E-book Overview: The New World Economy in 5 Trends: Investing in Times of Superinflation, Hyperinnovation and Climate Transition. 2024. Koen De Leus and Philippe Gijsels. Lannoo Press.
One sort of reader could also be searching for a sober evaluation of the economics of megatrends. One other could also be searching for one thing extra wide-ranging, humorous, and eclectic, replete with pointers towards funding alternatives. For each sorts of reader, The New World Economy in 5 Trends shall be a welcome discover. The e book presents an interplay between its two authors, who’ve contrasting types that handle to come back collectively as a coherent complete.
Koen De Leus, chief economist at BNP Paribas Fortis in Belgium, and Philippe Gijsels, chief technique officer on the similar establishment, coauthored this e book. De Leus is the diligent economist who approaches his matters with thorough data-driven evaluation, targeted on figuring out the long run implications for the economic system of immediately’s altering world.
Gijsels focuses on figuring out the funding implications of those financial adjustments. Clearly a bookworm, Gijsels refers time and again to his broad studying. He has a weekly presentation of latest books on LinkedIn, “Over My Shoulder,” and his type of research can lead him in sudden and attention-grabbing instructions.
At its core, the e book examines 5 particular developments that the authors consider can have the best influence on economies and investments between now and the center of this century. The developments highlighted are innovation and productiveness, local weather, multiglobalization, debt, and ageing.
Evaluation of developments or megatrends is nothing new. Notice, for instance, that one thing comparable options within the CFA Institute curriculum for the Certificate in ESG Investing. What could also be new right here is the usage of such detailed financial evaluation to tell funding implications.
The part on ageing gives a very good instance of how the economist and the strategist work together. De Leus analyzes world demographic developments comprehensively, by age group, nation, and area. He appears at developments within the dependency ratio, the ensuing “time bomb below the social safety system,” and impacts on rates of interest and inflation, in addition to potential cures out there to totally different nations.
Gijsels’s contribution to the chapter is extra eccentric. He “interviews” nineteenth century economists Thomas Malthus and David Ricardo. He cash new phrases like “seniorescence” and “transiteer,” and he refers to French fables. Out of those eclectic parts, nevertheless, comes stable evaluation of funding alternatives — biotechnology, robotics, the expertise economic system, battery applied sciences, actual property, and extra.
Naturally, the authors stress that the concepts within the e book “ought to by no means be seen as funding recommendation. We’re merely offering you with a number of foundational ideas.”
The developments typically overlap. For instance, the part on ageing has an attention-grabbing evaluation of the impact of demographics on innovation (“oldtimers don’t innovate”). Actual property comes into play in a number of sections, and the prospects for commodities are analyzed in each the local weather and multiglobalization sections.
The authors neatly summarize every of the 5 developments, first with “Ten factors to recollect” after which with “Ten to spend money on.” The recommendations about the place or the right way to make investments are usually common in nature, suggesting the place to begin for additional evaluation somewhat than providing full-fledged funding proposals.
For instance, in relation to innovation and productiveness, there’s recommendation on the right way to take care of the AI growth and an assertion that “whoever owns information has the ability and will get the income.” Within the part on local weather, we learn that “the vitality transition is likely one of the largest funding alternatives ever. Don’t miss your likelihood.”
Of the 5 developments mentioned, multiglobalization often is the one with essentially the most novel therapy. On the one hand, there’s a research of phenomena resembling re-shoring and diversifying world provide chains. Alternatively, the authors present evaluation of how companies can change into globalized, particularly “intermediate” companies resembling information entry somewhat than “remaining” companies resembling accountancy.
The dimensions of digital companies exports is important, totaling €38 trillion globally in 2022, in keeping with the authors (citing an Worldwide Financial Fund report). The ensuing funding alternatives are considerably unclear, however we’re suggested that “it might be unwise to not sit on the Chinese language desk from an funding perspective.” An identical sentiment applies for “low-cost progress markets.”
A technique that the e book appears forward to the long run is thru occasional simulated information studies from the 2040s and 2050s. These supply a mix of unfavourable and optimistic predictions. For instance, one such report describes the dire state of the planet ensuing from local weather change and “previous authorities leaders’ procrastination.”
The part on globalization foresees a discount in world progress ensuing from larger import restrictions, albeit this discount in progress will be reversed by extra open commerce insurance policies. On a extra optimistic observe, the authors predict big will increase in productiveness ensuing from innovation like AI and quantum computing. These studies are additional examples of the e book’s ever-varying construction. This selection, together with a fascinating writing type (and even enticing typesetting), retains the reader’s curiosity on this quantity of greater than 400 pages.
For all of the e book’s good qualities, it’s disappointing to search out errors and typos all through the textual content. These might consequence from translation error — the e book was initially revealed in Dutch, whereas the model being reviewed is an English translation. Nonetheless, a extra thorough proofreading may need averted errors resembling misspelling “rigthly” and “artifially”, complicated the World Well being Group and the World Commerce Group, and rewriting Mario Draghi’s famend phrase “no matter it takes” as “the whole lot potential.”
Referring to a different title, Gijsels feedback, “The e book does what any good e book ought to do: It offers insights and is a place to begin for evaluation and dialogue.” That is an apt remark about The New World Economic system in 5 Tendencies itself. Most of the e book’s prognostications might finally fail to come back true, and certainly developments not referred to right here will emerge within the many years forward. Nonetheless, the e book does an admirable job of trying by means of present developments to 1 potential future, thereby serving to its readers to “surf the waves” of change.
