2030 vision: what lies ahead
At this time of year many fund managers look into their crystal balls and make predictions for the 12 months ahead. But we encourage investors to have longer horizons. Should we not be looking further ahead at the changes that will impact over the long term? The next decade will bring huge change and some exciting technological developments. What might the world look like in 2030?
The United Nations estimates that by 2030 the global population will rise to 8.6 billion people (from 7.6 billion today). Fertility rates are declining in many parts of the world, but people are living longer. Longevity will drive growth.
There will be population shifts, too. By 2030 India will have overtaken China as the most populated country on Earth. Nigeria will be well on its way to overtaking the United States in third place.
Currently, about 54% of the global population is urban. The figure is expected to reach 60% in 2030. Over a hundred new megacities (cities with more than 10 million residents) are forecast to arise. Tokyo will surrender its ranking as the world’s largest megacity to New Delhi, with London also growing by some 10%. To put this into perspective, a further 2.5 billion people will live in our cities in one generation’s time.
The urban environment will need to adapt to this growth explosion of data-hungry citizens. We are already becoming accustomed to the ‘internet of things’, with smart homes hooking fridges, lighting and security up to smartphone apps and virtual assistants. In the future this may become a feature of city planning, too. Over the next decade we could see energy-efficient streetlighting act as a means of streaming data between city infrastructure and personal devices and augmenting the artificial intelligence of autonomous vehicles with real-time situation data. This will improve sat-navs. And an integrated, digitised urban network will make drone delivery of parcels and takeaways possible.
Vertical space will become ever more valuable in these crowded cities. Public squares and parks may move underground, using lighting that synthesises daylight. Buildings will get taller. Skyscraper construction has already increased by over 400% since 2000. If built, the Burj Mubarak al-Kabir in Kuwait will be the world’s tallest building. At 1,000 metres, it will eclipse the current record holder, the Burj Khalifa in Dubai.
Demographic change will influence communication. Despite Mandarin, English and Spanish currently being the most prominent global languages, one projection by French investment bank Natixis suggests that French may rise to the top – a result of population growth throughout Africa and decline in Asia.
You might imagine that this will benefit the 2030 French economy, but technology may intervene. Google Translate could be brought to life by the artificial intelligence of the ‘Translatotron’. Rather than converting speech to text or text to text, Translatotron will offer real-time, speech-to-speech translations. It will retain the crucial characteristics of tone and inflection, making us all multilingual. Will this diminish the competitive advantage speaking English offers companies in the UK?
The International Air Transport Association (IATA) predicts there will be 7.8 billion passengers travelling in 2036, almost double the amount who flew in 2017. And while French may overtake Mandarin as the world’s most spoken language, the World Economic Forum believes China will overtake France as the world’s top tourist destination.
Indeed, travel agents may define China as a short-haul destination in 2030. Oxfordshire-based Reaction Engines is developing the Synergetic Air Breathing Rocket Engine (Sabre), a hybrid rocket that aims to fly planes at twice the speed of Concorde. It hopes to usher in an age of hypersonic travel, generating speeds of 4,000mph. That would cut flight times to New York to 60 minutes and Sydney to four hours.
Such speeds generate heat that can melt engines. Sabre seeks to overcome this challenge with super-cooled helium that chills incoming air from 1,000 degrees centigrade to zero in one-twentieth of a second. The heat is harnessed to power the engine. With its potential for use both inside and outside Earth’s atmosphere, Sabre – if it takes off – may bridge the gap between air and space travel.
The space economy is forecast to grow from US$244 billion in 2010 to US$805 billion in 10 years’ time. While Messrs Bezos, Branson and Musk’s ‘Billionaire Space Race’ heats up, astronaut Don Thomas predicts that by 2030 a trip to space could cost as little as £7,000.
Automation and the workplace
Of course, the workplace will change in the next decade. Automation will assimilate more of our repeatable and manual tasks (such as manufacturing, some aspects of customer service and even long-haul trucking), and there will be higher demand for the cognitive skills of critical thinking and decision-making and creativity. Career advice service Monster predicts that engineers, teachers, games designers and healthcare workers will be among the most in-demand professionals10 years from now.
