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The great shakeout

Global trends 2020–2025
Five significant trends will dramatically shape the global outlook and operating
environment.

Foreword by Erik R. Peterson

Executive summary
• Embattled governments. Crises of rising inequality, climate change, and now COVID-19 are converging to place
unprecedented levels of fiscal and political pressure on governments throughout the world. As fiscal deficits
persist through 2025, national governments increasingly constrained by stock of debt and fewer economic policy
prerogatives will turn to local administrations and the private sector for support to maintain public trust.

• Push to national self-sufficiency. The pandemic has served as a wake-up call to national governments on the
need for self-sufficiency and resilience in the face of crisis. As governments move to improve their domestic
capabilities in key sectors—healthcare, technology, food, energy, and manufacturing—the private sector may find
opportunities for increased collaboration with government. Too much government intervention, however, could
stifle innovation in the long run.

• Stranded segments of society. Over the next five years, growing inequality—exacerbated by COVID-19—will lea
to further marginalization of stranded segments of society, including minorities, low-skilled workers, students,
children, working mothers, and others. Reintegrating them will be a tall order in a weak economic environment,
but it behooves governments and businesses to work together to re-skill and reposition these important groups in
society.

• Rise in food insecurity. A global food crisis is on the horizon, with disproportionate downside implications for
emerging markets. Food supplies are tightening due to trade restrictions and COVID-induced production
disruptions, and incomes are falling amid economic turmoil. The five-year outlook suggests the situation will get
worse, resulting in changes in the food industry, widening inequality between countries, and depressed
productivity overall.
• Industry consolidations, mergers, and acquisitions. The economic disruption brought about by the pandemi
has weakened finances for businesses across the world. This trend will result in a wave of industry disruption and
consolidation as stronger companies acquire weakened rivals, technologies, or assets—with private equity, big
tech, and the energy industry poised for the biggest shakeouts over the next five years.
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Embattled governments
COVID-19, global protests of systemic inequality, climate change, and widespread economic woes ranging from
income stratification to unemployment. These are just a few of the issues placing staggering burdens on federal,
regional, and city governments throughout the world. While some are crumbling under the pressure, others are
making use of policy and technology to ensure they get through the pandemic while mitigating human and
economic loss. Over the next five years, governments will have to contend with massive macroeconomic and health
constraints while maintaining or rebuilding the trust of their citizens as the fallout from COVID-19 and social injustice
protests persist. This test will be central in the coming great shakeout over the course of pandemic recovery, with
implications not only for which countries emerge stronger or weaker but also for the global operating environment
overall.

Government policy in an uncertain world

As the COVID-19 pandemic assails governments throughout the world, many leaders are employing fiscal and
monetary tools to temper the economic fallout (see figure 1). The scale of the fiscal interventions is impressive—and
is perhaps marking a reemergence in popular support for “bigger” government. Japan, for example, has
introduced a fiscal stimulus package amounting to more than 20 percent of its GDP. The United States has funnele
an estimated $2.3 trillion into the Coronavirus Aid, Relief and Economy Security (CARES) Act, though momentum
on a second tranche is uncertain at the time of this writing. And the European Union (EU) announced a €750 billion
Next Generation EU recovery fund.
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The scale of monetary policy interventions is no less impressive. At the end of March 2020, the United Kingdom cut
interest rates to their lowest level ever—0.1 percent—to keep borrowing costs down for government and business
Many other countries have followed suit, with some such as Chile and Peru on the verge of negative real interest
rates as a result of monetary easing and inflation dynamics. In the United States, the Federal Reserve has announce
a major policy shift to average inflation targeting, which means that it may allow inflation rates to exceed 2 percent
before raising interest rates.

Governments are also calling on the private sector for support. Many Western governments are taking policy action
that are unprecedented outside of wartime, such as repurposing production to essential goods and seizing supply
chains to produce or procure emergency equipment. The United States, for example, has relied on the Cold War-
era Defense Production Act to shift production to medical equipment, mandating General Motors to construct
ventilators and 3M to fabricate N95 respirator masks for the federal government—efforts that could be expanded in
the future. The German health system has relied on private-sector laboratories to analyze far more COVID-19
samples than any other country. And at the beginning of the crisis, Nigerian private sector companies joined
together to create the Coalition Against Coronavirus (CACOVID) in order to complement government efforts to
spread awareness about the virus and support healthcare institutions.

Governments’ expanded fiscal and monetary policy actions amid COVID-19 are likely to continue over the next five
years, which could lead to further challenges down the road. Advanced economies may be able to sustain additiona
debt burdens and low interest rates for some time, but these bills will eventually become due. While these measures
are necessary to navigate this present moment of crisis, they will grow more difficult to sustain for a long period as
debt mounts. Emerging markets face more immediate challenges as funds run dry sooner and borrowing
opportunities are more limited. Additionally, their currencies are less accepted globally, leaving them with less
room to maneuver than their more developed counterparts.

Implications
Global of overstretched
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governments
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Between 2019 and 2020, government deficit levels
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About usgrown dramatically as a result of the extreme fiscal and
monetary measures taken to combat the economic impact of COVID-19 (see figure 2). The implications of these
rising government deficits could be significant both in macroeconomic terms and to key sectors affected by public
finance. In the United States, the federal deficit has reached 17.9 percent of GDP in the 2020 fiscal year—a figure
almost twice as large as the highest seen during the Great Recession (9.8 percent) in 2009. As of October, the
United Kingdom was facing its highest debt-to-GDP ratio in 50 years. And South Africa’s growing debt burden—
which could reach 84 percent of GDP by the end of fiscal year 2020—is reducing the government’s ability to offer
further support to its state-owned enterprises such as power utility Eskom and South African Airways.

Such soaring deficits are expected to continue through 2025 for many advanced economies. The implications of
this budget overstretch are jarring. It could lead to a loss of trust in government overall, a tendency that has
historical precedent. As a result of the 2008 financial crisis, for example, levels of mistrust toward the European
Commission (EC) rose from 27 to 47 percent between 2007 and 2013. And it may be worse this time around.
According to a Kantar survey, people across almost all of the world’s leading advanced economies have become
more skeptical about their governments’ handling of the coronavirus pandemic over time. In the Group of Seven
(G7) nations in May, only 48 percent of respondents approved of authorities’ handling of the pandemic, down from
54 percent in March.1
As federal governments become more financially constrained and public trust deteriorates, they may rely on local
administrations to share the burden of leading through the crisis. While a recent Edelman survey found increasing
aggregate trust in governments overall, in places where trust in the federal government was lacking, local
government filled the void. This held in countries including the United States, Japan, and France. Indeed, cities
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are taking on an outsized role during the pandemic as they carry out contact tracing, institute
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lockdowns, and care for the vulnerable in their respective populations. To keep local governments operating
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effectively, federal governments may increasingly need to provide funding support. Estimates from the World Bank
and UN entities suggest that local governments may on average lose 15 to 25 percent of revenues in 2021 owing to
COVID-induced economic turmoil.

