The future

As an asset manager, Adrian Clayton at Alphen Asset Management spends a great deal of time, attempting in some or other way, to forecast the future - be it economic forecasts or company forecasts.

Some managers are most interested in predicting events over the next few days, whilst others have a longer time horizon of three and even five years.

Futurology is obviously an inexact science, but it is an essential practice affecting many areas of modern life. For those unfamiliar with the term, it is the art or science of utilising present data or facts and extrapolating these into the future to determine an outcome.

With this raw definition in mind, I lately came across certain futurological forecasts of our world in 2030, which I thought were very interesting and worth sharing with our readers.

I would like to re-stress the point, that futurology is not crystal ball gazing, it is instead trend extrapolation, scientifically constructed scenarios and in this case, predominantly focused on demographic, sociographic and economic factors.

These were the major issues highlighted:

1. Fascism and communism are unlikely to resurface on a mass scale in Japan, Europe and the US by 2030. In 30 years time, the largest group of people constituting the current population of these countries will still be alive and they are vehemently anti-communist and fascist.

2. China's GDP will be lower than the US's. The reasoning behind this is that even with China's current prolific growth rate, it will not have caught up to the US by 2030. Furthermore, it would struggle to create a homogenous trading block with India and Japan that could overtake the US as these potential partners disagree with China's political positioning.

Futurists believe that China will account for 22% of global GDP by 2030, with the US having fallen from 29% in 2000 to 25%. The larger European Union will equate to 18% and Japan will have fallen from the early teens to 7%.

3. Population numbers: Fertility is falling throughout the world except in Sub-Saharan Africa and India. Based on 2000 growth rates, the world's population would have increased to 9.3bn in 2030 from 6bn in 2000.

Ten countries will represent 58% of the world's population and Sub-Saharan Africa will have grown from 640m people to 1.4bn.

4. Major threats: Deforestation - between 1990 and 1995 man destroyed about 500 000 square kilometres of forest, equal to the surface area of France. At this rate, 3 million square kilometres of forest will have been lost by 2030 with massive environmental consequences.

5. Water loss: Water is likely to become an increasingly scarce commodity, particularly in Africa and Asia.

6. Great opportunities - futurology has focused on opportunities in the following areas:

- Genetics - much attention will be placed on disease prevention and prosthesis creation. It is also likely that a cure for certain types of blindness would have been found.

-Weaponry - weapon design will be concentrated on non-lethal weapons with electronic weaponry a huge theme.

-New energy sources - there will be a big focus on inexhaustible energy sources which will lead to reduced petrol consumption and offer some assistance to the global warming problem.

Whilst I am glad that my job focuses more on the next few years rather than the next 30, it is important and necessary to understand larger trends when making investment decisions.

Many companies of today are preparing themselves for the decades to follow and first mover advantage has obvious beneficial consequences.

Based on the above, much opportunity exists, but various serious threats loom on the horizon.