This month represents the tenth anniversary of GPC’s Sign of the Times. The world today is a very different place than it was when the first Sign was published in October 2011, even though it’s title “Increasing Challenges for Foreign Investors in China?” still feels very contemporary. Barack Obama had yet to complete his first term as America’s president, Xi Jinping was still paramount leader in waiting of a country that was growing at 10% per annum, while most economies around the world were still recovering from the Global Financial Crisis of 2008. Further, Britain was an integral part of the European Union and one of the most prosperous and open countries in Europe, India’s growth had stalled from a 20 year high of 8.5% in the prior year, and the UN Sustainable Development Goals and the Paris Agreement were still years away.
The intervening ten years have seen National Populism surging across the world, including in historical bastions of democracy, the emergence of a new cold war between a deeply divided America and an increasingly assertive China, a UK out of the EU with conflicts with its neighbours and no trade deals with the major global trading blocs, and more recently a global pandemic that has simultaneously triggered the worst economic crisis since the Great Depression and the worst humanitarian crisis since the Second World War. At the same time the number of billionaires in the world has more than doubled, the Dow Jones has more than tripled, the S&P 500 has quadrupled, and the number of social media accounts globally has increased more than five-fold, pointing to a world that is both richer and more connected than ever before despite its many challenges. Further with COP26 currently underway, US$130 trillion of assets and 90% of global GDP are now covered by net zero carbon commitments, up from 0 for both a decade ago.
At the ten-year mark, this month’s Sign of the Times looks back on a decade’s worth of analysis and reporting to identify 12 of the most important and impactful thought pieces as we see it, ‘Leaders’, as we call our leading pieces each month, that best illustrate our thinking and our values in a world full of opportunities and challenges amidst profound multi-dimensional change.
True to its name, the Sign of the Times’ mission since inception has been to highlight the most important events and issues facing the world, and to look out at what this might mean for the world order. The topics have been global and wide-ranging with some on India and China as two rising powers in the east. In addition to highlighting and analysing a series of important themes and subject matters, the Sign of the Times, the ‘Sign’ has also sought to deliver a series of insights and, when possible, foresights on the most critical issues to provide input to decision makers across the world navigating the many increasingly interrelated challenges they face. During the past decade of global change, the Sign has highlighted a wide range of political, economic, social, technological and financial topics, across issues as as diverse as cyberwarfare, national economic strategies, smart cities, the link between democracy and economic growth, slums sustainability.
Underneath this apparently eclectic mix of subjects however lie a series of recurring themes that reflect not only the Zeitgeist of the past decade, but also the underlying values of the Sign of the Times team, namely to see the issues of our times, no matter how extreme they may be, from the lens of the opportunity to promote peace, prosperity and freedom in the world, and warning against the counter to these.
Issues like the changing nature of American power and the post-war order, China’s and increasingly India’s continued rise, the need for sustainable development, mass inclusion, and the importance of freedom and democracy have not only shaped the past decade but are likely to be fundamental in the decades to come too, and therefore represent core areas on which the Sign has focused (see inset), and expects to continue to as well in the years to come.
In some cases, the thinking was explicitly tied together around a theme and published serially (such as the Coronavirus Pandemic and the Shape of the World series), while others (such as analysing India’s growth trajectory or democracy freedom) were published as standalone pieces that were nevertheless thematically tied together.
The reader base and engagement has expanded to include leading transnational institutions, governments, companies, entrepreneurs, investors, and individuals.
