Based on expert speculations, what can we expect of the decades ahead? Let’s learn from Nouriel Roubini (professor emeritus of economics at New York University’s Stern School of Business) and Hamish McRae (economic journalist). Here’s part 2.
For this look into possible futures, I used Roubini’s book Megathreats (published 2022) and McRae’s book The World in 2050 (published 2023).
In part 1, we looked at McRae’s five change drivers: demography, resources & environment, finance & global trade, technology, and governance.
Let’s continue with Roubini’s Megathreats.
Ten Megathreats
Roubini’s megathreats align with McRae’s forces for change. The frame they use differs: whether threats or forces for change – it depends on your mindset. Either way, when you’re anticipating the futures you must take them into account.
Debt crisis
The Debt crisis, the dangerous policies to manage it, and the boom-bust cycles. Public debt owed by governments, on top of private debt owed by corporations, financial institutions, and households, was soaring out of control before the gigantic tab for the COVID-19 pandemic response came due. The Institute of International Finance found that global debt was well over 350 percent of global GDP by the end of 2021. Estimates suggest that the global debt ratio will amount to more than four times global output by 2030, a level that would smother economic growth (and investments in green technologies, etc) under the massive costs of debt. How do we tackle this?
Every remedy to high debt levels brings its own costs: the paradox of thrift, the chaos of defaults, the moral hazard of bailout, the wealth taxation that can lead to less private capital investment, the labor taxation that hurts the most vulnerable, and unexpected inflation that wipes out the wealth of creditors.
Wiping out debts sounds like good news for debtors, but then you are wiping out creditors also. Defaults are ugly. First, you see a credit crunch. Then banks collapse. Credit dries up. Corporations go bust. People lose jobs. Households lose their incomes and homes. The stock market tanks. Without access to capital, economies contract. Local currency becomes worthless. Printing more money invites inflation. Poverty proliferates. Governments that cannot provide for their populations do not last long. Chaos opens the door to empty promises by authoritarians armed with populist slogans and freelance militias.
Currently, keeping interest rates low and continuing to pile up debt is the path we’re on. Roubini: “We are in a collective state of denial. We don’t want to tighten our belts or admit that the future lacks opportunity to grow incomes, much less concede that our purchasing power is likely to decrease.”
Boom-bust policies
The policy of governments invites boom-bust cycles, says Roubini. If we’re in danger of a crash, we open the cheap money taps to avoid deflation and recession. But before we do so, we should ask why crashes occur. The answer: crashes occur because in good times, we are not smart or prudent. We should save more and shouldn’t borrow money for spending, only for investments.
Roubini expects stagflation: a stagnating economy with inflation. He counts eleven potential global negative supply shocks that loom over the medium term. They reduce economic output, growth, and increase the costs of production and inflation. Some examples are aging populations, deglobalization and protectionism, reshoring of manufacturing, competition between the USA and China, more geopolitical shocks, global climate change, which disrupts and damages livelihoods, production, and transport, global pandemics, and more….
Demography
Demography – “a time bomb” according to Roubini: Not enough money exists to deliver on the financial promises made to current workers and the swelling numbers of retired workers in advanced economies – and even in aging emerging markets such as China, Russia, and South Korea.
Longer life expectancies and new medical technologies now pose a nightmare. Advanced economies created social safety nets when many workers were dying before retirement age. So, how to solve this challenge? One partial solution is immigration.
Research links immigration with higher economic growth rates. Skilled workers go to regions where wages are higher. Motivated immigrants become entrepreneurs who build new businesses. Also, immigrants send income home that helps stabilize those economies. So, freer immigration has a more positive net impact on global domestic product than liberalizing trade, movements of capital, or financial services.
However, average wages in advanced economies with higher initial wage rates will decrease over time with free immigration- that explains part of the resistance.
Next, as robots replace factory and office workers, even immigrants with skills may not find work and compete for even scarcer jobs. Businesses in developed economies rely increasingly on robots and AI as a way to deal with fewer workers, given the aging population.
De-globalization?
Roubini also foresees currency meltdowns and financial instability, and maybe the end of globalization? “One path into the future continues to unite an efficient global marketplace while compensating or retraining workers left behind. Consumers worldwide enjoy lower prices while employment in emerging markets lifts millions of global citizens out of poverty.
The opposite path, deglobalization, favors protectionist policies aimed at bringing lost jobs back home and preventing jobs from moving abroad. As appealing as protectionism may sound, when tried before, it toppled the economic ladder for nearly everyone.”
Which way the world will turn is a big uncertainty.