There is reason for optimism, however. Despite concerns about inadequate funding or even insolvency, city
governments around the world have been stepping up throughout the COVID-19 crisis, increasing pedestrian
access, building makeshift hospitals, and providing housing for the homeless. Houston, Texas, for example, has
developed a new initiative known as the COVID-19 Community Health Education Fellows (CHEF), designed to
educate and empower at least 100 youth and young adults to help the city fight COVID-19, particularly in the most
vulnerable communities. The private sector is also involved in this endeavor, as JPMorgan Chase has provided a
$100k grant to the program. Such measures are not restricted to cities in advanced economies. Despite limited
funding, Kigali placed numerous portable sinks for handwashing at bus stops, restaurants, banks, and shops acros
the city. And in Monrovia, the Cities Alliance has relied on social mobilizers to spread the word in informal
settlements about basic hygiene practices. As pandemic recovery progresses, federal, provincial, and city
governments globally—in concert with the private sector—will need to find ways to strengthen their cooperation to
meet both the immediate and longer-range challenges posed by the pandemic.

The outlook
As governments take on additional responsibilities through and beyond COVID-19, they’ll face mounting economic,
political, and social challenges. Further, embattled governments will need to find new ways to work together and
engage in multilateralism to rebuild international institutions in a way that is sustainable and appropriate for the 21st
century. They need to retool domestic capacity to make it more resilient as well (see Trend #2). Even with renewed
efforts on the part of multilaterals, maintaining public trust in government will be a persistent challenge. To mitigate
this stress, governments increasingly will rely on the private sector to re-skill the unemployed, especially stranded
segments such as low-skilled workers (see Trend #3). Such cross-sector collaboration will also be necessary to
develop and deploy contact-tracing technology, PPE, and vaccines. There is reason to hold out hope that the great
shakeout could result in renewed multilateralism and increased government efficiency. Such efforts will be required
if embattled governments are to survive the challenge ahead.

Business implications
• Businesses will take on functions that governments cannot. As governments become more financially
constrained over the next five years and beyond, businesses will assume additional responsibilities to support and
fill gaps—even in the absence of government regulations to guide their activities. Indeed, businesses are already
supporting governments in initiatives to combat COVID-19. In May, Google and Apple announced a joint effort to
enable the use of Bluetooth technology to help governments and health agencies reduce the spread of the virus.
Technological and cash support to vulnerable segments will continue as businesses recognize the reputation and
financial gains that follow.
• Companies will harness stimulus funds to rebuild. As beleaguered governments inject cash into diverse
sectors ranging from travel and tourism in the United States and Europe to renewable energy in South Korea,
businesses will take advantage of upcoming fiscal stimulus bills and identify strategies to best apply for and
benefit from this government support. “Green” recovery programs will also involve the private sector, as
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energy efficiency improvements and installation of
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renewable energy systems. Such advances in the circular economy in turn help governments meet climate and
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sustainability goals.

• Small and medium-sized businesses (SMBs) will seek out creative funding sources to fill in government
funding gaps. Though many governments throughout the world have provided emergency funds to a variety of
SMBs, the support often has not been enough. Therefore SMBs will increasingly look for financing from other
sources, such as through GoFundMe’s Small Business COVID Relief Initiative, microloans, and venture capital
funding. As governments become even more embattled over the next five years, innovative SMB funding method
and sources will only grow in number and popularity.

Trend #2
Push to national self-sufficiency
Governments around the world face encumbered supply chains, scarce medical supplies, and a race to health and
recovery. The COVID-19 pandemic has served as a wake-up call to national governments on the need for self-
sufficiency and resilience in priority economic areas, including medical goods and technology. This push toward
producing more goods at home, using domestic companies, will only increase in the next five years over the course
of the great shakeout brought about by the pandemic. New policies to boost domestic capabilities in key sectors
such as healthcare, technology, agriculture, energy, and manufacturing could have a positive impact on the
economy by supporting emerging industries and minimizing the risks of globalized supply chains. Yet there are also
risks of too much government intervention, which could disincentivize innovation and artificially prop up inefficient
“national champions.” It’s as yet unclear where governments will fall on this spectrum, but there’s little doubt that
these shifts toward greater self-sufficiency are underway.

The pendulum swings away from the world and back toward the state
From the late 1980s to the Great Recession of 2008, globalization defined the business-operating environment. As
the world grew more connected following the fall of the Soviet Union, the creation of the North American Free Trade
Agreement, and China’s entry to the World Trade Organization, statist policies were abandoned in exchange for free
trade and global value chains. After the financial crisis, however, the pendulum began swinging away from
globalization. As former US Secretary of State Henry Kissinger wrote in 2008, “globalization tempts a nationalism
that threatens its fulfillment.” In the years that followed, populist leaders worldwide rose to power advocating agains
globalization, immigration, and open markets. The US–China trade war, Brexit, and the rise of industrial policy
worldwide are just some signals of this shift. Rather than relying on international connectedness, countries started t
look for opportunities to re-shore in order to bolster domestic capabilities, and they began preparing for further
trade protectionism. Then COVID-19 arrived.

The virus has since spurred rapid shifts toward domestic capacity in key sectors, most notably in healthcare and
technology. Springtime shortages of medical equipment have prompted governments to beef up national supply
chains and stockpile materials (see figure 3). Some are investing in vaccine research, including Russia, China, and
India (which is funding vaccine trials for local companies like Bharat Biotech). India’s Serum Institute, moreover, is
working to mass-produce a coronavirus vaccine, half of which will be reserved for Indians, with the other half for
emerging markets. The United States has mandated that US companies such as General Motors use their plants to
produce ventilators under the US Defense Production Act to ensure sufficient domestic capacity without relying on
imports, though critics have argued that this mandate was insufficient to meet demand. And in the EU, Brussels has
member
Global Business
advised states to be
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direct investment
leadership in medical fields out of fears that foreign ownership
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could direct these products abroad. In light of the much-celebrated news from Pfizer and Moderna in November
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showing that their vaccines appear to be highly effective, a number of countries either have existing agreements or
are reaching deals with these companies to provide the vaccine to their populations. This includes the United States
Canada, Japan, and the United Kingdom, along with the European Union, though their respective health authorities
must approve the vaccine before it can be administered. If further developments are announced, more national
supply deals are likely.

