What are the biggest stories looming on the global agenda? Building on our Agenda Weekly email update, each month we look ahead at the events and trends that will have the most impact.
Expecting shocks. Stock and commodity markets are jittery these days while bond markets are pricing in a rising chance of recession in the United States -- even though most analysts see growth slowing, but not stopping. Why such pessimism? One answer is growing fear around trade uncertainty and political risks. Another is the rise and risks of ever more complex financial instruments. Weaker than expected economic data doesn’t help, though at least one developing country is positively booming.
- Forward View: The International Monetary Fund has urged a fight against inequality and closing the gender gap to build a more sustainable global economy. The World Economic Forum is partnering with the World Bank, the International Development Research Centre, and the German government on a new platform, GrowInclusive, to scale best practices and foster inclusive, sustainable business models.
The centre holds. Pro-EU parties managed to hold on to about two-thirds of seats in Europe’s elections. The far-right did increase its share to about 25% from 20%, with particularly strong showings in France, Italy, and Poland, but overall fell short of expectations. Turnout was the highest in 20 years, as pro-Europe voters also made their voices heard. In the UK, even if a pro-Brexit party led, it underperformed polls. Anti-Brexit parties combined won more votes, but this is unlikely to be reflected in the dominant pessimistic narrative. The major European powers are arm wrestling over nominations for the top EU jobs.
- The big picture. Worldwide, nationalism may be on the rise, as recent elections in India and Australia show. Yet in Europe’s elections the distinctly anti-nationalist Greens did far better than expected. Polls show that the British are not anti-immigration, and the French President has set out five ways to reform the EU and counter its critics. In the world’s largest Muslim-majority country, a moderate defeated religious nationalists. Globally, prosperity and peace require that growth and equality grow together.
Not just trade? What are the US and China really fighting about? If it is just trade, a deal is possible. But if trade talks become a proxy for geopolitical rivalty, resolution may be difficult. Rhetoric in China may be indicating a long fight, in which the economic and political pain could grow. There’s a risk that this clash could split the world in two. For now, the costs are mounting.
- What happens now: Will the US and Chinese leaders meet at the G20 summit in Japan this month? No meeting might mean no deal, and there’s scepticism too about what a meeting could accomplish. The Forum’s platform to shape the future of international trade offers a space to reduce tensions and foster sustainability in global trade.
Et tu, tech. US measures against Chinese tech giant Huawei could ramp up trade tensions into a new tech cold war. The impact is already spreading to suppliers and users in Europe and Asia. European governments are resisting US pressure to block Huawei, which remains part of 5G plans, but companies are bending. There’s debate over whether US security concerns are legitimate, if it’s all paranoia, or if it’s just one aspect of a broader geopolitical struggle.
- Forward view: President Trump has indicated that Huawei could be part of an eventual trade deal. China is seeking to lead new kinds of global tech coordination. Making 5G and other building blocks of the Fourth Industrial Revolution secure and accessible to all will require global collaboration to shape the future of the digital economy.
More than words. Amid rising tensions with Iran, the US is sending more troops to the Middle East and selling advanced arms, despite Congress’s disapproval, to Iran’s rivals. Iran’s government says it will defend itself against any aggression, while seeking diplomatic support in the Middle East and in Europe. The US is signaling that it does not want a war, but one might happen by accident.
- Forward view: An expert answers questions on the crisis, including likely outcomes. If history is a guide, sanctions are unlikely to have their intended effect. The Forum’s Global Platform for Geostrategic Collaboration offers a space for shared understanding. The Forum has also mapped out challenges and opportunities throughout the Middle East.
Humanity may survive. The threat is real. Rising sea levels could displace 200 million people within two generations. The UN warns that a conjunction of climate risks could even threaten humanity’s survival. Yet the signs are growing that humanity can meet these threats. Nuclear fusion is advancing, offering the possibility of limitless, zero-carbon energy. Total financial investment in renewable energy was stagnant last year, but that’s in large part because the cost of renewables had fallen so much.
- Next steps: How to ramp up renewables innovation and scale up implementation? Bill Gates has ideas for better renewable energy storage and transmission. Europe should consider its own green new deal, and the fight against climate change is an area where tariffs may actually be called for. Any climate-related initiative will be more effective if they use a global platform for private/public sector collaboration.
On a lighter note, here’s a burgeoning export industry from China that other countries are likely to welcome with open arms: science fiction.
