HUG Magazine 2017 EN - Issue 1. (№5) by PAIGEO - Pallas Athene Innovation and Geopolitical Foundation

VISIONS OF THE FUTURE – VISIONS 2050 GEOPOLITICAL THINKERS OF THE 21 ST CENTURY LÁMFALUSSY LECTURES CONFERENCE WORLD ECONOMIC FORUM 2017 TECHNOLOGY AND INNOVATION– 2017/ I.

ISSN 2498-647X

THE 4TH INDUSTRIAL REVOLUTION SINGULARITY AND SYNCHRONICITY NEXT DECADES

FOREWORD

Introduction This is the third time in 2017 that we can celebrate a new year. We celebrated the new calendar year on 1st January, the Chinese Spring Festival (Chūn Jié) or the Lunar New Year, celebrated by the one-fourth of the world’s population, on 28th January, and Nowruz, the Persian New Year on 31st March. The term ‘Nowruz’ originates from the Old Persian language, meaning new Sun or sunlight. The Persian New Year is a traditional festival in numerous countries of the region, from Iran to India. We launched our HUG (Hungarian Geopolitics) magazine a year ago. Its aim has been to provide the stage for value-creating discourse exploring the geostrategic and geo-economic networks of our times. In the last twelve months, our quarterly magazine has become Hungary’s most significant magazine on geopolitics and geo-economics. HUG is also available in an electronic format both in Hungarian and English. 850 pages have featured articles by international geopolitical thinkers and major strategists, as well as by young Hungarian researchers; 64 studies, numerous book reviews, and the transcripts of interesting specialist lectures. At the end of last year, the research institute of PAGEO was awarded as best think tank of the region on the Silk Road by the European Institute for One Belt One Road Economic and Cultural Cooperation and Development, and I am pleased that, as the 64th member, we could join the Think Tank Network for research programme of the 16+1 countries and the New Silk Road. We believe everything happens with a reason. The events happening around us, the geopolitical milestones have significantly reshaped the face of our Earth.

Noah Raford (who wrote an essay in our first issue a year ago) described his vision on 2066 at this year’s ART DUBAI event, while George Friedman, a worldfamous geopolitical thinker of Hungarian origins, envisages the next 100 years in his book The Next 100 Years, published also in Hungarian by PAGEO. There are many who say we have entered a new, longterm epoch, the most important elements of which are knowledge, talent, creativity and technology–it is not a coincidence that this new era is called the age of technology and technocracy. The former unipolar world order has become multipolar, the map of the world continues to shift, with new collaborations and new system of values. Join us this year as well in the first issue of HUG in 2017.

Yours faithfully, In this issue, we are looking ahead, dwelling on the worldview, future visions, visions and geo-visions of 2050: what the most important trends will be, how and to what extent different countries, nations, communities will be impacted by the fourth industrial revolution, how technological boom will change our everyday lives, why cities will be in focus and how geopolitical thinkers see our future.

Norbert Csizmadia Pallas Athéné Geopolitical Foundation Chairman of the Board of Trustees HUG Editor-in-Chief

TABLE OF CONTENTS 8

Building “One Belt, One Road” in Cooperation between China and Europe

Prime Minister Viktor Orbán’s Speech at Lámfalussy Lectures Conference

The Cooperation of “One Belt, One Road” and Hungary

Geopolitical Thinkers of the 21 st Century

The Next 100 Years by George Friedman (excerpt)

World Economic Forum 2017

Munich Security Conference 2017

Futures Studies in Hungary

The Future of World Economy in 2050

Demography and Sustainability

On the Energy Vision

104

Technological Visions – 2050

114

Singularity University

116

The Future of Education

126

Human Resources of Cyberspace

140

The Digital Economy

150

Security Policy Challenges and Trends in the Mid-21 st Century

154

2050 – The Paris Agreement. The Peace of Westphalia 2.0

166

Singularity and Synchronicity

180

A New Theory of the Sun and Life: the Helios Theory

192

Book Recommendations

194

TOP 10: Hungarians in the Global Forefront

Future of Cities

The Central Bank of Hungary organises the "Lรกmfalussy Lectures" professional conference since 2014. The aim of the event is to invite prominent foreign lecturers to Hungary, to share their views with each other and the professional audience on global economic political issues, particularly the current hot topics of monetary policy and the financial system. The title of the conference comes from Alexandre Lamfalussy, also known as "the father of the Euro", which symbolizes the significance of Hungary in the international economic processes. In the 2017 conference, 14 renowned foreign and Hungarian lecturers discussed the two main topics of the event, the effects of the New Silk Road on the economic growth and the future of the European integration.

