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Bain consultants' macro trends department have released a report examining trends in demographics, automation and inequality to produce a set of predictions.
This kind of report seems to be all over the place these days, but this one seems more detailed and perhaps a little less optimistic than most.
In the US, a new wave of investment in automation could stimulate as much as $8 trillion in incremental investments and abruptly lift interest rates. By the end of the 2020s, automation may eliminate 20% to 25% of current jobs, hitting middle- to low-income workers the hardest. As investments peak and then decline—probably around the end of the 2020s to the start of the 2030s—anemic demand growth is likely to constrain economic expansion, and global interest rates may again test zero percent. Faced with market imbalances and growth-stifling levels of inequality, many societies may reset the government's role in the marketplace.
They predict that governments will assume a larger role in markets to combat inequality and boost demand, but will our corporate overlords decide that's in their interests, or continue to squeeze the lower and middle classes forever?
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(Score: 1) by khallow on Thursday February 15 2018, @01:26AM (2 children)
I'll just note here that the African economy is far smaller than developed world economies. For example, the GDP of Africa was $3.3 trillion in 2017 compared to California's $2.4 trillion. Basically, the economy of the entire continent is roughly a third larger than the biggest state in the US (subject of course, to the weaknesses of the GDP metric).
Sorry, but Africa's economy would be bigger, if it really were so instrumental to the rest of the world.
(Score: 1) by therainingmonkey on Thursday February 15 2018, @09:18AM (1 child)
Many of the vital resources which underpin the rest of global capitalism are extracted in Africa.
Glencore (probably the world's largest mining and mineral extraction firm) operates throughout the continent, but uses "tax avoidance" techniques or outright bribery and state capture to ensure they can do so without contributing to the countries they operate in. After laundering the value through their different arms and subsidiaries, Glencore in fact contributes to the GDP of Switzerland, not African nations.
This story is repeated time and time and time again at least since colonialism "ended" in the 1960s. It remains to be seen how Chinese firms will operate in Africa, but it looks as though they'll be just marginally better for African people; enough to be hailed as "saviours" from western exploitation while exploiting almost as hard.
(Score: 2, Informative) by khallow on Thursday February 15 2018, @11:21AM
So what? Vital resources don't magically turn into modern day goods and services. There's a lot of parties that have to cooperate to make it happen. My view is that the relative amounts of GDP are a fair indicator here of the relative contribution of each region. Resource extraction in particular is a notoriously low value operation. There needs to be an incredible amount of processing to turn raw ore and minerals, basic foods, and other resources into finished goods. And the poorest parts of the developing world just don't contribute that much to the process.
Even if you assume every bit of revenue generated by Glencore is tax avoided GDP that should go to Africa, you're still only looking at roughly $150 billion.
I get that this story gets repeated over and over in academia. But how about real life? How exactly is the African worker supposed to feed, clothe, better themselves, if they aren't being "exploited" by wealthy foreign employers? Remember the alternative is to be exploited by the poorer, local talent instead. At some point, you need to recognize that one needs more than just resources in order to prosper and the usual, near universal way to get there is by emulating the highly successful current developed world.
These anti-colonialist fairy tales obscure an important fact. Everyone, everywhere is doing better than they were in 1950 with the exception of some war zones. That includes Africa, Asia, and South America.
I get that Africa in particular has a tough time. That's why I think they'll be among the last to attain developed world status this century. It's very easy to forget that most of the developed world was pretty damn poor even as late as the Great Depression. The route is marked. One merely needs to follow it.