Trends Identified
Patterns of Labour Mobility
Remittances from migrants in developed states, worth $240 billion per annum, or more than twice the level of international aid, are the largest source of external capital in many developing countries and directly benefit 10% of the global population.224 Over half of the 16 million highly skilled expatriate workers in the 4 main destinations (US, Europe, Canada and Australia) have originated from outside the OECD area.225 Out to 2040, highly capable and skilled individuals, particularly those in niche or scarce areas, will continue to attract substantial rewards for their services and are likely to be mobile within the global economy. This flow of skilled migrants will become more complex and will be affected by the growth of research and entrepreneurial opportunities in developing economies, fluctuating migration policies, and changes to traditional career models in business and academia. This may result in a ‘brain circulation’ rather than a ‘brain drain’, as developing economies continue to rise, and opportunities and safeguards become more predictable; a reverse flow of people to countries of origin may accelerate.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence
Capital Flows
The volume of cross-border capital flows, both net and gross, is likely to increase, maintaining a high-level of financial interdependence between states. Gross capital flows have increased markedly over the last 30 years. For example, turnover on the foreign exchange markets generates flows of several hundred trillions of dollars per year. However, the majority of these trades represent short term speculative flows rather than longer-term investments, and net international flows, as a proportion of global output, are smaller than at the turn of the 20th century.226 The tension between the interdependency created by capital flows, and the instability that can be generated by capital flight, will continue. Financial instability may be one trigger by which protectionist- minded populations force de-globalising policies onto reluctant governments.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence
Global Governance
The UN will continue to offer a framework for international discourse. It will continue to be the global service provider, offering international coordination and direction in specific areas through bodies such as the World Health Organisation (WHO), UNHCR and United Nations Educational Social and Cultural Organisation (UNESCO). The permanent membership of the UN Security Council is likely to expand, but it will struggle to deal with conflict and tension. Other global institutions will face considerable challenges.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence
United States Transition
The status, culture and actions of the US will have a decisive effect on the evolution of the international system, as it adjusts to an uneven, possibly unbalanced transition from a uni-polar to a multi-polar world.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence
The Rising Powers
China’s economic development will be one of the most significant factors in the future of the globalised economy. Other growing, or resurgent powers are likely to be of influence, with Brazil and possibly South Africa strengthening their status as regional powers.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence
The Role of Multinational Corporations
Over the last 30 years, industrial production has been de-centralised and geographically distributed in an unprecedented manner. Countries, regions, and firms have specialised in particular stages of a product’s manufacture in response to competition, internationalising the markets for goods, services and labour. Such specialisation requires large-scale transportation of components, and this has been facilitated by technological advances in transport and communications, and trade liberalisation.227 MNCs and out-sourcing have emerged as integrating factors in the globalised economy, producing networks of interdependence between states that are unprecedented in scale and pervasiveness. This integrating effort is likely to persist out to 2040. The rise of state-owned enterprises (5 of the 10 largest MNCs are currently state- owned by the Chinese, Brazilian and Russian governments) is likely to continue, as is the proportion of MNCs based in emerging rather than developed economies.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence
Global Interconnectivity
The interdependence of the global system, under-pinned by physical links, international governance and norms, and a belief in the positive benefits of international markets and trade, is likely to act as a double-edged sword. It will act as a stabilising influence between major powers by raising the costs of confrontation and conflict, but is also likely to destabilise states and regions that are unable to cope with the increased competition and social change that interconnectivity brings. Interconnectivity and interdependence is epitomised by the symbiotic relationship between China and the US. On one hand both states are likely to see each other as a security challenge, but they will continue to exploit the economic opportunities that exist between them. However, the interconnectivity of the global system also represents a significant systemic risk to highly-integrated economies given that failure of one part is likely to have broad impact.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence
The Constituents of Power
Power is the ability to influence others. The constituents of power will continue to comprise a mix of ‘hard’ and ‘soft’ elements.229 Hard power is military, economic and some elements of diplomatic activity that can be used to coerce or pay others to change their behaviour. Soft power is the power of attraction based on culture (when it is pleasing to others), values (when they are attractive and consistently practiced), and policies (when they are seen as inclusive and legitimate).230 Soft power is at its most effective when under-pinned by hard power. The degree to which a state or group can combine hard and soft power into an amalgam of effective statecraft will determine their ability to achieve strategic objectives. Some states, especially in Europe, are already reluctant to use the military element of hard power. This trend towards a post- military society is likely to remain strong, but not irreversible. The ability of the Western liberal democracies to utilise power is likely to be challenged by the rise of alternative power bases in Asia, in particular in China and India. Moreover, all elements of power are likely to be wielded by a broader spectrum of actors and agencies, even by organised criminal, terrorist and insurgent groups.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence
The Role of the State
The state will remain the basic unit in international relations, although it will face challenges and the authority vested in it will vary. Most states will retain authority over the full spectrum of activities, whereas others, such as those in the EU, will voluntarily divest some to regional or supranational authorities. Others, such as some states in Africa, will have little practical authority. Transnational movements and groups will remain influential and are likely to further erode some aspects of state power. The varying levels of authority will complicate the ability of states to achieve and sustain multilateral partnerships and agreements.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence
Differing Political Systems
Any assumption that Western liberal values and processes would become the global norm has already been severely challenged. Out to 2040, there will be an era of competing political systems, ranging from liberal democracy through to autocracy and theocracy. Tension between regions, states and nationalist identities, and corruption among ruling elites, are likely to constrain the spread of democracy. Liberal democracies will still dominate in the West. However, the arguments of some democratic movements may not be perceived as strong enough to solve the problems in some developing states that maintain, or turn to, more autocratic or authoritarian political systems. The populations of some states may favour stability, the promise of economic growth and limited de-regulation at the expense of fully representative government. Political systems based on tradition, be it ethnic, tribal or religious, are likely to remain features of the global political system, as are dictatorships.
2010
Global strategic trends - out to 2040
UK, Ministry of Defence