DIGITAL TRENDSPOTTING 2019:1E — Social Context: Economics as a Result of Politics & Science

So if it really is so that our world is getting better for us humans, what has the political and scientific development during the 2018, in turn, resulted in for us financially? If we start with the broad perspectives this is usually assessed by the development for the business sector on the one hand, and the result on GDP-growth for different countries on the other.

The Old Established Stock Market

When it comes to stock market prices, 2018 was the first minus year since the 2008 disaster, where Dow Jones’s full year 2018 went down nearly -6% and Nasdaq by -4%. On the other side of the earth, we find dramatic losses in China at -10–35% and in Japan at -13%. Overall, it has given us the decade’s most sinister stock market year for S&P500 by more than -6%.

The New Growth Economy

But stock market prices to the majority capture established business and listed companies. When we go to what happens in more growth-oriented levels, in China 16,000 new companies are created every day — again as a direct consequence of Jinping’s planning and his mantra ”a zhong chuang ye, wan zhong chuang xin ”, i.e. “mass entrepreneurship and innovation”.

Most of all, perhaps the unicorn development reflects best the shift that is underway, where China today has generated 130 (some claim even more, i.e. 158) of the world’s 270 unicorns (against USA:s 83) — of which 16 within AI and 3 of the 4 worlds’ most highly valued — which revolutionize markets and reach hundreds of millions of consumers. Moreover, of these unicorns, over 70 are unlisted, and will attract immense amounts of capital once they are listed. (while China is by far not alone in Asia, where Singapore is the only one challenging Stockholm as having most unicorns/capita).

All this despite the fact that KPMG shows how USA last year still has almost twice as much venture capital investment ($ 82bn, this year expected to increase to $ 100bn) compared to second-tier China ($ 40bn — again, with their own media claiming more) — which, however, increased by 15% (where China’s big3, Tencent, Baidu and Alibaba, account for 42% of the investments, compared to the US Big4 which accounts for 5% in USA), and is also complemented by a massive development of government funds.

And, in the midst of everything, Europe stands proud with its 41 unicorns and…

… sinks, where, despite its tech industry being the only vertical showing the same direction in growth figures as the Asian countries’ GDP growth (in the honesty name only half, 3% compared to 0.5% for other verticals), the tech stands for such a small share as 3% of GDP — where Europe’s largest areas instead are old industry, offline retail and public administration.

As a rule, the entire tech industry in Europe is also turning its face to a one-sided direction. Nearly two-thirds of all tech-founders in Europe want to stay on their small continent, and a staggering 6% share can think of going to “the valley”, while a totally miserable 3.7% can imagine going where all the serious action is taking place, i.e.. Asia.

And it just goes on. Read Europe’s greatest writing in European tech, Atomico’s “State of European Tech”, and you will see how one’s only comparison with Silicon Valley shows already in the beginning — comparing with the country where 95% of all value creation in the tech sector comes from companies formed for over 15 years ago :-/

I can only say one thing: Open your eyes dear friends, while we old people in Europe and America continue to rumble, you will see where the real innovation power comes — Zuckerberg stayed in the valley, Saverin moved to Singapore (although symptomatically both with wives of Chinese origin?) — we will see who took the right decision 😊 I can just hear how the old biblical expression is turned towards those who invented it: “let wolf tear the wolf so that the lamb of god is alleviated”. You won’t know what hit you!

The resulting GDP growth

Overall, the negative trend for traditional listed companies and the more positive development for the new growth companies, has resulted in an overall GDP growth this year at 3.7%. Mainly this is done with the help of Asia + Africa which is still over 4–5%. All while Europe + North America once again comes to just under half 2–2.5%.

The latter is even more remarkable taking in consideration the escalation of the world’s by far biggest national debt of $22 trillions (China $5 trillion), while the upcoming year still wanting to keep on running halt the government on loans with a budget deficit of another $1 trillion. All now resulting in the US national debt being 107% of GDP — where north america now has the highest debt ratio in the world.

Setting it in perspective we now know that the global debt last year totaled $244 trillion, a record 318 percent of world gross domestic product (then also including household and corporate debt), making us all living in a fragile “debt economy”. Still the US level still sounds totally insane for someone like me who in my other home country (Sweden) only has 34%, while China despite an extremely expansive policy (including a massive ponzi scheme re-lending to other african and asian countries — including more than one of the US debt trillions), still has a mere 54%, and US “old” friend Russia has 15%.

Too big to fall? There’s a limit for everything :-/

And that’s exactly what we are seeing ahead. The future for the former two giants, Europe and America, continues to look darker. Asia has its risks, where the much mentioned deceleration of China should be taken a little less serious, still growing the twice as fast as US and four times the Eurozone, but primarily due to the “old” economies of Asia, ie. Japan and Korea.

But overall the future continues to look extremely much lighter than Europa and America, even in a slowing cyclically: “A few countries will be able to buck these trends, especially dynamic economies with low levels of debt, notably in Asia” .

Looking ahead India will therefor continue to be the fastest growing, and even if China is suffering from a longer slowdown it is at such a high level that China and India still is expected to take over as strongest economies by 2050. The exploding ASEAN will be right after USA as nr 4 (already 2020 becoming nr 5 in the world), finally outclassing the old economies of Europe and Japan by far.

And still, nations are not even “da shit” anymore. In the modern world everything is happening in either “global villages” or “giant cities”, and when you think of the power cities of the world, today cities like New York, Tokyo or London often comes into mind. Still data shows that all of the fastest growing cities in the world comes from… Asia (all the 10 fastest from India more particularly).

And there is not much that points in any other direction. The distorted population continues in the same track as before, where Japan and Germany have twice as old population as the Philippines and Egypt, which just nurtures that gigantic bomb that was assessed last year — where fewer young people in the old powers get to support more and more old people, while in other countries we have more who will support fewer — something that once and for all will contribute to a massive correction of the imbalance we have seen in the world before.

What all this means for digital development in 2019, is summarized in the next section 😉

• Published Sections So Far: Foreword, Section 1A, Section 1B, Section 1C, Section 1D, Section 1E, Section 1F
• Digital Trendspotting 2019: As an inverted Christmas calendar, the trendspotting will be delivered as goodies for several weeks at the dawn of the new year. It will be delivered both on LinkedIn (https://www.linkedin.com/in/onlinestrategy/), on Medium (https://medium.com/@blockchainboss), and some video abstracts in our blockchain journey at Insta (https://www.instagram.com/rufus.lidman.blockchainjourney/).

· Digital contact: As usual, I love commenting and hot debate, so for anyone who wants to discuss, is hunting for key note speeches, or wants to be part of backing up the world’s coolest digital venture, inbox me here, call on WA +46733 90 18 80, or email at rufus.lidman@aiar.com ;)