MinofDef_Global Strategic Trends - 2045

Strategic Trends ProgrammeGlobal Strategic Trends - Out to 2045Fifth Edition

Foreword............................................................................................................................................................................... iiiIntroduction.......................................................................................................................................................................viiHow to use..........................................................................................................................................................................ixSynopsis...............................................................................................................................................................................xiiiExecutive summary.......................................................................................................................................................xvMethodology................................................................................................................................................................xxivPart 1 Thematic 1ContentsDemography......................................................................................................................................................................3Gender................................................................................................................................................................................. 11Urbanisation.................................................................................................................................................................... 17Resources..........................................................................................................................................................................21The Environment......................................................................................................................................................... 31Health................................................................................................................................................................................... 41Transport...........................................................................................................................................................................49Information......................................................................................................................................................................55Education.......................................................................................................................................................................... 61Automation and work..............................................................................................................................................67Corruption and money............................................................................................................................................75Identity and the role of the state.....................................................................................................................83Defence spending and capabilities................................................................................................................93Part 2 Geographic 99Northern America.................................................................................................................................................... 101Latin America and the Caribbean................................................................................................................. 109Europe...............................................................................................................................................................................117Middle East and North Africa........................................................................................................................... 125Sub-Saharan Africa.................................................................................................................................................. 133Central Asia....................................................................................................................................................................141South & East Asia and Oceania........................................................................................................................147Polar regions.................................................................................................................................................................155Space................................................................................................................................................................................. 165Acknowledgements..................................................................................................................................................170Contact details..............................................................................................................................................................172Global Strategic Trendsv

IntroductionGlobal Strategic Trends (GST) describes astrategic context for those in the Ministryof Defence (MOD) and wider Governmentwho are involved in developing long-termplans, policies and capabilities. Without astrategic context there is a risk that planners,policy-makers and capability developers mayassume a future that adheres to preconceivedthoughts and assumptions. As well asproviding a strategic context, this fifth editionof GST (GST 5) identifies long-term threatsand opportunities, out to 2045. GST doesnot attempt to predict the future – it cannot.Rather, it describes those phenomena thatcould have a significant impact on the futureand combines these differing perspectivesto produce a multifaceted picture ofpossible outcomes.The need for the MOD to set out the futurestrategic context was articulated in the 1998Strategic Defence Review. To meet thatrequirement, the Strategic Trends Programmewas started in 2001 and the first edition of GSTwas published in 2003. Subsequently, GST,along with the Future Character of Conflict(which will be renamed the Future OperatingEnvironment when it is released in 2014) havebeen key elements of the MOD’s contributionto both the National Security Strategy and theStrategic Defence and Security Review – and weexpect them to play similar roles in the future.GST is the first step in a series of MOD longtermplanning activities. By providing a globalcontext, further work will then be able toexamine its implications and develop policyand capability options to meet the resultingchallenges. While GST is produced principallyfor MOD it has utility for others involved inlong-term planning. We have benefited fromconsiderable engagementwith those outside MOD –from academia, business andgovernment both domesticallyand internationally. In sodoing, we have deliberately attempted toavoid a single, subjective perspective.The starting point for GST is identifying trends(discernable patterns of change) – an exampleis the growth in world population. The nextstep is projecting those trends forward 30years, analysing their potential consequencesand using this to build a series of picturesof what the future could look like in 2045.Finally, these components are combinedto produce a strategic context, includingdefence and security implications, againstwhich policies, capabilities and plans can betested and refined. Key scenarios illustratehow these trends could interact and shocksprovide the reader with examples of how thestrategic context could be radically altered byunexpected events. In addition, alternativeoutcomes emphasise that there are severalpossible ways trends could impact on thefuture.Following a complex mapping process(explained further in the methodologysection) we have identified 13 clusters oftrends and drivers with particularly stronglinkages. This provides the overall structurefor the document, rather than the STEEPmethod 1 used in GST 4. Some trends (mostnotably those relating to economics, religion,technology and globalisation – themes that1 ‘STEEP’ analysis provides broad headings forgrouping information: social, technological,economic, environmental and political.viGlobal Strategic TrendsGlobal Strategic Trendsvii

SynopsisOur lives and the world we live in will almostcertainly change over the next 30 years, withthe impacts felt by all. We will probably livelonger and know more. By 2045, the globalpopulation is likely to grow by two billion, withfar-reaching consequences for how, and where,we live. Changing demographics could createnew threats and opportunities, with agingpopulations in many developed countries andyouth bulges in some developing countries.This is likely to be coupled with a growingnumber of migrants across the globe as webecome more connected. Gender inequalityis likely to remain in 2045, driving povertyand insecurity in large parts of the world.Governments may come under immensepressure to address the coming challenges,and if social expectations fail to be met, socialunrest or even violence could ensue. Over70% of a growing global population looksset to live in urban areas by 2045. Whereurbanisation is managed successfully, it couldspur economic growth and create a betterquality of life. Handled poorly, people may livein slums, without adequate infrastructure andservices – driving an increase in communicablediseases and poverty, possibly leading to violentinsurgencies.With more people living longer, demand forresources will almost certainly grow. We arelikely to need more food, water and bettersanitation. However, without successfullymanaging water stress, including more effectiveinternational cooperation, it is likely that 3.9billion people will suffer water shortages.Demand for energy could more than double by2045, although non-polluting power sourcesand better energy storage may offset some ofour reliance on coal and hydrocarbons.As we increase the stress we place on thenatural environment, our need to understand,protect and preserve it will almost certainlygrow. Climate change, a rise in sea levels,desertification and reducing biodiversity areall issues that could affect us even more overthe next 30 years. They are likely to impact onagricultural production and fishing, and couldexacerbate humanitarian crises. It is possible,however, that new technologies may holdsolutions to some of these problems.Physical inactivity, unhealthy diets andincreased life expectancy could lead to anobesity ‘epidemic’ as well as rises in noncommunicablediseases such as dementia.But significant improvements in health andmedicine could let us live longer and be moreproductive. We are likely to be able to makemedical diagnoses faster, more cheaply andwith greater accuracy. Innovative methodscould be introduced for drug and treatmentdelivery. Medicines may even be tailored to aperson’s genetic make-up, providing safer andmore effective treatment.Technological progress is occurring in almostall aspects of human life and is likely to causesignificant change by 2045. Everyone andeverything seem certain to become moreconnected, with revolutionary advances in howwe acquire, store and analyse information. Ifcurrent trends continue, there are likely to bedramatic increases in computing power thatcould enable us to predict and monitor manyaspects of our lives and surroundings. Thismay mean that complex global issues canbe modelled and predicted, such as climatechange, population movements, diseasepatterns and economic trends. But peopleare likely to find it increasingly difficult to go“Our lives andthe world we livein will almostcertainly changeover the next thirtyyears, with theimpacts felt by all.”xiiGlobal Strategic TrendsGlobal Strategic Trendsxiii

Synopsis‘offline’ and maintaining privacy could becomemore challenging. There could also be anincreasing threat of cyber attack from criminalsand terrorists as information, communicationsand critical national infrastructure becomemore integrated.Our changing technological world is likelyto have a tremendous impact on the waywe are educated in the future. Improvedcomputing power and ‘Big Data’ meansthat teachers are likely to have access to vastquantities of information. Learning is likely tobe stimulated through exercises, games andsimulations – enabled at the touch of a button.Although face-to-face education is unlikelyto disappear, teachers will probably becomemore like ‘learning advisers’, guiding studentsthrough digitally-delivered, personally-tailorededucation. Social networking is likely to playan important role in collaborative learning,through real-time discussion and virtualclassrooms. Learning is unlikely to end atschool and university – rather, lifelong learningwill probably become the norm. There is likelyto be a growing emphasis on the transferabilityand constant upgrading of qualifications.Global inequality in education is likely to remain,particularly as a ‘digital’ education is unlikelyto be available to all. There will probably stillbe a gender gap, despite near-parity for girlsand boys at the primary level. However, thedisparity between developed and developingcountries is likely to reduce. It is even possiblethat by 2045 the majority of the world’s childrenwill have enjoyed a university or higher-leveleducation.Technology is highly likely to change ourworking environment. By 2045, robots or‘unmanned systems’ (able to carry out complextasks without a human operator’s directinvolvement) are likely to be as ubiquitous ascomputers are today. Machines are likely tobecome more sophisticated and lifelike. Wecould also see robots used in many more areasof work and society, including caring roles,customer-service, surgery and in combat. Thiswill probably mean a period of adaption andchange, as robots take on some traditionally‘human’ roles. There will almost certainly bechallenges to overcome, such as establishingwhether we can learn to ‘trust’ robots. Butit is not just the increasing use of machinesthat has the potential to change the way wework. As the population alters, the workforcemay change as well – people are likely towork longer. We are likely to place a greateremphasis on flexible working, short-termcontracts and working away from the office.So much change will almost certainly affect ourperception of identity. And again, technologicaldevelopments are likely to drive change.Advances in human augmentation maymean we can enhance our sensory capability,become more physically able and improve ourcognitive functions. However, it is unlikely thistechnology will be available to all, potentiallycontributing to the increasing inequality theworld faces.How the state functions in this changing worldwill almost certainly alter. Individuals may feelless connected to their country of origin as theymigrate more frequently and identify morestrongly with online communities of interest.Private companies and non-governmentalorganisations could grow in power, providingservices that used to be the responsibility of thestate. Internationally, countries may be moreclosely connected, with stronger trading andpolitical blocs.Widespread and challenging implicationsfor defence and security will almost certainlybe generated by this increasingly connectedworld, with its rapidly advancing technologyand evolving societies. The face of somearmed forces may change, with an increasinguse of unmanned systems and women incombat roles. Militaries and security forcesmay be asked to meet the challenges of morehumanitarian disasters, and attacks by nonstateactors and cyber-criminals may increase.As more people live in cities, it is likely thatsome future adversaries will be found in larger,more complex urban environments, possessinga greater level of information and better accessto technology than they do today.Executive summaryThis fifth edition of Global Strategic Trends(GST 5) aims to describe possible futures toprovide a strategic context for policy- anddecision-makers across Government. Thirteenbroad thematic areas have been identified,with eight geographic regions and a sectionon space. Some trends (most notably thoserelating to economics, religion, technologyand globalisation) are so important that theyrun through all of the subject areas, and arediscussed as they arise rather than in their ownsections, to bring them to life more clearly. Inthe process of identifying threats, challengesand defence and security implications forpolicy- and decision-makers, there may be atendency for the document to seem rathernegative in its outlook. This is an inevitableconsequence of its purpose. There is ofcourse scope for human ingenuity to have asignificant impact on the future, and hencethere are considerable grounds for optimism.DemographyThe global population is likely to grow tobetween 8.3 and 10.4 billion by 2045, largelybecause of increasing life-expectancy,declining levels of child mortality andcontinuing high birth rates in manydeveloping countries. 1 Growth is not likelyto be evenly distributed and will probablybe slower in developed countries. Some,including Japan and parts of Europe, arelikely to experience a decline in population.In developing countries, rapid populationincrease and urbanisation will probablychallenge stability. Age and genderimbalances may exacerbate existing politicaland social tensions while a growing youth1 UN categories are used for ‘developed’ and‘developing’ countries.population, especially in the Middle East,Central Asia and sub-Saharan Africa, couldprovide a reservoir of disaffected youngpeople. Conversely, if harnessed, they couldprovide a boost to their economies. Migrationis likely to increase, with people movingwithin, and outside, their country of origin toseek work or to escape the effects of climatechange.GenderGlobal gender equality and opportunity gapswill almost certainly continue in economic,social and political spheres out to 2045.Although women’s autonomy is likely togradually increase in most regions, entrenchedgender disparities will probably remain asmajor drivers of poverty and insecurity. Asis the case today, women are likely to havegreater opportunities and autonomy indeveloped countries than elsewhere in theworld, but are unlikely to achieve total paritywith their male counterparts, particularly whensocial expectations inhibit the role of womenin society. In some regions of the world,women’s rights and feminist movements arelikely to continue to face a ‘backlash’ fromthose with vested interests in maintaining thestatus quo.UrbanisationWith 70% of the global population likely tolive in cities by 2045, urbanisation will be aparticularly important theme in developingcountries. Urbanisation is likely to enhanceeconomic and social development, but –without mitigation measures – may alsolead to pressure on infrastructure (and theenvironment) which could contribute tosocial tensions within the urban population.xivGlobal Strategic TrendsGlobal Strategic Trendsxv

Executive summaryExecutive summaryAs Arctic andAntarctic seaice retreats,many areas thatare currentlyinaccessible couldbecome opento commercialexploitation,particularly of oiland gas.“”Sub-Saharan AfricaSub-Saharan Africa will almost certainly remaina region of significant political and economicdifferences by 2045 but overall the region’seconomy should grow – possibly rapidly.However, economic performance is likely tovary sharply from country to country, with alack of infrastructure and political instabilitylikely to continue to provide some of thebiggest challenges to sustained growth.The region is likely to see the fastest rise inpopulation growth of anywhere in the world,with some countries’ populations morethan doubling by 2045. Governance in theregion is likely to improve and the currenttrend towards representative government islikely to continue, although this will probablybe resisted by some authoritarian regimes,possibly leading to violence. The risk ofstate-on-state conflict is likely to reduce butwill almost certainly remain a concern. Bycontrast, the threat from intra-state conflictand from terrorism is likely to endure - andcould worsen. The African Union’s ability todeal with crises is likely to improve, but it willprobably still require international assistancefor more demanding situations. Technologyis likely to facilitate links between differentparts of the region and with the wider world,thereby increasing economic productivityand improving governance. If current trendscontinue, most people in the region are likelyto have access to the Internet by 2045. Climatechange is likely to have a severe impacton some parts of sub-Saharan Africa, withagriculture particularly badly affected. Theregion is likely to continue to face significantrates of infection from communicablediseases such as HIV/AIDS and malaria. But it isconditions such as diabetes and cancer that arelikely to pose the greater health threat by 2045.Central AsiaDespite the divergent paths taken by thefive Central Asian republics (Kazakhstan,Kyrgyzstan, Tajikistan, Turkmenistan andUzbekistan) since their independence from theSoviet Union, each remains vulnerable to socialand economic risks. These potential problemsstem from internal threats caused by weakinfrastructure and institutions, as well as theirrelations with external actors. As a result, theregion is susceptible to ethnic conflict, suddenpolitical transitions, economic shocks, foodinsecurity and natural disasters – all potentiallyposing strategic threats beyond Central Asia tothe rest of the world.South & East Asia and OceaniaChina and India will almost certainly continueto be the dominant powers in the regionby 2045, with their economies ensuringthat South & East Asia makes the biggestcontribution to the world’s GDP. Japan is likelyto continue to have the region’s third-largesteconomy. In Oceania, Australia will almostinevitably remain the dominant power andhave the largest economy. South & East Asiaand Oceania are likely to continue to containover 50% of the world’s population by 2045,presenting both benefits and challenges.China and India are likely to continue todevote considerable resources to ensuringeconomic growth and both countries arelikely to continue to seek a strong economicrelationship with the US. The ways thatChina and India manage their societies’demands and their internal methods ofgovernance will be important to the region’sdevelopment. Both countries are likely tobecome increasingly dependent on theglobal economy for their long-term stability,prosperity and security.Polar regionsClimate change is the principal driver ofchange in the Arctic and Antarctic, withincreasing temperatures and precipitation.As Arctic and Antarctic sea ice retreats, manyareas that are currently inaccessible couldbecome open to commercial exploitation,particularly of oil and gas. The opening-upof the Arctic is likely to focus attention onthe region’s governance arrangements, but,despite challenges, current arrangementsare likely to endure out to 2045. Large-scalemilitary confrontation in either region isunlikely, but it is possible that some countries– depending on their internal politics – mayseek to project power in the Arctic if theyconsider their interests in the region to beunder threat. In Antarctica, the currentgovernance arrangements are likely to endureout to 2045, but the Antarctic Treaty Systemcould come under pressure to accommodateincreased commercial exploitation withincarefully managed bounds.SpaceOur reliance on space technology in a numberof commercial and military areas will almostcertainly increase out to 2045. Technologicaladvances are likely to further reduce thecost of manufacturing and launching spacevehicles, making space increasingly accessibleto (and profitable for) countries, companies,organised crime and private individuals. Asreliance on space grows, so could the impactof damage caused by deliberate attack, spaceweather and orbital collisions.Key defence and security implicationsEach section in GST 5 ends with a number of defence-related deductions. The followingare the most important of those defence and security implications. Rather than attach anyadditional prioritisation to them, they are listed simply in the order in which they appear inthe document.■■Technological developments will probably allow diasporas to remainmore closely connected to their native countries. Consequently, issuesfrom homelands are likely to be brought into host countries, and viceversa. Diasporas may also provide an impetus for governments tointervene - or refrain from interfering - in their citizens’ countries oforigin. Lack of integration of migrant groups could exacerbate socialtensions.■■Increasing numbers of women are likely to have front-line combat rolesin armed forces worldwide, mirrored by growing female participation inarmed resistance movements and terrorist groups.■■Sexual violence will almost certainly continue to be a feature of conflictand state violence and, used as a weapon of war, has the potential to be asignificant factor in instability. However, countries and their armed forcesare likely to face greater international scrutiny and legislation against suchactivities.■■Failed and failing cities, in both developed and developing countries,could pose major security challenges (such as social unrest and eveninsurgencies) with the potential for country-wide repercussions. If morepeople live in urban areas, security and armed forces will almost certainlyneed to operate in this environment to a greater extent. Adversaries couldrange from government-controlled militaries to armed non-state groupswith criminal or malign intent.■■Urbanisation concentrates populations, potentially making them morevulnerable to the effects of natural disasters, disease and deliberate actsof violence. With most urban areas in coastal regions, cities are likely to beparticularly vulnerable to the effects of rising sea levels.■■Growing use of nuclear energy raises the possibility of fissile materialbeing obtained by non-state actors as well as countries operating outsideinternational laws, potentially causing security threats.■■Extreme weather events, such as flooding and droughts, are likely toincrease in both frequency and intensity in a number of regions. Extremeevents will almost certainly continue to cause widespread damage andloss of life, although our warning mechanisms, defences and ability torespond may also improve in the same timeframe.3111117172131xxGlobal Strategic TrendsGlobal Strategic Trendsxxi

Executive summaryExecutive summary■■Armed and security forces, both at home and abroad, are likely to be morefrequently tasked with providing humanitarian assistance and disasterrelief, perhaps supporting indigenous responders.31■■The US and China are likely to have similarly sized defence budgets,potentially out-spending the rest of the world by 2045. India could have adefence budget equivalent to the EU’s total spending on defence.■■Increasing real-terms equipment costs may mean that platforms becomemore expensive. Consequently, higher levels of defence spending maynot lead to armed forces larger than today’s.■■Although China is likely to surpass the US in terms of GDP, the US is stilllikely to remain, militarily, the most powerful country in the world.■■NATO is likely to remain the key security alliance for Northern Americancountries, although US (and possibly Canadian) commitments elsewherein the world may mean that European countries will have to take on moreof the burden of maintaining security in their region.■■There are a number of issues and treaties which may involve the US andChina in armed conflict – with potentially dire consequences regionallyand globally.■■NATO is likely to remain the key organisation for military crisismanagement, although its cohesion may be challenged by diverse threatperceptions, a US focus on Asia and internal disagreement on its globalrole. The Alliance could be reinvigorated by the need to band together toaddress a deteriorating security situation in Europe’s near abroad.■■Internal terrorist threats are likely to continue in the Middle East andNorth Africa, as are attacks on other nations from groups based in theregion. Although Al-Qaida has been damaged in recent years, Islamicfundamentalism will almost certainly continue to fuel terrorist networksout to 2045.■■In sub-Saharan Africa, the combined challenge of an increased population,demands on resources and the effects of climate change (particularlydrought) on food and water supplies are likely to lead to tension, whichcould result in conflict.■■China’s military is becoming more capable and has increasing globalreach. By 2045, China’s military capability may be close to matching thatof the US, perhaps exceeding it in some areas. India’s military capability isalso likely to increase – but probably not to the point where it rivals that ofChina or the US by 2045.■■The East and South China Seas may be flashpoints for confrontationbetween China and the US and allied countries. Similarly Kashmir, theKorean Peninsula and the border between China and India are likely to beareas of tension. The risk of a major state-on-state conflict in the regioncannot be ruled out.■■Commercial activity expansion in the Arctic Ocean may require extensivemonitoring to safeguard Arctic countries’ sovereignty.■■Increasing reliance on space-based technologies, particularly in developedcountries, means that any large-scale disruption to satellites (such assolar superstorms) could have significant consequences for electricitydistribution, communications, navigation, logistics and weather forecasts.93■■Greater reliance on automated technologies could provide scope forterrorists and criminals to disrupt the transport system through cyberattacks.■■As more of our work and social activities depend on interconnectedinformation and communications networks – which may, in places, beextremely vulnerable to attack – there could be more opportunities forcriminals and terrorists to have a greater impact on our day-to-day lives.■■An increasing number of devices capable of collecting sensor data couldintensify levels of surveillance. Stealth vehicles may find it more difficult toremain hidden and the ability to prosecute covert operations, especiallyin urban environments, is likely to become more technically challenging.This is particularly significant given the probable increase in the size ofurban areas, along with the growing use of surveillance to prevent crime.■■Unmanned systems are likely to have an increasing role in combat,potentially transforming the way that wars are fought. Military decisionmakingis likely to remain a human preserve, at least in western countries,but it is possible that the actual fighting will no longer be a solely humanendeavour.■■The cost of unmanned systems is likely to fall, while the ease ofmanufacturing complex items rises, making unmanned systems muchmore widespread and harder to regulate. Criminal and terrorist groups arelikely to find it easier to gain, hold and use unmanned capabilities.■■The expansion of alternative currencies may make it easier to transfer andretain funds anonymously and hence harder for governments to freezecriminals’ assets or sanction rogue regimes. Criminal and terrorist groupsmay also find it easier to transfer funds between jurisdictions.■■The pressures of globalisation are likely to mean that individual countrieswill find it increasingly difficult to act unilaterally – most countries arelikely to be less powerful. This could lead to a reduction in conflict. Thestate is still likely to have the most important voice in international affairs,but out to 2045 the private sector and non-state organisations are likelyto become more influential. There is likely to be an increase in the useof private security companies by governments – interdependencies maystrengthen, despite their largely separate motivations.■■Some augmentation of humans with embedded sensors and computingdevices is likely to occur within the 2045 timeframe. This may provideadvantages such as improved situational awareness, health monitoring,and the ability to modify physiological and psychological states toincrease performance and enhance resilience. Mind-controlled machineryis likely to become much more sophisticated, with human brain-to-braincommunication possible by 2045.495555676775838393101101101117125133147147155165xxiiGlobal Strategic TrendsGlobal Strategic Trendsxxiii

MethodologyMethodologyReview of previous dataThe Strategic Trends Programme has beenrunning as a continuous research programmesince 2001 and as a consequence there isa considerable body of material on trendsand drivers. We began writing this fifthedition of Global Strategic Trends (GST 5) byreviewing our existing data to identify anyinconsistencies and enduring trends. Themes,trends and drivers from editions one to fourwere mapped and compared. This producedan enduring trends map that showedsimilarities and some areas of contradiction.Identifying gapsIn a parallel exercise, we engaged with a rangeof external contributors to explore the gapsin our existing research. We considered anumber of new areas as a result.Research topicsFrom the enduring trends map, output fromour external engagement and a continuingprocess of in-house gap analysis, we identifiednearly 30 research topics. These were a mix ofnew areas and existing themes that neededsubstantial updating. Researchers, fromthe Development, Concepts and DoctrineCentre’s (DCDC) Futures Team, wider Defenceor academia, wrote extensive essays on eachtopic, consulting widely and paying particularattention to defence and security implications.Breakdown, analysis and mappingThese essays were then analysed and mappedby DCDC’s Defence Analysis and Research(DAR) Team to identify drivers, factors andtrends. Ultimately, this produced a verydetailed cluster map, drawing together bothour previous work and new research. The mapordered themes and drivers into their top-levelthematic areas, highlighting interactions anddependencies. How these relationships relateto one another helped us to understand therelevance and importance of our findings. Theprocess also highlighted ideas that are basedon assumptions or assertions that needed tobe substantiated with additional evidence.Draft sections for consultationShort draft sections – based on either atheme or particular region – were sent forlimited consultation across Government,industry, think-tanks and academia. Extensiveengagement took place both in the UK andabroad, with visits to Brazil, China, France,India, NATO Allied Command Transformation,Qatar, Saudi Arabia, Singapore, South Africa,Sweden, the United Arab Emirates and theUnited States of America. Other internationalexchanges were conducted electronically,with Norway and Slovakia. We are gratefulfor the generous amounts of time and effortexpended on reviewing these drafts whichGST 5 has benefited from enormously. Itwas always our intention for GST 5 to bean inclusive and transparent, proactivelyengaging part of the Strategic TrendsProgramme, for wider benefit to policy- anddecision-makers.Consolidation, writing and editingThe final phase consisted of consolidating ourwork and incorporating feedback from theconsultations, writing up our findings, addingscenarios to highlight key potential outcomes,including certain strategic shocks, andsubjecting our work to a final round of peerreview and editing.UncertaintyPredictabilityInsight(1 to 2 years)NowTrends(3 to 5 years)Foresight(5 to 10 years)Farsight(10 to 30 years)FutureA timeframe looking out 30 years means there is a huge degree of uncertainty in the world thatwe describe, which by its nature, is based on extrapolation and a degree of imagination.xxivGlobal Strategic TrendsGlobal Strategic Trendsxxv

Part 1ThematicThis section brings together related trends anddrivers under important themes. We describethe relationships between themes, trendsand drivers and highlight the implications fordefence and security.Where a geographical relationship has beenidentified, the theme is cross-referenced to theappropriate regional section in Part 2.Demography.....................................................................3Gender................................................................................ 11Urbanisation.................................................................. 17Resources......................................................................... 21The Environment....................................................... 31Health.................................................................................. 41Transport..........................................................................49Information....................................................................55Education......................................................................... 61Automation and work...........................................67Corruption and money........................................... 75Identity and the role of the state................83Defence spending and capabilities...........931

Part 1DemographyThe global population is likely to grow to between 8.3 and 10.4 billion by 2045, largelybecause of increasing life-expectancy, declining levels of child mortality and continuinghigh birth rates in many developing countries. Growth is not likely to be evenlydistributed and will probably be slower in developed countries. Some, including Japanand a number of European countries, are likely to experience a decline in population.In developing countries, rapid population increase and urbanisation will probablychallenge stability. Age and gender imbalances may exacerbate existing political andsocial tensions while a growing youth population, especially in the Middle East, CentralAsia and sub-Saharan Africa, could provide a reservoir of disaffected young people.Conversely, if harnessed, they could provide a boost to their economies. Migration islikely to increase, with people moving within, and outside, their country of origin to seekwork or to escape the effects of climate change.Global population growthThe current world population of around7.2 billion is expected to increase by almostone billion in the next 12 years and reachbetween 8.3 and 10.4 billion by 2045. 1 Drivingfactors for such an increase are a decline ininfectious diseases, high birth rates in thedeveloping world, improving maternal andneonatal health, improved sanitation anddeclining under-five mortality. Most of thepopulation growth will probably occur, as itdoes today, in developing countries (mainly insub-Saharan Africa), while the population indeveloped countries is likely to remain largelyunchanged at around 1.3 billion. Developingregions are likely to account for approximately97% of global population growth by 2050,with 38% taking place in the least developedcountries. Africa is likely to account for 49% ofglobal population growth by 2050. Populationincreases in poor areas may magnify existingpoverty, generating an unsustainable demandfor public services (for example, education,health and sanitation), unless there is a parallelincrease in economic development. Conflictsover scarce resources are possible and couldbe an obstacle to development where it ismost needed.In most developed countries, birth rates havedeclined due to changes in attitude andway of life – the most important of which isan increase in the status of women. 2 Somecountries have seen a recent increase in birthrates, although this is likely to be a temporaryphenomenon. Overall, global birth rateshalved between 1950 and 2010, droppingfrom 5 to 2.5 per woman, 3 and are likely tocontinue to decline. Newly-industrialisingMost of thepopulationgrowth willprobably occur,as it does today,in developingcountries.“”1 Global population is expected to reach 8.323 (ifthere is a low birth rate), 9.308 (if there is a mediumbirth rate) or 10.352 billion (if there is a high birthrate) by 2045. This forecast is drawn from UN (2012)‘World Population Prospects: The 2012 Revision’,United Nations Department for Economic and SocialAffairs hereafter referred to as UN WPP, available athttp://esa.un.org/wpp/unpp/panel_population.htm2 Population Bulletin of the UN (2002), ‘Completingthe Fertility Transition’3 UN Department of Economic and Social Affairs(2010), ‘The World’s Women 2010: Trends andStatistics’, available at http://unstats.un.org/unsd/demographic/products/Worldswomen/WW_full%20report_color.pdfGlobal Strategic Trends3

Part 1DemographyDemographyPart 1Economic growthGross Domestic Product (adjusted for purchasing power parity)*, expressed in US$ trillion at 2012 values.Key20454.7Germany3.24.3UK2.33.8France2.26.6Russia2.5Now3.3Canada1.528.316.1EU1.2Kazakstan0.26.7Japan4.630.715.7USMexico 5.31.6Algeria 1.00.33.14.5 Turkey1.13.3 Iran3.1 Egypt1.00.52.3 Saudi0.926.1Nigeria0.9 Ethiopia0.50.14.7IndiaChina12.44.762.94.4Republic of Korea1.6The proportion of young adults is likely to grow most rapidly in sub-Saharan AfricaWorldin 2045243.16.6Brazil2.3World83.2South Africa 2.00.65.4Indonesia1.22.5 Australia1.0If managedeffectively, ahigh proportionof working ageadults couldprovide countrieswith an economicboost.“”international crises show that the severityof violence decreases as domestic genderequality increases. 9Globally, there are already three billion peopleunder the age of 25, and this group is likely toincrease. 10 The proportion of young adultsis likely to grow most rapidly in sub-SaharanAfrica, but there are also likely to be significantrises in Central and Southern Asia. In MiddleEastern countries, the proportion of youngadults will probably reach its peak during thecoming decade and by 2045 the majority ofthe population is likely to be between theages of 15 and 59. 11 If managed effectively,a high proportion of working age adultscould provide countries with an economicboost, but if the rising expectations of youngadults are not met, social unrest could follow.Avoiding unrest is likely to depend on effective9 Caprioli, M. and Trumbore, P. F. (2003), ‘Identifying‘Rogue’ States and Testing their Interstate ConflictBehavior’, available at http://lib.znate.ru/docs/index-124184.html10 Lagarde, op. cit.11 UN WPP, op. cit.governance together with positive andinclusive economic development. However,these conditions will probably only be met ina limited number of affected countries.MigrationMigration is likely to increase or, at least,remain constant. 12 In 2005, 191 million peoplelived outside their country of origin. Todaythere are 232 million (this figure alreadyexceeds our earlier assessment in the 4thedition of Global Strategic Trends). 13 Thosecountries attempting to limit immigrationare likely to be only partially successful. Inpreceding decades, migration has beencharacterised by people moving from Asia andAfrica to Northern America and Europe.12 Statistics on migration from UN WPP, op. cit. andOECD (2009), ‘The Future of International Migrationto OECD Countries’13 Figures from UN WPP, op. cit. show that the numberof international migrants has already risen above232 million (compared to GST 4’s estimation that 230million people would live outside their countries oforigin by 2040).Chile 1.00.3However, out to 2045, a growing number ofmigrants will probably move between andwithin Asia and Africa, with Asia becomingan increasingly important destination.Developed countries will almost certainlycontinue to attract significant numbers ofmigrants. As is the case now, most migrantsare likely to be seeking work, althoughtechnological advances could lead toreducing demand for less skilled migrantworkers and increasing demand for highlyandmulti-skilled people. Temporary largedisplacements due to crises will probablycontinue to occur with high local impact –and the magnitude of such events is likelyto be amplified by increased populationdensity.* Purchasing power parity is used to show a country’s comparative economic strength byexpressing domestic values in the equivalent US$ that would be required to purchase thesame amount of goods and services in the US domestic market.Source: Based on analysis by the MOD economics unit 2014Global economic centre of gravity shiftingThe steady rise of emerging economies in Asia will cause the world’seconomic centre of gravity – the average location of economic activity byGDP – to continue its move eastwards.1980 20142045Source: Quah, D. (2011), ‘The Global Economy’s Shifting Centre of Gravity’ (adapted by DCDC)6 Global Strategic TrendsGlobal Strategic Trends7

Part 1DemographyDemographyPart 1Asia’s share of the growing consumer class could more than double Chennai, IndiaA growing consumer classA rapidly growing consumer class (those whospend more than ten US dollars a day) willalmost certainly be a key driver of the globaleconomy. By 2030, this group is likely to growto more than five billion from two billiontoday, 17 while the proportion of consumerswho are European and North American is likelyto shrink from 50% today to just 22%. Rapidgrowth in many Asian countries, particularlyChina and India, is shifting the economiccentre of gravity south and east. This lookslikely to more than double Asia’s share ofthe consumer class from its current level of17 Lagarde, op. cit.30% to around 64% by 2030. 18 As well as itseconomic importance, this group is likely todemand, and receive, more political influence.Typically, they are likely to be more mobile,place greater value on education, and be lessaccepting of the status quo. The likely growthof the consumer class may, however, mask arise in global income inequality. Currently, 70%of the world’s population lives in countrieswhere disparities between the wealthiest andpoorest have grown over the last 30 years. 1918 Rohde, D. (2012), ‘The Swelling Middle’, available athttp://www.reuters.com/middle-class-infographic19 Lagarde, op. cit.Defence and security implications■■Areas with larger youth populations and poor governance are likely to suffer frominstability, which could lead to unrest or conflict within the 2045 timeframe.■■Lack of integration of migrant groups could exacerbate social tensions.“Rapid growthin many Asiancountries,particularlyChina and India,is shifting theeconomic centreof gravity southand east.”Climate change is likely to drive some peoplefrom areas that are particularly badly affected,although not everyone who wishes to leaveis likely to be able to do so. Millions of peoplemay be ‘trapped’ in vulnerable areas becauseof the high costs of migration, unable to raisethe capital needed for moving away. 14During 2010-2050, the number of internationalmigrants to developed countries is likelyto be about 96 million, whereas the excessof deaths over births is projected to be 33million, implying total net growth. The mainestimated net receivers of migrants are likely tobe the US, Canada, UK and Australia, while themain estimated senders are Bangladesh, China,India and Mexico. 15 Without immigration,the population in most developed countriesis highly likely to reduce. Those developedcountries that do see population growth,therefore, will almost certainly see an increasein the size and importance of their ethnic14 Government Office for Science (2011), ‘Migrationand Global Environmental Change’, available athttp://www.bis.gov.uk/foresight/our-work/projects/published-projects/global-migration/reportspublications15 UN WPP, op. cit.minority communities. While some ethnicgroups are likely to integrate effectively andbe economically successful, some are likelyto be poorly integrated and economicallydisadvantaged – this may lead to tension andinstability. 16 Some countries, for exampleJapan, are likely to face particular challenges.In light of Japan’s long-standing sensitivityto the ’otherness’ of gaijin (non-Japanese),immigration to Japan has been strikinglylimited and assimilation of newcomers moreso. Immigration, along with globalisedcommunications, is likely to contribute to agrowing cultural mix and complexity withincountries. While the norms of receivingcountries are likely to impact on migrants,the reverse may also be true. Technologicaldevelopments are likely to allow diasporasto remain more closely connected to theirnative countries and hence they are likely tobring issues from their homeland into thehost country, and vice versa. Diasporas mayalso provide an impetus for governments tointervene in their citizens’ countries of origin –or to refrain from intervening.16 See, for example, the European Commission series ofcohesion reports.■■Technological developments will probably allow diasporas to remain more closelyconnected to their native countries. Consequently, issues from homelands are likelyto be brought into host countries, and vice versa. Diasporas may also provide animpetus for governments to intervene – or refrain from interfering – in their citizens’countries of origin.8 Global Strategic TrendsGlobal Strategic Trends9

Part 1GenderGlobal gender equality and opportunity gaps will almost certainly continue ineconomic, social and political spheres out to 2045. Although women’s autonomy islikely to gradually increase in most regions, entrenched gender disparities will probablyremain as major drivers of poverty and insecurity. As is the case today, women are likelyto have greater opportunities and autonomy in developed countries than elsewherein the world, but are unlikely to achieve total parity with their male counterparts,particularly when social expectations inhibit the role of women in society. In someregions of the world, women’s rights and feminist movements are likely to continue toface a ‘backlash’ from those with vested interests in maintaining the status quo.Political decision-makersThe World Economic Forum reported that,of 110 countries it surveyed in 2006, 86% hadimproved their gender equality performance,while 14% had regressed. 1 Women’sparticipation in politics has accelerated duringthe last decade with the proportion of womenin national assemblies increasing from 11.6%in 1995 to 18.4% in 2008. Since 2004, theproportion of seats held by women in nationalparliaments has increased by 2% in developingas well as developed countries. If this trendcontinues, there would be an additional 10%of such seats by 2045. Trends indicate that, incountries with a quota system, such as thosein Africa, formal parity is likely to be achievedmore readily, although other measures alsohave a role to play in determining women’slevels of political influence. Globally,women often lack the resources to accessparliamentary level politics. They find barriersat selection and campaigning stages as wellas prejudicial attitudes during elections. As aresult, women at this highest level of politicsare likely to continue to be predominantly1 World Economic Forum (2013), ‘The Global GenderGap Report’, available at http://www3.weforum.org/docs/WEF_GenderGap_Report_2013.pdfdrawn from elite societal groups. Barriers toentering ‘formal’ politics make it likely thatwomen will continue to be comparativelybetter-represented in non-governmentalorganisations and civil society, playing animportant role in peace- and state-building.This could take on particular significance if,as seems likely, such organisations take onan increasing role in meeting global aid anddevelopment needs.Self-determinationTrends suggest that, particularly in thedeveloping world, improvements in women’sdegree of autonomy over personal decisions– such as those relating to their employment,marriage and health – are likely to be slow.Such change may require alterations in socialattitudes and ‘ways of life’ as well as legislation;and all segments of society may need tobe involved. It can be difficult to quantifyor measure gender inequality, but women’saccess to services such as contraception andhealth care can often be used as a proxyindicator for their degree of autonomy. Forexample, women with little say over their ownreproductive autonomy are unlikely to be ableto access family planning services. The rateof increase in women using reliable familyWomen’sparticipationin politics hasacceleratedduring the lastdecade withthe proportionof womenin nationalassembliesincreasing.“”Global Strategic Trends11

Part 1GenderGenderPart 1In low-income countries, the majority of women are involved in unpaid serviceWomen in front-line military roles will become increasingly commonplace Female Israeli Defence Force soldierplanning has stalled. Currently, more than220 million women in developing countrieswho want to delay or avoid pregnancy lackaccess to effective methods of contraceptionand voluntary family planning services. Fewerthan 20% of women in sub-Saharan Africa andbarely one-third of women in South Asia usemodern contraceptives. In the US, birth ratesare increasing, which is ascribed to a declinein access to contraceptives, terminations andeducation in family planning. The unmetneed for reliable birth-control methods islikely to continue out to 2045, with significantregional variations owing to a variety of socialand cultural factors.EmploymentIn most countries, women are less likely thanmen to be employed or looking activelyfor a job. Participation rates are highest inlow-income countries—where a majority ofwomen are active because they are involvedin unpaid subsistence agriculture, althoughthey are less involved in paid activities outsidethe household—and where few youth andadults are enrolled in education. Only 1% ofthe world’s titled land is owned by women – afigure that has not changed for over ten yearsand is likely to remain roughly the same by2045. It is estimated that women account fortwo thirds of the 1.4 billion people currentlyliving in extreme poverty and make up 60%of the 572 million ‘working poor’ in the world.This general trend in economic activity is likelyto remain in 2045.In the past two decades, the overall numbersof females participating in the labour forcehave remained stable. Changes in gendernorms and the roles of men and womenhave also begun to shift. However, women indeveloping countries still retain the ‘doubleburden’ of being responsible for (unpaid)domestic and care work, as well as takingon increasing roles in paid work outsidethe home. Gender inequalities in futureemployment are likely to centre on womennot having equal access to higher-quality jobs,with commensurate pay and treatment. As aresult of their lower educational attainment,domestic responsibilities and socially ascribedgender roles, women are more likely to workin informal employment. These characteristicsare highly likely to persist by 2045.Women tend to be more active in the labourmarket in developed countries, especiallythose with extensive social protectioncoverage and in societies where part-timework is possible and accepted. Female wealthcreation is likely to continue to increase withindeveloped economies. In 2009, womencontrolled 27% of global wealth (roughlyUS$ 20.2 trillion) 2 but only 24% of seniormanagement roles are filled by women. TheAlternative outcome:Rapid gender equalityBy 2045, women’s rights and status insociety could improve at an even greaterrate than current trends suggest, furtherreducing the gender gap. Increasesin gender equality have historicallyhad a substantial impact on povertyand the global economy, simply byimproving women’s access to birthcontrol, education and increasing theiropportunities.2 The Boston Consulting Group (2010), ‘Levelling thePlaying Field’, available at https://www.bcg.com/documents/file56704.pdfUK’s Equalities and Human Rights Commissionestimates it will take 70 years at the currentrate of progress to see an equal numberof female and male directors of FTSE 100companies. 3 In the UK, the gender pay gapstands at 15%, with women on averageearning £5,000 less a year than their malecounterparts. This disparity is even greater inpart-time jobs, going up to 35%. Followingthe trend over the last 30 years, it is likely that(within the industrialised world) the gender gapin terms of pay is likely to reduce out to 2045.Many of the world’s defence and securityorganisations are likely to incorporate specificgender equality targets, and it is likelythat by 2045 all formal barriers to womenbeing involved in ‘front-line’ combat will beeliminated in most developed countries’armed forces. Mimicking changes in militaries,it is also probable that in 2045, armed resistancemovements and terrorist groups will includegreater numbers of women than at present.3 Morse, F. (2014), ‘International Women’s Day 2014’,available at http://www.independent.co.uk/news/world/international-womens-day-2014-theshocking-statistics-that-show-why-it-is-still-soimportant-9177211.html“Female wealthcreation is likelyto continue toincrease withindevelopedeconomies butonly 24% of seniormanagementroles are filled bywomen.”12 Global Strategic TrendsGlobal Strategic Trends13

Part 1GenderGenderPart 1overall development. 8 In 2045, this globalfigure is likely to have only marginally declinedcompared to today. Sexual violence willalmost certainly still impact negatively on asignificant minority of women.Human trafficking ensnares millions of womenand girls in modern-day slavery. Womenand girls represent 55% of the estimated 20.9million victims of forced labour worldwide,and 98% of the estimated 4.5 million forced8 UN Women (2013), ‘Facts and Figures: EndingViolence Against Women’, available at http://www.unwomen.org/en/what-we-do/ending-violenceagainst-women/facts-and-figures; World HealthOrganisation (2013), ‘Violence Against Women’,available at http://www.who.int/mediacentre/factsheets/fs239/en/into sexual exploitation. 9 With furtherglobalisation, there could be an increase intrafficking and slavery by 2045, althoughthe trend may be mitigated by improvedsurveillance technology and internationalcooperation between police and securityforces. If not addressed, an increase intrafficking and slavery could impact onregional and local stability, as it could enhancethe criminal economy, thereby underminingthe capability and authority of the state.9 International Labour Organization (2012), ‘ILOGlobal Estimate of Forced Labour: Results andMethodology’There could bean increase intrafficking andslavery by 2045,although the trendmay be mitigatedby improvedsurveillancetechnology andinternationalcooperation.“”Defence and security implications■■Many of the world’s defence and security organisations are likely to incorporatespecific gender equality targets.The gender gap for primary school enrolments is closing School girls in CambodiaEducationEducational achievement is seen as a goodpredictor for future economic activity. Overall,the gender gap in primary education hasshrunk, and global primary enrolments arenow 48% for girls and 52% for boys. Thesestatistics on enrolment may mask the numbersof children, often girls, who fail to completetheir primary education because they areremoved from school to marry early or tocontribute to household income. While trendsfor girls and young women are improving,adult women still account for two-thirds of themore than 770 million illiterate adults in theworld. 4 This has not changed significantly inrelative terms over the past two decades and itis unclear whether it will improve significantlyby 2045. 5as many as 38% of murders of women arecommitted by a husband or partner. Factorsassociated with perpetration of sexual violenceinclude beliefs in family honour and sexualpurity, ideologies of male sexual entitlementand weak legal sanctions for sexual violence.Violence is also likely to continue to be usedas a weapon of war. Conservative estimatessuggest that 20,000 to 50,000 women wereraped during the 1992–1995 war in Bosnia andHerzegovina, 6 while approximately 250,000to 500,000 women and girls were targetedin the 1994 Rwandan genocide. 7 Violenceagainst women has tremendous costs, fromgreater health care expenses to losses inproductivity, impacting national budgets and■■Increasing numbers of women are likely to have front-line combat roles in armedforces worldwide, mirrored by growing number of females participating in armedresistance movements and terrorist groups.■■Sexual violence will almost certainly continue to be a feature of conflict and stateviolence. Used as a weapon of war, sexual violence can be a significant factor ininstability. However, countries and their armed forces are likely to face greaterinternational scrutiny and legislation against such activities.Violence against womenGlobally, around 35% of women haveexperienced physical or sexual assault, and4 OECD (2011), ‘Shifting Wealth, Shifting GenderRelations?’, available at http://www.oecd.org/dev/pgd/48619715.pdf5 Ibid.6 Based on reports by the Government of Bosniaand Herzegovina and the European Commission.Ward, J. (2002), ‘Bosnia and Herzegovina, If NotNow, When?: Addressing Gender-based Violencein Refugee, Internally Displaced, and Post-ConflictSettings’, cited in UNIFEM (2014), ‘Facts and Figureson Peace and Security’7 UN Special Rapporteur on the situation of humanrights in Rwanda (1996), ‘Report on the Situation ofHuman Rights in Rwanda’14 Global Strategic TrendsGlobal Strategic Trends15

