Where Is the World Going: Global Trends in the 21st Century & Their Impact on Business (2235.YR.009980.2)

General information

Type:	OPT	Curs:	1	Period:	S semester
ECTS Credits:	5 ECTS

Teaching Staff:

Group	Teacher	Department	Language
Year 1	Angel Pascual Ramsay	Dirección General y Estrategia	ENG

None

None, although an interest in global macro issues is presumed.

The workload for the course consists of a wide-ranging set of readings, class exercises and group presentations. There will be required readings for each session. These should be completed beforehand and students should be prepared to discuss them in class. They will be brief and interesting so they are manageable; students should therefore make an effort to read them, as they will get much more out of the class if they do so. To help gather sufficient enthusiasm to do so, students will be asked to submit before each class a text of up to 300 words commenting on a question related to the readings. Readings and cases will be available in the course Moodle.

Group presentations will be another important component of the course workload. Each of the groups will be in charge of presenting on a specific topic for each session, which is listed on Moodle, and for a which an additional reading is provided. The expected output of the presentations is a critical assessment of the reading assigned for that topic, which will be additional to the session's reading. Presentations may use PowerPoint support, and each shall last 10 to 15 minutes approx.

Course Description:
Even before the war in Ukraine and the COVID-19 pandemic, a number of profound global macro trends were already re-shaping the global context and giving rise to a whole new set of global risks. These trends might be geopolitical, economic, technological, social, demographic or related to global health and sustainability, but they all have one thing in common: they are conforming a new set of risks and opportunities that are profoundly reshaping the context within which executives and investors operate. In the increasingly challenging business context where executives and business firms will have to operate, business graduates like yourselves are unlikely to obtain a competitive advantage from the knowledge and application of business tools which everyone else commands. It is more likely to come from the development of an above the average ability to think critically, holistically and be forward-looking. An essential component of this will be the ability to understand how these trends may evolve, how they interact with each other and the possible scenarios they may take our economies and societies into. This course will help in that process. It will do so by exploring the key ?mega-trends' that are shaping the increasingly complex global context within which business firms have to operate, identifying the global risks (and opportunities) they will generate and equipping you with the tools to incorporate these factors into management and investment decisions.

Course Objective:
To familiarize future business executives with the trends shaping the global context in which they will have to live and work and to equip them to incorporate this awareness into their business decisions.

