Growth in the New Economy Towards a Blueprint 2026

Defining the new economy1 The contours of a new economy are being shaped by an evolving constellation of transformative forces. While much ambiguity remains, there are at least five key features of this new economy. 1 Acceleration in artificial intelligence (AI) and other frontier technologies is redefining industries and value creation, with the promise of immense economic opportunities but also the risk of far- reaching societal impacts, particularly on labour markets, economic inequality and polarization. 2 A new phase of geostrategic competition is reshaping the global economy, with intensifying interstate conflicts, large investments in defence and increasing barriers to trade, investment and the exchange of critical technologies and materials. 3 All-time records of private and public debt – at 235% of GDP3 (gross domestic product) – co-exist with mounting asset valuations and financial wealth. 4 Climate science remains unchanged as countries rebalance environmental, economic and societal priorities, while the production of green technologies is increasingly concentrated in a handful of countries. 5 Demographic shifts pose new economic challenges to countries whose populations are rapidly ageing or declining, while others are experiencing large youth cohorts entering education and labour markets and searching for economic opportunity. Against this backdrop, economic divides within many countries are increasing and opportunities for upward mobility are stalling, changing politics and social contracts within countries – in democracies and autocracies alike. Successive shocks – from the COVID-19 pandemic to interstate conflict, inflation, energy shocks, trade barriers and polarization – have turned the focus of governments and businesses to managing risks. Many economies have shown remarkable resilience in navigating this turbulence. Some have been deft in converting these transformations into new sources of growth, from AI to green growth, demonstrating that disruption can be the driver of economic value creation, not just a risk to manage. Old growth strategies in the new economy are unlikely to yield returns – and may even erode past gains. The new economy calls for an agile new blueprint for growth. The next section consolidates the “no-regret” moves as well as the dilemmas that governments and businesses face in continuing to grow in the new economy, grouped across four key areas of economic policy. Around each dilemma, this paper presents a binary choice for simplicity. However, these choices should be interpreted as a range – effective policy-making often combines elements of both ideas. The last section summarizes foresight into national trajectories of growth until 2030, collected from more than 11,000 executives globally. While governments are increasingly asked to tackle short-term crises, a long-term perspective into the future of growth remains essential to inform national strategies and navigate the dilemmas and “no-regret” moves outlined in this report. In addition to quantitative growth forecasts, decision-makers should also consider qualitative insight into future industry-level dynamics, potential sources of business growth and the expected impact of global trends and local barriers on national economies. Expectations of businesses and other stakeholders represent a source of insight to inform the elaboration of national blueprints for growth in the new economy. Old growth strategies in the new economy are unlikely to yield returns – and may even erode past gains. The new economy calls for an agile new blueprint for growth.A convergence of deep structural transformations is creating both new risks and opportunities in the new economy. Growth in the New Economy: Towards a Blueprint 6