Income inequality, political crises and climate to top agenda in 2015

The WEF's Outlook on the Global Agenda 2015 features an analysis of the Top 10 trends which will preoccupy experts for the next 12-18 months as well as the key challenges facing the world’s regions, an overview of global leadership and governance, and the emerging issues that will define the future.

A Pegida rally in Dresden, demonstrating against Islam
A Pegida rally in Dresden, demonstrating against Islam

Every year the World Economic Forum taps into the knowledge, observations and experiences of its Global Agenda Council Members, asking them to identify the issues that they believe will have the biggest impact on the world over the coming 12 to 18 months. The resulting insights, gathered with the help of the Survey on the Global Agenda, ultimately generate the Top 10 Trends – a forecast of the social, economic and political flash points that reside on our collective horizon.

1 Income inequality

The dangers of neglecting inequality are obvious. People, especially young people, excluded from the mainstream end up feeling disenfranchised and become easy fodder of conflict, says UN special advisor Amina Mohammed. In developed and developing countries alike, the poorest half of the population often controls less than 10% of its wealth, and according to the 2014 Pew Global Attitudes Survey, in the seven Sub-Saharan African nations polled over 90% of respondents regard the gap between rich and poor as a big problem; in the United States, almost 80% do.

2 Jobless growth

‘Persistent jobless growth’ refers to the phenomenon in which economies exiting recessions demonstrate economic growth while merely maintaining – or, in some cases, decreasing – their level of employment. Harvard professor Larry Summers says the percentage of workers aged 25 to 54 who are not working rose by three-fold over the last half-century. The robotics and 3D printing revolutions could accelerate this trend still further, as the comparatively low entry cost for these disruptive technologies makes them widely accessible to everyone, including developing economies. “Among the key areas that will have to change is education, so that our schools, colleges and universities place a premium on doing the tasks that machines cannot do: collaboration, creation and leading.”

3 Lack of leadership

A startling 86% of respondents to the Survey on the Global Agenda agree that we have a leadership crisis in the world today. “Perhaps because the international community has largely failed to address any major global issue in recent years,” says Shiza Shahid Co-Founder and Global Ambassador, Malala Fund, on the failure to deal with global warming, the failure of the global economy, and violence in the Middle East. “We have a surge of incredibly smart, enabled people coming out of education, building great companies and showing us the radical pace of innovation; this could explain why survey respondents ranked business leaders second only to non-profit organizations in our Global Leadership Index. By contrast, when we look at our governments and international institutions, it is tempting to only see ritual, politics and little progress, and to wonder if these systems are just holding us back.”

4 Geostrategic competition

After the Cold War, the triumph of liberal democracy was faced with security concerns from failed nations and the global reach non-state, terrorist networks. Renewed competition between key actors is a concern, the obvious illustration being the worsening tension between Russia and the West, says WEF managing director Espen Barth Eide. Economic sanctions against Russia and the country’s attempt to create a counterweight to the EU will see Russia complaining of ‘encirclement’ while the West moves away from the economic interdependence with Russia that was once hailed as a guarantor of regional peace and stability; China is on the road to superpower status, while Islamic State threatens to break down the Westphalian state system imposed by WWI victors.

“Yet in the face of potential globalization, and indeed de-globalization, rising nationalism and a deepening disbelief in multilateralism, the most important lesson from 2014 is that we cannot remain passive,” Eide says. “We need more international cooperation, not less… the current pattern of geostrategic competition threatens to harm us all.”

5 Weakening of democracy

The mechanisms are in place for systems to be more democratic than they have ever been, yet there is a fundamental disconnect between citizens around the world and the elected officials that supposedly represent them. The fact is that government is not part of the conversation on the internet where the public can identify people with the same values and fears, exchange ideas, and build relationships faster than ever before. “Our governments are elected, dissolved and re-elected only to pursue short-term agendas, yet the cycles that innovate and build trust with voters require long-term investment. It’s little wonder that people see the system as broken,” says Data4 founder Jorge Soto.

