all www  millennium-project.org

This Scenarios Bibliography is done by Susan Jette and is a collection that started in 1996 and is being updated with about 50 scenarios each year.

The scenarios annotated bibliographies are organized in the following domains:

I. International Economics and Wealth
II. Environmental Change and Diversity
III. Technological Capacity
IV. Demographics and Human Resources
V. Governance and Conflict
VI. Regions and Nations
VII. Integration or Whole Futures

I. INTERNATIONAL ECONOMICS AND WEALTH

The World in 2050. How Big Will the Major Emerging Market Economies get and how can the OECD Compete? PricewaterhouseCoopers. John Hawksworth, director, Macroeconomics. Copyright @ March, 2006.

The PWC report discusses how OECD countries will grow to the year 2050 in purchasing power parity comparisons to the emerging market economies along an overall trajectory of anticipated carbon emissions and climate change policy. The report looks at a number of indicators for G7 countries: US, Japan, Germany, UK, France, Italy and Canada, plus Spain, Australia, and South Korea; and the emerging market economies known as the E7: China, India, Brazil, Russia, Indonesia, Mexico, and Turkey. Among a number of major findings, the report acknowledged that there was no single way to measure growth of OECD against the emerging economies such as China and India. Considering all of the factors, there is overwhelming evidence that the E7 economies will be 25% larger than the G7 economies by 2050. Within the G7, due mainly to population aging, China and Russia are likely to diverge negatively from the rest of the G7 countries. India is the youngest economy with a working age population that will show positive growth over the period to 2050. The report shows that the country most likely to show the fastest growth throughout this period is India. By 2050, India will likely have a GDP close to 60% of that of the US (using market exchange rates). China, although it will slowdown on the overall, will be around 95% the size of the US by 2050. Brazil will be a similar size as Japan; India and Mexico will grow rapidly, becoming larger than Germany by 2050; Russia will not grow due to population aging, but by 2050, it will be a similar size to France; Turkey will be a similar size to Italy by 2050. These long-term projections are subject to uncertainties and thus the report models six scenarios and explores two scenarios in detail. The report cautions that the rapid economic growth of the E7 and moderate growth of the G7 combined will have serious consequences for carbon emissions because of global energy consumption. If countries continue with the “business as usual” approach to emissions policy, the world will experience a doubling of global carbon emissions by 2050. The long-term consequences of global warming will be serious. Two key scenarios (see report for more detail): Scenario 1) Baseline. A baseline scenario in which energy efficiency improves in line with trends of the past 25 years, with no change in fuel mix by country; this ‘business as usual’ scenario acts as a benchmark against which to assess the need for change, rather than as a forecast of the most likely outcome. Scenario 2) Green Growth + CCS. This scenario incorporates possible emission reductions due to a greener fuel mix, annual energy efficiency gains over and above the historic trend, and widespread use of carbon capture and storage (CCS) technologies. Of the scenarios considered in the report, only this ‘Green Growth Plus’ strategy stabilizes atmospheric CO2 concentrations by 2050 at what the current scientific consensus suggests would be broadly acceptable levels. The G7 economies - the US, Japan, Germany, UK, France, Italy and Canada - may need to take the lead in reducing their carbon emissions, given that emissions from the faster-growing emerging economies will almost certainly continue to rise over the next few decades. The author concludes: "Our analysis suggests that there are technologically feasible and relatively low-cost options for controlling carbon emissions to the atmosphere. Estimates suggest that the level of GDP might be reduced by no more than around 2-3% in 2050 if this strategy was followed, equivalent to sacrificing only around a year of economic growth for the sake of reducing carbon emissions in 2050 by around 60% compared to our baseline scenario." "But if this is to be achieved, it will take further concerted action by governments, businesses and individuals over a broad range of measures to boost energy efficiency, adopt a greener fuel mix, and introduce carbon capture and storage technologies in power plants and other major industrial facilities." John Hawksworth

Outsights on the Global Economy – Four Scenarios for the Global Economy. Global Outsight Group. Project participants include: Mark Beatson. Director of Innovation Economics, UK Department of Trade & Industry, Roger Bootle, Managing Director, Capital Economics, Waltraut Burghardt , Senior Director, International Finance, Oesterreichische Kontrollbank, Peter Cornelius, Senior Economist, Global Business Environment, Shell International & Tapan Datta, Director of Economics and Strategy, Emerging Markets. Copyright 2006.

This paper presents four scenarios for the future of the global economy. It discusses key driving forces wih primary dimensions of security and technology. This paper focuses more on non-economic drivers. Four main themes were identified at the workshop: 1.) Technology. How fast will technology develop and be adopted? How much does information technology (IT) impact productivity? What will be the impact of social attitudes and security concerns? 2.) Social attitudes. How will demographic changes be reflected in cultural and social differences? Is the "clash of civilizations" inevitable or over-hyped? What part will ethics play in economic life? How will the work/life calculus play out in different societies? 3.) Environment. At what point - and in what magnitude - will pollution, climate change, and limits to the availability of certain resources make themselves felt in the economic sphere? What role will regulatory regimes play? What happens when health is treated as an environmental issue? 4.) Governance. Are we moving towards more closed versus open models of governance, with freer or protected trade regimes? How will rising security concerns influence political interventions in economic life? How far will the BRICs reshape geopolitics? What role will the media play in the ways we are governed? Here is a brief overview of these highly detailed scenarios. Contact Global Outsight Group for the full report. Scenario 1) Fortress skcolidloG (Goldilocks in reverse). “This is a world of high technology in which fierce competition reigns, with conflict over everything from resources to religion. Rapid development of technology is valued as a means of enhancing security. It is a world of trade blocs and protectionism, slowing the distribution of resources worldwide and eventually slowing growth - and making it potentially very unequal between economies. This is the world economists and policy makers hoped would never emerge again after the lessons of the 1930s. Insecurity is real, not just a high perception of insecurity. (Goldilocks economy refers to an economy where the pace of growth is just right, not too hot and not too cold.) This scenario finds the military driving R&D and innovation in search of greater security, yet security is in reality (not just in perception) much worse than today. The high level of insecurity drives the world into introverted blocs. Among other flashpoints, resource-hungry economies such as China and Japan are drawn into conflict as they attempt to secure their supply lines in a global economy that is initially growing fast and where sustaining growth depends increasingly on the power of the bloc to attract the necessary means of production.” Scenario 2) Fast, Free & Filthy. “This is an alternative high-tech world in which environmental concerns come to the fore, having started with fast, conflict-free growth that ignores the costs of environmental degradation. Eventually, technological innovation is called upon to combat pollution and overcome resource constraints, allowing growth to continue apace in the long run. This scenario avoids conflict through global political cooperation rather than confrontation - with resources and the environment key areas for action. For example, despite massive demand for water, potential water wars are averted through good-faith treaties, the sharing of resources, development of new clean water supplies, advanced desalination technology. Renewable energy is developing rapidly.” Scenario 3) False Horizons “A scenario that is driven by deep value changes, many of which seek to reduce the power of big business and curb the advance of technology. This unstable scenario - a mix of conservatism, welfarism, regulation, anti-business, alternative approaches to security - opens (but does not resolve) a debate on how value shifts may change the direction of the world economy and how long such shifts might last. achieves general security through cooperation, reinforced by a values shift that seeks to counter inequalities and perceived injustices: e.g. potential resentment between haves and have-nots is countered by welfare spending. The values shift is driven both by a moral shift as well as by the understanding that security is linked to income i.e. the shift is not entirely disinterested. But it is not clear how long this shift can last: hence the notion of false horizons.” Scenario 4) Fears & Phobias. “This is a highly insecure world which combines the technophobia of False Horizons with the politics of identity (nationalism even to the point of xenophobia). Nations and economies look inward. also witnesses international cooperation but only where absolutely essential (e.g. to share critical water supplies). There is no ability to deal collectively with less directly threatening issues such global warming - the temptation to "free ride" is irresistible. At the national level, this is a world of highly restrictive regulation, with heavy-handed curtailment of trade in goods, services, people, knowledge and capital. This primarily inward looking, look-after- oneself world is tense, full of fears and a sense of insecurity as a result.”

Corporate Dealings with the Network Economy William deRidder, Futures 38.9 (Nov. 2006). 1103 (16).

The formation of networks in a network economy help companies create new business opportunities. Companies develop new products, open up markets and are continually reorganizing within networks. Companies that want to actively deal with new technology, changes in consumer behavior, and economic drivers will have to work successfully in a network economy. This article focuses on network formation and network economy. The network economy has led to the formulation of the following three laws: 1) David Sarnoffs Law, former-chairman of the RCA Corp: the value of a non-interactive network is proportional to the number of users; 2) Bob Metcalfe's Law, founder of 3Com Corporation and inventor of the Ethernet: the value of an interactive network increases with the square of the number of users; 3) David Reed's Law, researcher HP Laboratories and MIT Media Laboratory: the value of a social network (with open peer-to-peer information exchange) scales exponentially with the size of the network. These laws can be metaphors for worlds observed in scenarios. Sarmoff's Law applies to a reality in classical economics where companies serve their customers in a formal market relation. Customers are seen as solitary, rational actors who maintain a relation to the firm. Metcalfe's Law shows us networks of customers that share information and make choices together. It is assumed that there are no dominant players in such a network. Reed's Law connects to networks where a few dominant actors are present, but there are also a large number of participants that exert little or no influence in the network. In this article, networks have been named according to the 'laws' that best describe the nature of the network concerned. Here are excerpts from the article that describes the three laws and their implications in detail. Scenario 1) Future of Corporations in Sarnoff networks. “The near future will bring deployment of technology. New applications will enable a further reduction of production and transaction costs. For this reason, the search for economies of scale will be a constant battle against time. Market competitors will also try to realize increasing returns by using cost reductions to lower the selling price. Sarnoff networks will in particular bring forth commodities and this development will be strongest in such networks. Merges and takeovers will likely prove to be inevitable, as will be the loss of employment. Possibly, the largest threat Sarnoff networks contain is embedded in the low value of the informal networks concerned. The formalization of the organization, often through empowering protocol and formalized relations, limits the ability of these companies to adjust to not only to new technology, but also to new developments in their market. Where the level of uncertainty rises in the years to come, and the success of organizations will be more dependant on their ability to adjust to new, barely predictable developments, companies based on a Sarnoff network will struggle, in spite of their relative size and financial power. Barbabasi adds: 'These days the value is in ideas and information. We have gotten to the point that we can produce anything we can dream of. The expensive question now is: what should that be?' Nonetheless, a market for mass produced goods will always remain. This market in developed nations may be mature, developing economies offer many chances. Several companies, such as Unilever and Procter & Gamble have already been successful with so called Bottom-of-the-Pyramid products; cheap mass-produced goods in small packaging offered to poor consumers in, mostly, urban areas in the third world.” Scenario 2) Future of corporations in Metcalfe networks. “Many companies focus on the opportunities that a network organization may offer them. Amongst others they look after the possibility of reducing the number of management layers emphasizes horizontal organizational structures. New external alliances are sought and found. Increasingly, companies realize that they cannot survive without these networks. Connectivity with other organizations and institutions has progressively become a prerequisite. Management literature of recent years is filled with analyses, prognoses and recommendations concerning these issues. Consequently the network-company has matured on the drawing boards. But practice is unruly. Even if an organization attains a high quality level, success is not guaranteed. Even more frustrating is the observation that when a business is successful, this success cannot always be attributed to the quality of its products. Watts has remarked: 'The difference between a hugely successful innovation and an abject failure can be generated entirely through the dynamics of interactions between players who might have had nothing to do with its introduction.' In recent research it has become abundantly clear that random networks and rational actors are not common in reality. The future of Metcalfe networks in a growing network economy lies with smaller companies or parts of companies in which personal service based activities are the core business. Especially many smaller and medium sized businesses serve many customers that can be described as actors in a random network. As long as they realize the limits of this situation, chances are slim that these organizations will expect too much of their innovation, production and sales efforts. Ambitious companies focus on Reed networks. Quite possibly they are a part of such networks already without realizing it themselves.” Scenario 3) Future of corporations in Reed networks “Companies that sell products that satisfy the growth needs of the buyer and serve markets containing a distribution system typified by the 'power law' are part of Reed networks. They find themselves in a structure that contains certain characteristics. The most important of these may be the existence of dominant companies and, because of this, the lack of a large segment of middle-sized firms. As a result of this there is a quest for a dominant role in the market. This position is attractive, not in the least from a financial viewpoint. It is this position that often leads to enormous profit. The battle for the largest share of the market is magnified by the expectation that these markets will exhibit a great amount of growth over the following years.”