1. COURSE SESSIONS (SUBJECT TO CHANGE) PROVISIONAL COURSE SESSIONS Session 1. Introduction. Global trends and risks and why they matter to business In this first session we will go through an overview of how the world is changing and why this is relevant to business. Key `mega trends¿ are creating a very different world, and a whole new different sets of global risks, to the ones we have known up until now, including the current COVID-19 pandemic. These trends and risks are increasingly shaping the business environment within which firms operate and the ability to incorporate them into your business analysis will be, in the years to come, the key difference between mere tactics and real strategy. Compulsory reading: - Bach, D and Allen, B. 2010. ¿What Every CEO Needs to Know About Nonmarket Strategy¿. MIT Sloan Management Review. Spring 2010. - Paulson, H. 2018. `We are living in an age of unprecedented risk' Financial Times. Session 2. Geopolitics and geoeconomics: the return of big power rivalry and conflict risk The geopolitical stability of the last part of the 20th century is gone. We are immersed in an era of moving geopolitical tectonic plaques, which is giving way to a completely different strategic context and set of geopolitical risks for business where economics and technology are increasingly deployed as geopolitical tools. This session will help you understand the key geopolitical trends defining the new world order of the 21st century, their economic impact and the real risks and opportunities they pose for business. Compulsory Reading: - Kagan, R. 2022. The Price of Hegemony. Foreign Affairs, March 2022. - Kausikan, B. 2022. China¿s Strategic Dilemmas. Asia Sentinel, 22 March 2022 Session 3. The global economy: an age of secular stagnation, economic protectionism and de-globalization? Even before the impact of the Ukraine war and the COVID-19 pandemic, the shape of economic globalization was already changing. China has overtaken the US as the largest economy in the world. Developed economies confront a real risk of japanisation: a combination of low interest rates, low growth, inability to generate inflation and demand, high indebtedness and aging population. Furthermore, there are signs that globalization may be plateauing: the aftermath of the global financial crisis, the increase in economic nationalism and now of course the impact of the COVID-19 pandemic and the increased awareness of the vulnerabilities of global supply chains, are all forces that are making economic globalization more difficult to sustain. All this, together with the rise of state capitalism, the increasing role of sovereign wealth funds or the challenges of global economic governance, are all contributing to a very different global economic landscape, where trade and finance are quickly becoming weaponised and which creates an increasingly set of risks for business to navigate. Compulsory Reading: - Micklethwait, J. and Wooldridge, A. Putin and Xi Exposed the Great Illusion of Capitalism. Bloomberg. March 2022. - Foroohar, R. How War is Changing Business. Financial Times, 21 March 2022. Session 4. Technology and innovation: the 4th Industrial Revolution and the risks of artificial intelligence, robotization and job-less growth Disruptive technologies are changing the way we live and do business. This era of transformation has barely begun. Advances and convergence in information technology, genetics, biotechnology, nanotechnology, robotization and computerization will create in the near future a very different world from today¿s. Technology is both cause and consequence of innovation and innovation will be the pillar of the new economic paradigm that will substitute the industrial age. This session will explore how this new technological wave creates a vast new set of opportunities, but also risks to which business must adapt, such as robotization and the prospect of job-less growth. Compulsory Reading: - Harari, Y.N. 2018. Why technology favours tyranny. The Atlantic. October 2018. - Szczepan¿ski, M. 2019. The Economic Impact of Artificial Intelligence. European Parliament Research Service Session 5. Social and ideological risks: inequality, populism and social discontent The combination of technological disruption, economic globalization and prevailing ideologies has created a toxic mix of inequality, social discontent and ineffective democracies. This is giving rise to new social and political movements, including populism and nationalism, which threaten the era of political stability and business friend policies of the last decade. The backlash against globalization is certain to be intensified by the impact of the COVID-19 pandemic. This session will look at some of the most salient social and political risks for business that these generate. Compulsory Reading: - Milanovic, B. 'The higher the inequality the more likely we are to move away from democracy'. The Guardian, 2017. - Rodrik, D. 'Populism and the economics of globalization'. Harvard Kennedy School Working Paper. 