THE NEW ENGINE OF GLOBAL GROWTH

BUILDING “ONE BELT, ONE ROAD” IN COOPERATION BETWEEN CHINA AND EUROPE

Tien Gouli, Chairman of the Bank of China Ltd.

Lecture of Tien Gouli, Chairman of the Bank of China Ltd. at Lámfalussy Conference Over 2,100 years ago, Zhang Qian, a diplomat of the Han Dynasty travelled to the western region, creating a new road, the Silk Road, with the aim of connecting Asia and Europe from east to west, and opening gateways for trade between the East and the West in ancient times. The encounter of cultures created a wonderful outcome. The cooperation between Asia and Europe remained fruitful for centuries, thanks to the Silk Road, and now it is flourishing again due to the great “One Belt, One Road” initiative.

Today, in the age of radical changes, the financial crisis has had an enormous impact on the world, transforming the political and economic scene. Global economic growth continued to be weak in 2016. An economic growth below 2.0% had been estimated for that year, the lowest since 2010. In addition, some countries even suffered a downturn; direct foreign investment decreased significantly, by 12.5%; despite unprecedentedly low rates of interest demand for investment and consumption remained moderate, and on a global level prices were generally low, although the price of goods slightly increased. Global economic growth is expected to pose many challenges in the coming years as well, therefore the aging population, the lack of stricter financial regulations and a major technological breakthrough will continue to hinder economic growth in the long and medium term. Commercial protectionism and other “anti-globalisation” movements, as well as intense terrorism will result in an even greater political unrest, widening the gap between the economic and the political scene of the world, and lead to more black swan events. This bleak and dull global economic situation reminds me of the theme of the conference: remember professor Lámfalussy. We can thank to his tireless endeavour

that an economic and monetary union could be established in Europe and the creation of the Euro generated a great innovation in the history of world economy. Now “One Belt, One Road” offers a more hopeful vision of the future and a wide range of opportunities, because it links two peculiar and outstanding markets. At one end, we find Europe, having state-of-the-art technology and extensive experience; and at the other end, there is Asia, characterized by fast growth, enormous demand and an abundant supply of workforce. The two markets are mutually complementary and inclusive, and will become the world’s longest economic corridor after the integration, offering the greatest of opportunities. In this light, the Initiative has earned worldwide recognition since 2013, when it was first suggested by Xi Jinping, President of the People's Republic of China. It has also been appreciated by the United Nations, and was included in one of the UN resolutions in 2016. In the last three years, over a hundred countries have accepted the Initiative, and 56 countries and international organisations have signed memoranda of understanding with China to implement the Initiative. Hungary was the first European country to sign the “One Belt, One Road” agreement with China, not only indicating

“The implementation of »One Belt, One Road« has played an important role in the economic development of the countries and regions concerned.” Hungary’s strategic vision of the future, but also the fact that the Initiative perfectly fits the country’s policy of eastern opening. In addition, cross-border financial cooperation, with the Asian Infrastructure and Investment Bank (AIIB) and the Silk Road Fund playing the key roles, continually gains momentum, building numerous pioneering projects. The implementation of the “One Belt, One Road” Initiative has been fascinatingly developing up to its rise from the very first moment, and its outcomes far exceed provisional calculations. From 2014 to 2016, the annual average real growth rate of developed countries or the G7 was 1.7%, while a much higher growth can be observed in emerging markets such as in Asia, Europe, the Middle East and North Africa along “One Belt, One Road”, with figures of 6.6%, 3.2% and 2.7%. All these prove the enhanced viability of the countries concerned.

