Today’s post is by Martha Baxter and Bathylle Missika of the OECD Development Centre
Humankind has experienced more than two centuries of almost continuous progress since the Industrial Revolution, but will this trend continue? And as we prepare to adopt a new set of Sustainable Development Goals to guide our policy choices, how can we best capitalise on progress made while anticipating challenges ahead such as the youth bulge or massive droughts? A new report by the OECD Development Centre supported by the Rockefeller Foundation cautions that that a number of global trends could slow or even reverse the progress made. Securing Livelihoods for All: Foresight for Action looks at how the world’s livelihoods may change between now and 2030. It finds that threats may come from many fronts: from global economic trends and demographic transitions to environmental change and new technologies, among others.
The report doesn’t try to forecast what will happen. It uses foresight techniques to ask “what if?” questions and develop five stories of the future, interconnecting several trends we’re concerned about, and picking up on some of the weak signals coming from new and emerging trends.
Of the five possible futures developed in the OECD report, three are dire, involving massive population movements, inequality, poverty and citizen unrest, while two involve vibrant societies that possess the skills, creativity and flexibility to thrive and stave off global crises.
The first scenario is called “Automated North”. Automation proceeds faster than expected and affects ageing societies in particular. The rapid automation in advanced and some emerging economies means that jobs in most sectors are increasingly taken over by robots and artificial intelligence systems. The process is so fast that most people whose jobs are replaced by technology cannot adapt and find it difficult to secure their livelihoods. Inequality increases faster than expected. With fewer jobs available to nationals, pressure is growing to increase barriers to immigration in developed countries. Lower fiscal revenue combined with more people in need of social security support means that government debt becomes unmanageable. Social tensions and disruptions increase. In many developing countries, the automation process is much slower, meaning that these countries are no longer competitive, even in low-cost, low-value added sectors.
In the second scenario, “Droughts and joblessness in the South”, droughts become widespread in large parts of the developing world, challenging livelihoods in regions with large youthful populations (sub-Saharan Africa, North Africa, Middle East and South Asia). Subsistence farming becomes almost impossible and even larger scale farming is seriously challenged. Famines become normal, not only for small-scale farmers but also for poor people in urban areas as food prices sky-rocket. Migration takes place primarily within countries as rural populations flood to the cities. But international migration also increases as cities reach their absorption capacities. The pace of change – in the youth population explosion as well as in the severity of droughts – is very fast. Countries, communities and individuals are unlikely to be able to adapt livelihoods or support mechanisms fast enough. The result is hunger, increasing inequality and social disruption.
In the third scenario “Global financial crash, a major financial crisis triggers a collapse of the global trading system and a shift to protectionism. A housing bubble bursts in China and some other emerging countries. High levels of corporate debt in the developing world become unsustainable and lead to capital outflows. The European Union unravels, prompting another financial crisis. Commodity prices continue to fall rapidly, creating significant challenges for currency stability in countries relying on commodity exports. These financial disruptions trigger a major global economic crisis, affecting trade, investment and consumption. Protectionist pressure re-emerges but does not help to avoid social disruptions, and governments fail to address problems of increasing inequality. In developed and developing countries alike, many people’s livelihoods come under pressure. At least one billion people fall back into extreme poverty.
The “Regenerative economies” scenario posits a more positive vision of the future. Technological innovations create enough new jobs for most people and economic activity becomes more sustainable. Many new fields flourish, including cybersecurity, environmentally resilient engineering, robot-enhanced service jobs, and jobs requiring high skills in nanotechnology and biotechnology. As the real economy becomes a virtual economy, many sectors undergo a transformation. Country borders and distance become less relevant. Markets become more international than ever before. Countries reshape their education systems so that people can perform in the knowledge economy. Technological innovation in agriculture results in migration from rural to urban areas in many developing countries, but planned, medium-sized cities with energy-efficient infrastructure contribute to sustainable urbanisation rather than slumification. While impacts on livelihoods are positive overall, certain people will still need social security, but such systems will be more affordable for nation states under this scenario. This scenario could touch all regions of the world, but would come about faster in advanced and emerging countries.
In the final scenario, “Creative societies”, diverse experiments at the local level focus on individual resilience and social well-being. Technology-induced joblessness increases in developed and developing economies alike. Societies evolve towards new ways of living and working, in which individuals and communities are the key actors of change. In the absence of secure full-time employment, individuals must put together a portfolio of work – part-time jobs, shared work with colleagues, trading skills and services. This portfolio lifestyle is made possible by three important factors: technology, which allows people to work anywhere at any time; the adoption of guaranteed minimum incomes in most developed countries, paid for by higher taxes on capital, rather than labour; and new social attitudes in which young people are not so interested in consumer culture, but contribute to what might be called “the experience economy.” Cities pursue a green agenda, retrofitting buildings and prioritising water conservation. A robust urban food movement develops, involving urban community gardens. Public-private livelihood incubators flourish in most cities, providing job counselling, the matching of skills and opportunities, start-up financing, and individually tailored aid packages for young and old. Developed countries learn from experiments in social inclusiveness and adaptive, frugal innovation pioneered in developing economies.
So what is awaiting us? Which scenario triumphs depends on the building blocks laid down today, for example a shift in values towards prioritising sustainability, as highlighted in the “regenerative economies” scenario, and on policy choices. There are also many more scenarios that could be developed beyond the ones explored in the OECD report. But what matters is that imagining different scenarios of the future can create space for strategic, often difficult, conversations in today’s policy discussions. These conversations will allow us to discuss the livelihoods we have and the ones we want by 2030. The bad news is that in spite of the use of forecasts and foresight, we still do not have anything resembling a crystal ball. The good news is that we have more than a say in how our future livelihoods will unfold.