Prospect 2021+ (Part 1/2)

1. Introduction

We are living in unique times. The disruption that COVID-19 brought to the world was unprecedented in terms of impact, scale and intensity. It changed the way we live and work. While COVID-19 was wreaking havoc, climate change was manifesting acutely in the form of extreme weathers affecting millions of people. Urgency is in the atmosphere. Politicians are quick to politicize these phenomena adding more fuel to the already polarized politics. Emotionally affected society reacts with fervor to the violence to black people. As people were hit hard by the pandemic, with millions losing their job, the stock market rebounded quickly and reached record high [AP, CNBC]. The dichotomy between wall street and reality seems irrational [WHAR].

In face of these unparalleled events, how do we, as a student, parent, professional, entrepreneur, investor, leader of an organization, citizen of the world, go about adapting, surviving, and most importantly, contributing to the solutions of the current global challenges?

It is the responsibility of all of us to self educate and participate in the discussion, bringing different perspectives to enrich the conversation, ultimately converging into actions.

The Bloomberg’s “The Year Ahead” online event that I attended early this year provided me with valuable insights and triggered me to create this document. In this document I share the major themes and trends that will continue impacting our lives.

The trends are grouped into eight areas, but as you read, you will notice that the areas are interrelated and the content in them reference each other.

The purpose of this document is to incite the readers to investigate further those areas that matter to them, create a sense of urgency and translate the knowledge into actions.

2. COVID-19

The warning of a pandemic has been brought up by well-regarded people in the past [BI20]. In 2020 the risk becomes a global reality and countries all around the world fall into chaos. No other crisis in human history had this universal reach.

Now that a year has passed, we can examine the data and extrapolate.

2.1. Changes in People’s Life

Undoubtedly COVID0–19 brought many changes to our daily lives. Frontline industries, especially healthcare, were brought to their knees. The rest of the people were affected by the social distancing measures to reduce transmission of the disease. People and business had to adapt to the social distancing and lock-downs. A direct consequence of the measures was working and learning from home, which in turn accelerated the adoption of remote work tools such as video conferencing and distributed collaboration platforms. Likewise, the confined life at home increased the use of electronic services to purchase goods (e-commerce & delivery) and consume entertainment (games and streaming). Even the traditionally reluctant senior people adopted eBanking.

We don’t know for sure the lasting effect on today’s young adults, the Pandemials. They will likely face serious challenges to their education, economic prospects and mental health [WEF21].

A sad consequence of pandemic is the increase in income inequality. The blue-collars, whose lives were already tight, were furloughed or laid off. Likewise, the large businesses with proper digital infrastructure were gaining market at expense of smaller brick-and-mortar businesses.

From the world population of 7.8 billion, 3.7 billion do not have internet access [WEF20]. This implies that 47% of the world population do not have the adequate infrastructure to connect with proper information, telecommute or learn from home. The result is deepening wealth inequality.

2.2. Record-time Creation of the Vaccine

A major historical achievement during the pandemic was the development of COVID-19 vaccine in record time. Vaccine development is a laborious process that can take from 8 to 15 years. For your reference, the fastest a vaccine has ever been developed was the mumps vaccine in 1967 which took 4 years [BIOS].

Factors that made possible the development of COVID-19 vaccine record time includes:

1. Collaboration of the scientific community. China sequenced and promptly shared the virus genome. With the genome in hand, scientists could start vaccine development work without needing a sample of the virus [CONV].
2. Leveraging works on mRNA platforms. mRNA vaccines are not new, it has been in development for a while. The prior outbreaks of SARS, MERS, Zika fueled research on mRNA platforms. Advances on mRNA platform allowed faster development of the vaccine. Furthermore, the mRNA vaccines are easier to make compared to the traditional vaccines. This is so because mRNA vaccines, which consist of the virus’ outer structure, can be developed in a laboratory using a DNA template and readily available materials. The traditional vaccines need to cultivate weakened versions of the pathogen [CDC].
3. Running clinical trial phases in parallel. In order for a vaccine to be approved by regulators, it has to go through lengthy trials. The multiple phases of clinical trials make sure that the vaccine is safe, effective in a diverse population, and increases the understanding of possible side effects. For COVID-19 vaccine, the phases were grouped and ran in parallel as much as possible without compromising the quality of the tests [CONV].

The current pandemic is a battle testing mRNA platform efficacy at scale. This will serve as the foundation for development of vaccines for coronavirus variations and even other novel viral diseases. We could be entering an era where vaccines development cycles are measured in months, not decades.

2.3. Vaccine Distribution Faces Challenges

Multiple companies have developed the vaccine, but at the moment the world is facing challenges in the distribution.

