The World Ahead 2022: Adjusting to New Realities

A few weeks ago The Economist published The World  Ahead 2022, its 36th annual look at the economic, political, social and cultural trends that will likely shape the coming year. “If 2021 was the year the world turned the tide against the pandemic, 2022 will be dominated by the need to adjust to new realities, both in areas reshaped by the crisis (the new world of work, the future of travel) and as deeper trends reassert themselves (the rise of China, accelerating climate change),” wrote the issue’s editor Tom Sandage.

Here are the top ten major trends in The World Ahead 2022:

1. Democracy v autocracy. “America's mid-term elections and China's Communist Party congress will vividly contrast their rival political systems.” 
2. Pandemic to endemic. “For vaccinated folks in the developed world, the virus will no longer be life-threatening. But it will still pose a deadly danger in the developing world.” 
3. Inflation worries. “Supply-chain disruptions and a spike in energy demand have pushed up prices. Central bankers say it’s temporary, but not everyone believes them.” 
4. The future of work. “There is a broad consensus that the future is ‘hybrid’, and that more people will spend more days working from home.” 
5. The new techlash. “Regulators in America and Europe have been trying to rein in the tech giants for years, but have yet to make a dent in their growth or profits.” 
6. Crypto grows up. “Like all disruptive technologies, cryptocurrencies are being domesticated as regulators tighten rules.” 
7. Climate crunch. “Even as wildfires, heatwaves and floods increase in frequency, a striking lack of urgency prevails among policymakers when it comes to tackling climate change.”
8. Travel trouble. “Activity is picking up as economies reopen.… Meanwhile, as much as half of business travel is gone for good.”
9. Space races. “2022 will be the first year in which more people go to space as paying passengers than government employees, carried aloft by rival space-tourism firms.”
10. Political footballs. “The Winter Olympics in Beijing and the football World Cup in Qatar will be reminders of how sport can bring the world together - but … often end up being political footballs.”

Let me briefly discuss three of these trends.

The new hybrid workplace needs careful planning 

“Greater productivity, happier and healthier workers and lower emissions are just some of the benefits of the great work-from-home experiment,” said The Economist, noting that the vast majority of knowledge workers and most employers are now in favor of some version of hybrid work. This greater flexibility in working arrangements may well turn out to be one of the most important, long-lasting legacies of the Covid crisis.

In April of 2021, economists Jose Maria Barrero, Nicholas Bloom, and Stephen J. Davis published Why Working from Home Will Stick, a survey of both working arrangements and personal preferences during the pandemic; and of worker preferences and employer plans after the pandemic ends. Their survey found that 45% of those working in March of 2021 were doing so from home; and close to 50% of all working days from May 2020 to March 2021 were from home, about 10 times the pre-pandemic share. After Covid, - in 2022 or later, -  nearly 80% of of workers whose jobs enabled them to work from home want to do so at least one day per week; almost 40% prefer 1 to 3 days per week; and about 30% want to work from home all week. On the other hand, employers expect that 21% of full workdays will be from home.

But, while increasingly popular, this new hybrid workplace is likely to be “a messy concoction,” warns The Economist. “Left to develop organically, it is more likely to exacerbate existing inequalities than reduce them … because workers have different preferences about office work, and those differences are not distributed randomly. Given the choice, women, minorities and parents with young children will spend less time in the office.” They will likely pay a price for such a choice, losing out on pay rises and promotion because employers value physical presence. “A two-tier workforce could emerge, with a highly rewarded ‘in’ group and a less rewarded ‘out’ group.”

“In all the plans to reopen and bounce back, the need to address inequities that widened during the pandemic is often overlooked. Men are nearly twice as likely as women to say that working from home has positively affected their careers. Women are more likely to say they feel burnt out. … Any employer who wants to get off to a fair start in the hybrid world would be wise to deal with recovery and catch-up first.”

Covid will become just another disease

“Pandemics do not die - they fade away,” said The Economist. “And that is what covid-19 is likely to do in 2022. True, there will be local and seasonal flare-ups, especially in chronically undervaccinated countries. Epidemiologists will also need to watch out for new variants that might be capable of outflanking the immunity provided by vaccines. Even so, over the coming years, as covid settles into its fate as an endemic disease, like flu or the common cold, life in most of the world is likely to return to normal - at least, the post-pandemic normal.”

The article reminds us that the rapid creation and licensing of Covid-19 vaccines and treatments is a major scientific triumph. The polio vaccine took 20 years to go from its early trials in the 1930s to the development of a safe and effective vaccine by Jonas Salk in the mid 1950s. The Covid virus, SARS-Cov-2, was first identified around the end of December, 2019. Its genetic sequence was published two weeks or so later, triggering an unprecedented collaboration between the global pharmaceutical industry, university research teams and governments to develop a vaccine. By March, four vaccine candidates had been identified and entered human evaluation, and by the end of 2020, the first vaccines received emergency use authorization in the US and temporary approval in the UK and other countries. By the end of December, 2021, over 9 billion vaccines have been administered globally.

However, alongside this stunning success is a depressing failure, says The Economist. “One further reason why covid will do less harm in the future is that it has already done so much in the past. … The Economist has tracked excess deaths during the pandemic - the mortality over and above what you would have expected in a normal year. Our central estimate on October 22nd was of a global total of 16.5m deaths (with a range from 10.2m to 19.2m), which was 3.3 times larger than the official count.”

“Covid is not done yet. But by 2023, it will no longer be a life-threatening disease for most people in the developed world.” People will still die from Covid because they’re elderly, in poor health, or because they are unvaccinated. “It will still pose a deadly danger to billions in the poor world. But the same is, sadly, true of many other conditions. Covid will be well on the way to becoming just another disease.”

The travel recovery will be uneven

Let me conclude by summarizing The Economist’s outlook for travel over the next few years.

Overall, travel is picking up as economies reopen. “More people will rediscover the pleasures of jumping on a plane to go on a spontaneous city break, attend a long-planned family wedding or take the holiday of a lifetime.” But the recovery will be uneven. Domestic travel has already bounced back in large countries like the US and China. Before the pandemic, the number of cross-border travelers tripled between 1990 and 2019. But international travel isn’t expected to recover to pre-covid levels before 2023 at the earliest, more likely until 2024. Regional travel is picking up, but long-haul travel will remain at low levels until vaccinations are more widespread and regulations become easier to navigate.

“Leisure bookings surge whenever countries lift restrictions on foreign travel, and unless a new, more dangerous mutation of covid-19 emerges, that huge pent-up demand will help fill planes again on short-haul routes. Businesses, however, plan to spend less on travel. Surveys suggest that budgets are typically being cut by 20-40%. The gloomiest prognosticators reckon half of all business travel could be gone for good. Many meetings and conferences will remain virtual, or at least take place in hybrid form with far fewer people attending in person. … That is good for the planet, but bad for tourists whose trips are subsidised by high-spending business travellers.”

Comments

[david matthew]

Thank you, Irving. This was a stimulating editing of current trends, almost as pleasing as having a conversation with you (which has always been rewarding at The Research Board meetings). Many good wishes for the future. My New Year's prayer is for HOPE for us all.