Global Trends 2040 – Structural forces

Global Trends 2040 – Structural forces

We recently posted an overview of the US National Intelligence Center produces its Global Trends report – “A more contested world”. In this post we look in more detail at the “Structural forces”, the demographic, environmental, economic, and technological developments shaping the world we will live in.


Ageing populations

Population growth is forecast to slow over the period to 2040 (UN Population Division) with global population reaching 9.2 billion. But the pattern of growth varies considerably:

  • Median ages in developed countries will increase by 2040: Japan and South Korea over 53; Europe over 47, with Greece, Italy, and Spain ageing fastest. A greater share of national income will have to be diverted to pensions and healthcare.
  • Working-age populations in South Asia, Latin America, and the Middle East and North Africa will be over 65%. With fewer dependents, these countries have the potential for higher household savings and investment in human development.
  • More than one-third of Sub-Saharan Africa’s population will be younger than 15 in 2040, Other populous countries still below the median age threshold in 2040 include Afghanistan, Egypt, and Pakistan. These will be challenged to meet the basic needs of their populations with pressure on infrastructure, education, and healthcare.


The urban population share will rise from 56% in 2020 to nearly two-thirds by 2040, with the world’s least developed countries having the  fastest growing urban populations. Urbanization has historically been a key driver of economic development. However, rapidly urbanizing poorer countries will find funding the necessary infrastructure and public services difficult. Food insecurity is an issue. Many of these cities are also at risk from climate change, but protective infrastructure—flood control and sturdy housing—has not kept pace.

Human Development

During the past 20 years, at least 1.2 billion people were lifted out of poverty. Basic improvements in healthcare, education, and gender equality generated rising per capita incomes.  However, the report suggests that this progress will stall due to uneven economic growth and the fact that the easiest gains have already been made.

Lower birthrates have led to greater educational opportunities for women (and vice versa). However, there remain many patriarchal societies which limit women’s rights, notably to land ownership. Infant mortality has fallen, but again the report’s authors are pessimistic about the prospects of it falling much further. Similarly, they suggest advances in education have peaked.

Future health challenges include: stalled progress on combating infectious disease; growing antimicrobial resistance; rising levels of non-communicable disease; increasing strains on mental health, especially among youth.

Middle class and income inequality

The rise in middle class and decrease in proportion of poor people seen over 2000 to 2020 will both flatten off. Across many countries, the high per capita income growth of the past 20 years is unlikely to be repeated, as global productivity growth falls and the working-age population boom ends in most regions.


Migration flows clearly reflect wage differentials between countries— from smaller, middle-income economies to larger, high-income economies. Rapid population growth will drive continued emigration from Sub-Saharan Africa, but many other developing countries are nearing the end of peak emigration.

Greater need for workers in aging countries is a pull factor in European and Asian countries. Ageing European countries and Japan are expanding policies to attract immigrants. These could clash with strong cultural preferences for maintaining national identity and ethnic homogeneity.


The report’s basic argument in this area is that the combined effects of climate change and environmental degradation will erode human security which, despite mitigation efforts, will result in unequal burdens and increased instability and conflict. Neither the burdens nor the benefits will be evenly distributed within or between countries, heightening competition, contributing to political instability, and straining military readiness.

Global warming and its effects on climate are now fairly well accepted: melting arctic ice, rising sea levels, more extreme weather events, soil degradation, water misuse and pollution. Consequences such as food and water insecurity, threats to health, loss of biodiversity and migration are also much discussed.

We can see some more united political responses globally, though the speed of change to “net zero” is still debated. The authors identify the usual renewable energy technologies, but argue that carbon capture will still be needed. They also suggest exploring geo-engineering solutions such as solar radiation management (reflecting the sun’s rays back into space), despite “possibly catastrophic unintended side effects”.

Second-order effects identified include:

  • Tensions between climate activists and those bearing increased costs (eg gilets jaunes)
  • Increasing demands that developed countries provide financing to help vulnerable populations adapt
  • Heightened competition over food, mineral, water, and energy sources, notably in the Arctic.

Less often discussed is the effect on petro-states of a shift to renewable energy. Leverage in energy markets will instead shift to competition for key minerals, particularly cobalt and lithium for batteries and rare earths for magnets in electric motors.


The report predicts an “evolving international economic order” with:

  • Increasing national debt (even before the pandemic)
  • Fragmenting trade environment
  • Changes in global competitiveness
  • More powerful private corporations
  • Employment disruptions

leading to:

  • Constrained government spending
  • Diversified globalisation
  • Economic activity shifting to Asia
  • Large firms shaping connectedness.

The report is particularly concerned about high levels of debt. The economic costs of aging will strain public finances in all G20 economies raising difficult questions around reducing benefits and healthcare support or raising taxes.  Continuing low interest rates reduce the burden of servicing the debt. However, some emerging and developing economies have financed debt with external borrowing so could face a debt crisis because local currency depreciation.

The disruptive effects of technology – automation, AI – on employment patterns are also identified. The WEF report estimating that automation will create more jobs than it destroys is quoted. However, that still implies significant displacement, and the growth of “virtual” jobs – non-geographically specific work facilitated by online platforms.  New production technologies could diminish the attractiveness the Far East and accelerate reorientation of supply chains.

The faster economic growth in Asia could lead to some of the world’s most populous countries being among the world’s largest economies by 2040. Indonesia, the fourth most populous, could be one of the top 10 economies by 2040. However, their standards of living are likely to remain well below those of advanced economies.  These economies could increasingly demand more influence over international organizations like the IMF and WTO, to reflect their economic interests, rather than those of advanced economies.


The report reviews major developments in AI, smart materials and manufacturing, and biotechnology (there is a very interesting infographic on the benefits and risks of biotech applications). But it goes beyond that to consider the wider social and geo-political implications.

The race for technological dominance will lead to competition for talent, knowledge, and markets. State-led economies may have an advantage in directing and concentrating resources but may lack the benefits of more open, creative, and competitive environments. With technology timelines shrinking, planned economies may be able to react faster to emerging technology developments, potentially at the cost of reduced technological diversity and efficiency.

A hyper-connected world could raise concerns about privacy and anonymity. New tools to monitor populations will enable better service provision and security but at the same time enable enhanced surveillance and control. Patterns of crime will change. Cyber-security is a fundamental concern – global enforcement will be a major issue.

The speed of technological advance will continue to increase, as epitomised by the rapid development of Covid-19 vaccines.

Inequalities within and between states could be increased as those with the access, ability, and will to adapt win out at the expense of those who are unable or unwilling to change. Regulation and ethical guidelines will struggle keep pace.

Technological disruption to industries and supply chains could disproportionately affect less advanced economies. New jobs will require new skills at an ever-increasing rate: perhaps a limit to growth.

Finally, there are high impact low probability existential risks, from AI, nano-tech, biotech and cyber-attacks on nuclear facilities. The Covid-19 virus may not have escaped from a Chinese laboratory, but in future some other deadly manufactured virus could have an even worse impact. 

Overall, this section of the report covers mainly familiar ground on “megatrends”. Its context means that conclusions are oriented towards geo-political dynamics, especially the threats to the current status quo. Despite many positive developments in the last 20 years, the authors tend to conclude that they have run their course. They lean towards a pessimistic view of the future, possibly because they see their role as flying warning flags.  If one were more optimistic, there are plenty of areas where the same trends could lead to a better, fairer and more sustainable world.

The next blogpost in this series –  “Emerging Dynamics” – addresses societal, state and international changes.

Written by Huw Williams, SAMI Principal

The views expressed are those of the author(s) and not necessarily of SAMI Consulting.

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