The first challenge is on mechanics. The Pfizer vaccine requires very low temperature (-70C) for storage and transportation. The low temperature is necessary to keep mRNA structure from breaking down [NPR]. Maintaining such low temperature requires proper infrastructure and energy supply. If the temperature goes above the threshold prior to reaching the host, it will become useless.

The second challenge on equitable access to the vaccines. The supply of vaccines is limited, hence there should be full transparency in the policies on how the vaccines are distributed. The global and regional leaders must ensure that the vaccines are made available in a fair and equitative manner.

2.4. New Variants of COVID

There are already three variants identified around the world: one in the UK, one in South Africa and another in Brazil [CDC].

The variations are basically mutations of the virus. The UK variant is associated with increased risk of death compared to others. The Brazil variant may affect its ability to be recognized by antibodies.

It may be possible to change the antigen of the vaccine to be able to protect from the new variations. But if the mutation cycle is short, the pharmaceutical companies, even with mRNA technology, could stay in the constant race catching up the variations.

At the moment, the WHO doesn’t seem to be too worried about the variations [WHO21], but still the uncertainty remains.

3. Environmental Crisis

We are now in the Anthropocene, an epoch where human activity is the major force of changes on Earth’s geology and ecosystems [WEF19] . Unfortunately the changes have been for the worse. Humans have been causing biodiversity loss, habitat destruction, water and air pollution, and climate change; and the results are devastating.

According to the Global Risk Perception Survey by the World Economic Forum, the “Climate action failure” is the most impactful long-term risk identified [WEF21]. Climate change has already affected populations in different areas. Those places near the shores were impacted by catastrophic cyclones. The dry areas became drier increasing the probability of fires, while wet areas had heavier precipitations [NASA].

The ramifications are extensive. Agriculture will suffer dropping the food supply and increasing the cost. Population’s health in extreme climate areas will degrade, shooting up the cost of healthcare systems. Insurance rates will increase. Supply from hydroelectric power will decrease leaving many without electricity. All of these will lead to a higher living cost and less healthier environment. Unless a radical global measure is implemented, society will fall into a vicious cycle of the ever growing income inequality gap.

3.1. The Good News

The good news is that the majority of people nowadays consider climate change a top-tier issue [ATL20, NYT20]. There is a prevailing sentiment that the climate crisis is indeed a matter of urgency.

Citizens are demanding actions, consumers are demanding changes. Investors are requesting disclosure of NetZero plans to the corporations. In response politicians are prioritizing climate magenta and CEOs of companies are incorporating sustainability into their core strategy. We, as responsible citizens and consumers, must ensure that the leaders abide by their promises.

“Climate Change is investment risk” Laurence D. Fink / CEO of BlackRock

Another fact that brought us hope is that renewable energy became cheaper than fossil fuels [FC21, OWID]. Subsidies are no longer needed. Clean technology is constantly improving and so are the practices around. However, electricity accounts about 26% of the carbon emission [EPA]. And considering that cleantech is mostly deployed in developed countries [OWID], it is a minimal offset from overall global greenhouse gas emission.

3.2. Challenge for All of Us

Let’s make no mistake, even with the U.S. reinstating to the Paris climate agreement, the projections are somber. The Paris agreement is not legally binding, but rather each country determines its own target called the Nationally Determined Contributions (NDC). The truth is, the NDC of the majority of countries falls lamentably short [CAT]. With the current pledges, we will fail to limit the warming 1.5°C above the pre-industrial levels by 2100. Countries need to be more aggressive. Beyond carbon reduction, carbon sequestration should be seriously considered [PHT19].

Climate movement is gaining momentum, but unless immediate, radical changes are implemented, we may reach a point of irreparable damage to the planet. Let’s not be oblivious of other environmental crises: plastic pollution, biodiversity loss, and destruction of natural habitat. Ever growing production of plastic is affecting the ecosystem in the ocean and we are yet to know the effects of microplastics in our body. Meanwhile, the destruction of natural habitat can cause a food crisis and accelerate another global pandemic.

Experts agree that the economic recovery should go hand-in-hand with green strategy [WEF20, CONV]. A well implemented Green strategy can, in fact, address the economic crisis and health crisis. Governments, non-government institutions and industry sectors across the world should work together to tackle the environment problem. Legislations should change to enforce sustainability, corporates should adopt new green practices, and we should change our lifestyle to an eco-friendly one: reduce and reuse.

Every day we are emitting more greenhouse gases, dumping more plastic, cutting down more trees. We are all in this together. The clock is ticking.

—

In the second part I discuss the trends in the society, science and technology, economy, politics, and global dynamics in which we will see more disruptions and transformations.