Part 1UrbanisationWith 70% of the global population likely to live in cities by 2045, urbanisation will be aparticularly important theme in developing countries. Urbanisation is likely to enhanceeconomic and social development, but – without mitigation measures – may also leadto pressure on infrastructure (and the environment) which could contribute to socialtensions within the urban population. Urbanisation and the effects of climate changeare likely to result in an increase in the magnitude of humanitarian crises, particularlysince the majority of urban areas will almost certainly be either on, or near the coast,making these cities vulnerable to flooding.From rural to urbanBy 2045, the proportion of people living inurban areas is likely to have increased from alittle over 50% to around 70% of the world’spopulation. 1 Urbanisation will probablyincrease most rapidly in the developing world.Of the 23 cities expected to have ten million ormore inhabitants by 2015, 19 are likely to be indeveloping countries. The greatest increasesin urbanisation are likely to be in Asia, withbetween 250 and 300 million people likely tomove from rural to urban areas over the next15 years in China alone. 2 Although thosewho remain in rural areas may experienceincreased isolation as rural populationsdecline, technological advancements arelikely to enable better communication andremote working. Managed successfully,urbanisation could stimulate economicgrowth. 3 In part, due to the exposure ofnew ideas and the accessibility of goodsand services, it may also act as a spur for civilactivism and improve the quality of life formany. While older cities are likely to have1 OECD (2012), ‘Environmental Outlook to 2050’2 Calculations by the Chinese Government as part ofguidelines for infrastructural demands in the comingfive year plan, specifically underlined by Premier LiKeqiang in his inauguration speech.3 McKinsey Global Institute (2012), ‘Urban World: Citiesand the Rise of the Consuming Class’established links to resources, new cities mayenjoy an infrastructural advantage – they willbe able to build transport and communicationnetworks suitable for modern vehicles andways of working, without the constraints ofhistoric buildings, narrow streets and obsoleteinfrastructure.By 2045, there are likely to be around 280megacities (cities with more than 20 millioninhabitants 4 ). Many of these could beagglomerations spanning administrative, andin some cases national, boundaries therebydriving integration and changing governancestructures. Europe, for example, may havemore than 20 major agglomerations by2045 – the German Ruhr region, much of theNetherlands and Belgium could become asingle gigantic urban area. The taxation rightsof some major cities could make them majorregional or international actors.Urban challengesMuch of the rapid urban growth in developingcountries, particularly in sub-Saharan Africa,is unlikely to be matched by investment inessential services and infrastructure. Onebillion people throughout the world alreadylive in slums, lacking basic amenities – and4 UN Habitat (2011), ‘State of the World’s Cities Report2010/2011’Urbanisationcould stimulateeconomic growthand may alsoact as a spurfor civil activismand improve thequality of life formany.“”Global Strategic Trends17

Part 1UrbanisationUrbanisationPart 1A growing population living in the urban environmentMajor centres of population20152025203520450 1 2 3 4 5 6 7 8 9 10Global population in billionsSource: UN ‘World Urbanization Prospects: 2011 Revision’there could be almost three billion peopleliving in these conditions by 2045 if mitigatingaction is not taken. 5 Unless there is sufficientopportunity for bettering their lives, theurban poor are likely to become frustrated– and with increasing access to information,there is likely to be a growing awareness ofinequality. If not dealt with effectively, thiscould lead to violent protest and possiblyfull-blown urban insurgencies. Similarly, citiesin areas with population decline, or those withdysfunctional governance, will probably find itdifficult to attract people and resources. Theseissues are likely to be exacerbated by demandsfor resources. In particular, urbanisation oftenresults in increasing requirements for energy(particularly electricity), which could be asource of considerable tension unless it isprovided in a sustainable way. Once peoplehave access to energy, they are likely to alwaysexpect it. Some cities, in both developed and5 UN (2013), ‘World Economic and Social Survey 2013’,available at http://www.un.org/en/development/desa/policy/wess/wess_current/wess2013/WESS2013.pdfRuralUrbandeveloping countries could fail (for example,becoming bankrupt or seeing a breakdown inlaw and order) – potentially becoming securityissues. Correctly managed, though, urbangrowth could generate greater prosperity andhigher tax revenues, potentially offsettingsome of these more negative aspects.Because of their concentrated populations,when disasters (whether natural or man-made)strike cities, large numbers of people areaffected. Many of the biggest cities, a numberof which are vital to the global economy,are situated in coastal regions which couldface more extreme weather events and bevulnerable to rising sea-levels. Furthermore,because of inadequate sanitation, slums couldbe susceptible to communicable diseases –which could then spread globally because ofincreased connectivity between cities.Los AngelesMexico City20152045ChicagoShows the top 30 cities bypopulation size in 2015 and2045 together with those withpopulations greater than 10million that are forecastedto increase by more than40% between 2015 and2045. London is included forcomparison.New York-NewarkSão PauloBuenos AiresLondonParisRio de JaneiroKinshasaLuandaIstanbulMoscowDefence and security implications■■Rapid urbanisation and inadequate socio-economic infrastructure are likely toincrease the number and scale of densely populated slums. Such areas are likely tobe more prone to social unrest.■■Failed and failing cities, in both developed and developing countries, could posemajor security challenges (such as social unrest and even insurgencies) with thepotential for country-wide repercussions. If more people live in urban areas, securityand armed forces will almost certainly need to operate in this environment to agreater extent. Adversaries could range from government-controlled militaries toarmed non-state groups with criminal or malign ideological intent.■■Urbanisation concentrates populations, potentially making them more vulnerableto the effects of natural disasters, disease and deliberate acts of violence. With mosturban areas in coastal regions, cities are likely to be particularly vulnerable to theeffects of rising sea levels.■■People living in slums could be more susceptible to communicable diseases, whichcould then spread globally as a result of increased connectivity between cities.LagosCairoSource: UN World Urbanization Prospects: 2011 RevisionLahoreKarachiAhmadabadMumbaiDelhiBangaloreBeijing TianjinChongqingShanghaiChengduHyderabadDhakaCalcuttaChennaiCity size guide (millions)10 20 40WuhanFoshanHo Chi Minh CityJakartaTokyoOsaka-KobeDongguan, GuangdongShenzhenGuangzhou, GuangdongManila18 Global Strategic TrendsGlobal Strategic Trends19

Part 1ResourcesDemand for resources of all kinds is likely to increase out to 2045, as the world’spopulation rises to around nine billion. While the demand for food will grow, somecountries are likely to experience significant declines in agricultural productivity. Watershortages are likely to be particularly acute in many areas, exacerbated by increasingdemand and climate change. In the 2045 timeframe, coal and hydrocarbons are likely toremain the most important sources of energy, with renewable and nuclear energy likelyto make an increasing contribution.WaterEven at current population levels, supply offresh water is, arguably, insufficient. 1 Factorssuch as population growth, increasingdemand from industry and agriculture, andreliance on unsustainable water sources(such as aquifers) are likely to mean thatmany people may not have reliable accessto adequate supplies of water. 2 By 2045,global agricultural water consumption couldincrease by 19%, with global fresh waterdemands likely to grow by 55% in the sameperiod. 3 Estimates of those suffering fromwater shortages today vary between 450million 4 and more than 1.3 billion people. 5Without mitigation, by 2045 or sooner, around3.9 billion people – over 40% of the world’spopulation – are likely to be experiencing1 Oxford Research Group (2011), ‘Competition overResources: Drivers of Insecurity and the GlobalSouth’2 Wiltshire, A. et al. (2013), ‘The Importance ofPopulation, Climate Change and CO 2PlantPhysiological Forcing in Determining Future GlobalWater Stress’3 OECD (2012), ‘Environmental Outlook to 2050’4 UN Environment Programme estimate.5 Falkenmark, M. (1986), ‘Fresh Water - Time for aModified Approach’; Rockström, J., et al. (2009);‘Future Water Availability for Global FoodProduction: The Potential of Green Water forIncreasing Resilience to Global Change’water stress. This represents a significantincrease on the estimated 2.6 billion peoplesuffering water shortages in 2000. 6The poorest people often have extremelylimited access to fresh water. Someone livingin a slum may only be able to access aboutfive to ten litres daily, while a middle- or highincomeindividual living in the same city mayuse about 50-150 litres per day. An estimated2.2 million people die every year from diseasesthat cause diarrhoea because of inadequatewater and sanitation. 7 This is still likely to beproblematic by 2050, when 1.4 billion people(mainly living in developing countries) areunlikely to have basic sanitation. 8 Efforts toimprove safe water supply and health-careaccess have succeeded in reducing deathsfrom diarrhoea, but these gains may bethwarted as the number of people livingin slums increases, while environmentalchange places further stress on fresh wateravailability. However, there continues to beadvances in water desalinisation technology,as well as activity to reduce water waste and6 Wiltshire, A. et al., op. cit.; Arnell, N. (2004), ‘ClimateChange and Global Water Resources: SRES Emissionsand Socio-Economic Scenarios’7 WHO (2009), ‘Water-related Diseases’, availableat http://www.who.int/water_sanitation_health/diseases/diarrhoea/en/8 OECD, op. cit.By 2045 orsooner over 40%of the world’spopulationare likely to beexperiencingwater stress.“”Global Strategic Trends21

Part 1ResourcesResourcesPart 1Meat consumption in Asia is increasing“There are anumber ofreasons whyviolent conflictover water mayoccur.”improve water utility. Improvements in wastetreatment and purification technologies offerhope that in the future more water could bereused or recycled.A shortage of water could lead to countries(and communities within them) divertingwater for their benefit to the detriment ofothers. Many water resources are shared bymore than one country – 263 river basinsand 269 aquifers are shared by two or morecountries, 9 and 21 rivers and four aquiferscross the boundaries of more than fivecountries. 10 As demand for water intensifies,it could lead to conflict. Some experts arguethat water scarcity drives closer cooperation 11and, despite tensions, no modern state hasever declared war on another solely overwater. 12 But there are a number of reasonswhy violent conflict over water may occur9 Cooley, H. et al. (2009), ‘Understanding and Reducingthe Risks of Climate Change for TransboundaryWater’, available at http://www.pacinst.org/reports/transboundary_waters/transboundary_water_and_climate_report.pdf10 Ibid.11 Allouche, J. (2010), ‘The Sustainability and Resilienceof Global Water and Food Systems: Political Analysisof the Interplay Between Security, Resource Scarcity,Political Systems and Global Trade’12 Pandya, M. (2009), ‘Troubled Waters: Climate Change,Hydropolitics and Transboundary Resources’by 2045 or sooner. For example, globaldemand is likely to increase while supplies offresh water dwindle, yet water managementissues are likely to become increasinglycomplex. The effects of environmental andclimate changes will also probably becomemore severe in many locations, potentiallyoutweighing any beneficial consequences.FoodBy 2045, food production is predicted tohave increased by nearly 70%, to feed a largerand more demanding population 13 – andit is possible that demand could outstripsupply. Some types of consumption are likelyto grow particularly strongly. As affluencegrows in the developing world, the demandfor more protein-rich diets is also likely toincrease. China, for example, has seen meatconsumption increase by 63% between1985 and 2009, and this trend seems likely tocontinue. 14 Pollution and soil erosion are likelyto adversely affect agricultural land – someestimates assess that, globally, as much as13 UN Food and Agriculture Organisation (2009), ‘Howto Feed the World in 2050’, available at http://www.fao.org/fileadmin/templates/wsfs/docs/expert_paper/How_to_Feed_the_World_in_2050.pdf14 Australian Department of Agriculture (2012), ‘FoodConsumption Trends in China’25% of agricultural land is already degraded. 15Climate change will almost certainly haveadverse effects on some agriculture, butmay open up new areas for cultivation,with positive impacts on particular crops incertain regions. On balance, even though thequality of some areas is likely to have beendegraded by 2045, the global arable landarea is projected to remain relatively constant(estimates range from a 10% decrease to a25% increase), 16 with some potential increasesin crop productivity in the high latitudes,and decreases across the tropical regions. 17Furthermore, warming, acidification and overfishingalso threaten to reduce the amount offood that can be harvested from the oceans.Estimates of future food prices are highlyvaried and may be more volatile, althoughmost projections indicate a general increase. 18Analysis by the International Food PolicyResearch Institute suggests that average pricesof many staple grains could rise by 30% evenin the most optimistic scenario. 19 Disruption,and possibly congestion, of global trade routesmay lead to sharp increases in food prices –particularly in those countries dependent onfood imports. When the effects of climatechange are taken into account, the priceincrease above present levels could be as15 Re|Source Conference (2012), ‘The Challengeof Feeding 9–10 Billion People Equitablyand Sustainably’, available at http://www.reversethefuture.org/media/medialibrary/2012/07/Professor_Charles_Godfray_-_ReSource_2012_Food_Briefing.pdf16 Lobell, D. B., Baldos, U. L. C., and Hertel, T. W. (2013),‘Climate Adaptation as Mitigation: the Case ofAgricultural Investments’; Zhang, X. and Cai, X. (2011),‘Climate Change Impacts on Global Land Availability’17 Fischlin, A. et al. (2007), ‘Ecosystems, Their Properties,Goods, and Services’; Müller, C. et al. (2010), ‘ClimateChange Impacts on Agricultural Yields‘, Knox, J. et al.(2012), ‘Climate change impacts on crop productivityin Africa and South Asia’18 Lobell, D. B. et al., op. cit.; Nelson, G. C. et al. (2009),‘Climate Change: Impacts on Agriculture and Costsof Adaptation’; Nelson, G. C., et al. (2013), ‘Agricultureand Climate Change in Global Scenarios: Why Don’tthe Models Agree?’19 Nelson, G. C. et al. (2010), ‘Food Security, Farming,and Climate Change to 2050: Scenarios, Results,Policy Options’, available at http://www.ifpri.org/sites/default/files/publications/rr172.pdfmuch as 100%. 20 Inflation of food prices couldalso be driven by a shortage of arable land,particularly in Africa and developing parts ofSouth and East Asia. A number of factors arelikely to put pressure on the availability of landfor cultivation, such as: the rapid developmentof bio-fuels; the effects of climate change;dwindling water supplies; increasingdemand to use land for industrial and urbangrowth. Set against this, transferring currenttechnologies and closing existing productivitygaps by developing new measures tomaximise yields could be important inensuring productivity growth keeps pace withdemand. Developments such as geneticallymodified crops, laboratory-cultured meat,improved agricultural techniques and recentdevelopments in nitrogen fixing from the air, 21may also increase productivity while loweringthe environmental impact of agriculture.These advances may mean that forecastedfood prices could be lower than expected, oreven cheaper than today. Historical evidenceshows that higher food prices cause a jump inhunger levels. For example, during the 2008food crisis, the number of hungry people inthe world increased by 40 million, primarilydue to increased food prices. It is likely that by2045 food shortages will increase the numberof children under the age of five who areundernourished by around 20-25 million, 22while the global malnourished populationcould increase by around 49 million. 2320 Ibid.21 Phys.org (2013), ‘World Changing TechnologyEnables Crops to Take Nitrogen from the Air’,available at http://phys.org/news/2013-07-worldtechnology-enables-crops-nitrogen.html#ajTabs22 Nelson, G. C.,et al. (2009), op. cit.23 Baldos, U. L. C. and Hertel, T. W. (2013), ‘GlobalFood Security in 2050: The Role of AgriculturalProductivity and Climate Change’Average pricesof many staplegrains couldrise by 30%even in themost optimisticscenario.“”22 Global Strategic TrendsGlobal Strategic Trends23

Part 1ResourcesResourcesPart 1“Much of thefuture demandfor electricitywill probablyoriginate indevelopingcountries,although it maybe extremelydifficult to meetthis growth indemand.”AdoptingEnergyA growing global population will almostcertainly increase its demand for energy.Most analysts expect that demand couldmore than double by 2045. 24 The amount ofpower derived from nuclear 25 and renewableenergy is likely to increase out to 2045, butmay remain less significant than coal andhydrocarbons. Growing use of nuclearenergy raises the possibility of fissile materialbeing obtained by non-state actors as well asstates operating outside international laws,potentially causing security threats. Whilethere could be significant breakthroughs indeveloping novel energy sources or makingexisting technologies suitable for the massmarket (thorium reactors or fuel cells, forexample) there is little evidence to suggestthat this will occur by 2045. Furthermore,while fossil fuels remain relatively cheap, thereis little incentive to fund the development ofnew energy sources.24 International Energy Agency (2012), ‘World EnergyOutlook’; Energy Information Administration (2012),‘International Energy Outlook’; Exxon Mobil (2012),‘Outlook to 2040’25 There are currently 435 operable civil nuclearpower reactors around the world, with a further 67under construction. See World Nuclear Association(undated), ‘Number of Nuclear Reactors’, availableat http://www.world-nuclear.org/Nuclear-Basics/Global-number-of-nuclear-reactors/Scenario:Breakthrough in alternative energyDemand for electricity is also likely toincrease. 26 Regardless of the source,producing electricity consumes a significantamount of primary energy (though this canbe limited to the manufacturing stage – forexample, producing solar panels) and energyis also lost in transmission, and sometimesthrough theft. However, technologicaldevelopments are likely to increase theefficiency of electricity generation by 2045.Much of the future demand for electricity willprobably originate in developing countries,although it may be extremely difficult to meetthis growth in demand without investingsignificantly in power generation capacity andthe necessary distribution infrastructure. Itis unclear whether such investments will bemade. In developing countries, particularlythose in Africa, creating economically viabledistribution networks will probably requirecooperation between countries. Theinterconnectedness of energy markets andtransportation networks may also meanthat current choke-points become morecongested. The consequences of blockagesin areas such as the Panama Canal, Straits ofHormuz and the Malacca Straits could be feltfar beyond their point of origin.26 Exxon Mobil (2013), ‘The Outlook for Energy: AView to 2040’, available at http://cdn.exxonmobil.com/~/media/Reports/Outlook%20For%20Energy/2014/2014-Outlook-for-Energy.pdfIt is possible that, by 2045, work on new methods of generating energy will bear fruit,such as harnessing the Sun’s energy by splitting seawater into hydrogen and oxygen.If such processes could be industrialised, without producing significant amounts ofpollution, near-limitless amounts of extremely cheap energy could be generated.Without the constraints of cost or pollution, heat and light could be freely available toall of the world’s people, with a number of beneficial consequences.Global energy demand by sourceQuadrillion British Thermal Units100075050025002010 2015 2020 2025 2030 2035 2040 2045Source : US EIA ‘International Energy Outlook 2013’Energy storagePower sources such as wind, tidal and solarare intermittent, providing energy whenconditions are right rather than whenneeded. This mismatch between availabilityand demand is one of the main obstacleslimiting the proportion of energy generatedfrom renewable sources 27 and perpetuatingreliance on conventional methods of powergeneration. Improving the ability to storeenergy would make using renewable energysources much more practical. While a numberof means of storing energy are available, theysuffer limitations that prevent their use on aglobal scale. For example, storing water toproduce hydropower has limited capacity forexpansion, and conventional batteries are tooexpensive for storing vast amounts of energy. 28New approaches such as adopting organicmaterials like wood and newly discoveredliquids to produce large-scale batteries couldprovide affordable and environmentally27 Energy Research Partnership, collated by Workman,M. (2013), ‘DCDC Technology Review for Shale Gas,CCS and Energy Storage’28 Pumped-storage hydropower typically takesadvantage of natural topography and accounts formore than 99% of bulk storage capacity. See TheEconomist (2012), ‘Energy Storage: Packing SomePower’, available at http://www.economist.com/node/2154OilGasCoalNuclearBiomassHydroRenewablessustainable storage. 29 Such systems are highlylikely to be available and in common useby 2045, making it possible to rely more onrenewable energy and reduce the numberof conventional power stations neededto meet the growing demand for energy.International interest in energy storage hasled governments in Europe, the US, Japanand elsewhere to provide funding or makeregulatory changes to encourage innovation.Growing US energy independence 30A key change to the global energy marketby 2045 is likely to be growing US energyindependence, driven by recently adoptednovel oil and shale gas production techniquessuch as ‘fracking’. If the current increasesin production continue, the US looks set tobecome the world’s number one oil producerby around 2020 and a net exporter by 2030,29 The Economist (2013), ‘Battery technology: A Pileof Wood’; Huskinson, B. et al. (2014), ‘A Metal-FreeOrganic–Inorganic Aqueous Flow Battery’, availableat http://www.nature.com/nature/journal/v505/n7482/full/nature12909.html30 ‘Energy independence’ refers to a country meetingits total energy requirement from all sources at itsdisposal, including imports and trades. This is notthe same as ‘energy self-sufficiency’, a term oftentaken to mean that no imports or trade are requiredto meet a country’s energy needs.organic materialsand newlydiscovered liquidscould provideaffordable andenvironmentallysustainable[energy] storage.“”For example, if energy cost was no longer an object, desalinated water could betransported via pipelines to irrigate much of the Sahara, massively increasing thecontinent’s arable land and potentially ending hunger. Similarly, desalinisation plantscould resolve the probable crisis in water supply.24 Global Strategic TrendsGlobal Strategic Trends25

Part 1ResourcesResourcesPart 1“Rising demandfor rare earthelementscould continueto motivatecountries in tryingto develop orsecure their ownsources of supply.”Resource protectionismIncreased demand for critical materials –which could include oil and water – has seengovernments adopt protectionist measuresto boost revenues and secure access toresources. These practices are likely to endureout to 2045. Anti-competitive behaviourssuch as expropriation of foreign companies,export restrictions, cartel-pricing behaviour,‘land acquisition’ or high taxation are formsof resource nationalism designed to restrictinternational supply. For example, potash(used in agriculture) is increasingly subject togovernment-to-government trade deals ratherthan being traded on the open market. Risingdemand for, and concerns over, access to rareearth elements could continue to motivatecountries in trying to develop or secure theirown sources of supply, bypassing internationalmarkets. While running out of these materialsis unlikely within the 2045 timeframe, reliabilityof supply could be an issue because theyare only mined in a very small number ofcountries (for example, China produces 86%of all rare earth elements). If one of thosecountries restricted supply, it would be likelyto have a significant impact on availability andprice. 37 However, such action is not without itscosts. Unpredictable and retro-active policychanges to protect resources can, for example,lead to a drying up of foreign investment orcustomers.Resource inequalityInequitable distribution of resources includingfood, water, energy and materials will almostcertainly endure out to 2045, both betweencountries and within them. Plentiful suppliesof food and water are usually beneficial.However, plentiful supplies of hydrocarbonsand minerals can be destabilising – especially37 Ernst and Young identified resource nationalism asthe top risk in their assessment of ‘Business RisksFacing Mining and Metals 2011–2012’, availableat http://www.ey.com/Publication/vwLUAssets/Business_risks_facing_mining_and_metals_2011-012/$File/Metal_Mining_paper_02Aug11_lowres.pdf. This represented a move from fourth highestrisk, behind skills and cost, to the number one riskin 2012 – an assessment which has held in theirupdated report. See also Lee, B. (2012), ‘ResourcesFutures’, available at http://www.chathamhouse.org/publications/papers/view/187947in countries with authoritarian or fragilegovernance. In such countries, profits frommineral and hydrocarbon extraction are often(through corruption) concentrated in thehands of elites. This can result in grievances,leading to instability and potentially violentconflict. Inequitable availability of food andwater, particularly in those countries sufferingfrom shortages, is also likely to lead toinstability and violence.Rare earth elementsReserves, productionand consumptionChina produces almost 85%of rare earth elements andconsumes around 60% ofthe global supply. Suppliersoutside of China aredeveloping capacity.Nechalacho-Thor LakeAvalon Rare Metals Inc.Estimated start date late 2016Hoidas Lake(Great Western Minerals Group)Mountain Pass(Molycorp Inc.)Was the world’s biggest supplier from about1965–1984 but environmental problems andcompetition from China put it out of business.It re-opened in 2012.Estimatedreserves55,000,000 tonsChina74,000 tonsProduction95,000 tonsDefence and security implications■■Competition over some resources is likely to intensify and exacerbate existing politicaland security tensions, potentially acting as a catalyst for intra- and inter-state conflict.■■Demand for food may outstrip supply, leading to a rise in costs. Food shortagescould lead to sharp price spikes, which could result in instability in those areasunable to absorb the increase.■■Climate change could contribute to increasing incidences of crop failure, potentiallycausing disruption to global food supplies.■■Growing use of nuclear energy raises the possibility of fissile material being obtainedby non-state actors as well as countries operating outside international laws,potentially causing security threats.■■A reduced requirement for Middle Eastern oil by the US, coupled with a shift in theMiddle Eastern markets toward Asia, could bring the US commitment to defence ofMiddle East export routes into question. However, US involvement in the Arabian Gulfis unlikely to alter significantly. But the US may look to other countries, including Chinaand the EU, to play a greater role in security provision in the Middle East.Consumption13,000,0001,600,0003,100,000 10,000,000 36,000 30,000 31,000,000United StatesAustraliaIndia Commonwealth of Ind. States* Brazil Malaysia Other United States Japan & South Asia7,000 4,0002,8002,500 300 3506,00018,50023,500Lovozero, RussiaSichuan Province(multiple producers)Kinta Valley(multiple producers)Mount Weld(Lynes Corp.)Nolans Bore(Arafura Resources Ltd.)Bayan Obo(Chinese Government)The world’s biggest rareearth mine since at least1990.Dong Pao(Vietnamese Government/Toyota Tsusho/Sojitz)Jiangxi Province(multiple producers) TheChinese Governmenttook control of miningoperations from localauthorities in 2011,allowing for greater controland to tackle corruption.Dubbo ZirconiaProject(Alcane Resources Ltd.)Map keyIdentified rare earth depositSite that produces or hasproduced at least somerare earthsCurrent major producerCould be a major producerwithin five yearsSource: Analysis by DCDC based oninformation from the US GeologicalSurvey and other open sourcereporting. Original design conceptNew York Times.* Member states: Armenia, Azerbaijan,Belarus, Kazakhstan, Kyrgyzstan,Moldova, Russia, Tajikistan andUzbekistan; and participating statesTurkmenistan and Ukraine.28 Global Strategic TrendsGlobal Strategic Trends29

Part 1The EnvironmentA growing population will demand more food and water, increasing the strain on theenvironment out to 2045. As centres of population cluster in vulnerable areas such ascoastal regions, the consequences of adverse weather are highly likely to be felt morekeenly. By 2045, climate change is likely to have more noticeable effects. Withoutmitigation, rising sea levels will increase the risk of coastal flooding, particularly inregions affected by tropical cyclones. Droughts and heatwaves are also likely to increasein intensity, duration and frequency. Some of these events could precipitate naturaldisasters which, because of the interdependencies enabled by globalisation, may haveconsequences far beyond the site where the disaster occurs.People and the environmentHuman activities are likely to continue to havean impact on the environment. The processesof urbanisation, deforestation, industrialisation,agriculture and fishing have damaged thenatural environment. By some estimates,pollution and soil erosion have led to as muchas 25% of available land being degraded. 1Similarly, over-fishing and pollution havereduced the amount of food that can beharvested from the oceans. However, moresustainable farming and fishing methods andbetter industrial and urban practices couldmitigate these adverse effects.Climate changeInertia in the climate system means thathistoric greenhouse gas emissions will almostcertainly affect the climate for the next fewdecades, regardless of any mitigating actiontaken. By 2045, average global temperaturesare likely to have increased by approximately1.4°C above levels recorded at the end of the1 Re|Source Conference (2012), ‘The Challengeof Feeding 9–10 billion People Equitablyand Sustainably’, available at http://www.reversethefuture.org/media/medialibrary/2012/07/Professor_Charles_Godfray_-_ReSource_2012_Food_Briefing.pdf20 th century. 2 Without concerted action, 3 itis unlikely that it will be possible to preventglobal average temperatures rising more than2°C above pre-industrial levels. 4 Althoughthere may appear to have been no significantincrease in temperatures over the last 10-15years, periods of slow-down and speed-upin global temperature trends have occurredbefore, and are likely to occur again. Energywhich would usually manifest as a rise insurface temperature is also being absorbedelsewhere in the Earth system, primarily inthe oceans. Observations of ocean heatcontent and of sea-level rise re-enforce thisconclusion. 52 Kent, C. and Lewis, K., Met Office Hadley Centre(2014), ‘Climate Change for Global StrategicTrends out to 2045’. It is worth noting that futuretemperature predictions are projections based oncomputer modelling, and hence are subject to theinherent uncertainties involved in such modelling, aswell as to the uncertainties associated with any kindof prediction.3 Rogelj, J. et al. (2012), ‘Global Warming Under Oldand New Scenarios Using IPCC Climate SensitivityRange Estimates’4 Intergovernmental Panel on Climate Change (2014),‘Fifth Assessment Report’. Hereafter referred to as‘IPCC AR5 (2014)’. AR5 data is used throughout GST 5where available; AR4 data is used when AR5 data hasnot yet been published or interpreted.5 Kent, C. and Lewis, K, op. cit.Global Strategic Trends31

Part 1The EnvironmentThe EnvironmentPart 1Amount of CO 2emitted per capitatCO 2/ per capita161284013.4 13.6Source: Based on Organisation for Economic Co-operation and Development (OECD) Environmental Outlook to 2050: Output from IMAGE/ENV-Linkages“Withoutmitigatingaction, on a percapita basis,most developedcountries’emissions arelikely to remainhigher thanthose of mostdevelopingcountries.”14.315.05.47.28.4OECD BRICS Rest of World Global averageWithout meaningful effort to secure globalconsensus on the scale of the problem andhow it should be tackled, it will almost certainlybe challenging to limit global temperatureincreases. By the end of the century, the Earth’sclimate is likely to be substantially warmer anddifferent from today’s. A large body of scientificevidence indicates that climate changeis mostly being driven by human-causedgreenhouse gas emissions, 6,7 particularly carbondioxide (CO 2) from generating power. Whilethe proportion of CO 2emitted by developingcountries (particularly India and China) is likelyto increase significantly out to 2045 withoutmitigating action, on a per capita basis, mostdeveloped countries’ emissions are likely toremain higher than those of most developingcountries.Abrupt events (or tipping points) such as thefailure of the Indian monsoon, changes inlarge-scale ocean circulation (for example aweakening of the Gulf-stream), substantialmelting of the Greenland ice sheet and therelease of large quantities of methane from9.76 ‘Greenhouse Gas’ refers to CO 2(approximately 0.04%of the atmosphere), methane (CH4), nitrous oxide(N2O) and various fluorinated gases as well as watervapour (gaseous H2O).7 The Intergovernmental Panel on Climate Change(IPCC) Fourth Assessment Report (AR4) foundgood agreement between climate models for theglobal temperature to increase throughout the 21stcentury, primarily driven by changes in GreenhouseGas (GHG) concentrations. This assessment holds forcurrent report. See IPCC AR5 (2014).3.84.34.85.36.27.07.88.5the ocean floor are possible. All could causemajor global disruption, although it is notpossible to quantify the likelihood of theseevents occurring by 2045. Heatwaves andextremely hot days are likely to becomemore frequent and intense, as are droughts,while instances of extreme cold are likely toreduce. It is also probable that instances ofintense rainfall will increase and that extratropicalstorms move pole-ward. 8 Historically,8 Knutson, T. R. et al. (2010), ‘Tropical Cyclones andClimate Change’Shock:Catastrophicclimate change2010202520352045If advances in energy technology areinsufficient to ensure the requiredamounts of electricity for economicgrowth, countries could burnhydrocarbons at ever-higher rates. Thismay increase greenhouse gas levels,causing global temperature rise. In turn,this could lead to long heat waves innormally temperate latitudes. Sustaineddrought could contribute to repeatedharvest failures, as arable crops wouldbe unable to cope with the hightemperatures. Severe food shortagescould lead to sudden mass migrationof populations across national borders,triggering widespread social unrest.the flooding in Pakistan in 2010 displaced anestimated 20 million people, and damaged 1.6million homes. Similarly, some experts believethat a 2.5cm rise in sea levels would displace50 million people in the coastal regions ofIndia. 9 The economic impact of extremeevents is uncertain, but losses per event from1980-2010 ranged from a few billion US dollars(USD) to over US$ 250 billion in 2005 followingHurricane Katrina. 10 It seems likely thatdeveloping countries will feel the economicimpact of climate change particularly sharply,as they are unlikely to have the resources tomitigate its effects as successfully as moredeveloped countries.The Arctic is likely to see significant changewith the melting of sea-ice opening up newroutes across the Arctic Ocean during thesummer months. Reduced summer sea-icemay present opportunities as new traderoutes and areas rich in natural resources openup for exploitation. Thawing permafrost couldmake transportation to and from Arctic oil andgas facilities problematic as ice roads turn tomarsh, particularly in Siberia. The softening ofthe ground is likely to make new areas suitablefor agriculture.Rising sea levelsGlobal sea-levels are likely to rise by between0.32–0.38 metres by 2050, although largerincreases cannot be ruled out. 11 The effectsof sea level rise will not be uniform across theglobe and there will be regional variationswhich affect the vulnerability of certaincoastal regions. Currently, between 270 and310 million people are believed to be at risk9 DCDC conversations with the Institute for DefenceStudies and Analyses (IDSA), India, February 2014.10 Estimated property damage totalled US$ 108 billion,with economic impact assessments estimatinglosses of US$ 150 billion. See Blake, E. S. et al. (2011),‘The Deadliest, Costliest, and Most Intense USTropical Cyclones from 1851 to 2010 (And OtherFrequently Requested Hurricane Facts)’; Burton,M. L. and Hicks, M. J. (2005), ‘Hurricane Katrina:Preliminary Estimates of Commercial and PublicSector Damages’11 Jevrejeva, S. et al. (2012), ‘Sea Level Projections toAD2500 with a New Generation of Climate ChangeScenarios’Scenario:City concentrationand sea level riseIf our use of coal-fuelled powerstations increases out to 2045 (perhapsas developing countries build theireconomies), alongside a possibledemand from the growing consumerclass for larger, higher-status petroldrivencars, it is conceivable that globalwarming could significantly increase,perhaps by as much as 3 o C. Withsuch a rise in temperature, significantmelting of Arctic ice-sheets could occur,releasing vast amounts of methane andraising temperatures (and hence sealevels)even higher.Current trends indicate that a numberof mega-cities will be in littoral areas.If this coincides with climate-changeinducedsea level rise and extremeweather events, the consequencescould be disastrous – particularlyin those rapidly expanding citiesin developing countries wheregovernance is weak.of coastal flooding. 12 By 2045, a growingnumber of low-lying islands could be at riskof near total submersion – displacing entirecommunities. Without measures to mitigateand adapt to the effects of sea-level rises, by2045 there could be between 80 and 130million more people at risk from flooding,three-quarters of them in Asia. 13DesertificationArid and semi-arid areas cover about 40% ofEarth’s land surface and are home to morethan two billion people. 14 These areas are12 Hinkel, J. et al. (2014), ‘Coastal Flood Damage andAdaptation Costs Under 21st Century Sea-Level Rise’13 Jongman, B. et al. (2012), ‘Global Exposure to Riverand Coastal Flooding: Long Term Trends andChanges’; Met Office (2013), ‘Sea-Level Rise’ availableat http://www.metoffice.gov.uk/climate-change/guide/impacts/high-end/sea-level14 UN FAO (2008), ‘Water and Cereals in Drylands’;Warner, T. (2004), ‘Desert Meteorology’Between 270 and310 million peopleare believed to beat risk of coastalflooding.“”32 Global Strategic TrendsGlobal Strategic Trends33

Part 1The EnvironmentThe EnvironmentPart 1“Around 20-30% ofplant and animalspecies could beat high risk ofextinction due toclimate change.”Concentrated reliance on 30 crop speciesexpanding, with one study suggesting anestimated 135 million people will be at risk ofbeing displaced by desertification over thecoming decades, due to water shortages andreduced agricultural output. 15 In sub-SaharanAfrica alone, some 60 million people areexpected to move from ‘desertified’ areas tonorthern Africa and Europe by 2020, and thisfigure is highly likely to increase out to 2045.WaterFuture water stress is likely to be mainly drivenby socio-economic factors. 16 The frequency,intensity and duration of droughts in manyparts of the world are likely to increase.Climate change is likely to contribute tolonger-term changes in water availability,particularly in areas dependant on glaciermelt-water. The continued melting of glacierscould increase freshwater availability out to2045, but may bring with it an increased riskof localised flooding. In the longer term, asglaciers melt, the inter-annual reliability of thesupply of water in glacial rivers will be affected.Changing rainfall patterns may mean decliningwater availability for some, and an excess forothers.15 Global Humanitarian Forum (2009), ‘Human ImpactReport - Climate Change’, available at http://www.ghf-ge.org/human-impact-report.pdf16 Kent, C. and Lewis, K., op. cit.7,00012030Historically cultivated forconsumption *Widely cultivated †Critical in providing 95% of dietaryrequirement **Source: FAO http://www.fao.org/biodiversity/components/plants/en/†Source: Shiva, V., Buiatti, M.,Ceccarelli, S., Dolder, F., Esquinas, J. T.,Mammuccini, M. G., Magarinos-Rey, B.& Pucci, G. (2013) ‘The Law of the Seed’,Navdanya International, p.9. (http://www.navdanya.org/attachments/lawofseed.pdf)Marine lifeMarine ecosystems are expected to undergosubstantial change by 2045. 17 For example,numerous studies suggest that the increasingacidity of the ocean (due to greater absorptionof carbon dioxide) will have harmfulconsequences for calcifying organisms suchas coral reefs and many species of shellfish. 18Around inland and coastal areas, changingpatterns of freshwater runoff, droughts,floods, increasing temperatures and risingsea levels could all have a significant negativeeffect on fisheries and aquaculture. 19 Inlandfisheries are particularly vulnerable to lowwater levels, changes in spawning grounds,water extraction and modifications to rivercourses (such as the construction of dams).Freshwater runoff could reduce the salinity ofseawater, adversely affecting fishing groundsand coral reefs. Aquaculture depends heavilyon adequate water exchange and is vulnerableto temperature extremes and storm damage,particularly in coastal areas.BiodiversityThe impact of pollution, habitat destructionand climate change will almost certainlyhave a profound effect on wildlife. Somespecies are likely to adapt to the changesin their environment but many may not beable to. More species will almost inevitablybecome extinct, with the OECD’s projectionsindicating that terrestrial biodiversity coulddecrease by up to 10% by 2050. 20 The UNassesses that biodiversity loss has been morerapid in the last 50 years than in any otherperiod in human history, 21 a trend that somecommentators suggest shows no sign ofslowing. 22 Around 20-30% of plant and animal17 Fischlin, A. et al. op. cit.18 IPCC AR4, op. cit.; Bellard, C. et al., op. cit.; Wittmann,A. C. and Pörtner, H. O. (2013), ‘Sensitivities of ExtantAnimal Taxa to Ocean Acidification’19 FAO (2009), ‘Report of the Expert Workshop onClimate Change Implications for Fisheries andAquaculture’, available at http://www.fao.org/docrep/011/i0203e/i0203e00.htm20 OECD (2012), ‘Environmental Outlook to 2050’21 UN Millennium Ecosystem Assessment Board (2005),‘Ecosystems and Human Well-Being’, availableat http://www.unep.org/maweb/documents/document.354.aspx.pdf22 Karkkainen, B. (1997), ‘Biodiversity and Land’Pressures driving global biodiversity lossProjected Mean Species Abundance* loss as the result of different human induced pressures,with a large role for agricultural land use, encroachment and climate change.0%-10%-20%-30%-40%2010 2030 2045Source: OECD Environmental Outlook to 2050species could be at high risk of extinction dueto climate change. 23 Reduction in biodiversitydecreases the natural environment’s resiliencewhen adapting to change, since geneticdiversity is the raw material for evolution.A reduction in biodiversity could also leadto the loss of organisms that keep pest anddisease species in check. There may alsobe significant economic consequences tobiodiversity loss, with some suggestions thatthe annual cost to the global economy isbetween US$ 2bn and US$ 5bn. 24 Reductionin biodiversity may also place food supplies atrisk. At present, four crops (rice, wheat, maizeand potato) provide more than 60% of globalfood energy. 25 Relying so heavily on such asmall number of crops means that, if growingconditions change (due to drought, increasedtemperatures or flooding, for example), wemay not have sufficient genetic variety tobe able to breed crops to cope with theseenvironmental stresses.23 Fischlin, A. et al. (2007),‘Ecosystems, Their Properties,Goods, and Services’; Bellard, C. et al. (2012), ‘Impactsof Climate Change on the Future of Biodiversity’24 OECD, op. cit.25 UN FAO (2014), ‘Biodiversity: Plants’CropsEnergy cropsPastureForestryInfrastructure, enchroachmentand fragmentationFormer land-useNitrogenClimate change* This is a way of measuring the impact of human behaviour on ecosystems. It compares the current number and variety of species in a particular areawith historic data, to assess the major causes of biodiversity loss.AgricultureThe impact of climate change on agricultureis complex and region-dependent. Adverseimpacts (for example, heatwaves, droughts,storms and flooding) are expected acrosstropical regions 26 and much of theMediterranean basin. 27 Higher latitudesare likely to experience a range of bothpositive and negative impacts (such aschanges in water availability, heat stress ,increased growing seasons and decreasesin the occurrence of frost damage). 28 Untilabout 2050, modest warming is expectedto improve growing conditions for a rangeof crops in the mid- and high-latitudes. 29Increased atmospheric carbon dioxide couldalso increase the growth rates of many plant26 IPCC AR4, op. cit.27 Ferrise R. et al. (2013), ‘Climate Change Impacts onTypical Mediterranean Crops and Evaluation ofAdaptation Strategies to Cope With’28 Gornall, J. et al. (2010), ‘Implications of ClimateChange for Agricultural Productivity in the EarlyTwenty-First Century’29 Fischlin, A. et al. op. cit.34 Global Strategic TrendsGlobal Strategic Trends35

Part 1The EnvironmentThe EnvironmentPart 1species. 30 However, the indirect impacts ofclimate change – wildfires, land degradation,pests and diseases, extreme rainfall and sealevelrise – could have significant effects. Forexample, it is currently estimated that eachyear 10-16% of the total global harvest is lostto plant diseases, 31 and climate change couldincrease this figure by 2045. Nevertheless, agreat deal of the world’s agricultural potentialis unused or under-used. If this ‘yield gap’could be closed, perhaps by technologicalimprovements, GM crops and improvedmethods of agriculture and farming, the trendtowards a decrease in food production could30 Notaro, M. et al. (2007), ‘Global Vegetation andClimate Change due to Future Increases in CO 2asProjected by a Fully Coupled Model with DynamicVegetation’31 Chakraborty, S. and Newton, A. C. (2011), ‘ClimateChange, Plant Diseases and Food Security: AnOverview’be slowed or reversed. Even using currenttechnology, the potential exists to increaseproduction by up to 40%. 32About 60% of the workforce in developingcountries (around 1.5 billion people) isemployed in agriculture, livestock, fisheriesand tourism. While the proportion of peopleworking in these areas is expected to reduce(not least due to increased urbanisation), manyare still likely to depend on the health of thenatural environment for their livelihoods andmay therefore be particularly vulnerable to theeffects of climate change and environmentaldegradation. Degraded and threatenedenvironments are likely to lead to affectedcommunities migrating – with potentiallydestabilising consequences.32 Department for International Development (2014),unpublished comments at the Horizon ScanningOffice for Government (GOSH).Water security(Projection for 2045)■ Highly unstressed■ Unstressed■ Approaching water stress■ Moderately water stressed■ Highly water stressedFood Insecurityvulnerability to climate(Projected change between2010 and 2045)■ Low–Low■ Low–Medium■ Medium–Medium■ Medium–High■ High–High■ Low–High■ OECD and EU*Population densityPersons per km 2 (Projection for 2045)■ Very low■ Low■ Medium■ High■ Very High■ Extreme1,200*OECD and EU countries are not considered at risk due to their economic means and access to global food marketsSources:Climate Security Team, Met Office Hadley Centre (2014), ‘Climate Change and FoodSecurity: Measuring Climate Impact Through the Hunger and Climate Vulnerability Index’Wiltshire, A. J., Kay, G., Gornall, J. L., and Betts, R. A. (2013), ‘The Impact of Climate, CO 2and Population on Regional Food and Water Resources in the 2050s’Wiltshire, A., Gornall, J., Booth, B., Dennis, E., et al. (2013), ‘The Importance ofPopulation, Climate Change and CO 2Plant Physiological Forcing in DeterminingFuture Global Water Stress.’UN World Urbanization Prospects: 2011 Revision36 Global Strategic TrendsGlobal Strategic Trends37

