Stratfor has just published our latest Decade Forecast, looking at the major trends that will shape the international system in the 2020s. In addition to looking at the traditional components of politics, economics and security, we also delve into eight factors that will shape developments in the decade, ranging from challenges to global norms and standards to climatic elements, from demographic trends to forces teasing apart global information and telecommunications connectivity.
The core theme of the decade is the shifting structure of the world system. We do not see China rising to replace the United States as the new singular global hegemon. Nor do we see the world moving to a Cold War-style system split between the United States and China. Rather, we see a world where the United States and China sit as key pillars of power and influence, Europe and Russia are both secondary poles, and smaller alliances and alignments will shift and maneuver among these larger powers. It is a world that is more alike to past centuries than to the post World War II structure that is often taken for granted as the “norm.”
Forecasting the structure of the world system over a decade is a fool's errand. But we do it anyway. It is part of the core concept behind Stratfor - a name that itself is short for Strategic Forecasting.
Forecasting anything is a risky proposition. Forecasting the structure of the world system over a decade is a fool's errand. But we do it anyway. It is part of the core concept behind Stratfor — a name that itself is short for Strategic Forecasting. We believe that the contours of the future can be discerned, even if the events themselves are not predictable. Building from geographical and historical patterns, we overlay political, economic, security, social and technological trends, seeking to discern where these trends counteract or reinforce one another.
While there is a numerical component to this, looking into quantifiable factors including economics, demographics, trade and education, there is no Hari Seldon magic cube that can pull together all the variables of humanity and spit out an equation for the future. Forecasting future trends is also an experiment in creativity, narrative and qualitative extrapolation. It is as much art as science, if not more.
But if forecasting is so imperfect, why do we even attempt it, and why on such a grand scale of time and space? Forecasting forces one to rethink their assumptions and expectations. The least likely future is a linear future, but many decisions and actions are based on linear extrapolation. By countering the conventional expectations, but from a reasoned perspective, forecasting can assist individuals, organizations, businesses and governments in thinking about alternative futures, within a narrower realm of the plausible rather than the unmanageable realm of the possible. These alternative futures then provide a way to mitigate future risk and identify potential future opportunity, to think through scenarios before the "black swan" or "grey rhino" strikes. It allows leaders to do what sports teams do — prepare for both the expected and unexpected. Having thought through scenarios and responses, if a shift occurs, the time to decision can be shortened.
A decade forecast sets a frame of reference for shorter and more circumscribed forecasts that can be more immediately relevant.
Over the past several years, working with this company its and organizations around the world, we have taken our forecasting process and developed what we call the Geopolitical Risk Monitor — a way of breaking down key forecasts into bite-sized chunks, identifying the core assumptions made to get to the forecast outcome, and providing a discrete number of alternative scenarios based on challenges to those assumptions. We can then identify key signposts to monitor to see if we are on track with the forecast and change our percent confidence in each scenario over time. This allows users to both think about alternative futures (and thus shape alternative plans) and at the same time monitor to see early signals of shifts in trend, allowing a faster time to decision.
Forecasting may seem a fool's errand at times, but the lack of looking forward and challenging expectations leaves decision-makers at the mercy of events. The forecast may not always be correct, but it does facilitate better preparation, and thus more thoughtful responses to our ever-changing world.