Dystopia, the opposite of a utopia, describes a place where life is full of hardship and devoid of hope. Analysis of linkages across various global risks reveals a constellation of fiscal, demographic and societal risks signalling a dystopian future for much of humanity. The interplay among these risks could result in a world where a large youth population contends with chronic, high levels of unemployment, while concurrently, the largest population of retirees in history becomes dependent upon already heavily indebted governments. Both young and old could face an income gap, as well as a skills gap so wide as to threaten social and political stability.
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The word “dystopia” describes what happens when attempts to build a better world unintentionally go wrong. This case considers how current fiscal and demographic trends could reverse the gains brought by globalization and prompt the emergence of a new class of critical fragile states – formerly wealthy countries that descend into lawlessness and unrest as they become unable to meet their social and fiscal obligations. Such states could be developed economies where citizens lament the loss of social entitlements, emerging economies that fail to provide opportunities for their young population or to redress rising inequalities, or least-developed economies where wealth and social gains are declining.
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Two dominant issues of concern emerged from the Arab Spring, the “Occupy” movements worldwide and recent similar incidents of civil discontent: the growing frustration among citizens with the political and economic establishment, and the rapid public mobilization enabled by greater technological connectivity. A macro and longer-term interpretation of these events highlights the need to improve the management of global economic and demographic transformations that stand to increasingly define global social trends in the decade to come.
These trends are evolving differently across developed, emerging and least developed economies. In developed economies, such as those of Western Europe, North America and Japan, the social contract that has in recent decades been taken for granted is in danger of being destroyed. Workers nearing retirement fear cutbacks in social entitlements they have grown up to expect, such as state pensions, pre-established retirement age and guaranteed access to quality healthcare.
Meanwhile, young adults in this same group of economies realize that they are part of a compressed labour force that is expected to support a growing population of elderly citizens, while bearing the brunt of austerity measures required to offset growing national debts. At the same time, these same youths must save enough to provide for their own old-age needs in the most challenging economic climate in a generation. Experts anticipate that high unemployment rates will increasingly co-exist with employers’ unmet demands for skilled labour – a sign that many young people may lack the skills needed to make the necessary economic and social contributions.
http://reports.weforum.org/global-risks-2012/#=