Postcards from the Future: The Futures of Branding. Nathan Shedroff and Davis Masten. AIGA

Postcards from the Future is a new book developed by two brand professionals about the future of the brand industry. Workshops were started within the AIGA’s Center for Brand Experience. The authors, Shedroff and Masten took the results of the workshops and created eight visions in which branding plays key—and often scary—roles. The book combines both visuals and in-depth analysis, making it a source of fresh and challenging thinking to designers, marketers, brand professionals, executives, and cultural anthropologists. The following are brief overviews of eight brand visions. For the detailed report, contact the AIGA. Scenario 1) Economic Nirvana. “In world economies, whether due to new priorities, technologies, understandings, or cooperation, the vast majority of people are now able to meet all subsistence needs (shelter, food, healthcare, work, education, etc.) and have, for the first time for many of them, something called leisure time and new opportunity to pursue other interests. How does this effect the development of global brands? Or, local ones? Do brands face more competition or less? Does everyone become more or less brand-conscious? Does increased prosperity increase the quantity of brands? What about the quality?” Scenario 2) Economic Peril. “The world economy suffers a tremendous collapse. Whether due to lack or resources (or accessibility), too much demand, insecure speculation, or political conflict that destroys the carefully balanced and orchestrated coordination of trade between countries, all monetary systems are severely devalued and a majority of people have problems meeting subsistence needs. Do people even worry about "brands" in this climate? Are they more concerned with quality, substance, or "real" value as a result? Or, are they even more oriented to brands that help them make quick judgments and decisions about their needs? Are they so busy with survival that issues of style, fashion, and more ethereal concerns mostly go unaddressed?” Scenario 3) Demassification. “In a world where technologies have finally made it cost-effective--even profitable-to make customized products for all sorts of customers of almost every type. People can now extensively customize their designs for cars, clothing, pre-made foods, jewelry, curricula, and pets just like many houses have been for a long time. What does this do to traditional brands? If these products can now be changed substantially, are they even the same products any more? Do brands disappear? Can they compete? Do the customization processes and experiences themselves become the significant brands? Do product brands fade and corporate brands become more important?” Scenario 4) Remassification. “For whatever reason (economic, technological, social, or cultural), customization has either not been successful or not been possible. There is a new interest in cultural connection to others and building shared experiences and identities. Status as a member of a group is more important to most consumers than status as an individual. These groups might be cultural, religious, corporate, professional, local, regional, national, or ideological. What might help brands compete in such a competitively reduced set of brands? How do people choose (or do they) which groups/brands make the most sense? How does our construction of identity change or influence the formation of these brands?” Scenario 5) The Mavericks. “Traditionally, only a small percentage of the population has broken-away from the "pack" and pursued their own, ideally original identities. These people tend to be less brand-influenced and more motivated to either eschewing brands or developing their own brands. Imagine what would change if many more people became mavericks in their personal and professional lives. Could the stable order of work and life be maintained without the automated responses by consumers and expectations by companies around mass adoption of consumer brands? What happens when everyone not only establish their own, personal brands, but also forges their own path?” Scenario 6) Environmental Concern. “Through a combination of events and communications, the greater world of consumers finally gain a deep concern for the environment-what they might think of as nature. Not only are environmentally-oriented brands becoming more popular, but also processes that are thought to help the environment are adopted in full force (such as reuse, recycling, composting, reduction, etc.). How do these new concerns change the adoption, perception, and creation of brands? What do products and services that are seen to either have no clear relation to the environment or are actually bad for the environment do to react to these market conditions? Do they reposition? Change their products, services, or resources (if they can)? Do they hibernate?” Scenario 7) Privacy is a Rarity. “Due to an escalation of surveillance technologies, we are watched almost everywhere and at every time-certainly in the public space. Only inside our homes (or in some cases, our rooms) are we physically private and we are almost never private in a virtual space. Cameras watch our driving (and GPS pointers and satellites monitor our speed and route), our working, and our movement in restaurants, bars, casinos, shops, and plazas. Microphones listen into our conversations with customers, colleagues, peers, and family members. Workers from nannies to store clerks to managers-and even some executives are monitored via camera, phone, and email. What effect does this have on the appearance and development of, identification with, and visualization and presentation of brands? Are people less likely to adopt or display brands? Will they tend to use brands as camouflage? Can brands somehow augment our sense of privacy?” Scenario 8) City as Brand. “In an evolution of an already established scenario, more and more cities begin sophisticated, integrated brand development and management projects in both strategies and tactical presentations. Using New York City as a focus, since it has both opportunity and pressing need to reframe itself, what directions can the city take in evolving its already strong brand? How should it differentiate itself from other cities and, indeed, where is it already positioned? What mechanisms can be used to both create and promote new or newly articulated values? Is it possible for a city to have a brand? Is it possible to create or manage a brand for an experience as complex as a city? Who makes the decisions and how can it be managed? Is agreement needed at all levels-or any at all? Is there a process that can be employed? Is there a client? How does one measure success?”

Society in 20205 – What Next for the Make Poverty History Generation? Tom Hampson, Editorial Director of the Fabian Society . Fabian Society, 11 Dartmouth Street, London, SW1H 9BN. Independent Newspapers UK, 2006.

The respected forecasting group Henley Centre Headlight Vision tested public attitudes to help it guess what kind of a society consumers might impact in 20 years' time. Would the values of the “Live8” generation last? In three of the four likely scenarios for 2025, “selfishness appears to outweigh caring about others.” It turns out that consumerism and individualism may prove a more dominant force by 2025. Caring about others or the problems of poverty may take a back seat. The following presents an overview of the scenarios. Contact the Fabian Society for the pamphlet containing the complete scenarios.. Scenario 1) Choice Unlimited. This is a scenario in which today's consumerist culture would become stronger; ethical consumption less mainstream and people would engage with international issues only sporadically. This is the type of scenario in which most people would have "personal home stylists" who would refresh their wardrobes, kitchen and interiors every four to six weeks. Scenario 2) My Home, My Castle. In this scenario, consumers would look inward; are suspicious of each other and encourage the Government to concentrate on consumers rather than global issues. The government look inward, community suspicion grows and government is encouraged to focus on the citizens rather than international issues. Scenario 3) The Puritans Return. This scenario would see people focusing much more on local issues, a rise in self-righteousness, the poor regarded by the masses as undeserving and the government expected to set a "moral" agenda at home. Scenario 4) The Good Life. In this scenario, community involvement grows and politicians come under under increasing public pressure to focus on global social and environmental justice. Green issues would be part of mainstream politics and climate change at the top of the agenda. After this study was published, the Trade Justice Movement was inspired to come up with a visioning exercise to the year 2025 (with additional contributions from Jubilee Debt Coalition.) The group discussed the reality of the business cycle and agreed on the following global and economic trends that are most relevant to business and global consumerism: 1) Growing power of trananational corporations – TNCs will continue to grow in reach, wealth and power. 2) Increased inequality – The rewards of growth are increasingly concentrated in the hands of a very small percentage of the global population. This trend is likely to continue in the West and to spread to emergent economies with unpredictable political, economic and cultural consequences; 3) Climate change - Global warming will be headed to well above 2 degrees C resulting in runaway climate change, with impacts already felt hard in poor economies; 4) Civil Society – More diffuse in the North and South; more militant. Southern involvement in campaigning changes; 5) Conflict, migration, the impact of HIV/AIDs, Water – may also become more pressing issues; 6) Trade – Multilateral/WTO trade system collapses into stasis and irrelevance, retreat into protectionism; more bilateral and regional agreements, increased south/south trade; 7) Oil and commodities – Major global oil shocks; OPEN crisis, huge switch to alternative fuels; 8) Economies and geopolitical power – China 2nd biggest economy in world; India growth too. China likely to continue its dramatic growth through 2010; 9) Migration – Increased protectionism against migration. Unsustainable population growth will be very big, fueling illegal migration and unsustainable use of environment; 10) Power will probably continue to shift to the larger developing countries (China in particular) – this will affect existing institutions and may lead to a new South-South trade agreements and new institutions. 11) World Bank/IMF – will continue to implement fiscal austerity on poorest countries; 12) Increased availability of communications technologies – while the increased availability and accessibility of communications technology potentially developing global solidarity.

Global Economic Prospects 2007: Managing the Next Wave of Globalization. 2007 World Bank - The International Bank for Reconstruction and Development. The World Bank, Washington, DC. ISBN 1014-8906.

