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Visit Other Web Forums Futurist's Field Notes Futurist Authors Provide a Glimpse into the Future  at the Proteus Academic Workshop By William L. Wimbish and John Auger The Proteus Management Group (PMG) conducted a workshop to explore complexity and examine new and emerging "futures" concepts, methods, and processes in strategic intelligence analysis and decision making to meet future national security challenges. The workshop was held from August 14–16, 2007 at the Center for Strategic Leadership, Carlisle Barracks. The 3-day event featured 7 guest speakers and 27 panel presentations which included 15 papers and 4 monographs. A number of distinguished members of the World Futures Society provided provocative insights into the future. This included Graham Molitor, former vice president/legal counsel of the World Future Society, who delivered a keynote presentation on "Global ‘Economic Warfare’ - Maintaining the ‘Edge’" and Doctor Marvin Cetron, coauthor of "53 Tends Now Shaping the Future" and "Worst–case Scenario: The Middle East," who chaired one of the workshop panels and delivered a presentation on "Tigers and Dragons and the Effect on the Eagle in the Future" in which he discussed the emerging growth of China and India, as well as their effects on the United States. Short synopses of their presentations follow. Global "Economic Warfare" Maintaining the "Edge" Mr. Graham T. T. Molitor, President of Public Policy Forecasting, provided an enlightening discussion on the future strategic challenges to U.S. economic sustainability. He noted that economic performance, particularly in a rapidly globalizing marketplace, becomes an indispensable adjunct of national power, prominence, and survival. Prowess in economics and national security go relatively hand-in-hand and will shape the future for the United States. Countries with winning strategies over the past 25 years include Sweden, Japan, and Singapore, while China and India loom as the future powerhouses competing with the U.S. He forecasted that the U.S. will continue to decline as an economic power as others grow in tomorrow’s global landscape unless it changes its policy and focus. Molitor believes that economic warfare underscores the idea that the survival of the fittest can be a combative foray. To his mind, survival also means preserving vital assets for both sides of international trade and commerce. Means of production and business represent huge investments should not be devastated and squandered by destructive acts. He noted that no longer are multi-national corporations the only ones that abhor the devastation of war, but the widespread democratization of stockholding has created the potential for similar attitudes among a far broader base of investors. His analysis of history indicates that there are a wide range of conflicts and the future promises a wide variety of disorder to include ethnic/religion based extremism, terrorist attacks, insurgencies, resource disputes, water wars, etc. The way ahead is fraught with uncertainties that require global vigilance, even while nations make their way toward the globalization of commerce and stability. His analysis of current trends indicates that the U.S. is losing its global position with a declining share of world trade volume, increased job outsourcing, fewer scientists and engineers as compared to competitor nations, etc. He opined that the U.S. must take the steps to prevent further decline by increasing innovation with resolve and determination. U.S. economic development policy must be based on visionary thinking and planning holds enormous potentials to enhance human conditions and change where entire economies are headed. Leaders need to look to more conscious and aggressive long range thinking and planning versus the shorter range as evidenced recently. Economic development is derived from and driven by scientific and technological advances. Looming over the course of this millennium are prospects for at least five new major economic centers of activity that shape and transform things yet to come. In Molitor’s view the "Big Five" eras expected for the U.S. are: Leisure (year 2015), Life Sciences (year 2100), Meta-materials (between years 2100-2300), Fusion Energy (between years 2250-2500) and New Space Age (beyond year 2500). Technological and organizational advances will further reduce time on the job creating the demand for increased leisure time activities. The Life Sciences or biotechnology will see innovative genetics and significant changes. Meta-materials will witness advances in nanotechnologies and particle detection. Fusion Energy or the New Atomic Age will see a succession of resources to meet energy demands as the world runs out of fossil fuels and petroleum. The New Space Age will provide increased space travel and new technologies. He stressed that the U.S. needs to be in a position to take competitive advantage of these opportunities and that this requires the development, deliberation, and setting of realistic national goals and the appropriate strategies to realize those goals. He noted that global trade volume grew 25 fold between 1950 and 2007 and continues to grow at an even faster pace in the world’s rapid globalization. Currently, China is ranked seventh and is expected to move up rapidly with leading export nations such as European area, U.S., Germany, United Kingdom, and Japan. China