Book review: The latest global economy in 5 trends: Investing in times of superinflation, hyperinnovation and climate change. 2024. Koen De Leus and Philippe Gijsels. Lannoo Press.
One sort of reader could also be on the lookout for a sober evaluation of the economics of megatrends. Another could also be on the lookout for something more comprehensive, humorous and diverse, with loads of tips to investment opportunities. For each forms of readers, the book is a welcome discovery. The book presents an interaction between its two authors, who’ve different styles but which mix to form a coherent whole.
Koen De LeusChief Economist at BNP Paribas Fortis in Belgium, and Philippe GijselsChief Strategy Officer of the identical institution, is co-author of this book. De Leus is a conscientious economist who approaches his subjects with thorough, data-driven evaluation and focuses on identifying the longer term impacts of today’s changing world on the economy.
Gijsels focuses on identifying the impact of those economic changes on investments. Gijsels is clearly a bookworm and all the time refers to his extensive reading. On LinkedIn he introduces latest books weekly: “Over my shoulder‘, and his analytical style can lead him in unexpected and interesting directions.
The book focuses on five specific trends that the authors consider can have the best impact on the economy and investment between now and the center of this century. The trends highlighted are innovation and productivity, climate, globalization, debt and aging.
The section on ageing provides a very good example of the interaction between economist and strategist. De Leus provides a comprehensive evaluation of worldwide demographic trends by age group, country and region. He examines the evolution of the dependency ratio, the resulting “time bomb for the social security system”, the impact on rates of interest and inflation, and possible countermeasures available to different countries.
Gijsels’ contribution to this chapter is more eccentric. He “interviews” nineteenth century economists Thomas Malthus And David Ricardo. He coins latest terms like “seniorescence” and “transiter” and references French fables. But from these eclectic elements emerge solid analyses of investment opportunities – biotech, robotics, the experience economy, battery technologies, real estate and more.
Of course, the authors emphasize that the ideas within the book “are in no way intended as investment advice. We are simply giving you a few basic concepts.”
The trends often overlap. For example, the section on ageing includes an interesting evaluation of the impact of demographics on innovation (“oldies don’t innovate”). Real estate comes into play in several sections, and the outlook for commodities is analyzed in each the climate and multiglobalization sections.
The authors aptly summarize each of the five trends, first with “Ten Things to Remember” after which with “Ten Things to Invest In.” The suggestions for where and how you can invest are more general in nature, providing more guidance on where to start further evaluation than offering full-fledged investment suggestions.
For example, within the context of innovation and productivity, there’s advice on how you can cope with the AI boom and the claim: “Whoever has the data has the power and reaps the rewards.” In the section on climate, we read: “The energy transition is one of the greatest investment opportunities of all time. Don’t miss your chance.”
Of the five trends discussed, multiglobalization is maybe the trend with probably the most novel treatment. On the one hand, phenomena reminiscent of re-shoring and the diversification of worldwide supply chains are examined. On the opposite hand, the authors analyze how you can globalize, especially “intermediate services” reminiscent of data entry, but not “final services” reminiscent of accounting.
The scale of digital services exports is important and can reach €38 trillion globally in 2022, based on the authors (citing a report by the International Monetary Fund). The resulting investment opportunities are somewhat unclear, but we’re told that “from an investment perspective, it would be unwise not to be at the Chinese table.” The same assessment applies to “low-cost growth markets.”
The book looks into the longer term by occasionally presenting simulated news reports from the 2040s and 2050s. These offer a combination of negative and positive predictions. For example, one in every of these reports describes the dire state of the planet brought on by climate change and the “hesitation of previous government leaders.”
The section on globalization predicts a decline in global growth in consequence of greater restrictions on imports, although this decline in growth might be reversed by more open trade policies. On a more positive note, the authors predict huge increases in productivity in consequence of innovations reminiscent of AI and quantum computing. These reports are further examples of the book’s ever-changing structure. This variety, together with an interesting writing style (and even attractive typesetting), keeps the reader eager about this 400+ page volume.
Despite all the nice qualities of the book, it’s disappointing to search out errors and typos throughout the text. These might be attributable to translation errors – the book was originally published in Dutch, while the version reviewed is an English translation. Nevertheless, more thorough proofreading could have avoided errors reminiscent of the misspelling of “rightly” and “artifially”, the confusion of the World Health Organization and the World Trade Organization, and the rewriting of Mario Draghi’s famous phrase “whatever it takes” as “everything Possible”.
Referring to a different title, Gijsels comments: “The book does what every good book should do: it provides insight and is a starting point for analysis and discussion.” This is an apt comment on itself. Many of the book’s predictions may not ultimately come to pass, and positively trends will emerge in the approaching a long time that should not mentioned here. Nonetheless, the book does an admirable job of taking a look at possible futures based on current trends, thus helping its readers to “surf the waves” of change.
