(Last Updated On: January 6, 2018)

The case for optimism

There have been three major periods in human communications. Up until the mid-1400s, illiteracy was the norm and life was difficult for nearly everyone. Information was expensive as storing it required memorising, or writing on parchment or clay tablets.

In 1439 Johannes Gutenberg invented the printing press and revolutionized communications by making knowledge available to average people, which initiated a huge rise in living standards.

In 1995 the next communication revolution began when the Netscape Navigator allowed easy Internet connection and web browsing. Now more than 5 billion people with Internet or mobile phones can communicate with virtually any other human on the planet. Knowledge is available everywhere, instantly.

Telecommunications were once a vast infrastructure hurdle for developing nations. Now satellites and mobiles do the job at a fraction of the cost.

Education is a key ingredient in economic development, and the very best education is available via the Internet. Worldwide, illiteracy halved between 1970 and 2005 and four-fifths of the world’s population have now attended a school.

Poverty and infant mortality are falling almost everywhere. Human beings are getting healthier, happier, richer and living longer.

Business has a global market at its fingertips.

The next generation will enjoy an even higher standard of living

A baby born today is going to reach adulthood in a much richer Australia.

Australia’s GDP (Gross Domestic Product) per capita is $53,000. Adjusted for inflation the GDP per capita has grown at a rate of 1.2% pa for the past decade. If that rate keeps up for the next 25 years, the per capita, inflation adjusted GDP will grow to $72,000 – an increase of $22,000 pa per person.

Similar growth rates are occurring in the US and Europe.

Over the past 15 years, 1.5 billion people in developing countries have left poverty behind, and joined the middle class. Millions more will follow.

For business this means a rapidly growing, global middle class. Australia is well placed as the world’s leading mineral producer.

Productivity growth is huge

Fueling this increase in per capita income, is the huge increase in productivity.

Productivity is the output per hour worked. Internet, computer and communication technologies have made business hyper-efficient.

Productivity growth is passed on in higher profits, higher wages, or lower prices. When there are lower prices, which is happening now, everyone shares in the benefit. For a whole range of goods (cars, airfares, mobile phones), consumers are buying more for less.

Universal Basic Income

Over the next decade up to 30% of jobs are forecast to disappear, replaced by robots.

Countries will move to providing all citizens with a minimum liveable basic income, making other government welfare payments redundant.

With greater leisure time, education, entertainment, sport, travel and shopping will become even more popular.

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