continues to grow among the world’s industrialized nations due to its vast population and low labor costs. China already has an export –led, high growth economy, and is rapidly becoming a consumer-oriented economy. Add to vehicles and fuels, the vast array of goods and services ranging from public works development to car washing establishments’ show the tremendous potential one sector has on the Chinese economy. Not to mention the other sectors that will explode once China improves its mobility and transportation infrastructure. In looking at Gross Domestic Product, Mr. Molitor noted that China is growing rapidly and India is not too far behind, and his prognosis is that they will likely jump to second and third place behind the U.S. in affecting the world’s economic landscape. Mr. Molitor’s assessment is that country by country, alignments and collaboration in international commerce are heading into a triumvirate of regional blocs. These convenient trade arrangements are likely to continue enlarging their reach both within their trading blocs as well as inter-regionally. European nations head the list of nations currently garnering the largest percent. The next bloc of aligned trading partners includes the U.S., Canada, and Mexico and may bring in Latin and South America. The fastest growing is the Asian Pacific rim which includes powerhouses: Japan, China, Australia, South Korea, Singapore, and others. In pondering the demographic future, Molitor noted that a key question is: how long will China retain its status as the world’s largest nation? Recent demographic forecasts project India overtaking China in the not too distant future; and the U.S. will drop to sixth or seventh. Not only will India and China top the largest list of countries but other nations such as Nigeria, Indonesia, Brazil, and possibly Pakistan are destined to be at the top the list. The major populations of the world are mostly crowded into vast urban sprawls or mega-cities; most situated close to shores and giant rivers. Multi-sited bio-tech food factories already have been sited to supply nearby sizeable communities. Mr. Molitor concluded his presentation by addressing the issue of whether the U.S. is losing its technological edge. He noted that recent studies show that Asian nations account for the overwhelming share of global and engineering talent that is eroding our edge. Both China and India produce far greater numbers of engineering and technical graduates when compared to the U.S. The brute force size of the U.S. investment dedicated to science and technology overwhelms all nations with Japan ranking second with China lower. Committing major efforts and increasing funding to carefully chosen sectors can make a difference. Tigers and Dragons and the Effect on the Eagle in the Future Dr Marvin Cetron, President, Forecasting International, discussed the emerging growth of China and India, as well as the effects on the United States. He noted that India is a democracy; China is not, and it has no intention of becoming one in the near future. Economy – Dr. Cetron noted that China is the world’s third largest trading nation behind the United States and Japan with India not even in the top 20. India still imports more than it exports, while China is a major net exporter. China is building important trade alliances throughout Latin America; and Sino-Latin trade grew 991 percent between 2001 and 2005. China has built its economy on manufacturing (53 percent of GDP), and India on services (61 percent of GDP.) China’s manufacturing output grew by 27.7 percent and India’s grew by 8.2 percent in 2005. Demographics and Literacy – He pointed out that China’s population is aging while India’s is growing younger. In China, 11 percent of the population is over 60; by 2040, 28 percent will be over 60. In India, the number over 60 will not reach 11 percent until 2025. India’s population grows by about 1.4 percent per year, China’s by only 0.6 percent. In 2020, there will be more Indians than Chinese. As to literacy, no less than 91 percent of Chinese can read and write well enough to meet UNESCO literacy standards. Only 61 percent of Indians are literate, even by India’s standards, which are much less stringent. Some 48 percent of Indian women and girls were literate in the 2001 census, up from 40 percent a decade earlier. English training is not going as quickly as expected in China, especially in preparation for the Olympics. Virtually all educated Indians speak English, which is the international language of business and science. Workforce and Compensation – Dr. Cetron highlighted the fact that only 1.3 million Indians, out of a working-age population of 400 million, are employed in the so-called "new economy," - the information technology and business process industries. In India, some 250 million people survive on less than $1 per day. In China, 150 million live on less than $1 per day. About 150 million displaced Chinese peasants roam from city to city looking for work. The difference between the rich and poor is getting wider in China but narrower in India. Western companies once outsourced only routine tasks to Asia. Many now are sending high-end professional functions such as Research and Development to India and China, particularly in computer, software, and pharmaceutical sectors. Financial Indicators – Dr. Cetron reported that China has managed to privatize or eliminate half of its 300 million