What may change? - 2021

Please see below a range of 2021 outlooks and forecasts, grouped across the following 21 topics.

Business, Climate, Conflict, Demographics, Economics, Energy, Food, Freedom, Health, Innovation, Nature, Politics, Purpose, Risk, Space, Sustainability, Technology, Travel, Trust, Values and Work.

There is also a bonus list of additional 2021 forecasts in appendix.

See also:

What changed in 2020?

BUSINESS

In 2021, companies and boards will face an acceleration of existing challenges and be compelled to address how they are building resilience and creating sustainable value in a rapidly changing business environment. EY believes that. with increased investor scrutiny and stakeholder considerations, company boards will need to focus on key priorities in 2021, including:
- Overseeing strategy to create long-term value
- Promoting enterprise resilience in the face of uncertainty
- Focusing on workforce transformation and new ways of working
- Leading on diversity, equity and inclusion
- Guiding an Environmental, Social and Governance (ESG) strategy that drives stakeholder engagement and value.

CLIMATE

The coronavirus crisis demonstrated that, when confronted with a significant threat, governments across the world can take decisive action to mitigate the effects. However, despite the very visible devastations of the climate crisis, addressing it has suffered from, among other things, partisan politics and a sometimes disjointed global awareness of where responsibility lies and the extent of action needed. As countries convene in Glasgow for COP26 to update their Nationally Determined Contributions, and the US attempts to re-assert its leadership in climate circles by re-joining the Paris Agreement, Chatham House examined whether there is an opportunity in 2021 to reinvigorate international cooperation on tackling the climate crisis.

CONFLICT

Chatham House explored crucial questions about modern conflict in a COVID-affected world through the lens of International Crisis Group’s annual report 10 Conflicts to Watch in 2021. It examined what lessons in cooperation and coordination should the international community draw from the past year, asked whether, given technological advances in warfare capabilities, will conflict transcend into unconventional battlegrounds, and studied the key challenges for global security and democratic governance.
As the coronavirus pandemic curbed job opportunities for young professionals, applications to join the military soared around the world, while US service members enlisted for longer, reported The Wall Street Journal. In 2020, the UK hit its annual recruitment target for the first time in seven years. The likely reason? The pandemic ravaged the job market for young workers, making the military look like a stable and attractive employer in which to ride out the crisis.

DEMOGRAPHICS

Projections from major economic institutions suggest we could see a few important statistical records broken in the year ahead. Longer lifespans and falling fertility rates will continue to age the global population. In 2021, the global median is expected to hit 31 for the first time in recorded history, according to projections from the United Nations.

ECONOMICS

The global economy still faces the myriad problems it did before 2020, from trade wars to inequality to weak investment. Quartz's field guide provided a preview of what to expect for the global economy in 2021, including the indicators to watch, and potential wildcard events.
COVID vaccine hoarding by rich countries and uneven global access to the jabs could draw out the global recovery from the pandemic. In fact, it could cost the world economy as much as $9.2 trillion, according to a study by the International Chamber of Commerce.
Industries that weren’t directly affected by the health crisis are now experiencing job losses, business failures and declines in spending; more layoffs that were originally classified as temporary are being classified as permanent; and the rate of long-term unemployment - a hallmark of the Great Recession - is on the rise. The implication: a “double-dip” recession is the greatest risk for 2021, according to economist Campbell Harvey. Economist Mohamed El-Erian agrees, deeming the risk of a subsequent recession “high and rising,” based on global data from the manufacturing and services sectors.
China’s GDP expanded by 2.3% in 2020. It was the only major economy to have reported growth, though consumers kept their purse strings tight, with retail sales down 3.9% for the year, reported Quartz.
The Indian economy is estimated to contract 7.7 per cent in 2020-21 compared to 4.2 per cent growth in the previous fiscal year, mainly on account of the impact of the Covid-19 pandemic.
Sub-Saharan Africa is forecast to see moderate but positive GDP growth of 2.7% in 2021, a rebound from the region’s first recession of 25 years in 2020, when GDP shrank by an estimated -3.7%.
For Chatham House, a Biden presidency suggests a less antagonistic and more cooperative approach to trade policy, but at the start of 2021 it was unclear whether there would be significant change in substance or just a change in style from the new administration, and also what this might mean for broader developments in global trade,
Global demand for Chinese goods has been so strong recently it’s creating a shortage of containers and driving up shipping costs, potentially impeding the nation’s exports in coming months. Exports have rising quickly since mid-2020, fuelled by pandemic-related purchases like medical masks and work-at-home equipment, including computers. Imports haven’t been growing at nearly the same pace, resulting in a lack of shipping containers returning to China to be refilled and sent out again.

