This working group will consider the history, contemporary dynamics, and possible future trajectory of the world economy.
Economic globalisation, once taken for granted, has slowed and in many cases gone into reverse, and economic integration is yielding to fragmentation. Increasing numbers of countries are adopting industrial policies and seeking to renegotiate the terms of their insertion into the global economy. This will have profound implications for the future of economic growth, international trade and global cooperation more widely.
The working group will consider these policies and their ability to achieve their expected social, economic, security, geopolitical, environmental objectives, as well as their ability to mitigate and respond to systemic shocks, ranging from runaway climate change to financial crises, debt distress, pandemic disease, and disruptive technologies.
The working group, comprising prominent and globally representative experts, will assess how these trends are playing out across sectors and regions. It will identify potential policy interventions and institutional innovations to manage the challenges created by economic interdependence, over a time horizon of the next 30 years, with the goal of encouraging the emergence of a world economy that is more inclusive, equitable, resilient, and sustainable, and that can deliver shared prosperity.
The working group will devote special attention to four interlocking shifts in the world economy:
The shift from a globalised to a fragmented trading system, in which more countries are pursuing industrial policies, seeking to secure supply chains (including of critical minerals), and embracing (sub)regional and plurilateral arrangements;
The shift from a globalised to a fragmented financial system (as expressed, for example, in changing FDI flows and experiments to diversify reserve currencies);
The shift from a globalised to a fragmented technological system (evinced, for example, in growing controls over investment and research in advanced tech)
The rapid demographic shifts taking place globally with significant drivers of international mobility (for example through the increasing impact of climate change, conflict and violence, and continuing development challenges)
The working group will analyse how these economic trends interact with major ongoing stresses, shocks, and disruptions – including those posed by shifting demographic and migration patterns, worsening climate change and biodiversity collapse, rising debt levels, inequality within and between countries, and the uneven spread of AI and other technological innovations.
Participants will consider possible economic strategies, policy options, and institutional approaches to navigate these centrifugal dynamics, including possibilities for bridging divides between the global North and South, emerging blocs, and regions of the world.
We envision three major workstreams for this initiative:
Addressing systemic shocks
This workstream will consider the current architecture of global economic management and governance, assessing its capabilities, legitimacy and relevance to contemporary challenges and how these institutions might be reformed or used more productively to minimise global economic disruptions and to advance a more equitable, resilient, prosperous, and sustainable world economy.
Strategies to respond to global economic fragmentation
This workstream will focus on analysing national and regional responses to (and impact on) a fragmented global economy, with an eye to contributing to transnational dialogue and harmonised policy approaches (see next bullet).
Encouraging dialogue among major global economies, blocs, and regions
This workstream will focus on the interplay and friction between different major economies and economic groupings. Participants will discuss and provide options and recommendations on managing fragmentation and disintegration and minimise potential disruption.
Research questions
Several sets of questions will animate and inform these investigations:
Where is the global economy headed in 30 years’ time?
What are the economic scenarios that we face, including increased fragmentation, and how can we prepare for them? Are our existing national and global economic models adequate to the task of navigating this world, or do they need to be adapted or supplemented (including to underpin social contracts or ecological imperatives)? What scenarios can we imagine for the future of capitalism, as well as the shifting balance between the state and the market in the domestic and international economy?
What are the most important stresses and disruptors that the world economy will confront in the coming years?
For example, inequality, geopolitical competition between the US and China, demographic mismatch, climate catastrophe, water and food insecurity, pandemic disease, energy transition, debt distress, the AI revolution, mass unemployment, populist nationalism. How do these stressors interact? How will these trends affect the challenges of sustainable development?
What are the consequences and potential economic, political, societal, and environmental scenarios if disruption and dysfunctionality take hold and indeed accelerate and intensify?
How might the evolving role of the private sector contribute to or mitigate such turbulence?
What sorts of new strategies, institutions, and investments may be needed to navigate and mitigate these shocks and manage volatility and turbulence at the global, regional, and national levels?
What are the most promising avenues to reducing inequality, both within and between nations? How should the multilateral system navigate geopolitical frictions, competing models of political economy, North-South divisions, and the growing demand for global public goods? Is it realistic to imagine a common set of rules for global economic governance, much less a shared global narrative for the world economy – in a world of pluralism?