New cold war?
But the most serious decoupling and fragmentation of the global economy is ahead of us as the new cold war between China (and its allies) and the United States (and most of the West) accelerates over the next two decades. Hopefully, these “frenemies” will co-exist and not escalate into a cold, or, worse, real war.
The AI threat
Then there’s the AI threat. Al initially replaced routine jobs. Then it started to replace cognitive jobs that repeat sequences of steps that a machine can master. Now, Al is gradually able to perform even creative jobs.
So for workers, including those in the creative industries, there is nowhere to hide. As people earn less, inequality will grow. Technological innovation is capital-intensive, high-skill-biased, and labor-saving. If you own the machine or are in the top 5 percent of the human capital distribution, Al will make you richer and more productive.
If you are a low- or even medium-skilled blue- or white-collar worker, Al will eventually reduce your wages and make your job obsolete. Polarization will pit the rich against the poor. Enter the new precariat, educated and semi-skilled workers who lose careers to AI and end up in gig work with unstable income and no benefits.
An uninhabitable planet
Unless you live on high ground in cool latitudes with plenty of drinking water and rich farmland, get ready to move. If good luck has landed you in the right place, expect lots of new company dispersed by global warming, both human and microbial. The megathreat of climate change is already upon us. We should expect to see conflict and grinding poverty. It will push migration to new heights – and epidemics and pandemics as well.
So, now what? Roubini: Many of the problems fueling megathreats require solutions based on high-powered economic growth. High growth – between 5 and 6 percent GDP — can help pay down the debts that threaten us. That kind of growth can fund expensive public projects to forestall climate change, aging, and tech unemployment, or tackle future pandemics. It reduces political tensions and strife.
Higher growth is driven to a great extent by technological innovations that increase productivity. Could tech innovation help us grow our way out of our troubles?
Maybe if fusion is possible, it might eventually become cost-competitive. If this new source of energy or a similar innovation becomes reality, then we’ll have a real shot at net zero emissions without slamming the brakes on economic growth.
But is economic growth in the current global industrialized capitalist system the only way out? There are other options. Eventually, we will achieve transformational change in our current systems. That’s why Future Studies teacher Andy Hines wrote the book Imagining After Capitalism.
And also why Rob Hopkins argues for imagining the future we want. What does the future look like when things turn out okay?
But naive, blind optimism is useless. It has been labeled “hopium” by Michael Dowd and others who contemplate the decline or collapse of our current systems (and a transition to something new).
Let’s activate hope as Joanna Macy teached. That is hope based on informed actions that you can take to mitigate negative consequences or adapt to tough transition situations. It is the core of futures thinking: exploring your options and taking action. Even when things look discouraging, we use our courage to do what is right and work toward the best possible outcome.
Recap: negative and positive speculations
What might go wrong? Here’s a short list from McRae’s book (read it for more insights):
1. The US political system fails to hold together
2. China, India and the US mismanage their relationship
3. Russia overplays its hand
4. Sub-Saharan Africa fails to escape from poverty
5. Religious conflict bursts out
6. Environmental degradation and climate change become irreversible
7. The long-term blow from Covid-19 – and pandemics that follow
8. The Middle East becomes truly unstable
9. The information revolution might have a malign impact, not a beneficial one
10. The threat to democracy
But here are also Ten positive ideas from McRae’s book:
1. A middle-class world (two-thirds live well)
2. A calmer, more comfortable, self-confident United States
3. The rise of the Anglosphere (English-speaking countries bond)
4. China – the world’s largest economy moves from aggression to cooperation
5. The European Union diverges into a core and a periphery
6. India and the Indian subcontinent take it rightful place (and manage internal issues well)
7. Africa becomes more important to the world
8. Globalization doesn’t halt but changes direction – from moving goods to moving ideas and money
9. Technology comes to the rescue
10. A more harmonious relationship between humankind and our planet – we will make haste, triggered by a catastrophic event or charismatic leader. We have nowhere else to live…
If you want to learn more, buy and read:
Ten Megathreats – by Nouriel Roubini
The World in 2050 – by Hamish McRae
- Which trends, threats or change drivers stand out for you?
- Which affects your organization the most?
- When can you convene your team to talk about future opportunities and threats?
Doing nothing with this information is the riskiest strategy we can choose. Let’s think about it, let’s have a dialogue, let’s brainstorm possibilities, let’s do what we can.
What feels most challenging about becoming future-fit in your organization or your client work? Let me know in the comments or send me an email! We’re here to help.
© Marcella Bremer, 2026
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