Reporting the future

09 October, 2014

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By Surya Balakrishnan

Last month the McKinsey Quarterly celebrated its 50th birthday by releasing a report on the way the world will look 50 years from now. The Financial Times’ Lucy Kellaway promptly excoriated the report whose main feature, as she put it, was its “arresting banality.”

It’s not easy to disagree. The three big trends McKinsey identifies as shaping the future are technology, emerging markets and aging populations which, for a report ostensibly about the future, are some pretty well-worn clichés. Kellaway calls them platitudes, though I’m not so sure. Platitudes are usually meant to be correct, if trite, and there’s certainly no guarantee that McKinsey’s predictions will pan out. Their most famous prediction, after all, or at least the one that gets the most press, was that by 2000 there would only be a few hundred thousand mobile phone subscribers.

It’s certainly a snappy story, though perhaps a bit unfair to bring up every other time you run a story on McKinsey. Predicting the future, after all, isn’t easy. You can do what McKinsey did, and extrapolate current trends into the future, or you can try and guess at trends that haven’t made themselves apparent yet. Either way, experience tells us, you’re far more likely to be wrong than right.

HSBC’s report ‘The World in 2050’ leans towards the latter strategy. Same topic, but HSBC elected to forgo McKinsey’s nebulous forecast and go the other extreme – pinpointing the 50 largest economies of 2050, and in ranked order no less. Nor is their ranking just a restating of the consensus. In fact, some of HSBC’s predictions are so novel as to be pretty implausible.

China ends up in first place, unsurprisingly, but by a much smaller margin than is usually forecast – only 3 trillion in 2000 dollars ahead of the U.S. at number two. Japan does (literally) unbelievably well, at number four despite a significantly declining population. Another surprise winner is the UK, whose economy is supposed to double thanks to an extra 10 million people in the population. Quite how it will do this when the US only achieves the same amount of growth by adding 90 million people to a much more fundamentally sound economy is left unexplained. A surprise loser is Indonesia at 17, well behind fellow MINT economies Mexico and Turkey at 8 and 12 respectively. 

HSBC’s predictions may be so off-the-mark they appear wrong even today, let alone 50 years from now, but they are certainly memorable. For one, they are still being reported on today, two years after the report’s publication, something that is unlikely to be the case with the McKinsey document. Given that both are primarily marketing tools – neither HSBC nor McKinsey is in the business of compiling reports for charity – that would make HSBC the clear winner, no?

Probably not, given the very different target audiences of the two businesses. HSBC, one of the largest banks in the world, likely benefits from having its name in the public consciousness, something that would happen when the likes of CNN or The Guardian repeat your predictions in attention-grabbing headlines. But the man on the street is unlikely to be hiring McKinsey for a job anytime soon. Their goal is to appeal to the C-Suite executives who give them business, precisely the kind of people whose job it is to think about abstract phenomena like technology, globalization and a changing world. In that respect, both reports do their job rather well, it just turns out that job doesn’t have nearly as much to do with the future as it does with the present.