This World Bank report examines the stresses and benefits of integration in a global economy. The discussion centers around a long term growth scenario, called the “central scenario” from 2006 – 2030. The results of the scenario describe “a world in which the gross domestic product (GDP) in high-income countries is slated to nearly double and that of developing countries will more than triple. The progressive expansions of China and India, the two largest developing economies and home to half the people of the developing world, are projected to drive the process. Their impact on the global economy will be increasingly felt as their exports and energy use, for example, approach the levels of the European Union and the United States.” World Bank The report then takes a series of projections and simulations built around this central scenario to examine aspects of the evolution of the global economy . The next wave of globalization will see the growing economic weight of developing countries in the international economy, the potential for increased productivity that is offered by global production chains, and the accelerated diffusion of technology. The World Bank also writes extensively about three growing consequences: growing inequality, pressures in labor markets, and threats to the global commons. The following is an excerpt from the report’s central scenario. The full report is available through the World Bank. Central Scenario to the Year 2030. “The medium-term outlook for the world economy remains positive. And while the pace of economic expansion is slowing, developing economies are projected to grow by an average 7.0 per cent in 2006, more than twice as fast as high-income countries (at 3.1 per cent). Over the next 25 years, developing countries will move to centre stage. Global economic growth is forecast to be faster in the 25-year period between 2006 and 2030 than the corresponding period 1980-2005. The output of the global economy rises from $35 trillion in 2005 to $72 trillion at constant market exchange rates and prices in 2030. This is an average annual increase of 3 per cent--2.5 per cent for high-income countries and 4.2 per cent for developing countries. In the central scenario, even though the incomes of developing countries will still be less than one-quarter those in rich countries in 2030, these incomes continue to converge with those of wealthy countries. This implies that countries as diverse as China, Mexico and Turkey will have average living standards roughly comparable to Spain today. While rich and poor countries alike stand to benefit from global economic growth, certain stresses already apparent--in income inequality, in labor markets and in the environment-- become more acute. - By 2030, the world's population rises from some 6.5 billion to 8 billion, with more than 97 per cent of this growth in developing countries. Over the next 25 years, rapid technological progress, burgeoning trade in goods and services, and the increased integration of financial markets will facilitate faster long-term growth. However, some regions, notably Africa, are at risk of being left behind. Moreover, even though many in the developing world are likely to enter what can be called the 'global middle class', income inequality widens within many countries. At the same time, low-wage competition from China, India and other developing countries--not only in goods trade but also in services--will place additional pressure on an integrating global market for labor. Unskilled workers, in particular, may fall farther behind. Managing these forces places a new burden on national policy makers--and on the international community as a whole--to ensure that the opportunities of global integration are broadly shared. The coming globalization also sees intensified stresses on the 'global commons'. Addressing global warming, preserving marine fisheries and containing infectious diseases will require effective multilateral collaboration to ensure that economic growth and poverty reduction proceed without causing irreparable harm to future generations.”

The DCDC Global Strategic Trends Program: 2007 – 2036. Development Concepts and Doctrine Center, published by UK Ministry of Defense, January, 2007.

Strategic Trends is an independent view of the future produced by the Development, Concepts and Doctrine Center (DCDC), a Directorate General within the UK’s Ministry of Defense. IT is a source document for the development of Defense Policy.
Key findings included eight major trends that were transformed into a scenario over the next three decades. These trends are: 1) Resource competition – economic growth and increased consumption will result in greater demand and competition for essential resources.; 2) Climate change - compelling evidence to indicate that climate change is occurring and that the atmosphere will continue to warm at an unprecedented rate throughout the 21st Century. Over the next 30 years, the resource-related challenges to global stability will be diverse, wide-ranging and significant. Climate change and a shifting environment; increasing demand for natural resources, particularly food, water and fossil fuels; a growing and rapidly globalizing economy; urbanization and the emergence of new health challenges will all have major impacts and unpredictable effects. While the global economy is likely to grow during the period, improving material conditions for many people, the combined, uneven effect of these impacts will be to increase uncertainty for many, creating new sources of insecurity, instability and tension; 3) Economic growth combined with the continuing rise in the global population - will intensify the demand for natural resources, minerals and energy. Oil is likely to remain the principal source of motive power, particularly for vehicles, and growing competition for this diminishing resource will lead to a significant rise in energy prices. It is possible that this will cause a slow down in economic growth from 2020, although this may be offset by new sources of energy: coal derivatives, hydrogen fuel cells, bio-ethanol and for power generation, nuclear fusion. 4) Energy market instability - may lead to political and even military interventions in order to protect access and safeguard supply. 5) Food price spikes - increasing demand and climate change are likely to place pressure on the supply of key staples; 6) Evolving family systems - In response to globalization and the pressures of a more uncertain world, networks based on family, clan or tribe structures and extended kinship groups, in common with a more communitarian approach, are likely to proliferate, especially in areas of declining or low prosperity and opportunity. 7) Strategic shocks - an analysis of trends and probable outcomes can only go so far in describing the future, the unexpected also needs to be taken into account - shocks will happen. The discussion in this repot outline ways in which discontinuities may occur. 8) Middle class proletariat - the middle classes could become a revolutionary class, taking the role envisaged for the proletariat by Marx. The following is an excerpt from the scenario developed by an examination of trends to 2030. The complete text of the report can be found at the Development, Concepts and Doctrine Centersite. Scenario: Ring Road Issues. “During the thirty-year period, covered by the study, human activity is dominated by three pervasive “Ring Road Issues”, namely, climate change, globalization, and global inequality. During the next three decades, there are constant tensions between growing interdependence and heightening competition among the nations. As a result, all aspects of human life changes at an unprecedented rate, throwing up new features, challenges, and opportunities. Three areas of change, or Ring Road issues, touches the lives of every human being on the planet by 2040 and aggravates climate change, globalization, and global inequality. The increasing pace of climate change alters the physical environment in which a rapidly growing population lives and its access to habitable land, food and water is under strain. The world economy expands at an unprecedented rate and its different segments become more and more integrated, creating globalized interdependencies and enabling multiple supra-national linkages in all areas of human endeavor. This does not benefit all strata of the society in equal measure. There are gainers and losers. A sizeable section of the society sees substantial improvement in material living conditions while others continue to face hardship and deterioration in their plight. These people suffer from fluctuations within a globalized market-based economy, making their lives full of uncertainties. In all the most affluent societies, rapid, large shifts in global markets, which are increasingly sensitive to uneven supply and changing demand, result in potentially dramatic change in personal fortune and confidence. Globalized communications field aspirations, heightened expectations and serves to expose differences in advantage and opportunity, stimulating grievance and raising the significance of global inequality as a social and political issue. During the next three decades, thanks to globalization, the volume of world trade rapidly expand, cutting across national barriers and overcoming distance. This leads to internationalization and integration of markets for goods, services and labour. Even though this boosts the pace of economic growth, it brings risks for national markets of developing countries, as they are exposed to destabilizing influence of global market. The ups and downs in the global market impact national markets, as they are transmitted through new and more efficient means of telecommunications. Labour comes under intensive pressure. It is “subject to particularly ruthless laws of supply and demand.” To quote the study: Socially, looser forms of political, cultural and economic association multiply, whose existence is largely virtual and dissociated, linking members who are physically dispersed, but who share common interests and seek competitive advantage of association. Politically, globalization raises levels of interdependence between states that are increasingly integrated within the globalized economy. Notwithstanding the increasing global production and improving material conditions for most people, the income disparities widen and poverty continues to be an insurmountable challenge.”

Raising Our Game: Can We Sustain Globalization? The Past and Future of Sustainability Bill Baue. Policy Innovations. June, 2007.

Established in 1987, SustainAbility advises clients on the risks and opportunities associated with corporate responsibility and sustainable development. This report looks to the year 2027 to examine future scenarios for the world’s sustainable development. It brings macro trends into a pattern so readers can understand six dimensions that are encompassed in the four future scenarios. The report uniquely creates the acronym G.A.M.B.L.E. (growth, acceleration, mainstreaming, barriers, leadership, and equity) as the six common aspects to all of the scenarios – indicators that also pose as changing variables. The report ends with seven recommendations, or "new rules" to face the trade-offs involved in choices between environmental and social value. What is in the Cards for the Future? The report proposes four potential scenarios (based on a card game metaphor) for how the future will unfold over the next 20 years, depending on how business attends to social and environmental sustainability. Each scenario corresponds to a card suit (Clubs, Diamonds, Spades, and Hearts) on a matrix with environmental wins and losses on the horizontal axis and social wins and losses on the vertical axis. Scenario 1) Hearts Scenario. “This is the future that the Brundland Commission “pointed us toward," the report states, as it balances environmental sustainability with social development. It projects a scenario where a pandemic slows global transportation, forcing simultaneous attending to human health and curbing environmental impacts. The crisis inspires creative destruction and innovation that ultimately leads to true sustainability. The report acknowledges that the concept of sustainable development has stood the test of time since it was first injected into the political mainstream in 1987 by the Brundtland Commission, though the marriage between sustainability and development has always contained tension. This is a world which demography, politics, economics, and sustainability gel. It is the future that the Brundtland Commission pointed us towards. The early years of this scenario, however, are rough, with a global pandemic shutting down global trade. But in this case the challenges come in forms that drive positive responses, underlining the importance of shared solutions and inclusiveness. Over time, virtuous spirals of improvement set in, in most places. The outcome: a second Renaissance, but across a larger canvas.” Scenario 2) Spades Scenario. “Democratic societies open out higher living standards to growing populations. One key consequence is that natural resource prices rise, but another is that ecosystems are progressively undermined, with most governments unwilling to take the political risks of asking voters to make sacrifices in favor of the common good. The challenges are managed to a degree, thanks to more open societies, but not well enough. Deteriorating environmental conditions gnaw at the islands of affluence.” Scenario 3) Clubs Scenario. “This is a world in which, among other things, the elites learn how to use environmental sustainability as an excuse for denying the poor access to their fair share of natural resources. One outcome is a slowing of the destruction of ecosystems locally, but this future is characterized by protracted periods of social tension – broken with increasing frequency by insurrections. The waves of change build fitfully, chaotically, with closed societies and communities often operating in denial for extended periods. Over time, this erodes islands of sustainability. One outcome is a slowing of the destruction of ecosystems locally, but this future is characterized by protracted periods of social tension – broken with increasing frequency by insurrections. The Spades and Clubs scenarios play out the potential consequences of over-weighting environmental sustainability at the cost of social stability, or over-weighting development in ways that compromise environmental viability.” Scenario 4) Diamonds. “This scenario is bleak – a domino-effect world, in which instead of Adam Smith’s invisible hand, our invisible elbows knock over a series of economic, social, and environmental dominoes. Demographic trends and the spread of western lifestyles devastate ecosystems. The challenges come in forms that disable decision-makers and overwhelm society’s ability to respond effectively. Over time, as fear closes down thinking and creativity, vicious spirals develop in politics, governance, economics, and technology.”

Global Scenarios on Microfinance- Part I. CGAP Executive Committee, World Bank. Focus Notes No. 39, October, 2006.