We have also observed that the cooperation created within the framework of the Initiative gives hopes of economic growth to the countries referred to. The economic and commercial cooperation between China and the countries involved in “One Belt, One Road” is accelerating. From a commercial point of view – although China’s foreign trade has slowed down for two consecutive years – bilateral trade between China and Hungary has demonstrated stable growth: in 2016, volume of commerce exceeded $8 billion, witnessing a growth of 11.2% in the first 11 months of the year on a year-to-year basis, while the volume of import and import between China and Poland reached $17 billion, and between China and Romania it amounted to $4 billion. China is continuously enhancing its investment cooperation with the countries along “One Belt, One Road”, which carries enormous growth potential. From 2014 to November 2016, Chinese enterprises made investments in 53 countries concerned by the “Initiative”, and non-financial direct investments in total reached $40.71 billion. In addition, the value of new contracts concluded in 61 countries related to the Initiative by Chinese enterprises as contractors amounted to $279.26 billion, which is more than half of the total value of China’s new contracts in the same period.

BUILDING “ONE BELT, ONE ROAD” IN COOPERATION BETWEEN CHINA AND EUROPE

China’s reform of more than thirty years and its opening can be considered as real miracles. The annual average of its economic growth continuously exceeds 9%, it has managed to resolve the food and clothing problem of the population, decrease the number of impoverished rural population by 700 million, and become an important engine of the world’s economic growth. According to the statistics of IMF, the growth rate of China’s GDP increased from 2.7% in the 1980s to 3.6% in 2000, and then to 15.2% in 2015, while its contribution to the world’s economic growth increased from 3.3% in the 1980s to 10.3% in 2000 and to 33.2% in 2015. At present, several countries must face unsatisfactory demand; China, however, due to great market potential, is slowly becoming the driver of global commercial growth. Pursuant to China’s thirteenth five-year plan, the GDP and the per capita income of the rural and urban population will double on the basis of the figures of 2010, and by 2020 poverty will have become an unknown notion for the entire rural population. Per capita GDP will exceed $10,000, the size of the middle class will reach 6-700 million, generating enormous demand and offering an excellent business opportunity for other countries. Simultaneously with the implementation of Chinese reforms, Chinese economy is expected to grow at a rate over 6.5%, becoming a key player of global economic development. I believe that the cooperation framework of the Initiative will offer a place for several countries in the high-speed train of the Chinese economic growth, and the countries related to “One Belt, One Road” may gain various advantages. Yesterday I was honoured to be able to participate at a Liszt piano concert. I was deeply fascinated by the talent and the Romantic art of the maestro. Music enchants the audience despite their different races, faiths and cultural backgrounds. During the European economic and monetary integration, all European countries persist in eliminating geographical and ideological isolation so that goods, services, employees and capital should flow as freely as within the countries. Similarly, the objective of the “One Belt, One Road” Initiative is to create a new pattern by connecting infrastructure, production and systems, ground joint development, and raise the European-Asian cooperation onto the next level.

THE OBJECTIVE OF THE FIRST PRIORITY AREA IS TO ACCOMPLISH THE INTERCONNECTIVITY OF INFRASTRUCTURE. The main priority of the initiative is to accomplish ultimate interconnectivity between Asia and Europe, including important infrastructural projects, such as the TransEuropean transport networks, the China-Europe mainland-sea express line and the new Eurasian Land Bridge. The development of infrastructure may have such an effect on the social and economic ecology that surpasses imagination. People used to travel to Tibet with great difficulty, since it is situated in isolation from the other provinces on the Qinghai-Tibet Plateau, which boasts of the highest peak on Earth, the vast Gobi Desert and harsh weather. Since the Qinghai-Tibet railway was opened in 2006, however, the volume of goods transported to and from Tibet has increased considerably, fresh vegetables can be provided to the local population even in winter, and the tourists can also reach Tibet much more easily. The Qinghai-Tibet railway was dubbed the “Wonderful Road to Heaven”. The rapid development of motorways and high-speed railways have radically changed the life of people in China, and they have become the best initials of the great transformation. There was no high-speed railway in China ten years ago. It was extremely time-consuming and difficult to go home to celebrate the Spring Festival. Today we can cover the distance of 1,300 km between Beijing and Shanghai in five hours. By reducing the differences of place and time, high-speed railways expand people’s living and work spaces.

