John and Doris Naisbitt
Australia's financial stability and linkage between the west and the emerging new economies gives it an advantage that Europe and the US can't match, according to the futurist authors of Megatrends.
American-Austrian husband and wife team, John and Doris Naisbitt, laid out their vision for the new century as part of their keynote at CeBit 2014.
They described The Great Southern Belt (GSB) of emerging economies, which includes Africa, the subcontinent, Indonesia, Latin America as the key economic drivers of the next 20 years, alongside top tier countries such as China.
Australia, positioned as having the best elements of the west, key free trade agreements with these countries and a handy geolocation, is well positioned in this new marketplace, especially since it has weathered the global financial crisis relatively well.
These emerging economies are already resisting 'old world' global institutions, such as the UN, the International Monetary Fund and the World Trade Organisation, and are building their own trade agreements and financial structures. Australia, having free trade access to these economies, and not bound by archaic bureaucracy has a back door into these key trading blocs.
The Naisbitts said their research shows that the GSB will out perform all western economies over the next half century, particularly in the new information economy.
Doris Naisbitt said the GDPP of the 150 emerging economies (which excludes China), already exceeds the GDP of the top 37 developed countries.
"This shift is a watershed in the global economic landscape," she said.
Globally there are already 8000 companies exceeding $1bn in annual revenues. Seventy Seven per cent of these are in developed countries currently. But with the rise of the middle class in these emerging countries. There are an additional 7000 companies that will move into this range in the coming decades - and 70 per cent of those will be from emerging markets. The Fortune 500 will soon consist of 45 per cent of companies from these emerging regions, a 25 per cent increase from today.
John Naisbitt said that he expects the GSB countries to outperform the west in this time. Already 80 per cent of the global population lives in the GSB. Currently, their middle class consists of just 2bn people. By 2030 this will be 4.9bn - a doubling.
"It will be the first time in history we will talk of a global middle class," he said.
By comparison, the European and American middle classes will shrink 50 per cent, to consist of just 22 per cent of the total by 2030. By then, Asia will host 64 per cent of the world's entire middle class.
The Naisbitt's believe that the rapid rise of cities will be the drivers of economic growth. 200 years ago 2 per cent of people lived in cities, by World War I this was still only 16 per cent. Today, it is around 50 per cent. They predict that in the next two decades 70 per cent of the world will live in cities.
"This is the most dramatic migration in the history of the world, we will live in a world of cities," he said.
China, for example, still only has 50 per cent urbanisation, compared to Austalia's 90+ per cent. Interestingly, Doris Naisbitt believes that the number of cities won't change so much as their location. 250 of the world's largest 500 cities will be places westerners have never heard of - such as the various kitset cities being built along China's seaboard - Guangzhou and such.
So as cities such as Detroit in the US decay and die, Guangzhou's citizens hope to replicate their city as Detroit in its peak - and they have the car industry to prove it.
We will also move into a post-country world - cities will behave as city-states, similar to Renaissance Florence, rather than the Roman Empire.
'Countries are clumsy," Naisbit said, noting that cities can react faster to market conditions, and adapt far faster than the usual heirachical state politics.
China's model of 'doing a U turn' has become an inspiration to all the GSB countries. It's tied to economics and education rather than state ideology, which defined the last century. China's opening up in the 1980s, to send its youth overseas to Australian, American and European universities directly contributed to its extraordinary growth, at the same time education in the west, at the highest levels especially, became more and more unaffordable.
The rise of online education has rapidly closed the education gap between the haves and have nots. While the dispersion of talent worldwide is random, the ability to capitalise on it is not. Australia may be squandering some of our brightest minds by making education unaffordable, in the same sense that Afghanistan cannot get books to its pupils to educate them.
Massachusetts Institute of Technology's (MIT) OpenCourseWare, which provides all of its lectures online for free, is a new model that has only be made possible via the internet. It currently has 150 million users worldwide, and is adding 1 million a month as more and more of the third world comes online and thirsts for knowledge.
"It is the most important innovation since the printing press, this dispersion of knowledge," John Naisbitt said.
It also builds a community of learners, lecturers and tutors, available 24/7, that makes e-learning one of the biggest innovations we are seeing in our lifetimes.
Doris Naisbitt divides the history of the modern world into four great industrial revolutions. The original, in 1880, saw steam and water power enable mass production - the average wage then was $700 a year globally. Electricity took that to $2700. The IT technology revolution has seen that shoot to $20,000. We are now at the dawn of the fourth age - production based on cyber systems - and this is expected to see an average wage of $90,000 by 2020.
Anyone that isn't focusing their economy on IT, and the economics and education thereof, is in trouble.
"IT driver is the driver of progress in our time," Doris Naisbitt said.
Allan Swann is the ARN Editor at IDG Communications Australia. Follow Allan on Twitter @allanswann, and at Google+.