A major driver for financial inclusion worldwide has been microfinance, a concept that gained extraordinary momentum over the past ten years. The authors at the World Bank ask whether this is strong enough to be irreversible? Will it gather the momentum to reach the billions who still have no access to microfinance? This report takes a regional look at the low to middle income nations and considers regional stability factors in demographics, technology, and new financial structures. Part I herein looks at two scenarios of how wireless information technology impact regional microfinance. According to the World Bank, BRICs (Brazil, Russia, India, and China) are forecast to overtake the G6 industrialized countries over the next 40–50 years in terms of the size of their economies. If one or more of the BRICs were to become unstable and falter, global growth prospects would be seriously compromised. The report asserts that developed country capital, structures, standards, and advice is declining in influence when it comes to BRIC and in turn, what happens in the BRICs will affect the LICs (low income countries). It is becoming apparent that what happens in the BRIC will affect the LICs (low income countries) so that LICs seeking economic growth and political influence will increasingly follow the lead of the BRICs. BRIC models for economic growth are increasingly compelling. Over the next decade, cell phones may be the key to bringing microfinance to very poor and remote peoples. Wireless technology could radically reduce transaction costs and create anytime, anywhere access, even for very poor and remote clients. Most of the microfinance community believe that the government’s best role is to create a friendly policy environment for microfinancial services and not to provide them directly, at least when it comes to credit. However, in the BRICs, many of these countries have populist governments and are increasingly getting directly involved in delivering financial services directly to the poor. The following scenarios provide an overview of the effects of wireless technology on microfinance in these regions. Scenario 1) Massive Access “Wireless technology revolutionizes the way financial institutions and other businesses offer financial services to low-income people. Hundreds of millions of poor and unbanked clients gain access to cell phones, either by owning their own or using someone else’s. This sparks the interest of domestic banks because the costs of executing low-value transactions can be lowered substantially. Because international banks are capturing most of the corporate clientele, domestic banks turn more to retail business. They invest in delivery systems that can reach more people at lower cost, thus improving access for lower-income clients. In BRIC countries, the movement down-market starts with the burgeoning number of lower middle-class consumers. Major mobile phone operators form a new hub that enables international remittances to be securely and cheaply routed to mobile phone numbers. Innovation in handsets and software design spurs rapid customer adoption even among poor and illiterate clients. Regulators appreciate the potential of technology and especially the combination of cell phones, smart cards, and POS, to extend access. In addition, they see wireless technology as a fast and transparent way to track transactions, making it easier, among other things, to comply with international standards that combat money laundering and the financing of terrorism. They amend regulations that limit banking transactions to conventional bank branches, allowing other infrastructure to do double duty as virtual branches. Once customers can make payments, transfers, cash withdrawals, and deposits outside of conventional branches, banking becomes more convenient and less intimidating for them. User-friendly products, some tailored for illiterate and semi-literate customers, attract many poor clients. The increased volume of remittances and internal transfers stimulates demand for other services. Higher volumes and lower costs allow deeper penetration. In the BRICs, as well as LICs such as Bostwana, Kenya, and Namibia, governments opt to make social transfer payments to their “stem” of poor citizens through banks and other financial institutions, using electronic payments and wireless technology. Once deployed, this wireless backbone can handle huge numbers of transactions, including not only financial services but also other development activities. For instance, cell phones and wireless Internet kiosks transmit basic health education to poor households, market information to remote farmers, and rainfall conditions to holders of weather insurance. Easy access to information makes it far simpler for those in developing countries to tap into global best practices. It also ensures that governments are held more accountable.” Scenario 2) Deeper Digital Divide. “Technology is adopted mainly to serve the easier-to-reach, wealthy clients and the substantial middle class in BRIC countries. The high fixed cost of technology infrastructure allows large banks to push out small players. The large banks find other opportunities more attractive than extending the lower income frontier of the retail market, thus leaving most of the poor outside the system and worsening the digital divide. As financial institutions move toward automated processes, clients interact more with machines than with people. Poor people who do not fit lenders’ automated profiles lose out on the benefits of conventional microfinance, including the personal relationships with loan officers that make uncollateralized, unscored credit possible, and interaction with other poor clients, which builds confidence and empowerment, especially for women. Governments in developing countries are concerned that increasing numbers of financial transactions, including deposit collection, occur outside of the banking sector, beyond their limited capacity to supervise. In reaction, they tighten financial regulations, prohibiting banking services via cell phones and other electronic means outside of bank branches. Governments also clamp down on nonbanks, such as telecommunications companies, offering card and cell phone-based payments/banking services. The trend away from legalizing immigration in Europe and the United States blocks access to bank accounts and possibly even easy cell phone subscriptions for immigrants in the North. This makes it harder to send funds safely and cheaply back home to family members. The traditional donor community and other international actors supporting microfinance assume that technology can solve the access problem commercially: they think most of the job is done. They lose interest in financial inclusion. Most poor people are left behind, and entire LICs as well. This shift in interest leaves countries like Sudan and Zambia with limited support for building financial access, even while they remain on the fringes of the wireless revolution.”

Global Scenarios on Microfinance – Part II. CGAP Executive Committee, World Bank. Focus Notes No. 39, October, 2006.

A major driver for financial inclusion worldwide has been microfinance, a concept that gained extraordinary momentum over the past ten years. The authors at the World Bank ask whether this is strong enough to be irreversible? Will it gather the momentum to reach the billions who still have no access to microfinance? This report takes a regional look at the low to middle income nations and considers regional stability factors in demographics, technology, and new financial structures. Part II herein looks at two scenarios of how state institutions impact regional microfinance. This is part II of the overview of global microfinance scenarios that look closer at the trend of new state credit programs in poor countries. According to the World Bank, “The pendulum seems to be swinging back from widespread privatization and liberalization toward more state control—and possibly even nationalization in some cases. In between, there are several other options: requiring institutions to lend to priority social sectors (India, Colombia); requiring financial institutions to serve the communities from which they receive deposits (as with the U.S. Community Reinvestment Act); linking government contracts to banks’ social performance (South Africa); creating fiscal incentives to invest in priority sectors (as has been done in the Netherlands); or fostering moral suasion for banks to commit to access targets (South Africa’s Financial Sector Charter).” World Bank As states exercise more control over retail financial services, some may heed the accumulated lessons of microfinance experience. Armed with good practice guidance, governments could potentially provide these services directly and do a good job. On the other hand, governments may continue naturally to succumb to the significant social and political pressure to deliver subsidized, uncollectible loans. Scenario 1) Successful State Involvement. “A few governments take an informed, long-term approach to the use of their massive state bank infrastructure to offer sustainable financial services. They follow examples such as Bank Rakyat Indonesia, a state bank that successfully built firewalls between politics and the technical business of banking, resulting in sustainable provision of more than 31 million savings accounts and 3.2 million small loans outstanding at present. Based on sound practices and fuelled by massive injections of start-up capital, access skyrockets. Loan repayment is high, and state banks become profitable. BRIC and other governments channel social transfer payments to the poor through state and other commercial banks, enabling many people to have bank accounts for the first time. Governments professionalize their state savings banks, which become better at collecting, protecting, and investing poor people’s savings. Other governments successfully motivate private banks, for instance by entering into public/private compacts to extend access. They also encourage developments like credit bureaus that enable the poor to develop credit histories transferable from one provider to another. They work together with banks to develop common financial architecture like interoperable ATMs and POS machines and cell phone-based transaction networks that reduce costs and increase mobility of poor people’s money. The few success stories where governments in both BRICs and LICs have really insulated credit from politics and replaced traditional approaches with sounder practices draw imitators throughout the developing world. For one thing, aid flows, except in the poorest countries, are increasingly small relative to private capital flows and even smaller compared with remittances from workers abroad (see Figure 5). In 1988 remittances were less than half of official flows: by 2001 they were more than twice the size of official flows. As the cost of wiring money drops, and the number of migrants increases, remittances are likely to become an even more important source of money for the poor. The composition of the international donor community is also changing. New actors are emerging on the scene, both governments and private players. The BRICs and some of the oil-rich Islamic states are playing an increasing role as donors. Fortunes made in business, and especially in technology, are now being deployed to solve some of the problems of development. Warren Buffett’s spectacular $31 billion contribution makes the annual budget of the Bill and Melinda Gates Foundation (already the largest private foundation in the world) bigger than the GDP of over 40 countries.” Scenario 2) Flood, Distortion, and Collapse. “BRIC and populist governments reject so-called international “good practice.” They blame the free market orthodoxy emanating from the West, and especially Washington, for deepening poverty and social divides in their countries. These same governments experience immense pressure to deliver resources quickly to poor and remote constituencies. In addition, a number of governments (especially in BRICs and some Middle Eastern countries) are so concerned about the potential impact of youth unemployment that they rush to create unsustainable microcredit schemes as a solution. As a result, state-owned “Banks for the Poor” crop up in dozens of countries. Interest charged on the loans is far below the cost of delivering them, and borrowers are not compelled to repay them. This kind of unfair competition squeezes out sustainable private MFIs. In BRIC countries, the governments finance these efforts as part of their welfare policy. In LICs, donors grudgingly agree to bankroll these new state players, in fear of being completely left out of the development debate in countries increasingly hostile to free-market ideas. Some countries reinforce each other’s stances, as happened in 2006 when oil-rich Venezuela donated $100 million to the Bolivian government for state-run microcredit, threatening to undermine Bolivia’s well-established and viable private MFIs. South-to-South dialogue and technical support hasten the spread of the new state credit initiatives throughout the developing world. Interest rate ceilings are imposed at levels too low for private microcredit players to survive, and so the subsidized and weak state-run Banks for the Poor are left as the only source of financial services for the poor. Thus poor people have access to their services only as long as the subsidy and political interest lasts.”

The Coming Global Knowledge Society: How to Analyze and Shape Its Future. Peter H. Mettler. Futures Research Quarterly. Spring 2005. p. 51.