2017 Session 6. Demographic changes: urbanization, aging and immigration. Demography is one of the most powerful drivers of change. It is slow moving but its impact is profound and long lasting. Today we are living in the midst of a great demographic transformation. The world is getting older and more urban, with migratory pressures across the world. Add to this other social changes like the increasing presence of women in the work force and the advent of a new global middle class in emerging nations and you have the ingredients of a great transformation for society and business through drivers such as changing consumption patterns, new growth markets and a very different composition of the work-force. In this session we will look at some of these trends and the risks they may pose to business. Compulsory Reading: - McKinsey Global Institute. 2016. Global migration¿s impact and opportunity (EXECUTIVE SUMMARY) - Lingdart, Z et al `Unlocking Growth in the Middle: How to Capture the Critical Middle Class in Emerging Markets¿. Rotman Magazine Spring 2013 Session 7. The sustainability challenge: the energy transition, climate change and pandemics Each industrial revolution has been preceded and made possible by a transformation in energy resources. Today we are again in the midst of one, with new sources, from renewables to fracking, transforming the energy landscape. This is just one example of the race for resources that, as the world strives to maintain a growing population, will be one of the defining trends, and causes of conflict, of the 21st century. Both energy and resource consumption, are also at the heart of one of the greatest unanswered challenges of our time: climate change. In fact, our current economic growth and globalization paradigms are facing serious environmental constrains. Climate change and the recent COVID-19 pandemic are just two examples of the environmental consequences, and future limitations, of our current social and economic models. The pandemic has highlighted the vulnerabilities brought about by globalization¿s high degree of interconnectivity, both at a human and at an economic level. This session will analyze the risks to business that these phenomena generate and which are becoming increasingly difficult to ignore. Compulsory Reading: - International Energy Agency. 2021. World Energy Outlook 2021. Executive Summary. IEA. - Hodgson, C. Global warming will hit 1.5C by 2040, warns IPCC report. Financial Times, 9 August 2021. - Allwood, J. 2021. The only way to hit net zero by 2050 is to stop flying. Financial Times, 7 December 2020 Session 8. The times they are a changing¿ or are they? There is a pervasive sense that we are living in times of profound change. But is this really the case? History has taught us to be sceptic of claims that `this time is different¿ and we tend to exaggerate the historical significance of our age. Yet there are some developments ¿ from AI to nuclear technology ¿ that could give some credence to the claim that we are living in uniquely transformational times. As a way of getting our minds primed for the `long-term thinking¿ that we want for this course, in this session we will explore this question and what it means for the future of the global economy within which business operates. We will pay special attention to the so-called `crisis of capitalism¿ and to which extent the tensions we are observing signal the end of the current mode of economic production and distribution. Compulsory reading: - King, M. Why the next stage of capitalism is coming. 2021. BBC Futures - BBC, Are we on the road to civilisation collapse? (2019, February 19) Session 9. Applying geo-strategic thinking to business In the two concluding sessions of the course we will introduce key tools to put to practical use what we have learnt over the preceding sessions and illustrate how global risks to business can be, if not avoided, at least mitigated and managed. In this first session we will briefly look into some of the different channels of transmission of global risks to business. Whether emanating from the actions of national political actors in response to these global risks (expropriation, sovereign defaults, capital controls,¿) or from the global phenomena themselves (global financial crisis, cyber-risks, pandemics,¿) these global risks can affect businesses through either macro-level mechanisms or sector or even firm-level ones. Compulsory reading: - Grant, A et al. 2022. How global companies can manage geopolitical risk. McKinsey Global Institute March 2022. - Saffo, Paul. "Six Rules for Effective Forecasting." Harvard Business Review. July-August (2007): 1-11. - Wilburn, Kathlen & Wilburn, Ralph (2011). `Abbreviated Scenario Thinking¿ Session 10. Where is the world going? Scenarios and class discussion We will finish the course with an exercise in forecasting and scenario building, in the understanding that global risk management is not so much about prediction than about building capabilities for resilience. Compulsory Reading: - National Intelligence Council. 2021. Global Trends 2040. A more contested world. Executive Summary. NIC, March 2021 - Bank of America Merril Lynch. 2019. Transforming world: the 2020s. BAML, 19 November 2019. - Stephens, M. The west is the author of its own weakness. Financial Times, 30 September 2021.

