a question asked to attendees at Davos this year. This is what senior politicians, global business leaders are concerned about.
Western Middle Classes are the only major Population Segment without Economic Growth
Major job losses are on the middle income jobs. The western middle classes are the only major population category that has seen no improvement in GDP per capital over last 30 years; most poor grew 17%, 50 percentile grew 76%, richest 1% grew 65%. Western middle classes have seen no growth in average GDP per capita since 1990s.
The USA is the first ever nation with increasing GDP combined with reducing life expectancy- the major reductions in life expectancy are in “white 45-55 years old”.
It is not globalization but technology (job automation) that is leading to the loss of middle class jobs in advanced societies.
While official Debts are Huge, Off Balance Sheet Debts are Massive
USA, Japan, Germany have lots of debt; but they owe most of it to themselves. Spain owes 86% of its debt to foreigners. Ireland’s total debt is 7x it’s GDP and it owes lots to foreigners.
Unfunded liabilities are huge in western economies. This is predominantly pensions that are paid out of current taxes. In most advanced western economies, unfunded liabilities are 2 to 5 times greater than oficial government debt.
Money supply has multiplied by 5 since the 2008 financial crisis. There is a lot of dollar bills and sterling out there than needs to be pulled back in by the central banks.
Your Job is Going to be Automated
Unless you are a Doctor, a dentist or a CEO (top left on the graphic below), your job is at risk of automation. Also safe: therapists, athletic coaches, priests, editors, firefighters, and actors. Very risky: telemarketers and accountants.
With all of this negative economic news, you’d think we are in a bad place. Not at all. From a health point of view, we have never had it so good. Life expectancy has doubled since 1800. This chart is from the Our World in Data website.
What will this mean for you, your business, your children, your education? The standard life of school til 21, work til 65 and then retire to the golf course til 75 is over. Education and change must be continuous over your life. You will have major career changes every decade (if not by choice, it will come from the outside).
What do you need to learn this year? What do you need to stop doing? What do you need to automate in your job? Who do you need on your team of advisors? Do you have Chinese and Indian leaders in your network?