The Sign of the Times: Key Series and Themes
The Shape of the World to Come
The Coronavirus Pandemic
American Power and Multilateralism
India’s Growth Trajectory
The Nature of China’s Rise
Sustainable Economic Development
Democracy and Freedom
The Sign of the Times: A Dozen Highlights from the Past Decade
This month’s Sign of the Times is a simple one. It draws upon a decade’s worth of analysis to highlight a dozen of the most memorable Leaders that best reflect the Sign of the Times’ thinking and values, and further point to the emerging themes of change that will shape the world to come in the next decade. These include:
Creating Prosperity for 1bn People: Re-architecting the System of Wealth Creation (April 2021)
The world’s financial systems currently exclude nearly 70% of the global population from access to formal sources of borrowing and financial savings products and are clearly unsustainable as a result. The answer lies in enhancing the system of wealth creation itself. Such a system of enterprise will need to (i) drive rapid scaling of companies, (ii) drive rapid productivity growth, (iii) deliver participation in the benefits of that productivity growth equitably to workers, and (iv) be environmentally sustainable. While every nation has a different model and so each will require a different solution, the case study of India as the next rising power, demonstrates the opportunity to create a new system of wealth creation and in doing so accelerate its path to prosperity through a fundamental shift which sees the country’s poor not as a resource to enrich the already prosperous, but rather as participants in an economic system that will unlock new opportunities and share prosperity for those that work for it. The lessons are far reaching for other developing countries in providing a roadmap for progress, for the US and EU to develop an ally that would be a true counterweight to China, and for democracies in demonstrating the potential of freedom to deliver prosperity.
The Rise of Sustainable Finance: Global Investment Implications (March 2021)
There is a major shift underway in the global finance industry towards a more conscious form of capitalism, in which capital is allocated more responsibly, and financing is mobilised to help address critical issues facing the world and unlock the opportunities to build a more advanced and prosperous world. In December 2020, a new report, “Capital as a Force for Good: Global Finance Industry Leaders Transforming Capitalism for a Sustainable Future” examined the initiatives being undertaken by over 60 of the world’s largest global financial institutions across ESG (environmental, social and governance criteria), sustainability and stakeholder engagement. The report had four key findings: (i) a significant “common ground” has emerged among leaders in the finance industry in terms of their sustainability initiatives, (ii) a number of financial institutions are going further and breaking new ground by driving initiatives that can deliver disproportionate impact, (iii) there is a clear link between a focus on sustainability and superior performance and (iv) the initiatives of these finance industry leaders have the potential to transform the overall system of capitalism itself.
Assailing Democracies and How to Defend Them (February 2021)
The raid of the US Capitol building on January 6 represents a unique event in the country’s modern history. In the short-term, it marked the effective end of Donald Trump’s presidency. Over the longer term, however, it may be seen as the coda of an unprecedented assault on America’s democratic principles. Of course, having to rely on an insurrection is in itself a failure of strategy. However, while the actions taken by Trump failed, with some augmented initiatives and drawing on important lessons from history, they provide important elements of the playbook that an assailant on a modern democracy could follow to gain power. While the agenda of defenders of a democracy will vary from case to case, the principles that underpin this agenda are, for the most part, common and include: (i) promoting truth, transparency and trust, stopping fake news, misinformation, and hate speech. (ii) strengthening an open and tolerant civil society, through improved education (iii) overcoming political fragmentation and partisanship through the adoption of shared agendas and codes of conduct, (iv) strengthening the democratic process, and electoral integrity and reform campaign finance, (v) creating economic equity through national development institutions and programmes and (vi) pre-empting and countering international assailants, bringing bad actors to account. This playbook for peace, prosperity and freedom is one that the leaders of democracy urgently need to write together.
The Quadrilateral Power Blocs Shaping the World: Will Democracy Prevail? (December 2020)
America has been the sole great power for nearly three decades. Inevitably, others have risen in its wake and are catching up. The foremost of those is China. As an autocracy and a challenger for global leadership, it holds the biggest threat to American power, to the EU and India, and also to democracies worldwide. This is not because it has articulated an ambition to threaten any of these or to seize global power, but because it would be the first time in over 200 years that an autocracy is the dominant economic power in the world. While no leading power in history has been able to reverse its inevitable decline, the US is uniquely placed to reinvent itself as a leader that is fit for purpose in the 21st Century, innovating a sustainable energy source in the world, implementing an equitable model of growth and developing practical solutions for the management of the global commons. Such a transformation will, however, take time and the US will therefore need partners to share the burden. Based on the shifting dynamics of global power, the EU and India represent the most significant potential partners for the US, each embracing liberal democracy and free markets as core values. Partnering with these countries provides the US with the critical economic, demographic and political mass required to exercise continued leadership in the world.