The author describes global trends and the dynamics of trends by examining two scenarios of the future with two different timelines: 2030 and 2070. The following global trends were highlighted in the scenarios: 20 million people, completely self-determining and economically almost self-sufficient are heavily networking globally in respect to science, knowledge and know how, with strong feelings of responsibility for future generations as well as to help develop less developed regions. • Social futures, e.g., wealth-distribution, life-expectancy and population policy, as well as future studies in leisure, sport, professional activities, etc.; • Cultural futures, in particular the dialectics between individual and (world) society, as well as future studies on values, tolerance, morality or criminality; • Urban futures, in particular of megapols, as well as questions such as: "Would megapols be capable of forming countervailing forces to TNCs?" And/or: Would they be developing into a fourth political power besides the UN, nation-states and global-economy-players?; • Security futures, e.g., how the military and the armament industry, the technology of ABC weapons and their international proscription, the aerospace industry or SDI/NMD might develop; • Ecological futures, in particular man-made climate changes, weather doomsdays, water shortages and genetic manipulations in respect to agriculture and food as well as to humans; • And finally the question, how a decline of world population to -5 billion people could come about by 2150? Scenario 1) 2030 – Virtually the Same as 100 Years Ago. “The year 2030 is reminiscent of what it was like 100 years ago and what the situation led to then. Superpower Structure: The situation is comparable with that of 100 years ago in that now, as then, there are hardly any fixed points of reference any more; chaos prevails. Traditional factors—such as states, their military and security forces (the state's monopoly of power and strength), their economic power (with commissions from the state or income from the state's tax monopoly) and their territory—have largely lost their significance: the TNCs that have taken their place are neither wanting nor able to take these functions over. TNCs are aware of their responsibility only towards their shareholders, or at best towards their customers. In countries, (large) regions and even (sub-)continents—the Islamic world, China and/or India—internal wars have broken out (ideologies, separate regions and army units fighting against each other). Some of this is about spheres of influence. And in some places there have already been millions of casualties. Old and new ideologies are about conquering the world and eternal happiness, as well as condemnations of opponents, going as far as new calls and plans for genocide. Two entities play special roles: Urban Agglomerations: The chaotic conflicts are mainly fought in the urban agglomerations: in each of the approximately 50 megapols with more than 35 million inhabitants there are different victors, who enter alliances with like-minded rulers of other megapols (wherever they may be in the world), and are not afraid to use hunger as a weapon for suppression within the regions. Telematics: Telematics starts to be used to usurpers' ends, Orwell's visions were comparatively benign. Population: The world population declines, for the first time in over 200 years. Migratory movements involving hundreds of millions of people leave behind completely devastated areas. To combat this migration, local armies in the shape of citizens' vigilante groups are in the making. Military Structure: Although the armies of the former national states no longer exist (owing to the fact that the states are bankrupt), there are still huge arsenals of weapons available, constituting an incalculable risk (like the old Soviet nuclear weapons did after the implosion of the USSR in 1989). In particular, there are signs that fundamentalist fanatics are contemplating (and planning) how they could get hold of them. Scientific and Technological Development: Science and technology are scarcely global any more either: they are compelled to serve the high and mighty and do research and/or development for their purposes. Economy: Due to the almost complete collapse of world trade, there are extremely acute supply shortages: between 1980 and 2010 the range of varying production processes was given up in favor of specialization and market niches almost everywhere in the world (comparable with the situation in the USSR's successor states after the former had imploded). Education, Cuture, and Religion: Helplessness and rashness prevail, along with incriminations and the search for transcendental explanations for the disaster; but there is also a return to classical religions and values. The latter result in the most varied recommendations as to how to overcome the crisis.” Scenario 2) 2070 or Outcome of the Renewed Experience. “Where there is danger, help grows too. Superpower Structure: History does not repeat itself, but historic parallels do keep occurring: due to the situation in the year 2030, which retrospectively (i.e., as seen from the year 2070) can be seen as the climax of the crisis, a new power structure developed, which has not yet (i.e., by 2070) managed to lay down new basic rules that have any chance of retaining their validity for any length of time (e.g., after the Viennese Congress), but which have, nevertheless, succeeded in dissuading the world from using its weaponry and forcing it back to the negotiating table. Since then, more and more proposals for a new version of the UN and a new world economic structure were put forward. Four world players are likely to make up this new UN / world: • The parliament of the approximately 100 largest megalopolises, comprising about 1/3 of the world population. • The parliament of the approximately 100 largest TNCs, making up for around 40% of the world's GNP. • The parliament of the approximately 350 (nation) states, which still have approximately V4 of the world's GNP at their disposal. • The parliament of the approximately 20 economic blocks, which account for around 85% of the world's GNP. Their intertwining links no longer permit any single "entity" to grow beyond a given size (+7%), and the hierarchical systems (at least 4 levels) incorporate so many early warning systems that crises can and must be dealt with at an early stage: UN Megapols' TNCs' States' Economic blocks'. Urban Agglomerations: Since poverty vk'as greatest here, some of them joined to form a democratic alliance against those megapolis that were ruled in criminal ways. Their example encouraged the inhabitants of megapols ruled in criminal ways to gradually get rid of their rulers. They were assisted herein by both, the old (political) structures still in existence (e.g., international concerns, national states and political economic blocks such as the EU) and by telematics, which had been impossible to keep under total surveillance for a long time. Apart from this, people—in accordance with their own needs—made themselves relatively self-sufficient locally (i.e., in municipal districts) and could thus be blackmailed only to a certain extent. In a new sense, Mao's old saying, "Let 1,000 flowers bloom" came back into favor again. Telematics. During the last decades, the vast worldwide telematics network has passed its democratic test. Dictatorships covering small areas (even including those ruling several hundred million people) were not able any more to conceal the truth from the people they suppressed. And luckily, almost everywhere worldwide there was already so much telematics know-how available that local "experts" were unable to hinder communications to any substantial degree or penetrate even the most suppressed people. Population: The view that there is an optimum population for each area is now scarcely questioned. It has finally been recognized that the education of the population and its scientific and technological knowhow —not just its sheer numbers—constitute the capital of each region. Since medical sciences had managed by 2055 to increase average life expectancy by over 14 years (and remained stable since), world population has now stagnated at the level of 12 billion. Military Structure: There are just a few military units with geo-strategic tasks (and abilities), which report to the UN; apart from this, there are security forces specific to individual territories, with technically superior equipment but rotating staff. The territorial forces from two to three neighboring territories can prevent any invasion attempts by individual units, whilst the units with geo-strategic tasks can dissolve any alliance between several territorial forces. Scientific and Technological Development. Numerous experts (from all areas) opposed usurpers worldwide, committing themselves to more local/regional attempts to solve problems. Now, however, world associations exist again, even if they are not geared towards individual disciplines as they were previously. The percentages of all four parliamentary budgets earmarked for science and technology are rising again, but the qualification requirements are tougher than ever before: the more funding an expert or a program/institute gets, the tougher they become. Economy: The term "economy" (including the above-mentioned GDP rates) is currently being replaced by complicated regional development indices, which are now nearly fully developed, and which subordinate thinking in terms of finance and capital to thinking in terms of quality of living. Education, Culture and Religion: It is here that the actual fate-turning revolution has taken place. The egoistic, partial and particular manners of thinking—decisively shaped by the Occident—which so frequently resulted in criminal actions, realized its own limits in view of all the dangers, dimensions and complexities. But the old dangers have not really been eliminated/overcome, nor is there any safeguard against new dangers which will certainly emerge. Emphasis again is put on the concept of socially and environmentally tolerable flexibility.”

Global Innovation Outlook 2.0 – IBM. Samuel J. Palmisano, Chairman and CEO, IBM Corporation.

The Global Innovation Outlook provides a platform for candid and open conversations about important issues of our day and in the future. Contributors include IBM’s top researchers, consultants, and business leaders. The Global Innovation Outlook also included 180 experts on business and business innovation. 2020 Scenario of the Corporation of the Future. In 2020 the corporation is modeled after Hollywood’s studio system where talent is recruited for very specific projects. The corporation creates an outside entity, subscribes internal and external talent to it, “creates stuff” (via project management), then deploy assets. “By 2020 the change is driven by a new generation of workers more comfortable with the idea of job fluidity rather than job permanence. The 2020 employee’s primary identification is less with the company and more with the “company they keep”—the larger network of colleagues and peers who share their interests, expertise or worldview. The employee of 2020 are coders or computational biologists or designers or educators first, and employees second. But a more fluid, flexible and mobile workforce is just one factor driving this change by 2020. Also helping to redefine the notion of the enterprise is the confluence of collaborative innovation, networked technology, and viable new business models such as business process outsourcing, customer-driven design and peer-to-peer production. Thus by 2020 the “specialized enterprise” comes into being. The ’90s version of this idea focused on “core” vs. “non-core” functions and activities. The goal was to contain what was core, and ship out the noncore to lower-cost providers. By 2020 the nature of competition becomes increasingly intense, global and unpredictable—requiring strength across the board. The objective therefore, is to decompose the enterprise into its component parts, understand with great precision what is truly differentiating—where the enterprise has strengths and weaknesses—and then make decisions about how to build, buy or partner for world-class capability. In this model, companies can focus their energies on their true point of differentiation, instead of trying to master many domains and ultimately squander competitive advantage by dispersing focus and investment. Rather than existing as static and fixed organizations, the enterprises of 2020 essentially become an aggregation of specialized entities with complementary interests—expanding, contracting and reconfiguring themselves in a way that best adapts to or even anticipates market dynamics. Paradoxical as it may sound, these super-flexible configurations prove more stable over time.”

Scenario Planning at British Airways – A Case Study. Long Range Planning, Vol. 29, No 2. 1998. Given the competitiveness of the airline industry, British Airways' Chief Economist, DeAnne Julius, proposed the use of scenarios to the Chairman's Committee. Because the expected benefits were somewhat intangible the decision was made to treat the exercise as an "experiment" to see if the process was suitable for use within the company. The exercise was divided into two phases: scenario development and scenario workshops. Each phase was led by a senior member from the Corporate Strategy department. The aim was to link the scenario workshops to the business plan of British Airways. Driving Forces for the scenarios included the information revolution, economic restructuring, and global competition. (See report for the complete scenarios.) Scenario 1) Wild Gardens. In "Wild Gardens" global integration goes so far that it is impossible to build lasting new structures of governance to replace the old, crumbling structures. In this world it is the Darwinian battle of winners and losers which shapes the future. There are Boom and busts in OECD, fast growth in LDC’s. In terms of values, there is no clear direction, Europe widens to numerous countries, and the party splits and strange coalitions. Niche players flourish in the airline industry, new players enter and exits thus shifting alliances and commodity market behavior. Scenario 2) New Structures. In "New Structures" shared values and new ways of organising are found which enable growth to continue in a manageable, rather than in a socially disruptive, way. Drivers include the market forces of competition and costs and need for flexibility. In this world there is a earch for order and stability, infrastructure investments, and long-term horizens. Europe grows strongly but there are setbacks in Asia and LDCs. Values are inner-directed. Euro-enthusiasts deepen the EU. Asia focuses on security. In the airline industry subsidies end in Europe, more European mergers, large, powerful distributors, huge environmental costs, airport constraints slow growth, HS trains and video-conferencing takes off.

Around the World – Collective Forethought: A New Paradigm in Strategy
Klaus Heinzelbecker and Adrian Taylor. Heinzelbecker headed the BASF AG Chemical Group, responsible for the management of the scenario project and the steering of different project teams.

