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Prediction Consensus: What the Experts See Coming in 2021

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prediction consensus 2021

2021 Predictions: What Experts See in the Year Ahead

Making predictions is a tricky business at the best of times, but especially so after a year of upheaval. Even so, that didn’t stop people from trying their hand at reading the crystal ball. If anything, the uncertainty creates a stronger temptation for us to try to forecast the year ahead.

Out of the thousands of public 2021 predictions and forecasts available, there are plenty of one-off guesses. However, things really get interesting when a desperate majority of experts begin to agree on what might happen. In some ways, these predictions from influential experts and firms have a way of becoming self-fulfilling prophesies, so it’s worth paying attention even if we’re skeptical about the assertions being made.

This year, we more than doubled the number of sources analyzed for our 2021 Predictions Consensus graphic, including outlooks from financial institutions, thought leaders, media outlets, consultancies, and more. Let’s take a closer look at seven of the most popular predictions:

ESG reaches a tipping point

It seems like only recently that the term ESG gained mainstream traction in the investment community, but in a short amount of time, the trend has blossomed into a full-blown societal shift. In 2020, investors piled a record $27.7 billion of inflows into ETFs traded in U.S. markets, and that momentum only appears to be growing.

prediction consensus esg

Fidelity, among others, noted that climate funds are delivering superior returns, which makes ESG an even easier sell to investors. Nasdaq has tapped ESG to be “one of the hottest trends” over the coming year.

China has a strong 2021

Financial institutions that issue predictions generally hedge their language quite a bit, but on this topic they were direct. The world’s most populous country has already left the pandemic behind and is back to business as usual. Of the institutions that mentioned a specific number, the median estimate for GDP growth in China was 8.4%.

prediction consensus china

A souring outlook on SPACs

Much like any hot trend, once enough people get on the bandwagon the mood begins to sour. Many experts believe that special purpose acquisition companies (SPACs) are going to enter that phase in 2021.

prediction consensus spacs

SPACs had a monster year in 2020, raising $82 billion in capital. That’s more funds in one year than in the last 10 years combined. Of course, now that these 200+ companies are flush with capital, they’ll need to find a target. Scott Galloway argues that SPACs “are going to vastly underperform over the next two to three years” since there aren’t enough good opportunities to satisfy that level of demand.

Brands must be authentic and values-driven

Over the past few years, brands have become increasingly values-driven. In their 2021 predictions, experts see this trend being pushed even further.

Millennials, which are now the largest generation in the workforce, are shaping society in their own image, and the expectation is that companies have an authentic voice and that actions align with words. This trend is augmented by the transparency that the internet and social media have enabled.

prediction consensus values-driven companies

Being a “values-driven” company can mean many things, and often involves focusing on a number of initiatives simultaneously. At the forefront is racial inequality and diversity initiatives, which were a key focus in 2020. According to McKinsey, nine out of ten employees globally believe companies should engage in diversity and inclusion initiatives. When the chorus of voices grows loud enough, eventually actions must follow.

A great rethinking of office life is underway

The great work-from-home experiment will soon be approaching the one-year mark and a lot has changed in a short amount of time.

Even firms that were incredibly resistant to remote work found themselves in a position of having to adapt to new circumstances thanks to COVID-19. Now that the feasibility of at-home work has been proven, it will be tough for companies to walk things back to pre-pandemic times. Over 2021, millions of companies will begin reengineering everything from physical offices to digital infrastructure, and this has broad implications on the economy and our culture.

prediction consensus rethinking office life

Individuals and employers start taking wellness seriously

The past year was not good for our collective mental health. In response, many companies are looking at ways to support employees from a health and wellness standpoint. One example is the trend of giving teams access to meditation apps like Headspace and Calm.

prediction consensus wellness

This focus on wellness will persist, even as people begin to return to the office. As commercial leases expire in 2021, companies will be re-evaluating their office needs, and many experts believe that wellness will factor into those decisions.

Lastly, this trend ties into the broader theme of values-driven companies. If brands profess a desire to impact society in a positive way, employees expect actions to extend inward as well.

Big Tech backlash continues

Among experts, there’s little doubt that the Big Tech backlash will bleed over into 2021. There is a divergence of opinion on exactly what will happen as a result. There are three general themes:

    1. 1. Regulators will admonish and threaten Big Tech publicly, but nothing concrete will happen.
      2. Facebook will be broken up into parts (Facebook, Instagram, and WhatsApp)
      3. Companies will proactively change their business practices and look for ways to settle quickly
  • prediction consensus tech-backlash

    Aside from the thread of regulatory action, the tech sector is facing a bit of an identity crisis. Silicon Valley is grappling with the reality that the center of gravity is shifting. Pitchbook notes that Bay Area will fall below 20% of U.S. deal count for first time, and there have been very public departures from the valley in recent months.