American Power: Mapping its Rise and Calculating its Fall (and Return) (August 2020)
American power, one of the foundations of the global liberal order, has endured for nearly a century due to its multi-dimensional nature, providing it with economic, military, innovation, multi-lateral and soft power leadership. However, mapping the trajectory of American power onto those of other great powers and empires throughout history reveals that America, as currently conceived, and as a great power, is set to decline and likely to end by the middle of this century, ceding the ability to set the global rules of engagement to a competitor (likely China) at this time. America’s ability to arrest or even reverse a decline that looks like a historical inevitability relies on the country both renewing its commitment to multilateralism and working with its allies as well as reinventing itself as an information age superpower. America as the de-facto leader of a power bloc alongside the EU and India, has the ingredients to remain the pre-eminent power in the world through the end of the 21st century despite the rise of China. However, America First is the fastest route to realizing that decline, given its insistence that opting out a viable option for country, , alienating allies, and closing down the option to work with partners.
The Coronavirus Pandemic: A Global Test of Resilience, Leadership and Values (April 2020)
Covid-19 is a highly contagious pathogen, that has revealed many cracks in the world’s existing political, economic and governance systems, including in public health, international cooperation, economic flexibility and government effectiveness. The East led the world initially in the absence of leadership from the West at large, with countries demonstrating a cohesion and discipline that enabled them to maintain among the lowest infection and fatality rates in the world. The global shutdowns showed how capital, globalisation, trade, consumerism and community can operate differently if required. The pandemic exposed the weaknesses in transparency and nationalism in China, but then quickly went on to expose the weaknesses of the National Populist models in the US and UK which suffered some of the worst infection and fatality rates in the world. The early days of the pandemic also showed that the widespread heroism of ordinary people in restricting their lives for each other, the world over, was greater than the initial fear that gripped them. However, with different political approaches, it became clear that some countries were vulnerable because of the lack of health infrastructure and resources, and others were vulnerable because of their leadership and politics. The crisis also demonstrated very quickly that countries need to work together to face such challenges with global coordination, collaboration and sharing to solve and defeat global issues.
National Populism and the New World Order (August 2019)
Liberal democracy is perhaps the most successful political ideology in history and has led to unprecedented global development, peace and prosperity. However, it is now facing an internal threat in the form of national populism. Over the past three years national populism has grown from a fringe movement, supported by money, media and personalities into a powerful ideology, National Populism. The resulting clash of ideologies between National Populism and liberal democracy leaves the world at a crossroads and will determine what the next civilisation will look like. The first possibility is an open, inter-connected world based on a new liberal order. The alternative, is defined by a world of islands in a new, illiberal order, offering essentially a vision of societies defined in terms of various national, sub-national, ethnic, racial, sexual, or cultural units; a modern form of tribalism, and where national populists occupy key countries, they are a disruptive force along multiple dimensions from security to trade. For the former to materialise and national populism to be defeated, responsible politicians in the West will need to fundamentally change direction and speak truth to the people. The fight is for a civilisation based on the pursuit of peace, prosperity, and freedom in the face of seducers speaking small truths to sell big lies. The alternative would see America becoming a version of China in terms of its autocracy and control over its people, something it is not suited to be.
Global Cyber Rivalry Challenges American Geopolitical Leadership (December 20181)
The global cyber disruptions occurring in the world today are indicative of the shift of civilisations away from the industrial to the informational. Among these disruptions is an unprecedented proliferation of cyber warfare capabilities, driven by the dissemination of digital technology among both state and non-state actors. Cyber-attacks are becoming more sophisticated and more strategic, evolving from simple cyber theft to asserting control over physical infrastructure and undermining governments. This field provides for a new paradigm in warfare, with low barriers to entry, an immediate global position, low cost compared to conventional weapons, easy transfer of know-how, the potential to erase or obscure the trail of evidence for actions taken, deniability on the part of governments, the ability to take the fight from digital to physical, a proliferation of skills and with vast potential for growth. While America continues to lead the world in cyber capabilities, the asymmetric nature of cyber warfare continues to pose credible threats to the US and other nations. In addition, China has made one of the most significant investments to build its capability and is an emerging superpower in cyber capability. Given the critical importance of cyber as one of the key control points of any new world order, America cannot afford to not also lead in establishing the cyber rules of conduct for the world. This in turn will require the country to reaffirm its previous principles and carry them over to the digital space, while simultaneously (re-)assuming its role as a global leader with full cyber-attack and defence capabilities and dominance in digital trade, commerce and finance, while maintaining the peace at large.