Apart from medical goods, the pandemic has also underscored the need for modernized domestic technology
infrastructure. From contact tracing and health data analysis to communications facilitation during shutdowns,
technology has been crucial to navigating the pandemic. National efforts to support domestic technology and
restrict foreign products were already underway pre-COVID, exemplified by the international competition to develo
5G, US sanctions on Huawei, and the EU’s plans for “technological sovereignty” to develop digital capabilities that
could match those of China and the United States. The pandemic has simply accelerated these trends. In June, US
legislators proposed more than $22 billion in tax breaks and grants to support domestic chip manufacturing in an
effort to build national self-sufficiency, citing vulnerabilities in existing supply chains and reliance on trading partner
like China. China, on the other hand, has leaned on domestic tech companies for contact tracing efforts. And in
Europe, the EU provided €164 million in R&D funding to coronavirus-focused tech start-ups based in EU member
states and associated countries. Governments increasingly see domestic technology capacity not just as important
for their population’s well-being but also as a crucial component to compete in the world economy and protect
national security.

Countries
Global will
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in more fields to contend with future crises
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Beyond the immediate needAdvisory
for increased medical
services andus
About technological self-sufficiency, countries are looking at
boosting other industries that will mitigate future crises—food, energy, and manufacturing chief among them. Some
are taking measures to strengthen domestic food production, particularly as food insecurity worsens (see Trend #4)
Though agricultural subsidies for domestic farming were well established before the pandemic, countries are now
expanding such programs. For instance, the EU has raised agricultural aid to maintain domestic production, giving
the hardest-hit farmers up to €7,000. Some member states have gone even further: lawmakers in the Czech
Republic have introduced a bill that would require at least 85 percent of food on retailers’ shelves to be produced
domestically by 2027. Across the Atlantic, the United States has launched the Coronavirus Food Assistance Program
to disperse up to $16 billion in direct relief to domestic farmers and ranchers. Importers in the Middle East have also
considered boosting local food production through tariffs and improving farming infrastructure, and Singapore is
investing more in vertical farming to improve food security. National investment in domestic food production is only
likely to grow in the coming years as food insecurity worsens worldwide, and especially if trade protectionism
remains.

National self-sufficiency efforts in the energy sector, also long-standing, have become a part of pandemic economic
recovery efforts in several countries. The United States, for example, pursued a policy of energy independence
before COVID-19 with the goal of reducing reliance on energy imports. Early in the crisis, oil prices dropped to
historic lows due to plummeting demand driven by stay-at-home orders. To support its domestic oil industry, the
United States took the historic step of involving itself in OPEC+ discussions to lift prices.2 Europe, on the other hand
is looking to boost its renewables sector by incorporating parts of its European Green Deal into its COVID-19
recovery plans. The bloc intends to fund green projects such as the North Sea Wind Power Hub Programme, an
initiative led by EU companies that will receive €14 million to increase offshore wind production. This effort will not
only advance the region’s climate goals but also help diversify energy sources by supporting European companies,
win-win for greater energy self-sufficiency. South Korea has taken similar steps to help domestic companies
compete in green technologies. The country’s Green New Deal, for example, aims to have at least 1.13 million
electric vehicles on the road by 2025, which will likely help national firms such as Hyundai and Kia as they expand
their electric fleets.

Countries also see manufacturing self-sufficiency as necessary to surviving future shocks (see figure 4). Shortly afte
COVID-19 struck, Japan started subsidizing companies to move production out of China in the hopes of stabilizing
supply shocks. One company alone, Sharp Corporation, is slated to receive more than $536 million in this effort.
India has also updated policies to increase domestic electronics production, which is aligned with its 2014 Make in
India initiative. In May, the country unveiled a plan to support domestic industry through the Self-Reliant India
program, which supports small and medium- sized enterprises through subsidies and tax breaks. In the medium
term, these efforts will only grow as geopolitical tensions remain fraught and countries search for ways to kick-start
economic growth post-pandemic.
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The outlook
As the pendulum swings further toward a state-centered economy, we can expect to see more government
investment in the five industries mentioned—namely healthcare, technology, agriculture, energy, and manufacturing
(and potentially a few others, including infrastructure). This investment will likely add to the pressures already faced
by embattled governments around the world (see Trend #1). Long, multinational supply chains are highly exposed to
global risks such as an international pandemic, and external shocks show no signs of abating in the next five years.
Government support for domestic industry is an attractive risk-mitigation measure and could help indigenous
industry take off, creating more jobs and development. Yet it can also be costly and, if the pendulum swings too far,
could create other challenges. Too much government intervention could keep inefficient and unproductive
industries afloat by eliminating competition and disincentivizing innovation. And eventually rolling back such
subsidies could prove politically challenging. In the next five years, the great shakeout will result in increased
government intervention and moves toward self-sufficiency. It will be incumbent on strategic businesses to monitor
just how far this pendulum swings.

Business implications
• Companies will face greater pressure to localize supply chains. National governments may continue to offer
incentives to companies that choose to localize production. These incentives are already taking place in Japan,
the United States, and parts of Europe, as governments look to rebuild manufacturing capacity and minimize
disruptions from multinational value chains. Re-shoring or near-shoring will likely continue as barriers to trade and
increased geopolitical tensions remain. This trend will create opportunities for companies that can relocate closer
to home, and provide additional benefits such as the ability to better monitor environmental and labor standards.
• Businesses may have trouble using and sourcing foreign tech, especially components such as chips. As
technological competition intensifies, strategic companies will consider where they source their component parts
such as semiconductors. Efforts like those underway in the United States to boost domestic chip production will
continue, while export controls could become more common in much of the world, including in China. If countrie
take Business
Global more steps to restrictGlobal
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forums access
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buy locally made goods over imports.
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• Manufacturing could make a comeback in advanced economies. Though many advanced economies are
service based, further government support in manufacturing and emerging Fourth Industrial Revolution (4IR)
technologies such as digital twins could help the sector revive. This is particularly true in areas such as chip
manufacturing, electronics, minerals processing, and the automotive industry, as these companies look slated to
receive significant government support in the next five years. Companies can take advantage of this support by
investing in manufacturing opportunities in advanced economies, as some firms such as TSMC are doing.

Trend #3
Stranded segments of society
Far from being a great equalizer, COVID-19 has disproportionately affected the world’s most vulnerable. As global
poverty levels rise to new heights, inequality is growing, fueling protests and riots from the United States to
Australia. Over the next five years, this inequality will worsen, exacerbated by COVID-19, and lead to further
marginalization of already stranded segments of society in both advanced and developing economies—including
ethnic minorities and low-skilled workers. In parallel, new segments such as students, children, and working mothers
will also find themselves stranded as the virus restricts opportunities for learning and earning. As these groups fall
victim to the great shakeout, there will be increased pressure for governments and businesses to work both
independently and in concert to support them.

