The World Ahead 2024: The World Is Changing at Mind-Boggling Speed

In mid-November, The Economist published “The World Ahead 2024,” its 38th annual issue that examines the trends and events that will likely shape the coming year. Last year, the overriding message from “The World Ahead 2023” was that after two years in which the pandemic was the dominating force shaping the immediate future, the war in Ukraine would be the main driver in 2023, causing the world to have to grapple with the conflict's impact on a series of unpredictable issues, incluging geopolitics, security, inflation, energy markets, and China’s post-pandemic path.

“Life comes at you fast,” wrote World Ahead editor Tom Sandage  in his introduction to the  “The World Ahead 2024.” “Whether it’s the upsurge in armed conflict, the redrawing of the global energy-resources map or rapid progress in artificial intelligence (AI), the world is changing at mind-boggling speed. From the situation in the Middle East to the adoption of electric vehicles to the treatment of obesity, things look very different from the way they did just a year or two ago.”

Here are the ten major trends to watch in the coming year.

1. Vote-a-rama! — “Elections all over the world, for more voters than ever before, will put a spotlight on the global state of democracy. There will be more than 70 elections in 2024 in countries that are home to around 4.2bn people.”
2. America’s global choice — “Voters, and the courts, will give their verdicts on Donald Trump, who has a one-in-three chance of regaining the presidency.”
3. Step up Europe — “Europe must step up and provide Ukraine with the military and economic backing needed for a long fight, while laying out a path towards eventual EU membership.”
4. Middle East turmoil — “Hamas’s attack on Israel, and Israel’s retaliation against Gaza, have upended the region and scotched the idea that the world could continue to ignore the Palestinians’ plight. Will it become a wider regional conflict — or offer a new chance for peace?”
5. Multipolar disorder — “America’s plan to pivot to Asia, and focus more on its rivalry with a rising China, has been derailed by war in Ukraine and now Gaza. Russia, too, is distracted and losing influence.”
6. A second cold war — “As China’s growth has slowed, tensions rise over Taiwan, and America continues to limit Chinese access to advanced technologies, the ‘new cold war’ rhetoric has hardened.”
7. New energy geography — “The clean-energy transition is minting new green superpowers and redrawing the energy-resources map. Lithium, copper and nickel matter much more, while oil and gas, and the regions that dominate their supply, matter less.”
8. Economic uncertainty — “Western economies did better than expected in 2023 but are not out of the woods yet, and interest rates staying ‘higher, for longer’ will be painful for companies and consumers alike, even if recessions are avoided.”
9. AI gets real — “Businesses are adopting it, regulators are regulating it and techies continue to improve it. Debate will intensify over the best regulatory approach — and whether arguments over ‘existential risk’ are a decoy that benefits incumbents.”
10. Uniting the world — “Perhaps ideological differences will be put aside as the world enjoys the Paris Olympics, astronauts (maybe) looping around the Moon, and the men’s T20 cricket World Cup. But it is just as likely that those hoping for some global unity will be stumped.”

Let me briefly discuss three of these trends.

New energy geography: The energy transition will mint new fortunes in surprising places

One of last year’s top ten predictions was that the war in Ukraine would accelerate the switch to renewable sources of energy, and that in 2023 the world would redouble its efforts to create an energy system that’s cheaper, cleaner and more secure as “a safer alternative to hydrocarbons supplied by autocrats.”

“A net-zero global economy, if it materialises, will not just be carbon-neutral,” notes The Economist. “It will also consume far fewer raw materials. Going from here to there, however, will require a heap of them. In the next few decades, supplying them will create new fortunes.”

The Economist reminds us that moving towards a cleaner energy system will still need dirty fuel for some time, especially as the poorest parts of the world continue to rely on their use of vast quantities of energy in order to prosper. Even after oil consumption peaks, countries that can produce high quality oil at low cost, like Saudi Arabia and the UAE, will enjoy feasts before the longer term famines. So will major natural gas producers, — a significantly cleaner alternative to coal for power plants, — like the US, Australia, and Qatar.