The Chemical Advisory Group for Europe conducted a scenario workshop examining the external business driving forces for the scenarios. This included the regulatory burden in Europe compared to the rest of the world; relative costs of Europe vs. elsewhere in, e.g., labor, energy, and logistics; degree that globalization continues with regard to trade and investment; volatility and absolute levels of feedstock price; public perception of the industry's reputation and innovation. Drivers relative to the chemical industry include restructuring by scrapping inefficient plants and invest in better ones and innovation not just in products and processes but also business models.
Scenario 1) Sunny: Bright Future Ahead. “In this scenario, the EU in 2015 has access to competitive feedstock, and there is strong demand from local converters that reduces the pressure on prices. The innovative climate, with support of the general public, encourages new technologies such as biotechnology, and the emergence of suppliers using new raw materials.
Customers and important industries stay in Europe. Overall costs do not improve, but also do not get worse. The mostly positive external environment encourages the chemical industry collectively to do its homework, finding new business models and proactively restructuring.
This, in turn, spurs investment in the EU market and provides a flow of qualified workers, who no longer come from the synthetic chemistry background alone. This emerges as a normative scenario, where win-win relations can be developed for governments, greens and industry if all play their cards right. Certainly, the hope must be that this will be taken up as the basis for discussion on how to move forward.” Scenario 2) Cloudy – Realistic Optimism. “The external environment is not as favorable, with geopolitical tensions causing feedstock prices to rise and increasing their volatility. This situation is further aggravated by high energy prices within the EU, and decreased refinery capacity, both of which push up production costs considerably. Europe faces extremely tough competition from Asian finished products and Middle Eastern intermediate products. However, the regulatory authorities in the EU realize the problems, and give industry a helping hand in its restructuring, by supporting innovation and giving reasonable time delays for implementing regulations. Thanks to the positive message from the regulator, restructuring is undertaken whole-heartedly across the industry, with scrap and build taking place and specialization in niche markets. While there is a shortage of qualified labor, this is partly made up by bringing in qualified staff from developing countries. It is clear from this that, even faced with a threatening external environment, there is hope if the authorities can be won over, and if all Cefic member companies join forces to transform the industry.” Scenario 3) Rain – Be Prepared. “This scenario starts from a rather favorable external situation, where feedstock prices are reasonable, and there is bearable pressure from Asian competitors. Even if some client industry segments are leaving Europe, important clients remain active. However, the EU legislative machine is stuck in a "muddling through mode" following enlargement, and is unable to steer policies to reform, or indeed in any particular direction. The result is an increasingly unclear regulatory situation, which damages business confidence. Lacking this lead, the chemical industry fails to get its act together. Innovation is focused on short-term cost saving, restructuring is slow, and major investments flow to other parts of the world, leading to a brain drain, as top talent leaves in search of more dynamic horizons abroad. This scenario reinforces strongly the notion that the industry's fate lies in its own hands, too. A favorable outside world is not
enough to guarantee success as, by failing to seize the opportunity given them, with each company thinking only for itself, problems ensue.” Scenario 4) Storm: Whom to Blame? “A threatening geopolitical situation is coupled with a deliberate subsidy of feedstock in some producer regions combined and with a heavy and increasing legislative burden imposed by the EU authorities that fails to replace national regulations, but rather comes on top of them, with each country implementing EU laws in a different way. Even though Asia is not sucking in so much in investment, the problems of Europe are sufficiently large that few companies wish to build up local capacity there. Chemical companies therefore tend to cash-cow their EU assets, letting the productive resources age and decline. Innovation and innovators leave the European market, making it harder to recruit new talented human resources, even from outside the EU.
This scenario is clearly a minatory tale of just how bad the picture could get in the absence of good will from all those involved.”

World Out of Balance – Three Scenarios for 2015. Adapted from the book, “World Out of Balance” by Paul A. Laudicina. Copyright 2005. McGraw Hill Education.

A.T. Kearney's Paul Laudicina offers three scenarios that depict possible visions of the global future. Based on five key drivers of change - globalization, demographics, consumption patterns, natural resources/environment and regulation/activism - the author envisions three possible and plausible scenarios for the ten-year global outlook. Scenario One: Castles and Moats. “In this darkly pessimistic (though not necessarily most-probable) scenario, the world in 2015 is plagued with instability. Terrorist groups have continued their campaign of well-coordinated attacks against the United States and its institutions abroad. They succeeded in eroding global confidence in what was once seen as the world's preeminent political and economic superpower. Although most of al Qaeda's leaders have been caught and killed, many questions are still unresolved. They include Palestinian statehood, ongoing conflicts in Central Asia and the Caucasus region, as well as worsening standards of living in Middle Eastern countries. Fortress world - As a result, among Western nations, national security trumps all other concerns. Civil liberties have taken a backseat to security concerns, as governments subject their citizens to constant surveillance. With xenophobia on the rise, immigrants, foreign workers and even ethnic minorities are viewed with suspicion. Fewer and fewer people are willing to travel, work or live abroad, knowing that they will be subjected to intense scrutiny. As a siege mentality sets in, rising nationalist and populist sentiment is the catalyst for heightened levels of economic protectionism. Governments now consider it a high priority to protect jobs and prevent them from going overseas. And barriers to foreign investment and cross-border travel ensure that countries can safeguard their own unique ways of life. Countries no longer believe in the efficacy of multilateral arrangements and prefer alliances with small groups of like-minded countries they feel they can trust.” Scenario Two: Patchwork World. “Let's now switch to another, less calamitous, view of the world of the future. The state of the world and the business environment is characterized by a muddle-through mentality. Few governments show much leadership or vision — or even have enough high-quality talent to try to do so. The corporate sector responds in kind. Companies seek growth and profits by working their relationships and looking for advantage wherever they can find it in a fairly chaotic and turbulent world. Large patches of the globe are mired in poverty and violence, although the good news for North America, Europe and Australasia is that much of the trouble is localized. It does not spill over excessively into the zones of affluence, though they would be getting even more affluent if global growth rates were higher. The United States and the expanded European Union prove to be more resilient than others, given their vast internal demand and relative self-sufficiency. Widening divide - However, trade barriers in export markets have a damaging impact on key industrial sectors in Japan, China and Southeast Asian nations, curtailing overall macroeconomic growth in these countries. Government aid and emergency financing grow more scarce, leaving the developing world to fend for itself, while the world's wealthiest consumers account for a greater share of global spending power than at any other time in modern history. Rise of the middle class - In advanced markets, these on-the-go consumers show a penchant for sophisticated, easy-to-use goods and services that simplify lifestyles and address personal needs. Meanwhile, middle-income spending shifts to emerging markets such as China, India, Mexico and Brazil. Collectively, roughly two billion people — 29% of the world population — form the basis of this growing middle class. However, purchases of cars and first homes are sluggish, owing to economic growth rates that are lower than expected. Despite the broad convergence in purchasing power, a truly global "middle class" consciousness fails to take hold. National governments find it increasingly difficult to regulate corporations, in part due to the mass exodus of talented senior policymakers seeking more lucrative careers in the private sector. State, Inc. - Confronted with tight budgets and growing obligations to care for their aging populations, governments turn to corporations to handle a number of formerly public sector services. These include technical training programs, law enforcement and healthcare. As corporations assume a more visible role in the public sphere, they become increasingly sensitive about how they are perceived by the general public. As government oversight declines, a broad coalition of activist groups step into the breach to enforce certain standards of corporate behavior.” Scenario Three: Open Borders, Lingering Fears. “The United States and China are the dominant economic, political and demographic players on the world scene — with large, robust markets that are highly intertwined, with muscular roles in the world that sometimes collide. This is a time of intense business activity and technological innovation, and the rising tide of affluence continues to lift living standards in countries open to the global economy, even as further trade liberalization remains gradual. In the richest markets, companies tap into new consumption patterns emphasizing high-end, lifestyle-enhancing products and services. Trade in services is booming, and secure digital connections allow far-flung, truly global production and distribution networks to emerge. Rising expectations, coupled with a demand for constant innovation, makes consumers less tolerant of products and services that are cumbersome to use and do not deliver on their promises.”

Russian Prospects – Political and Economic Scenarios. Kaare Stamer Andreasen, Master of Social Science in Geography and Eastern European Studies , Jakob Kelstrup, Master of Arts in Russian and Eastern European Studies. Copenhagen Institute for Futures Studies, March/July 2005.

