We all do it at the start of the year, some more obstreperously than others (prediction #27: dictionaries will be eclipsed by “Google define”). So here’s my top 12:
1 – Peace on earth
No, I’ve not recently read “How to win a pageant and influence people” nor have I any aspirations to win the Nobel Peace Prize (although, as I’ve always said, my greatest aspiration in life is to be quoted in a Nobel speech). I simply think that 2012 might be the year with the greatest likelihood to be the most peaceful in the history of mankind. Gone are (most of) the tyrants that started 2011 full of faith that they will see out another year “in office”. While their removal, by their subjects or by God, may exacerbate conflict in their respective regions – imagine Kim Jong-un believing himself destined to conquer South Korea – I suspect these skirmishes will be restricted to the margin. The superpowers (read: China, Europe and the US) will have their domestic issues to deal with and would not want to get overextended abroad. Of course, international conflict, civil war and crime will continue to make headlines, but on a per capita basis – given the escalating global population – I predict that the world will be more peaceful place then ever before. (Which, incidentally, is what most “experts” apparently predicted at the start of 1914…)
2 – European fiscal integration
It is the only solution for Europe’s continuing malaise and fortunately Europeans are beginning to realise this. There are serious constraints to further integration, of course, the most important of these is probably the difference in the way social security systems are financed between Germany, for example, and France. (In Germany, the current generation pay their own pensions; in France, future generations – who will be smaller in number – will pay for the current generation’s pensions.) But these are trivial problems in the face of the alternative, a fragmented Europe, where each country resorts back to its own currency, imposing higher trade barriers and isolation. A federal model, based on the US system with some tweaks, offers the only positive outcome for a continent in crisis.
3 – Silicon Africa
Africa will increasingly become a hub for technology exports. Yes, while many parts of the dark continent are still, well, dark, the lights of technological innovation are being lit in the most unlikely of places. In the most immediate future (read: 2012), the attention will be on mobile technology. Kenya has taken the lead, but Nigeria and South Africa are fast catching up (and with their greater access to capital, will most likely purchase these start-ups, only to be dwarfed later by the Googles and Facebooks). Also expect some of the smallest and poorest African countries to join Silicon Africa, notably Uganda, Angola, Ghana, Ethiopia, Rwanda and Tanzania. This should not be surprising, as I’ve attempted to show in earlier research. The relatively high transport costs of containers and the relatively inexpensive communication costs (including internet access) will create a disincentive to export manufactured goods and allow African countries a comparative advantage in service exports. Travel services (tourism) is one area where this is already evident (although this sector is highly subject to stability and security; the terrorism attacks on the East coast can have serious consequences for tourism growth), but IT services will follow soon. Mobile is the first step in this movement, although we’ll have to wait beyond 2012 to see second-generation applications emerging.
4 – Obama 2.0
Barack Obama will win a second term in office and begin to find the charisma that made him the hero of the free world in 2008. Perhaps he focused too much on issues that were less important to voters in the midst of a recession, but a (slowly) recovering economy will help him realign his priorities and push for “change”. It will, of course, be helped by the fact that there is no serious Republican contender, an obvious consequence of the ideologically bankrupt sectarianism of the Republican Party. Once elected, Obama will push for a more integrated US economy (which might mean a greater focus to lower trade barriers, but we’ll have to wait till 2013 for Doha), greater incentives for innovators and entrepreneurs, more investment in infrastructure, education reform and higher taxes.
5 – Building BRICS
The world’s largest democracy is perpetually quashing domestic issues which leaves it little scope for contributions on the international stage. 2012 will see India becoming a more important stakeholder in international affairs, especially as mediator between the stagnant West and expanding East. Brazil will continue to grow on the back of high food demand (and higher food prices), especially from China. We’ll also see more pessimistic predictions of the Brazilian FIFA World Cup and Rio Olympic Games. December protests in Russia will continue and become more severe; the 2014 Winter Olympic Games could suffer as a result. China will get new leadership, but don’t bet against them religiously adhering to the blueprint of the previous. South Africa will realise that Nigeria is the more deserving African country to be included in this group of emerging economies; how about “On the BRINC” as the next business blockbuster?
6 – Oscillating ANC
Closer to home, expect statements from ANC officials and their alliance partners to become even more tumultuous than previous years. The stakes are high at the ANC policy conference in June and each stakeholder would want the upper hand as deliberations begin. This tumble drier policy would have little impact on what actually happens on the ground, both in terms of actual ANC fiscal and monetary policy (which will be dictated by Trevor Manuel and Pravin Gordhan, perhaps with some marginal tweaks to appease different factions) and private business (and the JSE), which will now have become used to political ramblings of all sorts. At the end of the year, it’s a race between Jacob Zuma and Kgalema Motlanthe at the ANC elective conference in Manguang. The safe money is on wily Zuma, but don’t be surprised if Motlanthe manages to bring together an eclectic assortment of vocal supporters. As a risky investor, I’d go for Motlanthe; he’s in any case a better opponent to Helen Zille in a national election and probably a better president.