China’s Path to World Leadership (August 20182)
Since assuming office in 2012, President Xi Jinping has given increasing expression to leading China into a ‘new era’ as a premier global power. China’s increasing economic, political and security assertiveness indicate that China’s bid for increasing global leadership is both comprehensive and multi-dimensional. The world is in the midst of a ‘Global Great Game’ with territories being staked out by world leaders. China has been highly effective at positioning itself, safeguarding its homeland from foreign political and corporate influence, deepening dependencies in states where it chooses to trade, occupying positions which America has neglected, staking out new territories like its One Belt, One Road initiative, building global positions in Asia, the EU, the Middle East, and Latin America and developing its own soft power through media and aid. China today much choose a path that lies between two ends of spectrum. At one end lies the ‘Long and Patient Path’, with China continuing to engage as a transactional merchant trader, preferring bilateral engagements where its scale provides it with an edge and avoiding entanglements where it feels it has little to gain, always keeping an eye on its long held view that its mandate is to protect China’s interests. At the other end of the spectrum, a more inclusive and engaging China would focus on global integration and partnership, sharing in initiatives, promoting common values and ultimately underwriting a new sustainable international order, with the aim of being one of, if not the, leading, ‘Architect of the New World Order’.
The Shape of the World to Come, Part III: The Path to a New World Order (March 2017)
We live in the most peaceful, prosperous, and free time in human history based on some of the most fundamental measures of progress, while having deep disparities and issues at the same time. The analysis of these factors preceded the third part in the series on ‘The Shape of the World to Come’ to describe the transition to and the shape of the rising New World Order. It is clear that the world is currently at an inflection point in history. The order that has defined our lives is drawing to a close and the world faces a period of increasing uncertainty, risk and instability. The certainties in times of uncertainty include a multipolar world, rising emerging powers and markets, population and resource competition, environmental calamities, widespread technological disruption, asymmetric conflict, migration flows and shifts away from industrials to information. Previous changes suggest that the transitions between world orders are often accompanied by large scale violence. In today’s highly globalised world, this would raise the prospect of a world war with the potential for catastrophic consequences. The choices that we and the world’s leaders make now will determine the severity and duration of this transition. A collaborative approach, based on coalitions of nations to build a bridge to take the world to a better more inclusive future with management of issues together, would be the most rational and stable path. As always, the risk comes from those that break coalitions, divide and compete for their own ends.
India’s Slums Need to be Transformed as India Rises (April 20133)
In order to truly unleash the productive potential of its dynamic urban population, India (and others, such as Mexico, Brazil and South Africa) will need to build scalable urban centres capable of housing, caring for, employing and integrating large and increasing numbers of new inhabitants. There are of course no simple solutions to the problem, however, history shows that the slums that were much of London, Paris and New York can be transformed into vibrant parts of a city. A sustainable solution would take a holistic view based on the macro drivers that create slums and would encompass strategies that (i) transform the physical character of slums so they are integral, interesting and productive, (ii) build in continuous dynamic infrastructure planning and execution to increase habitable capacity, (iii) an ‘industrial’ revolution to generate worthwhile and meaningful work and continually develop skills to make people participants, (iv) full exploitation of the knowledge and freedom advantages of a democracy, enabling people to demand and be supplied with opportunity and (v) re-visioning and investment in rural development to stem the flow and create value where people live. While none of these five strategies on their own can transform the slums, if implemented together, they could transform mass migration and the lack of dignity of slums into vibrant population centres within a broader strategy promoting stability in regions and rural geographies.