ENERGY

The International Energy Agency promised to publish a road map in May to help the global industry reach net-zero emissions by 2050, the IEA’s executive director told the FT. That long-term target will only be met if “decisive action” is taken over the next decade, while tracking progress and accountability will also play a key role, he warned.

FOOD

Global food prices hit a six-year high in December 2020 and areexpected to continue rising through 2021, reports Bloomberg, citing U.N. data. Environmental factors, protectionism and strong demand pushed up prices on items like vegetable oil, cereals and dairy. Rising food prices risks increasing inflation and threatens poorer consumers already hurt by the pandemic.

FREEDOM

Even though mass vaccination now underway in some countries has spurred optimism that the pandemic is nearly over, tensions between governments and citizens all over the world will continue to grow as more restrictions on basic freedoms are imposed in the early months of 2021.

HEALTH

As the coronavirus pandemic entered its second year and vaccination rollout efforts gained momentum, experts expressed cautious optimism for a return to something resembling normal life by the Northern Hemisphere summer, but such an optimistic scenario requires many things to go right, according to the Atlantic:
- Vaccination supply chains and distribution programs will need to operate at a nearly flawless level.
- Enough people will need to be willing to get vaccinated and then continue to take precautions like wearing masks and social distancing.
- And the vaccines on hand will need to be able to fend off the virus's mutations.
- And if all goes as planned, The Atlantic added, we'll then need to take full stock of the economic, institutional and psychological damage this crisis has caused.
The lead scientist at the World Health Organisation warned that there will be no global COVID-19 herd immunity in 2021. Without it, the virus will continue to spread. There are three main factors that will slow the return to normalcy, according to health experts: Poorer countries will take longer to receive large quantities of vaccine, a significant number of people in all countries will avoid vaccination, and mutations of the virus will make containment a moving target, noted GZERO Media.
“Going to the doctor” could start to take on a new meaning in 2021. Amid the coronavirus pandemic, healthcare providers in Europe and the US have been employing AI-powered chatbots to diagnose millions of people, according to consultancy Oliver Wyman. These “doc-bots” can serve patients day and night, they continuously learn and improve, and they are “economically compelling”.

INNOVATION

In large parts of the global economy, the past 10 years have been marked by disappointing growth. The innovations of the 2010s - smartphones, social media - didn't seem to accelerate productivity as anticipated. But several signs suggest we are on the cusp of a growth spurt from 2021, The Economist reported on biological advances that have led to the rapid development of several COVID-19 vaccines, renewed investment in R&D from the private and public sectors and the swift adoption of digital tools during the pandemic, all offering hope that a new innovation era is dawning.

NATURE

In Will Nature Go Mainstream in 2021?, Nature argued that, as we we set our collective vision toward global recovery in 2021, recognising and making decisions based on nature’s value will be essential for building a better world. Whether it’s for our physical health or our fiscal health, it’s clear that we need nature now. This year, world leaders will convene for to agree on a new framework for protecting biodiversity and increased global climate commitments that will guide efforts to save the planet for the next 10 years, but setting ambitious targets at these meetings presents a new start, not an end, to the work ahead mad we won’t be able to follow through on these goals if we don’t make nature part of the mainstream in our economies, societies and everyday lives.

