6 trends that could drive trillions into global economy and provide 'Great Reset'
New UN report commissioned by the UAE found major market opportunities in the circular economy and big data among others
Up to $30 trillion (Dh110tn) can be poured into the global economy by 2025 if governments take advantage of an influx in data, cutting-edge technology and new consumer preferences, according to the United Nations.
The Future Possibilities Report, commissioned by the UAE government, identified a half dozen trends - from circular and "experience" economies to biomaterials and big data - that will advance the UN’s 2030 Agenda for Sustainable Development.
"By focusing on opportunities that achieve the twin objective of financial returns while contributing to human and sustainable development, [the report] suggests a pragmatic approach for countries for the next normal, and for the much needed Great Reset," Mohammad Al Gergawi, Minister of Cabinet Affairs for the UAE, said.
Economic disparities and the climate crisis have come into stark relief during the pandemic.
Global economies are forecast to contract 7.6 per cent in 2020 in the absence of a Covid-19 vaccine, and unemployment in some of the world’s largest economies could more than double to about 11 per cent, according to the Organisation for Economic Cooperation and Development.
The first trend the UN identified is the "exabyte economy". As computing power and storage becomes affordable and efficient, and as 5G technology is rolled out, Internet-connected devices will underpin work, commerce and interaction to an even greater extent. Data and connected devices will drive an estimated total economic value of up to $8tn by 2025, according to the UN.
The second trend is the circular economy, which is becoming more relevant amid increasing public awareness to reduce impact on the environment. The circular economy, recycling and upcycling will become more mainstream as new technology is introduced. This will continue to open new possibilities across consumer value chains, totaling up to $4.5tn by 2025.
The UN also found that interest in physical and mental wellbeing is set to grow considerably as activities that promote overall health are embedded at individual, institutional and community levels. The combined value of this emerging sector, including preventative health, self-improvement coaching, fitness and real estate could reach $7tn within a few years.
"There will be multiple opportunities in this sector, particularly in high-income but also middle- and lower-income countries," according to the UN.
The fourth trend highlighted societies’ interest in an emerging "experience" economy, a trend that is trickling down from high-end markets to mass markets. Chatbots will increasingly enable service personalisation, and 3D printing will expand opportunities to customise products.
“Experience tourism” accounts for a growing share of the global travel market, and virtual reality is becoming more sophisticated and affordable. Together these trends could build an "experience economy" worth up to $6.5tn by 2025.
Achieving net-zero carbon emissions through new investment models and markets can also be expected in the next five years. Major innovations are expected in battery technologies, electric vehicles, energy-efficient buildings and hydrogen-powered fuel cells. Meanwhile, rapid progress in biomaterials, plant science and synthetic biology will lead to breakthroughs in areas such as biodegradable materials, resilient crops and animal protein substitutes.
"It is no longer enough for government policies to aim to boost the productivity of the economy as a whole," Fabrizio Hochschild, under-secretary-general of the UN, said. "The link between productivity and economic growth is weakening and, in many countries, growth is becoming less of a priority relative to issues such as climate change and income inequality."
The report was launched during a global dialogue on “Opportunities for the Future We Want”, co-hosted virtually by the UAE government and the “UN75: 2020 and Beyond” initiative.
The meeting hosted ministers, ambassadors and officials from over 100 governments worldwide, ahead of the UN General Assembly’s annual meeting in September, which will commemorate the 75th Anniversary of the group's founding.
Updated: August 4, 2020 10:13 PM