It’s easy to be a pessimist these days, particularly when it comes to economics. After all, governments have racked up historical amounts of debt, taxes are increasing worldwide, and legacy industries are being regulated out of business. Only watch the news, and you’d probably think the world is going in the wrong direction or that it was better in the ‘good ol’ days.’ And that’s what made reading ‘Ten Global Trends Every Smart Person Should Know’ by Ronald Bailey and Marian L. Tupy so enjoyable. In addition to being very educational, it’s a fast-paced read that’ll leave you feeling optimistic about our global economic future.
‘Ten Global Trends Every Smart Person Should Know’ is inspiring for entrepreneurs and investors alike as the book lays out in plain English where opportunities can be found and in what industries. Bottom line: This is a must-read.
Three (and there are many more) Interesting Facts from ‘Ten Global Trends Every Smart Person Should Know’
For every dollar of economic output/GDP produced, we’re using far less energy than even 30 years ago. And our negative impact on the environment has decreased steadily as a result. Optimizing our production processes whilst minimizing the use of natural resources is critical to our very existence. However, we haven’t always held these views (Industrial Revolution).
‘Ten Global Trends Every Smart Person Should Know’ reads,
“The good news is that production processes are becoming more environmentally friendly throughout much of the world.
The World Bank estimates that the United States produces roughly 24 percent of the world’s wealth. The European Union produces 22 percent, China 15 percent…”
“Now consider CO2 emissions per dollar of gross domestic product. In 1960, the United States emitted 0.94 kilograms of CO2 per dollar of output. By 2014, that number fell to 0.32. That’s a reduction of 66 percent. The EU has reduced its CO2 emissions per dollar of output from 0.57 to 0.19 kilograms. That’s a reduction of 68 percent. After China abandoned its inefficient communist system of production, its CO2 emissions per dollar of output fell from 5 kilograms in 1978 to 1.24 kilograms in 2014 — a reduction of 75 percent…”
Although humanity was wasteful with natural resources/energy for much of the last 150 years or so, and it has increased the level of carbon dioxide in our atmosphere, we’ve made tremendous improvements to our energy usage and productivity in the last 40 years. For that we should be proud.
On the point of producing more with less, the book covers the ‘dematerialization’ phase we’ve entered and how great that has been for our environment — while simultaneously increasing our economic output and global opportunities for employment and entrepreneurship.
“If consumers dematerialize their intensity of use of goods and technicians produce the goods with lower intensity of impact, people can grow in numbers and affluence without a proportionally greater environmental impact.”
For the most glaring example of dematerialization, look at your smartphone. It’s a few inches tall and wide, yet it can do everything your TV, home phone, camera, video game system and stereo used to… think about how much materials were needed to produce all those goods just thirty years ago. Today, smartphones can do even more than the devices mentioned above while requiring a mere fraction of the materials.
Dematerialization is going to continue to build momentum. Think about video games as another example. Physical games/discs are no longer needed — games are downloaded on your PC or console.
Dematerialization will grow exponentially as the digital economy gathers more steam and concepts such as the ‘Metaverse’ and NFTs grow in adoption.
We Once Worked Weeks to Produce a Few Hours of Light
What was once only for the rich is now basically free. I’m referring to lighting. The evolution of lighting throughout humanity’s existence is fascinating. We went from labouring for days to get a few hours of light (literally trading hours of labour for hours of light), to completely taking light for granted, and that’s a good thing. The abundance of lighting, and its near-zero cost, has made for a far more productive, safe and prosperous civilization.
According to the book,
“Nordhaus estimates that our Paleolithic ancestors labored 58 hours, mostly gathering wood, to “buy” 1,000 lumen-hours of light. ( A lumen hour is a unit of luminous energy, equal to that emitted in 1 hour by a light source emitting a luminous flux of 1 lumen.) By 1800, it took about 5.4 hours, and by 1900, it took 0.22 hours. In 1992, 1,000 lumen-hours required 0.00012 hours of human labor. That amounts to a reduction of close to 100 percent.”
What was once a threat to our existence in some parts of the world now costs next to nothing.
Army Personnel Shrinking as a Percentage of the Population
It wasn’t too long ago when serving in your country’s military was deemed a coming of age moment and the responsible thing to do. In many ways it still is. Both my mom and dad served in the military, and I admire them for it. However, with global trade increasing year in and year out, the emphasis on military might has subsided. Building the economy is the new way for a country to flex its muscles. This is a good thing. Instead of countries recruiting soldiers, they’re promoting entrepreneurship and innovation to compete with rival nations.
The increase in global trade over the last fifty years has given hundreds of countries skin in the game, so to speak. So, focusing on the military apparatus has become less important than maintaining good business relations with other countries. The book reads, “Armed forces personnel as a share of the global labor force declined from 1.1 percent in 1990 to 0.8 percent in 2016.”
Additionally, military spending as a percentage of GDP has declined from roughly 3.8% in 1960 to just over 2% in 2016.
‘Ten Global Trends Every Smart Person Should Know’ is a data-backed book on economics that will instil a sense of optimism for entrepreneurs. A quick read, the book breaks down the opportunities that are forming across various industries. Highly recommend this book.