POLITICS

GZERO Media pointed to the forthcoming "elections that matter" internationally in 2021:
- For the first time in 16 years, Germans will elect a government that will not be led by Angela Merkel. The German Chancellor is stepping down, and the race to replace her is heating up. Her centre-right CDU party will select a new head to carry the flag into the election, but non-centrist parties such as the far-right AfD or the leftwing Greens will try to continue to erode the dominance of centrist parties.
- In Iran, hardliners hostile to rapprochement with the West did well in last year's parliamentary elections, and are the front-runners ahead of a presidential vote in June. That could complicate any push to revive the 2015 Iran nuclear deal.
- In November, Russians will vote in tightly controlled legislative elections that are almost certain to give victory to the ruling United Russia party. But Russia's been hit hard by the coronavirus crisis, and Vladimir Putin's approval ratings are near historical lows (for him, at least).

PURPOSE

After a year unlike any other, business leaders are looking ahead to what 2021 will bring. Eventual emergence from the COVID-19 pandemic will introduce an unprecedented set of challenges for governments, businesses and communities around the world. People increasingly expect businesses to be part of the solution. The confluence of health, and economic crises and growing societal expectations means that 2021 is the year when talking about corporate purpose must pivot to meaningfully acting on it, noted EY. The EY CEO Imperative study found that “67% of CEOs feel moderate to extreme stakeholder pressure to address global challenges,” a number that rises by 10 percentage points for leaders of the largest organisations.

RISK

The Doomsday Clock - used by a group of nuclear scientists to illustrate how close we are to a man-made disaster that could end the world - remained for the second year in a row at 100 seconds to midnight, the closest it's ever been. The pandemic was bad, the clock's keepers at the Bulletin of Atomic Scientists noted, but they also pointed to better-than-expected progress on climate change and the extension of a major US-Russia arms control pact.
The geopolitics of COVID-19 will shape many political risks around the world, including emerging market debt and new industrial policies, argued EY. The three leading geopolitical powers - the US, EU and China - will compete for greater self-reliance, particularly in digital technologies. While 2021 may be challenging, companies can leverage the enhanced agility and resilience exhibited in response to the pandemic.
Having ranked 10th in 2020, infectious disease sits atop the World Economic Forum’s global risks list for 2021. Not only has COVID-19 cost more than 2 million lives so far, it has throttled development in poorer regions “while amplifying wealth inequalities across the globe,” the forum said. And while the pandemic threat comes first in terms of impact, it is "climate action failure" and related threats that account for most crises confronting the world this year - both in terms of likelihood and impact.
Among Eurasia Group's top risks for 2021:
- "Long COVID", to capture the lingering impact of COVID-19 on both political stability in many countries and the global economy. The pandemic will leave a legacy of high debt, displaced workers, and lost trust. The distribution of vaccines will further divide haves from have nots, both within and among nations, stoking anti-incumbent anger and public unrest in many countries.
- A combination of low-probability but high-impact risks and inexorable technology trends will make 2021 the year that cyber conflict creates unprecedented technological and geopolitical risk in cyberspace.
- Energy-producing countries in the Middle East and North Africa faced a collapse in global energy demand in 2020 that left governments from Algeria to Iran with less cash flowing into their coffers as the pandemic sickened citizens and weakened economies. 2021 will be worse, because energy prices will remain low. Reforms will slow, and protests will grow.

SPACE

Many space missions are scheduled for blast-off in 2021. To tweak the orbit of an asteroid’s moon that is nearly as big as a stadium, America’s NASA plans to launch a car-sized craft to smash into it the following year. Neither the asteroid, Didymos, nor its moon, Dimorphos, threatens Earth, but the collision should yield potentially handy “planetary defence” know-how. NASA also plans an uncrewed flight around the Moon, and, with help from the space agencies of Canada and Europe, the launch of the James Webb Space Telescope, the biggest and priciest ever. India may put three astronauts into orbit. India and Russia aim to launch lunar landers. And China will begin launching parts of its next and biggest space station, Tiangong-3.
Blue Origin, founded by Amazon CEO Jeff Bezos, successfully completed the fourteenth test run of their New Shepard rocket booster and capsule, cementing plans for their first manned flight to the edge of outer space in 2021. Travelling 100 kilometres into outer space, the rocket will be fully autonomous and stay in zero gravity for close to 10 minutes.

