A report by PwC and ESADEGeo says that in 2033, Spain will fare better than other European countries in a world of regional blocs
In 2033, the global geopolitical stage will look radically different. The Western powers will have lost ground to new regional blocs – both economic and political – that will compete with one another, protect their own markets and jockey for flows of direct investment. This is one of the conclusions of España en el mundo en 2033 ["Spain in the world in 2033"], a new report by PwC and ESADE’s Center for Global Economy and Geopolitics (ESADEgeo). The report was presented today at a session featuring Carlos Mas, Chairman of PwC Spain, and Javier Solana, President of ESADEgeo.
The study describes four possible scenarios of what the world might look like in 2033 – global governance, regional blocs, national protectionism, and domination of economic interests – and concludes that the second scenario, regional blocs, is the most likely.
The report forms part of the PwC project Spain 2033, which aims to get ahead of trends that will shape the country’s economic and social future. A highlight of the project is analysis by Club 33, a "reflection group" featuring future executives of some of Spain’s largest companies.
Two decades from now, there will be no clear hegemonic world power. There will be no referee on a playing field characterised by a diverse line-up of players and competition between major regional blocs. The power of national governments will gradually wane as other sorts of actors gain ground. The major blocs – Brazil and Mexico; China, India and Japan; Nigeria and South Africa; Saudi Arabia and Iran; Turkey and Russia; the United States and Canada; the European Union; and others – will compete with one another with a certain tendency towards protectionism. Bilateral trade agreements will proliferate and intraregional trade will grow.
Europe will be an important region. The continent will be more economically cohesive – a true monetary, banking and fiscal (but not political) union – and Germany will be its most influential power. This scenario will be favourable to Spain. Because Latin America and the European Union will be the main destinations for Spanish exports, Spain will be better positioned than other European countries to overcome the effects of restricted world trade.
Spain’s dual Latin and European nature will raise the country’s profile as a mediator between the new regional blocs. At the global level, Spain will try to position itself as a hub for talent, thanks to its status as the EU’s fifth-largest economy, its high-quality infrastructure, and its attractive culture, lifestyle and language.
España en el mundo en 2033 also identifies six major trends that will transform the world over the next two decades:
1. Geopolitics: a match without a referee. The waning influence of the West, the consolidation of new emerging powers and the effects of globalisation will make the geopolitical world atlas look like a football match without a referee. The political and ideological diversity of the players and the predominance of economic strength over military power will increase complexity, presenting companies with a more difficult and heterogeneous context.
2. The world economy: the balance shifts towards the Pacific. The shift of economic power towards emerging countries will cause the new global balance to tilt towards the Asia-Pacific region. Over the next few decades, the capacity for economic growth will dwindle in Europe and Japan and surge in the United States and emerging economies. In this more global world – with larger systemic entities and a greater risk of contagion in future crises – a global financial governance regime will be essential.
3. Innovation: the foundation of everything. In the new production model of the coming decades, everything will be based on innovation. The fight for talent and labour mobility will reach previously unknown heights. Exacerbated by the impact of new technologies on manufacturing processes, this phenomenon could lead to greater inequality among workers and other hard-to-predict social effects.
4. The structure of society: the individual takes on greater autonomy. The structure of our society will be shaped by economic development, the appearance of a large, emerging middle class, and the impact of information technologies. Society will be altered by an increase in freedom and decision-making capacity at the individual level, as people gain power with respect to the state.
5. Demographics: longer lives, in cities and on the move. Global demographics will be shaped by longer life expectancy, higher quality of life, plummeting birthrates, booming cities, and patterns of migration. Women will make important social advances.
6. Sustainability: fewer – and costlier – resources. The pressure on natural resources will increase significantly over the next 20 years as the global population increases and the emerging middle classes expand. As states and companies compete to secure supplies of natural resources, unconventional energy sources will play an important role in geopolitics and the world economy.
According to Carlos Mas, Chairman of PwC Spain: "Over the next 20 years, Spain will have to address huge challenges. Decisions made in the medium term will lead to the country’s success or failure. Our future will depend on the degree to which society, institutions and companies adapt to the circumstances." The new report includes a series of recommendations for government bodies and companies.