In this section, we identify the stories that haven’t made big headlines but are likely to shape the agenda next month and beyond. The Forum's Strategic Intelligence team applied its AI knowledge tools to the content being published by the world's top think tanks. Here are the articles and ideas that bridged the most topical areas.
6 May 2019
Many hope that algorithms will help human decision-makers avoid their own prejudices by adding consistency to the hiring process. But algorithms introduce new risks of their own. They can replicate institutional and historical biases, amplifying disadvantages lurking in data points such as university attendance or performance evaluation scores. Even if algorithms remove some subjectivity from the process, humans are still very much involved in final hiring decisions. Arguments that cast “objective” algorithms as fairer and more accurate than fallible humans fail to fully recognize that in most cases, both play a role.
6 May 2019
Teaching a child about the warming climate often raised concerns among parents about the issue. Fathers and conservative parents showed the biggest change in attitudes, and daughters were more effective than sons in shifting their parents’ views. The results suggest that conversations between generations may be an effective starting point in combating the effects of a warming environment.
8 May 2019
Climate change will upend the world in an array of disastrous ways—droughts, floods, fires, hurricanes, sea level rise. It will change our lives —famine, migration, inundation, desertification, disease, conflict. Yet we barely talk about it. All too rarely do we sit down for deep, nuanced, and fact-based discussion of what climate change practically means for humanity. While some of us spend a lot of time reading and worrying about it, seldom do we gather in a room to consider where the science is pointing and what we might collectively do about it.
9 May 2019
There is nothing wrong with making better medicines. A cure for asthma or HIV would indeed be welcome. But would it not be better to live in a world where these diseases no longer exist? To get this world, we must have the humility to see that there is more to health than our capacity to cure disease and extend life. Health emerges from our shared context—from the air we breathe, the water we drink, our economy, politics, schools, workplace safety laws, corporate practices and other large-scale influences.
9 May 2019
As its name implies, 5G is the next generation of broadband wireless following 3G, which brought the internet to smartphones, and 4G, which increased the speed. But advocates claim it is no mere mobile phone upgrade, they say that 5G, which transmits on much smaller frequencies than existing wireless networks, will revolutionize internet access altogether, creating a wireless cloud of data and rendering cords largely obsolete. Viettel plans to make Vietnam an earlier innovator in the tech, punching well above its own weight in the process.
10 May 2019
The frictions facing businesses in terms of their direct transition costs (economics) and the possible unwillingness of consumers to engage (social norms), mean that the AI revolution, and the related effect on the labor market, will not be complete any time soon. Invention and implementation typically run on different schedules, and the survey evidence suggests that firms have a long way to go.
10 May 2019
Light-emitting plants, which debuted in 2017, are not genetically modified to produce light. Instead, they are infused with nanoparticles that turn the plant’s stored energy into light, similar to how fireflies glow. “The transformation makes virtually any plant a sustainable, potentially revolutionary technology,” says Michael Strano, the Carbon P. Dubbs Professor of Chemical Engineering at MIT. “It promises lighting independent of an electrical grid, with ‘batteries’ you never need to charge, and power lines that you never need to lay.”
16 May 2019
This brand of social innovation sees the world of social problems almost entirely as “design challenges.” It assumes that the secret sauce of solutions comes from observing the problem, generating ideas to address it, and prototyping and testing small-scale fixes. This process works well, for instance, to help people access clean water and wind-powered electricity. But when it comes to the deeper problem of structural racial inequality, it stumbles.
16 May 2019
Some may shrug, believing that since their phones already track them, and their social-media accounts provide a record of their preferences, travel, and in many cases political beliefs, one more incursion on their privacy does not amount to much. But facial-recognition technology is rather different. A person can choose to leave their phone at home, or delete their social-media accounts. To avoid being tracked in a city blanketed with facial-recognition cameras, they would have to stay home.
23 May 2019
Without a doubt, the contractor model has created great value for workers and consumers alike. For many drivers, it has created a flexible source of part-time work with relatively few barriers to entry. But in recent years it has also become clear that the existing status quo is not sustainable, either for workers or the firms themselves.
23 May 2019
The rich-world jobs boom is partly cyclical—the result of a decade of economic stimulus and recovery since the great recession. But it also reflects structural shifts. Populations are becoming more educated. Websites are efficient at matching vacancies and qualified applicants. And ever more women work. In fact women account for almost all the growth in rich-world employment rate since 2007. That has something to do with pro-family policies in Europe, but since 2015 the trend is found in America, too. Last, reforms to welfare programmes, both to make them less generous and to toughen eligibility tests, seem to have encouraged people to seek work.