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Book Review: Five Trends to Consider in the New Global Economy

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Book review: Five trends for the new global economy: Investing in a time of hyperinflation, hyperinnovation, and climate change. 2024. Koen De Leus and Philippe Gijsels. Ranu Press.

One type of reader might want sober analysis of the economics of megatrends. Another type of reader might want something broader, more humorous, more eclectic, full of investment opportunity tips. Five trends that define the new global economy It’s a delightful discovery: the book depicts the interaction between two authors with contrasting styles, but whose work manages to come together coherently.

Cohen de ReusChief economist at Belgium’s BNP Paribas Fortis, Philip GyselsThe book is co-authored by De Roos, the University’s Chief Strategy Officer. De Roos is a diligent economist who approaches topics with rigorous data-driven analysis, focusing on determining future implications for today’s ever-changing global economy.

Giesels is focused on identifying the impact of these economic changes on investing. Giesels is clearly an avid reader, and he has mentioned his wide range of reading on multiple occasions. He recommends a new book every week on LinkedIn, writing:Over my shoulder” and his analytical style can lead him in unexpected and interesting directions.

At the heart of the book are five specific trends that the authors believe will have the greatest impact on the economy and investment between now and mid-century. The trends highlighted are innovation and productivity, climate, multi-globalization, debt, and ageing.

Analysis of trends and megatrends is not new: it is even found in the CFA Institute curriculum, for example. ESG Investment CertificateWhat’s new here is the use of such detailed economic analysis to inform investment implications.

The section on ageing is a particularly good example of how economists and strategists interact. De Luce provides a comprehensive analysis of global demographic trends by age group, country, and region. He considers trends in dependency ratios, the resulting “social security time bomb,” the implications for interest rates and inflation, and possible solutions available to different countries.

Giesels’ contribution to this chapter is more unusual: he “interviews” nineteenth-century economists. Thomas Malthus and David RickardHe coins new terms like “seniorsens” and “transitors” and references a French fable.But from these various strands emerges some solid analysis of investment opportunities, including biotech, robotics, the experience economy, battery tech and real estate.

Of course, the authors emphasize that the ideas in the book “should never be taken as investment advice. We are simply providing some basic concepts.”

Trends often overlap: for example, the section on ageing features an interesting analysis of the impact of demographics on innovation (“Older generations don’t innovate”), real estate is featured in several sections, and the outlook for commodities is analysed in both the climate and multi-globalisation sections.

The authors provide a brief summary of each of the five trends, starting with “10 points to remember” and then “10 points to invest in.” The suggestions on where and how to invest are not full-blown investment recommendations, but are more general in nature, intended as a starting point for further analysis.

For example, on innovation and productivity, there’s advice on how to handle the AI ​​boom and the assertion that “he who owns the data has the power and the profits.” In the section on climate, it says, “The energy transition is one of the greatest investment opportunities of all time. Don’t miss it.”

Of the five trends discussed, multiglobalization is perhaps the one that receives the most novel treatment. On the one hand, there are studies of phenomena such as reshoring and the diversification of global supply chains. On the other hand, the authors service In particular, “intermediate” services such as data entry are likely to be globalized, rather than “end” services such as accounting.

Exports of digital services are large, reaching a total of €38 trillion worldwide in 2022, say the authors (citing an International Monetary Fund report). The resulting investment opportunities are somewhat unclear, but the advice is that “it would be unwise to not have a seat at the table with China from an investment perspective.” The same thinking applies to “low-cost growth markets.”

One of the ways the book predicts the future is by occasionally simulating news reports from the 2040s and 2050s. These reports contain a mix of negative and positive predictions. For example, one such report describes the planet in a dire state due to climate change and the “procrastination of past government leaders.”

The section on globalization predicts that world economic growth will slow due to tighter import restrictions, but this slowdown could be reversed by more open trade policies. On a more optimistic note, the authors predict that innovations such as AI and quantum computing will lead to significant productivity gains. These reports are further examples of the book’s ever-changing structure. This variety and an attractive writing style (even more so, attractive typesetting) keep the reader engaged throughout the book’s 400-plus pages.

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There is much to be said for this book, but it is unfortunate that there are errors and typos scattered throughout the text. These may be due to translation errors; the book was originally published in Dutch, and the version being reviewed has been translated into English. That said, more thorough proofreading could have avoided mistakes such as the misspelling of “rightly” and “artificially,” the confusion of the World Health Organization with the World Trade Organization, and the rewriting of Mario Draghi’s famous phrase “whatever it takes” to “everything possible.”

Giesels comments on another title: “This book does what a good book should do: provide insight and serve as a springboard for analysis and discussion.” Five trends that define the new global economy Although many of the book’s predictions may not ultimately come to fruition, and trends not mentioned here will no doubt emerge in the coming decades, the book does an admirable job of projecting current trends into one possible future, helping readers “ride the wave” of change.

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