India Wide Open – Transforming India Now, for 2040 (February 20124)
India today is at an inflection point. Following two decades of reform and growth, the cracks in the current economic and political system have become visible. Given the country’s expected population growth, India will need to fundamentally transform itself in order to feed, clothe, educate, gainfully employ and turn into productive agents its population of 1.6 billion by 2040. To do so it will need to, among other things, create a transparent government, secure the resources required for growth and create a system of entrepreneurship to allow the private sector to take a leading position in India’s transformation. Doing all of these things will require an ‘India Wide Open’ policy, bucking the regulation-and-taxation-heavy government model that is being embraced by fearful governments around the world. The cumulative effects of such a policy is that is would successfully meet the fundamental challenges facing the country and has the potential to see Indian GDP growth accelerating to c.11% through to 2025, and continuing at nearly 9% through 2040.
Conclusions, The Narrative: Through a Difficult Transition to a Positive Future
Stepping back from the challenges and opportunities that are a sign of our times brought to life over the last decade in our thought pieces, (and from the other 108 issues of the Sign of the Times published to date), there are a series of themes that can form an ultimately positive narrative of the trajectory of our species on this planet over the coming few decades. The essential story is:
Exponential Progress and Existential Issues. The world has gotten smarter and smarter, creating fundamental breakthroughs at an accelerating pace delivering innovations in energy, medicine and human health, material sciences, and global distribution and connectivity reaching the nearly 8 billion people in in the world today. Thanks to the exponential growth of knowledge, humankind has the potential to solve nearly every issue facing it given sufficient alignment and willpower to do so. At the same time the world is also facing a series of mounting issues, many of them existential in their nature: climate change, inequalities both global and local, a fundamental lack of inclusion and access to opportunities and even basic necessities like clean water for a large part of the global population. These challenges are becoming an increasing factor in our daily lives that can overwhelm progress and are a source of instability and chaos.
Inequalities Driving Populism and Conflicts. Persistent and increasing inequalities has provided the fodder for conflict and populism, promoting a system of politics that enables people to be divided people and pitted against each other on the basis of their differences. National Populist leaders appear to speak for the underrepresented and those suffering from inequality, with a voice that is compelling to voters but is unable to solve the underlying problems since the very basis of their approach denies science, expertise and basic truth. The most successful systems of National Populism are ultimately driven by power rather than by ideology or the ideals in which their leaders cloak themselves, given that the truth ultimately becomes self-evident, and that in order to follow untruths, populist leaders will need to continue to dance between issues, inciting hatred and stoking conflict. As the opposition adopts the same tactics in a desperate bid to defeat populists, the differences between them will become more difficult to judge. The danger for democracies is the emergence of competence on the part of national populists in delivering jobs and opportunity alongside these tactics, alongside the incompetence of their rivals.
Post-Truth Risks Undoing the World’s Progress. Addressing national populism and the risks it creates requires not just systemic change, but collective change in the role of individuals as citizens, voters, and as members of society. The ‘average’ individual today is more empowered than at any other time in history, given global connectivity and the free flow and generation of information. However, in today’s decentralised global communications networks, much of this information is opinion, rather than fact, with the distinction between the two becoming increasingly blurred in the absence of moral authority or trusted institutions. With the boundaries blurred, opinions that excite human emotions increasingly trump science and facts, thereby putting the progress of the world - gained through the exponential growth of knowledge - at risk.
Fundamental Demands for Peace, Prosperity, and Freedom. The world has seen an increasing number of people asserting their need for freedom as a fundamental one, following behind the call for physical and safety needs. Closely tied to this need for freedom is the desire to prosper, as individuals and as societies. Early steps of this progression saw peoples overturning autocratic regimes for freedom and a chance for achieving prosperity. While the call for freedom led to the Arab Spring and the overthrow of governments, it also led to the mass murder of those calling for freedom in Syria, and then on to Brexit and the election of Trump. With the mass movement of immigrants to the EU it destabilised the bloc, resulting in the election of populists but thus far not a dissolution of the EU. It is clear that peace, prosperity and freedom are the cornerstones of stability within and across countries an continents, and walls are not sufficient to prevent the flow of people looking for these.
