We’re living in a world of rapid change, where disruption is the norm and innovation is the only way to stay relevant.
The dynamic nature of society makes it difficult to decipher. However, despite the world’s complexity, there are some long-term trends that have emerged among the chaos. These help us make sense of the world today, and can give us an idea of what to expect in years ahead.
Here’s a look at five long-term trends that are set to transform society as we know it.
#1: Aging World
With every successive year, our global population is skewing older.
Since 1970, our worldwide median age has grown by almost a decade. By 2100, it’s projected to increase by another 10 years.
Of course, not all countries are aging at the same rate.
Using data from the UN, the graph below covers the old-age dependency ratios (OADR) of different regions, showing the proportion of working-age citizens versus the percentage of older people, who are less likely to remain in the workforce.
What’s the economic impact of an aging population? Some potential risks include rising healthcare costs, a shrinking workforce, and even economic slowdowns.
To mitigate some of these risks, it’s crucial that countries build solid pension systems to support their aging citizens. Other potential solutions include increasing the age of retirement, enforcing mandatory retirement plans, and limiting early access to benefits.
Aging populations are also influencing the make-up of households in many countries. In the U.S., the share of multigenerational family households has been rising steadily since the 1970s.
At a societal level, people in the oldest age groups often play a different role in society than working age people. Many seniors engage in volunteerism and play a pivotal role in childcare for their families–activities that fall outside traditional measures of economic activity.
#2: Urban Evolution
Another macro trend that’s set to transform many regions of the world is rapid urbanization.
Currently, more than half of the global population lives in urban areas, and this influx of city-dwellers is expected to grow even more in the years ahead.
While urbanization may seem like an long-established phenomenon, it’s actually a relatively new trend, historically speaking.
Throughout human history, populations have typically lived in small villages. All the way up to the early 1800s, close to 90% of the global population still lived in rural areas. Urbanization didn’t take off on a widespread scale until the 20th century.
But once urban migration started, it snowballed, and since then it’s shown no signs of slowing down. By 2050, over two-thirds of the global population is expected to live in urban settings.
The Rise of Megacities
Even in developing countries, urban life is becoming the norm – a shift that is causing a boom in megacity growth.
The median population size of the world’s top 100 cities has been growing steadily too – from eight million in 2000 to a projected 12 million in 2035.
Why is this happening? People tend to migrate to urban areas for socioeconomic reasons, and these economic pull-factors are particular strong in the developing world. Over time, this migration and increase in the standard of living is lifting millions of people out of poverty. This brings us to our third trend.
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#3: Rising Middle Class
While poverty is far from eradicated, the global middle class is growing, and fewer people are living in extreme poverty than ever before.
As the above graph shows, there was an overall increase in daily income from 1971 to 1995. By 2019, income levels had increased even further.
According to Brookings, an average of five people are entering the global middle class per second, and by 2030, the worldwide middle class population is expected to reach 5.3 billion.
As the global middle class grows, so does the market for products and services around the world. And as the middle class has more disposable income to spend, these developing markets can create new opportunities for companies and investors alike.
In fact, according to MSCI, although global equity markets are dominated by North American companies (61.5%) in terms of market capitalization, the vast majority of revenues (70.1%) come from outside North America. As the rest of the developing world gets richer, this trend is likely to accelerate.
#4: Rising Wealth inequality
People in lower-income economies aren’t the only people generating more wealth—the richer are also increasing their net worth. By a lot.
Over the last few decades, the wealth of America’s top 10% has increased by billions of dollars, while the middle and bottom wealth groups have stayed relatively stagnant.
What’s driving this wealth inequality? One key factor is the different types of assets each wealth group owns. While the top 10% invest heavily in the stock market, other wealth groups rely on real estate as their main form of investment.
Historically, equities have had higher returns than real estate—making the rich richer and leaving the bottom 90% behind.
#5: Environmental Pressures
So far, we’ve touched on four demographic shifts that are transforming society as we know it. But these changes in our global population size, wealth, and consumption habits have had far-reaching consequences. This last trend touches on one of those consequences—increased environmental pressure.
Since the year 1850, the global average temperature of land areas has risen twice as fast as the global average.
Various factors have contributed to increasing temperatures, but one major source stems from human-produced greenhouse gas emissions.
What human activities contribute to global emissions the most? The biggest culprit is industrial activity—32% of total emissions, while energy use in buildings comes in second at 17%.