Multiple segments of society are becoming stranded

Minorities, and more specifically Black and Latinx people, have long experienced economic and social inequity in
many countries; the virus is exacerbating these inequalities. In the United States, for example, a Pew Research study
conducted in April found that 73 percent of Black Americans did not have emergency funds to cover three months
of expenses during the pandemic, while only 47 percent of white adults said the same. Disparities are also evident in
contraction of the virus—Black Americans represent roughly 14 percent of the population but around 30 percent of
COVID-19 cases. And the National Bureau of Economic Research found in the same month that US Latinxs were
disproportionately affected by the COVID-19 recession, experiencing an unemployment rate of 18.2 percent
compared to the national average of 14.2 percent. These challenges are not limited to developed markets. In South
Africa, predominantly Black townships were much harder hit by the pandemic than primarily white areas, and in
Brazil COVID-19 deaths were disproportionately high among Black and mixed-race patients. Along with COVID-19,
structural racism is inciting protests throughout the world as these stranded segments fight not only a disease of th
body but also systemic problems that require massive policy interventions to address.

Low-skilled workers in both advanced and emerging markets, many of whom were already weathering the left-right
punches of outsourcing and automation, are also facing disproportionate COVID-era challenges. Even before the
onset of the pandemic, Oxford Economics predicted that 20 million global manufacturing jobs could be lost to
robots by 2030. And low-skilled workers may be stranded from their jobs at even higher rates as automation ramps
up. Call centers, from Manila to Bangalore and beyond, are on the decline during the COVID-19 crisis as chatbots
take over. Moreover, restaurants, hotels, and food services are among the establishments around the world that
employ large numbers of low-skilled workers who are now faced with unemployment. According to the US
Department of Labor, by September, workers with bachelor’s degrees or higher had nearly fully recovered jobs lost
in early spring. However, those with just a high school diploma held 11.7 percent fewer jobs in September than in
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February. Policy
As contactless Global forums
technology becomesThought leadership
more popular, workers such as delivery drivers and supermarket
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employees could see similar job displacement. Dutch grocer Ahold, for example, is accelerating development of a
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robotic order processing arm that can scan and stock shelves.

As these technological developments cause massive job displacement among low-skilled workers, the private and
public sectors will feel pressure to find ways to reintegrate these workers and other stranded segments into the
economy.

Students, recent graduates, and children are among the new groups to face growing marginalization. A global
survey released by Save the Children in September indicated that more than 1.6 billion learners have faced school
closures due to the pandemic, with fewer than 1 percent of children from poor households having access to the
Internet for distance learning. University students and recent graduates are also facing challenging futures. Indeed,
it is likely that Gen Z will de-prioritize college and university education (at least in the early post-COVID world) as in-
person classes are limited. In the United States, a higher education trade group has predicted a 15 percent drop in
university enrollment nationwide, including many foreign students unable to return for their studies, which will
amount to a $23 billion revenue loss for colleges. Recent graduates are also hard hit, with two-thirds in the United
Kingdom seeing a job application withheld or put on hold as a result of the virus.

Additionally, children’s learning from home has upended the lives of many working parents, especially mothers, in
both advanced and emerging economies. Among married couples who work full time, women provide close to 70
percent of childcare during standard working hours—a burden that has grown considerably as schools and other
activities have shut down amid COVID-19. Indeed, in September, more than 860,000 women dropped out of the
workforce in the United States, citing the need to care for children at home. Non-college-educated women have
been hit especially hard by job losses in the United States (see figure 5). And in the developing world, the departure
of many women from jobs in the informal sector is leading their families into financial ruin, with gender poverty
gaps expected to widen even further by 2030.
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A multisector response to reintegrate the stranded

Stranded segments will continue to decouple from the global economy over the next five years unless the
government, international institutions, and the private sector all work both independently and together to
reintegrate them. This effort includes taking action to support integration of racial and other minorities. Some
modest steps have already been taken. For example, in response to the summer protests throughout the world
combating structural racism, politicians have ordered the removal of Confederate statues in the United States and
promised police reform. Japanese fashion retailer Uniqlo joined forces with the ACLU and committed to donating
$100,000 to organizations that aid the Black Lives Matter movement. Adidas has said it will fill at least 30 percent of
its open positions with Black and Latinx employees. And Apple and Japanese giant SoftBank have both pledged
$100 million to minority-owned businesses and those promoting diversity. These moves will not solve long-standing
and deep-rooted problems of racial inequity in and of themselves, but they do represent steps in the right direction

For low-skilled workers, forward-thinking governments and businesses are focusing on re-skilling initiatives to
ensure that stranded employees are able to progress in a more automated post-COVID world. Sweden has taken an
early lead in forging a public-private re-skilling alliance during the pandemic. The partnership between HR and
search firm Novare Human Capital and Sophiahemmet University offers a basic medical training program for SAS
(Scandinavian Airlines) cabin staff to transition into assistant nurse roles. And Microsoft has pledged to offer digital
skills training for 25 million people worldwide by identifying the most in-demand skills ahead of the COVID-19
unemployment surge and offering relevant courses accordingly.
Students and children will also need the support of both public and private institutions to avoid being further
stranded. To that end, UNICEF and Microsoft have conducted an early launch of their Learning Passport program,
which helps facilitate online learning in countries where the curriculum can be digitized. Timor-Leste, Ukraine, and
Kosovo were the first to release their online curricula through the program. And national governments are creating
their
Globalown resources
Business to help Global
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and on-siteThought
learnersleadership
(see figure 6). Argentina, for example, has introduced
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Seguimos Educando, which bridges digital gaps by offering notebooks filled with learning materials to students
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without adequate access to technology. Initiatives such as these will ensure that educational and digital inequality
do not negatively affect students’ prospects when they eventually enter the workforce.

Finally, governments and businesses can ensure that working mothers do not become further stranded by
subsidizing childcare to keep them in the workforce. Important benefits beyond subsidies or onsite childcare could
include flexible work schedules, more predictable hours and schedules, backup childcare assistance, and flexible
childcare spending accounts. Google, for example, has already made strides in this area, having expanded its paid
family caregiver leave policy by eight weeks. Governments, in both advanced and emerging economies, can help
working mothers by boosting funding for primary schools so they can open safely and providing federal funding to
childcare providers (among other initiatives).