Part 1The EnvironmentThe EnvironmentPart 1Sudanese mothers and their malnourished babies gather at a field hospitalTheoretically plausible geoengineeringmethods (intentional, large-scale activitiesintended to counteract aspects of climatechange) have been proposed for anumber of years. 36 Detailed studies onthe environmental implications of differentgeoengineering activities have recentlybegun to appear, but large-scale testingand implementation of such methodshas not occurred – in some cases due topublic opposition. 37 One theoretical ‘solar36 The Royal Society (2009), ‘Geoengineering theClimate: Science, Governance and Uncertainty’;Political and governance issues discussed byBodansky, D. (2012), ‘The Who, What, and Whereforeof Geoengineering Governance’37 Lenton, T. M. and Vaughan, N. E. (2009), ‘TheRadiative Forcing Potential of Different ClimateGeoengineering Options’; Kravitz, B. et al. (2011),‘The Geoengineering Model IntercomparisonProject (GeoMIP)’; Kravitz, B. et al. (2013), ‘ClimateModel Response from the Geoengineering ModelIntercomparison Project (GeoMIP)’radiation management’ technique wouldaim to disperse sulphates into the upperatmosphere, reflecting the sun’s rays backout to space, producing a cooling effect.However, as with most geoengineeringtechniques, there are questions about howto maintain the intervention, and minimisethe potentially harmful side-effects. Forexample, it is not known what the longtermeffects of dispersing large quantitiesof sulphates into the atmosphere would be.Over-reliance on particular geoengineeringtechnology to mitigate the effects of climatechange could also render users vulnerableto catastrophic effects if equipment failed orwas sabotaged. It is not clear therefore what,if any, role geoengineering will play by 2045in countering the effects of climate change,and the extent to which it could heighteninternational tensions.“Advancedcarbon capturetechnologies havethe potential toconvert carboninto usefulproducts such asplastics.”Humanitarian reliefThe financial requirements for humanitarianassistance are projected to increase by up to1,600% over the next 20 years, in large partdue to the effects of climate change. 33 By2045, this figure is likely to be substantiallyhigher. Funds available for disasterpreparedness and relief are widely assessed tobe inadequate. As the incidence and impactof natural disasters increase, this situation islikely to worsen. Governments, particularlythose in the regions most affected, are likely tobecome increasingly focussed on: preventing,preparing for (and dealing with) the impact ofenvironmental and climate related disastersat home; and with providing humanitarianassistance and disaster relief abroad. Somegovernments are likely to require their armedforces to take on an increased role in disasterrelief.Intervention and preventionReducing greenhouse gas emissions is likelyto be the most important means by whichclimate change is managed – although outto 2045 it appears likely that the drivers of33 Webster, M. et al. (2008), ‘The Humanitarian Costs ofClimate Change’greenhouse gases will continue to increase.Inertia in the climate system means thatwarming would continue even if emissionswere cut to zero tomorrow. Catchinggreenhouse gases before they are releasedinto the atmosphere through techniquessuch as carbon capture and storage couldplay a vital role in reducing climate change –particularly while fossil fuels remain a majorenergy source. 34 Although at an early stage ofdevelopment, and with questions remainingabout whether they could operate on alarge scale, more advanced carbon capturetechnologies have the potential to convertcarbon into useful products such as plastics. 35At a local level, constructing flood defences,altering agricultural practices in light ofchanging weather patterns and implementingwater conservation measures are likely to bethe primary means of adapting to the effectsof climate change.34 Bosetti, V. et al. (2009), ‘Optimal Energy Investmentand R&D Strategies to Stabilize AtmosphericGreenhouse Gas Concentrations’35 IEA (2009), ‘Technology Road Map, CarbonCapture and Storage’, available at http://www.iea.org/publications/freepublications/publication/TechnologyRoadmapCarbonCaptureandStorage.pdfDefence and security implications■■Extreme weather events, such as flooding and droughts, are likely to increase inboth frequency and intensity in a number of regions. Extreme events will almostcertainly continue to cause widespread damage and loss of life, although ourwarning mechanisms, defences and ability to respond may also improve in the sametimeframe.■■Reductions in the extent of summer Arctic sea-ice could open up new shippingroutes during the summer months and boost economic growth in the region –increasing its strategic significance for many countries.■■Degraded and threatened environments are likely to lead to affected communitiesmigrating – with potentially destabilising consequences.■■Armed and security forces, both at home and abroad, are likely to be morefrequently tasked with providing humanitarian assistance and disaster relief,perhaps supporting indigenous responders.■■Without mitigation measures such as carbon capture and storage, continuedreliance on coal and hydrocarbons for the majority of energy demand mayexacerbate climate change and its knock-on effects.38 Global Strategic TrendsGlobal Strategic Trends39

Part 1HealthDevelopments in technology are likely to lead to significant improvements in medicineand health, such as the potential for developing cures for some cancers by 2045.Advances in diagnostic techniques, the development of artificial organs and mindcontrolledprosthetic limbs mean that we are highly likely to live for longer and havemore productive lives. But new challenges to good health will almost certainly emerge.Rising physical inactivity and unhealthy diets are likely to contribute to an obesityepidemic and a rise in non-communicable diseases. Antibiotic-resistant pathogenscould be widespread by 2045, making post-operative infections potentially lethal.Impediments to healthFalling under five mortalityGlobally, significant progress has been madein reducing levels of child mortality. Between1990 and 2012, the number of under-fivesdying each year fell from 12 million to 6.3million, and further decreases look likely.However, more than one third of the globalpopulation (approximately 2.5 billion people)currently lack access to adequate sanitation,and despite efforts to reduce it, due to theprobable increase in the number of peopleliving in slums, this figure is likely to growout to 2045. Perhaps the most seriousdevelopment in global health is the increasein the prevalence of non-communicablediseases (such as cardiovascular diseases,diabetes, cancers) which – following thesuccess of treatments for communicablediseases – have become the leading globalcauses of death, particularly in developingcountries. 1 Of the 57 million deaths in2008, 63% were due to non-communicablediseases. They are the most frequent causesof death in most countries, except thosein Africa. Even here, the incidence of non-Number of deathsper 1,000 of populationSub-Saharan AfricaGlobal averageCentral AsiaMiddle East & N AfricaS & E Asia and OceaniaLatin AmericaEuropeNorth America12510075502510204520352025201520051 WHO (2011), ‘Global Status Report onNoncommunicable Diseases 2010’, available athttp://www.who.int/entity/nmh/publications/ncd_report_summary_en.pdfSource: UN (2012), ‘World Population Prospects: The 2012 Revision’Global Strategic Trends41

Part 1HealthHealthPart 1“Outdoor urban airpollution currentlycauses about 1.2million deathsevery year, andthis number islikely to increaseout to 2045.”170communicable diseases is rising rapidly. 2 Thisglobal rise is mainly attributable to populationgrowth; ageing; and economic transitionand the resulting changes in behavioural,occupational and environmental risk factors.Most non-communicable diseases are stronglyassociated, and causally linked, with fourparticular behaviours: tobacco use; physicalinactivity; unhealthy diet; and the harmful useof alcohol. 3Antimicrobial resistance among bacteria,viruses and fungi is increasing. If currenttrends continue, antimicrobial resistantpathogens could be prevalent by 2045 orsooner. This could make surgery and medicalprocedures such as chemotherapy (whichsuppresses the body’s immune systems) muchmore hazardous. Already, 25,000 people a yeardie in Europe due to antimicrobial resistance.The consequences of infected wounds onmilitary operations would also become moreserious if we returned to a ‘pre-antibiotic’ era.Moreover, research and development for newantimicrobials is very limited – no new classof antibiotics has been developed since 1987.However, alternatives to antibiotics are beingexamined, including using vaccines, metals 4and viral agents. 5Emerging infections and the risk ofpandemicsUp to 70% of recent emerging infections haveoriginated in animals and this will almostcertainly continue to be the case out to 2045.The time and location of new infections (orre-emergence of already known infections)cannot be accurately predicted, but placeswhere animals and humans interact are likelyto be particularly problematic. The likelihood2 Ibid.3 WHO (2011), op. cit.4 Lemire, J. A. et al. (2013), ‘Antimicrobial Activityof Metals: Mechanisms, Molecular Targets andApplications’, available at http://www.nature.com/nrmicro/journal/v11/n6/abs/nrmicro3028.html5 Mathur, M. D. et al. (2003), ‘Bacteriophage Therapy:an Alternative to Conventional Antibiotics’, availableat http://www.ncbi.nlm.nih.gov/pubmed/15266928;Borrell, B. (2012), ‘Could Bacteria-Fighting VirusesReplace Overused Antibiotics?’, available at http://www.scientificamerican.com/article.cfm?id=couldbacteria-fighting-viruses-replace-antibioticsof disease outbreak could, however, bemitigated by alertness to changing trendsin infectious diseases (in both humans andanimals), joined-up surveillance strategies andsharing of information across disciplines andborders.Climate changeClimate change is already affecting health,contributing to a decline in clean air, safedrinking water, sufficient food and secureshelter across the globe. Increased frequencyand intensity of extreme weather eventsare likely to affect physical health (such asheat-related illness) as well as mental healthproblems, 6 such as increased stress due tothe impact of flooding. 7 Higher temperaturesare also likely to raise the levels of ozone andother pollutants in the air that exacerbatecardiovascular and respiratory disease.Outdoor urban air pollution currently causesabout 1.2 million deaths every year, 8 andthis number is likely to increase out to 2045.Climatic conditions strongly affect waterbornediseases and diseases transmittedthrough insects, 9 snails or other cold-bloodedanimals. Lengthening transmission seasonsof important vector-borne diseases, such asdengue fever, could also alter their geographicrange. 10 The loss or contamination of freshwater is almost certain to lead to disease andcrop destruction – resulting in food shortages,poor nutrition and malnutrition. Longer-termchanges in weather patterns may lead tosignificant decreases in fertility of farmlandand water availability in some areas. 116 WHO (2013), ‘Climate Change and Health: FactsheetNo. 266’, available at http://www.who.int/mediacentre/factsheets/fs266/en/7 Health Protection Agency (2011), ‘The Effectsof Flooding on Mental Health’, available athttp://www.hpa.org.uk/webc/HPAwebFile/HPAweb_C/13171317674238 WHO (2013), op. cit.9 WHO (2014), ‘Climate Change and VectorborneDiseases’, available at http://www.wpro.who.int/mvp/climate_change/en/10 Costello et al. (2009), ‘Lancet and University CollegeLondon Institute for Global Health Commission’11 Met Office (2012), ‘Climate Impacts on Food Securityand Nutrition’, available at http://www.metoffice.gov.uk/climate-guide/climate-change/impacts/foodmillion children globally are overweight or obeseObesityWere obesity to be considered a disease, therewould arguably already be a global obesitypandemic. 12 By 2008, an estimated 1.5 billionadults globally were overweight and 500million adults were obese. An estimated 170million children globally were also classified asoverweight or obese. This includes more than25% of all children in some countries – morethan double the proportions from the start ofthe global rise in obesity in the 1970s. Unlikeother major causes of preventable death anddisability, such as tobacco use, injuries andinfectious diseases, there are no examplesof populations in which rising obesity hasbeen reversed by public health measures.The increases in obesity in adults are widelyprojected to continue to rise in the next 10 to20 years. However, some reports are emergingfrom countries such as Sweden, Switzerland,France and Australia which indicate thatoverweight and obesity prevalence in some12 Swinburn, B. A. et al. (2011), ‘The Global ObesityPandemic: Shaped by Global Drivers and LocalEnvironments’childhood age-groups may be flattening oreven decreasing, although overall occurrenceis still high. Very few countries have adequatemonitoring systems in place to track differentpopulations.AgeingIn 1950, there were 200 million people agedover 60 across the world – by 2050, thenumber is likely to be around two billion, 13nearly a quarter of the global population.Over the past century, advances in medicinehave contributed to people living longerand healthier lives. However, as we livelonger, different types of diseases, suchas dementia, are likely to become moreprevalent. Current estimates indicate 35.6million people worldwide are living withdementia. This is likely to double by 2030and more than triple by 2050 if no treatmentis found. Dementia is a costly condition:13 Aging Societies Working Group 2012 (2012), ‘CreatingSustainable Health and Care Systems in AgingSocieties’, available at http://www.ilcuk.org.uk/images/uploads/publication-pdfs/GHPS_Ageing_Societies_Report.pdf42 Global Strategic TrendsGlobal Strategic Trends43

Part 1HealthHealthPart 1Mental healthconditions are theleading cause ofhealthy life yearslost worldwide.“”socially, economically, and on the quality oflife of those afflicted by it. Nearly 60% of theburden of dementia is concentrated in lowandmiddle-income countries and this is likelyto increase in coming years. More modernmedical advances have also turned many lifethreateningconditions such as some cancersand heart disease into long-term conditions, asmore people survive acute episodes of illnessand live for many years with their conditions.This helps to explain why the extra years oflife that people have gained are not alwayshealthy or disability free.Mental healthThe global cost of mental health conditionsin 2010 was estimated at US$ 2.5 trillion. Thisis likely to more than double to US$ 6.0 trillionby 2030. 14 Of these costs, 65% are incurred bydeveloped countries and this is not expectedto change over the next 20 years. By disease,mental illness accounted for the largest shareof the global economic burden in 2010 andis likely to in 2030, just slightly more thancardiovascular diseases (followed by cancer,chronic respiratory disease and diabetes).Mental health conditions are the leadingcause of healthy life years lost worldwide andaccount for 37% of the healthy life years lostfrom non-communicable diseases. 15Prevention, monitoring and diagnosisImproved computing power, data collectionand processing are likely to make medicaldiagnosis quicker, cheaper and more accurate.Through implementing global standards,medical information such as patient recordscould be shared by clinicians in differentcountries. With a globalised medicalinformation network interlinked with millionsof sensors, advanced analytical systemscould identify, track and predict the spreadof disease, providing information so thatpreventative measures can be quickly putin place. Similarly, portable medical devicesthat can be linked to medical networks may14 World Economic Forum (2011), ‘The Global Burdenof NCDs’, available at http://www3.weforum.org/docs/WEF_Harvard_HE_GlobalEconomicBurdenNonCommunicableDiseases_2011.pdf15 Ibid.Alternative outcome:Drop in noncommunicablediseasesCurrent trends suggest that there islikely to be a rise in deaths from noncommunicablediseases out to 2045.However, this could be reduced orreversed if: large-scale lifestyle andbehavioural changes are made; accessto primary healthcare is improved; andresearch into preventative medicine orcures proves fruitful.mean that remotely operated (or automated)medical systems will allow larger numbers ofpatients to be treated and cared for in theirown homes.Drug and treatment deliveryIn 2001, the first camera pill was approvedby the US Federal Drug Administration fordiagnostic applications. Seven years later, a pillcapable of being electronically programmedto control medicine delivery according to apre-defined drug release profile was readyfor serial manufacturing, and being used asa research and development tool. 16 Currentadvances have produced a pill which canmonitor the patient, communicate withexternal diagnostic systems and respondto instruction for the targeted delivery ofdrugs within the digestive tract. The nextevolution will probably see further integrationof monitoring and drug delivery, withautomated diagnostic and response systems.As technology advances, the size of devices islikely to be reduced while retaining the samecapability. It seems probable, therefore, thatthere will be future medical devices smallenough to travel in the bloodstream.Personalised medicineThe field of pharmaco-genomics (the studyof how an individual’s genetic inheritanceaffects the body’s response to medicines)16 Phys.org (2008), ‘Philips’ Intelligent Pill TargetsDrug Development and Treatment for DigestiveTract Diseases’, available at http://phys.org/news145640874.htmlis in its infancy, but holds the promise thatmedicines might be tailor-made to a person’sgenetic makeup – making medicines moreeffective and safe. 17 New approaches arebeing developed, which should make precisemedicine formulations, treatment duration anddosing for individuals possible. 18 The abilityto determine the genetic basis for certaintoxic side effects would allow medicines to beprescribed to those who are not geneticallyat risk of such side effects, thereby pavingthe way for potentially lifesaving medicinesthat may otherwise be taken off the market. 19Whole genome sequencing is also likely toincrease the diagnosis rate for rare diseasesand stimulate new treatment development.Regenerative medicineActive bio-materials have the potentialto provide an alternative to surgery andtransplants by allowing in-situ repair andregeneration of damaged tissue. 20 Thesematerials could deliver drugs to particularsites or activate specific genes that stimulatelive tissue to regenerate. 21 Using stem cells(either separately or combined with activebiomaterials or DNA engineering to correctgenetic defects) 22 may lead to a new kind ofcell-based medicine that could be appliedto every system in the human body, offeringan alternative approach to treatment bymedicines. Possibilities include: growing entireorgans to replace damaged ones; providing17 National Institute of General Medical Sciences(2014), ‘Frequently Asked Questions aboutPharmacogenomics’, available at http://www.nigms.nih.gov/Research/SpecificAreas/PGRN/Background/Pages/pgrn_faq.aspx18 Government Office for Science (2011), ‘Customisationof Drugs through Biotechnology’, available at http://www.sigmascan.org/Live/Issue/ViewIssue/474/5/customisation-of-drugs-through-biotechnology/19 National Institute of General Medical Sciences, op.cit.20 Government Office for Science (2012), ‘ActiveBiomaterials for Regenerative Medicine’,available at http://www.sigmascan.org/Live/Issue/ViewIssue/478/5/active-biomaterials-forregenerative-medicine21 Ibid.22 Young, S. (2014), ‘Genome Surgery’ in MIT TechnologyReview, available at http://www.technologyreview.com/review/524451/genome-surgery/an endless supply of red blood cells fortransfusion; and treating severe burns withbio-materials. 23 Neural stem cells may also beused to treat spinal cord injury and replacedamaged neurons in the brain. 24 Novelmedical and surgical interventions such asthese will almost certainly improve casualties’survival and recovery rates.ProstheticsArtificial limbs that connect to the wearer’snervous system are already being developed.Neural receptors that are able to controlmechanical limbs are in use today, significantlyimproving the quality of life of those whopossess them. 25 Developments in this area arelikely to see refinement of control to provideShock:Rapid medicaladvancementsA game-changing medicalbreakthrough, similar in impact tothe discovery and mass-productionof antibiotics, could significantlyextend the human lifespan anddramatically reduce the incidence ofnon-communicable diseases such ascancers. Initially, this breakthroughwould probably only be availableto the very rich, exacerbating socialtensions. As the treatment becameaccessible to everyone, there would be asignificant impact on populations, as lifespan dramatically increased. Withoutmitigating action, there could be asubsequent unsustainable increase indemand for food, water and housing.23 Government Office for Science (2009), ‘Stem CellResearch and Hope for Cell-based Medicine’,available at http://www.sigmascan.org/Test/Issue/ViewIssue/473/4/stem-cell-research-and-hopes-forcell-based-medicine/24 Panchision, D. (2012), ‘Repairing the Nervous Systemwith Stem Cells’, available at http://stemcells.nih.gov/info/Regenerative_Medicine/pages/2006chapter3.aspx25 See, for example, the artificial hand developedby Touch Bionics http://www.touchbionics.com/products/active-prostheses/i-limb-ultra/44 Global Strategic TrendsGlobal Strategic Trends45

Part 1HealthHealthPart 1Some may elect to use genetic modification as a route to securing advantageunconscious response, greater dexterity andsensory feedback, as well as providing newways to connect the able-bodied to machinesand computers. 26 By 2045, there is a realprospect that artificial devices will providea superior level of performance than can beachieved naturally – for example, hearing-aidsthat can detect sounds beyond the range ofthe human ear.Fertility and reproductionThe recent development of a device in whicha mouse embryo was successfully implantedand able to grow for a short period of timein an artificially created environment, opensthe possibility of allowing a human embryoto develop outside the body. 27 Advances in26 Singh, A.K. (2012), ‘Robotics as a Future andEmerging Technology’27 University of Nottingham (2012), ‘Artificial ‘Womb’Unlocks Secrets of Early Embryo Development’,available at http://www.nottingham.ac.uk/news/pressreleases/2012/march/artificial-womb-unlockssecrets-of-early-embryo-development.aspxsimilar technology could provide a meansfor childless couples to have children andgive greater flexibility when choosing whento have children. The ability to transfer adeveloping foetus to an artificial environmentcould enable surgical procedures to beperformed that would otherwise have tofollow childbirth.The extent to which human attributes could(or should) be selected through manipulatingtheir embryonic genetic make-up is a highlycontroversial area. The first child to be bornafter his parents had the entire genomes ofa batch of their IVF embryos screened forabnormalities was reported in July 2013 inthe UK. 28 This was done with the intentionof selecting the healthiest for implantationbut there is evidence that pre-implantationgender selection is already widespread in28 Geddes, L. (2013), ‘First Baby Born After Full GeneticScreening of Embryos’, available at http://www.newscientist.com/article/dn23827-first-baby-bornafter-full-genetic-screening-of-embryos.htmlsome societies. 42% of US clinics whichoffered pre-implantation genetic diagnosiswere found in 2008 to allow gender selectionfor non-medical reasons. 29 There is clearlyalso scope for selecting, or engineering, othergenetically-determined characteristics. Preimplantationgenetic diagnosis and screeningor genetic modification is regulated in theUK but is currently commercially available inthe US for around 100 medical conditionsincluding some cancers. Some countries(and individuals) are likely to want to usetechniques like genetic modification togain a competitive advantage, while otherswill probably constrain their developmentfor ethical reasons. The extent to which itwill be possible to select, or influence thedevelopment of complex characteristics,such as athletic ability or intelligence, isunclear. However, it seems probable that, intime, technology will be available that willmake it possible for parents to select a rangeof attributes for their child – though notnecessarily by 2045.Health workersSince 2000, the number of doctors hasgrown in most OECD countries, both inabsolute number and on a per capita basis,with only a few exceptions (Estonia, Franceand Israel). However, in most countriesthere are twice as many specialist doctors as29 Baruch, S. et al. (2012), ‘Genetic Testing of Embryos:Practices and Perspectives of US In Vitro FertilizationClinics’, available at www.ncbi.nlm.nih.gov/pubmed/17628552generalists. 30 The slow growth or reducingnumber of generalists raises concerns aboutfuture access to primary care. There are alsoconcerns in many countries about shortagesof nurses. The demand for nurses continues toincrease, with the ageing of the ‘baby-boom’generation leading to greater numbers ofretired people requiring nursing. There arealso growing concerns about a severe globalshortage in the supply of homeworkers.Trends indicate that, without successful plansfor expanding this workforce, the crisis couldincrease in the future. Immigrants are seenas a plausible answer to this problem, at leastfor developed countries. There are significantflows of care workers from low- and middleincomecountries to high-income countrieswithin Europe.30 OECD (2013), ‘Health at a Glance 2013: OECDIndicators’, available at http://dx.doi.org/10.1787/health_glance-2013-enDefence and security implications■■Antimicrobial-resistant infection could significantly increase medical risk on militaryoperations.■■Novel medical and surgical interventions will almost certainly improve casualties’survival, and recovery rates.■■Advances that allow patients to interact with their prosthetics and other aids arelikely to lead to new ways to connect the able-bodied to machines and computers.■■Some countries (and individuals) are likely to use advanced medical techniques,such as genetic modification, to gain a competitive advantage. Others will probablyconstrain their development for ethical reasons.The extent towhich it will bepossible to select,or influence thedevelopmentof complexcharacteristicssuch as athleticability orintelligence isunclear.“”46 Global Strategic TrendsGlobal Strategic Trends47

Part 1TransportNew materials, manufacturing techniques and power systems, as well as advancesin information technology, are likely to open up new opportunities for automatedtransport and generate step-changes in speed and efficiency. Driverless transport islikely to be widespread by 2045, providing greater independence for the elderly andimpaired. Unmanned systems could play a key role in the mass delivery of goods. Newdevelopments in super-sonic flight could make sub-orbital space transport a commercialreality in the next 30 years.Drivers for changeTransport has not changed fundamentallysince high-speed rail travel, jet-powered flightand oceangoing container transporters wereintroduced half a century ago. The dominanceof oil as a source of energy is argued by someto have been the primary constraining factorlimiting developing alternative modes oftransportation. 1 However, new materials,manufacturing techniques and power systemsmay provide the catalyst for more significantchange.Personal transportMore efficient engines and the possibleadoption of fuel cells could make transportsystems more efficient and probably cheaper. 2Increasing automation could enable a fargreater density of traffic to move at higherspeeds and provide automatic routing toavoid congestion and hazards. Driverlesstransport is likely to be prevalent by 2045,providing bespoke transport solutions formany who currently find it difficult to access acar, such as the elderly, children, and the visually,physically, and mentally impaired. Driverlesstransport is likely to be safer and more reliable– driverless vehicles would not be affected byhuman failings such as road rage, drink-drivingor falling asleep at the wheel.Mass transportFuture mass transport solutions are likely toprovide faster and more closely-integratedtransport using a variety of road, rail, sea andair systems. Future improvements are framedaround the concept of ‘seamless transport’,the idea that journeys could be taken withoutinterruption. This would reduce waiting ortravel time and there could be an ability todo other tasks while travelling. 3 To achievethis, there is likely to be closer integrationand coordination across infrastructure andtransport providers, as well as adoptingautomated systems. Unmanned systemscould play a much greater role in the massdelivery of goods. For example, an urgent,high-value product (such as blood of a raretype), could be quickly delivered. WhileAmazon’s recently proposed remotelypiloted aerial delivery system may seem likeDriverlesstransport is likelyto be prevalent by2045, providingbespoke transportsolutions for many.“”1 Rodrigue, Jean-Paul (2013), ‘The Geography ofTransport Systems’2 Scott, C. (2014), ‘Hydrogen Vehicles, LongPromised, Finally Hit the Road’, available at http://singularityhub.com/2014/01/08/hydrogen-vehicleslong-promised-finally-hit-the-road/3 OECD (2012), ‘International Transport Forum:Summary of Findings – Consultation withInternational Organisations On SeamlessTransport’, available at http://www.internationaltransportforum.org/2013/pdf/Findings_Consultation2012.pdfGlobal Strategic Trends49

Part 1TransportTransportPart 1If fewer inventory items were being routinelytransported, the resources needed fortransportation could also decrease.Technologies such as additive manufacturing(‘3-D printing’) could allow spares and otheritems to be manufactured where needed,further reducing the need for stock holdings.Additive manufacturing could reduce theamount of certain manufactured goods thatare transported globally. However, the overallvolume of material moved internationallyis likely to increase due to the growingconsumer class. New materials are also likelyto increase the performance of vehicles,reducing the energy required for a givenjourney. Lighter-than-air-vehicles, for example,could significantly reduce the cost and timeof transporting material over difficult terrain,such as regions with a limited road network.However, the effects of climate change arelikely to have an adverse affect on most formsof transport. Warming in the Arctic is likely tolead to the melting of permafrost. In turn, thiswill probably adversely affect land transport,as ice roads turn to marsh. However, newArctic shipping routes are likely to open upduring the summer months.Aircraft will be able to travel at many times the speed of soundscience-fiction, the European Commissionand US Federal Aviation Authority haveboth published remotely piloted air systemsairspace integration roadmaps. We may seemany more such aircraft, both large and small,in future skies, meaning that aircraft providingpassenger travel may have to compete forspace, particularly over urban areas. However,greater reliance on automated technologiescould provide scope for terrorists and criminalsto disrupt the transport system through cyberattacks.Super-sonic flightWith the final flight of the Concorde in 2003,an era of super-sonic passenger flight ended,but developments in design and enginetechnology have continued. New conceptssuch as variable-cycle engines (an engine thatis designed to operate efficiently under mixedflight conditions, such as subsonic, transonicand supersonic) and recent successes withother reaction engines, offer the potentialfor very high speed travel at many timesthe speed of sound. Striving for increasedrange and fuel efficiency, combinationpower sources are likely to see a blend ofconventional hydrocarbon-fuelled andelectrically-powered flight – advances whichare also likely to improve stealth capabilitiessuited to military applications. The majorglobal manufacturers have announced theirintent to develop aircraft which deliver theseobjectives by around 2030. In the 15 yearsfollowing, developments to further improveefficiency, capacity and speed are near certainto continue, with commercial sub-orbital flightbetween two destinations likely by 2045 orsooner.Transportation of materialOn current trends, by 2045 the tonnage ofmaterial moved by sea is likely to have doubled,as are the number of international flights.This could lead to increasingly congestedshipping lanes and air corridors, althoughgreater connectivity and computing-powermay enable more efficient traffic management.However, international governance will almostcertainly be required if this is to happensuccessfully. Increased computing power andconnectivity could also increase efficiency –for example, routes could be automaticallyoptimised to take into account traffic andweather forecasts. This could reduce therisk of loss and damage when transportingcommodities such as perishable foods.Technology is also likely to improve inventorymanagement, by automatically monitoringconsumption levels. This could allow spares tobe safely dispatched in sufficient time – largeamounts of expensive stock would no longerhave to be held in readiness for prolongedperiods.Global passenger and freight travel growth201055 trillion passenger and tonnes per km2045106 trillion passenger and tonnes per km19.315.521.013.38.17.7Globaltravel growthVehicle type%12.919.832.8Source: Dulac, J. (2013), ‘Global Land Transport Infrastructure Requirements’4.45.439.82010204550 Global Strategic TrendsGlobal Strategic Trends51

Part 1TransportTransportPart 1Defence and security implications■■The development of driverless vehicles could provide benefits such as safer andmore reliable transport, reducing the need to put drivers and pilots, particularly oftransport vehicles, into harm’s way.■■Greater reliance on automated technologies could provide scope for terrorists andcriminals to disrupt the transport system through cyber attacks.■■Advances in propulsion and design are likely to provide faster and more efficienttransport.■■Developments such as additive manufacturing, automated inventory managementand remotely piloted and unmanned transport systems are likely to bring significantefficiencies to logistics but also increase its technical complexity.The tonnage of material moved by sea is likely to double by 2045 Shanghai container terminalScenario:Maritime choke pointBy 2045, sea lanes are likely to continue toplay a major role in the global economy,despite probable advances in additivemanufacturing and improvementsto air and land based transport. Oncurrent forecasts, the tonnage of goodstransported by sea is likely to doublewithin the next 30 years. Anticipatedgrowth in computing power, situationalawareness and automation could meanthat the shipping of goods will be quicker,cheaper and more reliable. Shipping isalso likely to be safer than ever before,driven by more accurate long-rangeweather forecasts and improved shipconstruction and operating procedures.As such, a significant amount of theworld’s economy would depend uponmaritime trade - some countries couldface major financial crises if sea transportbecame significantly disrupted.If tensions rose between countries near toa vital maritime choke point, particularlyif threats to block the sea lane were made,the international community wouldalmost certainly act. Countries that arelikely to be highly internationally activeby 2045 (such as Brazil, China and the US)could be expected to work together to tryand find a resolution. Should diplomaticefforts fail to reduce tensions, theinternational community could approvethe deployment of an international navaltask force to ensure that key sea laneswere kept open. Land-based internationalobservers could be deployed to thosecountries bordering the choke point andair, cyber and space surveillance of theregion is likely to be intensified.52 Global Strategic TrendsGlobal Strategic Trends53

Part 1InformationRevolutionary advances in how we acquire, store and analyse information, togetherwith dramatic increases in computer processing power, are likely to give us the abilityto predict accurately a wide range of phenomena, from crime hot-spots to the effectsof climate change. As everyday objects are increasingly connected to the Internet, thisvast network of sensors is likely to gather data on more aspects of our lives and theenvironment, making it hard for anyone to go ‘off the grid’.Computational powerIn 2000, the highest performing processorsachieved levels of computation equivalent tothat of a spider – today they are close to being aspowerful as the brain of a mouse. If processingpower continues to grow at its current rate(doubling every three years), by 2023 somecomputers could have the processing powerof the human brain and by 2045 they couldbe 100,000 times more powerful. 1 If quantumcomputing becomes a reality, even theseextraordinary figures could be exceeded.The idea of quantum computing starts fromthe premise that quantum physics generatesfundamentally novel ways of processinginformation, although due to the extraordinarilycomplex nature of this immature technology,there is little consensus on what actuallyconstitutes a quantum computer. Initialversions of such machines are limited toperforming highly specialised processes andlack the utility and flexibility of conventionalcomputers. It is unclear when quantummachines with the usefulness of existingcomputers will be produced, although it is likelythat this will be achieved close to or by 2045. 21 Time Magazine (2011), ‘The Year Man BecomesImmortal’, available at http://content.time.com/time/interactive/0,31813,2048601,00.html2 DCDC research interview with Dr Simon Benjamin,Oxford University, 14 October 2013.If quantum computing becomes a reality, akey benefit could be a revolution in cybersecurity through harnessing quantumcryptography, to guarantee the security ofa message while detecting eavesdropping.Traditional methods of securing data rely onencryption and decryption keys. Once a keyis compromised, the encrypted informationis accessible to all who have the key.Drawing on the fundamental properties ofquantum mechanics, the secure distributionof encryption keys can be assured, as canthe ability to safeguard the contents ofencrypted messages. In both cases, theact of illicit ‘listening-in’ to the transmissionchanges its quantum properties rendering itunreadable. The message is protected whileits interception is flagged. However, becauseit is in such an early stage of development, itis difficult to make any firm predictions aboutwhen the advantages of quantum computingare likely to be realised. Indeed, someexperts believe that quantum computingmay make all codes ‘crackable’ and genuineencryption impossible, as theoretically aquantum computer could try every possiblecombination of codes simultaneously tounlock a system. If this is the case, armed andsecurity forces may have to physically separatetheir computer systems from the Internet,posing huge problems for networking andefficiency. In turn, this may result in a greaternumber of self-contained networks, making aSome expertsbelieve thatquantumcomputingmay make allcodes ‘crackable’and genuineencryptionimpossible.“”Global Strategic Trends55

Part 1InformationInformationPart 1Growth in volume of digitally stored informationExabytes of data (Exabyte is a billion gigabytes)13220058,2512015213,381Source: Analysis by DCDC based on work by Gantz, J. and Reinsel, D. (2011) ‘Extracting Value from Chaos’ and EMC 2 (2014) ‘The Digital Universe of Opportunities: Rich Data and theIncreasing Value of the Internet of Things’2025small contribution to slowing the current trendof greater Internet use.Instantaneous communication opens thepossibility of creating a network of quantumcomputers, which – regardless of their location– would be able to operate as a single system.This could generate significant advances inforecasting and modelling ability, enablingnear real-time representation of complexsystems, such as population dynamics,economic models and weather patterns.‘Big Data’In 2000, 25% of the world’s information wasstored digitally: today it is more than 98%. Onthis trajectory, by 2045 there will be 20,000times more digital information than there istoday. The ability to collect and analyse thisgrowing volume of information has beentermed ‘Big Data’. Such a large amount ofdata generates yet more information whenappropriately analysed, allowing us to identifypatterns which may help to counter thespread of disease, combat crime and evenpredict social and behavioural patterns.Access to information has until now only letus understand the past, leaving it to people6,172,1272035178,531,6572045to extrapolate and imagine what this maymean for the future. Big Data is increasinglyallowing us to predict future behavioursaccurately. Complex data sets which containcrime records, meteorological data, andbehavioural heuristics are starting to be usedto map probable crime locations 3 – and inthe future they are likely to deliver far moresophisticated forecasting tools. The advancesin computation power mentioned previouslyare likely to enable further analytical processesdevelopment. This could provide the ability tomodel very large and complex systems moreaccurately to make predictions in areas such asclimate change and population movements.While Big Data could become important inhelping solve some complex global issues,businesses may also become increasinglydependent on it – we are already seeingBig Data being used to predict consumerbehaviours. Accountability and situationalawareness are likely to increase too, as moreaspects of life are quantified and analysed.3 Friend, Z. (2013), ‘Predictive Policing: UsingTechnology to Reduce Crime’, available at http://www.fbi.gov/stats-services/publications/lawenforcement-bulletin/2013/April/predictivepolicing-using-technology-to-reduce-crimeAlongside privacy issues, it is also likely tobecome harder to go ‘off-line’. Those who domay even find that they have made themselvesmore conspicuous by their absence.The ‘Internet of Things’The number of devices linked to the Internetis increasing rapidly, with everything frommobile phones to cars and even fridgeshaving an Internet connection. This ‘Internetof Things’ is already a reality, with around 20billion devices already connected, 4 rising to anestimated 40 billion by 2020. If that trajectorywere to continue, there would be around 100billion devices connected to the internet by2045. However, increasing availability (notleast because they are becoming cheaperand smaller) is likely to lead to a sharp increasein the number of connected devices, so thatby 2045 there could be around 50 trilliondevices connected to the internet. 5 Thesedevices are likely to be producing and sharingvast amounts of data and information whileconnected to each other and to additionalsystems. Such a large number of devicesconnected across the world will almostcertainly require a significant increase incommunications infrastructure. The costs andtechnical challenges involved are likely to meanthat there are some global disparities in access,at least in the short to medium term.The number of Internet users is almostcertain to rise, with Internet penetration and4 EMC 2 (2014), ‘The Digital Universe of Opportunities:Rich Data and the Increasing Value of the Internetof Things’, available at http://www.emc.com/leadership/digital-universe/2014iview/internet-ofthings.htm5 Based on exponential growth forecast.Number of connected devicesThe number of connected devices has increased by 4,000%between 2003 and today. The new IPv6 internet protocol allows for340,282,366,920,938,463,463,374,607,431,768,211,456 connectionswhich is believed to be sufficient for the foreseeable future.200320102040201320152020Connecteddevices(Billions)Perperson0.5 0.0812.5 1.8120 2.7925 3.4140 5.1895+ 10.22Source: Analysis by DCDC based onwork by Evans, D. (2011) ‘The Internetof Things’, EMC2 Digital Universe withResearch & Analysis by IDC and ABIResearch (2013) ‘More Than 30 BillionDevices’.56 Global Strategic Trends Global Strategic Trends57

Part 1InformationInformationPart 1More sensors will intensify levels of surveillance“The informationadvantagecurrently enjoyedby countries’defence andsecurity forcescould be erodedor even reversed.”connection speeds continuing to improvein developed economies, facilitating remoteworking and further entrenching globalisation.Internet access in the Middle East and NorthAfrica region grew by more than 2,500%between 2000 and 2012, with 40% of theworld's population now online. As mobiletechnologies become cheaper, it is likely thatsub-Saharan Africa and developing parts of Asiawill see similar adoption rates. A vast increase inInternet access in the developing world couldprovide significant competitive advantages,as access to markets is improved and theinformation advantage of the developedworld is equalised or even exceeded.As more of our work and social activitiesdepend on a richly interconnectedinformation and communications network(which may, in places, be extremely vulnerableto attack) there could be more opportunitiesfor criminals and terrorists to have a greaterimpact on our day-to-day lives. Cyber bullyingcould also have a greater impact on ourlives, as the online environment becomesincreasingly socially important. Electroniccommunications can facilitate harassment,with online users writing comments that theywould be unlikely to say in person. Anonymitycould also lead to a greater propensity formalicious gossip, witch-hunts and hatecampaigns,potentially leading to rapidescalation of issues. Similarly, electronic mediaallows small, technologically-savvy interestgroups to have a disproportionately loudvoice. This could further the rights of underrepresentedminorities but may also lead topolarization as extreme views are exchangedand reinforced in forums where dissentingvoices are absent.People in many parts of the world are used tohaving mobile phones and computers withInternet connections, but by 2045, it is likelythat numerous objects will contain some kindof sensor. There will probably be ubiquitous,tiny and cheap monitors reporting on thequality of drinking water, detecting structuraldamage in buildings and vehicles, and sensingand measuring pollution in the environment.Machinery and consumer products arelikely to be monitored for the state of theircomponents and materials, enabling themto report when repair or replacement isnecessary. With progress in nanotechnology,vast networks of security sensors couldprovide continuous monitoring of criticalinfrastructure (such as buildings, bridges andpipelines), 6 detecting chemical and biologicalattacks. 7 The fusion of data from a range ofsensors, combined with inputs from publicsources such as social networking sites, willprobably improve profiling and trackingcapabilities. Stealth vehicles are likely to find itmore difficult to remain hidden and the abilityto prosecute covert operations, particularlyin urban environments, is likely to becomemore technically challenging. As the numberof connected public sensors increases, theinformation advantage currently enjoyed bycountries’ defence and security forces couldbe eroded or even reversed as adversaries,including non-state actors, attain similar levelsof situational awareness.The uptake of social networking sites andeven the use of supermarket loyalty cardsshows that – for comparatively small rewards– people are readily persuaded to recordtheir movements, financial transactions andbuying habits. This behaviour is highly likelyto continue out to 2045. National authorities6 Foresight Horizon Scanning Centre Sigma Scan2.0 (2009), ‘Nanosensors for Innovative SensingApplications’, available at http://www.sigmascan.org/Live/Issue/ViewIssue/527/5/nanosensors-forinnovative-sensing-applications/7 Ibid.are almost certain to seek to use this potentialmine of information – a development thatis likely to raise major privacy concerns. 8Marketing campaigns are likely to portray thebenefits of smart technology and machineto-machineinteraction, but the increasedsurveillance capability may make others fearan increase of state control. In turn, this islikely to drive the growth of the ‘hactivist’community characterised by groups suchas Anonymous. 9 However, it is likely to beincreasingly difficult to avoid the sensor8 Defence Science and Technology Laboratory (2012),‘Mass Surveillance’9 Kelly, B. (2012), ‘Investing in a CentralizedCybersecurity Infrastructure’network of a future ‘Internet of Things’, sinceeven remote environments are likely to containsome connected devices. A desire not tobe part of the ‘Internet of Things’ may createnew markets, for example a holiday resortadvertising its facilities as literally ‘getting awayfrom it all’ with a promise that you will becompletely ‘off-grid’. This could also lead to adrive to try to create spaces, both physical andvirtual, which are unseen or ungoverned bystate authorities around the world. 1010 As predicted by Social Identity Theory. See Tajfel, H.and Turner, J. C. (1986), ‘The Social Identity Theory ofIntergroup Behaviour’Defence and security implications■■Quantum computing could make all codes ‘crackable’ and genuine encryptionimpossible, as a quantum computer could theoretically try every possiblecombination of codes simultaneously to unlock a system. If this is the case, armedand security forces may have to physically separate their computer systems fromthe Internet, posing huge problems for networking and efficiency. Alternativelyquantum cryptography could guarantee security of a message.■■Better gathering and analysis of data could vastly improve our understanding ofphysical and virtual environments. Predicting crime hotspots could enable moretargeted deployment of police officers. Greater awareness of deficits and surplusesmay make logistics more efficient. Similarly, detailed and rapid analysis of socialnetworks could provide a deeper understanding of the local population, its cultureand the environment.■■As more of our work and social activities depend on interconnected informationand communications networks – which may, in places, be extremely vulnerable toattack – there could be more opportunities for criminals and terrorists to have agreater impact on our day-to-day lives. Similarly the ability to keep secrets is likelyto become increasingly difficult.■■Connectivity of assets with strategic importance (such as those relating to nationalinfrastructure) is likely to increase. Although this is likely to lead to gains inefficiency, it may also make such assets more vulnerable.■■An increasing number of devices capable of collecting sensor data could intensifylevels of surveillance. Stealth vehicles may find it more difficult to remain hiddenand the ability to prosecute covert operations, especially in urban environments, islikely to become more technically challenging. This is particularly significant giventhe probable increase in the size of urban areas, along with the growing use ofsurveillance to prevent crime.■■As the number of connected ‘public’ sensors increases, the information advantagecurrently enjoyed by countries’ defence and security forces could be eroded or evenreversed as adversaries, including non-state actors, attain similar levels of situationalawareness.58 Global Strategic TrendsGlobal Strategic Trends59

Part 1EducationIncreasing computing power, growing access to the Internet and ‘Big Data’ are likely tohave a transformative effect on education, with an increasing blurring between onlineand offline learning. Education levels will almost certainly continue to rise across theglobe and for both sexes. At the same time, educational institutions could face a seriesof major challenges, including facilitating smoother transitions from education to workand encouraging lifelong learning to ensure the workforce can adapt to a changing jobmarket. These pressures may force educational institutions to provide more informal,distance and personalised learning. There is likely to be a growing emphasis on thetransferability and constant upgrading of qualifications, as well as a shift towards morepersonalised forms of assessment that use a range of technologies to trace the paths ofindividual learners.Technology’s impact on educationand skillsSignificantly increased computing powerseems likely to be available on demand atgreatly reduced cost over the next threedecades. Teachers are likely to have accessto vast quantities of data, and could have thefacility to command the flow of informationand learning in their classrooms by controllingthe exercises, simulations and games, inwhich their students participate, at the touchof a button. Books will almost certainly bemore widely available online – as e-booktechnologies evolve, they seem likely to offernew ways of interacting with shared, adaptive,dynamic and multimedia publications. As ‘BigData’ changes our understanding of the world,developing data analysis and computing skillsare likely to become increasingly central. Forexample, social science students are likely toincreasingly examine social phenomena usingcomputer models and data rather than justfieldwork. As school teaching becomes moreonline and software-based in nature, existingeducational inequalities could be exacerbated,as not everyone is likely to have the samelevel of digital access. 1 However, it is likelythat online learning will continue to makeeducation more accessible, particularly forpeople who are geographically isolated.Education courses, particularly at universitylevel, are likely to depend increasingly on theInternet, with some delivered exclusively, oralmost exclusively, online. Digitally-deliverededucation could also provide increasingpersonalisation, with students able tocustomise when, where and how they learn.While face-to-face teaching in the classroomis unlikely to disappear, it is likely to becomeincreasingly focussed on simulation, interactivegames and debate rather than traditionalclassroom-based learning. Teachers’ primaryroles are likely to become that of learningadviser, helping students navigate theirown education rather than providing it allthemselves.1 Facer, K. (2011), ‘Learning Futures: Education,Technology and Social Change’; Sharples, M. et al.(2012), ‘Innovating Pedagogy 2012’; Stoyanov, S. etal. (2010), ‘Mapping Major Changes to Education andTraining in 2025’Global Strategic Trends61

