SPECIAL BRIEFING: HOW TO UNDERSTAND TOMORROW'S ECONOMY TODAY

Monday, December 31, 2018
Ozy

WHAT TO KNOW

It’s been a decade since the Lehman Brothers collapse marked the start of the financial crisis, and the global economy is still feeling the impact. More recently, markets have reacted with volatility to President Donald Trump’s policies, among other prominent factors, feeding further uncertainty over what 2019 may bring. Hint: Slower growth — at least in the U.S. — seems to be on most economists’ minds.

But as long-accepted principles of free trade face populist challenges, transformative new ideas are emerging. How will capitalism and currencies look a decade from now? Can we save the planet and eliminate poverty? Continuing our smart coverage of the global economy — including whether the U.S. will be blamed for the next global recession — OZY has launched an original series exploring the Economies of the Future and introducing you to the people whose work could shape them.

HOW TO THINK ABOUT IT

Sharing is caring. For years, governments viewed the disruptive nature of the sharing economy — think firms like Uber and Airbnb — with skepticism. But now that’s changing: Growing numbers of city, state and national officials from South Korea to Sweden are embracing the social, economic and environmental benefits of sharing. Whether by promoting incubators or easing regulations, governments are realizing that it makes more sense to join, and possibly even mold, the sharing economy instead of fight it. 

He’s banking on it. Once the No. 2 at the Bank of England, Sir Paul Tucker has chosen a somewhat peculiar retirement activity: waxing poetic about why we should place limits on the powers of central banking. Ask Trump, who’s repeatedly blasted Federal Reserve Chair Jerome Powell in recent weeks, and he might say the same thing. But Tucker’s taking a more thoughtful approach. Concerned that central banks wield too much power — which he believes compromises the legitimacy of representative democracy on both sides of the Atlantic — he wants to more closely involve elected officials in the policymaking process. Leading scholars, meanwhile, say he’s onto something. 

Safe havens. Given bitcoin’s volatility this year, larger economies have approached cryptocurrencies with waves of regulation. But smaller countries and territories — from Bermuda and Liechtenstein to the self-proclaimed nation of Liberland — are welcominginvestments in the new medium of monetary exchange, launching their own sovereign cryptocurrencies and steering clear of heavy-handed rules. While they’re also exposing themselves to the vulnerabilities of virtual currencies and their trading, these tax havens could serve as models for smaller economies of the future.

The Keynes to prosperity. In a nod to British economist John Maynard Keynes’ 1930s prescription for government-guaranteed full employment, Duke University public policy professor William Darity Jr. has long advocated federal job guarantees for anyone in need of work. Until recently, that proposal seemed far-fetched. But jolted by Trump’s ascent, potential Democratic presidential contenders for 2020 are looking for bold new proposals — and they’re increasingly opening up to the idea of job guarantees. Such ideas are still a long way from becoming law, but Darity isn’t letting politics dissuade him.

WHAT TO READ

Tech Companies Aren’t the Only Ones Competing for Tech Workers, by Vanessa Fuhrmans in the Wall Street Journal

“Auto makers and a slew of Silicon Valley firms are hiring autonomous-driving technicians, but so is insurance giant Allstate Corp. And health-care company Johnson & Johnson has been recruiting experts in three-dimensional printing — touted as the next revolution in manufacturing — to develop customized orthopedics and surgical tools.”

How Business Schools Are Adapting to the Changing World of Work, by Brandie Weikle on CBC

“Canadian business school leaders say soft skills such as creativity and agility are now cornerstones of business education, as universities and colleges adapt to a world where many of the jobs graduates will hold don’t even exist today.” 

WHAT TO WATCH

The Tech Innovations Transforming Oil and Gas

“The spread of intelligent and connected devices has allowed automation to make operations safer, more efficient and cheaper.”

Read the full article here