Our Warmer World
Why is this significant? Rising temperatures pose a risk to our ecosystems and livelihood by changing weather patterns and putting the global food supply at risk.
The past half-decade is likely to become the warmest five-year stretch in recorded history, underscoring the rapid pace of climate change. On a global scale, even a small increase in temperature can have a big impact on climate and our ecosystems.
For example, air can hold approximately 7% more moisture for every 1ºC increase, leading to an uptick in extreme rainfall events. These events can trigger landslides, increase the rate of soil erosion, and damage crops – just one example of how climate change can cause a chain reaction.
For the billions of people who live in “drylands”, climate change is serving up a completely different scenario of increased intensity and duration of drought. This is particularly worrisome as 90% of people in these arid or semiarid regions live in developing economies that are still very reliant on agriculture.
As a society, we will need to take a hard look at the way we consume in order to begin mitigating these risks. Will we rise to the challenge?
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The Biggest Tech Talent Hubs in the U.S. and Canada
6.5 million skilled tech workers currently work in the U.S. and Canada. Here we look at the largest tech hubs across the two countries
The Biggest Tech Talent Hubs in the U.S. and Canada
The tech workforce just keeps growing. In fact, there are now an estimated 6.5 million tech workers between the U.S. and Canada — 5.5 million of which work in the United States.
This infographic draws from a report by CBRE to determine which tech talent markets in the U.S. and Canada are the largest. The data looks at total workforce in the sector, as well as the change in tech worker population over time in various cities.
The report also classifies which metro areas and regions can rightly be considered tech hubs in the first place, by looking at a variety of factors including cost of living, average educational attainment, and tech employment levels as a share of different industries.
The Top Tech Hubs in the U.S.
Silicon Valley, in California’s Bay Area, remains the most prominent (and expensive) U.S. tech hub, with a talent pool of nearly 380,000 tech workers.
Here’s a look at the top tech talent markets in the country in terms of total worker population:
|🇺🇸 Market||Total Tech Talent||% Talent Growth (2016-2021)|
|SF Bay Area||378,870||13%|
|New York Metro||344,520||3%|
|Salt Lake City||55,930||29%|
America’s large, coastal cities still contain the lion’s share of tech talent, but mid-sized tech hubs like Salt Lake City, Portland, and Denver have put up strong growth numbers in recent years. Seattle, which is home to both Amazon and Microsoft, posted an impressive 32% growth rate over the last five years.
Emerging tech hubs include areas like Raleigh-Durham. The two cities have nearly 70,000 employed tech workers and a strong talent pipeline, seeing a 28% increase in degree completions in fields like Math/Statistics and Computer Engineering year-over-year to 2020. In fact, the entire state of North Carolina is becoming an increasingly attractive business hub.
Houston was the one city on this list that had a negative growth rate, at -2%.
The Top Tech Hubs in Canada
Tech giants like Google, Meta, and Amazon are continuously and aggressively growing their presence in Canada, further solidifying the country’s status as the next big destination for tech talent. Here are the country’s four tech hubs with a total worker population of more than 50,000:
|🇨🇦 Market||Total Tech Talent||% Talent Growth (2016-2021)|
Toronto saw the most absolute growth tech positions in 2021, adding 88,900 jobs. The tech sector in Canada’s largest city has seen a lot of momentum in recent years, and is now ranked by CBRE as North America’s #3 tech hub, after the SF Bay Area and New York City.
Vancouver’s tech talent population increased the most from its original figure, climbing 63%. Seattle-based companies like Microsoft and Amazon have established sizable offices in the city, adding to the already thriving tech scene. Furthermore, Google is set to build a submarine high-speed fiber optic cable connecting Canada to Asia, with a terminus in Vancouver.
Not to be left behind, Ottawa has also taken giant strides to increase their tech talent and stamp their presence. The country’s capital even has the highest concentration of tech employment in its workforce, thanks in part to the success of Shopify.
The small, but well-known tech hub of Waterloo also had a very high concentration on tech employment (9.6%). The region has seen its tech workforce grow by 8% over the past five years.
Six out of the top 10 cities by tech workforce concentration are located in Canada.
Evolution of Tech Hubs
The post-COVID era has seen a shifting definition of what a tech hub means. It’s clear that remote work is here to stay, and as workers migrate to chase affordability and comfort, traditional tech hubs are seeing some decline — or at least slower growth — in their population of tech workers.