Methodology:
The methodology used is designed to encourage active student participation. It consists of a combination of lectures, class exercises and self-directed learning. Most sessions will include a lecture, a presentation by a group based on a reading or set of readings on a particular topic and a case to be discussed or exercise to be undertaken together in class. The teaching format will be a ?Socratic' and interactive one, in which the instructor will ensure to create a class-wide conversation where participants will be forced to think independently and critically about these issues and challenge the assumptions and contradictions with which they confront them, with the aim of developing a more nuanced and effective approach to understanding and managing these risks. The course will therefore assume active individual participation. Passive listening will not be sufficient to get a good grade, in the same way that it will not be sufficient in the real business world executives are being trained for. Quality rather than quantity of questions will be valued. In order to facilitate class participation the lecture PowerPoint slides will be posted in Moodle after the class, so the student's main task during the class should not be to take notes but to critically analyse what you are listening to and discuss it with the lecturer and the rest of the class.

Readings:
There will be required readings for each session. These should be completed beforehand and students should be prepared to discuss them in class. They will be brief and interesting so they are manageable; students should therefore make an effort to read them, as they will get much more out of the class if they do so. To help gather sufficient enthusiasm to do so, students will be asked to submit before each class a text of between 300 and 500 words commenting on a question related to the readings. Readings and cases will be available in the course Moodle. This guide provides some of them, although they might be changed if before the start of the course more relevant readings become available, so they should only be taken as an orientation. For the extremely enthusiastic I have provided a copious Background Bibliography. These readings are of course not compulsory but will serve those of you interested in deepening your knowledge of a specific topic or subject.

Group presentations will be another important component of the course workload. Each of the groups will be in charge of presenting on a specific topic for each session. The expected output of the presentations is a critical assessment of the reading assigned for that topic, which will be additional to the session's reading. Presentations may use PowerPoint support, and each shall last 10 to 15 minutes approx.

Below is a general background bibliography, for reference only and not compulsory. See Course Contents for provisional required readings for each session:

- 2030 Water Resources Group (2013). "Charting Our Water Future. Economic frameworks to inform decision-making?, Washington.
- Acemoglu, D., Akcigitz, U. & Celik, M.A. (2013) "Young, Restless and Creative: Openness to Disruption and Creative Innovations?, mimeo.
- Artuç, E., Docquier F., Özden, C. & Parsons, C. (2013). "A Global Assessment of Human Capital Mobility. The Role of non-OECD Destinations?, International Migration Institute, Universidad de Oxford, Oxford.
- Asian Development Bank (2010). "The Rise of Asia's Middle Class?, in Key Indicators for Asia and the Pacific 2010, Manila.
- Asian Development Bank (2013). "The Key Indicators for Asia and the Pacific 2013?, Manila.
- BP (2013). "Energy Outlook 2035?, Londres.
- Bremmer, I, & Xinbo, W. (2014). "What's Next? Essays on Geopolitical that matters. Vol. 2?, World Economic Forum, Ginebra.
- Bremmer, I. (2012). "Every Nation for Itself: Winners and Losers in a G-Zero World?, Penguin Group, Nueva York.
- Bremmer, I. (2010). "The End of the Free Market: Who Wins the War Between States and Corporations?, Penguin Group, Nueva York.
- Brzezinski, Z. The Grand Chessboard: American Primacy and Its Geostrategic Imperatives New York, NY: Basic Books, 1998.
- Chandy, L., Ledlie, N. & Penciakova, V. (2013). "The Final Countdown: Prospects for Ending Extreme Poverty by 2030?, Brookings, Washington.
- Clapper, J.R. (2014). "Worldwide Threat Assessment of the US Intelligence Community. Statement for the Record?, Senate Select Committee on Intelligence, Washington.
- CIPD (2013). "Megatrends?, London.
- Cohen, Saul B. Geopolitics: The Geography of International Relations. London: Rowman & Littlefield Publishers, Inc., 2009.
- European Commission (2013). "European Innovation Scoreboard?, Brussels.
- European Commission (2012). "Global Europe 2050?, Directorate-General for Research, Brussels.
- European Commission (2011). "Open data. An engine for innovation, growth and transparent governance?, Brussels.
- European Commission (2012). "The 2012 Ageing Report: Economic and budgetary projections for the 27 EU Member States (2010-2060)?, Brussels.
- Commissaire général à la stratégie et à la prospective (2013). "Quelle France dans dix ans??, París
- CRED (2013). "People affected by conflict 2013. Humanitarian needs in numbers?, London.
- Development Initiatives (2013). "Investments to end poverty Real money, real choices, real lives?, Bristol.
- Dullien, S. & Torreblanca., J.I. (2013). "What is political union??, European Council on Foreign Relations, Londres.
- Eichengreen, B. & Gupta, P. (2014) "Tapering Talk: The Impact of Expectations of Reduced Federal Reserve Security Purchases on Emerging Markets", MPRA Paper 53040, University Library of Munich, Munich.
- Energy Information Administration (2013). "International Energy Outlook?, Washington, United States.
- Ericsson (2013). "Ericsson Mobility Report 2013?, Estocolomo.
- ESADEgeo, ICEX & KPMG (2013). "Sovereign Wealth Funds Report 2013?, Madrid.
- Fagnant, D.J. & Kockelman, K. (2014). "Preparing a nation for autonomous vehicles: opportunities, barriers and policy recommendations for capitalizing on self-driven vehicles?, TRB, Washington.
- FAO (2009). "How to Feed the World in 2050?, Roma.
- Fatas A. & Ilian M. (2013). "From recession to normalcy: Recoveries as a third phase of the business cycle?, VoxEU.
- International Monetary Fund (2012). "Changing patterns of global trade?, Washington.
- International Monetary Fund (2013). "World Economic Outlook, International Monetary Fund?, Washington.
- Fontagné, L. & Fouré, J. (2012). "Opening a Pandora's Box: Modelling World Trade Patterns at the 2035 Horizon?, CEPII WP.
- Frey, C.B. & Osborne, M.A. (2013). "The future of employment: how susceptible are jobs to computerisation??, University of Oxford, Oxford.
- Frieden, Jeffry A. "Global Capitalism: Its Fall and Rise in the Twentieth Century?. New York, NY: WW Norton & Company, 2006.
- Friedman, George. The Next 100 Years: A Forecast for the 21st Century. New York, NY: Doubleday, 2009.
- Gertz, G. & Kharas, H. (2010). "The New Global Middle Class: A Cross-Over from West to East?, Brookings Institution, Washington.
- Graedel,T.E., Harper,E.M., Nassar, N.T. & Reck, B.K. (2013) "On the materials basis of modern society?, PNAS.
- Guerrero, T. & Blanco, A. (2013). "Ten Trends Shaping the International Economy?, ESADEgeo, Madrid.
- Inglehart R. & Foa, R. "Religión y valores en la era globalizada?
- Inglehart R & Welzel, C. (2005). "Modernization, Cultural Change and Democracy: The Human Development Sequence?, Cambridge University Press, Cambridge/Nueva York.
- International Energy Agency (2013). "Tracking Clean Energy Progress 2013?, París.
- International Energy Agency (2013). "World Energy Outlook 2013?, París.
- Kennedy, Paul. The Rise and Fall of the Great Powers. New York, NY: Harper Collins, 1988.