Part 1EducationEducationPart 1Blending formal with informal teachingThe capacity to manage and mobilisesocial networks will almost certainly be anincreasingly important skill-set to possess,with growing demands on educators andemployers to build this capacity. Researchshows that people learn best with, andfrom, others. Therefore, as social networkingevolves, there may be more collaborativelearning, with online networks offering realtimediscussion and virtual classrooms.The ‘Internet of Things’ is likely to allow datafrom the classroom to be used for continuousperformance management. Networkeddevices are likely to combine with cheapdata storage to open up new accountability,scrutiny and reporting practices. New toolscould permit students to share commentsabout their education in public forums,opening up new ways of holding teachersto account. Students and teachers may feelincreasingly scrutinised, with some positivebenefits – such as detailed, sophisticated andreal-time feedback on performance – andmany negative, such as a decline in socialskills. 2 Already sites like ‘RateMyTeachers’are beginning to challenge old powerrelationships and underpin new ones, andthey are likely to become even more widelyused in new and sophisticated ways. 3Restructuring traditional educationsystemsAs research reveals more about thepsychology of education, so learning is likelyto increasingly be packaged in a way thatblends the formal with the informal. Linemanagers in the workplace may take onincreasing responsibilities as ‘learning advisers’for their staff and, as workplace learningand development becomes more ongoing,social and informal, organisations are likely torun extensive programmes of coaching andmentoring as a core element of their learningand development programme. As informaland social learning grow in importance,individuals may increasingly look for ways forthis learning to be recognised or accredited todemonstrate their value in the marketplace. 4Educational institutions may be increasinglyorganised (and classes brought together) onthe basis of common knowledge, skills andpreferred learning and teaching styles ratherthan (just) age. Educational programmesare also likely to include elements dedicatedto developing students’ skills in learning.Research highlighting the importance ofcreativity in underpinning academic andbusiness success may stimulate a new focuson developing students’ creative skills atschool and university. Cognitive testing mayhave developed to such an extent that itsresults replace qualifications and experienceassessment as the major element in therecruitment process. It is possible that, by2045, hiring decisions will become (almost)entirely based on cognitive tests rather thanqualification levels. 52 Facer, op. cit.; Cliff, D. et al. (2008), ‘Future Issues inSocio-Technical Change for UK Education’3 Facer, op. cit; Castells, M. (2009), ‘CommunicationPower’; Taylor, E. and Sheehan, T. (2010),‘Perspectives on the Future of Learning’4 Ibid.5 Facer, op. cit.; Fairhurst, P. (2010), ‘Learning andDevelopment: Perspectives on the Future’As the future workforce, at least in developedcountries, is recruited increasingly from anolder population, so the need for an improvedlifelong training and education system couldincrease. Educational providers may aimshort and online courses at lifelong learners,and sabbaticals could become increasinglypopular as a means of refreshing one’slearning in a fast-paced world. Educationalentrepreneurs are likely to recognise thatthere is a huge market among middle-agedpeople wanting to upgrade their knowledgeand older people wanting to pursue secondcareers. Simultaneously, as the world’spopulation ages, and as education becomesmore informal and less institutionally based,so the family home could become a morecritical educational space. As opportunitiesfor education increasingly occur at home,away from the classroom, so grandparentsand great-grandparents could be more crucialto its delivery. As older people mix work andcare later in life, they may become partnersin learning alongside their own childrenand grandchildren. It is already commonto find grandchildren acting as teachers forgrandparents to introduce them to digitaltechnology, and other precedents can befound in the roles played by younger childrenin citizenship education and adjusting olderfamily members following migration. Asthe twenty-first century nears its mid-point,educational institutions may become crossgenerationalhubs of learning, with olderfamily members actively involved in passingon their learning to the younger generationsand, in turn, picking up new ideas and skillsfrom them. 6The global education marketplaceInstitutions in Europe, Northern America andAustralia may increasingly run their highestquality programmes from campuses indeveloping countries, as well as introducingmore distance-learning courses. As morepeople learn outside their country of origin,and migrate to pursue careers, it is likelythat there will be a drive to standardisequalifications at the global level. Even if acommon global curriculum is not universally6 Facer, op. cit.; Fairhurst, op. cit.pursued at secondary school level – as anextension and expansion of the InternationalBaccalaureate, for example – it is probablethat qualifications will be defined as partof a common global system. 7 Across thedeveloped world, many schools are likely tobe increasingly run (or at least sponsored)by powerful corporate organisations or byparent groups. There may be much-reducedgovernment oversight and involvement.Educational inequalitiesGlobal gender gaps at the primary schoollevel are likely to have largely disappearedby 2045, 8 although girls are likely to remainunder-educated in many of the world’s mostintractably poor countries. This trend is likelyto be strongly evident in those countrieswhere cultural and religious factors (suchas some interpretations of Islam) constrainwomen from taking part in education andthe economy. Access to education could alsobecome more polarised, depending on wealthor ability to pay. Students may be separatedinto vocational and academic streams froma young age. As corporate involvement ineducation grows it may encourage children’sentry to one or other stream at even earlierages, as corporations and organisations(including the armed forces) seek to identify– and train accordingly – the strongest futureperformers. 9The average level of educational attainment ishighly likely to rise, shrinking the gap betweendeveloping and more developed countries.Countries like Bangladesh, India, Pakistan andNigeria are projected to raise the average yearsof schooling of their workforce by about threeyears over the next three decades. However,the average number of years spent in full-timeeducation is likely to remain at current levels inwell-educated workforces. In more advanceddeveloping countries, women’s participationin formal education is likely to increase7 Stoyanov, S. et al. (2010), ‘Ten-Year Forecast’8 Beck, B. (2012), ‘Women’s World’; Dickson, J. R. etal. (2010), ‘Patterns of Potential Human Progress’;Dorling, D. (2013), ‘Population 10 Billion’9 Facer op. cit.; Watson, R. (2010), ‘Future Files: a BriefHistory of the Next 50 Years’; Benn, M. (2011), ‘SchoolWars: the Battle for Britain’s Education’As educationbecomes moreinformal and lessinstitutionallybased, so thefamily homecould becomea more criticaleducational space.“”62 Global Strategic TrendsGlobal Strategic Trends63

Part 1EducationPart 1considerably. By 2045, it is possible that amajority of the world’s children will have had auniversity or higher-level education.Machines, jobs and educationMachines are likely to take over certainjobs from people, with developments inartificial intelligence ultimately meaning thateducation could focus on those (few) areas ofhuman thought and activity that machinesare unable to deliver efficiently. This meansthat education may play an important role inenhancing people’s ability to develop newideas, to interact empathetically with otherpeople and to take responsibility – all thingsthat it is difficult to envisage machines doingby 2045. 10Gender gaps within schools are likely to have largely disappeared by 204510 Facer, op. cit.; Cliff et al., op. cit.; Watson, op. cit.Defence and security implications■■Global education levels are likely to increase, but educational inequalities willprobably persist, entrenching social discontentment and allowing youth disaffectionto continue.■■In the new education and training mix facilitated by employers, online and virtualblended learning are likely to predominate, though formal face-to-face learning isunlikely to die out completely.■ ■ Some countries may begin to educate and train children assessed as having thepotential to succeed in specific careers (including in the armed forces) from a veryyoung age.64 Global Strategic TrendsGlobal Strategic Trends65

Part 1Automation and workRobots or ‘unmanned systems’ – machines capable of carrying out complex taskswithout directly involving a human operator – are likely to be as ubiquitous in 2045 ascomputers are today. Unmanned systems are increasingly likely to replace people in theworkplace, carrying out tasks with increased effectiveness and efficiency, while reducingrisk to humans. This could ultimately lead to mass unemployment and social unrest.As robots become more lifelike, perhaps capable of appearing to express emotion,interactions with people are likely to become more sophisticated. The increasedcapability of robots is likely to change the face of warfare, with the possibility thatsome countries may replace potentially large numbers of soldiers, sailors and airmenwith robots by 2045. However, military decision-making is likely to remain the remit ofhumans for ethical reasons, at least in western countries. Others may not be so willingto make the same trade-offs between speed and accountability.The proportion of older workers in the global labour force is likely to increase out to2045, with a possible corresponding decrease in opportunities for younger people.Flexible working practices are likely to become more widespread, with people employedon shorter-term contracts and a growth in working remotely. Workers will probablyhave less predictable income and increasing economic insecurity. By 2045, there is likelyto be greater equality between men and women in the jobs market, particularly in thedeveloped countries. In part, this may be driven by a global shift away from manuallabour, towards a more knowledge-based economy.Robots in the workplaceRobots are increasingly likely to replacepeople at work, which could ultimately leadto social unrest. Robots are likely to continueto carry out tasks deemed too dirty, dull ordangerous for people, and will probably beused more extensively in such roles, as wellas for more highly-skilled jobs. As robotsbecome increasingly sophisticated, they arelikely to perform tasks which would otherwiseput people at risk, such as minefield clearance.By 2045, it is even possible that robots willtake on combat roles. Non-military jobs suchas fire-fighting or construction are also likelyto be carried out by machines in the future.In the same way that the widespread use ofcomputers has made some professions (suchas typists) almost redundant, we can expectrobot development to remove a number oftypes of job that are common today. 1 Whileadvancements in robotics may create newjobs that we have not yet envisaged (justas web designers were not imagined in the1980s), adapting workers to a new set of rolesmay take considerable time, causing problemsin the interim. While it is possible thatgovernments will legislate to try to preventthe employment of robots in some areas,to safeguard human jobs, it is not clear howeffective this would be in the face of marketforces. It is also unclear whether new jobs willbe created at a rate sufficient to replace thosethat are lost. As some automated processesbecome cheaper than even the lowest-paid1 Lin, P., Abney, K. and Bekey, G. (2011), ‘Robot Ethics:Mapping the Issues for a Mechanized World’By 2045, it is evenpossible thatrobots will take oncombat roles.“”Global Strategic Trends67

Part 1Automation and workAutomation and workPart 1Developmentsin roboticsmay meanthat robots arealmost physicallyindistinguishablefrom humanbeings.“”human workers, it is possible that there willbe a rebalancing of global manufacturingeconomies.Additive manufacturingGlobal manufacturing is currently evolvingfrom a highly labour-intensive processtowards more information technologybasedprocesses. 2 This is, in places, drivinga trend towards manufacturing processesrelocating closer to their consumers, to avoidlong supply chains. This could affect thebalance of manufacturing in the developedand developing world, with less need forconventional manufacturing jobs in manyregions. 3 Automation already facilitatesthis trend, and we expect to see additivemanufacturing (more commonly knownas ‘3-D printing’) also making a significantcontribution. Additive manufacturing hasthe potential to transform the manufacturingindustry, with performance and costeffectivenessrapidly improving to the pointwhere large-scale adoption for manufacturersis plausible well within the 2045 timeframe.3-D printing enables on-demand production,allowing items to be created quickly when anorder is placed, rather than large amounts ofcostly stock having to be held in readiness forprolonged periods. With more decentralisedproduction, products could be designed andprinted for local consumption, potentiallyreducing reliance on expensive importsand requiring less industrial infrastructurethan conventional manufacturing. It is alsolikely that personal use of 3-D printers willincrease rapidly, allowing for unprecedentedlevels of mass customisation and eventhe ‘democratisation’ of manufacturing,as consumers and entrepreneurs begin toprint their own products. 4 By 2045, additivemanufacturing systems could be a commonfeature in the home and be capable ofproducing a wide range of outputs – food,clothing, and even complex devices withmechanical and electronic components.2 RAHS Vanguard (2013), ‘Rising Robotics and the ThirdIndustrial Revolution’3 National Intelligence Council (2012), ‘Global Trends2030: Alternative Worlds’4 Ibid.Additive manufacturing is almost certainto enable the production of a wide rangeof illicit objects, although it seems unlikelythat, by 2045, additive manufacturingsystems will be able to replicate complexchemical components, such as propellants forammunition.More life-like machinesA growing number of customer-serviceroles are likely to become automated orbe performed by robots. Over the lastcentury, industrial processes have shownhow automation can dramatically increaseproductivity, while lowering cost. This trendwill probably continue, with increasingautomation of service roles, such as telephoneor Internet-based customer support. By2045, advances in artificial intelligence arelikely to mean that such services could beenhanced to the point that a virtual telephoneoperator would be indistinguishable froma human one. There is also likely to be anincreasing shift towards mechanising caringroles, particularly in areas where there arefew human candidates. Japan is developingpioneering robots that can provide carefor the elderly, driven partly by its ageingpopulation and shrinking workforce. 5 Usingrobots as companions is also likely to increasein the timeframe. For example, Japan isexperimenting with using robot companionsfor its astronauts in space, 6 and robotic petsand computer programmes with simulatedpersonalities are growing in popularity.Eventually, developments in robotics maymean that robots are almost physicallyindistinguishable from human beings, but itis hard to believe that by 2045 they will haveachieved the degree of social acceptanceor skills necessary for them to operate in allroles. For example, jobs that require a humanface will probably remain a human preserve,as will roles that require the display (or atleast appearance) of emotion. Althoughdemonstrating the appearance of realistic5 Lin, et al., op cit.6 Sky News (2013), ‘Robot Astronaut Kirobo CallsHome From Space’, available at http://news.sky.com/story/1137583/robot-astronaut-kirobo-calls-homefrom-spaceemotion is likely to endear robots more tohumans, this could create its own problems,with people potentially becoming emotionallyattached to machines. Such a phenomenonhas arguably already been experienced bya small sub-set of computer-users’ feelingstowards virtual characters, 7 and may beparticularly problematic in the case of childrenforming emotional attachments to robotcarers. The implications of human-machinerelations are not yet known, and even by 2045,the long-term effects may not be clear.Technological advancements are almostcertain to provide increasing levels of roboticautomation, improving efficiency, speedof response and ease of use. By 2045, it islikely that there will be many more robotsthat are able to perceive their environments,make limited decisions and take action forthemselves. The level of responsibility givento such robots is likely to be determined bythe importance of the roles they are intendedto be used for and, more significantly, howwilling we are to trust them. 8 This trust is likelyto largely depend on how well robots performthe tasks they are instructed to do, and howwell they are able to learn.Research, regulation and healthResearch into, and development of, unmannedsystems will probably be increasinglycommercially led. How unmanned systemsdevelop is likely to depend, to a considerabledegree, on how they are funded. Buildinglarge or highly complex robots – such asthose used for surgery – can be extremelycostly, while the decreasing cost of manytechnological components makes developingsmaller or simpler robots more affordable. Thismay impact on which countries or companiescarry out cutting-edge research. The USGovernment may lead on robotics for militaryusage, while Japanese companies are currentlyat the forefront of developing robots withcommercial applications. 97 Rani, A. (2013), ‘The Japanese Men Who Prefer VirtualGirlfriends to Sex’, available at http://www.bbc.co.uk/news/magazine-246148308 Singer, P. W. (2009), ‘Robots at War: The NewBattlefield’9 Lin, et al., op. cit.An increasing shift towards mechanising of caring rolesAs robots become more sophisticated, takingon a wider range of responsibilities, novel legalquestions will almost certainly emerge. Forexample, when robots malfunction, is it theowner, manufacturer or programmer whois responsible? Does a robot with biologicalcomponents have rights? Changes tolegislation will almost certainly be required,but past experience suggests it is highly likelythat legislation will fail to keep up with thespeed of technological developments.Surgery and surgical implants of the future arelikely to be less invasive and more effective.By 2045, robots will almost certainly be ableto respond to fast-moving or microscopicenvironments far better than humans, dueto their faster information-processing times, 10enhanced precision and lack of susceptibility10 Parasuraman, R. et al. (2007), ‘Adaptive Automationfor Human-Robot Teaming in Future Command andControl Systems’68 Global Strategic TrendsGlobal Strategic Trends69

Part 1Automation and workAutomation and workPart 1Some expertsbelieve thatrobots will beginto replace infantrysoldiers for somedeveloped-worldmilitaries withinthe next ten years.“”to human weaknesses, such as fatigue orhand-tremors. This is highly likely to leadto new possibilities for medicine, such aseventually removing human surgeons fromoperating theatres, diagnoses performed byrobots travelling along the bloodstream andoperations performed at a cellular level. Someexperts suggest that robots will eventuallybe small enough to fit inside a single livingcell, capable of repairing damaged DNA oracting as antibodies against viruses/infections,although it is unclear whether or not suchtechnology will be available by 2045.Automation and conflictThe increased capability of robots is likely tochange the face of warfare. Improvements inrobotics have obvious applications for militaryusage. Unmanned naval vessels – possiblyreconnaissance submarines to probe a hostileshore – are likely to become as much a partof the military system as unmanned andremotely piloted platforms have in the air.Machines are likely to carry out tasks, such asminefield clearance and delivering suppliesacross hazardous areas, although the highlycomplex nature of these tasks may mean thatdriverless military vehicles lag behind theircivilian counterparts. There may also be adrive towards replacing infantry soldiers withrobots, as society becomes less willing toaccept death or injury in warfare. In 2045, it islikely to continue to be much more palatableto put a machine in harm’s way, rather thana human soldier. Some experts believethat robots will begin to replace infantrysoldiers for some developed-world militarieswithin the next ten years. 11 The extent towhich military personnel will be replaced byautomated systems within the 2045 timeframeis unclear. However, robots are likely to work incollaborative human/machine teams, similar tothe way that dogs and their handlers currentlyoperate. 12 Western countries are likely tocontinue to keep humans in the decisionmakingloop for ethical reasons, althoughothers may not be so willing to make the sametrade-offs between speed and accountability.If combat is primarily conducted by machines,11 Singer, op. cit.12 Ibid.with much less human involvement, itmay become more publicly and politicallyacceptable, and potentially more likely.In the future, a sophisticated robotic ‘army’could theoretically be operated by a singleindividual, giving that person enormous power.Authoritarian regimes may therefore find iteasier to stay in power, at least in the face ofinternal uprisings. Similarly, using robots couldsignificantly amplify the capabilities of smallgroups of insurgents or terrorists, therebyincreasing the threat that they present.Age inequality in the workforceThe proportion of older workers in the globallabour force is likely to increase, with a possiblecorresponding decrease in opportunities foryounger people in some areas. The retirementage in many western countries is rising andlooks set to continue doing so, driven by anincrease in life expectancy, improvementsin health and the rising cost of supportingolder people who are not working. Severalestimations indicate that the number ofpeople aged 60 and over in the EU workingagepopulation will increase by about 0.5% ayear over the next 30 years. 13 Some membersof this older workforce may not possess thedigital and high-tech skills that many jobs arelikely to require. Nevertheless, they are likelyto have the expertise in management andcustomer relations that may enable them toremain in comparatively well-paid employment,which may block younger workers fromsatisfactory career progression. This couldcreate an uncertain and frustrating working lifefor some younger people, who may be cut offfrom financial stability while simultaneouslybeing provided with increasing amounts ofinformation (via growing access to the Internet)about the financial security enjoyed by others.The economic disenfranchisement of youngpeople is likely to be particularly problematic inthose regions and countries (most notably sub-Saharan Africa, the Middle East and India) whichare likely to have sizeable youth populations.However, this may be counterbalanced to someextent by the higher numbers of young peoplewho become entrepreneurs or are employed in13 Bell, D. N. F. (2013), ‘Older Workers and Working Time’Scenario:Large-scale automation of workRobots and automated systems havethe potential to be near-ubiquitousin 2045, capable of carrying outextremely complex tasks with no humaninvolvement. Potentially, machinescould: carry out all manufacturing andagricultural tasks; repair themselves; aswell as clean, cook and tidy. Advancesin artificial intelligences could makemachines so life-like that they are able toanswer phones in call-centres, take careof children and even teach. Computerscould potentially diagnose and treatalmost every medical condition. Ifprogress on this scale is made in thefuture, it is possible that there would bevery few jobs still carried out by humanbeings, who could, in practice, be almosttotally excluded from the workforce.In richer countries, this large-scaleautomation of work would be likelyto have a mostly positive effect, asgovernments would probably be able toprovide their citizens with all the materialcomforts they need. However, manypeople may initially struggle to achieve asense of purpose and social status withoutwork, with possible rises in cases ofdepression. Education systems may needto be totally redesigned to enable peopleto self-motivate and to gain satisfactionfrom activities other than work. Overthe new technology enabled jobs that are likelyto appear – rather like the jobs in web designand social media marketing that have appearedin the past couple of decades.Flexible workingFlexible working practices are likely tobecome more widespread, potentiallyincreasing economic insecurity. It is highlylikely that developments in information andcommunications technology will make remoteworking more feasible. Consequently, thereare likely to be smaller and fewer permanentworkspaces, with increasing use of working hubs,time, when populations had becomemore used to a life without work, theymay fill their time playing sport, painting,reading and composing music.In poorer countries, however, large-scaleautomation of work could stall economicdevelopment, perhaps even reversingit. For example, foreign companieswould be far less likely to employ cheaplabour, as machines would be so muchmore cost-effective and efficient. Someemployment could initially remain, aspoorer countries would be less likelyto afford to use machines to carry outroles in their internal labour markets.Eventually, though, automated equipmentwould probably become cheap enoughfor even these countries to afford.Poorer governments may not be ableto provide more than an extremelybasic level of subsistence, meaning thatpeople would have no way to improvetheir living conditions. This could leadthem to become deeply frustrated andangry. Nevertheless, citizens would stillreceive some benefits from large-scaleautomation, such as charity-fundedmachines capable of providing verycheap diagnosis and treating disease.Mass protests and civil unrest could stilldevelop, with ‘anti-robot’ movementsbecoming increasingly powerful.hot desks and teleconferencing. Organisationsare also likely to have an ever-smaller pool of corefull-time employees for fixed functions, with themajority of workers employed on short-termcontracts, allowing employers to adapt morereadily to ebbing and flowing demand. Theseflexible working practices may let employersoperate more efficiently in an increasinglyuncertain, unpredictable and competitivebusiness environment. While some workersare likely to welcome the increased freedomthat more variable employment brings, othersare likely to resent the insecurity caused by anunpredictable income.70 Global Strategic TrendsGlobal Strategic Trends71

Part 1Automation and workAutomation and workPart 1Gender and workThere is a global move away from jobsrequiring heavy manual labour, with acorresponding shift towards a knowledgebasedeconomy, in which women and menare likely to be able to perform on more equalterms. Women are also less likely than mento emigrate for work. However, they are morelikely to be mobile within their own country,providing economic benefit to their countryof origin rather than exporting that expertise. 14Improved information and communicationstechnology could render geographicallocation less important, making women moreable to access the workplace while caring fordependents.The stigma attached to fulfilling oppositegender roles may decrease. Men are likely14 Docquier, F. (2008), ‘Are Skilled Women MoreMigratory than Skilled Men?’to readjust their aspirations to suit a moregender-equal workplace, as it becomes morenormal for women to have long-term careers.However, some men may find it difficult toadjust their career aspirations and adapt to adomestic role, with women still being morelikely to care for dependents in 2045. It islikely that there will continue to be professionspreferred by one gender over another, and50/50 representation in all careers is unlikely.In most western cultures, the ‘glass ceiling’ islikely to increasingly be replaced by a ‘glassfunnel’. Gender may still play a role in filteringpeople for the most high profile jobs, butthere will probably be increasing paths tothe top for women in most professions. It islikely that the aperture of the ‘glass funnel’will widen in the 2045 timeframe, and thatwomen’s representation at higher levels ofsociety, politics, industry and in the militarywill increase.Defence and security implications■■Automated manufacturing techniques and practices may lead to economicdestabilisation, as there is less need to use cheap labour. This maydisproportionately affect emerging economies that would otherwise have benefitedfrom out-sourced production arising from inexpensive labour.■■There may be public mistrust of, and resistance to, using unmanned systems (androbots in particular).■■Unmanned systems are likely to have an increasing role in combat, potentiallytransforming the way that wars are fought. Military decision-making is likely toremain a human preserve, at least in western countries, but it is possible that theactual fighting will no longer be a solely human endeavour.■■There is unlikely to be global legal and ethical agreement on the way in whichmilitary unmanned systems should be employed.■■If combat is primarily conducted by machines, with much less human involvement, itmay become more publicly and politically acceptable, and possibly more likely.■■The cost of unmanned systems is likely to fall, while the ease of manufacturingcomplex items rises, making unmanned systems much more widespread and harderto regulate. Criminal and terrorist groups are likely to find it easier to gain, hold anduse unmanned capabilities.Automation will drive a move away from jobs requiring heavy manual labour72 Global Strategic TrendsGlobal Strategic Trends73

Part 1Corruption and moneyIf unchallenged, corruption is likely to continue to exacerbate global inequality andconflict. By 2045, consistent attempts to curtail corrupt practices are likely to be madeby national governments, international governing institutions, the private sector andnon-state actors. Technology is highly likely to play a significant role in both enablingand combating corruption.State-backed currencies will almost certainly still be the dominant form of money in 2045,although alternative currencies are likely to expand, constituting the main shift in thefinancial landscape. Criminal transactions may increasingly be made using alternativecurrencies, with a possible growth in the anonymous raising and transferring of funds byterrorist groups. Governments could have less influence over alternative currencies and,as a result, may be less able to shape the global financial system or raise revenues throughtaxation. A single international currency within the timeframe is improbable, with the USdollar likely to remain the most important global currency by 2045. China is likely to allowgreater financial liberalisation, contributing to its possible overtaking of the US in termsof GDP within the next 30 years. This is likely to be a factor in some erosion of the preeminenceof the dollar as the dominant global reserve currency. Increased globalisationcould also make transmission of financial shocks more widespread.Defining corruptionTackling corruption is particularly difficultbecause there is little global agreement onwhat it is. While most people have a sense ofwhat ‘corruption’ means to them, this oftenvaries between countries. What constitutescorruption in one country may be entirelyculturally acceptable in another – politicallobbying is seen as corrupt in Brazil but normalin the US, while the UK Parliament is debatingwhether to regulate it further. Social norms andperceptions of what constitutes corruption arelikely to continue to change, although once asociety labels a practice ‘corrupt’ it rarely goesback to being deemed acceptable. The poorare likely to continue to be disproportionatelyaffected by corruption, contributing to risinginequality and potential civil unrest. Forexample, although they are most in need ofgovernment services, they are often unable topay the bribes required to access them.The potential for corporate corruption mayincrease as multinational corporations growin prominence and economic reach. Politicalparty funding and lobbying by industriesand interest groups are also likely to be keyaspects of the debate around corruptionover the next 30 years. Some countries mayseek to promote more transparency andregulations in lobbying to prevent informalor illegal practices. Police and judiciariesin many countries are likely to continue tobecome more transparent, reducing overalllevels of corruption. Where these authoritieshave entrenched corrupt practices, efforts tocomplete institutional and cultural reforms willprobably be impeded.Responses to corruptionThere is already an acceptance today thatcorruption needs to be addressed, but it islikely that by 2045 this will have become evenThe potentialfor corporatecorruption mayincrease asmultinationalcorporations growin prominenceand economicreach.“”Global Strategic Trends75

Part 1Corruption and moneyCorruption and moneyPart 1Anti-corruption legislationFinancial Action TaskForce (FATF) createdUK Bribery Acts,1889, 1906 & 1916FATF set firstglobal anti- moneylaundering standardsWorld Bank ‘cancer of corruption’speech marking first anticorruptionstrategyOECD BriberyConvention in force1989 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010“The shift towardsonline bankingand finance maysimply alter thevehicle of bribery,with unregulated,non-state-backedcurrencies beingused to avoidscrutiny.”Extension of UKbribery lawUK moneylaunderingregulations inline with FATFmore widespread. Global efforts to countercorruption are likely to continue to develop,probably in an increasingly international andcollaborative way, underpinned by treaties andformal agreements. While some corporategovernance practices already addresscorruption, it is likely that by 2045 there willbe more nuanced approaches taken to ensuregreater transparency in the activities of thestate. Reform is likely to be slow, as stronggovernance institutions and cultural reformstake time to establish. For example, whiledemocracy is correlated with significantlylower levels of corruption, this only appliesafter democracy has been in place for anumber of decades. With corruption still likelyto be endemic in some countries by 2045,there may be an increased focus on foreigndirect investment as an alternative to aidprovided through governments.Technology and corruptionTechnology is likely to have both a positiveand negative impact on corruption. Thegrowing number of Internet users – anestimated three billion today 1 – togetherwith the accessibility of ‘Big Data’ and everexpandingdigital and social media to shareinformation and organise campaigns, is likely1 Lagarde, C. (2014), ‘A New Multilateralism for the 21stCentury: The Richard Dimbleby Lecture’World Bank andInternationalMonetary Fundagree to addressmoney-launderingCentralised reportingof bribery allegationsUK proceeds of CrimeAct (asset recovery)OECD DevelopmentAssistance Committeedonor principles agreedUN Convention AgainstCorruptionAgreed In ForceCabinet OfficeInternationalCorruptionGroup ActionPlanMinisterial‘Champion’appointedStolen Assets Recoveryinitiative establishedInternationalCentre forAsset RecoveryestablishedMet PoliceProceeds ofCorruption UnitestablishedUN ConventionAgainst Corruptionreview processagreedCity of London Police, OverseasCorruption Unit establishedto drive dialogue between the citizen andstate and promote state accountability. Forexample, the UK has already been requiredto demonstrate public transparency overthe beneficial ownership of companies.There might be greater transparency overcorporate ownership and the risks of moneylaundering even before 2045. Whistle-blowersare likely to increasingly use cyberspace asa publishing platform and may demandmore protection when they reveal corruptpractices. However, it may be easier to hidepayment of large bribes in the vast datasetsthat increased global connectivity produces.The shift towards online banking and financemay simply alter the vehicle of bribery, withunregulated, non-state-backed currenciesbeing used to avoid scrutiny.Criminal transactions are likely to beincreasingly made using alternative (nonstate-backed)currencies, potentially makingit easier for illegal groups to transfer fundsbetween jurisdictions. The potential forindividuals to make anonymous payments(bypassing laws and avoiding tax), alongwith a lack of central control and regulationmakes alternative currencies such as Bitcoin,Litecoin or Ripple attractive for criminal use.When the founder of a website associatedwith the sale of narcotics and firearms (‘theSilk Road’) was detained by US authoritiesRoyalAssent toBriberyAct 2010in October 2013, the value of Bitcoin fellsharply. Some commentators have suggestedthat this incident illustrates the impactthat criminal users have on the value ofthe currency. 2 This view is reinforced by arecent study which showed that daily saleson the Silk Road website corresponded toapproximately 20% of the activity on the mainBitcoin exchange. 3 It is likely that non-statebackedcurrencies will continue to be usedas a means of payment for online criminalactivity. It is also possible that terrorist groupscould adopt such currencies as a means offundraising or transferring funds anonymously– governments are, of course, likely to try tomonitor the use of these currencies.2 Hern, Alex (2013), ‘Bitcoin Price Plummets After SilkRoad Closure’, available at http://www.theguardian.com/technology/2013/oct/03/bitcoin-price-silkroad-ulbricht-value3 Christin, N (2013), ‘Travelling the Silk Road: AMeasurement Analysis of a Large Anonymous OnlineMarketplace’State-backed and alternative currenciesState-backed currencies will almost certainlystill be the dominant form of money in2045, although a global currency by then isimprobable. A genuinely global currencywould require a high level of internationalcooperation, likely to be brought about only inthe case of an extraordinarily severe shock tothe international financial system. Countries (orblocs of countries) are highly likely to remainthe dominant seats of global authority by2045. Consequently, such countries are likely tocontinue to be seen as the most reliable backersof monetary systems, above multinationalcorporations or private organisations. Furthercurrency unions, such as the euro, are possiblein the timeframe. State-backed currencies havean established position and usefulness that willalmost certainly guarantee their persistence asthe principal means of exchange. Advances intechnology are likely to make online monetarysystems increasingly important, but these willprobably remain complementary to statebackedcurrencies, rather than replacing them.Crypto currency values and market shareThe crypto currency market is valued at over US$6.8 billion, with Bitcoin accounting for over 80% of the market.Total global valueUS$ 6.8bnSource: CoinMarket“Non-state-backedcurrencies willcontinue to beused as a meansof payment foronline criminalactivity.”Bitcoin $5.5bn 81%Ripple $758m 11%Litecoin $298m 5%Others* $222m 4%*130 other currencies exist ranging from 0.0002–0.5% global share76 Global Strategic TrendsGlobal Strategic Trends77

Part 1Corruption and moneyCorruption and moneyPart 1“States’ monopolyon money is likelyto be increasinglyeroded byalternativecurrencies out to2045.”There are, however, a number of situationsin which alternative currencies could seemmore attractive. For example, state-backedcurrencies could be undermined if governmentindebtedness rises sharply, perhaps due to anincrease in interest rates. Similarly, if bankingregulations become too onerous, alternativecurrencies may be more appealing tobusinesses and customers alike.Even if these scenarios do not emerge,alternative currencies are likely to grow in sizeand importance out to 2045, constitutingthe main shift in the financial landscape.We are already seeing this trend. Althoughpredominantly used for online transactions,Bitcoin has already been used to make offlinepurchases such as food and drink in pubs andrestaurants. 4 If alternative currencies holdtheir value in the future better than thosebacked by the state, people may convert theirsavings into alternative currencies to insulatethemselves from wider economic uncertainty.Currently, their volatility means that cryptocurrenciesare not considered a ‘safe bet’for storing value. There may be an increasein international businesses carrying outtransactions using online currencies to avoidexchange-rate volatility. Small businesses mayincreasingly turn to alternative currencies toavoid credit card fees and tax. 5States’ monopoly on money is likely to beincreasingly eroded by alternative currenciesout to 2045. Alternative currencies may beable to bypass emergency capital controlsor other measures taken by governments inthe wake of financial crises. While this is onlylikely to have a limited effect on developedeconomies, there could be a greater impacton more economically closed countries(those nations which have a limited amountof external trade), which rely on capitalcontrols to protect their national currencies.Governments’ ability to raise revenue isalso likely to be curtailed by the growthin alternative currencies. As ever-moretransactions are carried out using alternative4 Shubber, K. (2013), ‘London’s Bitcoin Pub’, available athttp://www.wired.co.uk/news/archive/2013-06/17/london-bitcoin-pub5 Needleman, S. (2013), ‘More Small BusinessesEmbrace Bitcoin’Alternative outcome:Globalisation backlashGlobalisation could conceivably facea backlash, perhaps driven by antiimmigrantsentiment or resentment atperceived over-reaching of authorityby international organisations.Although unlikely, there could be acorresponding rise in nationalism andeconomic protectionism, along with areduction in international cooperation.In turn, this could lead to more conflict,particularly over water resources, energyand food. If institutions such as theEuropean Union failed, there could bedramatic shifts in the global economy.Countries may be unable to effectively‘police’ regions of the world on theirown, leading to more failed states.Resurgence of national identity couldencourage societies to become lessproactive in tackling global issues suchas climate change and poverty.currencies, their anonymous nature is likely toprovide a significant challenge to identifyingand taxing economic activity.However, alternative currencies are likelyto remain vulnerable to attack. As withtraditional forms of money, alternativecurrencies are only as secure as theorganisation that controls them. Governmentsand commercial banks have technologicaladvantages over ordinary users of theircurrency. They spend considerable resourcessecuring their systems and responding toforgeries. By contrast, alternative currenciesmay come under attack from those whopossess similar levels of skill and resourcesto the currencies’ developers. For example,Bitcoin’s infrastructure has been subject toseveral malicious attacks, with an attack in2013 leading to its value dropping by 20%. 6While there is no reason in principle whyalternative currencies should not implementan improved security infrastructure, this would6 Clinch, M. (2013), ‘Bitcoin Hacked: Price StumblesAfter Buying Frenzy’, available at http://www.cnbc.com/id/100615508The requirement to hold US currency reserves may reduceprobably take time to develop and incursignificant costs, which may be beyond theresources of most private organisations.Reserve currenciesThe US dollar is likely to remain the mostimportant currency by 2045, but its statusas the pre-eminent reserve currency willprobably be eroded. Perhaps the mostsignificant factor contributing to this erodingeffect is the probable broad shift in economicpower from West to East, meaning that theUS is likely to account for a comparativelysmaller part of the global economy. Thistrend is already evident, with the WorldBank suggesting that the US accounted for39% of global economic output in 1960, butonly 22% in 2012. If this trend continues,the dollar is likely to become less central toglobal trade. As foreign reserves are used tomake purchases and settle debt obligations,governments tend to hold the currenciesof their major trading partners. Less tradewith the US (as a proportion of globaltrade) may mean that there is less need forcountries to hold US dollars as a reserve. Theconsequences for the US of a less dominantdollar could be significant. The US benefitsfrom the dollar’s reserve status to maintainits debt and to fund its expenditure. If thedollar becomes a less dominant reservecurrency, it is likely that that the US willhave to curb its expenditure. It is difficult toassess the implications of reduced spendingbut, as defence constituted 19% of federalexpenditure in 2013, 7 it is likely that thedefence budget will decrease. This may inturn limit the US’s international military roleand possibly influence.China is likely to be the US’s main rival asthe global reserve currency provider withinthe 2045 timeframe. The recent growthof China’s economy has not yet beenmirrored by a growth in the prominenceof its currency, the Renminbi. China’s strictcapital controls – designed to keep thevalue of the Renminbi low – have so far7 Center on Budget and Policy Priorities (2014),‘Policy Basics: Where do Our Federal Tax DollarsGo?’, available at http://www.cbpp.org/cms/index.cfm?fa=view&id=1258The dollar is likelyto become lesscentral to globaltrade.“”78 Global Strategic TrendsGlobal Strategic Trends79

Part 1Corruption and moneyCorruption and moneyPart 1“The Renminbi isunlikely to replacethe US dollar asthe pre-eminentreserve currencybut it maybecome a rivalto it.”prohibited developing international tradein the currency. 8 However, out to 2045,China is likely to want to grow its economy(and influence) still further by implementingsignificant financial liberalisation. As Chinadevelops and domestic demand grows, it islikely to make sense to allow the Renminbi toappreciate, allowing cheaper imports to satisfya growing consumer class. Increasingly liberalfinancial measures could also allow the globalmarket to deliver the kind of credit neededfor a complex modern economy. China hasalready made some moves in this direction.It has encouraged an offshore Renminbimarket in Hong Kong and allowed offshorebanks to trade Renminbi among themselves,paving the way for Renminbi-denominatedfinancial products. Perhaps most significantly,in September 2013, China’s Central Bankannounced that it wanted to accelerateloosening capital controls. 9The Renminbi is unlikely to replace the USdollar as the pre-eminent reserve currencyin the 2045 timeframe, but it may becomea rival to it. Currently, only a tiny minorityof international foreign reserves are in theRenminbi. Although it is held by close tradingpartners such as Taiwan, most governmentsdo not yet include it as part of their reserves. 10However, it is likely that the Renminbi’s riseas an international reserve currency will bepreceded by its adoption as a major regionalcurrency, and there is evidence that this isalready happening. 11 For Chinese businesses,Renminbi internationalisation may offer arelative benefit in dealings with foreign firms,as trade can be carried out in their domesticcurrency. It also transfers exchange rate riskfrom Chinese companies to their foreign8 Chey, H. (2013), ‘Can the Renminbi Rise as a GlobalCurrency? The Political Economy of CurrencyInternationalization’9 Orlik, T. (2013), ‘China Signals Speedier Moves toLoosen Capital Controls’, available at http://online.wsj.com/article/SB10001424127887323623304579056741795219748.html10 IMF (2012), ‘Will the Renminbi Rule?’, availableat http://www.imf.org/external/pubs/ft/fandd/2012/03/prasad.htm11 Peterson Institute for International Economics (2013),‘The Renminbi Bloc Is Here: Asia Down, Rest of theWorld to Go?’counterparts. These are factors which havelong benefited US businesses, and mayserve to increase China’s overall competitiveadvantage.Shock:Global financial collapseFollowing the drop in price of itsprincipal exports, a massive uprisingfollowed by a coup could fragment alarge, pivotal economic power. Beforeits disintegration, such a country wouldalmost certainly have held trillions ofUS dollars of foreign debt and wouldhave been home to many of the world’smost influential banks and investmentcompanies. The collapse of this typeof country could mean that globalcapital flows would be brought to anear-halt and the world’s financialsystem would, in such a situation,cease to function effectively. Multipledefaults on payments could lead tothe further collapse of numerouscountries and potentially a collapse ofthe international trading system. If thisoccurred, hyper-inflation could takehold, making global trade drop to itslowest recorded level, with catastrophicconsequences for the global economy.Globalisation and financial shocksIncreased globalisation is highly likely tomake transmission of financial shocks morewidespread. The world will almost certainlybecome even more financially interconnected,with most western governments andmultilateral financial institutions increasinglypromoting the removal of restrictions on theflow of capital. While the 2008 financial crisisled to reduced international capital flows,money still moves relatively freely. One ofthe key benefits of the flow of money is thatcapital is allocated more smoothly throughoutthe world – investors are not limited to puttingmoney into projects in their own countries.In turn, this helps smooth out economicimbalances and fosters higher growth. 12However, more interconnectedness may alsomean that financial shocks in one area of theworld economy can be quickly transmitted toother areas. Arguably, volatile global capitalflows have contributed to financial crises,such as the bursting of the East Asian credit12 Peterson, op. cit.bubble in the late 1990s and the 2008 globalfinancial crisis. In line with the trend over thelast 30 years, global capital flows are likely toincrease out to 2045. The effects of this trendare difficult to predict, but it is reasonable toassume that the risk will be similar to thoseexperienced so far. Although leading toan overall increase in wealth, it is likely thatincreased capital flows will lead to volatility insome parts of the global economy.Defence and security implications■■In the majority of cases, corruption will almost certainly continue to be adestabilising factor. This will disproportionately affect the poor.■■As corruption continues to prevent some aid money from reaching its intendedrecipients, donor countries may increasingly use direct investment as an alternative.■■The expansion of alternative currencies may make it easier to transfer and retainfunds anonymously and hence harder for governments to freeze criminals’ assetsor sanction rogue regimes. Criminal and terrorist groups may also find it easier totransfer funds between jurisdictions.■■Out to 2045, alternative (non-state backed) currencies are likely to grow, havingsome effect on governments’ ability to raise revenues.■■The US dollar’s status as the pre-eminent reserve currency may be eroded makingit more difficult for the US to fund its debt. This may lead to cuts in the US’s defencespending and limit its international role.80 Global Strategic TrendsGlobal Strategic Trends81

Part 1Identity and the roleof the stateThe state will almost inevitably be the dominant actor in international affairs in 2045.Private or semi-state owned companies and non-governmental organisations are likelyto exert increasing influence, but are less likely to exercise state-like legal and decisionmakingpowers. Individuals may define themselves less by their nationality, withgrowing migration and stronger links to virtual communities. Rising costs, demands,technical complexity and need for specialisation could see private and other non-stateentities increasingly functioning as the primary providers of those services that stateshave traditionally delivered, such as security. Some states may lose their monopoly onforce, as private security contractors are increasingly employed and as some privatecompanies take more responsibility for their own security. The extent to which thesechanges happen under the control of state-based decision-makers is likely to varybetween countries according to their stability and forms of governance.Personal privacy will very probably be increasingly difficult to achieve in the yearsleading up to 2045, as identity is ever-more defined by online activities. Peopleare likely to demand higher levels of privacy protection from governments andbusinesses. Religion will probably remain a significant component of identity, withthe spread of representative governments providing the space for some religions tobecome increasingly politically assertive. A range of technological enhancementshave the potential to transform human identity by improving sensory perception,physical performance and perhaps even giving us the ability to control fear and otheremotional states.GovernanceSince 1941 (when only 11 countries weredemocratic), 1 democracy, as a system ofgovernment, has spread. By 2012, the numberof electoral democracies had reached 118 2– just over 60% of all countries. Despitethis, the spread of democracy has arguablyslowed since 2000. In most establisheddemocracies, voter turn-out is reducing and1 The Economist (2014), ‘What’s Gone Wrong withDemocracy?’, available at http://www.economist.com/news/essays/21596796-democracy-was-mostsuccessful-political-idea-20th-century-why-has-itrun-trouble-and-what-can-be-do2 Freedom House (2013), ‘Freedom in the World 2013’,available at http://www.freedomhouse.org/report/freedom-world/freedom-world-2013could conceivably reach the point wherethe legitimacy of democratic institutionsis challenged. Membership of politicalparties has also been reducing, as has trustin government. The ‘Beijing Consensus’(a limited free market, with strong centralcontrol) is sometimes cited as an alternativeto the Western democratic model. China’ssuccess at rapidly improving the standardof living of its population could be seen asproof that its system of governance is moreeffective (although democratic Brazil hasachieved, proportionally, a similarly impressivefeat). However, China’s per-capita income isstill substantially lower than that of establisheddemocracies, and looks likely to remain soby 2045.Global Strategic Trends83

