Summary: Social and economic anxieties are consigned to the past as new fund alleviates inequality.
In the coming years, possibly within a decade, some one quarter of current jobs as we know them may be displaced, as automation replaces physical labour and AI replaces growing chunks of Information Age jobs. Oxford University researchers even project that half of US jobs could become obsolete by 2030.
This dynamic will aggravate both inequality and increasingly polarised modern labour markets. The march of technology, combined with reliance on the legacy principles of the free market economy, is already undermining the social contract and even tearing at the very social fabric; Covid-19 has only accelerated these trends. In 2021 and beyond, our society will have to find a new policy path if we are to avoid deepening injustice, but also political upheavals, social unrest and systemic risk.
So what is to be done? Every crisis brings with it the required energy for making bold changes. In 2021, policy comes in for a major overhaul, with a whole new approach to reducing inequality that has little to do with adjustments to the tax code.
Instead, a Citizens Technology Fund is created that transfers a portion of asset ownership of capital assets to everyone, with an extra portion going to displaced workers, allowing them and everyone else to participate in the productivity gains of the digital era. The policy is spun as a Disruption Dividend, and goes a long way to relieving the economic and social anxieties for those who have been losing out on the share of economic output in recent years.
The Disruption Dividend frees up enormous entrepreneurial energy at the individual and community scale as millions have more time and energy on their hands away from repetitive and stressful jobs. More meaningful work in community restoration, artisanal crafts and food production explode in popularity. Leisure-related sectors boom as well, from hobbies to recreational sports and activities, real and virtual.
Trade: Long companies in education, art, crafts and hobbies. But also in the digital spectrum, virtual reality, gaming and E-sports.
See next 2021 prediction:
A successful Covid-19 vaccine kills companies
AI: The good, the bad, and the bubble
While a deep recession may not be iminent thanks to central bank policy, interest rates will have to stay high for longer, and this will be accompanied by volatility risk from the unwinding of bubbles, especially within AI.
Steen Jakobsen,
Chief Investment Officer
The emergence of advanced AI systems is by far the most surprising event this year, turning everything upside down, while risks and benefits are debated. AI will also become an arms race between the US and China.
Peter Garnry,
Head of Equity Strategy
As China navigates global fragmentation, its cycle of technology application, productivity enhancement, and growth is threatened by US breakthroughs in generative AI, limited computing power, and geopolitical tensions.
Redmond Wong,
Market Strategist
Japan’s expertise in semiconductors and robotic integration could be the foundation of AI dominance. Combining two of this year's themes, Japanese equities and artificial intelligence, brings a wave of opportunities.
Charu Chanana,
Market Strategist
The AI fever has turned the technology into a darling, pushing crypto further into no-man’s-land. There are striking similarities between AI and crypto, and if these are to come full circle, AI won't be spared for bubbles.
Mads Eberhardt,
Cryptocurrency Analyst
Stocks related to artificial intelligence (AI) have appeared on investors' radars. Expectations are high, but it may be necessary to consider how to get exposure to AI in a diversified way.
Hans Oudshoorn,
Trainer Academy
The USD is on its back foot as markets celebrate an eventual Fed rate peak and steady long US yields. The stakes are even higher for the Japanese yen if longer major sovereign yield curves have to price in economic acceleration.
John J. Hardy,
Head of FX Strategy
While commodities, broadly speaking, have faced some tough months, a partial reversal during June could signal that the asset class is getting back on its feet with energy holding up and precious metals with upside potential.
Ole S. Hansen,
Head of Commodity Strategy
As inflation remains high central banks face hard decisions about whether they should keep hiking interest rates or stop. Meanwhile, the rise of AI creates bubble-like conditions that only make the decision harder.
Althea Spinozzi,
Senior Fixed Income Strategist