    Faced with pressure from a number of different angles, the technology sector may have a year of soul-searching ahead.

    The Elephant in the Room

    COVID-19 is the one factor that impacts nearly every one of these 2021 predictions, yet, there were few predictions–and certainly no consensus from experts–on vaccine rollouts and case counts. It’s possible that the complexity of the pandemic and the enormous task of dealing with this public health crisis makes it too much of a moving target to predict in specific terms.

    In general though, expert opinions on when we’ll return to a more “normal” stage again range from the summer of 2021 to the start of 2022. With the exception of China, most major economies are still grappling with outbreaks and the resulting economic fallout.

    It remains to be seen whether COVID-19 will dominate 2022’s predictions, or whether we’ll be able to look beyond the pandemic era.

    The Good Stuff: Sources We Like

    Of the hundreds of sources we looked at, here were a few that stood out as memorable and comprehensive:

    Bloomberg’s Outlook 2021
    : This article compiled over 500 predictions from Wall Street banks and investment firms.

    Kara Swisher and Scott Galloway’s Big 2021 Predictions: Swisher and Galloway combine their deep understanding of the technology ecosystem with frank (and hilarious) commentary to come up with some of the most plausible predictions of 2021. From Robinhood to Twitter, they cover a lot of ground in this interview.

    Crystal Ball 2021: Fortune’s annual batch of predictions is always one to watch. It’s comprehensive, succinct, and hits upon a wide variety of topics.

    John Battelle’s Predictions 2021: John Battelle has been publishing annual predictions for nearly two decades, and this year’s batch is perhaps the most eagerly anticipated. His predictions are thoughtful, credible, and specific. It’s also worth noting that Battelle circles back and grades his predictions – a level of accountability that is to be praised.

    Like this feature? An expanded look at 2021’s predictions will be shared with our VC+ audience later this month.

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    Green

    Visualized: A Global Risk Assessment of 2021 And Beyond

    Which risks are top of mind in 2021? We visualize the World Economic Forum’s risk assessment for top global risks by impact and livelihood.

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    Visualized: A Global Risk Assessment of 2021 And Beyond

    Risk is all around us. After the events of 2020, it’s not surprising that the level and variety of risks we face have become more pronounced than ever.

    Every year, the World Economic Forum analyzes the top risks in the world in its Global Risks Report. Risks were identified based on 800+ responses of surveyed leaders across various levels of expertise, organizations, and regional distribution.

    Which risks are top of mind in 2021?

    The World’s Top Risks by Likelihood and Impact

    According to WEF’s risk assessment methodology, all the global risks in 2021 fall into the following broad categories:

    • 🔵 Economic
    • 🟢 Environmental
    • 🟠 Geopolitical
    • 🔴 Societal
    • 🟣 Technological

    It goes without saying that infectious diseases have now become one of the top societal risks on both metrics of likelihood and impact.

    That said, environmental risks continue to dominate the leaderboard, accounting for five of the top 10 risks by impact, especially when it comes to climate action failure.

    Several countries are off-track in meeting emissions goals set by the Paris Climate Agreement in 2015, while the pandemic has also delayed progress in the shift towards a carbon-neutral economy. Meanwhile, biodiversity loss is occurring at unprecedented rates.

    RankTop Risks by LikelihoodTop Risks by Impact
    #1🟢Extreme weather🔴Infectious diseases
    #2🟢Climate action failure🟢Climate action failure
    #3🟢Human environmental damage🟠Weapons of mass destruction
    #4🔴Infectious diseases🟢Biodiversity loss
    #5🟢Biodiversity loss🟢Natural resource crises
    #6🟣Digital power concentration🟢Human environmental damage
    #7🟣Digital inequality🔴Livelihood crises
    #8🟠Interstate relations fracture🟢Extreme weather
    #9🟣Cybersecurity failure🔵Debt crises
    #10🔴Livelihood crises🟣IT Infrastructure breakdown

    As for other risks, the prospect of weapons of mass destruction ranks in third place for potential impact. In the global arms race, a single misstep would trigger severe consequences on civil and political stability.

    New Risks in 2021

    While many of the risks included in the Global Risks Report 2021 are familiar to those who have read the editions of years past, there are a flurry of new entries to the list this year.

