For those who have not read my earlier post in this series check out 'Crystal Ball - Looking back at the first decade of this Millennium'.
One of the key mega trends that got started last decade is the global power transfer from West to East. This is a gradual and long drawn process expected to last though a good part of this century. It will play a key role in shaping the political and economic equations across the world in this century. This is a common phenomenon that has occurred several times over the course of history. Pre-industrial age India and China were the economic super powers and contributed a good chunk of world GDP. They attracted traders and merchants from far and wide. Sometime during the 17th Century the global power center got shifted from Asia to UK & Western Europe due to the advent of industrial age, colonization and increased trade with their global colonies. Towards the second half of 18th century America started developing rapidly and took over the mantle of global super power around middle of 19th century right after world war II.
America has been at the top of the world for the last 6+ decades. At the beginning of the last decade (Year 2000) America was the unquestionable super power. However during the decade the tide has started to shift and some of the major developments in the last decade - dot com crash, 911, Iraq/Afghan wars and lastly 2009 economic downturn etc have weakened America and is threatening its standing as a super power.While America was fighting some of these battles, China and India grew rapidly and have established themselves as global manufacturing & Knowledge Services hubs. Both these countries are currently on a multi-decade steep growth curve(>8%) and are starting to become global economic power houses. They have ramped up their military capabilities, are nuclear capable and currently locked in a space race similar to US/USSR in the 50's and 60's. The global stature of both the countries has increased over the past decade and China more specifically has started to assert itself in the global politics. China economy is expected to become the largest economy in the world by 2035 and India is expected to overtake US to become second largest economy by the middle of this century.
This global power shift is inevitable. While America may reinvent itself through innovation it can only delay the process. In any case I expect this power transfer to complete by the middle to later half of this century. I'm not suggesting that America is going to decline. America has been and will be a great country however India and China due to the sheer size of their population & the resultant human capital will grow past America. In the knowledge age global power is directly proportional to the economic power of a country. Unfortunately for America it is faced with multiple fires at this crucial time - Fixing unsustainable lifestyles and reducing its ecological footprint, Unstable financial systems, Reducing working age population coupled with increasing dependents, burgeoning debt(Expected to cross $20T by 2020), Imminent Social security & Healthcare crisis etc. How well America succeeds in fixing some of these critical issues and re-invents itself is going to determine when the power transfer would occur and how smooth it would be.
One of the key lessons from history is that these power shifts are typically accompanied by conflicts & tensions. Given the global warming, shortage of resources etc that are expected to impact human race in this century I expect this process to be rough. I hope west will recognize this imminent power shift and make this a smoother process. Anyways in time we will know the answer as we experience this power transfer in our lifetimes.
I look forward to your comments and views on the above post. Thank you!
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