The outlook
As COVID-19 persists, several countries and businesses are using recovery mechanisms to address the
institutionalized inequality that has existed throughout the world for far longer than the virus. Much work remains to
be done. Social movements such as Black Lives Matter, public-private partnerships, and economic recovery
measures from COVID-19 may prove beneficial, but centuries of deeply entrenched inequality will take far longer to
address on a meaningful scale. Some stranded segments may never be fully reintegrated into society. For example,
large numbers of low-skilled workers may not have the means or opportunities to re-skill. If many of these groups
continue to be alienated or stranded, we could see more of a drift toward populism or nationalism—in emerging and
developed markets
Global Business alike—asGlobal
Policy they feel victimized
forums in a post-COVID
Thought leadership environment. While there are still opportunities to
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avoid these worst outcomes following the great shakeout, strategic businesses and governments would do well to
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prepare for these scenarios—and at the same time work alongside other stakeholders to prevent them.

Business implications
• Leadership will be held to new standards. Strong public and private sector leadership is vital to reintegrate
stranded segments, and consumers will increasingly call for just that. Indeed a recent global study found that
consumers are four to six times more likely to buy from and defend “purpose-driven businesses” dedicated to
something more meaningful than products and services. In order to address the need for more inclusive
representation and societal demands for greater tolerance, business leaders will therefore vocalize the need for
nondiscriminatory behavior in the workplace and push for greater diversity on boards.

• Companies will focus more on their childcare benefits and offerings. Over the next five years, companies wi
increasingly take tangible steps to improve their childcare support and offerings for working parents—in no small
part to disincentivize mothers from leaving the workforce due to heavier burdens at home. Hubspot, for example,
is already taking innovative steps in this direction by offering virtual events for children such as story times or
sessions in which they learn about outer space. These virtual events give parents more time to focus on work.

• Re-skilling and workforce training will be prioritized. Given the devastating impact of COVID-19 on minorities
students and recent graduates, low-skilled labor, and other groups, companies will work independently and with
governments to promote re-skilling, joining initiatives such as the World Economic Forum’s Re-skilling Revolution
This multi-stakeholder effort aims to provide one billion people with education, skills, and jobs over the next
decade by connecting and coordinating re-skilling initiatives at scale. The urgency for such programs and others
like it will grow as automation eliminates jobs and displaces laborers.

Trend #4
Rise in food insecurity
Disrupted supply chains, lockdowns, rising prices, and shortages are just some of the ways that COVID-19 is
exacerbating food insecurity. As the great shakeout upends governments and business, food insecurity is rising,
widening economic disparities and weakening productivity. The World Food Programme, the 2020 Nobel Peace
Prize winner, estimates that 265 million people could face food insecurity this year, up from 130 million in 2019.
Export restrictions and stockpiling have the potential to tighten food supply as more people struggle to pay for
goods given the economic downturn. And while food insecurity has global implications, emerging markets are
particularly vulnerable given their existing rates of hunger, dependence on remittances, and large agricultural
sectors—all of which are facing additional pandemic-driven stresses. These dynamics have direct business
implications—from decreased productivity to a rise in absenteeism in the workplace. And the food industry itself is
also changing to accommodate limited consumer spending power amid the pandemic, from offering discounts to
changing package sizing and reducing food waste.
Even after the virus recedes, food insecurity is here to stay
Before COVID-19, consistent progress had been made in reducing global hunger, food insecurity, and malnutrition,
despite some setbacks in recent years. The proportion of undernourished people worldwide had been declining
rapidly until 2015, when it reached 11 percent. Since then, the absolute number of those experiencing hunger has
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increased to 820 million in 2018, from 795 million just three years earlier.3 The challenge is particularly pronounced
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in emerging markets owing Advisory
to high rates of poverty
services andusconflict. In sub-Saharan Africa, almost 23 percent of the
About
population is hungry, and in Southern Asia, the proportion is 15 percent, representing roughly 239 and 279 million
people, respectively.

While hunger may not be as prevalent in advanced markets, food insecurity—or the lack of continuous access to
nutritious food in sufficient quantities— persists. The Food and Agriculture Organization (FAO) estimates that around
8 percent of people in Europe and Northern America are food insecure (see figure 7). Rates in some countries are
even higher: US estimates show that over 11 percent of the population falls into this category, as does 10 percent o
Great Britain. One common side effect of food insecurity— especially in advanced economies—is obesity, as familie
opt for faster, cheaper, less healthy options over costlier healthy foods.

COVID-19 has made these food insecurity challenges in both emerging and advanced economies far worse.
Lockdown measures—necessary to slow down the spread of the virus—have prevented agricultural workers from
reaching farms. In addition to COVID-19 breakouts at meat plants, micro-level disruptions in planting, growing, and
processing food have become more common. For much of 2020, large crop exporters such as Russia limited
exports of foodstuff, provoking national stockpiling. These supply disruptions have happened as the global
economy is entering a deep recession, leaving many without enough money to buy food. In the United States,
between 27.5 percent and 29.5 percent of households with children were food insecure by the end of June, up
from around 15 percent two years before. Rising food prices are exacerbating this challenge. In May, US food prices
were up around 5 percent year over year, but the United States is hardly alone in this respect. As of October, global
food prices are up 8 percent since the height of the lockdowns in May, and experts say this increase is hitting
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markets
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particularly hard. Prices of key staples are even higher—the October 2020 FAO Cereal Price
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Index, for instance, was 16.5 percent higher than October 2019. In Brazil, the prices of staple items such as rice, milk
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and tomatoes have risen over 25 percent.

The pandemic will ultimately prove most disruptive to food supply in emerging markets, where hunger was already
concern. Africa is projected to see food insecurity spikes as remittances fall owing to COVID-induced economic
disruptions and conflicts in some countries. And those that are in the most dire need of food, such as Yemen and
Afghanistan, are struggling to attain it as humanitarian aid gets cut. International aid for Yemen, for example, fell
from more than $4 billion in 2019 to just $1.75 billion during the first 10 months of 2020. In the next five years, hunge
will plague emerging markets, but embattled governments will find reducing hunger challenging as debt levels
surge, currencies weaken, commodity prices remain low, and international institutions find themselves stretched
thin.

Food insecurity has commercial implications

In addition to these global consequences, food insecurity has wide-ranging business implications. Hunger has been
linked to stunting, a condition that can come with physical and cognitive issues that last into adulthood.4 Globally,
more than 20 percent of children under five were stunted in 2019. In some parts of Africa and Asia, the combined
productivity and economic losses from stunting can reach as high as 11 percent of GDP. More generally, Chatham
House has found that malnutrition in emerging markets can cost companies up to $850 billion in lost productivity.
And high food prices, another key driver of food insecurity, have been tied to increased likelihood of civil unrest.
Massive protests over food shortages— like those in Chile and Lebanon this spring—can contribute to instability in
the operating environment by disrupting business activity and potentially provoking sudden policy changes. In
advanced economies, obesity rates can rise as more face food insecurity. Estimates show that the combination of
high blood pressure, diabetes, physical inactivity, obesity, and smoking already costs US businesses more than
$36.4 billion annually.

