Seizing the next decade

Shaping a better future with citizen-centric policy initiatives is about knowing the local context, engaging with the global picture and decoding the available opportunities.

It is also a whole lot about timing. Not about the timing of wheat, sugar, edible-oil and cotton imports and certainly not about the appropriate timing of announcing, or not, a minimum support price for crops. But more so about the right time for seizing the global themes for which the time has come. The emerging themes that ultimately determine the destiny of nations and the good fortune of citizens.

Learning about evolving themes is a little easier than before as access to information is sometimes just a click away. However, a deeper understanding needs a more engaging approach. One that I have found particularly helpful is conversations and brain-storming sessions with international equity and debt fund managers. The smart ones operating in global markets and managing hundreds of billions of client dollars have not only a world-class research team but also a good gut to tap the most impactful themes. What makes such brain-storming sessions intense is their desire to be one-up on their competition. It is that edge and the ability to find a needle in the haystack that can catapult a fund’s return on investment. Similarly, countries have to understand emerging trends to become a part of the global game plan.

Let’s try and put into context some emerging themes amplified by the biggest health crisis in living memory. One, ‘cheap money for longer’ is almost a norm, as central banks push policy rates near to zero and are on a marijuana high when it comes to quantitative easing. They are ensuring that the monetary policy is financing the whole economy. The mood is to ensure financing conditions remain extremely favourable, recalibrating instruments to counteract the negative impact of measures for containment of the virus. Easy money is complemented by fiscal stimulus to the tune of 3 to 10 percent of GDP to support growth.

Two, ‘disruptive ideas’ have stormed the world scene. Disruption has never been more important than it is today. Disruptive innovations are creating new markets and value networks and eventually disrupting existing markets and value networks, displacing established market-leading firms, products, and alliances. Companies are challenging incumbents across a whole range of industries including retail, transport and logistics, financial services, communications and healthcare. Three, phenomenal strides are visible in ‘productivity’ with Industrial Revolution 4.0 taking centre-stage and a green economy looking more achievable.

New technologies in the form of connectivity platforms, fintechs, buy-now-pay-later digital platforms and e-health are overtaking traditional ways of doing business, pushing the boundaries of human productivity. Understood more simply, we are in a world of anywhere operations. This refers to an information technology operating model designed to support customers everywhere, enable employees everywhere and manage the deployment of business services across distributed infrastructure.

Four, ‘hyper-automation’ is sinking in as businesses automate as many processes as possible, using tools like Artificial Intelligence, machine learning, and robotic process automation. Five, a ‘lower inflation’ environment aided by an increasing push to productivity and supported by slumping cost of doing business is making lives easier.

Six, there is emphasis on smart, green ‘people-centric cities’, with receding pollution levels and amplifying soothing noises of children playing. Moms and dads are shifting to e-bikes, giving up gas-guzzlers. Elite mobility is being replaced with walkability, public transport and footpaths – the total experience. Seven, each day 200,000 people are born globally, leading to about 70 million more mouths for farmers to feed each year. Resultantly, “agriculture and adjacent services including mining” have a bright future.

Some of these trends have taken hold whereas some are emerging themes of the 2020s. Innovation is driven by a passion of free-spirited individuals with a prime focus to design, develop and sell the next best thing, which in-turn makes human lives easier and more convenient than before. As smartphones were the innovation of the last decade, the decade of the 2020s is likely to be shaped by Artificial Intelligence with possibilities not yet in our imagination.

The last decade helped 3.5 billion or 44.87 percent of the world’s population to have access to a super computer in their hand in the shape of a smartphone. All of us can instantaneously connect to the world, buy and sell equities or clothes or dog food, write an essay, submit an assignment, book our travels, find a place on Airbnb or – those with bad taste – troll tweets.

We learn that, as fund managers find the next big theme to invest and multiply manifold their multi-billion-dollar investments, countries are no different. Whereas some countries remain to be innovators, others find their niche in being the factory of the world. Vietnam partnered with Samsung and built an export of $74 billion from scratch in just a decade. This is not a chance occurrence but one of encashing the theme hypothesis.

Economic breakthroughs for countries are possible by embracing themes that are more suitable to the local context rather than developing less impactful vague policy documentation. The gruelling part is applying our minds to use the themes to our advantage. The unprecedented socioeconomic challenges for Pakistan require the organizational plasticity to transform and recompose the future just as Vietnam did more than a decade ago.

The writer is former advisor, Ministry of Finance, Government of Pakistan.

Email: khaqanhnajeeb@gmail.com

Twitter: @KhaqanNajeeb