Global Economic Futures Productivity in 2030 2025

Scenarios2 The purpose of these scenarios is not to predict the future, but to understand how technology and human capital dynamics may affect economies and sectors. Technological breakthroughs, shifting regulatory landscapes and global disruptions create an environment in which traditional forecasting methods can struggle to accommodate the complexity and unpredictability of these dynamics. By contrast, scenario analysis is designed to offer a structured process for exploring, understanding and navigating uncertainty. It encourages decision- makers to think critically, creatively and purposefully about the future. The scenarios presented in this paper should be considered in this light: as a tool to help decision- makers understand trends, vulnerabilities and opportunities and to identify strategies that can shape better future outcomes. The narratives presented in this chapter allow decision-makers to analyse how the possible futures and the assumptions underpinning them play out across economies and sectors. This is a crucial step in understanding how businesses are likely to be affected by – and can adapt to – changes. The framework used to develop these exploratory scenarios starts with identifying key trends and drivers shaping the future of productivity (see Chapter 1) before narrowing things down to explore the interaction of two particularly high-uncertainty and high-impact drivers – to capture the most strategically meaningful futures. In the case of productivity between now and 2030, those are technology and human capital and their potential trajectories of acceleration and slowdown. The scenarios consider these dynamics throughout the technology and human capital ecosystems, meaning that acceleration or slowdown can be achieved through faster and broader improvement at different levels, not just at the frontier. Technological development: Technology has historically been a powerful driver of productivity growth. It is currently in a prolonged acceleration phase, but its trajectory and impact on global productivity remain uncertain. Key questions that will shape future technological development include: –Will AI and other cutting-edge innovations deliver real productivity gains, or will the “productivity paradox” persist? –Will investment flows and policy choices enable or stifle productivity-enhancing innovation? –Will rapid technological change lead to lower costs for adoption and diffusion? –Will geopolitical tensions and natural resource constraints inhibit technological development and diffusion? Human capital development: People are another critical driver of productivity. A highly skilled workforce is essential to drive and adopt innovation, as are leaders and managers capable of identifying new opportunities and reorienting their organizations to exploit them.25 Yet, labour markets are subject to deep uncertainty and dramatic disruptions: almost two-thirds of today’s workforce is employed in occupations that did not exist in the mid-20th century,26 and nearly a quarter of current jobs globally face disruption over the next five years.27 Key questions that will shape the future of human capital development include: –How quickly will education and training systems adapt to emerging needs? –How will demographic trends (ageing, migration, etc) affect the global distribution of human capital? –Will there be sufficient skills in all areas of the global labour force (workers, leaders, entrepreneurs, etc) to drive productivity growth? –How resilient will the labour force be in the face of future disruptions (of skills, occupations, etc)? Combining these two drivers generates the following four scenarios for the future of productivity by 2030 (see Figure 5). 2.1 Framework The narratives presented in this chapter allow decision-makers to analyse how the possible futures and the assumptions underpinning them play out across economies and sectors. Global Economic Futures: Productivity in 2030 11