- Kowalski, P., Büge, M., Sztajerowska, M. & Egeland, M. (2013). "State-Owned Enterprises: Trade Effects and Policy Implications", OECD Trade Policy Papers 147, OECD Publishing, París.
- KPCB (2013). "2013 Internet Trends?, Kleiner Perkins Caufield & Byers, Menlo Park.
- Lakner, C. & Milanovic, B. (2013) "Global Income Distribution From the Fall of the Berlin Wall to the Great Recession?, Banco Mundial, Development Research Group Poverty and Inequality Team, Washington.
- Maddison, A. (2007). "Contours of the World Economy, 1-2030 AD. Essays in Macro-Economic History?, Oxford University Press.
- Magnus, George. The Age of Aging: How Demographics are Changing the Global Economy and Our World. New York, John Wiley & Sons, 2008.
- Magnus, George. Uprising: Will Emerging Markets Shape or Shake the World Economy. New York, John Wiley & Sons, 2010.
- Mamolo, M. & Scherbov, S. (2009). "?Population Projections for Forty-Four European Countries: The Ongoing Population Ageing?, European Demographic Research Papers.
- ManpowerGroup (2013). "Talent Shortage Survey 2013. Research Results?, Milwaukee.
- Milanovic, B. (2012). "Global Income Inequality by the Numbers: in History and Now ?An Overview??, World Bank Poverty and Inequality Team, Development Research Group, Washington.
- Milanovic, B. (2012). "Globalization and inequality?, Edward Elgar, Cheltenham/ Northampton.
- Mitchell, B. (2007). "International Historical Statistics 1750-2005?, Palgrave Macmillan, Nueva York.
- Mouhoud, E.M., Oudinet, J. & Duwicquet, V. (2011). "International Migration by 2030. Impact of immigration policies scenarios on growth and employment?, Bruselas.
- National Intelligence Council (2012). "Global Trends 2030: Alternative Worlds?, Washington.
- Newman, E., Thakur, R. & Tirman, J. (2006). "Multilateralism Under Challenge? Power, International Order, and Structural Change?, United University Press, Tokio.
- OCDE- International Futures Project (2009). "The Bioeconomy to 2030. Designing a Policy Agenda. Main Findings and Policy Conclusions?, París.
- OCDE (2012). "Medium and long-term scenarios for global growth and imbalances?, Economic Outlook, París.
- OCDE (2009). "Innovation and growth. Chasing a moving frontier. OECD and the World Bank?, París.
- OCDE (2010). "Measuring innovation. A new perspective?, París.
- Ortega, A. & Pascual-Ramsay, Á. (2012). "¿Qué nos ha pasado?: El fallo de un país?, Ensayo, Barcelona.
- Oxford Martin Commission for Future Generations (2013). "Now for the Long Term?, University of Oxford, Oxford.
- Pew Research Center (2013). "Despite Challenges, Africans Are Optimistic about the Future?, Washington.
- Pew Research Center (2013). "Environmental Concerns on the Rise in China?, Washington.
- Pew Research Center (2013). "The Future of the Global Muslim Population?, Pew Forum on Religion & Public Life, Washington.
- PricewaterhouseCoopers & SMI (2013). "Transportation & Logistics 2030. Volume 3: Emerging Markets - New hubs, new spokes, new industry leaders?, Dusseldorf.
- PricewaterhouseCoopers (2013). "World in 2050. The BRICs and beyond: prospects, challenges and opportunities?, Londres.
- Rodrik, D., Subramanian, A. & Trebbi, F. (2002). "Institutions rule: the primacy of institutions over geography and integration in economic development?, NBER Working Paper 9305, Cambridge.
- Rodrik, D. (2011). "The Globalization Paradox: Democracy and the Future of the World Economy?. Norton & Company, Nueva York.
- Santiso, J. & Capapé, J. (2011). "Sovereign Funds Are Helping Strike A New World Economic Balance?, ESADEgeo, Madrid.
- Taleb, N. & Blyth, M. (2011), "The Black Swan of Cairo. How Suppressing Volatility Makes the World Less Predictable and More Dangerous?, Foreign Affairs, vol. 90, nº 3, Nueva York.
- Themnér, L. & Wallensteen, P. (2012). "Armed Conflicts, 1946-2012?, Journal of Peace Research, Oslo.
- United Nations (2013). "Millenium Development Goals 2013 Report'. New York.
- UNEP (2012). "21 Issues for the 21st Century: Result of the UNEP Foresight Process on Emerging Environmental Issues?, United Nations Environment Programme, Nairobi.
- UN Population Division (2013). "World Population Prospects: The 2012 Revision?, Nueva York.
- UNESCO (2012). "The United Nations World Water Development Report 4. Managing Water under Uncertainty and Risk?, París.
- U.S. Energy Information Administration (2012). "International Energy Outlook 2012?
- World Bank (2012). "China 2030: Building a Modern, Harmonious, and Creative High-Income Society?, Washington .
- World Economic Forum (2013). "Climate Adaptation: Seizing the Challenge?, Ginebra.
- World Economic Forum (2013). "The Global Competitiveness Report 2013-2014?, Ginebra.
- WVS/EVS. "The European and World Values Surveys Four-wave Integrated Data File, 1981-2004 / World Values Survey Five-wave Aggregated Data File, 1981-2005?.

Group	Teacher	Department
Year 1	Angel Pascual Ramsay	Dirección General y Estrategia