At the sector level, the food industry itself will likely change as a result of this growing insecurity. Consumer
preferences could shift toward cheaper items if incomes remain tight and food prices keep increasing, as is
expected in the next five years (see figure 8). FAO forecasts that global meat production will drop by 1.7 percent this
year due to drought, animal disease, and COVID-induced supply chain disruptions, which could mean higher prices
In the United States, for example, meat prices have proven volatile due to pandemic-related disruptions. The prices
of non-meat alternatives, on the other hand, have been steadily trending down since these supply chains have
largely escaped pandemic-related challenges. By April, the prices of Beyond Meat burger patty value packs were
more or less in line with traditional beef patties, and the company aims to undercut beef prices within five years. The
market for plant-based meat substitutes could grow even more rapidly if this trend continues.
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The way food is sold and distributed is also likely to change in the next five years. Discount stores and generic
brands grow more popular when food prices increase, which could incentivize retailers to reduce prices through
promotions or bulk offerings. In addition, pressure to reduce food waste could intensify. Today, roughly 30 percent
of food is lost or wasted before it reaches the consumer, suggesting room for improvement. The industry may turn
to technologies such as blockchain to track food products. Food supply companies might also try reducing
individual packaging sizes to lower costs. And given that consumers are increasingly doing their grocery shopping
online, suppliers will have to respond accordingly by going digital. This step comes with steep costs, as items must
be refrigerated, products can be fragile, and expiration dates are tight. British firm Marks & Spencer, for example,
paid $2 billion for a partnership with Ocado Retail to improve home delivery services. For companies without such
deep pockets, micro-fulfillment centers—which pile groceries up in efficient rows— are also an option.

The outlook
Rising food insecurity is already affecting countries globally, and its influence will only increase in the next five years
If the recession proves long lasting, even more individuals could find themselves unable to buy food, especially if
handout programs are cut. This trend will create greater inequalities between countries, as emerging markets will
have to cope with rising rates of hunger just as their economies are projected to contract. However, advanced
economies are still at risk, as food insecurity will still rise in a recession, particularly if governments cut programs
such as increased unemployment benefits. Such dynamics not only contribute to social tensions but also
exacerbate the health issues that accompany food insecurity such as obesity and stunting. The COVID-induced
great shakeout has highlighted the need for stronger food supply chains, as multinational models can be easily
disrupted. Therefore, companies will need to learn how to operate locally while better tracing their products to track
hiccups along the value chain.
Business implications
• Demand for technology that strengthens food supply chains will rise. As food insecurity grows, companies
will face pressure to reduce waste and deliver goods in a reliable and timely manner at a lower cost. Digital
technologies, including blockchain products that track items from farm to table, will prove central in these efforts
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Italian pasta maker Barilla, for example, has a new digital passport that allows consumers to scan a code and see
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where the product originated. More
Advisory firms could
services introduce
About us similar measures as food becomes an even more
precious resource.

• Food processing, packaging, distribution, and sales will evolve as a result of COVID-19. Demand for bulk,
non-perishable items and discount products could grow in advanced economies. One study found that soup sale
were up 25 percent year over year in July as a result of consumers stockpiling during the pandemic. Firms are also
likely to face pressures to change packaging and food sizes to reduce costs by making packaging smaller or
offering more family-sized portions, as Mondelez International and Campbell Soup are reportedly considering.

• Companies will face pressure to address health and wellness. As food insecurity worsens, consumers could
turn to the private sector to address food-related challenges, as they do today for racial justice and climate
change. Companies in advanced markets may follow firms such as LinkedIn, Google, Panda Express, Glassdoor,
and a number of smaller start-ups by providing employees with free meals. These programs can boost overall
morale and team building. In emerging markets, companies may consider efforts to combat the negative
economic impacts of hunger by offering lunch to workers, as some plants in China already do.

Trend #5
Industry consolidations, mergers, and acquisitions
Extended lockdowns amid COVID-19 and other pandemic-related dislocations have squeezed the profit margins of
many businesses globally, leading to record levels of corporate defaults. This economic shock is poised to result in
a wave of mergers and acquisitions (M&A) as stronger companies acquire weakened rivals, technologies, and assets
at bargain prices. Over the next five years, the influence and size of companies and industries already wielding
sizable market share are likely to grow as struggling competitors are eliminated during this great shakeout.
Depending on the dominance and acquisition appetite of current players, global consumers may face higher prices
or fewer market options. Such developments could easily boost government efforts to strengthen national antitrust
and foreign investment rules, which have come into the spotlight as the pandemic has exposed vulnerabilities in
crucial supply chains—particularly medical supplies—and sparked efforts toward self-sufficiency (see Trend #2).

A COVID-induced M&A wave

Companies across multiple industries will go shopping for competitors over the next five years. In the meantime,
with more than $1.5 trillion in capital and a sea of financially weakened targets made available as a result of COVID-
19, private equity groups have deployed their record levels of dry powder in the months following the pandemic,
making more than 5,500 deals in the first nine months of 2020 (see figure 9). This activity aligns with a June M&A
Leadership Council survey of senior executives, in which almost half indicated that they’d like to “opportunistically
buy distressed companies” and close to a quarter were interested in diversifying future revenues. This trend will
persist well into the medium term, particularly as uncertainty over a COVID-19 vaccine and its distribution continues
New lockdowns are possible and would further amplify pressures on businesses, small and large.
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Stronger companies in sectors benefiting from the pandemic—such as grocers, e-commerce, and digital companie
—are also likely to seek growth and additional capabilities by acquiring rivals or new technologies to improve
business efficiency. For example, retailer Target acquired the technology of Deliv—a delivery technology start-up
struggling in the pandemic. And Chinese conglomerate Fosun said that COVID-19 “spells potentially huge
opportunities for every single company” in view of lower business valuations.

Of course, big technology companies are also looking to acquire. Between January and May 2020, tech giants such
as Alphabet, Amazon, Apple, Facebook, and Microsoft announced their highest number of acquisitions since 2016—
a total of 19. In the third quarter of 2020, both big technology companies and other players continued technology
deals, with transactions surging to more than $200 billion—levels not seen in two decades. Such acquisitions are
enabling companies to position themselves in areas likely to grow during and after COVID-19, such as automation,
fintech, digital services, and food delivery. The activity is further spurred by both the availability of attractive
valuations and rising fears of tighter M&A regulations. For example, Facebook spent $5.7 billion on a 9.99 percent
stake in India’s digital platform Jio, Microsoft acquired IoT and cybersecurity company CyberX, and European food
delivery platform Just Eat Takeaway agreed to acquire the United States’ GrubHub for $7.3 billion. Indeed, tech start
ups that are unable to compete with the giants will become more vulnerable to acquisitions as the latter seek to
minimize competition, improve capabilities, and boost revenue streams.

