World Economic Forum publishes report on preparedness for transformational trends in the global economy

WEF releases Future Possibilities Report: Newsweek Vantage and the Swiss Horizon Group released the first Future Possibilities Index (FPI) report (pdf) at the World Economic Forum (WEF) meeting in Davos, Wam reports. The report identifies six global transformational trends — representing current shifts in society, nature, or technology that are predicted to bring new economic avenues in the next 5-10 years — and ranks countries around the world on how well they can leverage each trend. The country’s are evaluated based on the effectiveness of their government policies and industries in driving the growth of the identified trending economies.

The green economy is trending: Three of the trending sectors identified in the report — the net zero economy, the circular economy, and the biogrowth economy — are estimated to reach a global market value of USD 4 tn, USD 4.5 tn, and USD 1.7 tn by 2030, respectively. The net zero category is evaluated based on green practices, carbon neutrality, and environmental sustainability, the circular economy focuses on recycling, waste management, and resource efficiency, while the biogrowth economy includes the use of natural resources for green agricultural and industrial practices, biomaterials and refinery, and synthetic biology.

UAE comes on top regionally: The UAE came first in the region in several of the indices. The country was rated 8th globally in government strategy on the circular economy trend, 9th in biogrowth economy, and 19th in government strategy on the net zero economy trend. The UAE's lead comes due to its progress in the net zero economy, where its government strategy ranked 12th as the country made strides in increasing its energy capacity, and investments in research and development for green hydrogen, solar, and nuclear energy, the report outlined.

How is the rest of our region faring? The MENA region is lagging behind others in circular economy, biogrowth economy, and the net zero economy, the report concludes. The overall future possibilities score ranked UAE 23rd in the world, Saudi Arabia 36th, Egypt 52nd, Bahrain 53rd, Oman 54th, Jordan and Kuwait 56th and 59th, and Morocco and Tunisia 60th and 62nd, respectively. Middle-income countries have a better average performance in the biogrowth sector compared to others due to a focus on tech innovation in agriculture, the report adds.

Nordic countries are leading the pack: In the net zero economy, Denmark ranked first with other Nordic countries in the top five due to changes in their climate policies and commitments to carbon neutrality. The UK came first in the circular economy, although the report highlights there are no “clear leaders and laggards” globally as few governments have set binding policies to support it. The biogrowth economy saw Germany in the lead, which the report links to patent innovations in the sector.

Skilled labor for the new economies is needed: The transformational trends will have an impact on sectors' talent demand. The growth of the net zero economy will see strong talent demand rise, specifically in energy and utilities. The circular economy sector will require talent in information and communication technologies, while the biogrowth economy will boost demand for workers in the energy and utilities, advanced material, and biotechnology sectors.

And nature-based solutions are in demand: The report emphasized the importance of nature-based solutions in encouraging green urban infrastructure, fighting climate impact in cities, and reaching 2030 net zero goals. The report outlines some examples of nature based solutions including reforestation and sustainable farming practices such as agroforestry.

Developing countries' emissions in focus at Davos: One of the main critical areas for global cooperation is addressing future emissions which are expected to emanate from developing countries, Asharq Business writes, citing a report by WEF experts. More private capital is needed alongside ensuring investments include adaptation strategies in the Global South to tackle their expected emissions, the news outlet added. Multilateral development banks and the start-up sector also need to be more climate-oriented and adopt green energy strategies focused on channeling investments from the developed world.