Part 1Identity and the role of the stateIdentity and the role of the statePart 1Although difficult to measure, the spread ofinformation and ideas appears, on balance, tobe increasing the pressure for governmentsto be accountable and representative.The increasing spread of information andcommunication technology (includingInternet uptake) looks likely to accelerate thistrend – and will probably lead to democracycontinuing to spread out to 2045.Interdependence and internationalorganisationsGlobalisation is likely to lead to increasingconstraints on countries’ freedom of action,with countries likely to become moreeconomically and politically interdependent.As economic power shifts from west toeast over the next 30 years, internationalrelationships and institutions are likelyto undergo a similar change in powerdistribution. As well as becoming increasinglyreliant on other countries for critical suppliesof food, water, energy and materials, smallercountries, in particular, may find that theway to be most effective on the global stageis to work within blocs. Such blocs maybe structured around regional alliances orshared values, to meet common interestsin a more crowded environment. Currenttrends suggest we are likely to see moreblocs with increased powers, although it isunlikely many will have the same level ofauthority as the current EU. Groups are alsolikely to be established to seek solutions forwider challenges, such as enabling trade orcountering the effects of climate change andresource allocation. Future organisations maylook similar to the G-20. Formed in 2008 as anemergency response to the global financialcrisis, the G-20 has come to be recognised asthe principal forum for leading states to agreeglobal financial governance. Another exampleis the Alliance of Small Island States (AOSIS)whose member states are geographicallydispersed, formed around the shared interestof highlighting and seeking solutions to risingsea levels. Through new groups like these,countries could challenge or seek to reformexisting international organisations to providelegitimacy for their actions and increase theirrepresentation.Such organisations may strengthen theconditions for countries to fragment. If subnationalregions believe that their interests willbe represented by international organisations,they may have less reason to stay within theiroriginal country. This is not a new trend –regions within countries have split throughouthistory, and this trend is likely to continueout to 2045. As parts of supra-nationalorganisations, countries are more likely to besubject to international rules, standards andinstitutions, further constraining their freedomof action. Increasing use of: internationaltribunals (such as the WTO Dispute SettlementMechanism); transnational private arbitrationarrangements; regional mechanisms (such asthe European, African and American Courtsof Human Rights); the EU arrest warrant; andthe International Criminal Court, could bringformal justice systems closer together. Someof these organisations, though, have facedcriticism which may hamper their futureeffectiveness – the International CriminalCourt is sometimes accused of being overlyfocussed on Africa, with all six of its currentcases from that continent. By 2045, there arestill likely to be clear regional differences inlegal and judicial practice even between closeallies, such as the US and European countries.Over the next 30 years, there is likely to besignificant pressure on perhaps the mostsignificant international organisation – the UNSecurity Council (UNSC) – to reform. Drivenby the growing self-confidence of memberstates and the increasing economic strength ofemerging countries such as India, Brazil, Nigeriaand South Africa, there may be continuedpressure to expand Council membership,which still does not include any permanentregional representation from Latin America,Africa or Oceania, and to reform its workingpractices to incorporate greater transparency.Such reforms may also be associated with anincrease in the number of non-permanentmembers. Non-UNSC states’ current lack ofconsensus as to what UNSC reform should looklike, and unwillingness to expend effort pushingfor change may, by 2045, be overcome by anincreasingly evident disconnect between theinternational distribution of economic andmilitary power and the distribution of politicalpower in the UNSC.Non-governmental organisations in consultative status with theUN Economic and Social CouncilAs of 2013 there were 3,900 organisations with consultative status: 147 in generalconsultative status; 2,774 in special consultative status; and 979 on the Roster.The status of 157 organisations is currently suspended.*4,0003,5003,0002,5002,0001,5001,00050001946195019601970*There are 408 organisations with consultative status with other United Nations bodies or the specialized agencies for whichentry dates are not recorded that are included under 2013.Source: UN Economic and Social Council (2013)Non-state actorsThe concept of the state will almost certainlycontinue to exist by 2045 and states are stilllikely to have the most important voices ininternational affairs. Large private, or semiprivate,companies and non-governmentalorganisations will very probably grow innumber and power, seeking to influencenational and international decisions. 3 Somemultinational corporations are alreadyworth as much financially as some nationaleconomies, with 12 multinational corporationsamong the top 100 economies. 4 For example,Apple is bigger, economically, than Ecuador,while Ford is bigger than Morocco. 5 Shell has aprivate security force of 1,200 people in Nigeriaalone. Non-governmental organisations,such as major charities, also have significantvoices and exert influence, entering intoformal and informal negotiations with states.3 Ritzer, G. (2010), ‘Globalization: A Basic Text’4 Lagarde, C. (2014), ‘A New Multilateralism for the 21stCentury: The Richard Dimbleby Lecture’5 Risk Assessment and Horizon Scanning ProgrammeOffice, Singapore (2013), ‘Future Stake’198019902000At some major international conferences, thenumber of non-governmental organisationsexceeds the number of states. 6 More than3,500 non-governmental organisations have‘consultative status’ with the UN Economicand Social Council, 7 up from 700 nongovernmentalorganisations 20 years ago. 8As a result of this growing influence, thenext 30 years may see increasing calls for thelargest multinational corporations and nongovernmentalorganisations to have voicesin, and be accountable to, supra-nationalorganisations (such as the G77). Withoutsuch an accommodation, existing companiesand non-governmental organisations may6 For example, at the annual UN FrameworkConference on Climate Change. The best-known ofthese conferences was held at Kyoto in 1997, whenthe Kyoto Protocol seeking to limit carbon emissionswas signed.7 Willets, P. (2013), ‘The Growth in the Number of NGOsin Consultative Status with the Economic and SocialCouncil of the United Nations’, available at http://www.staff.city.ac.uk/p.willetts/NGOS/NGO-GRPH.HTM8 Lagarde, op. cit.2013Nongovernmentalorganisations,such as majorcharities, alsohave significantvoices and exertinfluence.“”84 Global Strategic TrendsGlobal Strategic Trends85

Part 1Identity and the role of the stateIdentity and the role of the statePart 1“The state willprobably be of lessrelevance to theindividual, due tothe movementof people,informationand ideasacross nationalboundaries.”proliferate and become an increasing focusof policy-making, coordination and publiclobbying and scrutiny to the detriment ofstate-based international organisations.Private companies are also likely to providemany of the security functions currentlyprovided by the state, with states increasinglycontracting out their monopoly on force.Private companies already provide securityin prisons and contribute to militaryoperations – a recent Congressional reportput the proportion of American contractorsin Afghanistan, Iraq and the Balkans atmore than 50% of the total number of USpersonnel present. 9 If this trend continues,by 2045, armed forces may have evolved intoa confederation of public and private sectorcapabilities. Questions about regulation willalmost certainly be raised if binding nationaland international legislation continues to applyto armed forces personnel, but not to privatemilitary contractors.These patterns of non-state encroachmentinto areas where the state currently dominatesare likely to take different forms in differentcountries. In robust, stable democracies andauthoritarian states, state-based governingelites are likely to retain strategic direction andcontrol, with the non-state sector deliveringservices and fulfilling functions rather thanexercising power. Increasing interchangesbetween governing and commercial elites(for example, as traditional career structuresbreak down) may blur the boundaries of stateand non-state influence and policy-making,particularly in states with weaker systemsof transparency and control. Some fragile,unstable, resource-dependent states may wellfind themselves subject to greater pressures,particularly from transnational enterpriseswholly or partly owned by other states.National identityBy 2045, more individuals are likely to definethemselves less by their country of origin orresidence than they do today. In developing9 Congressional Research Service (2013), ‘Departmentof Defense’s Use of Contractors to Support MilitaryOperations: Background, Analysis, and Issues forCongress’countries, some people may continue tofeel more closely bound by tribal allegiancesor other loyalties than connected to thestate. Globally, the state will probably be ofless relevance to the individual, due to themovement of people, information and ideasacross national boundaries. As individualsfeel less connected to the state, they are alsolikely to become less interested in supportingit. 10 (This is far less likely to be the case inautocratic regimes, where nationalism mayincrease.) Participation in politics in maturedemocracies looks likely to continue to fall,which could result in citizens challenging thelegitimacy of their governments. Finally, asglobal connectedness (particularly economicinterdependence) grows, people may moveabroad more frequently. We are alreadyseeing this trend with UN figures showing thatin 2013, the number of international migrantsworldwide reached 232 million, up from 175million in 2000 and 154 million in 1990. 11State provision of servicesA growing population may underminesome countries’ ability to provide services,causing unrest. As expanding and agingpopulations grow more demanding of evermore personalised, technologically advancedmedical, financial and other services, and assupply chains grow more complex requiringmore specialisation and more sophisticatedproject management techniques, states mayneed to turn increasingly to the private andnon-governmental sector to deliver essentialservices. While developed countries are likelyto be able to have the resources to meet thesedemands – or at least are likely to be able toimport or contract out the means to respondto them – this is less likely to be the case forsome developing countries. If countries areunable to provide vital services required bytheir growing populations, their citizens arelikely to become increasingly discontent,which may manifest itself in protest or unrest.Protest is likely to be facilitated by advances incommunications technology, allowing those10 Cooper, R. (2004), ‘The Breaking of Nations’11 UN (2013), ‘232 Million International Migrants LivingAbroad Worldwide – New UN Global MigrationStatistics Reveal’, available at http://esa.un.org/unmigration/wallchart2013.htmwho are discontent with their government tochallenge it collaboratively, as seen in the ‘ArabSpring’. 12 This could lead to increased civilunrest and in extreme cases a disintegration oforder in affected countries.A key service that the state is less likely to beable to provide in future is security, particularlyinformation security. As people live moreof their lives online, safeguarding personaldata is likely to be increasingly important.Private companies already provide muchof our communications infrastructure, fromdelivering post to providing phone and emailservices, and it seems likely that – in responseto customer demands – they will take greaterresponsibility for making sure those servicesare secure. Similarly, despite reducing ratesof crime, individuals may be more likely toseek alternatives to the state to provide theirphysical security.PrivacyThe longevity of data storage means thatthere is an ever-growing record of people’sactivity, and attempts to avoid leaving a digitalfootprint may become increasingly difficult.At the same time, the growth in the numberof surveillance devices is increasing at a rapidrate and, unless individuals go to great lengthsto avoid detection, it is likely that by 2045, anear-complete record of their movementscould be built up by an interested party. Muchof the data created and rendered accessibleby the information age has the potential tobenefit society. For example, criminality mayprove increasingly difficult to conceal, allowinggovernments, businesses and individuals tobe held to account. But governments mayalso increasingly exploit extensive databasesand surveillance devices to monitor and curtailindividuals’ activities. 13 It is, however, likelythat individuals and societies will demandhigher levels of privacy protection from theirgovernments and from businesses that they12 RAND Europe (2013), ‘Thinkpiece for a ‘FutureRole of the State’ Workshop in Support of the GSTProgramme’; High Level Panel on Fragile States(2014), ‘Ending Conflict and Building Peace in Africa:A Call to Action’13 Schmidt, E. and Cohen, J. (2013), ‘The New DigitalAge’Digital anonymity will be increasinglydifficult to maintaininteract with. Public demand for encryptionsoftware could increase as individuals seekto live their digital lives without leaving apermanent trace. However, it is likely thatgovernments will resist such demands astheir ability to detect and prosecute criminalactivity could be impeded.Religion and ideologyReligion is likely to remain a significantcomponent of people’s identity, withevangelical Christianity growing in popularityin Latin America, Asia and Africa, as well asIslam becoming more prevalent in the MiddleEast and North Africa. 14 Some religionsare likely to become increasingly politicallyassertive. 15 This influence will almost certainlycontinue to be assisted by globalisationand by developments in communicationstechnology, permitting the messages ofreligious groups to unite diaspora populationsand appeal to a far wider audience thanpreviously possible. Technology is also likelyto contribute to diaspora communities beingincreasingly affected by intra-faith discordin countries of origin. Some governments14 Micklethwait, J. and Wooldridge, A. (2009), ‘God isBack’15 Ibid.86 Global Strategic TrendsGlobal Strategic Trends87

Part 1Identity and the role of the stateIdentity and the role of the statePart 1may have to address new challenges fromreligious groups. For example, by 2045, Chinamay be home to some of the world’s largestMuslim and Christian populations and itsinternal politics and global posture are likelyto be influenced significantly by the mannerin which these two faith groups pursue theirgoals and seek religious freedom. 16 As religionis so fundamental to many people’s identity,where tensions between different groupsexist, they are likely to be exacerbated byreligious differences.While there is little evidence to suggestthat ideologies as influential as communismand fascism were in the 1930s and 1940sare emerging, ideology is likely to remainan important component of many people’sidentity. The desire by some to make allinformation freely available is, possibly, anexample of an emerging ideology.16 Micklethwait and Wooldridge, op. cit.Shock:Sectarian conflictAreas of considerable sectarian tensionexist across the world – if there wasa prolonged period of escalation,campaigns of terrorist attacks couldbe carried out on a previously unseenscale. It is possible that attacks on sucha level could cause a major power todescend into civil war. Pre-existingreligious divides could rapidly escalateinto a transnational conflict betweentwo aspects of the global society. Itis possible that some countries wouldbe drawn into a wider war, as pressurefrom their populations, existing treatyobligations and allegiances force themto take sides. If the UN was deadlocked,unable to manage this degree ofpolarisation, widespread killings couldoccur across the globe.Human augmentationFuture technologies may make it possiblefor people to radically alter their identitiesby using a range of physical and cognitiveenhancements. The power and range of thefive major senses is likely to be significantlyenhanced, often as a result of extending andapplying developments made for medicalreasons. Some developments are likely torequire surgical implants, implying a degreeof permanence – others will probably betemporary. However, it is difficult to speculateon the extent to which enhancing sensoryperception will lead to improved interpretationof our surroundings. Some augmentationscould provide signals from beyond ournormal sensory range. Despite its inherentadaptability, it is not clear how well the humanbrain will be able to process such data toproduce useful information and analysis.New technologies may be able to extendour visual sense beyond the range of visiblelight into other parts of the spectrum.Implants designed to help restore sightprovide an early indication of what could beachieved in allowing us to ‘see’ otherwisenon-visible radiation. 17 Our hearing couldbe significantly enhanced. Hearing aids arecurrently being developed that can chooseand boost frequencies of interest which wouldenhance the ability to detect and understandspeech in noisy environments. 18 Similarly,improved understanding of how the braincan discriminate between individual smellsin a mix of odours found in a typical room 19could provide the basis for developing futuretechnology that may enhance our sense ofsmell. Even the tongue could be used as anovel pathway to conduct a range of sensoryinformation to the brain, from external sensorssuch as cameras or sonar. 20Advances in a range of disciplines, such asbrain science and pharmacology, are likelyto increase our ability to influence emotionalresponses such as motivation, anxiety and fear– all of these affect individual performance inareas of considerable significance. Cognitivefunction may be enhanced either by machineinterfaces or by using chemicals. Treatments,often developed to address mental healthissues, may be widely used by healthypeople to augment or optimise cognitiveperformance, offering potential enhancementof many aspects of cognition, from learningand memory to wakefulness, attention andmotivation. 21External and internal electro-mechanicaldevices are likely to enhance human physicalperformance. For example, poweredexoskeletons already in development allowusers to lift loads of up to 90kg withouttheir performance being impaired, as wellas reducing fatigue experienced whenexercising. 22 Prostheses are being developedthat exceed the functionality of the limbsthey replace and whose electronic controlsystems outperform the original. Brainmachineinterfaces may allow direct control ofprostheses, exoskeletons and systems remotefrom the body. Control of simple devices bythought is already a reality. 23Some social and religious groups may not wishto adopt these new augmentations for ethical20 For example, see University of Nebraska (undated),‘Train the Brain’, available at http://www.unmc.edu/mmi/docs/TrainTheBrain.pdf21 Office of Science and Technology (2005), ‘DrugsFutures 2025’, available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/299221/05-1182-drugs-futures-overview.pdf22 Berkeley Robotics & Human Engineering Laboratory(undated), ‘Research Projects – HULC’, available athttp://bleex.me.berkeley.edu/research/exoskeleton/hulc/23 Goudarzi, S. (2006), ‘Human Thoughts ControlNew Robot’, available at http://www.livescience.com/9446-human-thoughts-control-robot.htmlExternal andinternal electromechanicaldevices are likelyto enhancehuman physicalperformance.“”17 For example, see Planker, D. (undated), ‘Restorationof Sight to the Blind: Optoelectronic RetinalProsthesis’, available at http://www.stanford.edu/~palanker/lab/retinalpros.html18 For example, see ABC Science (2008), ‘Chinese Froghas Tuneable Ears’, available at http://www.abc.net.au/science/articles/2008/07/29/2317848.htm19 For example, see Phys.org (2007), ‘Neuronal CircuitsAble to Rewire on the Fly to Sharpen Senses’,available at http://phys.org/news117036872.htmlChina will be home to one of the world’s largest Christian and Muslim populations88 Global Strategic TrendsGlobal Strategic Trends89

Part 1Identity and the role of the stateIdentity and the role of the statePart 1It is possiblethat directbrain-to-braincommunicationmay be achievedby 2045,transforming waysof working.“”reasons, in much the same way that the Amishcommunities of Northern America currentlyreject most modern technology. Equally, notall who wish to adopt these new technologiesmay be able to do so – the rich will almostinevitably have better access than the poor.Many of the technologies described abovewill almost certainly be expensive (at leastinitially), leading to the prospect of poorerpeople being excluded from the benefits thattechnological enhancements may provide.Such inequality could lead to disaffectionand instability when such groups perceivethemselves as being marginalised. Conversely,it is plausible that in the longer term, improvedand mass-produced technologies may providefor greater equality in delivering healthcare.Direct interfacingIt is possible that direct brain-to-braincommunication may be achieved by 2045,transforming ways of working. The realtimetransfer of behaviourally meaningfulinformation between the brains of two ratshas already been demonstrated, with ratssuccessfully performing tasks that they hadnot previously attempted. 24 Building on theprogress that has been made with animals, theability to move another’s hand through noninvasivebrain-to-brain interfaces has already24 Pais-Vieira, M. et al. (2013), ‘A Brain-to-BrainInterface for Real-Time Sharing of SensorimotorInformation’, available at http://www.nature.com/srep/2013/130228/srep01319/full/srep01319.htmlbeen demonstrated. 25 If extended to complexcognitive tasks, the approach of directlylinking brains could be the basis for whollynew methods of decision-making, problemsolving and planning. These methods couldinvolve collaboration and using directly-sharedknowledge and experience between humans(and potentially between humans and otherspecies).As well as potentially transforming both sensingand decision-making, direct brain linkagecould have profound implications for socialinteraction and for the notion of what it meansto be an individual human being. As seen withcurrent interaction with virtual environments,where high-use levels sometimes leadto addiction, 26 there could be powerfulbehavioural effects. Notions of individualitycould be challenged, possibly leading toquestioning of loyalties and allegiances toorganisations, as individual and group identitiesmerge. By 2045, it is even possible (althoughunlikely) that the sharp distinctions betweenpeople and machine will disappear.25 Armstrong, D. and Ma, M. (2013), ‘ResearcherControls Colleague’s Motions in 1st Human Brain-to-Brain Interface’, available at http://www.washington.edu/news/2013/08/27/researcher-controlscolleagues-motions-in-1st-human-brain-to-braininterface/26 American Psychiatric Association (2013), ‘InternetGaming Disorder Fact Sheet’, available at http://www.dsm5.org/Documents/Internet%20Gaming%20Disorder%20Fact%20Sheet.pdfDefence and security implications■■The pressures of globalisation are likely to mean that individual countries will find itincreasingly difficult to act unilaterally – most countries are likely to be less powerful.This could reduce conflict.■■The state is still likely to have the most important voice in international affairs, butout to 2045 the private sector and non-state organisations are likely to grow moreinfluential. There is likely to be an increase in the use of private security companiesby governments – interdependencies may strengthen, despite their largely separatemotivations.■■Non-state actors, such as multinational corporations, are likely to grow in influenceand some may develop highly capable security forces. The private sector and nongovernmentalorganisations are likely to increase their influence over governmentpolicy-making as developed states rely on them for providing services and as theygain greater control over markets, resources and infrastructure in fragile states.■■Advances in communications technology may increasingly enable those who arediscontent with local forms of governance to challenge it, in pursuit of perceivedbetterment.■■Some augmentation of humans with embedded sensors and computing devicesis likely to occur within the 2045 timeframe. This may provide advantages suchas improved situational awareness, health monitoring and the ability to modifyphysiological and psychological states to increase performance and enhanceresilience.■■Mind-controlled machinery is likely to become much more sophisticated, withhuman brain-to-brain communication possible by 2045.90 Global Strategic TrendsGlobal Strategic Trends91

Part 1Defence spendingand capabilitiesChinese defence expenditure is likely to rival that of the US over the next 30 years,reflecting China’s growing economic strength. These two global powers are likely tospend far more on defence than any other country, accounting for almost half of theworld’s total defence spending by 2045. India’s defence budget could see it occupyinga ‘second tier’ by 2045. Russia is likely to increase defence spending, although notquickly enough to match that of China, the US or India. European countries are likely tocontinue to spend substantial amounts on their armed forces, although their spending isunlikely to increase significantly unless a major threat emerges. Advances in technologyare likely to lead to increasingly effective non-lethal capabilities and increase theprecision of weapons. This is likely to alter the nature of conflict.Economic growthDefence expenditure, at least in peacetime,has historically depended on a country’seconomic strength. By 2045, the world’slargest economies (by GDP) are likely to beChina and the US, with India likely to be theonly country in a ‘second tier’. Some expertssuggest that the US and China may accountfor 45% of global defence spending in 30years’ time. 1 Although the EU as a whole islikely to have a GDP comparable to the US(although smaller than China) and spenda similar amount to India on defence, nosingle European country is likely to have adefence budget comparable to these threepowers. 2 Additionally, China, India and the USare likely to lead in defence-related researchand development – further enhancing theirmilitary capabilities. Russia is likely to increasedefence spending, although its economyis unlikely to grow quickly enough to allowit to match the future defence spending ofChina, the US or India, even if its expenditureas a percentage of GDP were to rise. Thosecountries currently occupying the ‘second tier’of defence spending (such as France, Germany1 Internal MOD economic analysis (2014)2 Ibid.and the UK) are likely to continue to spendsubstantial amounts on their armed forces,broadly maintaining their positions relative toeach other, but are unlikely to increase theirdefence spending significantly unless a majorthreat emerges.Political impacts of changingdefence spendingAt the moment, those countries with thelargest defence budgets are also permanentmembers of the UN Security Council. As levelsof defence spending change, it is possiblethat pressure will increase for membershipreform. If some permanent members spendless on defence, they are likely to be less ableto contribute to military operations, relyingmore heavily on support from others. Inturn, this could affect their political powerand influence. As the cost of staying aheadin a global technology race seems likelyto increase, maintaining a technologicaladvantage could increasingly be achievedby cooperation and burden-sharing. Ofcourse, higher defence expenditure does notnecessarily lead to greater military influence.For example, although India is likely to spendmore on defence than the UK, it will almostcertainly have to overcome domestic politicalGlobal Strategic Trends93

Part 1Defence spending and capabilitiesDefence spending and capabilitiesPart 1issues and improve the way it invests toattain the capabilities needed to projectconventional military power globally. Whilespending on defence is usually highest duringconflict, deterrence can also be associatedwith high levels of spending – for exampleduring the Cold War.Defence expenditureExpenditure (adjusted for purchasing powerparity)*, expressed in US$ billion at 2012 values.USChinaIndiaRussiaUKFranceJapanGermanyBrazil2012 2025 20356822511171135851464635204513351270Based on analysis by MOD economics unit 2014.*Purchasing power parity expresses a country’s expenditure inthe equivalent US$ that would be required to purchase the sameamount of goods and services in the US domestic market.65429510897876763Equipment and personnel cost inflationUnlike civilian technology, there is no trendthat suggests military equipment will becomecheaper as technology advances. The latestplatforms are more expensive in real termsthan previous generations. If this trendcontinues, armed forces are likely to havesmaller quantities of extremely expensiveequipment, suggesting that by 2045 onlythe two highest-spending nations – the USand China – would be able to afford a largeand cutting-edge air force and navy. Whilstcountries account for their Service personnelcosts in differing ways – making comparisondifficult – it seems likely that the Servicepersonnel costs per capita of many countries(including China) are increasing at a fasterrate than inflation – this may act as a spur forautomation.Future weaponsIncreased levels of defence spending andcontinuing advances in technology are likelyto lead to a variety of new weapons beingavailable by 2045. For example, laser systemsare maturing, with vehicle and sea-basedplatforms already at advanced stages of trial. 3Directed energy weapons, such as lasers, couldbe capable of discrete target discrimination,producing a focussed beam (or wider field) ofelectromagnetic energy or atomic radiationto cause disruptive or damaging effects toequipment and infrastructure. Such weaponsmay also be capable of delivering non-lethaleffect on human targets at considerabledistances. Increases in the number andsophistication of sensors (civil and military) arelikely to increase the accuracy of targeting, aswell as making it increasingly difficult to hidepeople, machines or equipment. As peopleuse electronic devices more frequently, theability to target an individual by their ‘digital3 BBC (2013), ‘Rheinmetall Demos Laser that can ShootDown Drones’, available at http://www.bbc.co.uk/news/technology-20944726; Greenemeier, L. (2010),‘U.S. Navy Laser Weapon Shoots Down Drones inTest’, available at http://www.scientificamerican.com/article.cfm?id=laser-downs-uavs. Forannounced deployment see USNI News (2013), ‘Navyto Deploy Anti-UAV, Small Boat Laser Next Year toGulf’, available at http://news.usni.org/2013/04/08/navy-to-deploy-anti-uav-small-boat-laser-next-yearto-gulfThe US/Israeli THEL system has spurred development of more capable laser weaponsShock:Weaponised virusTechnological advances couldallow a rogue regime, terrorists orcriminal groups to synthesize highlycontagious, fatal viruses with longincubation periods that would makeearly detection and quarantine verydifficult. The promise of an anti-viruscould be used to extort money, goodsor used for political leverage. It is evenpossible that viruses could, in future, beengineered to target specific individualsor groups, making them a more viableweapon.signature’ is likely to become easier. Similarly,as the cost of sequencing an individual’s DNAcontinues to fall, targeting an individual usingtheir DNA may be possible by 2045. We couldalso see sophisticated environmental warfare,capable of spreading plant and humandiseases by insects or insect-machine hybrids.Crops and cattle could be destroyed, as well aspeople being incapacitated or killed.Globalisation, in particular the spread oftechnology, information and ideas, is likelyto give an increasing number of people(both state and non-state actors) access tosophisticated and technologically advancedcapabilities. This is likely to increase theopportunity for unconventional attackson technologically sophisticated nations,including by terrorists. However, futuretechnology may also be developed to predict,detect and counter such attacks.94 Global Strategic TrendsGlobal Strategic Trends95

Part 1Defence spending and capabilitiesPart 1Levels of conflictAlthough many people see the 20th and early21st centuries as being the most violent andbloody in human history, evidence suggeststhat the frequency and intensity of wars, aswell as the number of violent deaths, has beendeclining sharply and is likely to continueto fall. 4 For example, no western Europeancountries have gone to war against each othersince the end of World War II, but by contrast,in the 600 years before 1945, they started anaverage of two new wars each year. Althoughthe number of civil wars increased after 1945,these have also been on the decline since1991. Countries are also much more willing,globally, to get involved in peacekeeping,with peace-support operations dramaticallyincreasing since the end of World War II(although they have slightly decreased innumber since 2000). 5 Of course, the risk ofa major conflict will almost certainly remain.Historically, the rise of two or more greatpowers in close physical proximity is usuallycorrelated with war or conflict – and there area number of such potential flashpoints aroundthe world, looking out to 2045.Nature of conflictThe nature of conflict will almost certainlycontinue to change, particularly as a result4 Pinker, S. (2011), ‘A History of Violence: EdgeMasterclass’, available at http://edge.org/conversation/mc2011-history-violence-pinker5 Ibid.of technology. Increasing use of unmannedsystems may mean that, in the future, physicalconflict could occur between unmannedsystems (for example, using remotely pilotedaircraft to attack an unmanned oil installation).The opportunities for bloodless attacks couldlower the threshold for conflict. Similarly,as people become more connected anddependent on technology, the potential forinflicting significant harm on an adversarywithout the need for violence, is likely toincrease. Power distribution networks orbanking systems could be closed down, ratherthan more physically destructive action beingtaken. Furthermore, globalisation is likely toprovide opportunities for actors to createsocial and political instability. For example,the reach and penetration of the internetcould be used to spread disinformation; socialmedia could be used to incite specific interestgroups and organisations; and the actor’sdiaspora communities could also be exploited,particularly where they have local grievances.When violence does occur, technology is likelyto make applying it more precise, and possibly,more effective. For example, targetedassassinations of the family members of aruling elite (or the threat of them) may havemore of a deterrent effect than the threat ofwar. Nevertheless, war is ultimately a humanendeavour. It will be humans who chooseto go to war, it will be humans who can stopwars and it will be humans who suffer theconsequences of war.Defence and security implications■■The US and China are likely to have similarly sized defence budgets by 2045,potentially out-spending the rest of the world.■■India could have a defence budget equivalent to the EU’s total spending on defence.This would put India in a ‘second tier’ of global defence expenditure, with a ‘thirdtier’ (comprising countries such as France, Germany, Russia and the UK).■■The link between expenditure and capability is not straightforward. Domesticpolitical problems may undermine the effectiveness of some countries’ armedforces. Other countries may choose not to develop global military reach.■■Increasing real-terms equipment costs indicate that platforms will become evermore expensive. Higher levels of defence spending may not lead to armed forceslarger than today’s.96 Global Strategic TrendsGlobal Strategic Trends97

Northern AmericaPart 2GeographicNorthernExpanding on the observations made inPart 1, we consider regional and (whereappropriate) country-specific effects ofthemes, trends and drivers.America.................................................. 101Latin America and the Caribbean............109Europe...............................................................................117Middle East and North Africa.......................125Sub-Saharan Africa............................................... 133Central Asia................................................................. 141South & East Asia and Oceania................... 147Polar regions..............................................................155Space.................................................................................165Global Strategic Trends99

Part 253Northern America2514By 2045, Northern America’s population is likely to grow to between around 394-478 million and become more ethnically diverse. Climate change is likely to open upshipping routes during the summer months, as well as new areas for extracting mineralsand hydrocarbons in the Arctic. However, it is also likely to cause significant harmthrough heatwaves, droughts, and flooding across the region. Northern America’seconomic outlook is positive, boosted by newly accessible energy reserves, and itis expected to integrate ever more closely with the global economy. While securitychallenges (including the threat of terrorism) will probably endure, the region is likely toremain stable and politically influential. The India-US relationship has the potential tobecome significant in the timeframe, but the pre-eminent relationship for the region islikely to be between China and the US, particularly as trading partners. However, therewill almost certainly remain a number of issues that could give rise to tensions betweenthe two countries.1 Bermuda2 Canada3 Greenland4 Saint Pierre and Miquelon5 United States of AmericaDemographyDriven principally by a mixture of immigrationand a high birth rate in the US, the overallpopulation of Northern America is likely toincrease from 352 million today to between394 to 478 million by 2045. 1 Canada’spopulation is expected to grow to between40 to 48 million, although this is likely to bedue to immigration rather than the birthrate, as the latter is expected to reduce.Canada’s population is likely to be increasinglyethnically diverse, but less so than that of theUS. While Canada’s population is likely toage, immigration and a changing economicemphasis towards production should helpmeet the demographic challenge. The USpopulation is expected to have grown byabout 80 million by 2045, 2 and will be moreethnically diverse. By 2045, the US is likelyto have a strong working age populationcomfortably able to provide for its elderly.1 UN (2012), ‘World Population Prospects: The 2012Revision’, available at http://esa.un.org/wpp/unpp/panel_population.htm2 Ibid.This is likely to differentiate the US from mostother developed economies, playing a keyrole in ensuring that the country’s economycontinues to prosper. The social impact ofthese changing demographics is expectedto be comparatively small due to the strongand inclusive nature of American culture andits continuing progress in managing diversity.Radical changes to US policy (especiallyforeign policy) as a result of its changingethnic mix are, therefore, unlikely.UrbanisationThe populations of the major cities are likelyto grow significantly, 3 in line with globaltrends towards increased urbanisation. Ifregeneration programmes are prioritised,scores of new communities could be createdfollowing the redevelopment of rundowninner cities – although some urban areasmay fail, contributing to security issues. New3 Kotkin, J. (2010), ‘America 2050: Where and How We’llLive’, available at http://www.newgeography.com/content/001469-america-2050-where-and-howwell-liveThe US is likelyto have a strongworking agepopulationcomfortably ableto provide for itselderly.“”Global Strategic Trends101

Part 2Northern AmericaNorthern AmericaPart 255% shareof globalpopulation20152045A growing population living in the urban environment2015202520352045Source: UN ‘World Urbanization Prospects: 2011 Revision’towns are also likely to spring up aroundnewly developed oil and gas fields. Citydwellingis likely to remain popular with theyoung and ambitious, but suburbia – thepredominant form of America life – willprobably evolve beyond the conventional1950s-style ‘production suburbs’ of vasthousing tracts constructed around existingcommercial and industrial centres. Instead,they are likely to become more compactand self-sufficient, providing office spaceas well as accommodating an increasinglyhome-based workforce. One in four or fiveNorthern Americans are likely to work fromhome by 2045 – and as remote working relieson frequent communication with others,potentially across the globe, this may break theUS population by groupThe charts show the change in populationcomposition between today and 2045.204520120 50 100 150 200 250 300 350 400 450 500African-AmericanAsian-AmericanAmerican IndiansHispanicPopulation in millionsWhiteSource: US Census Bureau and UN Population DivisionRuralUrbantraditional isolation of rural communities in theheartland of Northern America. 4EducationThe best-performing Northern Americanuniversities, particularly those in the US, arelikely to remain globally competitive. Thisshould benefit the region’s economy andallow it to maintain technical dominance ina number of fields, although it is of note thatmany of the students enrolled on graduateand science and technology courses areborn outside Northern America. NorthernAmerican universities are also at the forefrontof digital learning, and may well retainleadership in this field – further benefiting theregion’s economy and academic standing. Inthe US the standard of primary and secondaryeducation for some of the less affluent iscomparatively low for a developed country,and on current trends is likely to remain so.This may mean that some elements of thelabour force may not be able to achieve theeducational standards that are likely to beneeded in the information-driven economy of2045. This could lead to high unemploymentrates, further exacerbating inequality, whichmay lead to significant social tension. If, asseems likely, educational standards in othercountries continue to rise, the US economymay start losing its competitiveness if nomitigating action is taken. 54 Kotkin, J., op. cit.5 Nye Jr., J. S. (2010), ‘The Future of American Power’,available at http://www.foreignaffairs.com/articles/66796/joseph-s-nye-jr/the-future-ofamerican-powerClimate changeClimate change is likely to have a mixedimpact on Northern America, although theoverall effect will probably be negative.Melting ice in the Arctic is likely to open upareas of land for extracting minerals andhydrocarbons, and access to new summershipping routes, could have a beneficialimpact on Northern America’s economy.Melting permafrost in northern Canada andAlaska could, however, have large and costlyimplications for infrastructure that is builton top of it, such as pipelines or ice roads.Climate change will probably have a negativeimpact on the forest industry, extending theforest fire season and facilitating the spread ofpests, such as the pine beetle.The impact on agriculture from climatechange is also likely to be mixed. Averageannual rainfall is likely to increase in all regionsexcept for the Canadian Prairies, the westcoast, and south-west US. The Colorado River(a major freshwater source used for agriculture,water storage and energy generation), couldsee run-off reduced by around 10-30% by2045, potentially leading to water shortages.The cost of water stress on agriculturethroughout Northern America is expected tobe in the billions of dollars by 2045. Severeheatwaves could hit Northern America, withsome east coast cities (including Washington,New York and Toronto) likely to see an increasein their maximum summer temperatures. Thiscould cause power failures, crop damage andhigh death-rates among vulnerable peoplesuch as the young and elderly. At the sametime, moderate climate change could increaseyields from rain-fed and irrigated agriculturein some parts of the US and Canada. The USproduces more than 30% of the world’s wheat,soybean, corn and rice. Some crop yieldscould increase with moderate changes in theclimate (particularly in northern regions) butcontinuing warming may cause significantdecreases. One study suggests that maizeyield could decrease by as much as 18% bythe 2040s. 6 Rising sea levels and intense6 Urban, D. et al. (2012), ‘Projected TemperatureChanges Indicate Significant Increase inInterannual Variability of U.S. Maize Yields’,available at http://link.springer.com/article/10.1007%2Fs10584-012-0428-2rainfall could leave coastal cities and regionsmore exposed to flooding, particularly in theMississippi delta and cities along the east coastsuch as New Orleans, Miami and New York.Energy independenceIf the recent adoption of new oil and shalegas production techniques such as ‘fracking’continue to increase production at expectedrates, the US could become the world’snumber one oil producer by 2017 and a netexporter by 2030. Exploiting and exportingunconventional oil and gas, however, is notwithout its challenges. If such problems can beovercome (as seems likely), the cost of energycould return to pre-1970s prices. 7 This wouldprovide a significant advantage to the Canadianand US economies, which contain particularlyenergy-intensive industries. Consumers shouldalso benefit through lower energy bills, leavingthem more money for discretionary purchases;and because natural gas burns more cleanlythan coal, there could be environmentalbenefits. Northern America is also likelyto generate an increasing proportion of itsenergy from renewable resources, furtherstrengthening its energy security. Energyindependence is unlikely to mean thatNorthern America will become detached fromglobal markets. On the contrary, the region islikely to export hydrocarbons internationallyand – with Asia’s demand for hydrocarbonsexpected to grow – the potential for mutuallybeneficial trade should increase. However,relationships with countries that used to exporthydrocarbons to Northern America may cool asmutual dependence lessens.EconomyDespite the expected shift in the economiccentre of gravity to the south and east,Northern America is expected to remain amajor player in the world economy out to2045. Its share of global GDP is likely to remain7 Christopher J. Wolfe, Chief Investment Officer of thePrivate Banking and Investment Group at MerrillLynch, “We could end up with the cost of energyto U.S. manufacturers returning to what it was inthe 1970s or even the ’60s, adjusted for inflation.”Quoted in Merrill Lynch (2013), ‘A TransformingWorld’, available at http://wealthmanagement.ml.com/publish/content/application/pdf/GWMOL/AR9D50CF-MLWM.pdf“The US couldbecome theworld’s numberone oil producerby 2017 and a netexporter by 2030.”102 Global Strategic TrendsGlobal Strategic Trends103

Part 2Northern AmericaNorthern AmericaPart 2An ageing populationPopulation by ten-year age group and sexin the former could have a knock-on effect onthe global economy.“Northern Americais expected toremain a majorplayer in theworld economyout to 2045.”Male20152045Age group100+90-9980-8970-7960-6950-5940-4930-3920-2910-19about 20%, and the US will almost certainlyremain the dominant player in the region withits 85% share of the regional economy unlikelyto change significantly. While China’s GDP ishighly likely to have surpassed that of the US by2045, on a per-capita basis the US will probablybe five times richer. Furthermore, although theUS is likely to face a variety of internal issues,these are likely to be less severe than domesticproblems affecting China, if only because ofthe difference in the sheer numbers of peopleinvolved. This is likely to mean that the USwill have greater uncommitted resourcesavailable than China (or any other country)– a position that is only likely to strengthendue to its newly-available energy reserves.However, despite this positive outlook, thereare a number of risks to the US, such as therising costs of healthcare and other welfareentitlements which could burden its economyby 2045. In particular, if its debt grows, thecost of servicing it could become increasinglyonerous – and an increasing threat to the longtermhealth of the US economy.The international systemRegional economic interdependence isexpected to strengthen, and although thedevelopment of the North American FreeTrade Agreement has been somewhat bumpy,the shared interests of its member countries0-930 25 20 15 10 5 0 0510 15 20 25 30Millions of peopleSource: UN (2012), ‘World Population Prospects: The 2012 Revision’Female20152045(Canada, Mexico and the US) could make itone of the strongest regional economic blocsin the world. 8 Northern American countriesare also likely to continue to deepen theirintegration with the international system.Both Canada and the US are likely to remaincommitted to the Trans-Pacific Partnershipand they, along with Bermuda, Greenland andSt Pierre and Miquelon are likely to be includedin the Trans-Atlantic Free Trade and InvestmentPartnership. The region is likely to remainhighly influential within the internationalsystem and the US is likely to remain at theforefront of world politics. By 2045, the US isstill likely to have the most powerful militaryin the world and retain considerable politicalinfluence.NATO is likely to remain the key securityalliance for Northern American countries,although US (and possibly Canadian)commitments elsewhere in the world arelikely to mean that European countries willhave to assume more of the security burdenin their region – and possibly in Africa andthe Middle East as well. Nevertheless, the USwill probably continue to invest in NATO and8 Lanthemann, M. (2014), ‘NAFTA and the Future ofCanada, Mexico and the United States’, available athttp://www.stratfor.com/weekly/nafta-and-futurecanada-mexico-and-united-statesThe region is likely to remain highlyinfluential within the international systemis likely to remain the guarantor of Europeanstability. The US and Canada are also bothlikely to continue to be significant contributorsto the UN and the US membership of the UNPermanent Security Council is highly likelyto continue out to 2045. If the US becamedisengaged from the UN, it would be likelythat the organisation’s credibility and capacitywould be severely damaged.US commitment to the Middle EastA reduced need for Middle Eastern oil(coupled with a shift in the Middle Easternmarkets toward Asia) could bring the UScommitment to the Middle East into question.However, US involvement in the Middle East isunlikely to alter significantly, as the region willalmost certainly continue to have a significantbearing on global stability and security. TheUS also has long standing commitments tocountries in the region – not least Israel. Quiteapart from political concerns, the oil marketis genuinely global. The price of oil in theMiddle East affects the price of oil producedin the US, meaning that any serious disruptionUS rebalancing towards theAsia-Pacific regionWith the growth in Asia’s economic power,Canada and the US are likely to increase theirfocus on the region, as demonstrated whenthe US announced a rebalancing towards theAsia-Pacific area. Although both Canada andthe US have strong ties to several countriesin the region, the pre-eminent relationshipis likely to be between China and theUS – one which is likely to continue to beextremely complex. While the US has viewedthe increase in Chinese military capability,particularly its lack of transparency, withconcern, America’s economy is tightly tied toChina. China owns US$ 1.4 trillion of Americandebt (approximately eight percent) 9 and themutual trade in goods is valued at US$ 502billion annually. 10 Both figures could growout to 2045. Such economic interdependenceis likely to act as a stabilising influence andshould reduce the likelihood of militaryconflict.There are, however, a number of issueswhich may result in conflict between thetwo powers. US arms sales to Taiwan, USexercises with South Korea and China’srelationships with Iran and North Korea couldall exacerbate tensions. US security treatieswith Japan, the Republic of Korea and thePhilippines also mean that if these countriesmiscalculate their responses to China, the UScould be brought into the ensuing conflict.Managing the Chinese-American bilateralrelationship is likely to be extremely time- andresource-consuming, with the potential riseof India from 2030 onwards constituting asignificant complication. Canada has fewerbinding obligations with Asian countriesand, as a result, is likely to continue to be lessconstrained by its treaties than the US.9 Rogers, S. (2012), ‘US Debt: How Big Is It and WhoOwns It?’, available at http://www.guardian.co.uk/news/datablog/2011/jul/15/us-debt-how-big-whoowns10 Figures for 2011 from US Census Bureau, availableat http://www.census.gov/foreign-trade/balance/c5700.htmlUS involvementin the Middle Eastis unlikely to altersignificantly, asthe region willalmost certainlycontinue to havea significantbearing on globalstability andsecurity.“”104 Global Strategic TrendsGlobal Strategic Trends105

Part 2Northern AmericaNorthern AmericaPart 2of fish. Although Russia sees the Arctic as anarea of key national interest, open conflictbetween Russia and Northern Americancountries is highly unlikely. While Greenland’seconomy and political influence is likely tobe relatively small, its strategic location andmineral resources (particularly uranium and rareearth elements) mean that it is likely to be animportant partner for both Canada and the US.Defence and security implications■■While Northern America’s economic outlook is positive, US debt could grow, withsignificant ramifications for its future.■■Although China is likely to surpass the US in terms of GDP, the US is still likely toremain, militarily, the most powerful country in the world.■■A reduced need for Middle Eastern oil is unlikely to alter significantly the UScommitment to the region, which will almost certainly continue to have a significantbearing on global stability and security.■■NATO is likely to remain the key security alliance for Northern American countries,although US (and possibly Canadian) commitments elsewhere in the worldmay mean that European countries will have to take on more of the burden ofmaintaining security in their region.Canada may continue to reject claims over rights of navigational passageRegional integrityThe Northern American region will almostcertainly remain one of the most stable inthe world and the threat of major instabilityor conflict in the region is very low – but thethreat from terrorism will probably endure.Though diverse, the US has a strong cultureand sense of national identity and it is highlyunlikely that any state will secede from theUS – although a number of organisationsseeking independence for their states doexist. Similarly, it is likely that Canada willretain its territorial integrity, although thepossibility of a province or territory gainingindependence cannot be wholly discounted.The populations of Bermuda and St Pierreand Miquelon are likely to choose to remaindependent territories of the UK and Francerespectively so long as their prosperity andway of life is maintained. Greenland, however,is likely to have chosen independence, orsome lesser form of home rule, by 2045. Thereis likely to be competition for influence inGreenland, perhaps particularly from China,especially if – as is expected – melting iceopens up Greenland’s exclusive economiczone. It is also possible that Greenland will seekto join one or more of the North American FreeTrade Alliance, the EU and NATO.The Northern American ArcticThe Arctic is likely to be an increasinglyimportant region for the US and Canada outto 2045, particularly as melting ice opensareas for mining and hydrocarbon extraction,as well as shipping. Canada will probablycontinue to emphasise the importance ofthe Arctic to its national interests and maycontinue to reject US and Danish claimsover rights of navigational passage withinits exclusive economic zone. Despite thesedisagreements, it is likely to maintain goodrelations with both countries. Canada and theUS are likely to reach agreement on a rangeof Arctic issues, particularly over gas and oildistribution pipelines from the Arctic to themarkets of Northern America. The US maybe reluctant to assert its sovereignty overdisputed areas of the Chukchi Sea with Russiaand may find controlling fishing within theBering Sea challenged by several countries ifthe region continues to be a significant source■■There are a number of issues and treaties which may involve the US and China inarmed conflict – with potentially dire consequences regionally and globally.■■The Arctic is likely to be an increasingly important region for Northern America. TheUS and Canada (and possibly Greenland) are likely to grow military capabilities thatcan operate there.106 Global Strategic TrendsGlobal Strategic Trends107

