Four mega-trends that could be the biggest stories of the 2020s
Donald Trump will be re-elected. There will be a tense stand-off as the deadline for a trade deal with the EU approaches. M&S will report some terrible results and the British Airways computer system will go into meltdown on the August bank holiday. There are lots of things we already know will happen in 2020.
But what will be the big themes for the next decade – and not just the coming year? True, predictions are always virtually impossible. But given that we are stranded in the quiet space between Christmas and New Year, here are four potential mega-trends that are not on anyone’s radar right now – but might be among the biggest business stories over the next 10 years.
First, the rise of extra-terrestrial GDP. If we think it is hard to measure output accurately down here, then try going off planet. But with the rapid emergence of lots of commercially driven space projects – from Jeff Bezos’s Blue Origin to Elon Musk’s Spacex – it is increasingly necessary to start measuring all the wealth generated outside the Earth’s orbit. The US Bureau of Economic Analysis is already starting work on a “Space Economy Satellite Account” to add it all up. The initial estimates are that it comes to about $400bn (£305bn), or slightly more than the economy of both Ireland and Israel, and it is expanding rapidly. That (final) frontier market is set to grow and grow. By the end of the decade, space will be a major contributor to growth, and we will no longer be discussing the global economy but the wider human one.
Secondly, the customer will no longer be king. Lots of big, successful businesses have been built on the motto that the customer is always right. And yet, as anyone who actually runs a company will tell you, the customer can also sometimes be a complete idiot. In the past, you just had to put up with that. But technology, and big data, is giving businesses the opportunity to push back. Some retailers, especially online, have started to identify people who order lots of clothes, keep them for a couple of days, and then return them – and are blocking them from placing orders. Analytics experts are creating tools to identify permanently grumpy types who leave bad reviews so companies can decline their business.
“Nudniks” as they are now known in the business school literature (it’s from the Yiddish for a boring nag, in case you were wondering) may soon find that no one wants to serve them. After all, they are not worth a lot – and a few bad reviews on the web can cripple a business forever.
Thirdly, the rise of dark industries. With the smartphone-based app economy, something else is emerging as well – a whole new industry creating all the products that get delivered to your door. Dark kitchens are the most obvious example. Industrial-scale cooking hubs are being built to make all the food that then goes on bikes spreading out across every town (Travis Kalanick, the founder of Uber, is a major investor). Likewise, there are already massive dark supermarkets – huge sheds full of groceries to feed the home delivery vans. But those are just the tip of the iceberg. We will soon have “dark car parks” where all the driverless cars are stored when they are not out on the road. And we may have “dark offices” to house all the virtual workers as artificial intelligence accelerates – there may be a few carbon-based life forms around to deal with the occasional crisis but it will be very different from a traditional workplace. We may even have “dark farms” – vertical greenhouses close to the dark supermarkets and kitchens growing all the fresh vegetables to supply them, along with sterile warehouses for the lab-grown meat. A whole new hidden economy will emerge, ticking away quietly in the background and with very little human input.
Finally, watch out for the first venture capital backed state. The VC industry already has vast quantities of cash to invest and as all the major companies it has created get bigger it will have even more. Its next big project? A start-up state. A fund called Pronomos Capital (founded by Patri Friedman, the grandson of the Nobel Prize-winning free market economist Milton Friedman) has already raised money in Silicon Valley to create mini-city states in the developing world, with robust, English-based legal systems and low taxes and light regulation – think Singapore but a lot more freewheeling. Other funds are looking at similar projects. It remains to be seen whether any of them get off the ground, how long it takes, whether they flourish, and indeed whether existing countries will ever surrender part of their territory to a new entity. But it is not hard to see the demand. As the EU and other governments become more and more determined to tax and regulate the world’s most powerful technology companies, the appeal of creating a business and tech friendly space, where entrepreneurs are welcomed, new ideas can be tried out and wealth preserved, will grow and grow. And if the first VC state does emerge it may well prove remarkably successful.
There will be plenty of disruption in the decade ahead. At the start of this one, no one would have foreseen that Netflix would create a whole new industry out of streaming, that tariffs and trade barriers would be back, or that emerging markets would register disappointing growth while America flourished. By the end of the 2020s, the global economy, and the major companies within it, will no doubt look very different – and those four trends might just be dominating the business pages.
‘It is increasingly necessary to start measuring all the wealth generated outside the Earth’s orbit’