“Representative democracy needs to modernise itself and actively involve citizens in decision-making processes. Rather than seeing themselves as ‘pure’ problem solvers, governments should position themselves as the bodies that articulate the issues faced by society, and then strive to create the right environment for private enterprise and academia to find the solutions, providing the necessary data, policies and funding to support these stakeholders.”

6 Rising pollution in developing nations

China became the largest greenhouse gas emitter in 2005 and remains in this position, followed by the United States and the European Union, according to the World Resources Institute. Brazil and India are the fifth and the eighth biggest polluters. Developing countries will suffer the most from the weather-related disasters and increased water stress caused by global warming, consequences outlined in our other trend chapters. Even 2°C warming above pre-industrial temperatures – the minimum the world will experience – would result in 4-5% of African and South Asian GDP being lost and developing countries are expected to bear 75-80% of impact costs.

7 Increased severe weather occurrences

Severe weather events have dominated headlines recently, causing immense devastation. The irony and cruelty of climate change is that the costs of extreme weather events are highest for society’s poorest, says Adil Najam, Dean of the Frederick S. Pardee School of Global Studies, Boston University. “They are those least able to cope and least able to afford insurance.” Najam argues that the way to convince countries and companies to invest in climate resilience is the same as getting them to invest in mitigation. “Carry out ‘no regret’ spending: invest in policies that are good even if climate change adaptation wasn’t needed – infrastructure…  Find low-hanging fruits: inexpensive policies with high net gains, including disaster preparedness and early warning activities. Finally, look at long-term costs and benefits. Adaptation investments in sustainable and resilient technologies (such as saline agriculture) are just as good as clean energy investments.”

8 Intensifying nationalism

Can we show that neighbours of different cultures, traditions and identities can work with each other not just in a confined multinational state – but even in a more open and exposed global environment? asks former British prime minister Gordon Brown, who campaigned for a no vote in the Scottish independence referendum.  “Can we show that we don’t need to sever the connections between each other to thrive in the modern world, but can find ways of living together by not just sharing rights to services and benefits but by sharing sovereignty? In our case, we must do this through a strong Scottish Parliament as part of, not apart from, the rest of the UK and Europe,” Brown says, warning that much as in the years of the Industrial Revolution people turned to political nationalism to protect and shelter their communities, so are people turning back to old loyalties and traditional identities as they seek to insulate themselves. “Whether it be in Catalonia or Belgium or Lombardy, they are demanding protection against what seems to be the economic disruption and social dislocation of globalization, which threatens to sweep aside long-established customs, values and ways of life.”

9 Increasing water stress

Gary White, CEO of Water.org, says access is the key driver of the water crisis. Even where resources are plentiful, there are millions of people who lack access. While the United Arab Emirates has very little in the way of water resources, for example, they have the financial means to ensure the provision of clean water. Ethiopia, on the other hand, is known as the water tower of Africa, but more than half its population do not have access to a safe and reliable source. So as water stress increases across the world, will we see neighbouring governments, such as those of Pakistan and India, cooperating or manufacturing further tensions in order to seize resources?

“Governments must play a central role. For a start, water treatment and distribution in urban areas is a natural monopoly, as it doesn’t make sense to construct multiple sets of pipes from different companies. In many developed countries, there’s more financial and political will to invest in long-term infrastructure, while in developing countries, it’s not uncommon to see utilities lacking the means to invest in long-term infrastructure and often it is the poor who are left out when this infrastructure bypasses the slums.”

10 Growing importance of health in the economy

For developed economies, ageing populations place a heavy strain on healthcare networks. In developing nations, a lack of resources or inadequate infrastructure present separate challenges. The devastation Ebola wrought upon the African region shows how healthcare systems in this part of the world  were totally unprepared for the enormous challenge. China is increasing spending on healthcare delivery, soon to reach the US in spending on biomedical research. “The Chinese believe that improving their research capacity is a wonderful way to build their economy, and I think they’re right,” says Francis Collins, director National Institutes of Health, USA. “Paying attention to the Chinese example would be worthwhile. Investing in the health of a nation’s citizens is one of the smartest things a leader can do.”