    Here are some of the most interesting ones in the risk assessment, sorted by category:

    Societal Risks

    COVID-19 has resulted in a myriad of knock-on societal risks, from youth disillusionment and mental health deterioration to livelihood crises. The first two risks in particular go hand-in-hand, as “pandemials” (youth aged 15-24) are staring down a turbulent future. This generation is more likely to report high distress from disrupted educational and economic prospects.

    At the same time, as countries prepare for widespread immunization against COVID-19, another related societal risk is the backlash against science. The WEF identifies vaccines and immunization as subjects susceptible to disinformation and denial of scientific evidence.

    Economic Risks

    As monetary stimulus was kicked into high gear to prop up markets and support many closed businesses and quarantined families, the economic outlook seems more fragile than ever. Debt-to-GDP ratios continue to rise across advanced economies—if GDP growth stagnates for too long, a potential debt crisis could see many businesses and major nations default on their debt.

    With greater stress accumulating on a range of major industries such as travel and hospitality, the economy risks a build-up of “zombie” firms that drag down overall productivity. Despite this, market valuations and asset prices continue to rise, with equity markets rewarding investors betting on a swift recovery so far.

    Technological Risks

    Last but not least, COVID-19 has raised the alert on various technological risks. Despite the accelerated shift towards remote work and digitalization of entire industries, the reality is that digital inequality leaves those with lower digital literacy behind—worsening existing inequalities.

    Big Tech is also bloating even further, growing its digital power concentration. The market share some companies hold in their respective sectors, such as Amazon in online retail, threatens to erode the agency of other players.

    Assessing the Top 10 Risks On the Horizon

    Back in mid-2020, the WEF attempted to quantify the biggest risks over an 18-month period, with a prolonged economic recession emerging on top.

    In this report’s risk assessment, global risks are further classified by how soon their resulting threats are expected to occur. Weapons of mass destruction remain the top risk, though on a much longer scale of up to 10 years in the future.

    RankRisk%Time Horizon
    #1🟠Weapons of mass destruction62.7Long-term (5-10 years)
    #2🔴Infectious diseases58Short-term risks (0-2 years)
    #3🔴Livelihood crises55.1Short-term risks (0-2 years)
    #4🔵Asset bubble burst53.3Medium-term risks (3-5 years)
    #5🟣 IT infrastructure breakdown53.3Medium-term risks (3-5 years)
    #6🔵Price instability52.9Medium-term risks (3-5 years)
    #7🟢Extreme weather events52.7Short-term risks (0-2 years)
    #8🔵Commodity shocks52.7Medium-term risks (3-5 years)
    #9🔵Debt crises52.3Medium-term risks (3-5 years)
    #10🟠State collapse51.8Long-term (5-10 years)

    Through this perspective, COVID-19 (and its variants) remains high in the next two years as the world scrambles to return to normal.

    It’s also clear that more economic risks are taking center stage, from an asset bubble burst to price instability that could have a profound effect over the next five years.

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    Technology

    The World’s Top Car Manufacturers by Market Capitalization

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    The World’s Top Car Manufacturers by Market Cap

    View the high-resolution of the infographic by clicking here.

    Ever since Apple and other Big Tech companies hit a market capitalization of $1 trillion, many sectors are revving to follow suit—including the automotive industry.

    But among those car brands racing to reach this total valuation, some are closer to the finish line than others. This visualization uses data from Yahoo Finance to rank the world’s top car manufacturers by market capitalization.

    What could this spell for the future of the automotive industry?

    A special hat-tip to Brandon Knoblauch for compiling the original, regularly-updated spreadsheet.

    The World’s Top Car Manufacturers

    It’s clear one company is pulling far ahead of the pack. In the competition to clinch this coveted title, Tesla is the undoubted favorite so far.

    The electric vehicle (EV) and clean energy company first became the world’s most valuable car manufacturer in June 2020, and shows no signs of slowing its trajectory.

    RankCompanyMarket Cap (US$B)Country
    #1Tesla$795.8🇺🇸 U.S.
    #2Toyota$207.5🇯🇵 Japan
    #3Volkswagen$96.7🇩🇪 Germany
    #4BYD$92.7🇨🇳 China
    #5NIO$89.5🇨🇳 China
    #6Daimler$72.8🇩🇪 Germany
    #7General Motors$71.3🇺🇸 U.S.
    #8BMW$54.2🇩🇪 Germany
    #9Stellantis$54.2🇳🇱 Netherlands
    #10Ferrari$52.5🇮🇹 Italy
    #11Honda$46.9🇯🇵 Japan
    #12Hyundai$46.8🇰🇷 South Korea
    #13SAIC$45.2🇨🇳 China
    #14Geely$39.5🇨🇳 China
    #15Ford$39.4🇺🇸 U.S.
    #16Xpeng$33.9🇨🇳 China
    #17Maruti Suzuki$33.1🇮🇳 India
    #18Li Auto$29.5🇨🇳 China
    #19Suzuki$23.7🇯🇵 Japan
    #20Nissan$20.1🇯🇵 Japan
    #21Subaru$15.2🇯🇵 Japan
    #22Changan$14.6🇨🇳 China
    #23Mahindra$13.9🇮🇳 India
    #24Renault$12.0🇫🇷 France