inefficient state-owned companies in the last ten years and 45 percent of the jobs (about 45 million) they supported. Indian privatization remains hesitant and half-hearted. China’s public debt is 22 percent of GDP, compared with 53 percent in India. Inflation is 1.5 percent in China (2005), compared with 5.3 percent in India. India’s per capita GDP is $3,800 (2005) while China’s is $7,700 (purchasing power parity.) Chinese banks hold $500 million in nonperforming loans, even after two corrections of 8% each in 2007. To prevent failure of the country’s largest bank, the institution was opened to foreign investment. Energy, Technology, and the Environment - In pursuit of oil and gas, China also is trading heavily with Myanmar, Sudan, Iran, and other countries which Washington views as pariah states, while India is importing oil from Iran. Dr. Cetron opined that this is undermining American security policies. India has put at least one public Internet connection in every village in the country, giving them free access to the world’s flow of ideas while China heavily censors the Net. The environment is suffering in both countries. Some 80 percent of China’s major rivers are so polluted that fish cannot survive in them. In India, air pollution causes an estimated 2.5 million premature deaths annually, and water pollution kills 1.5 million pre-school children each year. Opacity - Dr. Cetron defined this as a combination of corrupt business practices, the legal system, economic policies, accounting guidelines, and the regulatory framework,. They act as a hidden tax on the economy. India pays foreign investors a risk premium of roughly 719 basis points on the money it borrows; China pays 1,316 basis points more than the most transparent countries do. India’s "vigilance commissions" are reducing corruption in that country; China has yet to get a handle on this problem. There were 87,000 riots in China in 2005, many in protest of corrupt business deals by local officials. Insurgencies – He noted that India now has thriving communist insurgencies—unrelated to the nominally communist political parties—in the so-called "Naxalite" (Maoist) belt in the eastern and southern parts of the country—this in addition to a host of regional, tribal, and Islamist militancies in Jammu, Kashmir, and other parts of the country. The Muslim insurgency in Kashmir has killed some 80,000 people in the last fifteen years. The communist Naxalite rebellion in Andhra Pradesh and nearby states has killed perhaps 6,000 over 20 years, 700 in 2005 alone. One group, the Naga National Council (now operating as the National Socialist Council of Nagaland), has been fighting almost continuously since 1946, despite a formal truce signed with the Indian government in 1997. A Forward Outlook - Both countries are developing blue-water navies and other forces capable of projecting force outside their territory. India seems content to defend its borders and shipping lanes. China’s forces are designed to dominate the region and to be taken seriously around the world. On world matters, China has become more active in Darfur and now supports intervention. In Iran, China backs nuclear restraints and wants the U.S. out of Iraq. China’s oil consumption up 30% this year and growing demand for concrete, steel, and other resources. The economic prospects in the short-term (5 years) show China in the lead; however, India leads in the long-term (over 5 years). He concluded that we should expect China and India to work very closely together as major corporations in India are moving their headquarters into China. Flights between India and China have tripled every year for the past three years! The Proteus Futures Academic Workshop Over 80 participants from a variety of disciplines and backgrounds participated in this year’s workshop. In addition to Graham Molitor and Marv Cetron, 32 others made presentations. This year’s workshop was the second in series of future annual academic workshops and one of several key Proteus Management Group initiatives to promote scholarly research and writing on the development and application of new and emerging "futures" concepts. The Proteus Management Group is sponsored by the Center for Strategic Leadership, U.S. Army War College and the National Intelligence University. The workshop report and copies of the papers and presentations delivered at the workshop are available at http://www.carlisle.army.mil/Proteus. About the Authors: William Wimbish is a private consultant and currently the Project Manager for the Proteus Management Group. He is a retired Army colonel and a former U.S. Army War College faculty member. He received a BS for Columbus State University and holds a M.A. in Business Management from Webster University. John Auger is the Program Manager for Booz Allen Hamilton providing support to the Proteus Management Group. His undergraduate degree is from the University of Detroit. He holds an M.A. in History from the University of Scranton and an M.A. in International relations from the University of Southern California. Both are graduates of the U.S. Army Command and General Staff College and the Army War College. Readers Comments: As the Transformation Manager for one of the Navy Warfare Center I am very interested in seeing more insightful discussion like the above essay by William Wimbish and John Auger. Submitted February 24, 2008, 02:07:05 Darrell Gooden darrell.gooden@navy.mil