Consolidation will also occur in weaker sectors. Distressed companies will look to merge with other similarly
distressed rivals to benefit from economies of scale or seek needed acquirers. For example, travel and tourism
plunged by 97 percent in the first four months of 2020, sending airlines, hotels, and rentals into a crisis. By the end
of the first half of 2020, tourism was down by 65 percent in 2020 vis-à-vis the same period in 2019. Signs of
consolidation have since emerged. For example, in a defensive maneuver, American Airlines and JetBlue
announced a partnership to more efficiently manage flights amid the pandemic. Malaysian hotel conglomerate
Berjaya Group acquired a majority stake in Icelandair Hotels in April 2020 for $45.3 million after receiving a 10
percent “COVID-19 discount.” And Chinese hospitality chain Huazhu Group planned to open about 1,800 hotels in
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2020, capitalizing
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on independent hotels closing doors amid the pandemic.
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Such consolidations will extend beyond travel and hospitality and into other key sectors, including energy. Historica
examples, such as Royal Dutch Shell’s acquisition of BG Group in 2016 and Occidental Petroleum’s 2019 acquisition
of Anadarko Petroleum, suggest that energy industry consolidation can spike following market and oil price crashes
And after plummeting in March due to a collapse in demand coupled with political tensions, oil prices are expected
to remain low. In the first eight months of 2020, 36 US shale oil producers filed for bankruptcy, laying the
groundwork for increased M&A activity. Smaller companies that are more affected by oil price swings are likely to go
bust or be acquired by larger players seeking efficiency, technologies, or assets. Most recently, US energy giant
ConocoPhillips acquired rival Concho Resources, Inc. for $9.7 billion in the largest US oil deal of 2020.

Surf breaks ahead

Obstacles to COVID-induced M&A activity are also starting to materialize, driven by a mix of protectionism and anti-
monopoly sentiment. Broadly, industry concentration can lead to inequality, wage reductions, price hikes, and the
erosion of consumer power—and policy makers are responding. In the United States in particular, some lawmakers
are aiming to prevent such industry concentration. In the US Senate, the Pandemic Anti-Monopoly Act was
proposed in May 2020. In October, a congressional investigation into big tech companies recommended breaking
up giants and stronger antitrust laws, just before the US Department of Justice filed an antitrust lawsuit against
Google. Regulatory scrutiny is intensifying elsewhere as well, with antitrust probes against tech giants, including
Facebook, Apple, and Amazon underway in the EU, Australia, Brazil, and Canada. This trend could signal a
fundamental change in the makeup of the tech industry, with more smaller players emerging as the bigger firms see
their power curtailed.

Challenges are also emerging elsewhere. Some governments are pursuing stricter foreign investment rules to
protect strategic sectors. The EU as a whole and several European countries have taken such steps amid the
pandemic. For example, Germany expanded its rules against non-EU takeovers of companies in healthcare in May
2020, and the country lowered the threshold for a government review process across other sectors. Australia also
lowered the deal value threshold for a government review process of foreign takeovers from $1.1 billion to zero in
March 2020. In April, India tightened its investment review process for fear of opportunistic transactions,
particularly from Chinese companies. The following month, Japan identified more than 500 companies as central t
national security and therefore subject to stricter FDI rules. And new rules were introduced in Britain this summer,
giving the government powers to examine foreign acquisitions that could jeopardize the country’s ability to manage
public health crises (see figure 10).
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Some companies are themselves becoming increasingly critical of coronavirus-driven M&A, particularly in the
medical sphere. The Pacific Business Group on Health, an industry group whose members include Boeing and
Salesforce, has called for a ban on M&A in healthcare, highlighting potential elevated costs of employer-sponsored
healthcare for companies already hit by COVID-19. Patients may also suffer greater costs due to healthcare
consolidation, as it leads to decreased competition and higher fees. A recent study shows that mergers could raise
patient costs between 11 and 54 percent. As healthcare becomes a more salient social justice issue, especially in
the United States, M&A—and corporate actions more broadly—that ignore social equity concerns and increasing
consumer preferences for social-minded brands may result in negative publicity or consumer boycotts of the
acquirer, target, or both.

The outlook
Disruption caused by COVID-19 has left many businesses with shaky finances. Much uncertainty remains regarding
the speed and nature of a global economic rebound, with global GDP unlikely to reach pre-pandemic levels until at
least 2022 and the effects of the pandemic likely to reverberate far longer. In the meantime, additional lockdowns
and further changes in consumer behavior may occur, with implications for spending and investment. Players with
more liquidity will take advantage of the situation by deploying longer-range strategies and making acquisitions tha
improve their existing business models or better position them for the post-pandemic future. Broadly, a wave of M&
will likely result in the realignment of market power in some industries, including healthcare, airlines, grocery, retail,
manufacturing, and auto components, which were already among the most oligopolistic industries pre-COVID. And
the energy industry—in which previous oil price crashes have fueled M&A—is likely to see one of the greatest
shakeouts in the medium term, amplified by continued political and public efforts to decarbonize the global
economy and reduce emissions. While emerging regulatory measures—like those in technology—may curb some of
the acquisition enthusiasm, the pool of attractive targets across sectors will only grow over the next five years.

Business implications
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• M&A success will hinge Advisory
on understanding
services post-COVID
About us consumer behavioral changes and shifts in the
commercial environment. COVID-19 has transformed industries and consumer behaviors in profound and
lasting ways. In order to survive and thrive through future crises, successful acquirers will invest in targets that
serve and adapt to evolving consumer preferences for contactless products, improved public hygiene, and better
healthcare. Further, government moves toward greater self-sufficiency (see Trend #2) and increased M&A
regulation will require deft engagement with governments to pursue targets.

• Optimization and risk preparedness will be new priorities. Companies that have stayed afloat amid COVID-19
and wish to avoid being acquired—or simply seek to remain solvent until the economy returns to growth—will look
for ways to optimize costs and reevaluate operations to prepare for future economic shocks. These efforts could
include reducing physical office blueprints, consolidating divisions and responsibilities, and renegotiating
supplier contracts.