Part 2321654514239225Latin America andthe Caribbean262172934151230352037281419 38 1046334 17114844274318314064124239Latin America and the Caribbean are likely to remain politically and economicallyfragmented, with individual countries pursuing bilateral relationships rather thanforming a strong unified bloc. Brazil and Mexico are likely to show the strongest growthin the region, with both countries likely to be major global economies (in terms of GDP)by 2045. Rising sea levels and extreme rainfall are likely to expose a number of largeand populous cities in coastal regions around South America to additional floodingrisk. Socially, weak governance is likely to continue to inhibit progress in a number ofcountries, with the growing consumer class being increasingly vocal in its challengeto regimes. Some Latin American countries are highly likely to have mature militaryindustrialcomplexes and armed forces capable of performing on the global stage by2045. Regional stability is highly likely to endure, although producing and globallydistributing narcotics will almost certainly continue, with an increasing ‘home market’.However, the emergence of a fully-fledged narco-state is unlikely.1 Anguilla2 Antigua and Barbuda3 Argentina4 Aruba5 Bahamas6 Barbados7 Belize8 Bolivia9 Brazil10 British Virgin Islands11 Caribbean Netherlands12 Cayman Islands13 Chile14 Colombia15 Costa Rica16 Cuba17 Curaçao18 Dominica19 Dominican Republic20 Ecuador21 El Salvador22 Falkland Islands23 French Guiana24 Grenada25 Guadeloupe26 Guatemala27 Guyana28 Haiti29 Honduras30 Jamaica31 Martinique32 Mexico33 Montserrat34 Nicaragua35 Panama36 Paraguay37 Peru38 Puerto Rico39 Saint Kitts and Nevis40 Saint Lucia41 Saint Vincent and the Grenadines42 Saint Maarten43 Suriname44 Trinidad and Tobago45 Turks and Caicos Islands46 United States Virgin Islands47 Uruguay48 Venezuela1383364722Political and economic fragmentationWith a population as large as that of the EU,the Latin American and Caribbean region ischaracterised by a diverse economic scale,political orientation, language, history andculture. While there is a desire for a strongpan-regional organisation, efforts to createone have not been realised. It is likely thatthe region will remain a loose communityof countries rather than becoming aninstitutionalised federal entity. While subregionalorganisations such as CELAC,CARICOM and Mercosur 1 are likely to continue,they are unlikely to develop into powerful,unified institutions. This makes it probablethat relationships with external actors will beconducted on a bilateral basis.1 CELAC: Community of Latin American and CaribbeanStates. CARICOM: Caribbean Community. Mercosur:an economic and political agreement betweenArgentina, Brazil, Paraguay, Uruguay and Venezuela,promoting free trade.Global economic powerhousesThe region’s most powerful economies,Brazil and Mexico, are likely to be among theworld’s ten largest economies by 2045. Bothcountries possess natural resources, includinghydrocarbons, which have the potentialto be very lucrative. However, exploitingthese resources has, to date, proved quitechallenging. For example, Mexico is estimatedto have the same amount of oil as Kuwait.However, its state-owned oil company haslacked the expertise to develop Mexico’soil fields, and the country’s constitution hasprevented private and public companiesfrom entering into joint ventures. 2 Mexicotherefore has to import more than 40% of itspetrol from abroad, 3 – although this could bechanging. Similarly, due to a lack of refining2 Thomson, A. (2013), ‘Rusty Wheels of Pemex RequireMuch Oiling’, available at http://www.ft.com/cms/s/0/0d5a467c-9bb0-11e2-8485-00144feabdc0.html#axzz2VBhfGoiL3 Nedelec-Lucas, C. (2012), ‘Unrefined Company:PEMEX and Gasoline Imports’, available at http://gbroundup.com/2012/08/07/unrefined-companypemex-and-gasoline-importsGlobal Strategic Trends109

Part 2Latin America and the CaribbeanLatin America and the CaribbeanPart 22015204589% shareof globalpopulationA growing population living in the urban environment2015202520352045Source: UN ‘World Urbanization Prospects: 2011 Revision’“Trade routes andchoke points willprobably becomeincreasinglyimportant toLatin Americancountries.”0 100 200 300 400 500 600 700 800 900Population in millionscapacity, Brazil’s state oil company, Petrobras,had to increase its petrol imports by 90% in2012 to meet consumer demand. Due to theGovernment setting the price of oil, Petrobrashad to sell on the fuel to the public at a hugeloss. 4 Unless such issues are resolved, Braziland Mexico could find themselves in theposition of merely being resource providersfor other economies, stopping their progresstowards becoming economic and politicalpowers.Foreign investmentThe US is likely to remain the pre-eminentexternal economic power in the region, withmany countries deepening their economicties with it. Compared to the US, China isa comparatively minor regional provider offoreign direct investment. 5 To date, China hasconcentrated its regional investment on Peru,Colombia and Ecuador, buying vast amountsof commodities and providing state loans.These purchases and loans often require theborrower to open up their internal markets tocheap Chinese goods, reducing the demandfor domestic products. Out to 2045, China’s4 This measure resulted in the refining sector ofPetrobras posting a 2012 loss of some 22.9 billionReais (US$ 11 billion). MercoPress (2013), ‘PetrobrasStill Going Strong but 2012 Low Profits and HighDebt Pound on Prospects’, available at http://en.mercopress.com/2013/02/05/petrobras-stillgoing-strong-but-2012-low-profits-and-high-debtpound-on-prospects5 OCO (2012), ‘Latin America’s Decade? FDI Trends andPerspectives’, available at http://www.ocoglobal.com/uploads/default/files/Latin_Americas_Decade_-_FDI_trends_and_perspecives.pdfRuralUrbanrelationship with the region is likely to remainan often uneasy marriage of convenience,with some Latin American countries resentingthe conditions attached to China’s financialinvolvement. China’s interest will almostcertainly remain economic and any move toinfluence Latin American politics, social normsor wider development will almost certainly bein the context of ensuring continued accessto markets and commodities. Trade with Asiamore generally is likely to increase, particularlyfor the ‘Pacific Alliance’ countries in the westof Latin America (Chile, Colombia, Mexico andPeru). Trade routes and choke points, suchas the Malacca Straits, will probably becomeincreasingly important to Latin Americancountries – some form of military presencein the area may be necessary to assist withpolicing. EU countries are likely to continueto invest in the region primarily on a bilateral,rather than collective, basis (although some EUnegotiations are likely to continue), increasingtheir trade links out to 2045.MigrationLatin American economies currently struggleto produce a sufficient number of skilled andeducated workers. This is likely to continueout to 2045, attracting economic migrantsfrom Europe and elsewhere into the region. 6If Europe’s economic problems continue,6 The number of European immigrants to Brazilrose sharply by 50% to almost 1.5 million in thefirst half of 2011. Emerging Market Musings (2011),‘Brazil’s Brain Gain Not Enough’, available at http://emergingmarketmusings.com/2011/12/11/brazilsbrain-gain-not-enough/this flow is likely to increase, leading to somesignificantly-sized European communitiesin the region, primarily working in well-paidmanagement or technical jobs. In stablecountries, this is likely to bring new businessopportunities, but in those less stable, it mayalso mean that countries such as Portugal andSpain could have significant ‘populations atrisk’. In extreme (but unlikely) cases, foreignnationals living and working in Latin Americamay need protecting or evacuating if severenatural disasters or rising political tensionsoccur.The consumer classLatin America and the Caribbean are likelyto see an expanding consumer class out to2045. The consumer class has grown by 50%in the last ten years, and now comprises 30%of the region’s population, with growth likelyto continue. 7 From a regional perspective,this growth in relative wealth is likely to havea positive, stabilising effect, as more peoplefeel that they are prospering within the currentsystem. However, with greater access to7 World Bank (2012), ‘Latin America: Middle Class HitsHistoric High’, available at http://www.worldbank.org/en/news/feature/2012/11/13/crecimiento-clasemedia-america-latinaSantiago, Chile. An example of growing urban prosperity in the regionthe Internet, a more confident and affluentconsumer class is likely to be increasinglyvocal in its scrutiny of governing regimes. Thegrowing consumer class, particularly in largerand more affluent countries like Brazil andArgentina, is also likely to find itself increasinglybeset by health problems commonly found inwestern countries, such as obesity and relatedillnesses like type-two diabetes – 18% of theArgentine population is currently obese. 8Consequently, workforce productivity couldbe lowered and a rise in healthcare costs couldburden these countries’ economies.ClimateAverage temperatures are projected toincrease by several degrees across the region,particularly in the south, but less so in thetropics. Heatwaves are expected to increasein frequency and intensity over much of theregion. Annual precipitation projectionsindicate a drying over the eastern Amazonbasin, Brazil and southern Chile, with increasesover north western South America. Sea-level8 Hill, A. (2011), ‘Expanding Waistlines - Obesityin Argentina’, available at http://www.argentinaindependent.com/currentaffairs/newsfromargentina/expanding-waistlines-obesityin-argentina/“Growth in relativewealth is likely tohave a positive,stabilising effect,as more peoplefeel that theyare prosperingwithin the currentsystem.”110 Global Strategic TrendsGlobal Strategic Trends111

Part 2Latin America and the CaribbeanLatin America and the CaribbeanPart 2An ageing populationPopulation by ten-year age group and sexMale201520456050rise, combined with potential increases inextreme precipitation events, could increasethe exposure of a number of large andpopulous cities in coastal regions aroundSouth America.Age group100+90-9980-8970-7960-6950-5940-4930-3920-2910-19WaterThe rainfall changes across the region, anda projected continuing retreat of glaciersdue to increasing temperatures, is likely toaffect the availability of freshwater acrossSouth America. This could have significantimpacts on agricultural productivity, waterfor hydro-energy (which meets around 60%of domestic energy demand) and ecosystemhealth and diversity. Continued retreat ofglaciers is likely to increase glacial runoff inthe short-medium term, but as the glacialmass reduces, reductions in glacial-wateravailability could occur. Drought events in theregion are projected to occur more frequently,particularly in the Amazon.AgricultureIn the south eastern part of South America,crop yields (such as soy, maize and wheat) areprojected to either remain stable or slightlyincrease out to 2045, due to more favourabletemperature conditions. However, waterlimitations and an increase in extreme weather0-940 30 20 10 0 010 20 30 40 50 60Millions of peopleSource: UN (2012), ‘World Population Prospects: The 2012 Revision’Female20152045events may reduce crop yields. In tropicalregions, the changing climate is likely toreduce crop production, particularly affectingcrops such as beans, corn, cassava and coffee.Marine ecosystem productivityThe future impact of climate change on theHumboldt Current (one of the world’s mostproductive marine systems) is uncertain, butfisheries could be damaged. Coral reefs,and the marine ecosystems and fisheriesthey support, have been identified as ‘at risk’due to increasing temperatures and oceanacidification. This may reduce the productivityof reefs to the north of the region, affectingthose who depend on them for work andfood.GovernanceFor its economies to grow, the region willprobably have to strengthen its politicalinstitutions, many of which currently faceconsiderable challenges in delivering effectivegovernance, tackling underdevelopedcommercial legislation, employment law andfiscal credibility.Without action, these issues are likely tocontinue to have a damaging effect on levelsof foreign direct investment, limiting theregion’s economic potential. 9 There are someindicators that the region’s governance isimproving. For example, in 2001, Argentina’scivil government dealt with the largestsovereign debt default in history. Despitesubsequent civil unrest, Argentina did notrevert to military rule, evidence that civilianinstitutions and government have taken hold.Nevertheless, corruption in Latin America andthe Caribbean is likely to remain a significantissue, with Transparency Internationalassessing a number of the region’s countries ashaving a serious corruption problem. 109 The World Bank’s ‘Ease of Doing Business Rankings’places the region’s two largest economies (Braziland Argentina) at 116th and 126th respectively, outof 189 nations evaluated. Doing Business (2013),‘Economy Rankings’, available at http://www.doingbusiness.org/rankings10 Paraguay ranks 150, Venezuela 160, Guyana 136,Nicaragua 127, Mexico 106. Chile, by contrast, israted 22nd out of 177 countries. TransparencyInternational (2013), ‘Corruption Perceptions Index2013’, available at http://www.transparency.org/cpi2013/resultsBrazil is increasing investment in defence capabilityMilitary developmentAlthough defence expenditure in LatinAmerican countries overall remains lowin global terms, 11 by 2045 Brazil is likely tohave the ability to project power globally.Brazil is buying more military capability andmodernising its military-industrial complex.It has recently stated its intention to buildnuclear- as well as conventionally-poweredsubmarines. While the degree to which Brazilwould wish to use these new assets for powerprojection remains unclear, it is apparentthat the capabilities needed for Brazil to playa large part in global security will almostcertainly exist within (approximately) the next15 years. Like Brazil, Argentina also aspires todevelop nuclear propulsion technology topower “vessels or submersibles” and has madea commitment that “the current 0.5% of GDP[spent on defence] will be increased in comingyears to reach 1.5%.” 1211 SIPRI (2012), ‘Trends in World Defence Expenditure2012’, available at http://books.sipri.org/files/FS/SIPRIFS1304.pdf12 MercoPress (2010), ‘Argentine [sic] to IncreaseBudget Defence [sic] 50%, Recovering Losses ofFalklands War’, available at http://en.mercopress.com/2010/09/01/argentine-to-increase-budgetdefence-50-recovering-losses-of-falklands-war112 Global Strategic TrendsGlobal Strategic Trends113

Part 2Latin America and the CaribbeanLatin America and the CaribbeanPart 2Although Argentina’s military is currentlygeared towards local defence and security,an increase in defence spending could seemore capable armed forces develop over time.Given the country’s sensitivities regarding therecent history of its military, however, lavishdefence expenditure and large armed forcesare likely to remain unpopular propositionsfor most Argentines. Other Latin Americancountries may also develop aspirations forglobal power projection and political influenceout to 2045.Similarly, Chile has recently offered to becomemore involved in peace support operations(including with the EU) and Columbia hasexpressed a desire to form a link with NATO.As Latin American countries become moreengaged, they are likely to seek greaterinfluence in international institutions –including the UN Security Council.consumer class becomes more affluent, thereis likely to be an increase in the ‘home’ drugsmarket. Some studies have suggested that“Brazil is now the world’s number one marketfor crack cocaine - with at least 1 million hardcoreusers.” 15 It is unlikely that a full-blown15 Ghosh, P. (2013), ‘Brazil Ensnared In Crack CocaineEpidemic: Sao Paulo takes Desperate Measures’,available at http://www.ibtimes.com/brazilensnared-crack-cocaine-epidemic-sao-paulo-takesdesperate-measures-1014090narco-state – a region controlled by drugcartels,with non-existent law-enforcement –will develop in the region, given the improvednature of domestic drugs policy and USinterests. However, smaller countries such asBelize, El Salvador and Panama are likely toremain highly vulnerable to the influence ofdrug cartels, as well as the related crime andcorruption that such influence brings.Although tension between some countriesis likely to endure out to 2045, Latin Americais unlikely to see an ‘arms race’. Whileincreasingly capable militaries and a maturingmilitary-industrial complex will almostcertainly be features of the larger countries,particularly within South America, a regionalstate-on-state conflict is unlikely. Althoughsuch wars have taken place comparativelyrecently, the increasingly interdependentnature of regional trade, as well as diplomaticactivities, provides strong incentives forpeace. 13No country in the region has made a publicdeclaration of its intent to acquire nuclearweapons. Indeed, some have enshrined nonnucleararmed clauses in their constitutionsor signed up to binding treaties. However,both Brazil and Argentina have pursued suchcapabilities in the past, albeit when theywere under military dictatorships. By 2045 anumber of countries in the region will almostcertainly have both the resources and thelatent expertise to pursue a nuclear weaponsprogramme should a political imperativeemerge.Out to 2045, many Latin American countriesare likely to become more globally engaged.Several countries could actively use theirmilitaries more internationally, probablyin peace support and security assistanceroles. Brazil, for example, has a programmeof military cooperation and developmentassistance along the African Atlantic coast.The region produces nearly all ofthe world’s coca leafNarcoticsA recent UN report stated that Colombia,Peru and Bolivia are responsible for producingalmost 100% of the world’s coca leaf. 14Narcotics intended for Northern American andEuropean markets will probably continue tobe smuggled through Central America andthe Caribbean. Drug cartels are highly likelyto remain a significant threat to social andpolitical stability throughout Latin Americaand the Caribbean. As the region’s ownDefence and security implications■■A mature military-industrial complex will probably be a feature of the wealthier LatinAmerican countries by 2045.■■While a Latin American arms race is unlikely, some countries are likely to have muchmore capable armed forces by 2045 than at present, with world-class capabilities insome areas.■■A regional state-on-state conflict is unlikely to occur.■■The emergence of a nuclear-armed country in Latin America by 2045 cannot beruled out, despite existing treaties to the contrary. The resources and knowledge tocreate nuclear weapons will almost certainly be present in a number of countries inthe region.■■More Latin American countries and their militaries are likely to become increasinglyactive internationally.■■It is not likely that a narco-state will emerge in Latin America or the Caribbean by2045, but drug cartels are likely to continue to have significant influence in a numberof countries for the foreseeable future.13 For example, the Cenepa War of 1995 between Peruand Ecuador, which resulted in approximately 500casualties.14 UN Office on Drugs and Crime (2011), ‘World DrugReport 2011’, available at http://www.unodc.org/documents/data-and-analysis/WDR2011/World_Drug_Report_2011_ebook.pdf114 Global Strategic TrendsGlobal Strategic Trends115

Part 2Europe234615143524371925458501 Albania2 Andorra3 Austria4 Belarus5 Belgium6 Bosnia and Herzegovina7 Bulgaria8 Channel Islands9 Croatia10 Cyprus11 Czech Republic12 Denmark13 Estonia14 Faeroe Islands15 Finland16 France17 Georgia21634530271229436181143347 28 22449394132 64226337214813118 Germany19 Gibraltar20 Greece21 Holy See22 Hungary23 Iceland24 Ireland25 Isle of Man26 Italy27 Latvia28 Liechtenstein29 Lithuania30 Luxembourg31 Malta32 Monaco33 Montenegro34 Netherlands201338491035 Norway36 Poland37 Portugal38 Republic of Moldova39 Romania40 Russian Federation41 San Marino42 Serbia43 Slovakia44 Slovenia45 Spain46 Sweden47 Switzerland48 TFYR Macedonia49 Ukraine50 United Kingdom4017Europe is likely to remain a substantial part of the global economy, with the euroand the single market still likely to exist by 2045. EU membership is likely to expand,although it is unlikely that all countries who wish to join will be included. The effectsof climate change are likely to be less severe in Europe than in most other regions,although increased water scarcity in the south may limit agricultural productivitythere. Energy consumption is likely to decrease out to 2045, although hydrocarbonswill probably continue to be the continent’s main source of fuel. Europe is likely to facea range of security challenges, but disagree internally over how to address them. Asthe US focusses increasingly on Asia, Europe will almost certainly be expected to makea greater contribution to its own security. Russia is likely to continue to be a majorpower, maintaining a substantial capability for regional intervention by 2045. China andEurope are unlikely to view each other as threats and may become partners in managingfuture crises.The European economyEurope is likely to remain a substantial part ofthe global economy, although the Europeaneconomic area is likely to face internalstructural problems. As Europe already hasa mature economy, opportunities for furtherdevelopment are comparatively few (relativeto the developing countries), which maymean that growth prospects remain low. TheOrganisation for Economic Cooperation andDevelopment (OECD) estimates that therewill be annual growth of 1.5-2% by 2045. 1Nevertheless, Europe is still likely to have amongthe highest levels of consumption and wealthin the world – the EU single market is likelyto remain a globally important and attractivetrade area. Despite competitive pressures,there is likely to continue to be a strong politicaland economic relationship between the EUand US. This is likely to be driven by commonvalues, extensive financial interdependence andshared interests between EU- and US-basedmultinational corporations.1 OECD (2011), ‘An Economic Projection to 2050: TheOECD ENV-Linkages’The euro and the European single marketwill probably continue out to 2045, but arelikely to face continuing economic challenges.Some countries may withdraw (or be forced towithdraw) from the single currency by 2045.It is possible that the euro will expand to takein new members, perhaps from EU accessioncountries. Further integration is likely to occurto bolster economic recovery and prepare forfuture crises. However, political and economictensions leading to the collapse of the eurocannot be ruled out. This would be a severesetback for European integration and have asignificant impact on the global economy.EU membershipBy 2045, it is likely that the EU will include mostof the countries in the western Balkans. Turkeyis likely to become increasingly important toEuropean security, as the size, capability andincreasing modernisation of its armed forcesmeans that it may have one of the morecapable militaries in Europe, as well as theMiddle East. 2 Despite Turkey’s importance,2 IISS (2013), ‘The Military Balance 2013’Global Strategic Trends117

Part 2EuropeEuropePart 220152045910% shareof globalpopulationA declining population with fewer living in the rural environment2015202520352045Source: UN ‘World Urbanization Prospects: 2011 Revision’0 100 200 300 400 500 600 700 800Population in millionsRuralUrbanAn ageing populationPopulation by ten-year age group and sexMale20152045Age group100+90-9980-8970-7960-6950-5940-4930-39Female20152045“Diaspora Muslimcommunities inEurope are likelyto be increasinglyaffected by intrafaithdiscord in theMiddle East.”it may not receive full membership of the EUby 2045, as existing members are likely to fearhigh costs of integration and disruptions tolocal labour markets. These reasons may alsorule out other countries wishing to join the EU.The EU is likely, however, to seek far-reachingtrade and cooperation agreements with thesecountries to promote stability.Urbanisation, diversity and religionUrbanisation is likely to continue, with supercitiesstraddling national boundaries. Morethan two thirds of the European populationcurrently live in cities and urbanisation is likelyto increase out to 2045, with large transnationalurban regions developing. The UNestimates that Europe will have more than20 such areas by 2045, with a substantialelement of south-west Germany, most of theNetherlands and much of Belgium forminga single agglomeration. 3 Urban areas acrossEurope are likely to contain pockets ofsocial deprivation, often containing a highproportion of migrants.Extensive immigration and mobility of peoplewithin Europe is likely to lead to increasinglymulticultural societies, with a trend towardssecularism. However, local communitieswith strong religious beliefs are also likely tocontinue to exist. The majority of Europeanswill probably tolerate integration andimmigration, rather than embrace it, revertingto a national or regional (rather than European)identity in times of stress. The Islamic3 UN Population Division (2011), ‘World UrbanisationProspects, 2011 Revision’, available at http://esa.un.org/unup/population of Europe is expected to continueto grow, exceeding 58 million by 2030 (8%of the total population), 4 but with Christiantraditions likely to remain dominant. DiasporaMuslim communities in Europe are likely tobe increasingly affected by intra-faith discordin the Middle East. In particular, tensionbetween Sunni and Shia Islam could spread.In 2012, Belgium’s largest Shiite mosque wasfire-bombed by hard-line Sunnis. 5 While theremay be an increase in incidents, particularly inresponse to events in Asia and the Middle East,it is unlikely that large-scale violence betweenthe different sects will occur in Europe itself,not least because of the small number ofShias. 6Family sizesEuropean family sizes are likely to remain small,with birth rates expected to remain underthe replacement level of 2.1 children for eachwoman. Population growth is therefore onlylikely to occur due to immigration. The UK andFrance are likely to have the highest increases4 Pew Research Centre (2011), ‘The Future ofthe Global Muslim Population’, available athttp://www.pewforum.org/files/2011/01/FutureGlobalMuslimPopulation-WebPDF-Feb10.pdf5 The Economist (2012), ‘The Sword and the Word:In the Struggle Between the Two Strands of Islam,the Sunnis are on the Rise’, available at http://www.economist.com/node/215545136 In the UK, Shiite leaders claim their number isapproximately 15-20% of local Muslims, whereasgovernment figures put the proportion at 5%. SeePuelings, J. (2010), ‘Fearing a ‘Shiite Octopus’: Sunni –Shi’a Relations and the Implications for Belgium andEurope’, available at http://www.egmontinstitute.be/paperegm/ep35.pdfin population in the timeframe, leading toincreased infrastructural and environmentalpressures in their urban regions. 7 Conversely,significant parts of central, eastern andsouthern Europe are highly likely to facedemographic decline and stagnation. 8ClimateTemperatures will almost certainly increaseacross the region, with a rise in extremeweather events such as the 2003 heatwave(which caused over 35,000 deaths). Rainfallpatterns will probably change, withnorthern Europe becoming wetter in winterand Mediterranean regions becomingsignificantly drier, particularly in summermonths. Droughts are likely to increasein number, particularly in the central andsouthern regions. Rising sea levels could havesignificant impacts for several major low-lyingcities particularly in the Netherlands.Agriculture and fisheriesThe climatic effect on agriculture willprobably have a significant impact on futureyields. Significant decreases in yields in the7 UN Population Division (2013), ‘World PopulationProspects, 2012 Revision’, available at http://esa.un.org/wpp/Documentation/publications.htm8 Ibid.20-2910-190-980 70 60 50 40 30 20 10 0 0 10 20 30 40 50 60 70 80Millions of peopleSource: UN (2012), ‘World Population Prospects: The 2012 Revision’southern regions are expected due to watershortages and increasing temperatures, withsmall decreases in the central regions, andincreases in the north. Europe is likely toremain self-sufficient for arable and livestockproduction, although many European peoplemay be concerned about food security.Technological advancements, such as moreefficient desalinisation plants, are likely tomitigate water shortages in the MediterraneanShock:Rise of a European powerIf a European country financiallyout-performed the rest of the EU to asignificant extent, domestic politicalconcerns could prompt the country’sleaders to use its leverage to dominateEurope not only economically but alsopolitically, severely challenging the EU’scohesion. In such a situation, Europecould split between those countrieswho are dependent on the large powerand those who resent its influence.There is a risk that NATO could becomeless effective, as European countriesmay place loyalty or opposition tothe economic power above any otheralliances.118 Global Strategic TrendsGlobal Strategic Trends119

Part 2EuropeEuropePart 2There is likely to be an increase in renewable energy capabilitiesarea, and genetically modified crops are likelyto become increasingly widespread (despiteopposition from environmentalists), allowingcontinued production as temperatures riseand rainfall patterns change. Warming of theoceans, due to climate change, may affect fishmigration and could lead to the collapse ofsome fisheries in European waters. There mayalso be tension over fishing rights, particularlyin the north Atlantic, as non-European fishingfleets seek to operate in the area.EnergyEuropean energy consumption is likely togradually decrease out to 2045 as a resultof wide-scale efficiency initiatives, althoughthere will probably be an increase in energyused for heavy transportation. 9 Hydrocarbonsare likely to continue to be the continent’smain source of energy. Although there islikely to be an increase in renewable energycapabilities, nuclear power is likely to continueto be the primary source of power-generationin some European countries and its use maybecome more widespread if safety concerns9 International Energy Authority (2013), ‘WorldEnergy Outlook 2013’, available at http://www.worldenergyoutlook.org/can be addressed. Europe is likely to remaindependent on imports to meet a substantialproportion of its energy requirements,potentially still relying on imports from Russiaand the Middle East by 2045. The US, however,is also likely to become an important Europeansupplier of hydrocarbons within the next twodecades. Nevertheless, reliance on energyimports is likely to mean that Europe will remainvulnerable to disruptions to its energy supply.European securityEurope is likely to face a range of securitychallenges, but disagree internally overhow to address them. However, on a subregionallevel, defence cooperation is likelyto increase to maximise scarce resources.Operational responsibilities (such as airand sea surveillance) will almost certainlycontinue to be shared, and resources pooled.Military capabilities are also likely to be jointlydeveloped and procured. In an increasinglyglobalised world, no European country islikely to be able to handle major securityissues in isolation. Such challenges may, forexample, come from: more sophisticatedtrans-national criminals and terrorists usingnew technologies; resource-security; andvulnerabilities in the cyber environment.Europe-wide decisions on foreign and securitypolicy are likely to remain a source of tension,with decision-making unlikely to proceedrapidly, even in times of crisis. Although theEU will probably continue to be one of theworld’s three largest economies by 2045, itslack of a central military capability means thatit is likely to be comparatively weak as a globalactor. European countries are, however, likelyto continue to agree on the necessity forsupporting and using institutions, such as theUN and the G20, to maintain global stabilityand security.As the US focusses increasingly on Asia,European countries will almost certainly beexpected to make a greater contributionto their collective security. NATO is likely toendure and remain globally significant, butits character will probably change. MostEuropean NATO members are likely to find itdifficult to deploy and sustain military poweroutside Europe without extensive US support.Smaller European countries are only likely tobe able to use their armed forces in a coalition.Exceptions to this trend will probably be theUK and France, who are both likely to continueto be nuclear-armed powers by 2045, andcapable of independent operations. Europeancountries’ defence spending is unlikely toincrease significantly unless a major threatdevelops, with an emphasis on technologyand professionalism rather than weight ofnumbers. This lack of volume may lead toan increased number of security contractorsaugmenting European countries’ forces inoverseas operations. NATO is likely to remainthe bedrock of European countries’ security.However, as US force levels decline and theUS is forced to prioritise, its role in NATOmay reduce. This could lead to the Alliancetaking on the character of a European-baseddefence organisation. In particular, EuropeanNATO-members and the EU may have to take amore active role in managing Russian influenceat a time when Russia’s military is re-emergingas an instrument of power. Similarly, Europeancountries are likely to be the principal provider ofstability in the Balkans.RussiaRussia is likely to continue to be a majorregional power, maintaining a substantialcapability for regional intervention by 2045.Russia’s permanent membership of the UNSecurity Council, geographical size, largeenergy reserves and substantial armedforces are likely to ensure its continuedstatus as a regionally (and, to some extent,globally) influential power by 2045. TheRussian political system will probably remainauthoritarian, even after President Putin’stenure ends. Restoring Russia’s status as a‘great power’ is likely to remain a key politicalobjective for the country. Russia will almostcertainly seek to influence its near abroad witha mixture of hard and soft power. Geopoliticalconsiderations, domestic concerns andeconomic pragmatism are likely to continue tocharacterise Russia’s foreign policy out to 2045.The Russian economy may have a better rateof growth than some European countriesin the short-term, but this is unlikely tocontinue out to 2045. Russia’s economy isalmost certain to remain smaller than theEU’s as a whole. Although energy exportsto Asian markets are likely to have increasingimportance, Europe will probably remainRussia’s primary economic focus. TheShock:Collapse of a major powerAn authoritarian country, held togetherby an oppressive, unrepresentativeregime could conceivably collapsefollowing a period of prolongedunder-investment in civil institutions,infrastructure and healthcare,combined with an economic declineexacerbated by international isolationand sanctions. If such a country alreadycontained a number of differentsub-national groups, civil war couldoccur, followed by fragmentation intoseveral new countries with severeconsequences for the global economyand regional security and stability.“The EU mayhave to take amore active rolein managingRussian influenceat a time whenRussia’s militaryis re-emerging asan instrument ofpower.”120 Global Strategic TrendsGlobal Strategic Trends121

Part 2EuropePart 2With sharedinterests Chinaand the EU maybecome partnersin future crisismanagement.“”country is almost certain to face a numberof challenges, such as an ageing society,environmental degradation, corruption,under-investment and narrow democraticinstitutions. Russia may also be hindered infulfilling its economic potential by inefficientallocation of resources and chronic underinvestment.In the long term, this may make itharder to maintain social stability.Russia’s growing Islamic population couldchallenge the traditional Slavic identity andcontinuing unrest driven by separatists inits outlying regions could exacerbate thegovernment’s security concerns. At the sametime, the generation of Russians born after theCold War may demand greater representationand reduced corruption. However, majorreforms of the political system and theinstitutional economic framework are notlikely unless there is a change in Russia’s styleof government. Without reform, however,Russia is likely to experience a gradualeconomic decline and there is the potential forextensive political and social unrest. A Russiancollapse or fragmentation would have seriousconsequences for the global economy andwould be likely to have severe implicationsfor the stability of neighbouring countries,including those in eastern Europe.ChinaWith shared interests such as stability in theMiddle East and security of trade routes,China and the EU may become partners infuture crisis management. Europe and Chinawill probably have a primarily economicrelationship, centred on the EU and the singlemarket. The Chinese market will almostcertainly be an important one for Europe,just as access to European consumers andcapital is likely to be important for Chinesegrowth. Chinese tourism to Europe is alsolikely to significantly increase, constitutingan important part of the European touristindustry by 2045. Militarily, China and Europeare unlikely to see each other as directthreats, although European countries maycontinue to view China with caution becauseof differences on human rights, systems ofgovernance and encroachment on intellectualproperty rights.Defence and security implications■■Countries in Europe are likely to agree on the broad nature of security challengesfacing the continent, but will probably disagree over how to address them.However, on a sub-regional level, defence cooperation is likely to increase tomaximise scarce resources. Operational responsibilities (such as air and seasurveillance) will almost certainly continue to be shared, and resources pooled.Military capabilities are likely to be jointly developed and procured.■■European countries’ defence spending is unlikely to increase significantly without amajor threat.■■NATO is likely to remain the key organisation for military crisis management,although its cohesion may be challenged by diverse threat perceptions, a USfocus on Asia and internal disagreement on its global role. The Alliance could bereinvigorated by the need to band together to address a deteriorating securitysituation in Europe’s near abroad.■■Russia is likely to remain an influential regional power. Its assertiveness and powerpoliticsmay cause future European security challenges.122 Global Strategic TrendsGlobal Strategic Trends123

Part 2202 3Middle East andNorth Africa2213119121 Algeria2 Armenia3 Azerbaijan4 Bahrain5 Egypt6 Iran7 Iraq8 Israel9 Jordan10 Kuwait11 Lebanon12 Libya13 Morocco14 Oman15 Qatar16 Saudi Arabia17 State of Palestine18 Syrian Arab Republic19 Tunisia20 Turkey21 United Arab Emirates22 Western Sahara23 Yemen511178918716102341562114Over the next 30 years, the Middle East and North Africa (MENA) are likely to remainvolatile areas, with high potential for tension and some violent conflict. The aftermathof the Arab Uprisings of 2011 may still resonate in some countries, with civil unrestlikely. Identity politics and sectarianism will almost certainly be key characteristics ofthe political landscape, constituting a serious challenge to good governance. Countriesin MENA are unlikely to be able to break the cycle of power politics, patronage, religioustension and authoritarianism. Social, environmental and economic issues will probablycontinue to threaten the region’s stability out to 2045, including an under-employedyoung population, a decline in natural energy resources and the effects of climate change.Political reformThe popular uprisings and protests thatbegan in 2011 – known as the ‘Arab Spring’– expressed a demand for more freedomand reform of the political systems acrossthe region. Activists were able to exploitsocial media, something that existing, rigidstate structures initially found hard to copewith. However, while this demand is likelyto increase over the next 30 years, it will notnecessarily lead to major political reform acrossthe region. Activists often struggle to translateshort-term revolutionary action into lasting,concentrated authority. Creating flourishingdemocracies in a number of Middle Easternand North African countries faces a range ofproblems, 1 but there is agreement that a lackof an established civil society is preventingsustainable change. There is also a broadconsensus that a willingness by authoritarianregimes to crack down on popular uprisingsusing force is preventing real change fromoccurring. Social and economic pressuresare likely to increase the demand for changein the region, driving violent unrest out to2045. Identity politics have made a resurgenceacross the region which is likely to continue,with many people defining themselves andtheir relationship with the state by their ethnicor religious identities. As witnessed in Iraqand Syria, sectarian differences are beingexploited as a justification for violence – atrend that is likely to continue out to 2045. 2Governments in MENA are using sectarianidentities as a basis for defining their powerand distributing resources, meaning conflictsare often superficially sectarian in nature evenif they are actually driven by power politicsand resources.Balance of powerIt is highly likely that over the next 30 yearsthere will be shifts in the balance of poweracross the region. For example, it is possiblethat the recent development in Iran’srelationship with the US will have a majorknock-on effect within the Middle East. Theeasing of sanctions and acceptance of Iran’sdevelopment of nuclear energy could see1 Burnell, Peter J. (2013), ‘Democratisation in theMiddle East and North Africa: Perspectives fromDemocracy Support’, available at http://wrap.warwick.ac.uk/55386/1/WRAP_Burnell_7270220-pais-280613-twq2%20%284%29.pdf2 European Council on Foreign Relations (2013), ‘TheGulf and Sectarianism’, available at http://www.ecfr.eu/publications/summary/the_gulf_and_sectarianism217Global Strategic Trends125

Part 2Middle East and North AfricaMiddle East and North AfricaPart 2A growing population living in the urban environmentAn ageing populationPopulation by ten-year age group and sex2015204576% shareof globalpopulation20152025203520450 100 200 300 400 500 600 700 800RuralUrbanMale20152045Age group100+90-9980-8970-7960-6950-5940-4930-39Female20152045Source: UN ‘World Urbanization Prospects: 2011 Revision’Population in millions“MENA’spopulation isexpected toincrease byaround 230million by 2045 toapproximately 670million.”Iran strengthening its position as one of theregion’s leading powers, and increasing itsinternational cooperation. However, theregion will almost certainly remain volatileand the thawing of relations between Iranand the US may be reversed. Out to 2045,it is likely that new drivers will emerge thatalter the shape of the region’s geo-politics,such as a potential decline in the marketfor hydrocarbons due to advancements inalternative energy sources.Regional demographicsIncreasing numbers of working-age peopleare likely to be dissatisfied with employmentopportunities, fuelling civil unrest. MENA’spopulation is expected to increase byaround 230 million by 2045 to approximately670 million, with the populations of somecountries, such as Yemen, almost doublingduring this period. 3 North Africa accounts forabout six percent of the world’s population,with an average annual growth rate of 1.7%.People of working age are likely to be thelargest section of the population, meaningthat governments will probably be underpressure to ensure that there are enough jobsto meet people’s needs. However, as theeconomies of many countries in the region aredriven by energy production or consumption,they generally lack the necessary economicdiversity for sustained growth. Many ofthe governments in the region are alreadyexperiencing significant problems with theiryouth, who now have better education and3 UN Population Division (2013), ‘World PopulationProspects: The 2012 Revision’ available at http://esa.un.org/wpp/unpp/panel_population.htmmore access to information via the Internet,causing them to become increasinglyfrustrated with their limited opportunities towork and improve their standard of living. Thisproblem is likely to worsen. By 2045, accessto information will almost certainly improve,making the population increasingly awareof inequality and their lack of opportunity.Providing work and meeting a growingsense of personal ambition among people ofworking age are highly likely to be significantchallenges for governments across the region.In 2012, for example, North African youthswere 3.4 times more likely to be unemployedthan adults. 4 These factors are likely to add togrowing civil discontent in MENA out to 2045,constituting some of the most likely causes ofcivil unrest.Israel’s future demographics are unclear, withsome predictions suggesting that by 2030 thenumber of Israeli Jews in the area betweenthe Mediterranean Sea and Jordan River couldbe in a 44% minority if the current rate ofpopulation growth continues (1.8% amongIsraeli Jews and 2.5% among Palestinians). 5Many argue that Israel must adopt the twostatesolution if it is to preserve itself as aJewish and democratic country. However,others argue the statistics are flawed and the‘demographic time bomb’ that faces Israelis a political tool to achieve a settlement.Evidence is inconclusive as to whether Israel’s4 High Level Panel on Fragile States (2014), ‘EndingConflict and Building Peace in Africa: A Call to Action’5 Israeli Central Bureau of Statistics (2012), ‘StatisticalAbstract of Israel 2012’, available at http://cbs.gov.il/reader/shnaton/templ_shnaton_e.html?num_tab=st02_03&CYear=2012changing demographics will necessarilyforce a Middle East settlement or alter thebalance of power between Israeli Arabs andJews, although it is likely that the Israeli Arabpopulation will increase significantly over thenext 30 years.20-2910-190-960 50 40 30 20 10 0 010 20 30 40 50 60Millions of peopleSource: UN (2012), ‘World Population Prospects: The 2012 Revision’ResourcesMost of the region’s economies are likelyto continue to be centred on exportinghydrocarbons and there is scope for furtherexploitation. For example, estimates suggestthat Libya holds 46 billion barrels of knownoil reserves 6 and Israel has recently startedexploiting extensive new fields of natural gas. 7Conversely, Egypt is already a net importer ofoil, a situation that is unlikely to change in theforeseeable future.6 Oil and Gas Journal (2011), ‘Libya: NATO DismissesGovernment Allegations of Air Attacks on Oil Fields’,available at http://www.ogj.com/articles/2011/04/libya--nato-dismisses.html7 Reuters (2014), ‘Israel Takes Step Towards Becominga Gas Exporter’, available at http://www.reuters.com/article/2014/02/07/woodside-leviathanidUSL3N0LB5KU20140207EnergyIt is likely that the majority of MENA’s energywill flow towards Asia and Europe, rather thanNorthern America, out to 2045. China andIndia, in particular, are likely to increase theirdependency on the region’s oil to drive theireconomic development, to the extent thatit could be the key factor in their economicprogress. MENA already provides more than70% of China’s oil, with Saudi Arabia beingits largest supplier – China is second only tothe US as a buyer of Saudi Arabian oil. 8 Indiahas long-established relations across MENA,including close ties with both Israel and Iran,and is the fourth biggest consumer of oil inthe world, importing around three millionbarrels of oil per day. Forecasts of India’soil consumption suggest that there couldbe a particularly steep increase as the gapbetween India’s production and consumptioncontinues to grow. Threats to MENA’s stabilityand its hydrocarbon production could havedevastating consequences for Asia’s economicgrowth over the next few decades – policies8 For a local review of growing and ‘fruitful’ China-Saudi relations see Arab News (2012), ‘WorkingTogether for Brighter Future of Saudi -Chineserelations’, available at http://www.arabnews.com/working-together-brighter-future-saudi-chinarelations“Threats to MENA’sstability and itshydrocarbonproduction couldhave devastatingconsequences forAsia’s economicgrowth over thenext few decades.”126 Global Strategic TrendsGlobal Strategic Trends127