Today’s Russia has widespread freedom, democracy, and growing affluence. Will that still be the case in 15 years? 15 years ago, the Soviet Union was a goliath of an inefficient system and injustice. How well can we imagine a Russia of the future? The authors encourage readers to develop their own conclusions. The scenarios are profiled to enable individual companies and organizations to understand consequences within each scenario that shows developments along the chosen uncertainty axes over time. These economic scenarios for Russia are based on two uncertainty axes: one axis concerns whether Russia moves towards a more centralized form of government or towards a more decentralized form of government. One concerns whether Russia evolves towards a market economy (free enterprise) or whether it evolves towards a planned economy. The other uncertainty axis concerns whether Russia’s economy becomes based on raw material production or whether it becomes a differentiated production and service economy.
Scenario 1)Russia has a Working Liberal Economic System. “The Russia of 2020 has a working liberal economic system, but it has failed to develop a differentiated production and service economy. The raw material-dominated industrial complex still constitutes a substantial part of the Russian economy. Russia is hence very sensitive to fluctuations in global raw materials prices. In times of global recession the Russian economy is weak and dependent, and in global boom periods the Russian economy booms. The purchase power of Russian consumers rises and falls almost synchronously with global raw materials prices. Market Economy at Half Steam. - Market forces control Russia’s economic and industrial development, but the country has failed to diversify its foreign and domestic investments and thus develop a more differentiated industrial structure. One of the reasons for this is that Russia still hasn’t modernized its investment laws and the entire bureaucratic and administrative organization sufficiently to encourage far more foreign investments over and above the big investments in the oil and gas sector. Although membership of WTO has helped improve conditions for foreign investments in the Russian economy, it is still subject to too much government interference with sensitive parts of the energy sector. But Russia is still the EU’s biggest trade partner and deeply integrated with the global market. Hampered Middle Class - The development of a strong middle class has been hampered by a lack of diversification of domestic industry. As a result, the development of a Russian middle class to carry Russia into the 21st Century and contribute to a strong economic growth is not much further along than it was 15 years ago. The Russian consumer society is geographically unevenly distributed. Unequal regional development and the lack of investments across sectors has given the economic growth centres in two or three regions in European Russia a greater selection of goods than the rest of the regions. There is steady migration from rural to urban areas, as the regions around Moscow and St. Petersburg still lag behind the growth centres. The labour market is riddled with moonlighting, and there is major unemployment outside the raw materials sector. In addition, there’s not the same flexibility concerning changes in occupation in Russia as there is in Western Europe. David vs. Goliath.- Russia is experiencing lopsided economic development; the resource-rich regions do much better than other regions. Some attempt is made at regional redistribution and balancing of economic resources, but Moscow, St. Petersburg, and the resource-rich regions do better than the rest. The central government keeps a tight rein on the regions to prevent the resource-rich regions from seceding. Most regions are quite far from being self- sufficient and have to participate in inter-regional division of labour. In Russia’s struggle between the centre and the periphery, the richest regions succeed at the expense of those with fewer resources, those that don’t have the economic clout to negotiate with Moscow for privileged status. Oil Sets the Agenda - The high oil prices and Russia’s sale of gas to the EU still provide a positive trade balance. Unfortunately, not enough of the profits from oil and gas have been reinvested in other sectors than the energy sector. The money contributes to a continued economic growth in Russia, but the Russian growth rates are relatively small compared to those of e.g. China and India. Large parts of the raw materials sector are under the control of multinational companies. The greatest foreign investments in Russia have been in the oil and gas sector. The latter is still partly state property. The pipeline network has been partially modernised, but the Russian government has refused to invest extraordinary capital. The export of gas to the EU is the biggest source of income for the Russian state. There has thus been little real improvement in the climate of investment, except for the mandated WTO regulations that Russia has had to introduce. The most mature part of the market is thus the raw materials sector, where we see a lot of business and a well-developed retail business in the economic growth areas. The economy is booming in the districts where the raw materials sector dominates. There’s little unemployment as most of the labour market here revolves around the raw material sector and its associated service jobs. WTO Has No Effects on Exports - Russia still imports large quantities of foreign goods. Due to the membership of WTO, Russia has been unable to protect or develop its domestic industry as much as it would have liked. The membership allows Russia to export more of its domestic production, but lack of investments on the domestic front has rendered the country dependent on imported goods. This dependence on imports combined with the poor selection of goods in the peripheral districts has led to comparatively high prices on consumer goods. The financial sector has experienced a boom in loans by Russian consumers, and the financial sector in turn has invested more in the private sector. The WTO membership has thus had a positive effect on the financial sector.”
Scenario 2) Russia Becomes a New Economic Superpower. In this scenario, Russia has grown into a heavyweight in the global economy by 2020. Russia contributes strongly to globalization and is clearly part of international business life. Many Russian companies are players on the global scene. The Russian economy is very dynamic and has many participants. The former economic structure dominated by the raw materials sector has been replaced by a more diversified economic and industrial structure. More and more small and medium-sized private companies crop up. Things are going well. The emergency measures that were introduced to the Russian economy after the turn of the Millennium, among them a stabilization fund to soak up oil revenues, has led to large foreign investments across the sectors. This in turn has led to noticeable modernization and economic growth in areas like physical infrastructure, telecommunication, and the service sector. Russia’s middle class has grown, and the country possesses a well-educated, motivated, flexible, and globally oriented workforce. Russia is growing steadily stronger in areas like research, innovation, and development. The country has a strong domestic production plus a great growth of export-oriented production. Business life is characterised by strong national and international competition. Many small and medium-sized businesses have appeared, and private enterprise flourishes as never before. The government is very anxious to create good conditions for entrepreneurs. Growing regions. The Russian market is mostly characterised by great competitiveness. Two manifestations of this are a great amount of production for the domestic market and gains made by big modern Russian retail chains at the expense of the international chains. Foreign retail chains were too hesitant about expanding their businesses in the Russian regions, and the Russian chains took advantage of that to exploit the ‘first mover’ initiative in these areas. As the purchasing power of Russian consumers has grown greater and greater, this strategy has enabled the local chains to report greater profits than foreign chains. Regional expansion of retail trade has caused the income and employment figures of big cities other than Moscow and St. Petersburg to grow too. The Volga region, the Urals, and the Southern and Eastern regions in particular show high growth rates. A typical market economy There thus is a lot of business-to-business trade going on. The black economy’s share of the Russian economy has grown smaller due to e.g. more transparent tax rules, increased encouragement for investments, and reduced government interference in economic activities. It is no longer as necessary for local and foreign investors alike to have good political and administrative connections in the Russian business world in order to do business as it was 10-15 years ago, another sign that Russia has become a typical self-regulating market economy. The implementation of a functioning legal system has been of great importance. A more differentiated production and service economy has generated greater international confidence in the Russian market. Hence, in 2020, far more investments are made in Russian business. At the turn of the millennium, foreign direct investments (FDI) in Russia lagged far behind investments in other emerging economies, like the Chinese and South East Asian economies, but by now they’ve reached a much higher level and are on a par with the Central and Eastern European nations in terms of per capita FDI. The confidence in the Russian market is a consequence of careful attention paid to long-term improvements to the investment climate. This attention has resulted in more transparent property rights and investment laws plus a greater transparency regarding official handling of investment cases. WTO shows the way Russia’s membership of WTO has forced it to improve the investment climate. Thanks to WTO, foreign investors perceive lessened risks associated with Russia’s business world, although there is still some way to go before reaching Western standards and corruption is still to be found in certain parts of the Russian business world. Russia experiences increasing foreign and domestic investments in the shape of portfolio investments and direct investments. Russia has a transparent market with international accounting standards. Many Russian companies are quoted on the international stock exchanges. Faith in the Russian market, combined with the global economic success of Russian companies, generates opportunities for global actors to make big money on the expanding Russian market. Various foreign and domestic investments have led to a gradual shift in the Russians’ choice of employment. Where the oil and gas sector used to generate the greatest income and contributed the biggest share of the GDP, in 2020, the workforce is spread more evenly across various sectors. Service jobs thus play a greater part in the economic growth. Prosperity and contentment. The Russian people are generally content with the way things are. The rising economic standard of living, the excellent prospects for the future and the many fine opportunities make for an optimistic and dynamic Russia. Globalization is perceived as something positive that, at the same time, can be used to reflect Russia’s unique qualities. People take pride in being Russian, and Russian culture is in focus. The prosperity also benefits Russia’s marginal districts. Geographical location is less important in a digital age. Remote villages in Eastern Siberia participate on equal terms in the international knowledge society. Since a growing part of production is intangible, all the Russian regions participate in the global production. There is a tendency towards economic dispersion in Russia. The Eastern regions turn more and more towards Asia, the Western regions towards Europe. However, this does not foster burgeoning separatist sentiments. Federated Russia is firmly embedded in regional political activities. The outlying regions contribute more and more to the Federal budget. Russia has achieved political maturity, and an efficient public administration provides an equal distribution of resources.
Scenario 3) 2nd World In this economic scenario, the Russia of 2020 is characterised by government interference with the economy. Not the same interference that was common during the Soviet era, but still with some of the same signs. The Russian economy is still based on raw materials, and only feeble developments have been made towards a more differentiated production and service economy. The Russian economy is growing very slowly, almost not at all. Russia’s business life is dominated by great oligopolies, and there are growing internal inequities and lopsided economic growth. Bureaucracy, political cronyism, and corruption are basic facts of life. Fettered market economy/signs of planned economy. The economic initiatives that were launched after Russia’s independence created a broad foundation designed to help the economy of all of Russia’s industrial sectors mature, but the process has been mired by Russia’s growing dependence on high global oil and gas prices. Russia has failed to reinvest the income from its oil in other sectors of the economy. As a result the country remains dependent on the raw materials sector. Gas and oil are thus the mainstays of economic growth. However, investments in the gas sector have been inadequate and parts of it have yet to be modernised. The Russian economy is becoming more and more planned; many of the former state companies that were privatised in the 1990s are back in government hands. The state has also taken over majority ownership of industries that were showing excellent growth rates, like telecommunication, oil, and finance. This is partly a product of protectionist measures by the Russian government and partly in consequence of the government’s desire to have powerful economic negotiation tools at its disposal. The effects can be seen in Russia’s relations with the outside world, such as cooperation with WTO and trade with e.g. the EU. Russia’s attempt at restructuring its economy towards a market economy has thus failed. Membership of WTO is still not in the cards, due to mounting protectionism. A powerful bureaucracy runs the public administration. The economic structure is hierarchical with the raw materials sector and the machinery of state on top, and on the bottom the less important production and service sectors, whose growth rates more or less depend on the fluctuating growth rate of the raw materials sector. The state of Russia’s market depends on the global economy, as the country has failed to attract enough foreign investments to develop a differentiated industrial structure. More CIS, less EU. Because of its vulnerability, Russia regularly imposes trade restrictions on trade partners like the EU and China. The trade partners retaliate, and the result is ongoing trade disputes. So Russia has turned its gaze towards the CIS countries. Cooperation in the CIS has received a new lease of life because several of the member states see advantages from closer economic cooperation. Russia’s neighbours in the CIS area experience the same sort of fluctuating growth rates as Russia and likewise have trouble becoming truly integrated in the global economy. The only exception is Ukraine, whose independent economic profile is moving it closer to the EU; as a result, the country is attracting large foreign investments. Poor climate for entrepreneurs. The hopes from the start of the 2000s for development of a big middle class in Russia have not come true. The inequalities between different classes of Russian society have become worse. Unemployment is high, and the funds allocated to education and research are inadequate. There’s no demand for well-educated employees outside the raw materials sector and the administration. Conditions within the service and production sectors are bad, and the climate for entrepreneurs is poor. Even though Russia needs well-educated workers, it can’t offer them decent salaries or the degree of modernization that would be needed for their further development. Hence there is a relatively large amount of brain drain as well-educated people seek employment abroad. Barter and black economy Russia is experiencing great regional inequalities. Some of the nation’s 89 regions and peoples were not included in the economic plans and only serve as extraction areas for raw materials. Hence barter is growing more and more prevalent in these areas, and the black economy looms large in the economically marginal regions. For this reason, official economic statistics do not give a true picture of the development of the Russian society.As regards infrastructure, Russia is still lagging behind the goals that were formulated at the start of the millennium and compared to the expectations held by many prognoses. Russia has failed to develop its transport and distribution system adequately because the expected foreign investments failed to appear and because there have been no reinvestments outside the raw materials sector. At the same time, Russia has failed to attract the amount of foreign capital that had been expected to its retail sector. Foreign retail chains have withdrawn from the country because of an unstable investment climate and impenetrable legislation, particularly in the field of ownership law. Inertia and bureaucracy Russia has not been able to keep up with the economic growth rates of the richest countries and looks more and more like a second-world country. Russia’s labour market is characterised by a wage-earner culture. There are no encouragements and no opportunities for social advancement. The state’s interference with and regulation of the economy has created an efficient, but rigid bureaucracy. The many rules and courts hinder the activities of entrepreneurs. Business advisors find it necessary to be able to offer customers access to strong personal networks linked to authorities and trade.
4th Economic Scenario: New Soviet It’s Russia in the year 2020. Russia has developed a differentiated production and service economy and its dependency on raw materials has eased. There is considerable government interference with the economy. This interference has resulted in massive economic planning, and several sectors are protected by tariff walls, subsidies, and other government measures. Russia is trying out an industrialization strategy based on import-substituting industrialization in order to achieve complete independence. The goal is to create a combination of import-substituting industrialization and export-oriented industrialization. However, the attempt is not succeeding too well, and Russia is at a crossroad between protectionism and dependency on imports. Economic growth but no international competitiveness Russia has grasped the necessity of reinvesting oil incomes from the stabilization fund in other sectors than the raw materials sector, so the service sector and small and medium-sized businesses show high growth rates. On the surface Russia thus has a differentiated production and service economy. However, the state frequently takes control of formerly privatised companies, especially in the oil sector, telecommunication, and the dairy sector. Not because these companies are failing, but because of state interference and tax policies.Although developments have been more along the lines towards a differentiated economy, there’s still not a sound differentiated economic structure in place; local products are seldom competitive on the global market thanks to increasing protectionism and erection of tariff barriers.Russia makes considerable use of domestic investments, including domestic entrepreneurs, who have become numerous. However, the result is a more inward-turning Russian production cycle that is more suited to domestic markets than to the global market. The result is that Russia still has a big demand for foreign goods and can only show a small positive trade balance. Corruption is alive and well The regions have become better integrated with the overall economic development. As a result, foreign investments are more distributed among the regions and don’t just wind up in the big growth areas round 3-4 cities. The competition among regions is becoming fiercer and fiercer. A region’s effectiveness depends on political contacts and the state bureaucracy. The Soviet legacy of corruption and bureaucracy of the public sector is still with us. WTO accommodations Russia is not a member of WTO, but it has still had to adjust its economic development according to WTO regulations. Although the country is self-sufficient with most products, a big demand for certain foreign products and industrial spare parts makes it necessary to trade with the outside world. That’s why the EU is still a major trade partner of Russia, in spite of protectionist measures such as import quotas and trade barriers being frequent features of this commercial relationship. Russia hasn’t got had the foreign investments it needed to strengthen domestic production and make Russian goods dominant on the global market. Instead it has used oil revenues to reinvest in domestic production, which has created an economically differentiated, not internationally sound industrial infrastructure. Joint ventures are the most important and most frequent form of foreign investment. The central authorities encourages joint ventures, but they’re still not particularly attractive to foreign investors, since investors have very little influence on the running of the business. A flexible currency Russia’s planned economy leads to a centrally fixed currency that goes up and down according to how it will aid Russian exports. So when economic growth lags behind, the currency is lowered to make it easier to sell goods on the global market, while in boom times the currency is raised to protect domestic production. This makes Russia a less attractive country for foreign investors. The laws are unclear and sometimes hostile to investors from abroad.Regionalization, internationalization, and centralization. The close ties between the individual regions have served to modernise infrastructure and distribution network. There are still parts of Russia that has not benefited from this development, though: the most remote areas, where raw materials extraction is of great importance, but where not enough resources have been allocated to modernise the distribution solutions and warehousing facilities of retail chains. As a result, you can find a few regions that cooperate closely with neighbouring regions and constitute small business enclaves with political contacts to the state as important assets.Russian exports are hampered by not being a member of WTO. Consumer goods are primarily exported to the CIS countries and to 3rd world countries. Furthermore, exports are still dominated by raw materials whose global prices still influence the degree of economic growth in Russia. Russia is experiencing a small, but by no means insignificant, market in connection with Business-Business, as the central decision-making processes frequently make themselves felt in the business world, both on the regional and the national level. The Business-Consumer market is relatively small for foreign businesses because domestic businesses cover all areas and get preferential treatment. Business-Government is in many cases vital and cover political contacts plus contacts to the regional and federal bureaucracies.