SUSTAINABILITY

McKinsey argued that the growth opportunities that a green economy portends could be substantial. Global investment company BlackRock noted in its 2021 Global Outlook that, “contrary to past consensus,” it expects that the shift to sustainability will “help enhance returns” and that “the tectonic shift towards sustainable investing is accelerating.” Green growth opportunities abound across massive sectors such as energy, mobility, and agriculture. Just as digital-economy companies have powered stock-market returns in the past couple of decades, so green-technology companies could play that role in the coming decades.
Further reading:
- 8 Sustainable Business Predictions For 2021 - The Triple Bottom

TECHNOLOGY

CB Insights released a report with 12 technologies that we probably should be watching in the future. These advancements include AI that has empathy, psychedelic medicines going mainstream, crypto rewards from companies, the emergence of health tech and self-care inside homes,
Many startups are building their own globe-spanning networks of nanosatellites, enabling a new kind of everywhere, all-the-time connectivity for people, animals and assets on Earth. Scientists who track the health of penguins in Antarctica are managing their cameras from thousands of miles away - via tiny satellites orbiting above our heads. Energy companies are exploring using the same technology for monitoring hard-to-reach wind farms; logistics companies for tracking shipping containers; and agribusiness companies for minding cattle. It even helped National Geographic track a discarded plastic bottle from Bangladesh to the Indian Ocean, noted the Wall Street Journal.
Further reading:
- Seven tech trends to watch in 2021 - EY
- Top 10 opportunities for technology companies in 2021 - EY

TRAVEL

McKinsey noted that people who travel for pleasure will want to get back to doing so in 2021. That has already been the pattern in China. The CEO of one major travel company noted that, beginning in the third quarter of 2020, business was “pretty much back to normal” when referring to growth. But it was a different normal: domestic travel was surging, but international travel was still depressed given pandemic-related border restrictions and concerns about health and safety.

TRUST

As the world continued to grapple with COVID-19, economic turmoil and systemic racism in early 2021, a proliferation of misinformation abounded. The Edelman Trust Barometer claimed that we're in the middle of an "infodemic," and people have lost trust in all news sources. Trust in social media is at an all-time low (35%), according to their annual report, while trust in owned media and traditional media are at 41% and 53%, respectively. Business was "the most trusted institution among the four studied" (business, government, NGOs and media) with a 61% trust level globally.

VALUES

Consumers’ expectations are continually evolving, but there has been a dramatic acceleration in certain trends as a result of the pandemic. Increasingly, consumers expect to access goods and services online and, having made greater use of virtual channels in 2020, they may buy less from traditional bricks-and-mortar businesses 2021 and beyond. Another important change relates to purpose. As highlighted in the EY Future Consumer Index, even before the pandemic struck, many consumers were already favouring products that aligned with their sense of purpose. Now they are even more committed to consuming in a purposeful way, with others choosing to consume purposefully for the first time.

WORK

The equivalent of 255 million full-time jobs were lost in 2020 due to the pandemic, four times the number of jobs lost during the 2009 financial crisis, according to the International Labour Organisation in a new report. A total of $3.7tn in earnings evaporated globally in 2020, the report notes. Women and young workers were hit the hardest, while Southern Europe was among the regions that faced a particularly steep decline in working hours. The ILO expects an additional 15 million jobs to be lost in Europe alone in 2021.
Even with the arrival of vaccines, the road to pandemic recovery will be challenging, warned EY. Digital transformation will continue to underpin organisations’ strategic and business imperatives in 2021. However, consumers are worried about how businesses use data, so building trust is crucial to maintaining organisations’ integrity.
According to PwC's recent US Remote Work Survey, 55% of executives expect that most (60% or more) of their workers will work remotely after the pandemic subsides, up from 39% who estimated most workers worked remotely before the pandemic hit. That’s just one example of how the crisis has accelerated workplace changes that had already been underway.
For example, Unilever workers will never return to their desks full-time, boss Alan Jope said. The consumer goods group chief said Unilever would adopt a “hybrid” model, claiming five days a week in the office seemed “very old-fashioned now”. In 2020, Unilever announced that it would pilot a four-day working week during a year-long trial in New Zealand. The maker of Dove and Lipton tea would give all 81 staff members at its New Zealand offices the chance to work four days a week without hurting their pay to assess working practices for its 155,000 employees globally.