“The objective of the new Silk Road is to accomplish the interconnectivity of infrastructure.” During the implementation of “One Belt, One Road” we can learn more and more about the unique value of the China Railway (CR) Express, that is the scheduled highspeed rail freight service between China and Europe. Today there are 39 CR Express lines in operation with more than 2,000 trains, such as the Chongqing-Xinjiang-Europe or the Yiwu-Xinjiang-Europe lines, gradually building such a transport infrastructure network

that connects the subregions in Asia and between Asia and Europe. 2,000 years ago, in the Han Dynasty, it took the diplomat Zhang Qianmore than two years to get to Central Asia from Xi'an, China, while today Chinese goods reach Duisburg, Germany from Chongqing, China in only twelve days on the Chongqing-XinjiangEurope International Railway. This railway reduces the journey time by 60% compared to shipping, and costs by 80% compared to air transport. The construction of the Budapest-Belgrade railway has been launched and is expected to be finished by 2017. It will play a key connecting role on the China-Europe Land-Sea Express Route. I firmly believe that, if opened, the new railway will be beneficial for the local people, and will transform Hungary into a regional transport and logistics node, and, on the other hand, it will offer favourable, new opportunities to the economic growth of the countries lying along the railway. THE SECOND PRIORITY AREA IS PRODUCTION, THE AIM OF WHICH IS TO ENCOURAGE THE CHINA-EUROPE CAPACITY COOPERATION, AND TO ESTABLISH ECONOMIC AND COMMERCIAL COOPERATION ZONES. Chinese and European leaders have generally agreed to harmonize the Initiative and the European development strategy, as well as China’s international capacity cooperation and the Juncker investment plan for Europe. While the primary objective of the Juncker plan is to unlock investments in the fields of strategic infrastructure, digital economy, high-quality production, innovative R&D, human capital, etc., China has continuously been coming up with innovations and achieving breakthroughs in recent years, especially in production. Some Chinese industries have participated with very apparent advantages in the global competition, and closely caught up with Europe. As a result, China and Europe have excellent potential in capacity cooperation. Economic and commercial cooperation zones are one of the important tools of capacity cooperation. By the end of September in 2017, China had invested a total value of $17.9 billion to establish 56 cooperation zones in the countries concerned by the “Initiative”, which hosted 1,045 enterprises, which realized a production of a value of $47.54 billion, paid almost $1 billion in taxes to local governments and created 163,000 jobs for the local population.

Hungary, the bridgehead of the European investment, is included in two of these zones: the most Chinese institutions and businessmen, as well as Chinese expatriates in Central and Eastern Europe are concentrated here. China attaches a great importance to its economic and commercial relationship with Hungary. Budapest hosts the China – CEE Tourism Coordination Centre, which is the most important coordination institution of the cooperation between China and Central and Eastern Europe. The two countries have achieved remarkable results in the development of the commercial structure, stimulating mutual investments and intensifying their financial cooperation. In addition, a new model has been created for economic, commercial and investment cooperation, since the Central European Commercial and Logistics Cooperation Zone in Hungary and the Chinese-Hungarian Borsod Industrial Park were established Let’s take the Central European Commercial and Logistics Cooperation Zone in Hungary as an example. A commercial centre (the Commercial Centre of Chinese Goods in Budapest) and two logistics parks (in Csepel and Bremerhaven) have formed a fast, convenient accessible distribution network in this zone, encompassing European and Chinese cities. The export and import volume based on the network has reached the amount of $245 million, which equals 6.5% of the trade volume between China and Hungary. THE THIRD PRIORITY AREA IS INSTITUTIONS AND SYSTEMS, THE AIM OF WHICH IS TO PROMOTE TRADE AND INVESTMENTS. The European Union (EU) has been China’s largest commercial partner in the last eleven consecutive years, while China has been the second largest commercial partner of the EU for the last twelve consecutive years. However, compared to the commerce between them, we can establish that their level of mutual investment is low. Investments made in China by the EU amount to only 6% of the total investment directed abroad, and vice versa. This low level of activity can be attributable to the discrepancies between the rules pertaining to market entry and investment, but it also offers a great potential for an investment cooperation between the two parties. Against the headwind of deglobalization, the negotiations on the China-Europe bilateral investment agreement help consolidate and intensify the results of the

