Futurecast: How Superpowers, Populations, and Globalization Will Change the Way You Live and Work

I have been attempting to predict the future since about 1965 when I first started reading science fiction. I have almost always been wrong. I have been reading expert's attempts to predict the future since about the same time. They have almost always been wrong. In spite of that it is great fun to predict the future, and even though there are so many variables that the predictions are almost always wrong, the attempt leads to greater understanding of the present. This book is well written and a pleasure to read. It discusses the main trends that will shape the future, and then goes on to discuss the unknowns, such as major technological changes or catastrophic terrorist events that could make major changes the current trends. I don't doubt that if you read this book in 10 years it would seem dated and you would smile at many of the incorrect predictions, but reading it today has given me a fine experience of thinking about what is happening in the world.

Robert Shapiro was Under-Secretary of Commerce in the Clinton administration from 1998 to 2001, and now leads a consulting firm for US and foreign companies on business issues in general. Now he brings us this book. "Futurecast: How Superpowers, Populations, and Globalization Will Change The Way You Live and Work" (358 pages) brings the "big picture' of what we can realistically expect in the next 15 years so so. Shapiro focuses on several general themes (geopolitics, globalization of the economy, and the global demographic shift) and the incredible shifts that they will INEVITABLY will bring about. Praise yourself lucky that you are is the US, as Shapiro's outlook for Europe and Japan is bleak at best. Observes Shapiro: "The geopolitical marginalization of Europe seems all but certain. It may be hard to imagine today when much of Europe disdains America's power and its president, but these developments could strengthen the Atlantic alliance." (He goes on to explain in great detail how that would happen.) Shapiro points out there are two wild cards in all scenarios: terrorism and Islamic fundamentalism (which are not the same thing, of course). The effects of the global demographic shifts are devastating, yet certain to happen (Russia is losing about 1 million, yes you read that correctly) people every year) and certain to cause huge political consequences, particularly in Europe and Japan. And on and on... Be forewarned: this is not a book you'll read in a couple of hours (or even days). This is dense and serious writing. It took me a good two weeks to read the book from start to finish, but it was so worth it. This book for me is as essential as Thomas Friedman's revolutionary "The World Is Flat" book 3 years ago. This book should be required reading for all college students, and frankly our politicians. Are you reading this, Wahsington? Absolutely essential reading.

1. China is the world's source of personal savings used in the global capital markets and will be the second largest market for everything produced. 2. China's rise will not preclude America's decline. China's expanding production will come from mainly from developing countries. In 2003, America's global production was 23 percent and stable. 3. China's leaders will have little choice over the next decade but to unwind state owned banks and let western financial institutions take hold. 4. American system of job-based medical insurance will continue to unravel, until the number of uninsured working people reaches a political tipping point and a battle for universal healthcare. 5. America's lower energy taxes make energy less expensive than Japan and Europe. Growth in China, India, and Central Europe, and other developing nations will put upward pressure on oil prices. The lack of America savings will produce a dollar crisis and stall the American economy for a time. 6. China saves so much of its income and private businesses retain so much of its earnings - it comes to 40 of China's annual GDP. 7. China attracted $850 billion in foreign investment, mostly in modern manufacturing operations. Between 2002 to 2005, China attracted almost $333 billion in new direct foreign investments. 8. From its start, China's tentative embrace of capitalism was fundamentally a political choice, as its leaders sought to distance themselves from the palpable failures of both Maoism and Soviet-led communist movement and focus on driving economic growth and national power it conferred. Chinese leaders opened industries to foreign trade and investment and for the first time allowed the workforce to move from village to bigger cities where the jobs existed. Western joint ventures brought western technology and expertise to China and provided training grounds for the next generation of Chinese managers and entrepreneurs. 9. With so much of China's growth and progress based on transplants from more advanced economies, most of what makes China modern exists in a kind of economic vacuum without the strong, natural ties to everything else that help maintain intricate forms of economic balance. Jobs could move to India and Bangladesh and this vast disparity makes it much harder for China to develop the kind of integrated national economy that large countries need to maintain their growth and development. 10. China's state owned banks keep monopoly companies afloat, forcing banks to write off bad loans that drain the working capital from the deposits of ordinary Chinese. 11. Building a world-class manufacturing platform that produces things that most China's businesses and people can neither use nor afford is creating another pitfall for stable economic progress, since China has to use its high savings to finance a good part of the foreign demand for its own exports, especially to the indispensable American market. 12. The US economy is dependent on the cen