Part 2Middle East and North AfricaMiddle East and North AfricaPart 2[The] lack ofnetworkedeconomicinterdependenceremains astructuralweakness for theregion.“”of non-intervention are likely to be difficult tomaintain. As a result, China and India couldbecome more involved in maintaining MENA’sregional security. 9 It is possible that the USwill reduce its involvement in the region, asit becomes more energy self-sufficient, but itis more likely to maintain a commitment toMENA due to its commitment to countries inthe region (including Israel) and because of itsstrategic military basing in the area. The US’sdesire to keep the price of oil stable, to avoidshocks to the global economy, is also likely tosecure its commitment to the region for sometime to come. The EU is likely to continueto be a major importer of Middle Eastern oil.Consequently, EU member states may findthemselves increasingly partnering Asiancountries in addressing security issues withinMENA.Economic diversification is likely to benecessary in a post-hydrocarbon era.For many MENA countries, economicdevelopment over the last 80 years hasbeen dominated by the hydrocarbon exportindustry, with only limited inter-regionaltrade. This lack of networked economicinterdependence remains a structuralweakness for the region, and could constitutea major challenge as hydrocarbon sourcesbecome less productive. Some countriesare, however, already investing in a posthydrocarboneconomic model. The UAE,for example, currently generates 63% ofits income from commerce and tourism. 10Alternative energy resources may reduce theregion’s reliance on hydrocarbons. Out to2045, solar power may offer some opportunityto secure sustainable energy for the region.Morocco is investing significantly in solarpower and Saudi Arabia has announcedambitious plans to invest some US$ 100billion in a project designed to produce onethird of its energy via solar power by 2032. 11However, building productive solar powerinfrastructure across the region is challenging.Desert conditions which create an abundanceof dust and a lack of water are two majorobstacles that increase costs and may makesolar energy prohibitively expensive for mostof the less wealthy MENA countries. Lack ofwater is particularly problematic, as MENA isthe driest and most water-scarce region in theworld – the vast majority of people in NorthAfrica survive on less than 100 mm of averageannual rainfall. However, breakthroughs insolar power technology, such as photo-voltaiccells, do not use water to convert the sun’s raysto electricity. If large-scale prototypes provesuccessful, the potential rewards are massive.Egypt, Jordan, Saudi Arabia and Turkey are allinvesting heavily in nuclear technology and itis likely to be an attractive alternative for many.The nuclear industry estimates that new-buildcontracts in the region will have passed US$200 billion by 2020, suggesting that by 2045the region will have significantly increasedamounts of fissile material and nuclearexpertise. 12Fuel, food and electricity subsidies maycontinue to impede economic development,with the International Monetary Fundestimating that governments in the MiddleEast spent US$ 212 billion on fuel andfood subsidies in 2011. 13 North Africangovernments also often use state subsidiesto reduce food and energy prices as a wayof artificially controlling potential instability.High spending of this kind arguably threatenseconomic development. In the oil-producingcountries in particular, subsidies have insulatedproducers from the need to cultivate largermarkets, stifling growth. The situation is made11 Marc, R. and Mahdi, W. (2012), ‘Saudi Arabia Plans$109 Billion Boost for Solar Power’, available at http://www.bloomberg.com/news/2012-05-10/saudiarabia-plans-109-billion-boost-for-solar-power.html12 NuclearEnergyInsider.com (2013), ‘NuclearConstruction Conference, MENA’, available at http://www.nuclearenergyinsider.com/mena13 International Monetary Fund (2012), ‘Costly MiddleEast Subsidies Need Better Targeting’, availableat http://www.imf.org/external/pubs/ft/survey/so/2012/car051412b.htmworse because most beneficiaries are thewealthy – subsidies therefore increase the gapbetween rich and poor. Changing the statusquo may prove difficult, due to resistancefrom interested parties who see subsidiesas a right. In already fragile countries withpoor governance, it could be very difficult forsubsidies to be reduced over the next 30 years.Climate, water and agricultureThe region will almost certainly becharacterised by rising temperatures andhot extremes, with average annual surfacetemperatures projected to increase acrossNorth Africa and the northern areas of theMiddle East by approximately 1.2 times morethan the global average. Global drying couldlead to a general increase in the size of deserts,such as the Sahara. Annual average rainfall willprobably reduce, with a shift to more intensedrought events which could negativelyimpact freshwater availability. These climateand weather factors, coupled with potentiallychanging pest and disease distribution, couldnegatively impact crop yields, particularly inthe North African region. Rising sea levelswill almost certainly increase the exposure ofmany coastal communities to flooding, withalmost the entire coast of North Africa beingvulnerable, due to levels of development andrapid population growth. With large populouscities, Egypt has been identified as havingimportant centres at risk of future coastalflooding.EducationMany MENA countries have invested heavilyin education over the last half of the century.Gains have been made across the region inthe education sector, with more equitableaccess to education being established.Gender disparity in education has reduced(but certainly not disappeared) and this hascontributed towards a significant declinein birth rates and infant mortality, as wellas increased life expectancy. Most childrenacross the region now attend primaryschool, and rates of secondary and universityeducation match those of countries in otherregions at comparable levels of development.However, funding for education has notdelivered significant results for MENA in termsof improving skills. 14 Patronage, using often14 Badr, M. et al. (2012), ‘Determinants of EducationalAttainment in MENA’, available at http://www.nottingham.ac.uk/credit/documents/papers/12-03.pdf9 Parthasarathy, G. (2011), ‘India-Middle East Relations’available at http://asianaffairs.in/february2011/indiamiddle-east-relations.html10 Government Office for Science (2013), ‘After the Oil:The Future of the Middle East’, available at http://www.sigmascan.org/Live/Issue/ViewIssue/491/4/after-the-oil-the-future-of-the-middle-east/Agricultural productivity will be challenging, particularly in Northern Africa128 Global Strategic TrendsGlobal Strategic Trends129

Part 2Middle East and North AfricaMiddle East and North AfricaPart 2out-dated or heavily religious syllabuses, anda reliance on rote-learning, have all had anegative affect on the region’s ability to turnbright students into productive and skilledworkers. Many of the region’s educationsystems are unable to provide pupils with thenecessary tools to transition successfully fromschool to work. This often drives parentaldecisions to remove children from educationat an early stage in favour of seeking work forthe child. Although there is some recognitionof the need to reform education, it is likelythat, until broader political and social reformstake hold in MENA, education will continue tosuffer over the next 30 years.ReligionOut to 2045, Sunni and Shia relations willalmost certainly continue to cause significantfriction in the Middle East. Tensions betweenShiite Iran and the Sunni Gulf CooperationCouncil (GCC) are likely to remain high.However, not all Shia movements willnecessarily be pro-Iranian and not every Salafi(hard-line Sunni) movement will be stronglyinfluenced by Saudi Arabia. 15 Indeed, there aresignificant Shiite minorities in GCC countries,as well as a growing Salafi movement inIran. Sectarian tensions also reflect socioeconomicdisparities and are likely toescalate if governments do not address thesefundamental issues. For example, Bahrainand Saudi Arabia, where economic inequalitybetween Sunni and Shia is greatest, aremore likely to see tensions rise than othercountries in the region. Satellite televisionchannels and social media are also likely toplay an increasing role in spreading sectarianmistrust. 16 Over the next 30 years, growingtensions are also likely within Sunni and Shiitecommunities. Sunni Islam is particularly likelyto become increasingly factionalised. AsSalafist groups grow in prominence aroundthe world, a backlash may emerge frommoderate Sunnis. Correspondingly, ShiiteIslam contains a number of internal divisions.15 Chatham House (2012), ‘Identities and Islamismsin the GCC: Future Trends in the GCC WorkshopSummary’, available at http://www.chathamhouse.org/sites/default/files/public/Research/Middle%20East/0512gcc_summary.pdf16 Ibid.TerrorismSocial, economic, religious and politicaljustifications for terrorism are likely to continueto be used by many groups within the region.Most terrorist groups in MENA are likely tocontinue to target Israel, western interestsin the region and secular governments,with many acting in the name of Islam andfollowing Islamic fundamentalist principles.Most terrorists are highly likely to remainfocussed on attacks within the region,although Al-Qaida and affiliated groups arelikely to continue to target western interestsout to 2045. China is already experiencingsome threat to its overseas interests withinMENA, and may increase its activity in theregion - which could lead to a correspondingrise in the terrorist threat to China. 1717 Zhu, W. (2011), ‘Middle East Terrorism, GlobalGovernance and China’s Anti-terror Policy’,available at http://mideast.shisu.edu.cn/picture/article/33/81/10/ca7475ef4594a8e57aaaaf20a6e7/ffa30577-f3be-4895-aac3-f29fa2ac421b.pdfDefence and security implications■■MENA is highly likely to remain a volatile region over the next 30 years and thepossibility of major regional conflict cannot be ruled out. The possible thawing ofrelations between Iran and the US could have significant implications for regionalsecurity.■■Socio-economic factors, including disparity in wealth, gender inequality andpoor education, are likely to be the underlying causes of much of the unrest andsometimes violent conflict within MENA.■■Identity politics in the region, particularly sectarianism, are likely to continue to beused as a mobilising factor in conflict.■■Internal terrorist threats are likely to continue, as are attacks on other nations fromgroups based in the region. Although Al-Qaida has been damaged in recent years,Islamic fundamentalism will almost certainly continue to fuel terrorist networks outto 2045.“Most terroristgroups in MENAare likely tocontinue to[operate], withmany acting inthe name of Islam.”Jerusalem, Western Wall and The Dome of The Rock. A manifestation of the proximity of religion130 Global Strategic TrendsGlobal Strategic Trends131

Part 271 Angola2 Benin3 Botswana4 Burkina Faso5 Burundi6 Cameroon7 Cape Verde8 Central African Republic9 Chad10 Comoros11 Congo12 Côte d’Ivoire13 Democratic Republic of the Congo14 Djibouti15 Equatorial Guinea16 Eritrea17 Ethiopia18 Gabon19402242292125381228420482393519 Gambia20 Ghana21 Guinea22 Guinea-Bissau23 Kenya24 Lesotho25 Liberia26 Madagascar27 Malawi28 Mali29 Mauritania30 Mauritius31 Mayotte32 Mozambique33 Namibia34 Niger35 Nigeria36 Réunion34151811613398441335124464537552474927325037 Rwanda38 Saint Helena39 Sao Tome and Principe40 Senegal41 Seychelles42 Sierra Leone43 Somalia44 South Africa45 South Sudan46 Sudan47 Swaziland48 Togo49 Uganda50 United Republic of Tanzania51 Zambia52 Zimbabwe1623171410433126413630DemographicsSub-Saharan AfricaSub-Saharan Africa will almost certainly remain a region of significant political andeconomic differences by 2045 but overall the region’s economy should grow – possiblyrapidly. However, economic performance is likely to vary sharply from country tocountry, with a lack of infrastructure and political instability likely to continue toprovide some of the biggest challenges to sustained growth. The region is likely to seethe fastest rise in population growth of anywhere in the world, with some countries’populations more than doubling by 2045. Governance in the region is likely to improveand the current trend towards representative government is likely to continue, althoughthis will probably be resisted by some authoritarian regimes, possibly leading toviolence. The risk of state-on-state conflict is likely to reduce but will almost certainlyremain a concern. By contrast, the threat from intra-state conflict and from terrorism islikely to endure and could worsen. The African Union’s ability to deal with crises is likelyto improve, but it will probably still require international assistance for more demandingsituations. Technology is likely to facilitate links between different parts of the regionand with the wider world, thereby increasing economic productivity and improvinggovernance. If current trends continue, most people in the region are likely to haveaccess to the Internet by 2045. Climate change is likely to have a severe impact on someparts of sub-Saharan Africa, with agriculture particularly badly affected. The region islikely to continue to face significant rates of infection from communicable diseases suchas HIV/AIDS and malaria. But it is conditions such as diabetes and cancer that are likelyto pose the greater health threat by 2045.Today, 877 million people live in sub-SaharanAfrica. This is likely to double by 2045,meaning that around 20% of the world’s totalpopulation could live in the region. Sub-Saharan Africa’s working-age population isexpected to exceed that of China by 2030 andIndia by 2035. 1 Correctly harnessed, this couldprovide a significant demographic dividend.However, this rapid population growth islikely to jeopardise social and economicdevelopment, particularly in the mostvulnerable countries. With the proportionof those in the 15-25 age-group higher insub-Saharan Africa than anywhere else in the1 McKinsey Global Institute (2012), ‘Africa at Work: JobCreation and Inclusive Growth’world, young people are likely to be under- orunemployed and hence disaffected, drivinginstability. For example, Nigeria currently seesfour million young people join the workforceeach year, but only a small proportion of themfind paid work. 2 In sub-Saharan Africa as awhole, official figures from 2012 put youthunemployment at 11.8% – double the ratefor adults. Much of this population growthis likely to occur in urban areas, with thepopulations of African cities growing by anestimated 15-18 million people each year. 3Over the next 20 years, city populations inthe region are likely to grow 45% faster than2 High Level Panel on Fragile States (2014), ‘EndingConflict and Building Peace in Africa: A Call to Action’3 Ibid.“Sub-SaharanAfrica’s workingagepopulationis expected toexceed that ofChina by 2030 andIndia by 2035.”Global Strategic Trends133

Part 2Sub-Saharan AfricaSub-Saharan AfricaPart 2% shareof globalpopulation2015204513 19A growing population in both rural and urban environments2015202520352045Source: UN ‘World Urbanization Prospects: 2011 Revision’“There has been asteady decline inrates of state-onstateconflict in theregion as a wholeand this trend islikely to continue.”0 250 500 750 1,000 1,250 1,500 1,750 2,000Population in millionsin rural areas, with 60% of people in Africalikely to live in cities by 2050. 4 Most sub-Saharan cities, though, are likely to struggle toprovide basic services, with an estimated 100million Africans – around 10% of the region’sprojected total population – living in slums by2020. 5GovernanceThe political picture within sub-Saharan Africawill almost certainly continue to vary fromcountry to country by 2045, but if currenttrends continue, there is likely to be a decreasein the overall number of coups. Between1960 and 2000, there were approximately20 successful coups each decade in theregion, but this fell to just six in 2000-2010.(Successful coups took place in the CentralAfrican Republic, Guinea-Bissau, Mauritania(twice), Guinea and Madagascar.) A numberof countries in sub-Saharan Africa now havedemocratically elected governments. Thisshift towards representative governmentis likely to continue, driven by improvededucation, higher income and better access,via technology, to information and differentpoints of view. 6 Demand and support forgreater representation is likely to becomewidespread among the general public,mobilising an increasingly politically activeand outspoken population. However, thepath towards democracy is unlikely to besmooth. Although multi-party elections willalmost certainly become the norm in most4 High Level Panel on Fragile States, op. cit.5 Ibid.6 Cillers, J., Hughes, B. and Moyer, J. (2011), ‘AfricanFutures 2050’RuralUrbansub-Saharan countries, they will probably varyin quality. Flawed democracies are still likelyto be prevalent in 2045, with some countriessubject to authoritarian governments.Demands for democratic elections couldbecome violent, particularly in areas wheredemocracy is not entrenched.Corruption is likely to decline in some partsof the region while enduring in others.Currently, three of the world’s ten mostcorrupt countries are found in sub-SaharanAfrica (Somalia, Sudan and South Sudan),while only three are among the 50 leastcorrupt countries (Botswana, Cape Verde andRwanda). 7 Poverty, weak political institutionsand poorly developed institutional checksand balances will probably continue to driveand allow corruption in some parts of theregion. However, this is likely to be mitigatedto some extent by: deeper involvement ofcivil groups; strengthening the judiciary;more transparency (facilitated in large part byincreasing information and communicationtechnology); and increasing education andcorruption-awareness programmes. Thiscould lead to a decline in overall levels ofcorruption (as perceived today) by 2045.Terrorism and conflictThere has been a steady decline in ratesof state-on-state conflict in the region as awhole and this trend is likely to continue outto 2045 – although some areas will remaincontested. Intra-state conflict will almost7 Transparency International (2013), ‘CorruptionPerception Index 2013’, available at http://www.transparency.org/cpi2013/resultscertainly endure, and fragmentation of somecountries remains possible, perhaps likely. Therisks of instability and violence are unlikelyto disappear (and may even increase insome areas) due to factors such as dramaticpopulation growth, unfulfilled expectations,unemployment, radicalising ideologies,widening inequalities and differences inaccess to resources. These factors may alsoincrease the risk of terrorism out to 2045. Anumber of more positive trends, however,may provide a measure of mitigation, suchas stronger civil societies, economic growth,greater access to education and the growingempowerment of women. 8 Indeed, thenumber of women entering politics hasincreased – for example, the number ofwomen members of the South AfricanParliament has more than doubled since 1994.Also, the capacity of African governments andregional organisations, particularly the AfricanUnion, to deal with security challenges is likelyto increase – although the more demandingsecurity challenges are still likely to requireinternational assistance.8 Cillers, J. and Schünemann, J. (2013), ‘The Future ofIntrastate Conflict in Africa: More Violence or GreaterPeace?’A resource rich region will attract foreign investmentResourcesSub-Saharan Africa is likely to continue to beresource-rich, with new oil and gas discoverieslikely to be made, potentially helping to satisfythe world’s rising demand for hydrocarbons.While this revenue is likely to boost theregion’s economies, it may exacerbate existinginequalities by concentrating wealth in thehands of a small number of people. Oil andgas production is likely to grow faster in sub-Saharan Africa than in other regions, attractingsignificant foreign investment. 9 China ishighly likely to continue to be involved in theregion, but could become less welcome if it isviewed as being exploitative rather than as aninvestor. With this increasing potential wealth,however, comes a corresponding increasein the potential for violence. Between 2010and 2011, friction over resources accountedfor approximately 35% of all conflicts insub-Saharan Africa – and this trend is likelyto continue. 10 By 2045, dramatic populationgrowth and the increasing threat from climatechange are likely to increase competition for9 Verma, Raj (2012), ‘Is Africa the New Persian Gulf?Not Yet’10 Heidelberg Institute for International ConflictResearch (2012), ‘Conflict Barometer 2012’134 Global Strategic TrendsGlobal Strategic Trends135

Part 2Sub-Saharan AfricaSub-Saharan AfricaPart 2An ageing populationPopulation by ten-year age group and sexMale20152045Age group100+90-9980-8970-7960-6950-5940-4930-3920-2910-190-9Female20152045250200150 100 50 0 050100150 200 250Millions of peopleSource: UN (2012), ‘World Population Prospects: The 2012 Revision’“Rising sea levelswill almostcertainly increasethe risk of floodingfor ecosystemsand coastalcommunities.”Falling crop yields may be alleviated by improvements in science and technologyfood, water and energy – these factors mayalso act as catalysts for further violence andinstability, particularly in the most fragilecountries. 11 Water scarcity could be a keydriver of conflict – water basins which crossnational boundaries account for 90% of Africa’ssurface water, with the Congo Basin alonespanning ten countries. 12ClimateThe sub-Saharan economy will almostcertainly continue to rely on climate-sensitiveactivities out to 2045. Average annualtemperatures are projected to increase, asare instances of heatwaves. Annual averagerainfall is also likely to increase over thetropical regions (particularly in east Africa)but decrease over the sub-tropical regions.The variability of rainfall is likely to change,with both intense rainfall and drought events11 Cillers and Schünemann, op. cit.12 High Level Panel on Fragile States, op. cit.becoming more frequent. The south of theregion is likely to be particularly at risk ofsevere droughts. Rising sea levels will almostcertainly increase the risk of flooding forecosystems (such as mangroves) and coastalcommunities (including a number of cities)with Mozambique and small island statesparticularly at risk.Agriculture and fisheriesMany crops in the region are already grownclose to their limits of heat tolerance and95% of sub-Saharan Africa’s agriculture israin-fed. Overall crop yields are expected todecline, and while improvements in scienceand technology have the potential to alleviatethese challenges, the region could facedecreasing productivity and increasing foodprices. Declines are projected for key cropsincluding wheat, maize, sorghum, millet andgroundnut. This is likely to impact productivityin a number of countries, particularly SouthAfrica, Zimbabwe and those in the east.Ocean acidification and temperature changesare also likely to adversely affect marineecosystems and fishing industries.TechnologyThe growth of information andcommunication technology within sub-Saharan Africa, although uneven, is likelyto drive change and improve the region’sintegration with the rest of the world,including via diaspora communities. Internetconnectivity is likely to continue to improveand, if current trends continue, the majority ofpeople should have access to the Internet andmobile communications technology by 2045.As communication gets easier, people arelikely to be able to monitor their governmentsmore readily and press for improvements. 13Governments will probably find it harder tocontrol or restrict the flow of information andto hide abuses of power from the public.HealthMortality levels in most sub-Saharan countrieshave decreased and are likely to continueto do so out to 2045. Of particular note areinfant and child mortality levels, which havedeclined by approximately 50% between13 Center for Strategic and International Studies (2011),‘Assessing Risks to Stability in Sub-Saharan Africa’the 1980s and the present day. 14 Thesedecreases are primarily due to sanitationprogrammes, vaccination campaigns andproviding nutritional supplements. Althoughthe number of AIDS-related deaths hasnoticeably decreased throughout the region,with significant progress in reducing motherto-childtransmission of HIV, 15 rates of infectionare still extremely high – over 4% of adultscurrently live with the disease. 16 Unless anaffordable cure is found, the disease is stilllikely to be prevalent in 2045. The same istrue for malaria, which caused an estimated627,000 deaths worldwide in 2012, mostlyamong African children. 17 Changes intemperature and rainfall could impact thegeographic distribution of malaria, causingareas of contraction as well as expansion.However, socio-economic factors are likely tocontinue to play a significant role in incidencerates. Sub-Saharan Africa is also likely to seea rise in non-communicable diseases such14 JICA Research Institute (2013), ‘DevelopmentChallenges in Africa Towards 2050’15 UNAIDS (2012), ‘Regional Fact Sheet’16 World Health Organisation (2011), ‘Global HealthObservatory: HIV/AIDS’, available at http://www.who.int/gho/hiv/en/17 World Health Organisation (2013), ‘Malaria FactSheet No. 94’, available at http://www.who.int/mediacentre/factsheets/fs094/en/index.html“As communicationgets easier, peopleare likely to beable to monitortheir governmentsmore readilyand press forimprovements.”136 Global Strategic TrendsGlobal Strategic Trends137

Part 2Sub-Saharan AfricaPart 2Some projectionssee [the region]achieving thehighest rate ofglobal economicgrowth between2030 and 2050.“”as hypertension, heart disease and cancer. 18There is an increasing trend in hospitalisationand mortality due to such diseases, whichare likely to account for more than 20% of thedisease burden by 2030. By 2045, the numberof deaths due to non-communicable diseasesin Africa is likely to exceed the combineddeaths from communicable disease, nutritionaldeficits and maternal and prenatal deaths. 19Health services in sub-Saharan Africa arecurrently under-resourced and struggle tomeet the demand for services. The region has14% of the world’s population and 24% of theworld’s diseases, yet it only has 1.3% of globalhealth workers. 2018 World Bank (2008), ‘The Business of Health in Africa’,available at http://www.unido.org/fileadmin/user_media/Services/PSD/BEP/IFC_HealthinAfrica_Final.pdf19 World Health Organisation (2013), ‘Fact Sheet: Non-Communicable Diseases’, available at http://www.who.int/mediacentre/factsheets/fs355/en/20 IRIN News (2008), ‘Africa: Climate Change Linked toSpread of Disease’Economic growthEconomic inequalities between countriesare likely to continue and potentially increaseout to 2045. 21 Some sub-Saharan countrieshave developed diverse economies which arelikely to reduce their vulnerability to externalshocks and enable them to achieve long-termgrowth. Other countries lack strong, stablegovernments and institutions – this is likely tohinder their ability to build a better businessenvironment in the future. Although there iscautious optimism about the region’s potentialto compete in global manufacturing, 22 unlessskills shortages and infrastructure challengesare addressed, only a few sub-Saharancountries are likely to be able to competewith countries such as Vietnam or Indonesiaby 2045. Although Africa is expected tocontinue to be the world’s poorest region,some projections see it achieving the highestrate of global economic growth between 2030and 2050. 2321 McKinsey Global Institute (2010), ‘Lions on the Move:the Progress and Potential of African Economies’22 Dinh, H. T. (2012), ‘Opinion: Could Africa Be World’sNext Manufacturing Hub?’, available at http://edition.cnn.com/2012/06/15/opinion/africamanufacturing-hub/23 OECD (2012), ‘Environmental Outlook to 2050’Defence and security implications■■The risk of state-on-state conflict is likely to reduce overall, although instability andviolence will almost certainly continue out to 2045, possibly increasing in someareas.■■Terrorist organisations are likely to continue to pose a threat to peace and security,driven by youth unemployment, dissatisfaction with governing regimes and themis-management of natural resources.■■The African Union’s ability to handle crises is likely to improve, although it willprobably still require support from the international community to deal with moredemanding situations.■■The combined challenge of an increased population, demands on resources and theeffects of climate change (particularly drought) on food and water supplies are likelyto lead to tension, which could result in conflict.■■The urban population is likely to increase significantly and many more cities arelikely to be located on or near the coast. Rising sea-levels are likely to lead tohumanitarian disasters that will probably need an international response.138 Global Strategic TrendsGlobal Strategic Trends139

Part 2Central Asia1 Kazakhstan2 Kyrgyzstan3 Tajikistan4 Turkmenistan5 UzbekistanDespite the divergent paths taken by the five Central Asian republics since theirindependence from the Soviet Union, each remains vulnerable to social andeconomic risks. These potential problems stem from internal threats caused by weakinfrastructure and institutions, as well as their relations with external actors. As aresult, the region is susceptible to ethnic conflict, sudden political transitions, economicshocks, food insecurity and natural disasters – all potentially posing strategic threatsbeyond Central Asia to the rest of the world.45132External influencesCompared to the other Central Asian countries,Kazakhstan has greater capability and scope topursue an independent foreign and economicagenda. The other four republics are likely tobe the subjects of competing interest frompowers outside the region. 1 As its own largereserves in the Arctic become more accessible,Russia may no longer see an overriding needto maintain specific influence linked to CentralAsia’s oil and gas supplies. Nevertheless, Russiais likely to continue to seek to be the dominantexternal actor in the region, aiming to preventother foreign powers from attaining a highdegree of political or military influence. 2 Chinais likely to continue to invest in Central Asianagriculture, energy reserves and associatedinfrastructure, looking for extra ways to link thecountries in the region to each other and toitself. This is likely to be welcomed overall, butsome in Central Asia may be concerned abouteconomic competition caused by the influxof Chinese goods into local markets. Amongthe South Asian countries, India and Pakistan1 Oxford Analytica (2013), ‘South and Central AsiaWorkshop: Strategic Trends out to 2045. Summaryreport produced for DCDC’2 Chatham House (2012), ‘The Long Goodbye: WaningRussian Influence in the South Caucasus and CentralAsia’, available at http://www.chathamhouse.org/sites/default/files/public/Research/Russia%20and%20Eurasia/0612bp_nixey.pdf(as well as Afghanistan) have most to gainfrom energy and trade relations with CentralAsia, but – with the exception of Pakistani-Turkmen gas cooperation – are unlikely tobe as influential as China in the region. Theregion’s largest trading partner, the EU, islikely to remain influential in 2045, as is theUS. Although all the major regional actorshave an interest in Central Asia, none appearsto have a strategy of territorial expansion intothe region or of becoming directly involved insecurity issues.Internal threatsAll the Central Asian republics are vulnerableto significant political and social threats that,in turn, pose risks to the region’s security. 3Of the five, Kazakhstan is the most stable.However, the eventual departure of itslong-standing President will almost certainlygive rise to some jockeying for position.Kazakhstan’s institutions are likely to besufficiently developed to prevent subsequentoutbreaks of widespread violence orseparatism. Kazakhstan also has the greatestpolitical and economic independence fromRussia, arguably making it the most importantCentral Asian country. 43 Oxford Analytica, op. cit.4 Chatham House, op. cit.Kazakhstan hasthe greatestpolitical andeconomicindependencefrom Russia,making it themost importantCentral Asiancountry.“”Global Strategic Trends141

Part 2Central AsiaCentral AsiaPart 22015204511% shareof globalpopulationA growing population living in the urban environment2015202520352045Source: UN ‘World Urbanization Prospects: 2011 Revision’“All five CentralAsian countriesface parallel risksto their watersecurity as aconsequenceof cross-borderdisputes.”0 10 20 30 40 50 60 70 80 90 100By contrast, Kyrgyzstan, Tajikistan,Turkmenistan and Uzbekistan havecomparatively weak government institutionsand relatively unitary political hierarchies (withthe partial exception of Kyrgyzstan, whichis demonstrating trends towards greaterpluralism). Like Kazakhstan, Uzbekistan mayalso face challenges with political stabilitydue to an aging President and no clearsuccessors. Out to 2045, Southern Kyrgyzstanis likely to remain a hotbed of inter-ethnicviolence between ethnic Kyrgyz and Uzbekcommunities, arising out of each community’sperceptions of unequal opportunities, historicgrievances and the central government’s lackof control over local security forces. A porousborder with Afghanistan is likely to continueto make Tajikistan vulnerable to developmentsin the north of that country, particularly ifhistoric conflicts resurface between Tajikistan’sgovernment forces and Islamist insurgents.In Uzbekistan, persistent poverty andinappropriate distribution of basic resources(such as land and water) will probably be longtermdrivers of instability.ReligionIslamist movements stand almost nochance of overpowering state institutions orgathering substantial support in urban areas. 5Nevertheless, the overall manner in whichthe governments of the region have soughtto combat extremism has exacerbated theproblem. It is also likely to remain a long-term(if low-level) threat to stability. Out to 2045,continued socio-economic adversity andgrowing animosity towards an overbearing,monopolistic state are likely to increase the5 Oxford Analytica, op. cit.Population in millionsRuralUrbannumber of instances of instability acrossCentral Asia. Social discontent may result insupport for underground religious movementsrather than opposition parties, which areexpected to remain weak.ResourcesFluctuations in food prices and low levels ofself-sufficiency will almost certainly continueto test the ability of Central Asian countriesto manage their food supply. Kyrgyzstanand Tajikistan currently import significantproportions (over 30%) of their food suppliesand remain the most vulnerable to pricefluctuations and supply disruptions. InUzbekistan and parts of Tajikistan, statepolicies of cotton cultivation have dramaticallyreduced the amount of land available forarable farming. Such policies are likely toremain in place for the foreseeable futuregiven how important cotton is to bothcountries’ economies. All five Central Asiancountries also face parallel risks to their watersecurity as a consequence of cross-borderdisputes over the Amu Darya and Syr Daryarivers and the Caspian Sea.ClimateThe region is characterised by a generallyhigh altitude, arid and semi-arid conditionswith warm summers and cold winters, withseasonal rainfall affecting water availabilityand flooding. Average annual temperaturesare likely to increase by around 1.5°C by themiddle of the century. Existing low wateravailability in the west of the region is likely toworsen. Heatwaves will probably increase infrequency and magnitude, while extreme coldevents are likely to decrease across the region.Natural disastersAll five Central Asian countries are, and willalmost certainly remain, prone to severeearthquakes and other natural disasters. 6 Themost seismically active areas are often themost densely populated, among them theOsh region in Kyrgyzstan and the FerghanaValley, which includes parts of Kyrgyzstan,Tajikistan and Uzbekistan and is home to morethan 11 million people (nearly 20% of theregion’s population). 7 Institutional weaknessand budgetary constraints leave populationsin Central Asia particularly vulnerable tonatural disasters. The only exception isKazakhstan, which has initiated long-termreform efforts and dedicated financialresources to develop risk managementcapabilities. By contrast, Kyrgyzstan hasrepeatedly failed to take into account thewarnings of seismologists, and more than 60%of the population live in housing that is not6 Oxford Analytica, op. cit.7 Asian Development Bank (2010), ‘Central Asia Atlasof Natural Resources’A mosque in Khiva, Uzbekistanable to withstand the strong earthquakes thatthe region is likely to continue to experience. 8Economic vulnerabilityUnemployment and poor resource availabilitymean that many people in the region are likelyto continue to migrate to find work. Therehave been large population movementsacross Central Asia since independence, bothwithin and between countries, and theseincreasingly reflect economic considerations.Together with Russia, Kazakhstan has becomethe preferred destination for immigrants fromthe poorer countries of Central Asia, whileTajikistan, Uzbekistan and Kyrgyzstan havebecome increasingly dependent on moneysent home by emigrants (which currentlyaccounts for 50% of GDP in Tajikistan, 40%8 Swiss Agency for Development and Cooperation(2008), ‘Kyrgyzstan Earthquake Safety InitiativeProject’, available at http://www.swiss-cooperation.admin.ch/centralasia/en/Home/Activities_in_Kyrgyzstan/COMPLETED_PROJECTS/Kyrgyzstan_Earthquake_Safety_Initiative142 Global Strategic TrendsGlobal Strategic Trends143

Part 2Central AsiaPart 2An ageing populationPopulation by ten-year age group and sexMale20152045Age group100+90-9980-8970-7960-6950-5940-4930-3920-2910-190-9Female20152045876 5 4 3 2 1 0 0 1 2 3 4 5 6 7 8Millions of peopleSource: UN (2012), ‘World Population Prospects: The 2012 Revision’in Kyrgyzstan, and 10% in Uzbekistan). 9 Theviability of this development model dependson external circumstances, and particularly onthe continued demand for imported labourin Russia and, to a lesser extent, Kazakhstan.The labour-exporting countries are, therefore,extremely vulnerable to an economicdownturn in the host economies or to theimposition of migration restrictions. Suchlimits are likely to be put in place by 2045 dueto Russia’s economic difficulties and associatedanti-immigrant violence. At the same time,Uzbek and Turkmen dependence on oil andgas exports is likely to continue to make bothcountries vulnerable to downturns in demandoutside the region and to reducing levels ofsupply. Out to 2045, Tajikistan, Kyrgyzstan,Uzbekistan and Turkmenistan are thereforelikely to be at risk of instability from economichardship.9 Oxford Analytica, op. cit.Defence and security implications■■Although all the major regional actors have an interest in Central Asia, none appearsto have a strategy of territorial expansion into the region or of becoming directlyinvolved in security issues.■■The primary triggers of instability in Central Asia remain rooted in the internalpolitics of each country. Countries in the region are likely to remain vulnerable tosignificant political and social threats that, in turn, pose risks to the region’s security.144 Global Strategic TrendsGlobal Strategic Trends145

Part 2251213316285482620109423718South & East Asiaand Oceania433222411 Afghanistan2 American Samoa3 Australia4 Bangladesh5 Bhutan6 Brunei Darussalam7 Cambodia8 China9 China, Hong Kong SAR10 China, Macao SAR11 Cook Islands12 Dem. People’s Republic of Korea13 Fiji14 French Polynesia15 Guam16 India17 Indonesia18 Japan19 Kiribati20 Lao People’s Democratic Republic21 Malaysia22 Maldives23 Marshall Islands24 Micronesia (Fed. States of)25 Mongolia26 Myanmar27 Nauru28 Nepal29 New Caledonia30 New Zealand31 Niue32 Northern Mariana Islands33 Pakistan34 Palau35 Papua New Guinea36 Philippines37 Republic of Korea38 Samoa39 Singapore40 Solomon Islands41 Sri Lanka42 Taiwan43 Thailand44 Timor-Leste45 Tokelau46 Tonga47 Tuvalu48 Vanuatu49 Viet Nam50 Wallis and Futuna Islands7213949Inset for South Pacific Islands1347503845623144361733415351924142723404829See inset30China and India will almost certainly continue to be the dominant powers in the regionby 2045, with their economies ensuring that South & East Asia makes the biggestcontribution to the world’s GDP. Japan is likely to continue to have the region’s thirdlargesteconomy. In Oceania, Australia will almost inevitably remain the dominantpower and have the largest economy. South & East Asia and Oceania are likely tocontinue to contain over 50% of the world’s population by 2045, presenting bothbenefits and challenges. China and India are likely to continue to devote considerableresources into ensuring economic growth and both countries are likely to continue toseek a strong economic relationship with the US. The way that China and India managetheir societies’ demands and their internal methods of governance will be importantto the region’s development. Both China and the US are likely to become increasinglydependent on the global economy for their long-term stability, prosperity and security.DemographyThe average age of China’s population islikely to increase from 34 in 2011, to 46 in2045, with some projections seeing China’sworkforce shrinking by 2045 as a result ofpopulation aging. 1 This could lead to Chinabecoming one of the first countries to agebefore it gets wealthy. 2 The populations ofSouth Korea, Japan and parts of Oceaniawill almost certainly become significantlyolder. Countries with younger age profilesand larger populations, such as Bangladesh,India, Indonesia, Pakistan and the Philippinesare likely to enjoy the economic benefits ofproductive, and relatively cheap, manpower.However, all countries will probably need todevelop adequate social policies, to ensurethat large-scale inequality and poor educationdo not generate social problems that lead toinstability. Furthermore, many South & EastAsian countries have significantly more menthan women. For example, China is likely1 OECD (2012), ‘Environmental Outlook to 2050’2 Goldman Sachs (2011), ‘Population Growth andAgeing in the BRICs’, available at http://www.goldmansachs.com/our-thinking/archive/archivepdfs/population-growth-ageing-brics.pdfto have around 48 million more men thanwomen by 2045. This could lead to socialchallenges, particularly as male-dominatedsocieties tend to be more authoritarian andmore prone to violence. 3 Urbanisation willalmost certainly continue at a rapid rate, withmany cities located in coastal areas vulnerableto flooding.Economic and strategic importanceAs well as containing over 50% of the world’spopulation, 4 South & East Asia are also likelyto be the greatest contributor to global GDPfrom 2030 onwards. 5 Its huge populationcould provide a vast consumer market, while3 Caprioli, M. and Trumbore, P. F. (2003), ‘Identifying‘Rogue’ States and Testing their Interstate ConflictBehavior’, available at http://lib.znate.ru/docs/index-124184.html4 UN (2012), ‘World Population Prospects: The 2012Revision’, available at http://esa.un.org/wpp/unpp/panel_population.htm5 Standard Chartered (2010), ‘The Super-Cycle Report’,available at https://www.sc.com/id/_documents/press-releases/en/The%20Super-cycle%20Report-12112010-final.pdf. Projections that suggest thatChina, India, Japan and the rest of Asia combined willcontribute 47% to global GDP by 2030, as opposedto 26% from the EU and US.Urbanisation willalmost certainlycontinue at arapid rate, withmany citieslocated in coastalareas vulnerableto flooding.“”4611Global Strategic Trends147

Part 2South & East Asia and OceaniaSouth & East Asia and OceaniaPart 2A growing population living in the urban environmentAn ageing populationPopulation by ten-year age group and sex% shareof globalpopulation 56 52201520452015202520352045RuralUrbanMale20152045Age group100+90-9980-8970-7960-69Female20152045Source: UN ‘World Urbanization Prospects: 2011 Revision’0 500 1000 1500 2000 2500 3000 3500 4000 4500 5000Population in millions50-5940-4930-39“China and Indiaare likely to attainglobal leadershipin select technicaldisciplines,achieving paritywith the West in anumber of nicheareas as soon as2015.”continued industrialisation, investmentin research and improved transportationinfrastructure are likely to drive economicgrowth and build independent capabilitiesacross South & East Asia and beyond. Forexample, the further development of thePan-Asia railway network includes a proposedrail link between China and Central Asianstates as well as between China and Russia.The economic growth of China, possiblysucceeded by India, will probably commandparticular attention over the next 30 years.Forecasts suggest that by 2045 China, the EU,India and the US will form the world’s largesteconomies, with Japan also likely to remain animportant economic power, both regionallyand globally. These countries or (in the EU’scase) blocs are likely to engage increasinglywith each other on a host of issues rangingfrom defence, through to climate change and,perhaps most significantly, continued nationaleconomic and industrial development. Mostcountries in South & East Asia are likely tocontinue to enjoy strong economic growth –with Indonesia likely to be one of the world’sten largest economies by 2045. Australiawill almost certainly remain the dominanteconomy in Oceania.Maintaining economic growth will probablybe the pressing national priority for all South& East Asian nations, but for India and Chinait is likely to take precedence over all mattersexcept national sovereignty and security. Anenduring aim of both countries is likely tobe sustaining a stable external environment,allowing India and China to pursue domesticreforms and expand trade and investmentopportunities with as many countries aspossible. However, both India and China arelikely to face problems such as the effectsof climate change, growing populations ofvarying composition and challenges to theirsystems of government. How India andChina meet these challenges is almost certainto have profound implications nationally,regionally and globally. Other South & EastAsian nations, such as Indonesia, are also likelyto see strong economic growth and facesimilar challenges, but none of them are likelyto rival India or China. The Chinese Renminbiand possibly the Indian Rupee are likely to betraded internationally as reserve currenciesby 2045 – assuming that both countries canundertake the necessary economic reforms tomake this possible. Given the strength of theChinese economy it is possible (though notnecessarily likely) that the Renminbi could rivalthe US dollar as the world’s principal reservecurrency by 2045. 6TechnologyChina and India are likely to attain globalleadership in select technical disciplines,achieving parity with the West in a number ofniche areas as soon as 2015 and more widelyby 2045. Chinese companies are already filingmore international patent applications thanbusinesses in the US or Japan. 7 As South& East Asian nations become increasingly6 Bloomberg (2011), ‘China’s Yuan Convertible by 2016in Global Poll Marking Big Investor Shift’, availableat http://www.bloomberg.com/news/2011-05-12/china-s-yuan-convertible-by-2016-in-poll.html7 Reuters (2011), ‘China tops U.S, Japan to BecomeTop Patent Filer’, available at http://www.reuters.com/article/2011/12/21/us-china-patentsidUSTRE7BK0LQ20111221significant developers of technology,protecting their intellectual property fromtheft and infringement will probably becomemore important. The region’s strengthin technology is likely to be enhanced bycontinuing high levels of investment ineducation. South & East Asian countries have,and are projected to continue to have, higherrates of enrolment in science and technologycourses than western countries – Japan,Taiwan, Malaysia, Singapore and South Koreaare already highly advanced.20-2910-19400 350 300 250 200 150 100 50 0 0 50 100 150 200 250 300 350 400Millions of peopleSource: UN (2012), ‘World Population Prospects: The 2012 Revision’EnergyAs their populations and economies grow,South & East Asian countries are likely to needaccess to more energy – and consequently,will probably seek to secure bilateral deals withother resource-rich nations around the globe.China and India are likely to lead the fieldin securing such agreements. For example,China is making significant investment ininfrastructure, including pipelines, to bringoil and gas from Burma. China is currentlythe world’s largest producer of greenhousegases (although it emits less on a per-capitabasis than most developed nations) but Indiacould be a bigger emitter by 2045. However,growing demand for coal and hydrocarbonsacross the region is likely to increase priceswhich may make alternative energy sources(such as renewable and nuclear energy)0-9more viable. Japan is a major investor inrenewable energy and India, in particular, haslarge reserves of material that can be used toproduce nuclear energy, such as thorium – anaturally occurring element.ReligionReligious tensions throughout the region arelikely to endure. Relations between religiousgroups will probably vary between countries,largely depending on the strength of politicalinstitutions and how well ideas of nationalidentity and cultural pluralism are propagated.In India, sectarian violence (for example,between Hindus and Muslims) is likely tocontinue, although elections could amelioratetensions – at least in some regions. In Pakistanthere is a risk that permissive conditions forpersecuting the Shiite minority will endure. 8Burma has seen large-scale violence betweenBuddhists and Muslims which shows littlesign of abating, with tens of thousands ofpeople displaced from their homes, andhundreds of fatalities. 9 Malaysia has bannedthe preaching of Shiite Islam since 1996,8 Ganguly, S. (2007), ‘ The Roots of Religious Violencein India, Pakistan and Bangladesh’9 Pew Research Centre (2014), ‘Religious HostilitiesReach Six-Year High’, available at http://www.pewforum.org/files/2014/01/RestrictionsV-fullreport.pdf148 Global Strategic TrendsGlobal Strategic Trends149

Part 2South & East Asia and OceaniaSouth & East Asia and OceaniaPart 2Christians makeup around5% of China’spopulation; thecountry couldhave the world’slargest Christiancommunity by2030.“”and anti-Shia sentiment has arguably beenbuilding throughout the 21st century, fuelledby the growth of Wahabism (a conservativeSunni faction) in Malaysia. 10 China has alsoseen religious tensions turn into violence,for example with an attack on Muslims byBuddhist monks in 2012, at the site of a newmosque. 11 In Indonesia, the persecution ofShiite minorities (including the burning ofShiite villages in 2012 in East Java, which ledto the displacement of hundreds of people)has drawn international attention. 12 However,a peace treaty initiated by Sunni and Shiitecommunities in Sampang, which saw thesafe return of exiled Shias, the creation ofnew housing and schools, and promises ofreconciliation, may offer hope for future Shia-Sunni relations in Indonesia. 13Christianity could have a growing role in anumber of countries in South & East Asia overthe next 30 years. An estimated 29% of SouthKoreans are adherents, making Christiansthe largest religious group in the country. 14China has seen a rapid rise in the numbers ofChristians since the middle of the 20 th century,with numbers of Protestants growing fromone million in 1949 to more than 58 millionby 2010. 15 Christians make up around 5% of10 Mahavera, S. (2013), ‘Ignorance, Extremist SunnisFuelling Anti-Shia Sentiments in Malaysia,Says Academic’, available at http://www.themalaysianinsider.com/malaysia/article/ignorance-extremist-sunnis-fuelling-anti-shiasentiments-in-malaysia-says-a11 Pew Research Centre (2014), op. cit.12 Human Rights Watch (2013), ‘Indonesia: Ensure SafeReturn Home of Evicted Shia Villagers’, available athttp://www.hrw.org/news/2013/06/30/indonesiaensure-safe-return-home-evicted-shia-villagers13 The Shia Post (2013), ‘Indonesia: Sampang Sunni,Shia Muslims Sign Peace Treaty’, available at http://en.shiapost.com/2013/09/25/indonesia-sampangsunni-shia-muslims-signpeace-treaty/;The JakartaGlobe (2013), ‘Government to Place Sampang Shiites’Future in Sunni Leaders’ Hands’, available at http://www.thejakartaglobe.com/news/govt-to-placesampang-shiites-future-in-sunni-leaders-hands/14 Pew Research Centre (2012), ‘The Global ReligiousLandscape’15 Phillips, T. (2014), ‘China on course to become‘world’s most Christian nation’ within 15 years’,available at http://www.telegraph.co.uk/news/worldnews/asia/china/10776023/China-on-course-to-become-worlds-most-Christian-nation-within-15-years.html; Pew Research Centre (2012), op. cit.China’s population, 16 and some commentatorshave suggested that the country could have theworld’s largest Christian community by 2030. 17ClimateTemperatures are likely to rise across theregion over the next 30 years. Averageannual rainfall will almost certainly increasein most areas, with a rise in monsoon rainfallpotentially leading to more flooding andreduced crop yields. Nevertheless, droughtsmay increase in frequency and intensityacross the region, particularly in centraland western Australia, southern Asia andsouthern China. Extreme cold events arelikely to decrease across the region. Hightemperature extremes will probably increasein frequency and magnitude. The dangerfrom wild fires across Australia is projectedto increase, with a reduced interval betweenfires, as well as increased fire intensity. Firesare likely to spread faster and be harder to putout. Southern areas are identified as being atparticularly high risk.The majority of countries in the regionare likely to adopt at least some measuresto counter the effects of climate change.Measures adopted by China are likely to beparticularly important, as it is the world’sbiggest emitter of greenhouse gases(although not on a per-person basis). China’ssystem of government allows the country toimplement environmental policies rapidly – forexample, its recent Renewable Energy Lawwas drafted in less than nine months andpassed with no amendments the followingyear. However, China’s directive approachcan have unintended effects – in 2009 and2010, local governments imposed rollingpower cuts to meet emission targets, evenas temperatures dropped to -10°C. 18 Theconsequences of such measures have andcould continue to result in a backlash; henceenvironmental policies failing in the long-term.WaterIncreasing annual rainfall across parts ofeastern Asia is likely to lead to increased riverrunoff,but demand for water will probablyalso increase. Changes to the Asian summermonsoon may result in increased flooding,but overall rainfall in South Asia could reduce.Many people across Asia rely on glacial meltwater which, due to continued melting, islikely to increase out to 2045 (but decreasebeyond then). Growing populations withhigher expectations, inefficient water usage,rising levels of pollution and more diversionsare likely to increase the regional demandfor water, which could heighten tensionsover, and competition for, shared resources.South Australia is likely to become drier andthe volume of water flowing in the Murray-Darling Basin (the largest river basin in thecountry, accounting for approximately 70% ofirrigated crops and pastures) could reduce bybetween 10-25% by 2045. While north-easternregions of Australia may experience moderateincreases in yield, average crop yields areprojected to decrease across the country.AgricultureThe effect of climate on agriculture is almostcertain to vary. Rice yields in East Asia,particularly in the Yangtze region coulddecrease. However, potato, rice, and winterwheat yields in other areas of China mayincrease. Cereal production across South &East Asia is projected to decrease, particularlyin the Indo-Gangetic Plains. Severe cropfailure is likely to force people to move,mostly within their country of origin, buta small proportion of the affected people(current estimates suggest around 1-2% of thepopulation) is likely to undertake internationalmigration.Marine and coastal areasA large proportion of the world’s coralreefs are located in Asia and Oceania,many of which are likely to be affected byclimate change, reducing biodiversity andproductivity. A significant proportion of theGreat Barrier Reef is projected to experiencecoral bleaching – adversely affecting fisheries.16 Pew Research Centre (2012), op. cit.17 Phillips, op. cit.18 Gilley, B. (2012), ‘Authoritarian Environmentalismand China’s Response to Climate Change’, availableat http://www.web.pdx.edu/~gilleyb/Gilley_AuthoritarianEnvironmentalism.pdfRice terraces in Longsheng, China150 Global Strategic TrendsGlobal Strategic Trends151