But over time, copper, cobalt, nickel, lithium and other metals needed to build new low-carbon infrastructures will matter much more, while oil and gas will matter less. Demand for these so called green metals “will redraw the global mining map.” For example, the increasing demand for copper, — used in wires, turbines, and other  green technologies, — will tap the vast reserves of Chile and Peru which already supply much of the world's red metal. The Democratic Republic of Congo is the world’s biggest source of cobalt, used in electric-car batteries. But Indonesia, the largest exporter of nickel, another battery metal, is becoming a growing supplier of cobalt as well. Latin America, Australia and China are the leaders in lithium, “the king of battery metals,” but may face unexpected competition from Iran, Ghana, and the US.

Economic uncertainty: Inflation has fallen, but vulnerabilities remain

Another top ten prediction for 2023 was: “Major economies will go into recession as central banks raise interest rates to stifle inflation, an after-effect of the pandemic since inflamed by high energy prices.”

But, the world economies avoided going into recessions, even though the continuing high interest rates have been painful for companies and consumers. Despite the fastest tightening of monetary policy since the 1980s, America’s economic growth accelerated in 2023, and Europe was able to mostly wean itself off Russian gas without economic catastrophe.

Global inflation was actually able to fall without the expected increase in unemployment. “As the year ends, optimists who predicted a soft landing are taking victory laps. Yet the world economy will remain fragile in 2024. Though inflation will be lower, it will remain too high. Economic policy still faces an excruciating balancing act. And even if America continues to dodge a recession, the rest of the world looks vulnerable.”

AI gets real: Just don’t expect its overnight adoption

After decades of promises and hype, AI has finally become the defining technology of our era. Over the past two decades, the necessary ingredients have come together to propel AI beyond universities and research labs into the broader marketplace: powerful, inexpensive computer technologies; advanced algorithms and models; and huge amounts of all kinds data. Like the steam engine, electricity, cars and airplanes, computers, and the internet, AI will have a historically transformative impact across economies and societies.

OpenAI’s release of ChatGPT to the general public on November 30, 2022 took the world by storm. Within two months over 100 million user were having all sorts of interesting dialogues with ChatGPT. Beyond the general public, interest in AI surged among investors and entrepreneurs. “Yet the real promise, these investors and entrepreneurs are betting, lies with its use in business. Here, too, it could be more rapidly adopted than past innovations. But that does not mean it will happen overnight.”

 “The Economic Potential of Generative AI: The Next Productivity Frontier,” a research report published by McKinsey in June of 2023 evaluated the potential economic impact of generative AI based on its analysis of over 60 concrete business uses cases. In addition the study estimated its impact on the productivity of the global workforce by analyzing detailed work activities across 850 occupations. According to  McKinsey, over time AI could add between $17 trillion and $25 trillion to the yearly global economy. In the near and mid term, 75% of the business uses of generative AI will fall in four areas: customer operations, marketing and sales, software engineering, and research and development.

Along with new skills and business processes, the deployment of previous historically transformative technologies at scale required major physical infrastructures, such as power lines, new kinds of motors, and  factories for electricity in the early 20th century. That’s not likely the case the case with a digital technology like generative AI, because much of the necessary digital infrastructure is already in place, including cloud computing, software-as-a-service, applications programming interfaces, and app stores. In addition, many software firms like Microsoft, Salesforce and Google are already embedding generative AI capabilities into their existing applications.

But, while many of the largest companies are already experimenting with AI, not all businesses will be enthusiastic adopters. “Outside the tech world, only a third of global managers tell McKinsey they are regularly using generative AI for work,” notes The Economist. “AI adopters, in short, are outnumbered two-to-one by the wary and the reluctant.” The wary are taking a cautious approach because much about the technology still needs ironing out, its so called ‘hallucinations’, and IP and copyright violations. Others are reluctant to become early adopters of a cutting-edge technology like AI.

“Differences in behaviour between firms at the productivity frontier and those that are less productive are not unusual. Lags in technology adoption can be long. Even though the internet began to be used by companies in the early 1990s, for instance, it was not until the late 2000s that even two-thirds of businesses in America had a website.”

“How then should the AI-curious boss think about the technology? It helps to make a clear-headed assessment of the gains to be had, and the costs of using a still new and risky technology, before deciding whether to be an enthusiastic adopter, or a wary or reluctant one. Most important of all, your workers need to be on board. So pay attention to their fears — and convince them of the joys of experimentation.”