The Changing Human Life Cycle

Given the recent focus on demographics, I went back to review a book in my library titled “The Great Demographic Reversal.” In a post that reviewed the book, I mentioned that the authors state several times that their findings are controversial and counter to the views of mainstream economists. By way of review, the authors concluded that the future is one of:

  • Inflation
  • A fall in working age population
  • An aging society that struggles with the ravages of dementia
  • Declining growth of real output
  • An increase in labor’s bargaining power
  • Possible interest rate increases
  • Increased health expenses
  • A reduction in inequality

Several of those projected characteristics of a possible future are currently in play. Whether these are transitory or the new normal suggested by the authors remains to be seen. We have the benefit of history in looking at the various forces that shaped the current global economy.

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Deglobalization

Deglobalization is a geopolitical building block with massive implications as it converges with its societal counterparts. In my August 2020 poll on the catalysts that drive change, deglobalization entered the list. It was not surprising, given the supply chain concerns that emerged in the early days of the pandemic. But is deglobalization likely? This recent article explores that question.

The risks of sourcing overseas are a less immediate concern than higher shipping costs, which might tip the balance in favor of sourcing from nearby – and shipping costs are not the only trade costs which are rising. Increasingly, policy is adding to trade costs. The EU’s new Carbon Border Adjustment Mechanism will add the equivalent of a trade tariff to reflect the emissions embodied in imports from outside the EU.

Inga Fechner, Joanna Konings, Rico Luman – Deglobalization Ahead? The Pros And Cons Of Reshoring

The article states that despite headlines about an increase in reshoring, evidence does not support the headline of companies bringing production back home. Instead, there is evidence of more diversification. Construction activity for manufacturing facilities is on the rise in the U.S., but mainly in critical areas such as microchips. Trade in intermediate goods continues its upward trend, but the war in Ukraine has introduced uncertainty regarding future direction. The recent announced G7 $600 billion infrastructure investment in response to China’s Belt and Road Initiative will increase trade, and friendshoring seems to have entered our vocabulary.

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Advancing Human Development: The Catalysts Of Change

More votes have come in since I last reported on my poll. The question based on history is this: what catalysts drive human action in the future? It took two world wars and a great depression to drive humans to act in ways that prevented reoccurrence and advanced human development. In a world that looks eerily similar to that era, we once again wonder about catalysts. Here are the current results.

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Revisiting The Catalysts Of Change

Seems like an eternity has past since I first launched this Poll on the catalysts that drive human action. As I mentioned back then, one of our Lessons from History was the presence of catalysts that drove actions that ultimately shaped our future. The major catalysts of the second revolution were astounding levels of innovation, World War One, The Great Depression, World War Two, and the eventual democratization of innovation. The question I asked in the poll was: What catalysts force stakeholder actions that ultimately shape our emerging future?

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What History Tells Us About Deglobalization

In looking at a Post Pandemic Society, I took a Journey to the 1920s and 1930s to understand what history might tell us about our emerging future. I have been amazed at the eerie similarities between our present day and that period a century ago (see visual below). If anyone is interested in exploring the cycles of history, I highly recommend the book The Fourth Turning. In the meantime, this recent Article explores a similar comparison to that time in history with a focus on deglobalization. Per the article:

“The post-pandemic world economy seems likely to be a far less globalized economy, with political leaders and the public rejecting openness in a manner unlike anything seen since the tariff wars and competitive devaluations of the 1930s.”

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