Trends Shaping Tomorrow's - World Future Society

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4.5% of revenues. Corporate R&D in the United States has shifted in recent years, with less emphasis on pharmaceuticals and computer-related fields and more focus on biotechnology, nanotechnology, and security technologies. • China has taken second place in the world’s R&D spending, with a budget estimated at $136 billion in 2006, up from $60 billion in 2001. Still more spending may be hidden in military budgets. China says it will raise its R&D spending from about 1.23% of GDP in 2004 to 2.5% in 2020. In 2008, it spent 40% more on R&D than the year before. China’s output of research papers increased from just over 20,000 in 1998 to nearly 112,000 in 2008. It passed Japan, Germany, and the United Kingdom in 2006. A study by the European Union predicts that China and India will lead the world in R&D by 2025. • R&D outlays in Japan have risen almost continuously, to nearly 3.5% of GDP. In 2007, Japan spent about $148 billion on R&D. In 2008, its R&D spending grew by 4.4%. • R&D spending by the top 350 companies in the European Union amounted to $170 billion in 2008, up 8.1% in a year. • In Russia, government R&D funding amounted to about $53 billion in 2008, approximately 60% of total research funding in the country. Some 44% of Russia’s R&D budget goes to defense research, 10% to space. These figures omit whatever clandestine military research escapes notice. Owing to the global recession, however, Russia’s research budget faced planned cuts of 30% in 2009. • Western corporations are outsourcing a growing fraction of their R&D to foreign contractors, just as they do other functions. Much of this work goes to India, some to Russia and eastern Europe, but the growth area is China. Assessment and Implications: This is a significant factor in the acceleration of technological change. The demand for scientists, engineers, and technicians will continue to grow, particularly in fields where research promises an immediate business payoff. Low-wage countries such as China 38 THE FUTURIST May-June 2010 once took only low-wage jobs from advanced industrialized countries. Today, higher-paid jobs in science, technology, and the professions also are at risk. Countries like India, China, and Russia once suffered a brain drain as those with high-tech skills emigrated to high-demand, high-wage destinations. Today, many students and professionals spend time in the West to learn cutting-edge skills, and then return to their native lands to work, start companies, and teach. This promotes the growth of some developing countries while reducing the competitive advantages of the developed world. ■ Services are growing faster than any other sector of the global economy. • Service jobs have replaced many of the well-paid positions lost in manufacturing, transportation, and agriculture. These new jobs, often part time, pay half the wages of manufacturing jobs. On the other hand, computer-related service jobs pay much more than the minimum for workers with sound education and training. Medicine, the law, and many other well-paid occupations also fall into the service sector. • Service industries provide more than 79% of the GDP in the United States, 77% in France, 74% in Britain, 73% in Japan, and 70% in Germany. In each case, services are growing rapidly; other sectors, less so. • Service industries account for about 77% of private nonfarm employment in the United States, up from 70% in 1990. Services accounted for the entire net gain in U.S. private employment in the decade ending 2010. • In Britain, services provide 80.4% of jobs; in France, 72%; in Japan, 68%; in Germany, 64%. In each case, the percentage of service employment is rising. • In contrast, services in China provide only 40.5% of GDP and 33% of employment. In India, they account for 63% of GDP and perhaps 35% of jobs. (Sector employment data for India are extremely dated.) • In the decade ending in 2016, service industries will provide 15.7 million new jobs, according to the U.S. Bureau of Labor Statistics (BLS). • Education and health services will add 5.5 million jobs, more than 30% of all new jobs expected for the period. Employment in professional, scientific, and technical services will grow by 28.8% and add 2.1 million new jobs by 2016. • Production and less-skilled jobs, in contrast, are disappearing. By 2014, the United States is expected to have more chief executives than machine tool operators, more lawyers than farm workers. • Meeting the BLS estimate of 15.7 million new jobs by 2016 would require the creation of some 300,000 jobs every month from November 2009 on. This assumes that it is necessary to make up the 8.4 million jobs that the official numbers say have been lost since the recession began. It omits 10 million or more people who either have given up looking for work or have settled for part-time employment. Assessment and Implications: This trend is helping to deplete the middle class, as well-paid jobs in manufacturing are replaced by illpaid service positions, leaving a country of “have lots” and “have nots,” but relatively few “have enoughs.” Services are now beginning to compete globally, just as manufacturing industries have done over the last 20 years. By creating competitive pressure on wages in the industrialized lands, this trend will help to keep inflation in check. The growth of international business will act as a stabilizing force in world affairs, as most countries find that conflict is unacceptably hard on the bottom line. ■ Job creation is ceasing to provide employment for all who need it. • According to official estimates, it takes 100,000 jobs per month to absorb young people and others just entering the labor force. Between January 1999 and October 2009, the U.S. economy generated an average of only 26,000 jobs per month. • Most economists believe it will take five years—that is, to 2015—just
to replace the 8.4 million jobs lost to date in the post-2007 recession. • Of the workers who lost middleclass or better jobs during the 2001– 2002 recession, an estimated twothirds were forced to accept positions that paid much less well and often required a radical loss of lifestyle. • In Europe, job losses are expected to top 20 million before the recession ends in 2010. • The economic turmoil of recent years is only partly responsible for this trend. It has accelerated the continuing replacement of human labor by computers and automation. In the United States, worker productivity rose by 6.9% (annualized) in the second quarter of 2009, 9.5% in the third, and 6.4% in the fourth. For more than a decade, most productivity gains have come in industries that have been reworking business processes to incorporate computers and automation. • In Europe, where companies have been slower to adopt computerized work methods, productivity gains have been just over half as quick as in the United States. • The other side of growing productivity is a declining need for human workers. If you raise productivity by 2.5%, you need 2.5% fewer workers to deliver the same amount of goods or services. Employment growth slows. And when productivity grows faster than the market, employment declines. • As computers become more powerful, they can take over more jobs that now require human input. Within 10 years, they will be capable of carrying out almost any task that does not need actual human hands. Manufacturing already is all but lost to human labor. Service, management, and even many research jobs are next. Human workers will be employable only in jobs that cater to the wealthy, who enjoy the exclusivity of being waited on, and where they can get the job done even more cheaply than computers and automated machinery. Assessment and Implications: This trend is inevitable. The United States and other developed lands will become essentially jobless societies within the lifetimes of today’s younger adults. Other lands will follow as they become able to afford the necessary technology. The only questions left are of timing. One of the most important functions of a society is to distribute wealth so that the majority of people have at least the opportunity to provide a secure life for themselves and their families. The jobs-for-wages model adopted during the Industrial Revolution is losing the ability to fulfill this mission. Within 10 years, the United States will begin to follow Europe’s lead, reducing the workweek so that jobs and income can be divided among more people. The developed world faces a more severe decline in living standards than many people recognize. Eventually, it will be necessary to scrap the current system in favor of some other means of fairly distributing society’s wealth. Developing that system may be the most pressing unrecognized necessity now facing the United States and its peers. Population <strong>Trends</strong> ■ The world’s population is growing rapidly, though not as fast as it once did. • Expect 9.2 billion people to feed by 2050. • Average annual growth worldwide peaked at 2.19% in 1963 and has fallen steadily since. The U.S. Census Bureau’s International Data Base projects that annual growth will fall below 1% in 2016 and below 0.5% by 2047. • The greatest fertility is found in those countries least able to support their existing populations. Countries with the largest population increases between 2000 and 2050 include Palestinian Territory (217%), Niger STUDIO VISION / ISTOCKPHOTO THE FUTURIST May-June 2010 39
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