E-book Evaluate: The New World Economy in 5 Trends: Investing in Times of Superinflation, Hyperinnovation and Climate Transition. 2024. Koen De Leus and Philippe Gijsels. Lannoo Press.
One type of reader could also be on the lookout for a sober evaluation of the economics of megatrends. One other could also be on the lookout for one thing extra wide-ranging, humorous, and eclectic, replete with pointers towards funding alternatives. For each sorts of reader, The New World Economy in 5 Trends will likely be a welcome discover. The e book presents an interplay between its two authors, who’ve contrasting types that handle to come back collectively as a coherent entire.
Koen De Leus, chief economist at BNP Paribas Fortis in Belgium, and Philippe Gijsels, chief technique officer on the identical establishment, coauthored this e book. De Leus is the diligent economist who approaches his matters with thorough data-driven evaluation, centered on figuring out the longer term implications for the financial system of right now’s altering world.
Gijsels focuses on figuring out the funding implications of those financial modifications. Clearly a bookworm, Gijsels refers many times to his broad studying. He has a weekly presentation of latest books on LinkedIn, “Over My Shoulder,” and his model of research can lead him in sudden and attention-grabbing instructions.
At its core, the e book examines 5 particular developments that the authors imagine could have the best impression on economies and investments between now and the center of this century. The developments highlighted are innovation and productiveness, local weather, multiglobalization, debt, and growing older.
Evaluation of developments or megatrends is nothing new. Be aware, for instance, that one thing comparable options within the CFA Institute curriculum for the Certificate in ESG Investing. What could also be new right here is using such detailed financial evaluation to tell funding implications.
The part on growing older gives a very good instance of how the economist and the strategist work together. De Leus analyzes international demographic developments comprehensively, by age group, nation, and area. He appears at developments within the dependency ratio, the ensuing “time bomb beneath the social safety system,” and impacts on rates of interest and inflation, in addition to attainable cures accessible to totally different international locations.
Gijsels’s contribution to the chapter is extra eccentric. He “interviews” nineteenth century economists Thomas Malthus and David Ricardo. He cash new phrases like “seniorescence” and “transiteer,” and he refers to French fables. Out of those eclectic components, nevertheless, comes strong evaluation of funding alternatives — biotechnology, robotics, the expertise financial system, battery applied sciences, actual property, and extra.
Naturally, the authors stress that the concepts within the e book “ought to by no means be seen as funding recommendation. We’re merely offering you with a number of foundational ideas.”
The developments usually overlap. For instance, the part on growing older has an attention-grabbing evaluation of the impact of demographics on innovation (“oldtimers don’t innovate”). Actual property comes into play in a number of sections, and the prospects for commodities are analyzed in each the local weather and multiglobalization sections.
The authors neatly summarize every of the 5 developments, first with “Ten factors to recollect” after which with “Ten to put money into.” The recommendations about the place or tips on how to make investments are typically normal in nature, suggesting the place to start out for additional evaluation slightly than providing full-fledged funding proposals.
For instance, in relation to innovation and productiveness, there may be recommendation on tips on how to take care of the AI growth and an assertion that “whoever owns information has the ability and will get the income.” Within the part on local weather, we learn that “the power transition is likely one of the largest funding alternatives ever. Don’t miss your probability.”
Of the 5 developments mentioned, multiglobalization stands out as the one with probably the most novel therapy. On the one hand, there’s a research of phenomena akin to re-shoring and diversifying international provide chains. However, the authors present evaluation of how companies can change into globalized, particularly “intermediate” companies akin to information entry slightly than “ultimate” companies akin to accountancy.
The size of digital companies exports is critical, totaling €38 trillion globally in 2022, in line with the authors (citing an Worldwide Financial Fund report). The ensuing funding alternatives are considerably unclear, however we’re suggested that “it could be unwise to not sit on the Chinese language desk from an funding perspective.” An identical sentiment applies for “low-cost progress markets.”
A technique that the e book appears forward to the longer term is thru occasional simulated information studies from the 2040s and 2050s. These provide a combination of detrimental and constructive predictions. For instance, one such report describes the dire state of the planet ensuing from local weather change and “previous authorities leaders’ procrastination.”
The part on globalization foresees a discount in international progress ensuing from higher import restrictions, albeit this discount in progress may be reversed by extra open commerce insurance policies. On a extra constructive observe, the authors predict big will increase in productiveness ensuing from innovation like AI and quantum computing. These studies are additional examples of the e book’s ever-varying construction. This selection, together with an interesting writing model (and even enticing typesetting), retains the reader’s curiosity on this quantity of greater than 400 pages.
For all of the e book’s good qualities, it’s disappointing to seek out errors and typos all through the textual content. These might outcome from translation error — the e book was initially printed in Dutch, whereas the model being reviewed is an English translation. Nonetheless, a extra thorough proofreading may need averted errors akin to misspelling “rigthly” and “artifially”, complicated the World Well being Group and the World Commerce Group, and rewriting Mario Draghi’s famend phrase “no matter it takes” as “all the pieces attainable.”
Referring to a different title, Gijsels feedback, “The e book does what any good e book ought to do: It gives insights and is a place to begin for evaluation and dialogue.” That is an apt remark about The New World Economic system in 5 Tendencies itself. Lots of the e book’s prognostications might in the end fail to come back true, and absolutely developments not referred to right here will emerge within the a long time forward. Nonetheless, the e book does an admirable job of wanting via present developments to 1 attainable future, thereby serving to its readers to “surf the waves” of change.