BUILDING “ONE BELT, ONE ROAD” IN COOPERATION BETWEEN CHINA AND EUROPE

economic and commercial cooperation already accomplished; at the same time, it may help both parties to exploit the economic growth potential, with which globalisation arrives at a newer stage and may reshape the international economic scene. The “Initiative” is a way to a “win-win” cooperation. Not only will it be useful for Asian and European countries, but may help involve Africa and South America in the economic recovery, and they may be able to join the larger market and range of opportunities created by the “Initiative”. In fact, financial support is indispensable to implement “One Belt, One Road”. Let’s take infrastructure. A total value of $6 trillion should be invested in infrastructural projects designed for the Eurasian continent, including railways, motorways, electrical installations and ports. In the past, when economic growth declined, and there was a low profile of investment projects, speculative capital flooded global markets, which did not encourage economic growth but brinkmanship for short-term profit. It impeded the economic growth of numerous countries. If such capital can be directed to the implementation of “One belt, One Road” and its projects, considerable benefits can be purchased for the countries concerned, since production investment and commerce boom significantly. A couple of years ago, when the “Initiative” was put forward, I suggested the concept of building a financial artery in relation with “One Belt, One Road”. If the peoples of different countries agree on a shared vision of the future, shake hands to create innovative mechanisms, and channel global capital into the economy, the financial artery means adequate incentive for the economic breakout of the countries of the “Initiative”. FIRST, WE NEED TO ENHANCE CROSS-BORDER COOPERATION TO EXTEND THE FINANCIAL RESOURCES REQUIRED FOR “ONE BELT, ONE ROAD”. In the initial phase of implementation, multilateral financial institutions played an important role in exploring energy resources and building infrastructure. In recent years, China adopted an active role in the cross-border cooperation with the countries and international financial institutions of the “Initiative”. The United Kingdom, France and other European countries have joined AIIB, and China became a member of the European Bank for Reconstruction and Development (EBRD) in

January 2016. At present, AIIB has officially started its operations, focussing on supporting energy, transportation and urban development projects in the countries of “One Belt, One Road”. The foundation of three of the first four projects funded by AIIB is a cooperation with several other multilateral development banks in order to bridge the gap of infrastructural investment. However, the support provided by exclusively development banks cannot meet all needs. Since several projects will be realizable for a market-driven operation, commercial banks should be mobilized to take an adequate role in cross-border cooperation. Commercial banks, for example, can support the projects of “One Belt, One Road” by trade financing, syndicated loans, and project funding. European financial institutions are armed with natural advantages in these fields. That is exactly the reason why Chinese and European financial institutions can work together in a financing cooperation by sharing information and joint capital investments to assert their strengths. SECOND, INNOVATIVE FINANCIAL INSTRUMENTS MUST BE INTRODUCED TO VISUALISE THE INVESTMENT RETURN OF “ONE BELT, ONE ROAD”. The implementation of the “Initiative” is a complex and systematic task. Its projects include long construction phases, and financing requires complex instruments. While these projects have long-term benefits in a broader sense, adequate innovative financial instruments are required to convert these broader and longterm benefits into visible, relatively short-term benefits for investors, encouraging more market players to invest their resources. Commercial banks, for example, can direct private capital to project funding by way of bond issues. In June 2015, the Bank of China carried out a remarkable experiment when it issued “One Belt, One Road” bonds of a value of $4 billion. The bonds, the maturity of which ranged from two to fifteen years, were issued simultaneously by five branches of the Bank of China in Hong Kong, Taipei, Singapore, Abu Dhabi and Hungary–all of them can be found along “One Belt, One Road”–, in renminbis, US dollars, euros and Singapore dollars. The money generated by the issue is being used in the projects related to the “Initiative”. 500 million euros, generated by the Hungarian branch of the bank, is used locally for the aid projects of the Borsod company and the State Grid Company.

THIRD, WE NEED TO DEVISE A MORE RELIABLE HEDGING MECHANISM IN ORDER TO DIVERSIFY THE RISKS INHERENT IN THE “ONE BELT, ONE ROAD” PROJECTS. Specific and various risks have occurred in numerous countries of the “Initiative”. Proper management of these risks is essential to implement the capacity agreements between China and Europe and expand the market. A new risk management structure should be devised to protect the implementation of “One Belt, One Road”. First, various credit guarantee institutions should be introduced and credit guarantee sharing functions should be created. Second, financial derivatives (e.g. risk swap products) should be developed for the pricing and sale of risks. Third, the markets of international syndicated loans and the securitisation of assets should be promoted to increase risk-sharing. Fourth, intermediary service providers should be involved to enhance the visibility of risks and information-sharing. FOURTH, THE CROSS-BORDER USE OF THE RENMINBI SHOULD BE ENCOURAGED TO OPEN A NEW INVESTMENT AND FINANCIAL CHANNEL FOR THE IMPLEMENTATION OF “ONE ROAD, ONE BELT”.