The 2030s will see continuing evolution in communication technology, as business meetings take place in virtual reality. It is claimed we will use virtual reality headsets to simulate the feeling of everyone being in the same room, though miles apart.
If you can work anywhere, maybe you can work any time. With an increasingly mobile workforce, led by a rise in freelancers and portfolio careerists, the 9-to-5 working day may meet its end. That will reduce the costs, fuel use and environmental impact of long-term commuting.
This will help business, with savings in the cost of owning or leasing property as they reduce their core, full-time employees to a bare minimum. A virtual workforce, working across borders, can handle specific tasks, enabling a more efficient means of accessing specialist skills. The downside is likely to be zero-hour contracts that transfer the financial risks to the employee.
The next decade promises exciting development in healthcare. Nanobots – programmed DNA strands that can enter your body and locate cancerous cells and other illnesses – are already being heavily researched. Such technology could deliver medical treatment with such specificity that it eradicates side-effects.
In 2020 the UK is to adopt a ‘presumed consent’ opt-out system in respect of organ donation. While this is forecast to save 700 lives every year here, there is still an international shortage of organs. One company, United Therapeutics, is developing a 3D printer that uses collagen – the main component of our connective tissue – to produce the structure of a human lung. This can then be infused with stem cells that bring it to life. The technology could herald the mass production of spare human parts.
This raises the spectre of eventually replacing failing organs in old age, extending our life expectancies, which are already rising. By 2030 a man born in the UK might expect to live for 82.5 years on average. A woman is forecast to live to over 85. In both cases that is about three years longer than today.
Food production in 2030
An increased population needs greater food production. But the amount of arable land per person is decreasing. According to the United Nations, by 2050 it will be one third the amount available in 1970.
Intensive agriculture is directly responsible for the loss of forestland across the world, exacerbating the climate crisis. Ironically, however, the search for new farmland may find a solution in the world’s increasing urbanisation.
Firms like Intelligent Growth Solutions (IGS) are using old factories and warehouses to grow stacks of fruit and vegetables in metal trays under LED lights. Artificial intelligence manages lighting, humidity and CO2 in a closed environment that needs neither soil nor sunlight.
And warehouses are just the start. Virginia-based Skyscraper Farm constructs multi-purpose urban buildings that can potentially yield 20 harvests a year. Their designs range from four-storey facilities used solely for growing to 52-storey skyscrapers that cover farming, residential and commercial space.
This maximises space and establishes climate independence. And, with food grown in the very urban environment in which it is consumed, less transportation is needed, saving on fuel consumption. But vertical farming is not without its critics, who fear that any climate benefits are offset by the energy demands of artificial lighting and climate simulation. A lettuce grown in a traditional greenhouse needs an estimated 250kWh of energy for every square metre of growing per year. A purpose-built vertical farm needs 14 times that amount.
By 2030 we may be growing clothes as well as food, as ‘bio-couture’ comes into vogue. Researchers are currently working with live organisms to grow biodegradable textiles. Researchers and students at the Fashion Institute of Technology in New York have used algae to create a material that can be dyed with natural colourants and woven into clothing. This reduces chemical usage and helps make clothes sustainably disposable. Organisms can even be ‘grown to measure’, using moulds to avoid excess production and waste.
The environmental benefits of smart clothing do not end there. Researchers at the University of Tokyo and Japan’s RIKEN research institute have developed a new type of solar cell, which may well be the forerunner of wearable solar panels that redefine what it means to buy a power suit. Thin, flexible and water-resistant, these cells can be woven into a jacket that can also charge your smartphone.
I have identified some companies here. They are not investment recommendations. Investing in early-stage technology is a specialist job and high-risk. It is well known that the early developers are not always the most successful and profitable. We tend to invest in large, well-established businesses.
So why bother looking beyond the horizon to 2030? The answer is simple: demographic and technological change will shape our world. We need to be aware of the disruptive threats facing established businesses. When we meet company managers we want to know how they are anticipating these emerging opportunities and how they are responding to the threats. It pays to look ahead.
Returning to the more immediate future, we wish all our clients health, wealth and happiness in 2020.
By James Horniman
Posted on 7th January 2020
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