Overall, the author does a good job of describing the megatrends he sees in our future. For instance, globalization will shift labor intensive jobs to areas of the world where labor costs are cheaper. The USA and China will emerge as superpowers and dominate globalization. As the number of working people go down- the quality of life goes down and the various social programs will be under funding strains as in Europe. The author sees overall challenges in health care, globalization and climate change. The traditional economies will experience slower growth with higher taxes, more elderly and a shrinking labor force. Globalization also encourages costly new medical procedures due to technological improvements. The government must find ways to control costs in this area by merging partnerships with industry. The USA will build and maintain global information networks. This is our area of strength. The USA labor force will grow decently over the next few decades due to the current stock of immigration. The new immigrants are needed to replace the labor pool of retiring baby boomers. There will be no baby boom in Sub Sahara Africa and Russia. These countries may suffer for the lack of a labor pool. In summary, Americans have produced more children than Europeans or the Japanese. The price of the baby bust is the end of strong growth in Europe and Japan according to the author. China must build its infrastructure and manage the coastal information technologies with the needs of inland China. Outsourcing does cause the loss of some jobs; however, there is a counterbalance to increments in productivity. I happen to believe that outsourcing is not a panacea or cure-all for a number of reasons. i.e. enforcement of corporate standards is more difficult; Random Acts of G-d can obliterate operations overnight etc. The author poses the question concerning oil demand and prices. Ultimately, oil prices will rise and stabilize at various equilibrium levels. The new technological advances may serve to keep oil prices in check , if there is a serious effort to seek new oil sources and build cars that are energy efficient. The book provides a serious perspective on the challenge we face in the future. Policymakers in Washington, DC and elsewhere should take note !

Robert Shapiro, former Clinton Administration Under Secretary of Commerce presents his vision of the world in the near future. In his view, there are three important factors that will have an impact on the shape of the new world: globalization, demographics and the superpowers. None of this is surprising and most of the people agree with this view. His presentation is provocative though, and the simple review of facts that occurred in the recent past and their extension into the near future is challenging the mindset that most of us have. The world is fast evolving and we have to adapt. It is difficult to grasp the massive dislocation brought to us by globalisation when you have countries like China and India entering the world stage changing completely the job market everywhere. In his view America will remain a superpower, but the rules are different. Robert focuses on US, China, Japan and Europe, with occasional touch on Ireland, UK, France, Germany, Italy and South Corea. The book has a lot of factual information and it contains, based on that information, predictions on future trends that are likely to occur until 2020. Suprisingly, there is not much about India, Canada and Australia (the last two countries have massive natural resources that have a key strategic importance in the evolution of global balance of power). The main factors that Robert predicts will have a significant influence in the evolution of world order are demographic, economic and political. The demographic factors are staggering. For instance China will have by 2020 over 170 million people over 60. Or consider the fact that in Europe and Japan the elderly will represent over 50% of the working-age population. These developments will have impact on productivity, economic growth, social system, tax and welfare in general. The story of China is interesting. The accelerated development is impressive, but there are huge risks lurking in the background. The eventuation of any of these risks has implications for the rest of the world. Robert Shapiro explains very well the connection between China and US as competitors fighting for leadership and partners sharing common interests. Of course there are unanswered questions, but who can pretend or demand that they should or could be answered? This is one of those books that make people debate forever, and that is good. The book is a very interesting read.