The Digital Civilizations Interviews

This growth will be accompanied by a significant redistribution of the global power balance:

• China, India, Brazil and South Africa will all become more powerful, as producers, innovators, markets and political powers. China will be the 2nd global power by 2020 and India the 3rd by 2030. Commerce between southern countries will progress twice as fast as that globally. This South/South co-operation will develop and influence international negotiations.
• Further European integration that will make the continent a moderate but continuous area of growth and stability. However, this will not halt its relative decline with regards to developing countries, particularly Asia.
• The persistent but contested domination of the US, its technological, financial and military power, the strength of the dollar, its healthy population, and its ability to attract migrants will assure the country a dominant geopolitical role and more growth than Europe. However, the weight of deficits and military spending, the inefficiency of its energy model and the emergence of new superpowers will weaken the foundations of this Empire.
• On the other hand, Africa and certain countries in Latin America, the Middle East and Asia (to a lesser degree) will not benefit from this global growth as much as others.

The demographic shock

As the populations of developed countries, and possibly China, continue to age while those in developing countries continue getting younger, this will have several economic consequences. Sooner or later (but not before 2020) savings rates and the value of stocks and shares will decrease. This will slow down growth. Some age-related transactions (retirement, health care) will take place, drying up public money and producing latent generational conflict. The amount of time we spend working will increase, both in hours per week and in years of our lives. This will create a huge demand for service industry jobs, and the only way to meet it will be to have an active immigration policy. This, however, is unlikely to be enough to relieve the demographic pressure in poorer countries.

Information technology, networks and forms of energy transform production

Business means of production are changing due to three main factors :

• Oil is expensive, very expensive ($150 or $250 a barrel);
• Costs under pressure because of global competition ;
• The increasingly large role of networks and information technology.

Digitalisation and networks will lower transaction and coordination costs, contributing to increased competition, the reformatting of chains of supply and value, and to globalisation. These will also shorten the life cycle of products, as they become more commonplace, as well as more easily copied and improved upon. If the pressure to reduce costs by optimising as much as possible remains as strong as it is today, only continuous innovation will be able to produce competitive, albeit temporary, advantages.

Because of this, there will still be a lot of anxiety about intellectual property, all the more so because digitalisation tends to make a kind of “public property” of knowledge; something that can be duplicated at no cost, although the original owner never has to give it up. Rich countries in particular, with their costly, aging manpower, need to stay at the forefront of innovation, and have an interest in protecting it. However, developing countries will continue to compete, both because of their capacity to innovate and because they have the capacity to benefit from knowledge and innovation produced elsewhere.