While it isn’t evident that there is a mass exodus of tech talent from traditional coastal hubs, the rise in high-paying tech jobs in smaller markets across the country could point to a trend and is positive for the industry.
While more workers with great talent, resources, and education continue to opt for cost-friendly places to reside and work remotely, will newer markets like Charlotte, Tennessee, and Calgary see a rise of tech companies, or will large corporations and startups alike continue to opt for the larger cities on the coast?
Animation: Visualizing U.S. Interest Rates Since 2020
U.S. interest rates have risen sharply after sitting near historic lows. This animation charts their trajectory since 2020.
Visualizing Interest Rates Since 2020
In March 2020, the U.S. Federal Reserve cut already depressed interest rates to historic lows amid an unraveling COVID-19 pandemic.
Fast-forward to 2022, and the central bank is grappling with a very different economic situation that includes high inflation, low unemployment, and increasing wage growth. Given these conditions, it raised interest rates to 2.25% up from 0% in just five months.
The above visualization from Jan Varsava shows U.S. interest rates over the last two years along with its impact on Treasury yields, often considered a key indicator for the economy.
Timeline of Interest Rates
Below, we show how U.S. interest rates have changed over the course of the pandemic:
|Date||Federal Funds Rate (Range)||Rate Change (bps)|
|July 27, 2022||2.25% to 2.50%||+75|
|June 16, 2022||1.50% to 1.75%||+75|
|May 5, 2022||0.75% to 1.00%||+50|
|March 17, 2022||0.25% to 0.50%||+25|
|March 16, 2020||0.00% to 0.25%||-100|
|March 3, 2020||1.00% to 1.25%||-150|
In early 2020, the Federal Reserve cut interest rates from 1% to 0% in emergency meetings. The U.S. economy then jumped back from its shortest recession ever recorded, partially supported by massive policy stimulus.
But by 2022, as the inflation rate hit 40-year highs, the central bank had to make its first rate increase in over two years. During the following Federal Reserve meetings, interest rates were then hiked 50 basis points, and then 75 basis points two times shortly after.
Despite these efforts to rein in inflation, price pressures remain high. The war in Ukraine, supply disruptions, and rising demand all contribute to higher prices, along with increasing public-debt loads. In fact, a Federal Reserve estimate suggests that inflation was 2.5% higher due to the $1.9 trillion stimulus, an effect of “fiscal inflation.”
Impact on the Treasury Yield Curve
The sharp rise in interest rates has sent shockwaves through markets. The S&P 500 Index has steadily declined 19% year-to-date, and the NASDAQ Composite Index has fallen over 27%.
Bond markets are also showing signs of uncertainty, with the 10-year minus 2-year Treasury yield curve acting as a prime example. This yield curve subtracts the return on short-term government bonds from long-term government bonds.
When long-term bond yields are lower than short-term yields—in other words, the yield curve inverts—it indicates that markets predict slower future growth. In recent history, the yield curve inverting has often signaled a recession. The table below shows periods of yield curve inversions for one month or more since 1978.
|Yield Curve Inversion Date||Number of Months||Maximum Difference (10 yr - 2 yr bps)|
*Data as of September 9, 2022
Source: Federal Reserve
For example, the yield curve inverted in February 2000 to a bottom of -51 basis points difference between the 10-year Treasury yield and the 2-year Treasury yield. In March 2001, the U.S. economy went into recession as the Dotcom Bubble burst.
More recently, the yield curve has inverted to its steepest level in two decades.
This trend is extending to other countries as well. Both New Zealand and the UK’s yield curves inverted in August. In Australia, the yield spread between 3-year and 10-year bond futures—its primary measure—was at its narrowest in a decade.
What’s On the Horizon?
Sustained Treasury yield inversions have sometimes occurred after tightening monetary policy.
In both 1980 and 2000, the Federal Reserve increased interest rates to fight inflation. For instance, when interest rates jumped to 20% in 1981 under Federal Reserve Chairman Paul Volcker, the U.S. Treasury yield inverted over 150 basis points.
This suggests that monetary policy can have a large impact on the direction of the yield curve. That’s because short-term interest rates rise when the central bank raises interest rates to combat inflation.
On the flip side, long-term bonds like the 10-year Treasury yield can be affected by growth prospects and market sentiment. If growth expectations are low and market uncertainty is high, it may cause yields to fall. Taken together, whether or not the economy could be headed for a recession remains unclear.
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