    All data as of January 15, 2021 (9:30AM PST)

    Tesla’s competitive advantage comes as a result of its dedicated emphasis on research and development (R&D). In fact, many of its rivals have admitted that Tesla’s electronics far surpass their own—a teardown revealed that its batteries and AI chips are roughly six years ahead of other industry giants such as Toyota and Volkswagen.

    The Green Revolution is Underway

    The sheer growth of Tesla may spell the inevitability of a green revolution in the industry. Already, many major brands have followed in the company’s tracks, announcing their own ambitious plans to add more EVs to their vehicle line-ups.

    Here’s how a selection of car manufacturers are embracing the electric future:

    Toyota: Ranked #2

    The second-most valuable car manufacturer in the world, Toyota is steadily ramping up its EV output. In 2020, it produced 10,000 EVs and plans to increase this to 30,000 in 2021.

    Through this gradual increase, the company hopes to hit an expected target of 500,000 EVs by 2025. Toyota also aims to debut 10 new models internationally to achieve this goal.

    Volkswagen: Ranked #3

    By 2025, Volkswagen plans to invest $86 billion into digital and EV technologies. Considering the car manufacturer generates the most gross revenue per second of all automakers, it’s no wonder Volkswagen is looking to the future in order to keep such numbers up.

    The company is also well-positioned to ride the wave of a potential consumer shift towards EVs in Europe. In response to the region’s strict emissions targets, Volkswagen upped its planned sales proportions for European hybrid and EV sales from 40% to 60% by 2030.

    BYD and Nio: Ranked #4-5

    China jumped on the electric bandwagon early. Eager to make its mark as a global leader in the emerging technology of lithium ion batteries (an essential component of any EV), the Chinese government handed out billions of dollars in subsidies—fueling the growths of domestic car manufacturers BYD and Nio alike.

    BYD gained the interest and attention of its billionaire backer Warren Buffett, while Nio is China’s response to Tesla and an attempt to capture the EV market locally.

    General Motors: Ranked #7

    Also with a 2025 target year in mind, General Motors is investing $27 billion into electric and fully autonomous vehicles. That’s just the tip of the iceberg, too—the company also hopes to launch 30 new fully electric vehicles by the same year.

    One particular factor is giving GM confidence: its new EV battery creations. They will be able to extend the range of its new EVs to 400 miles (644km) on a single charge, at a rate that rivals Tesla’s Model S.

    Stellantis: Ranked #9

    In a long-anticipated move, Fiat Chrysler and Peugeot S.A. finalized their merger into Stellantis N.V. on January 16, 2021.

    With the combined forces and funds of a $52 billion deal, the new Dutch-based car manufacturer hopes to rival bigger brands and race even more quickly towards the electric shift.

    Honda: Ranked #11

    Speaking of fast-paced races, Honda has decided to bow out of future Formula One (F1) World Championships. As these competitions were usually a way for the company to show off its engineering prowess, the move was a surprising one.

    However, there’s a noble reason behind this decision. Honda is choosing instead to focus on its commitment to become carbon neutral by 2050. To do so, it’ll be shifting its financial resources away from F1 and towards R&D into fuel cell vehicle (FCV) and battery EV (BEV) technologies.

    Ford: Ranked #15

    Ford knows exactly what its fans want. In that regard, its electrification plans begin with its most popular commercial cars, such as the Mustang Mach-E SUV. This is Ford’s major strategy for attracting new EV buyers, part of a larger $11.5 billion investment agenda into EVs through 2022.

    While the car’s specs compare to Tesla’s Model Y, its engineers also drew from the iPhone and Netflix to incorporate an infotainment system and driver profiles to create a truly tech-first specimen.

    Speeding into the Horizon

    As more and more companies enter the racetrack, EV innovation across the entire industry may power the move to lower overall costs, extend the total range of vehicles, and put any other concerns by potential buyers to rest.

    While Tesla is currently in the best position to become the first car manufacturer to reach the $1 trillion milestone, how long will it be for the others to catch up?

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