"The world is changing" says the writer. Is there any doubt this is true? How you fit in, how you prosper or lose in transition, do you contribute to solutions is very much up to you. Opportunities and challenges. Does not get any more basic than that.
We will split this into two posts:
The world is changing, and so are the opportunities and challenges that everyone must now face. Increasing life expectancy, mass-scale technological advances and shifting demographics have profound implications for how we will live.
How do we build a sustainable world for generations to come? How can we ensure that our burgeoning cities remain fit for purpose? How do we build stronger economies that can provide equal opportunities for all? How we address such fundamental questions today will come to define the societies we live in tomorrow.
In this series of video interviews, Simon Smiles, Chief Investment Officer for Ultra High Net Worth at UBS Wealth Management, identifies six megatrends in sustainable development driven by broad underlying economic, social, technological and environmental shifts.
1) Gender inequality
Significant progress has been made when it comes to gender parity in education and health, but women continue to lag behind men in economic equality. Globally, only about half of working-age women are employed, and they earn about three-quarters as much as men with the same level of education, even in the same occupation. The pay gap is further exacerbated by women being overrepresented in lower-paying and temporary jobs, with limited opportunities for advancement.
In September 2015, 193 U.N. member states unanimously adopted a bold new agenda to end poverty by 2030, with women and girls at the center of 17 sustainable development goals, including Goal 5: “Achieve gender equality and empower all women and girls.”
The social benefits of achieving gender equality are matched by financial benefits, too. If women were to participate in the economy in equal measure as men, they could add as much as $28 trillion, or 26 percent, to the world’s annual global GDP in 2025, according to projections by the McKinsey Global Institute.
2) Energy sustainability
Change is coming to the energy landscape, driven by the increasing use of sustainable electricity resources, primarily solar, wind, hydro and biomass. Meanwhile, ongoing developments in the automotive sector—away from the combustion engine and reliance on fossil fuels—could significantly reduce the world’s carbon emissions.
One change in the energy sector that could bring its own challenges is the prospect of the U.S. achieving energy independence. This elusive goal has excited American leaders for the past four decades, with the promise of significant benefits, including lowering the cost of energy and reducing the threat of supply disruptions.
However, a shift towards U.S. energy independence is set to bring its own challenges, including a reduction in the amount of dollars circulating in the global economy and possible cut backs on its defense budget, which UBS's 2015 World Economic Forum white paper on The New Global Context equated to 19 percent of the US federal budget and 3.8 percent of GDP.
3) The rise of the machines
The global economy is on the cusp of disruption that will be comparable in magnitude to the advent of the first Industrial Revolution, the development of assembly line production or the invention of the microchip, according to the UBS white paper for this year’s World Economic Forum Annual Meeting in Davos, Switzerland.
The Fourth Industrial Revolution is characterized by two key traits: increased automation and increased connectivity. Technological advances are introducing ever-greater levels of automation. Meanwhile, the near-universal ownership of smart devices in many parts of the world is leading to a degree of interconnectedness that was previously unimaginable.
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