System of Mass Inclusion Required. The liberal world order and the capitalist economic system that underpins it has delivered unprecedented knowledge and prosperity for the world, but over two-thirds of its population are not formally included in the system of wealth creation, and are falling further behind those who are. The world will need to develop systematic mass inclusion that not only addresses these disparities but also creates the additional capacity to integrate the nearly two billion additional people being added to the world by 2050, making them part of the system to enable their future success. The challenge of these times is to achieve this while solving the world’s existential problems like climate change, biodiversity risks and the proliferation of weapons of mass destruction, the time for many of which is running out according to the world’s leading scientists.
Need for Radical Breakthroughs. Achieving long term sustainable development requires both the scaling of existing technologies to drive the transition and the development of breakthrough technologies that repair the ecosystem and replace the resources that the world has used up, all of which will require financing at a scale the world has never seen. The finance industry, which has been instrumental in funding progress (and conquest and conflict) and the growth of civilisation throughout history, appears to have recognised the challenge and is stepping up to address it with over US$130 trillion of assets committed to net zero, US$9.5 trillion by a subset leaders to the broader United Nations Sustainable Development Goals and to up to US$100 trillion of financing capacity for climate change through 2050.
Finance being Revolutionised. However, finance itself is a key component of the global system that can either be a powerful liberating force or a source for creating and sustaining inequalities. Today, financial resources are anything but equitably distributed globally. This was much the same for knowledge and information leading up to the industrial revolution and took a sharp step upwards as the digital revolution spurred on by the world wide web. The current system of finance risks being assaulted by technology that enables distributed finance outside of the control of central banks. Much like the democratisation of information led to a loss of government authority and credibility, so the ‘democratisation’ of finance can lead to the loss of centralised monetary authority. Nearly all the money in the world today is managed or held by financial institutions, but over two-thirds of it is actually ultimately owned by individuals (and only one third by governments). The collective power of the individual has already become a major force in government and will become a similar one in finance.
Major Transition Underway. The forces of big change are now clear, and the most dramatic of them include the growth of the world’s population to nearly 10 billion by 2050 from 6 billion at the beginning of this century, the energy transition away from the carbon based fuels that have underpinned almost everything in our economies and the drive to mass inclusion along multiple dimensions (financial, digital, educational, healthcare, work place and more), as well as the shift from the industrial to the digital age currently underway are all part of the ongoing transition of the world to the next [mode of] civilisation. This transition is giving rise to a series of power shifts that will redirect global capital flows between new and emerging financial hubs, and also create rivalry and potential conflict between the four major power blocs that are the likely dominant world powers, the US, the EU, China and eventually India.
Emergence of a Post Scarcity, Sustainable, Equitable Future. Despite these potential rivalries and the current challenges facing the world, in the absence of global catastrophes man-made or otherwise, like unchecked climate change or artificial superintelligence, or nuclear war, the world has the tools and systems required to cross the bridge to a better future for all. In such a future, human activity would be built off an abundant, clean and near-free energy, new industries would be supplied by synthetic bio-degradable materials rather than depleting the worlds natural resources, machines would replenish the world’s commons, and manufacturing scale and economics would produce any essential at mass affordable near zero cost. Such a future, would make possible the next stage of humanity’s journey, accelerating the exploration of space and our expansion beyond planetary boundaries as well as delving deep into the human genetic code, psyche, and consciousness.
Recent events show the level of interdependence and interconnectedness on major issues such as the pandemic and climate change, and point to the likelihood that other major global issues will also require a more holistic view of the solutions needed, whereby joint progress is a pre-requisite for national progress to be stable and durable. The value of helping ones neighbour may be a necessity not just a virtue.
- Also see GPC’s July 2013 Sign of the Times, “Cyber Attack, Defense and Security in the Making and Preserving of Superpowers”
- Also see GPC’s December 2015 Sign of the Times, “China’s New Silk Road: Tactics, Overstretch or Grand Strategy?”
- An updated version of this piece was published in October 2020
- An updated version of this piece was published in October 2018, “Transforming India’s Growth Model”
Creating Prosperity for a Billion People: Re-architecting the System of Wealth Creation