The Shell Global Scenarios to 2025 The Future Business Environment: Trends, Trade-offs and Choices © Shell International Limited (SIL), 2005.

The reader is encouraged to refer to the 2001 Shell Global Scenarios (including the scenarios that were developed over a thirty year history of the Shell scenario project), for an apt and coherent background leading up to the 2005 work. In the 2001 scenarios, Shell presented two global scenarios that explored the challenges of a globalizing, deregulated, market-centric world. Today, the tensions captured in 2001 remain valid, but societies also face more complex choices on the nature of regulation, the framework for corporate governance, and welfare reforms. The key questions asked in 2001 were, “Will the resolution of dilemmas arising from globalization be dominated by global elites or by the people of the heartlands?” In 2001, the “Business Class” and “Prism” scenarios highlighted the “connections that matter” and “multiple modernities”. The 2005 Shell scenarios continues the work of 2001 and uses a metaphore for air navigation to show a charter of routes across three interrelated levels:1) the Jet Stream level of long-term, predetermined trends, uncertainties, and forces; 2) the Weather Systems level that reflect key regions as influenced by the Jet Stream context; and, 3) the Market-level of trends and turbulences. Part I of the 2005 Shell Scenarios present a “Trilema Triangle,”which is a unique analytical framework developed to map relations between market participants, civil society and states. Part II presents the scenarios themselves. Part III provides an analysis of critical trends common to all of the scenarios, starting with the international scene (emphasizing the US, China, the EU, Africa, and India), then matters of demography and patterns of economic growth. Part III concludes with a study on energy security and the move toward an energy and carbon industry. Key differences between the three scenarios are captured in Trilemmaps which compare specific features of Shell’s business environment that capture key dimensions. The following are scenario abstracts of Part II’s completed versions of the Shell Global Scenarios to 2025: Scenario 1) Low Trust Globalization: A Legalistic Prove it to me World: “The absence of market solutions to the crisis of security and trust , rapid regulatory change, overlapping jurisdictions, and conflicting laws lead to intrusive checks and controls, encouraging short-term portfolio optimisation and vertical integration. Institutional discontinuities limit cross-border economic integration. Complying with fast-evolving rules and managing complex risks are key challenges.” Scenario 2) Open Doors: A Progmatic, “Know Me” World: “Built-In” security and compliance certification, regulatory harmonization, mutual recognition, independent media, voluntary best-practice codes, and close links between investors and civil society encourages cross-border integration and virtual value chains. Networking skills and superior reputation management are essential.” Scenario 3) Flags: A Dogmatic, “Follow Me” World: “Zero-sum games, dogmatic approaches, regulatory fragmentation, and national preferences, conflicts over values and religion give insiders an advantage and put a brake on globalization. Gated communities, patronage and national standards exacerbate fragmentation, and call for careful country-risk management.”

Fleeting Equality: The Relative Size of the U.S. and EU Economies in 2020. U.S. - Europe Analysis Series. Adam S. Posen, Senior Fellow, Institute for International Economics, The Brookings Institution, Washington, DC.

In May, the European Union celebrated the accession of 10 new members. In one fell swoop, by adding their combined GDP to that of the current EU-15, Europe had finally caught up to the United States in economic size. Both economies at present have an annual income of around $11 trillion. Their per capita incomes differ significantly, with the European Union spreading the same income over 170 million more people. Nonetheless, for symbolic as well as practical reasons, the achievement of parity between the EU and U.S. economies marks a milestone.2 This parity, however, is not going to last. Given differentials in demographics (both fertility and immigration rates) and in productivity growth that will persist for the foreseeable future, American economic growth will outstrip European growth. Absent some change in current trends, the U.S. economy will be nearly 20% bigger than the enlarged European economy in 2020. This analysis paper projects the relative sizes of the U.S., the expanded EU, and the “rest of the world” [RoW] economies out to 2020 under three scenarios—and even under the one most favorable to Europe, parity will not be maintained. Adam S. Posen

Three scenarios are considered. Scenario 1) Baseline: “The United States, enlarged European Union, and RoW, are all assumed to grow at their annual average growth rates of 1993-2003. In this case, the U.S. share of global GDP is essentially unchanged by 2020, the EU share declines by over 3%, and the RoW adds 4%. The U.S. economy more than doubles in size to $24.6 trillion, while the EU economy goes from parity with the U.S. economy in 2003 to $20.9 trillion (15% smaller than the United States) by 2020.” Scenario 2) Demographic Determinism: “The U.S. growth rate is assumed to slow down by 0.02% each year due to declining birth rates, in part due to improved income of Hispanic- and African-Americans. The EU growth rate slows down by 0.07% each year due to rapid aging of the population, which is if anything exacerbated by the accession countries. Part of the growth decline comes from the effect of aging on government budgets, and on productivity growth of meeting those budgets through increases in interest rates and distortionary taxes, with the rest coming directly through shrinkage of the labor force. The U.S. share of world GDP declines slightly by 2020, remaining just above 20%; the enlarged EU share of world GDP declines by 5% (overall global GDP grows noticeably but not disastrously more slowly than in the baseline scenario). The relative gap between the U.S. and the EU economies in 2020 is wider than in the baseline scenario, with the U.S. national income worth $24.0 trillion, and the EU economy $19.1 trillion (a 20% difference).” Scenario 3) European Reform: “The U.S. is assumed to continue to grow at its average rate of 1993-2003, but the EU growth rate is assumed to jump by 0.5% in 2008, stay that amount higher, and gain a further 0.05% a year through 2020. Under this scenario, in 2020, the EU growth rate would catch up with that of the United States. The rationale for such a scenario is that productivity is boosted from integration of the accession countries’ low-wage labor forces or the results of a number of domestic reform efforts in core European economies following the upcoming election cycles. It is assumed that these benefits take a few years to be felt, but with ongoing beneficial effects. In this scenario, the U.S. and EU shares of world output decline at a slower but still noticeable pace by 2020 (the EU share from 21.3% to 18.6%; the U.S. share from 21.1% to 20.0%). The size of the EU relative to the U.S. economy goes up compared to the baseline scenario, reaching 93% of the U.S. size in 2020. These scenarios all likely overestimate the relative size of growth of the RoW, including that of China and India, for two reasons. First, by measuring the economies in PPP terms, rather than in traded goods terms at multi-year average exchange rates, the scenarios tend to increase the size of developing countries’ output relative to that of developed economies. PPP calculations, in their effort to better account for the value of non-tradeables, even in very low wage economies, effectively assume that producing a $1 haircut generates as much purchasing power for the economy as producing $1 worth of high-tech equipment for export. In fact, the high U.S. and EU share of cutting-edge technology production (relative to their share of the world economy) and their ability to borrow on world markets in their own currencies (given the greater liquid assets available to them) means they control a greater share of global income than PPP calculations of world GDP shares imply. Secondly, despite the Asian financial crisis and the travails of certain countries in recent years, the last 10 years have been years of relatively good growth in the major emerging market economies, and projecting out their ongoing growth at the average rate of the last 10 years is on the optimistic end of things (though certainly not unreasonable). This would be particularly the case for China and India, both of which have undergone unprecedented growth spurts of late that may not be sustainable indefinitely. Thus, the scenarios give a lower bound for the U.S. and EU share of the world economy. These scenarios also likely underestimate the relative performance of the U.S. economy versus the EU going forward (barring reform) as well.”

Global Normative Scenario to the Year 2050 Jerry Glenn and Theodore Gordon. Published in the 1999 State of the Future Report: Challenges We Face at the Millennium. This was sketched previously in the 1998 Report details have been added using 1998-99 year's and earlier Lookout Panel responses. as well as other sources of information.

Although the following may look like three alternative normative scenarios, they are intended to be one scenario with three interdependent themes. Each theme represents a different perspective on how change occurs. Some believe technology is the key force that has made change occur. Others argue that changing consciousness and the human capacity is more fundamental to long-term systemic change. Still others say that political and economic policies create the conditions for changes in both technology and human capacity. The following global normative scenario assumes that all three themes are important to the realization of the normative future of 2050.

Normative scenarios represent desirable future worlds. They employ credible cause, effect and feedback relationships to get from the present to a desirable future.

Scenario: A Normative World in 2050: “By 2050 the world had finally achieved a global economy that appears to be environmentally sustainable while providing nearly all people with the basic necessities of life and the majority with a comfortable living. The resulting social stability has created a world in relative peace, exploring possible futures for the second half of the 21st century. Different explanations have been given for the series of astounding successes achieved by 2050. Some believe that breakthroughs in science and technology were the keys, others that development of the human potential was more fundamental, and still others that political and economic polices made the difference. All three themes were important and mutually reinforcing.” Technological theme: Internet has become a right of citizenship. Businesses give free accounts to all customers; employers give them as an employee benefit. The connection of virtually all people to the global information and communications systems accelerated the pace of scientific research and the introduction and diffusion of new technology. Biotechnology, nanotechnology, and closed-environment agriculture fed the world. New and improved sources of energy made cleaner economic growth. Brain-like intelligent systems used neural networks to augment human intelligence and improve decision making. Molecular manufacturing (nanotechnology) lowered manufacturing unit cost, requiring less volume of materials and energy usage, and hence, lowered the environmental impact of a population that had almost reached 10 billion. Vaccinology and genetic engineering eliminated most acquired and inherited diseases further reducing the need for more frequent pregnancies to have a similar sized family. This was a factor in further lowering fertility rates, even though generational mini-booms have continued from the great population explosion in the mid-20th century. Cyberspace had become a major medium