7 – Twitternami
Twitter will continue to grow as the pre-eminent social networking tool. Whereas Facebook is much larger and convenient for maintaining contact with long-lost friends and storing photos, Twitter is able to offer one thing that Facebook does not: it makes subscribers more, not less, productive. And in the Darwinian economy, it is greater productivity – and the tools that make it happen – that ultimately determine longevity. Twitter should become our main source of news (I heard about the 2011 Japanese tsunami first on Twitter before any online news network had a story about it; an hour later, I could broadcast it live to my students during a lecture), but also our first port of call for any discussions on topics we find interesting (for me, blog posts on economic history topics or reports from Arsenal scouts). Moreover, it is much easier to “network” through Twitter; when a friend, which opinion you value highly, passes on an interesting tweet, the person responsible for that tweet can be followed immediately by the click of a button. It’s instant peer-review. Those with more followers are probably also those sending out interesting (and perhaps useful) tweets. And you can safely ignore those twits who rant on about their wife’s cooking or their baby’s first words. What better way to network or, as economists like to call it, build social capital? Have a business idea? Why not share it on Twitter with like-minded individuals who might suggest contacts, or even invest? It will be these linkages that will ensure Twitter’s continuing success, and for some Twitteratis, those who’ve built up a large following, even fame and (perhaps) fortune.
8 – The beautiful game
Beauty will make a comeback in 2012. In troubled times, people will be satisfied with fewer goods, but demand beauty in the things they do buy. Apple brought us beauty in simplicity. 2012 will bring beauty in colour and curves. Socrates, the great Brazilian footballer who died last year, believed that beauty comes first, winning a distant second. As sport, and especially football, becomes the new global religion, Socrates will be proven right. Barcelona and Real Madrid’s El Clasico brawls cost both teams fans; in 2012 they will be beautifully benevolent. Watch Holland to win the hearts of Europe, even if they again fail to win Euro 2012.
9 – Our children’s loss
Environmental matters will take a back seat in 2012. Like HIV/Aids, our inability to act will leave a path of destruction evident to all, yet the topic will be considered “boring”. Instead, we will refocus our attention on existing technologies, hoping to do more with less. Those that persevere with currently unprofitable (but innovative) ventures may win the most in the long-run. In South Africa, rhino poaching will continue, even as measures to protect these majestic animals increase. South Africans will want to continue blaming government unresponsiveness, greed or the Chinese. The only way to secure these animals sustainable existence is to legalise the trade in rhino horn. 2012 will not be the year when the rest of South Africa realise this.
10 – Going public
The popularity of public transport will continue to increase worldwide as a result of rising oil prices. More South Africans will also use public transport in 2012. Cape Town’s MyCiti bus network will expand, connecting more Capetonians to the city. In Gauteng, the final Gautrain link to Park Station, Johannesburg will open, with a surge in demand for these rapid train services. Expect plans for expansion to be tabled. The integration of transport will also speed up the integration of racial division that is still prevalent in many of South Africa’s urban areas. Hopefully, racial stereotyping will abate, with a greater focus on local issues and shared goals.
11 – Bookable
While the demise of the book will again be professed, more books will be written in 2012 than ever before. Hard copy book sales will also grow as people realise that not all books are better on the flat screen. Ironically, though, bookshops will continue to struggle. Expect online book retailers to do very well, especially those that compete on price. (I am a loyal supporter of loot.co.za but have recently been converted to bookdepository.co.uk which ships free anywhere in the world.)
12 – Class of 2011
Recent graduates will find it hard to get a job in 2012, and even more difficult to rapidly climb the corporate ladder. This will spur them to start their own thing. Starting a business in South Africa will be easier as red tape and tax regulations ease, and funding becomes more accessible. Expect local and foreign Angel investors to be on the look-out for the next innovative start-ups. The main constraint facing entrepreneurs may be weak demand, but there is always a market for a novel idea (according to Adrian Slywotzky and Karl Weber in their recent book “Demand: Creating What People Love Before They Know They Want It”). Recessions inevitably breed inventions and innovations, and 2012 may just be the year of the next big idea.
Bonus 13 – Let’s have some fun
We will have more fun in 2012. Shorter, breakaway weekends to local destinations will be in fashion. Expect guest houses and small hotels in rural towns to do well. Rural retreats may also become fashionable, as workers attempt to get away from the office, which now follows you anywhere there is a mobile signal. Pipe smoking will be in fashion. The Extreme Ironing movement will make a comeback. Cultural festivals will be popular, as will mega-events; expect the London Olympics to be excellently organised and well attended. Now, if just one of the Proteas, Stormers or Arsenal can just deliver a trophy…
Let the games begin!