• M&A transactions will carry additional risks. While some companies will find good acquisition targets that wil
strengthen their positions post-COVID, these opportunities may hide risks, including increased solvency and
liquidity risks owing to the pandemic, pre-existing weaknesses in business models, or some combination of both.
To mitigate these risks, acquiring companies will need to invest more in due diligence and insurance hedges, and
demand greater warranties and representations from target companies. Both will likely require higher legal (and
other) fees to secure.

Assessing the status of global trends 2019–2024

The five trends identified in last year’s global trends publication, Resilience, Replacement, and Renewal, remain
highly relevant and are continuing to shape the global operating environment. Each of these trends has advanced in
the past year, although some more rapidly than others. We present an update on the evolution of each trend below.

• Going cashless. Despite expert warnings that greater economic inclusion must occur before a truly global
cashless society can come to be, contactless payments have soared over the past year. As COVID-19 has reduced
in-person contact, the volume of e-commerce payments has surged more than 80 percent in Italy and 110
percent in Canada. And in July 2020, Visa reported a 100 percent year-over-year increase in contactless
payments for basic items in the United States. Part of this high growth can be attributed to regulatory support,
with more than a dozen countries lifting value ceilings and lowering fees on contactless payments amid the
pandemic. Even before the onset of the virus, the value of digital payments had reached $4.1 trillion worldwide in
2019, up from $3.6 trillion in 2018. And this value is expected to grow even further to $6.7 trillion by 2023.

• Great battery revolution. Over the past year, many new battery storage projects came online globally. In early
2020, the Asian Development Bank (ADB) approved a US$100 million loan to help Mongolia install its first large-
scale advanced battery energy storage system. And NEC Energy Solutions was awarded $4 million to build the
largest-ever energy storage system to be financed by crowdfunding in the Netherlands. COVID-19, however, has
slowed down some progress in the battery space. For example, monthly electric vehicle (EV) sales—a key use
case for lithium batteries—fell by 39 percent in China in Q1 2020. Despite this headwind, industry experts expect
that the battery storage market will recover to reach new heights in the years ahead.
• Global re-skilling race. Many companies have announced re-skilling programs over the past year, and COVID-19
has accelerated re-skilling needs as unemployment numbers soar. In January, even before the spread of the
pandemic, the US manufacturing industry announced plans to spend $26.2 billion on internal and external
training initiatives for new and existing employees in 2020 to combat the shortage of available workers. And in
earlyBusiness
Global February,Policy
French telecoms firm Orange
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Thought a €1.5 billion re-skilling plan to strengthen its employees’
leadership
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technology expertise. Amid COVID-19 and growing protests over structural racism, companies such as Indian IT
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consultancy Infosys have set new upskilling targets to reach key groups such as women, non-degree holders, and
minorities. The virus and the displacing effect it has had on many workers in industries such as retail, hospitality,
and tourism will undoubtedly lead many governments and businesses to reevaluate their skills needs and
determine how current and future employees can be best utilized in new essential industries such as healthcare
and medical research.

• Rise of climate-resilient infrastructure. Though the pandemic has fueled fears that efforts to prevent and
mitigate climate change will fall by the wayside, development of climate-resilient infrastructure has not taken a
significant hit— especially among smaller nations. On June 3, 2020, US Congress’s House Committee on
Transportation and Infrastructure introduced the INVEST in America Act, a five-year, $494 billion surface
transportation bill that aims to transform America’s aging infrastructure by funding projects that increase the
safety, reliability, and resilience of surface transportation while mitigating climate change. Smaller nations are also
taking action. In the face of persistent extreme weather events, Dominica has recommitted to its goal of
becoming the first climate-resilient nation by 2030. And in July, UN-Habitat launched a four-year, $14 million
project to boost urban resilience, reduce disaster risk, and increase climate change adaptation in Madagascar,
Malawi, Mozambique, and the Union of the Comoros.

• Loneliness epidemic. The loneliness epidemic has combined with the COVID-19 pandemic to create a real
danger to mental health over the past year. Social distancing requirements and full-blown lockdowns have led to
Germany seeing calls to its mental health helpline rise by almost 20 percent. And one in two Australians report
feeling more lonely since the onset of the virus, with young adults aged 18–25 feeling this isolation most acutely.
The elderly are also experiencing heightened loneliness, as their physical vulnerability forces them to isolate and
remain disconnected from family. Start-ups such as Norwegian No Isolation have stepped up to combat this
increased pandemic-induced loneliness by boosting production of items such as telepresence robots for
children and simplified tablets for the elderly.

About global trends

Global trends 2020–2025 identifies five macro trends that play an outsized role in the current and future operating
environment for businesses, governments, and citizens around the world.

As part of its core mandate to help leaders anticipate and plan for the future, the Kearney Global Business Policy
Council continually scans the horizon for developments across the global external strategic operating environment
in the key dimensions of demography, economy, environment, geopolitics, governance, resources, and technology.
In assessing these dimensions, the Council identifies emerging trends on an annual basis that may be slightly below
the radar but are likely to have significant implications for how businesses and governments operate in the next five
years. Global trends 2020–2025 explores the manifestation of each of this year’s trends today, analyzes its medium-
term outlook, and presents its high-level implications for business and government. This publication also revisits the
trends that the Council identified in last year’s report to assess their trajectories over the past year and update their
prospects.
The goal of the Council’s annual global trends publication is to help business and government leaders and strategic
planners question their assumptions and build their capacity for adapting to the future—whatever it may bring. As
such, the Council’s global trends analysis can help organizations develop monitoring systems for the evolution of
trends—and the strategic shocks they may generate—that are most germane to their sector or industry, mitigating
downside risks, Policy
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opportunities,
forums and strengthening
Thought their long-term strategies.
leadership
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The authors wish to thank Terence Toland, Gabriella Huddart, Rebecca Grenham, and Radina Belberova for their

valuable contributions to this report.

1
The Group of Seven (G7) is an international intergovernmental economic organization comprised of Canada, France,

Germany, Italy, Japan, the United Kingdom, and the United States.

2
OPEC+ describes a loose organization of OPEC producers and other oil producers, including Russia.

3
Per the Food and Agriculture Organization, undernourishment is how the group measures hunger.

Undernourishment measures the proportion of the population that consumes less in dietary energy than a set,

preconceived level. Hunger is defined as food deprivation scientifically, or an uncomfortable (and often painful)
sensation resulting from inadequate food energy consumption.

4
According to the World Health Organization, children are considered stunted if their height-for-age is at least two

standard deviations below the global median.

Authors
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Paul A. Laudicina
Chairman Emeritus,
Kearney; Founder,
Global Business Policy
Council

Erik R. Peterson
Partner and Managing
Director, Global
Business Policy Council