What will the next 10 to 20 years look like?

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I am currently listening to the audiobook of Bill Gates “The Road Ahead”.

There, around the year 1996, he describes what the future will look like.

There, he already foresees things like Netflix, streaming, the widespread use of the Internet, smartphones, etc.

Actually not even that hard 😊

At that time I was about 15 years old and also had a PC. Before I turned it on, I had already thought about how it would be used.

I imagined the computer and videos, etc. more like it would be in 2010 or 2015. In 1996, however, I had to realize that this was not the case 😊

You could predict many things already, even as a young person.

Bill Gates also has the advantage that he had already foreseen the advent of PCs in all households and the importance of operating systems and knows how important it is to make assumptions about the future and act on them.

I have also seen in my own family what advantages this has.

My mother had foreseen many years ago that the real estate market in India and also office buildings would increase massively in value and acted accordingly. The calculation then also worked out. However, the road there was anything but easy.

I would also like to make some predictions 😊

In the next 10 to 20 years, there will be some things that will change. Here are my thoughts on this.

People in third world countries are raised to the knowledge level of Europeans within months

I can still remember the time around 1996. The world literally revolves around only a handful of countries. The list goes something like this:

  • USA
  • Japan
  • Germany
  • United Kingdom
  • France

That’s it, actually. That was basically the global economy. All other countries were served with goods by these countries.

Switzerland, a country with about 6 million inhabitants at that time, had a much larger wealth than, for example, India, a country with 1200 million people.

In Switzerland, young people already had access to a PC and some even to the Internet.

In India, such conditions could not yet be imagined. In some cases, children had to sleep five to a room.

The currency difference was also enormous.

One Swiss franc could buy a huge meal in India in 1996. A luxury meal.

The great change

China was also still a poverty-stricken country in 1996.

Today, China is already the richest country in the world (as of November 2021).

India is also in the fast lane.

Why is that?

Youtube, stackoverflow, internet, apps, laptops, Amazon, eCommerce, streaming, smartphones, etc., etc.

A 16 year old Indian boy could teach himself to program in Java on his smartphone (which is affordable for everyone in India these days) with the help of Youtube and Stackoverflow.

For the next 3 months, he sits incessantly to write a code with which one can simplify payments.

After 6 months, his app already has 100 million users.

At 18, he has a billion-dollar company with more than 10,000 employees.

This is happening more and more here in India and around the world.

A few examples in India:

  • Zerodha: A financial platform like Robinhood. Run by young people, has several million users. The company is valued at billions
  • WazirX: A Crypto Platform with Billions in Turnover
  • Byjus: A learning platform for children and young people. Billion valuation

Level Playing Field!

Nowadays, we talk about a level playing field. A person in Europe can talk about the fact that the “poor” Vietnamese and Thais and Indians, etc. would not have the same chances as he/she does.

However, this no longer necessarily corresponds to the truth.

A Vietnamese these days has similar opportunities.

With less bureaucracy in the respective country and lower wage and living costs, the growth opportunities are even much higher than in Western countries.

The next 10 years

In the next 10 years, countries, especially in Asia, will catch up extremely. I also expect some countries in Africa to follow a similar path.

Here are particularly noteworthy:

  • India
  • Indonesia
  • Malaysia
  • Vietnam
  • Pakistan
  • Bangladesh

Surely there are other countries. But these have a special potential. There is no need to mention China, as we already know how it is developing.

India and Vietnam in particular are probably the most interesting in this list, as they are also more politically stable.

More consumers worldwide, more opportunities

Nowadays, you don’t necessarily have to sell to the West. Chinese or people in India are also available in large numbers as consumers.

VW, with its large sales of cars in China is just one example.

From the perspective of a European

I see myself as a European, since I grew up in Germany. And also my view is shaped accordingly.

It will be very exciting for Europeans to recruit employees in these countries in the short term.

After all, there is currently little difference in the knowledge offered by an employee in Europe. At the same time, the costs are still enormously lower.

It won’t stay that way for long. Maybe another 5, 10 or maybe another 15 to 20 years at the most.

During this time, however, you can benefit from tremendous geo arbitrage.

Because not many have understood this in Central Europe.

One reason is certainly also the mainstream media, such as ARD, ZDF and the other state media, the prayer mill-like speaks of “poor Asia”, which all want to Europe. Meanwhile, however, China has become the richest country on earth. “How can that be? ARD claims otherwise, doesn’t it?”

The winners

The winners will definitely be the people who understand in the short term the tremendous benefits of recruiting employees in countries like India, Pakistan, etc.

The problem

Due to the relatively fast adjustment of the output of people worldwide, the standard of living worldwide will also adjust.

Actually no problem 😊

But from an entrepreneurial point of view, the benefits of relocation, will no longer arise.

It will then make no difference where you have programming done, production done and the like. Because the output will no longer make any difference due to computing power, robots, automation, etc.

It will not matter whether someone from Germany presses the button of the factory in Germany, or a Vietnamese in Vietnam. The cost of personnel expenses will be the same. Also the cost of the factory, etc.

Then things like spatial proximity to customers, etc. will certainly become more important. For example, to deliver the goods faster.

My decisions to act

My choices for action are as follows:

Hire more employees

Because the cost differences are still high. The knowledge differences, however, only barely.

In the next 10 years, a young person will be more like a European or American than a “traditional Indian person”.

Even today, a teenager in India is more likely to watch the Avengers than a local production. Trades not infrequently with crypto currencies and stocks. Is on Youtube, Instagram, WhatsApp and Twitter. And plays the latest games on his laptop.

Investing in the Indian market

I am not rich 😊 But I try to invest the money I earn in Indian stocks and assets.

The problem, of course, is high inflation. Which of course also has to do with India’s high growth rates.

Moreover, it always makes sense to invest in American technology companies. Since the center of software development is still the USA and will be for the foreseeable future. (Of course with the shift which I already mentioned here in the post: Young people around the world having access to low-cost technologies; level playing field, etc.).

Conclusion

Many things can already be predicted with relative ease.

The one with China and India and that these countries will reach a high standard of living in an unexpectedly faster time is one of them.

However, I am very confident that a country like Germany will maintain its prosperity. This is because Germany has no oil or other raw materials in large form and is therefore dependent on innovations and knowledge.

Moreover, all the innovations of recent times, from 100 to 150 years ago, came from Germany (Diesel, Hertz, Fahrenheit, Gauss, Geiger, Kirchhoff, Ohm, to name just a few of the better-known names). The Federal Republic is still reaping the benefits of this today.

In Germany, topics such as effective pension accumulation through private provision are becoming more important.

How do you see the future?

One more point that just occurred to me:

Skype and other communication technologies let people get in touch with each other almost for free.

Almost every platform Facebook, Instagram, WhatsApp brings new ways to connect.

That, too, makes the world a smaller place. And knowledge and business relationships can also be built up quickly over great distances.

Even 15 years ago, most voip lines were not really usable. Nowadays, the systems even work with a mobile hotspot. In Asia, in some cases even better than in Europe.

Also, you can use tools like Google Docs, Gmail, WordPress, and project management tools like Trello for free. This facilitates distributed work.

Image source: Canva

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