Part 2South & East Asia and OceaniaSouth & East Asia and OceaniaPart 2related deaths in India in 2010); 19 and Uighurseparatists in China. Although the ability ofmany of the region’s countries to combatterrorism is likely to improve, its developingcountries may find it harder to manage suchdiverse ethno-religious groups.19 US Department of State (2011), ‘Country Reports onTerrorism 2010’, available at http://www.state.gov/documents/organization/170479.pdfDefence and security implications■■In large part because of its economy (likely to be the largest in the world by 2045),South & East Asia will probably be of increasing strategic significance.A changing climate threatens marine habitats such as Australia’s Great Barrier Reef■■A growing population, increasing demand and the effects of climate change arelikely to lead to food and water shortages. While cooperation over water has oftenovercome national differences, the potential for confrontation over shared waterresources may increase.Both Indiaand China willprobably seek todevelop sizeableand technicallyadvanced armedforces, includingocean-goingnavies.“”Rising sea levels are also likely to increase stresson coastal habitats and cause an increase incoastal flooding. Many Asian cities are highlylikely to be at risk of such flooding, including:Calcutta, Mumbai, Shanghai, Ho Chi Minh Cityand Bangkok. Although no major cities inAustralia or New Zealand have been identifiedas being at high risk of flooding due to risingsea levels, a significant proportion of bothcountries’ populations live near the coast. Theimpact of sea-level rise on low-lying islandcountries such as the Maldives and Vanuatumay lead to wholesale international migrationby these small nations. Singapore will almostcertainly be threatened by climate change butis likely to have sufficient resources to protectitself from catastrophic effects.ConflictAlthough China’s military-industrial complexis unlikely to surpass the technologicalsophistication of the US by 2045, it may rival itin terms of size, as could India’s. Both India andChina will probably seek to develop sizeableand technically advanced armed forces,including ocean-going navies, capable ofdelivering an enduring and capable maritimepresence both regionally and further afield.The military capabilities of other countries inthe region are also likely to increase but onlyChina, India, Australia, Japan (which is activelyincreasing its military capability) and SouthKorea are likely to have the ability to projectconventional military power globally.The emergence of India and China as greatpowers is likely to lead to tensions, bothbetween these two countries and theirneighbours that – if not carefully managed– could spill over into conflict. For example,the East and South China Seas are home toa number of disputed territories, and thelikelihood of conflict could be increased ifdwindling hydrocarbon reserves make thearea a more important site for extractions.Similarly, China and India dispute areas of theirborder; India and Pakistan contest sovereigntyover Kashmir; and the Korean peninsula alsoremains an area of heightened tension. Inshort, the risk of a major state-on-state conflictin the region cannot be ruled out.Terrorism will almost certainly remain anenduring factor in the region, particularlyin South & East Asia. A variety of terroristorganisations are likely to continue to operatein the region. For example, the Taliban inPakistan; Kashmiri inspired terrorist groups; anincreasingly active Maoist ‘Naxalite’ insurgencyin India (there were nearly 1,900 terrorist■■Rising sea levels are likely to lead to humanitarian disasters which may requireinternational assistance.■■China’s military is becoming more capable and has increasing global reach. By2045, China’s military capability may be close to matching that of the US, perhapsexceeding it in some areas. India’s military capability is also likely to increase – butprobably not to the point where it rivals China or the US by 2045.■■The East and South China Seas may be flashpoints for confrontation between Chinaand the US and allied countries. Similarly Kashmir, the Korean Peninsula and theborder between China and India are likely to be areas of tension. The risk of a majorstate-on-state conflict in the region cannot be ruled out.■■Terrorism will almost certainly continue to pose a threat in South & East Asia, lessso in Oceania. High levels of inequality based upon class, ethnicity and religionare likely to endure as sources of tension across the region and may impact on theoverall governance and stability of some countries.152 Global Strategic TrendsGlobal Strategic Trends153

1Part 221 United States2 Canada3 Greenland (Den.)4 Russia4Polar regionsArctic3Climate change is the principal driver of change in the Arctic and Antarctic, withincreasing temperatures and precipitation. As Arctic and Antarctic sea ice retreats, manyareas that are currently inaccessible could become open to commercial exploitation,particularly of oil and gas. The opening-up of the Arctic is likely to focus attention onthe region’s governance arrangements, but, despite challenges, current arrangementsare likely to endure out to 2045. Large-scale military confrontation in either region isunlikely, but it is possible that some countries – depending on their internal politics– may seek to project power in the Arctic if they consider their interests in the regionto be under threat. In Antarctica, the current governance arrangements are likely toendure out to 2045, but the Antarctic Treaty System could come under pressure toaccommodate increased commercial exploitation within carefully managed bounds.Arcticpossibly to catastrophic levels. The incidenceof severe storms is also likely to increase.1231 Argentina2 Chile3 Falkland Islands4 AustraliaAntarcticClimate changeAlterations in the climate are the driversbehind many of the changes expected to takeplace in the polar regions over the comingdecades. The impacts of climate change arealready being felt, from the reducing areaof sea ice during the summer to shiftingpatterns of rain and snowfall. In the Arctic,significant warming will almost certainly occurthroughout the region, and is likely to begreater than the anywhere else in the world. 1Sea levels will probably continue to rise andprecipitation is likely to increase, particularlyin winter. Sea ice is likely to reduce, facilitatingincreased access for shipping. Due to risingtemperatures, the permafrost is likely to melt.This could cause subsidence, infrastructuredamage and release methane – all addingto global greenhouse gas emissions andexacerbating global warming and its effects,1 Chatham House-Lloyd’s (2012), ‘Arctic Opening:Opportunity and Risk in the High North’, availableat http://www.chathamhouse.org/publications/papers/view/182839Transit routesOver the next few decades there is likely tobe a sustained reduction in both the extentand thickness of summer sea ice, and regularice-free summers may occur by 2045. TheArctic navigation season could be extendedand new shipping routes have the potentialto be opened up. This could save significanttime when transporting goods from theFar East to Europe and Northern America.Constraints on the utility of the new Arcticshipping routes for major global trade willprobably remain – none are likely to be majortrans-global routes by 2045. If countries areto fully exploit hydrocarbon reserves andshipping routes in the Arctic, they will needto invest substantially in icebreaking capacity.As the volume of maritime traffic increases,there is likely to be an associated growth in theenvironmental risks faced by the Arctic region– and regulating the passage of vessels is likelyto pose a significant challenge. The numberand magnitude of human disasters requiringsearch and rescue services is also likely torise. Measures to improve international4Global Strategic Trends155

Part 2Polar regionsPolar regionsPart 2Reduction in summer sea ice will extend Arctic navigation routescoordination and allocate regionalresponsibilities for providing such servicesare likely to be developed, but may becomeentangled in wider disputes over sovereignty. 2ResourcesGlobal demand for energy is expected tomore than double by 2045, with coal andhydrocarbons likely to continue to play amajor role in the global energy mix. TheArctic currently produces around 10% ofthe world’s oil and 25% of its gas, withapproximately 80% of these resourcescoming from Russian territory. It has beenestimated that the Arctic contains up to 13%of the world’s undiscovered oil and 30% ofits gas reserves, which are likely to becomeincreasingly attractive as existing reserves aredepleted. 3 Oil and gas exploration is likelyto be concentrated in Russia and northernNorway, with other new reserves possibleoff the seaboards of Greenland, Alaska andthe Canadian north. Developing bothexisting and new oil and gas fields will almostcertainly be complex, requiring advances intechnology and demanding high standardsof engineering and quality control. The Arcticwill probably remain particularly vulnerable2 Smith, L. C. and Stephenson, S. R. (2013), ‘New Trans-Arctic Shipping Routes Navigable by Midcentury’3 Chatham House-Lloyd’s, op. cit.to oil spills – as a consequence of both theslow recovery of cold ecosystems and thedifficulties facing clean-up processes inremote and cold areas where ice is present.It is possible that a major environmentaldisaster may halt economic exploitation of theregion until expensive safeguards have beenimplemented. A collapse in hydrocarbonprices, though unlikely, could also remove themajor economic imperative for developmentwithin the Arctic and may lead to majornegative impacts on many local and nationaleconomies within the region.Mining of minerals in the Arctic is likely tocontinue to be a major source of economicdevelopment and may expand significantlyas sea routes to deep water ports areopened up for bulk carrier access. Depositsof coal, diamonds, nickel, copper, gold,silver, manganese, chromium and titaniumare particularly likely to be exploited at anincreased level, bringing both money andpeople into several parts of the region.Although Russia and Canada are likelyto possess the largest reserves of theseresources, mineral wealth is widely distributedthrough the Arctic, and there are many areas,including Greenland, with great potentialfor new discoveries and further exploitation.Commodity prices are likely to rise further,which could provide an extra incentivefor more marginal areas to be opened forextraction. However, although explorationand extraction conditions are likely to improvein some areas as the ice retreats, thesechanging conditions are likely to add newchallenges. Melting permafrost, in particular,could impede developing sustainableinfrastructure on land. New technologyis likely to be needed to exploit mineralextraction potential in many areas affectedby melting permafrost, particularly in Russia.Mineral extraction is likely to be harmful to theArctic environment and adverse ecologicalimpacts could occur.Agri- and aqua-culture, forestryand tourismFishing is already an important source ofemployment in the region, with severalcountries, notably Iceland, Russia andNorway, investing in large fishing fleets.Major commercial fish stocks such as cod,herring and pollock are likely to be exploitedincreasingly easily as sea ice cover reduces,and the areas populated by these fish stocksare likely to increase further in size as theseas warm. For other species of fish, such assalmon and trout, the outlook is less positive,and climate change may significantly reducethese fish stocks. The opening up of the ArcticOcean, and the possible northwards migrationof fish stocks, may – when combined withgrowing demand for protein in world foodmarkets – encourage large numbers of EUand Asian fishing fleets to move into theregion, especially in areas not within countries’exclusive economic zones. By 2045, it is likelythat fish stocks in the Arctic will be undersevere pressure, potentially causing tensionsbetween Arctic Rim countries, the EU andother fishing countries.Climate change is already stimulatingsignificant changes to Arctic ecosystems and,as a result, to Arctic agriculture and forestry.The warmer climate is highly likely to extendthe growing season and may encourage cropdiversification at higher latitudes. Increasedcrop disease, also as a result of climate change,is unlikely to counteract increased crop yields.Timber productivity is likely to improve, withplanted forests in the Arctic likely to expandto the north, despite a likely increase in forestfires and tree-killing pests. Numbers ofcaribou and reindeer in the region could alsorise, although they may be more affected byinsect infestations. Diminishing cattle andsheep habitats in southern Europe may createmarkets for reindeer and caribou products,improving the economic situation of Nordicfarmers. Much of the Arctic is also alreadyseeing significant increases in tourist numbersand, by 2045, changes in climatic patterns arelikely to have opened up several new Arcticregions as viable tourist destinations. 44 Chatham House-Lloyd’s, op. cit.GovernanceThe Arctic region, comprising four millionpeople, eight countries and over 30indigenous groups, is largely under-populatedand is characterised by sparse communicationand infrastructure links. Out to 2045, thereare likely to be significant increases in using,and extracting, the region’s resourcesand developing its transport links. This isalready beginning to render its governancearrangements of deep significance and couldlead to increased tensions within the countriesand peoples of the region. Internationalgovernance, regional groupings and non-stateactors are all likely to play important roleswithin the Arctic. 5By 2045, it is unlikely that there will be anyappetite for a formal UN agreement settinga legally binding governance framework forthe Arctic region (as exists in Antarctica). Thedelineation of countries’ exclusive economiczones and continental shelf boundaries underthe UN Convention on the Law of the Sea(UNCLOS) process will probably establishthe ownership of economic rights in thevast majority of the Arctic Ocean, and it isunlikely that Arctic countries would attempt tooverturn these decisions by force. Althoughtension between countries over interpretingthe UNCLOS criteria for claiming jurisdictionmay increase during the period leading up to2045, it is likely that competing claims will bearbitrated such that each country will be ableto exploit large areas of the Arctic sea bedbeyond its exclusive economic zones. The UNSecurity Council will almost certainly continueto provide a forum for countries locatedoutside the Arctic (but with national interestswithin it) to discuss economic and politicalissues as they arise.New regional governance arrangements arealso unlikely to materialise, primarily becauseit is not likely to be in the national interests of5 Ibid.; Holte, N. J. (2009), ‘The Arctic Region is at aTime of Geopolitical Transition. Will this TranspireThrough Aggressive Competition or as PeacefulChange?’, available at http://www.da.mod.uk/colleges/rcds/publications/seaford-housepapers/2009-seaford-house-papers/shp09holte.pdf;Rogers, J. (2012), ‘Geopolitics and the ‘Wider North’:the United Kingdom as a ‘Strategic Pivot’It is unlikely thatthere will beany appetitefor a formal UNagreement settinga legally bindinggovernanceframework for theArctic region.“”156 Global Strategic TrendsGlobal Strategic Trends157

Part 2Polar regionsPolar regionsPart 2Isolated and sparsely populated areas are likely to see development of infrastructure and transport links“The EU is likelyto becomemore involvedin the Arctic asnon-Arctic EUmembers, such asGermany and theUK, become moredependent on theregion’s energyresources and fishstocks.”Arctic countries for them to do so. Althoughthe Arctic Security Forces Roundtable (a semiannualgathering of senior military officers)is currently informal, it has the potential todevelop into a more structured forum forinternational coordination by 2045. The ArcticCouncil is likely to continue to provide a focusfor all Arctic countries and peoples. It mayconsider some form of low-level economiccollaboration, but is unlikely to expand into thegovernance or security sphere. The influenceof the indigenous peoples is also likely tobe limited and dispersed, and focussedon exerting pressure on multinationalcorporations and authorities within theircountries to secure better economicconditions. Indigenous people are also likelyto continue to exert influence through theirposition at the decision-making table of theArctic Council. The EU is, however, likely tobecome more involved in the Arctic as it islikely to expand to incorporate Arctic countriesand as larger non-Arctic EU members, suchas Germany and the UK, become moredependent on the region’s energy resourcesand fish stocks.CanadaThe Arctic is likely to be an increasinglyimportant region for Canada out to 2045.Melting ice is likely to open new areas formining, hydrocarbon extraction, fishing andshipping during the summer months. Canadawill probably continue to emphasise theArctic’s importance to its national interests.It may also continue to reject US and Danishclaims to rights of navigational passage withinits exclusive economic zone. Despite thesedisagreements, Canada is likely to maintaingood relations with both nations. Canada andthe US are likely to reach an agreement on arange of Arctic issues, particularly over gas andoil distribution pipelines from the Arctic to themarkets of Northern America.ChinaBy 2045 China could have substantial maritimepower and may look to an accessible Arctic asa channel for trade and fishing in the region.To maintain these trading routes, China maydeploy its naval forces, which may heightentensions with Russia. China may also seek toextend itself economically into the Arctic, againrisking conflict, although violence is unlikely. 6RussiaRussia will almost certainly be the dominant– but unpredictable – state actor in the Arcticby virtue of its economic, political and militarystrength in the region, as well as its locationand size. Russia is likely to have sovereigntyover the region’s major fossil fuel reserves,fish stocks and mineral deposits, and climatechange could afford it the possibility ofexpanding its agricultural sector in the region.Russia is also likely to have significant influenceover the Northern Sea Route as it becomesmore viable to commercial traffic as summerice retreats. Russia’s Arctic region is currentlythe source of 20% of its GDP, 60% of its oil and90% of its gas, and the country’s leadershipwill probably continue to view it as a strategicinterest. Russia is likely to continue to maintainsignificant military capabilities in the Arcticto protect its nuclear forces and secure itseconomic assets, as well as providing a basisfor its search and rescue responsibilities. Theremay be more frequent demonstrations ofmilitary strength in the air and at sea, possiblyto distract from domestic sociopolitical issues.The United States of AmericaThe US, while seeking to ensure that itseconomic and security interests are protected,is unlikely to see the Arctic as a primary theatreof American activity. However, there may betension with Russia over disputed areas of theChukchi Sea, and US control of fishing withinthe Bering Sea may be challenged by Russian,Chinese, Korean and Japanese interests if theregion continues to be a significant source offish and sea mammals.Other Arctic countries and populationsNorway will almost certainly continue torely on NATO as the guarantor of its security,6 Blank, S. (2013), ‘China’s Arctic Strategy’, available athttp://thediplomat.com/2013/06/20/chinas-arcticstrategy/though it is likely to seek further bilateralagreements with EU countries to reinforceits position. More advanced than the othercountries in setting out a vision for theregion, it is likely to retain the lead in Arcticregional development. A newly independentGreenland may seek to join the EU and NATO,and could become the subject of intenseinterest from countries such as China. Out to2045, Iceland may also seek EU membershipas well as more substantive engagement withother NATO members.The indigenous populations of the Arcticare likely to see their lifestyles threatened,their numbers declining, and their influencewaning. Their unique lifestyle and patternsof subsistence are likely to have disappearedby 2045, and the need to assimilate andto gain new skills to compete with skilledmigrants from the south is likely to be bothan opportunity and a risk. The indigenouspopulation within the Arctic is likely to declineslowly, and may undergo some degree ofurbanisation as its members move in searchof healthcare and employment opportunitiesfor their young people. It is unlikely that theregional peoples will be able to counteract thepower and influence of their largely sub-Arcticbased governments and their influence willprobably remain largely peripheral (exceptGreenland’s large Inuit population). Tensionand low level violence between migrants andindigenous people is possible.Multinational corporationsMany of the inhabited areas of the Arctic willprobably continue, in practice, to be managedby multinational corporations and populatedsolely or predominantly by their workers.Russian-based conglomerates are likely toremain semi-state controlled. They are unlikelyto operate to levels of corporate governanceexpected in the West and are likely to beless inclined to comply with internationalregulations. Environmental pressure groupsand non-governmental organisations, suchas the World Wildlife Fund and Greenpeace,could play an increasing role in influencing theactivity of western countries and corporationsin the Arctic region.Russia’s Arcticregion is currentlythe source of 20%of its GDP, 60% ofits oil and 90% ofits gas.“”158 Global Strategic TrendsGlobal Strategic Trends159

Part 2Polar regionsPolar regionsPart 2Although theAntarctic Treatyexplicitly prohibitsextractingminerals andhydrocarbons,the [economic]potential islikely to becomea significantinfluence onthe region’sgeopolitics.“”AntarcticClimate changeAcross Antarctica as a whole, landtemperatures could rise by more than 2°C by2045, and sea temperatures in the region arealso likely to continue to rise, albeit at levelsbelow the global average. An increase inaverage annual maximum precipitation of 7%is likely by 2045 (compared with 1999 levels),and parts of Antarctica and its surroundingseas will almost certainly continue to loseice at a rapid rate up to, and beyond, 2045.The effects of climate change on Antarcticecosystems are likely to be significant.Melting Antarctic ice may contribute to sealevelrises, with a subsequent effect on therest of the planet.ResourcesGlobal demand for minerals, fossil fuelsand low-emission energy sources arelikely to continue to rise until at least2045, providing an incentive to operate inpreviously unexploited areas. Althoughthe Antarctic Treaty explicitly prohibitsextracting minerals and hydrocarbons (otherthan for scientific research purposes), thepotential for their extraction in Antarcticais likely to become a significant influenceon the region’s geopolitics in the comingdecades. It is already likely that substantialhydrocarbon deposits exist, including inthe area triple-claimed by the UK, Argentinaand Chile. Drilling, however, is likely toremain uneconomical unless oil pricesrise well above their current level or untiltechnological advances lower the cost ofexploitation significantly. Nevertheless, givenprobable global demand levels, proposals forexploitation are likely by 2045 if hydrocarbondeposits have been found on the continentand in its surrounding waters. Any proposalsfor exploitation could heighten politicaltensions in the region, and may not evenbe accepted given the likelihood of strongopposition from certain countries and fromenvironmental pressure groups. Exploitinghydrocarbon deposits in Antarctica is likelyto damage the local environment andcould bring about grave consequencesfor the continent’s ecosystems. Althoughthe geography of Antarctica lends itself toproducing renewable energy, it is unlikely tobe economically viable to do so by 2045.Although there is much uncertainty aboutthe extent and nature of mineral deposits,early studies indicate that Antarctica is likelyto contain mineral deposits similar to those inAustralia, Africa, India and South America, towhich it was once joined. The Dufek Massif– which lies within the area triple-claimed bythe UK, Argentina and Chile – is the locationwith the most significant potential mineralendowments within the Antarctic continent.All nations currently carrying out scientificresearch on Antarctica are likely to maintaina keen interest in its mineral potential, withChina foremost among them. Nevertheless,there are several physical, environmental andtechnological factors that effectively preventmining in Antarctica, some of which may not– as a result of melting ice and technologicaladvances – be present by 2045. Significantopposition to exploiting Antarctica’s mineralwealth is, however, likely to remain, based onenvironmental protection grounds. Althoughsome Antarctic Treaty System members, as wellas non-member nations, may lobby for miningto be allowed to ease economic pressures,there is likely to be strong pressure from othernations and non-state actors to maintain thestatus quo, preserving continental Antarcticafrom commercial activity.WaterBy 2045, one third of the world’s populationis likely to live in areas of water stress. In thedeveloped world, water scarcity is likely tobe overcome mainly through conservationand the increased use of desalinisation(which is extremely energy-intensive). Someestimates suggest that 90% of the world’sfresh water is in Antarctica, 7 mostly in theice sheets that flow to the continent’s coastand in the many ice shelves floating on thesea. These vast quantities of ice may holdpart of the solution to world water shortages,7 British Antarctic Survey (undated), ‘Ice Sheets inAntarctica’, available at http://www.antarctica.ac.uk/about_antarctica/geography/ice/sheets.phpparticularly if better and cheaper technologyenables the establishment of a commercialiceberg harvesting industry. Although thiscould generate worldwide benefits, suchcommercial exploitation could bring negativeenvironmental consequences to Antarctica,including damage to ecosystems.FishingCommercial exploitation of Antarctica’s marineresources has taken place for over a century,and has evolved markedly since the 1950sin response to a range of drivers, particularlyresource demand. Control mechanisms haveAbandoned whaling ship in Antarctica – a legacy of resource exploitationbeen developed that have adequately dealtwith fisheries management and loweredpolitical tensions. Under these mechanismsfish and krill are the only Antarctic livingresources whose exploitation has beensanctioned. However, an increase in demandduring the period leading up to 2045 islikely to put these control mechanisms andassociated political relationships under strain,and the Convention on the Conservation ofAntarctic Marine Living Resources is likely tohave to be amended to reflect higher levels ofdemand – or face being flouted.160 Global Strategic TrendsGlobal Strategic Trends161

Part 2Polar regionsPolar regionsPart 2Antarctic territorial claims and permanent research stationsUnited KingdomNorwayDefence and security implications■■Commercial activity expansion in the Arctic Ocean may require extensivemonitoring to safeguard Arctic countries’ sovereignty.ChileUnclaimedSt. Kliment Ohridski Base(Bulgaria)Comandante Ferraz(Brazil)Arturo Prat(Chile)Esperanza(Argentina)BernardoO'Higgins(Chile)ArgentinaMarambio(Argentina)See insetHalley(UK)Belgrano II(Argentina)Neumayer(Germany)Sanae IV(South Africa)Scott(NZ)McMurdo(US)Maitri(India)Jang Bogo Station(South Korea)Amundsen-Scott(US)Novolazarevskaya(Russia)Syowa(Japan)Zhong Shan (China)Progress (Russia)Vostok(Russia)Dumont d’Urville(France)Molodezhnaya(Russia)Concordia(France & Italy)Mawson(Australia)Bharati (India)Davis(Australia)Mirnyy(Russia)Casey(Australia)Australia■■Arctic Council members, in general, are likely to continue to operate in accordancewith its rules – the Arctic is likely to remain a largely well-governed space.■■Inter-country disputes within the Arctic, driven by access to, and control over,resources, are possible but are unlikely to result in military conflict.■■Russia will almost certainly remain the dominant power in the Arctic but, althoughunpredictable, is unlikely to take unilateral, aggressive steps to provoke conflict inthe region.■■Resource demands are likely to increase pressure on the Antarctic Treaty System, butlarge-scale military conflict is unlikely.Palmer(US)Vernadsky(Ukraine)FranceRothera(UK)San Martin(Argentina)New ZealandGovernanceThe Antarctic Treaty System is likely to endure,but may be subject to disputes as countriesdeal with climate change, populationincrease, resource scarcity and globalinequality. These stresses are highly likelyto cause tensions between Antarctic TreatySystem members, and between them andother countries. Any discovery of significantresources – especially hydrocarbons orstrategic minerals – on the continent is likelyto further increase the pressure. Although aresource-driven scramble for the Antarctic isunlikely, incremental increases in exploitingthe area under the Antarctic Treaty System areexpected. The global scientific communityis likely to act in concert to halt the openexploitation of Antarctica for economic ends,but is unlikely to be able to stop incrementalincreases in exploitation. While it is alsounlikely that the prohibition of military activityin the region will be breached (militarysupport to civil activity is likely to continue tobe permitted), there may be a considerableincrease in military activity in the surroundingseas and airspace, influenced by increasedcompetition for Antarctic resources.162 Global Strategic TrendsGlobal Strategic Trends163

Part 2SpaceOur reliance on space technology in a number of commercial and military areas willalmost certainly increase out to 2045. Technological advances are likely to furtherreduce the cost of manufacturing and launching space vehicles, making spaceincreasingly accessible to (and profitable for) countries, companies, organised crime andprivate individuals. As reliance on space grows, so could the impact of damage causedby deliberate attack, space weather and orbital collisions.Relying on space-based technologyDeveloped countries already depend heavilyon space-based technologies and thisreliance is likely to increase out to 2045, withmany developing countries also likely toseek similar capabilities. Almost 60 countriescurrently have satellites or space projectswith significant levels of investment – thereare an estimated 3,400 satellites in orbit, ofwhich around 1,000 are operational. 1 Someestimates put replacement costs for theseactive satellites at nearly US$ 140 billion,with the impact of their loss on the globaleconomy several times higher. 2 Activity inspace is increasing, and may well accelerate.In total, governments (including Kazakhstan,the Congo and Laos) spent more than US$40 billion on civil space programmes in 2013alone. 3 These high levels of investment aredriven by the critical role that space-basedtechnologies now play in routine activity.For example, global navigation satellitesystems (GNSS) are used to provide essentialposition, navigation and timing information1 European Space Agency (2013), ‘Space Debris:Frequently Asked Questions’, available at http://www.esa.int/Our_Activities/Operations/Space_Debris/FAQ_Frequently_asked_questions2 Ibid.3 The Economist (2014), ‘Ye Olde Space Race’,available at http://www.economist.com/blogs/graphicdetail/2014/02/daily-chart-11for industries as diverse as agriculture, finance,surveying, emergency services, energydistribution, wireless technology and railtransport. GNSS are also crucial for commercialaviators and sailors, and many departmentsof defence use space systems for globalcommunication and to collect remote sensingimagery of points of interest on the Earth. Theaccuracy of modern weather forecasts alsorelies on satellite imaging and sensing.Decreasing costs and improving accessThe traditional view of a satellite as a large,expensive object is being increasinglychallenged by the use of ever-smaller devices(some nicknamed ‘cubesats‘), often nolarger than 10 cm 3 and weighing as little asa kilogram. Small satellites usually operatein low-Earth orbits and take advantage ofcommercial off-the-shelf components toreduce production costs and developmenttimes. Some commercial organisations arealready using constellations of cubesatsto generate Earth imagery, 4 and their useis only likely to grow as their effectivenessand reliability are proven. Industry sourcesanticipate that up to 543 cubesats andmicrosatellities (up to 50kg in weight)could be launched in 2020, compared to4 Such as Planet Labs, http://www.planet.com/Global Strategic Trends165

Part 2SpaceSpacePart 2“The EuropeanCommission hasestimated that6-7% of westerncountries’ GDPis currentlydependent onsatellite timingand navigation:this equates to€800 billion forthe EU alone.”92 in 2013. 5 With greater access, though,comes greater competition, particularly forallocating satellite orbital slots and radiofrequencies. A more optimistic view is that,with more space objects and potentially morecollisions, there is a greater need to developand abide by international standards and tocreate as complete a picture as possible ofall activity in space. Notwithstanding thetrend towards greater collaboration betweengroups of countries, attempts to introduce acomprehensive, effective and binding legalframework have so far been unsuccessful.New economic opportunitiesAs space becomes more accessible throughsignificant advances in the development ofspaceplanes (vehicles that can operate in theEarth’s atmosphere as well as in space) andreusable rockets, new economic opportunitiesare likely to emerge. Several companiesare already proposing to extract water andminerals from asteroids that travel near Earth.One of these companies, Planetary Resources,is hoping to launch its first spacecraft in 2014,with prospecting platforms operating in thenext decade. By 2045, companies pursuingoff-Earth resources are likely to have extensiveoperations, particularly if the potentialrevenues are as significant as suggested bysome analysts. 6 For example, a single asteroid(1999 JV6) which passed the Earth in January2014 could generate mining profits of up toUS$ 218 billion. 7 Space tourism – both suborbitaland orbital – is also a real possibilityby 2045, with a number of projects currentlyin development. These potential economicbenefits, along with continuing reductionsin operating costs, make it likely that therecould be greater space congestion as morecountries, commercial operators and evenindividuals deploy orbital systems. Indeed,the UN recently commented that “The outerspace environment [is] becoming increasingly‘congested, contested and competitive’as States [vie] to benefit from space basedtechnologies.” 8 Orbiting laboratories couldbecome viable, with some companiesaiming for orbital platforms with significantlygreater capacity than the International SpaceStation. 9 In turn, this has the potential to leadto breakthroughs in the development of newmedicines and materials that require a microgravity environment.VulnerabilitiesOur reliance on space technologies generateswidespread vulnerabilities which are likely toincrease in the future. The UK Government’sNational Risk Assessment ranked severedisruption to satellite services, possibly as theresult of a deliberate attack by another state, inthe second highest category of security risksfaced by Britain. 10 Similarly, a US Governmentreport observed that lives and billions ofdollars could be lost if significant disruption toglobal positioning systems (GPS) occurred. 11The European Commission has estimated that6-7% of western countries’ GDP is currentlydependent on satellite timing and navigation:this equates to €800 billion for the EU alone. 12As well as deliberate threats, satellites areat risk from man-made space debris, spaceweather and from accidental collision witheach other. Such collisions have alreadyoccurred, and this risk is likely to grow as moreman-made objects are launched into space.8 UN (2013), ‘68th General Assembly GA/DIS/3487Press Release’, available at http://www.un.org/News/Press/docs/2013/gadis3487.doc.htm9 Bigelow Aerospace (undated), ‘Mission Statement’,available at http://www.bigelowaerospace.com/10 HM Government (2010), ‘A Strong Britain in an Ageof Uncertainty: The National Security Strategy’,available at https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/61936/national-security-strategy.pdf11 US Government Accountability Office (2013), ‘GPSDisruptions’, available at http://www.gao.gov/assets/660/658792.pdf12 European Commission (2012), ‘Galileo Will BoostEconomy and Make Life of Citizens Easier’, availableat http://europa.eu/rapid/press-release_MEMO-11-717_en.htm?locale=enCriminal use of spaceCriminals and other actors with malignintent may increasingly exploit space-basedcapabilities, particularly as access becomescheaper. Already, those who wish to discoverweaknesses in the security arrangementsof sensitive infrastructure can buy highresolution imagery from companies thatoperate Earth observation spacecraft. By 2045or earlier, criminal organisations could securepayload space on rockets operated by privatecompanies – this would allow them to launchtheir own surveillance satellites, potentiallythreatening individual and corporate privacy.JammingGround-based receivers of satellite signalshave already been jammed for short periodsin localised areas. In 2009, navigation aidsat Newark airport suffered daily breaks inreception, caused by a driver with a GPSjammer who regularly drove past. Drivers arelikely to continue to use jammers to preventtheir location being monitored by theiremployers and criminals may increasingly usethem to avoid paying GNSS-based road tolls.Perhaps more significantly, North Korea hasused large, lorry-based jammers to interferewith GPS signals in South Korea – the crewsof more than 1,000 aircraft and 250 shipsreported disruptions over a 16-day period in2012.Chain reactions and deliberate attacksThe large amount of space debris currentlyin orbit – an estimated 670,000 objects largerthan one centimetre and 29,000 larger thanten centimetres 13 – increases the risk of achain reaction of collisions which could renderlow-earth orbits unusable, disabling mostsurveillance satellites and threatening accessto higher orbits. Some debris mitigationmeasures are already in place, such asproviding extra fuel for manoeuvring neardefunctsatellites into the atmosphere so thatthey burn up. However, the European SpaceAgency suggests that, even if satellite launcheswere stopped today, a chain reaction ofcollisions is likely within 20 years, unless someof the debris currently in orbit is removed. 14Prototype machines for removing13 European Space Agency, op. cit.14 Klinkrad, H. (2013), ‘The Space Debris Environment’, apresentation to the Royal Aeronautical Society5 Spaceworks (2014), ‘Nano/Microsatellite MarketAssessment’, available at http://www.sei.aero/eng/papers/uploads/archive/SpaceWorks_Nano_Microsatellite_Market_Assessment_January_2014.pdf6 Knight, O. (2014), ‘To Infinity and Beyond forProperty’, available at http://www.knightfrankblog.com/wealthreport/news-headlines/to-infinity-andbeyond-for-property/7 Ibid.Reliance on space technologies generates widespread vulnerabilities166 Global Strategic TrendsGlobal Strategic Trends167

Part 2SpaceSpacePart 2“The risk ofcreating spacedebris maymake countriesor groups thinkmore carefullybefore carryingout a deliberatephysical attack onsatellites.”Scenario:A city without space 15By 2045, a solar superstorm of a similar size to the Carrington Event of the mid-1800s could occur and be so disruptive that there would be widespread loss ofcommunications and navigation systems for several days, with possible permanentloss of some satellites. Transport and logistic systems dependent on GNSS would bedisrupted - flights would be cancelled and planes already in flight may be unableto navigate to safe landing areas, potentially causing loss of life. Roads and railwaynetworks are likely to become congested as drivers find themselves lost. Vehiclescarrying high risk or hazardous loads are often tracked by satellite - they woulddisappear from the screens of monitoring centres, potentially resulting in accidents.Assisting casualties could be delayed as, without GNSS, the emergency services wouldtake longer to arrive at the scene. If traditional means of navigation had not beenretained, emergency vehicles may not be able to reach their destination at all. Logisticsnetworks are likely to be disrupted and - depending on duration - this could lead tobare shelves in shops, as most supermarkets hold very limited amounts of stock, relyingon daily deliveries. Criminals may take advantage of a lack of coordination and delayedresponse times to loot and riot.15 Based on Hammond, J. (2012), ‘Increased Problem of GPS Jamming’, lecture delivered at the RUSI Space andUK National Security Conferencemalfunctioning satellites and debris arebeing developed, but international law onlyallows the country that owns (or the agencythat launched) a spacecraft to touch it – astechnology able to remove an obsoletesatellite could equally be used to interfere withan operable one. The risk of creating spacedebris may make countries or groups thinkmore carefully before carrying out a deliberatephysical attack on satellites. Although somecountries already have the capability to carryout this kind of attack, the fragments created ifa satellite was destroyed in a usable orbit couldalso deny access to space to the perpetrator.However, this could make space assets anattractive target for those countries or groupsthat either do not rely on space-based systemsor that have developed resilient systems orprocesses. Cyber attacks on control networksmay be more likely, and there is some evidencethat such attacks are already occurring. In2008, a NASA Earth observation satellitewas effectively taken over, although thoseresponsible did not actually issue commands. 16Space weatherAlthough most satellites are designed todeal with the effects of minor space weather(such as disturbed orbits and radiation), theyare not usually able to withstand the effectsof solar superstorms. These extreme eventscan cause severe disruption. In 1989, forexample, the biggest storm to reach Earth for50 years led to space agencies losing trackof 1,600 spacecraft and the power grid ofQuebec collapsing in two minutes, leaving sixmillion people without power for nine hours.Similarly, in 2003, a superstorm interruptedthe Federal Aviation Authority’s augmentedGPS signal (used for aircraft vertical guidance)for 30 hours. Far more disruptive storms may,however, affect the Earth in future. 17 In 185916 US-China Economic and Security Review Commission(2011), ‘2011 Report to Congress’, available at http://origin.www.uscc.gov/sites/default/files/annual_reports/annual_report_full_11.pdf17 Hapgood, M. (2012), ‘Prepare for the Coming SpaceWeather Storm’the Carrington Event (a storm four timesstronger than any of the examples above) 18struck the Earth. Some experts suggest thata storm of Carrington’s magnitude is likely toreach Earth once every 100 years.The effects of a superstorm like the CarringtonEvent may lead to satellites being offline forperiods ranging from hours to days. Somemay even be lost entirely due to suddendamage, such as that caused by electrostaticcharging. All satellites would have theireffective lives reduced through exposureto an increased radiation dose. Solar radiobursts would be likely to interfere with GNSStransmission frequencies, with possible errorsof hundreds of metres. During the mainphase of a superstorm, navigational systemsmay be completely lost, with some expertssuggesting that GNSS could be partially orcompletely inoperable for up to three days.Communication satellites’ radio transmissionsand long-range terrestrial radio could also beaffected, making long distance communicationduring a superstorm particularly challenging.Military operationsMilitary activity, at least in developedcountries, has come to rely on space-derivedservices, a trend that is likely to increase out to18 Royal Academy of Engineering (2013), ‘ExtremeSpace Weather’, available at http://www.raeng.org.uk/news/publications/list/reports/space_weather_full_report_final.pdf2045. 19 If space capabilities were lost, modernarmed forces could be without many of theadvantages that they currently enjoy. A lackof strategic communications would makedirect command and control links impossible,hampering coordination with military partnersand making most remotely-piloted air systemsinoperable. Early warning systems would becompromised, removing the ability to providewarnings of ballistic missile launches or totrack and monitor missiles in flight. Navigationwould be more difficult, relying on mapsand compasses – and it is even possible thatcompasses would not function properly ifthe Earth’s magnetic field was sufficientlydisrupted. Collateral damage may increase,as precision-strike capabilities disappear.Limited surveillance and radar capabilitieswould make it more difficult to select thehighest-value targets or conduct timelybattle damage assessment. Without accurateweather forecasting, effective planningwould be difficult and operations would beriskier without warning of extreme eventsor conditions. Logistics would be disruptedas tracking and monitoring supplies couldbecome more difficult.19 Ministry of Defence (2013), ‘JDP 0-30 UKAir and Space Doctrine’, available at http://defenceintranet.diif.r.mil.uk/libraries/library1/MOD/July2013/20130716-JDP_0_30_UK_Air_and_Space_Doctrine.pdfDefence and security implications■■Increasing reliance on space-based technologies, particularly in developedcountries, means that any large-scale disruption to satellites (such as solarsuperstorms) could have significant consequences for electricity distribution,communications, navigation, logistics and weather forecasts.■■There could be increasing competition between countries for access to valuableresources, such as water and minerals, located in space.■■Criminal organisations and other actors with malign intent may take advantage ofreduced costs to acquire their own satellites, increasing their awareness of securityvulnerabilities and causing privacy and security concerns.■■The military operations of developed countries are heavily dependent on spacebasedtechnologies, the loss of which may be significantly disruptive.168 Global Strategic TrendsGlobal Strategic Trends169

AcknowledgementsWe have benefited enormously from the time and effort generously given by the organisationsand institutions listed below. To all of those individuals who contributed their valuable knowledgeand expertise – we regret that space does not permit us to thank you by name, but are extremelygrateful to you for your participation. We look forward to working with you in the future.Aberystwyth UniversityBespoke Industry WorkshopBrazilian Ministry of DefenceBrenthurst FoundationBristol UniversityBritish Geological SurveyBritish Peace Support Team, South AfricaBT InnovateCabinet Office: Cabinet Secretary’s AdvisoryGroupCabinet Office: Government Office forStrategic Horizon ScanningCentre for Strategic Futures, SingaporeCentre Interarmées de Concepts, de Doctrineset D’expérimentationsCranfield UniversityDepartment for Business Innovation and Skills:Government Office of ScienceDepartment for Business Innovation and Skills:Met Office Hadley CentreDepartment for Energy and Climate ChangeDepartment for Environment, Food and RuralAffairsDepartment for International DevelopmentDepartment of HealthDepartment of TransportDRPM GroupEconomic and Social Research CouncilEnergy Research PartnershipESKTNExplore Strategic Business Insights IncFirm FuturesForeign and Commonwealth Office: NationalSecurity Strategy NetworkForeign and Commonwealth Office: WiltonParkFrench Directorate of Strategic AffairsGetulio Vargas Foundation, BrazilHM Ambassador, Republic of KoreaHM TreasuryHome OfficeIgarapé Institute, BrazilImperial College LondonInstitute for Defence Studies and Analyses,IndiaInstitute of Applied Economic Research, BrazilInternational Energy AgencyInternational Institute for Strategic Studies,SingaporeInternational Institute of Strategic StudiesIR Consilium LtdJLT Speciality LtdJoaan bin Jasim Joint Command and StaffCollege, QatarJoint Committee for National SecurityStrategyKings College London (Defence StudiesDepartment)Lee Kuan Centre for Innovative CitiesLondon School of EconomicsMcKinsey and CompanyMicrosoftMinistry of Defence: Defence Academy of theUnited KingdomMinistry of Defence: Defence Science andTechnology LaboratoryMinistry of Defence: Royal College of DefenceStudiesNorth Atlantic Treaty Organisation AlliedCommand TransformationNorwegian Ministry of DefenceNow and NextObserver Research Foundation, IndiaOverseas development InstituteOxfamOxford AnalyticaPandia Calogeras Institute, BrazilPotomac Institute for PolicyPWCRajaratnam School of International StudiesRAND EuropeRespublicaRio de Janeiro State UniversityRisk Assessment and Horizon Scanning Office,SingaporeRoyal Holloway, University of LondonRoyal Institute of International Affairs(Chatham House)Royal United Services InstituteSaudi Arabia Armed Forces War CollegeSaudi Arabia based Defence Attachés fromAustralia, USA, Japan, Romania and PolandSaudi Arabia National Guard Command andGeneral Staff CollegeSchool of International FuturesScottish GovernmentShellSingaporean Ministry of DefenceSlovak Republic (Institute for Security andDefence Studies Ministry of Defence)Swedish Armed Forces HeadquartersSwedish Defence Research AgencySwedish Institute of International AffairsSwedish National Defence CollegeThe Diplomatic Institute, QatarUnited Arab Emirates based Defence Attachésfrom France, Italy, Australia, Canada andNetherlandsUnited Arab Emirates Center for StrategicStudies and ResearchUnited Kingdom Embassy and DefenceAttaché Staff• Brazil• India• Republic of Korea• Qatar• Saudi Arabia• Sweden• United Arab Emirates• United StatesUnited Services Institute, IndiaUnited States of America Department ofDefence Pentagon Joint Staff J7United States of America NationalIntelligence CouncilUniversity of CambridgeUniversity of ExeterUniversity of KentUniversity of OxfordUniversity of ReadingUS Army Training and Doctrine CommandUS Marine Corps Warfighting LaboratoryVivekananda International Foundation, IndiaWorld Energy CouncilWWF170 Global Strategic TrendsGlobal Strategic Trends171

Contact detailsStrategic Trends ProgrammeDevelopment, Concepts and Doctrine CentreShrivenhamSwindonSN6 8RFE-mail dcdc-strategictrends@mod.ukThis publication is available through thegov.uk website in interactive form.172