Decade ahead: 7 unthinkable (but not impossible) forecasts

22 June 2020

Dr Arthur KrebbersHead of Sustainable Finance, Corporates

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Phil LloydHead of Market Structure & Regulatory Customer Engagement

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Jim McCormickGlobal Head of Desk Strategy

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Caroline HaasManaging Director and Head of Sustainable Finance, Financial Institutions and SSAs

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Oliver CookeChief Digital Officer

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If the coronavirus crisis taught us only one thing, it would be that the future of the world can turn on a dime and anything is possible. So, we asked five of our specialists to use their wildest imagination in an outlook for the decade ahead. After mapping all their forecasts and trends together, it’s painted an interesting picture. Is it totally wacky, or actually plausible?

For a deeper dive as well as a realistic take on the decade ahead, read the Q&As. 

Tech skills redefine the corporate ladder, 3D-printed organ transplants save lives and digital virus risks must be monitored.

Could tech skills challenge traditional value factors such as age, experience and the old adage ‘it’s not what you know, but who you know’? Phil thinks so. But from a social and health perspective, what Arthur finds really exciting is the prospect of 3D-printed organs or human tissue made from biocompatible plastic — while this sounds strange it is actually happening and could become a more common solution. They aren’t fully functional or transplantable yet, but the research is already underway. What could this mean for our livelihoods, life expectancy and wellbeing over the next decade?

Meanwhile, Oli says it’s easy to imagine another massive and fast global event, but this time linked to technology failure of one sort or another. With our even heavier reliance on key infrastructure and short list of essential software, the chance of a crisis caused by global digital infection is not completely impossible.

Read Arthur’s Q&A

Read Oli’s Q&A

Read Phil’s Q&A

Sustainable investing is non-negotiable and Environmental Social Governance (ESG) is the new ‘investment grade’ credit rating. Supply chains get local, we travel less and virtual holidays become a reality.

Caroline expects ESG evaluations to become linked to the measurement of a company’s impact (both positive and negative) which, in turn, incentivises sustainable business decision-making. Arthur agrees, and is convinced ESG will become the new investment grade, seeing companies that fail to meet minimum requirements (aka ‘brown companies’) get locked out of public markets, ultimately forcing them to seek private funding. Caroline, Arthur and Jim all expect that supply chains will become shorter and more local. However, this emphasis on ‘local’, combined with acceleration in digital innovation could kick off a new trend into the world of virtual holidays, according to Caroline and Arthur. Maybe a virtual experience with all the sounds and smells of the Serengeti is too wacky, but wouldn’t it be great? It will certainly elevate the concept of ‘staycation’ to new heights and help our global carbon footprint!

Read Caroline’s Q&A

Read Jim’s Q&A

Read Arthur’s Q&A

Mass adoption of work-from-home alters city dynamics, populations redistribute, affordable housing benefits and we all have more outside space.

Opportunities and higher salaries in cities have always been an attractive reason for employees to relocate or do long commutes for work. Many jobs also traditionally require lots of business travel and hotel stays. Will any of that be necessary now that we’re all used to remote working and even more focused on health and ESG, Phil asks. Cities will always have tourism, but will their role as homes to big business and the top jobs change? It’s tough to say at this stage whether that will ever go back to pre-crisis levels. Ghost towns? Probably not. But Phil does expect that cities will become less populated, especially in the next couple of years. Caroline wonders if the rise in remote working will see cities develop split buildings with the lower floors as offices and the higher floors being residential. With more people working from home and more awareness of the climate, we’ll probably all travel a lot less, especially by car and plane. She doesn’t doubt that trains will become more popular, although hopefully cheaper through state-subsidies once the lines have been re-built.

Read Phil’s Q&A

Read Caroline’s Q&A

Nationalism takes over the west, Asia soars to the top, Europe divorces and globalisation declines.

In his Q&A, Phil asks if it is totally wacky to question whether rising populism in western society over the last decade might have paved the way for a full socialist agenda. Social priorities such as healthcare and welfare benefits have risen to the top of the agenda during the coronavirus crisis.

Meanwhile Jim thinks the gravitational pull of economic power towards Asia could become irresistible. Could the Chinese renminbi become the world’s reserve currency and overtake the US dollar? In his view, the strength of Asia is a force that isn’t going away — especially China. But Jim explains they are the new kid on the block and it will take them a while to shake that image and to build trust.

Jim also debates whether the coronavirus crisis is going to help answer if the European countries can stick together. Both outcomes would be a pretty big event and if Europe does actually divorce, it could lead to another crisis.

Read Phil's Q&A

Read Jim's Q&A

Fiscal policy endures, active management makes a comeback and passive becomes passé and crypto becomes safe-haven.  

Policy maker decisions have sparked debate over what’s next for inflation. In Jim’s Q&A, he imagines a future state where inflation rises to between an average of 5-10% for most major countries, seeing a spectacular crash in the 30-year bond market. If high inflation ever does come, it will completely alter the investment world as we know it. The idea of active management making a comeback is another market altering change that doesn’t seem totally crazy in Jim’s view; but he might be in the minority on this one — for many, the decline of passive investing does not seem likely.

Paying at our local corner store with a cryptocurrency feels unthinkable for many, but Arthur thinks it could well become part of our future. The crisis has seen a huge amount of money pumped into the system by central banks, as well as fiscal support from governments, to help keep the economy afloat. Could the crisis make blockchain-based currencies more and more appealing because there is only a fixed number in circulation and they are not subject to regulations?

Read Jim's Q&A

Read Arthur's Q&A

A fully-surveilled world with obligatory contact tracing, remote working and increased digital content consumption sees big data get bigger.

It might have been unthinkable before the crisis, but now a fully-surveilled world really is actually looking more plausible, says Oli. If you think of contact tracing as a way to meet obligations  required to keep employees safe, comprehensive surveillance doesn’t seem so far off, including by for-profit companies. According to Phil, the shift to remote- or home-working will very likely require some sort of employee data tracking policy —will companies issue stringent Big Brother programmes using data and reporting to monitor productivity and keep tabs on employees? It’s a concept we might need to get more comfortable with. Data on the whole will become even more important than ever before, Phil continues. As we spend less time with people in the flesh, metrics on how clients respond to our digital content for example, will become critical to day-to-day business. Data will need to be able to go deeper and offer more insight to help us better target prospects and go beyond vanity metrics such as likes, dwell time and shares.

Read Oli’s Q&A

Read Phil’s Q&A

Elite universities merge with big tech companies and offer low cost online options as well as pick ‘n’ mix degrees.

Today, universities offer education with a valued certificate and a life experience. According to Oli, the online delivery model many have had to adopt due to coronavirus, combined with a likely wave of restructuring for many universities who are in financial dire straits, could lead to a radically changed university landscape. Big tech — with their budgets, brands and thirst for data will likely get involved. Universities with great brands among students, who can attract the best teaching talent and who have the digital budgets to give a great learning experience will come out on top. Will we see revered lecturers become celebrities and influencers thanks to their online fame? Caroline had a similar thought, and also sees the university delivery model as ripe for radical change, with the scope to finally become more egalitarian. She loves the idea of online and digital courses making more spots available, lower tuition fees or even offering students the chance to pick ‘n’ mix their course across multiple universities. After all, the coronavirus crisis has showed us that the impossible is possible, so why not?

Read Caroline’s Q&A

Read Oli’s Q&A

Decade ahead


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