In recent years, the renminbi business has grown in Europe, and become a new driver of the growth of financial institutions, thanks to its growing market and diversified products. Meanwhile, China has continuously been increasing the clearing and settlement efficiency, facilitating the R&D and market development of products, to progress with the offshore renminbi business. China’s national bank, the PBOC has signed Memoranda of Understanding on the renminbi settlement agreement with the monetary authorities of 23 countries and regions, and designated a local renminbi clearing and settlement bank in each country and region. In 2016, the USA, Russia and the United Arab Emirates were successfully engaged in such renminbi settlement agreements. 36 countries and regions have been concerned by renminbi swap agreements of a total value of RMB 3.5 trillion Renminbi is popular in the Hungarian market, too, and encompasses an increasing market depth. in October 2015, the Bank of China held an opening ceremony of the renminbi clearing bank in Budapest, which was the first such bank in Central and Eastern Europe. In April 2016, the Bank of China, on behalf of the Hungarian government as its exclusive global coordinator, underwrote renminbi bonds of a value of RMB1 billion on the

Hong Kong stock exchange, and this is the first renminbi-based government bond in Central and Eastern Europe issued by a government bond issuer. The Bank of China has surveyed 3,000 customers since 2013 to draft the Official Government Report on the Internationalisation of the Renminbi. According to the results of 2016, 74% of the enterprises interviewed along the “Initiative” could easily get renminbi products and services in the local market, which is two percent higher than in the previous year. In the light of the increase of the FED interest rate, 78% of the overseas enterprises interviewed expressed their willingness, and this figure is particularly high, 87%, among enterprises operating in the countries of “One Road, One Belt”. Customers’ choice reflects the voice of the market, and the rise of the renminbi business, and projects an enormous potential in the financial cooperation between China and Europe. In my opinion, renminbi will beat a new investment and funding path for constructing the “Initiative”.

Dear Friends, The Bank of China, as a hundred-year old, large international bank, has always been devoted to build bridges between China and the rest of the world by exploiting its advantages and supported the economic growth of the recipient countries. In 2003, the Bank of China established its wholly owned subsidiary in Hungary. As the first operative branch office of a Chinese bank in Central and Eastern Europe, it has built up a solid customer base in Hungary, and extended its business activity in the surrounding countries as well. The renminbi clearing business is present in countries such as Hungary, the Czech Republic, Austria, Serbia, Bulgaria and Latvia. Most recently, we have established a subsidiary in Serbia, which will promote the Bank of China’s ability to serve the entire Central and Eastern Europe and stimulate regional economic development. Dear Friends, “One belt, One Road” offers important opportunities for global growth. The Bank of China intends to exploit its professional advantage to coordinate the cross-border cooperation between Chinese and European enterprises, and raise the economic and financial cooperation between China and Europe to a higher level.

Prime Minister Viktor Orbán’s

speech at Lámfalussy Lectures Conference

A MULTIPOLAR WORLD ORDER HAS OPPORTUNITIES TO OFFER

Prime Minister Viktor Orbán

Prime Minister Viktor Orbán’s speech at Lámfalussy Lectures Conference 23 January 2017 in Budapest

Honourable Governor, Honoured Conference Guests, I thought a great deal about whether to accept the invitation to this conference. Beyond doubt, the invitation itself was an honour, but such events have been witnessed in world politics recently–some of which have already been mentioned here, such as Brexit, a new US president, and all their consequences–that one cannot speak validly about the future without making statements of strong political content. And this entails risks, and indeed it may divert the customary peaceful course of the conference away. So, this was what I had to consider. But eventually I accepted the invitation. Firstly, this was because here in Hungary ever since the nineteen-eighties we have been following Mr. de Larosière’s thoughts; so, true legend has arrived here, with whom it is an honour simply to share the same table. Also, here is Mr. Tian Guoli, who has been our friend for many years, but is a particular friend of ours in the policy of eastward opening. In addition, he is the one who, at our regular meetings, reduces our over-inflated European complacency to the correct size by supplying us with figures which you could also hear just now. I am also grateful to him, and it is an honour to be in his company today. Furthermore, China’s rise draws our attention here, in Europe, to a psychological problem. There is a saying which sounds primitively simple: “whatever exists is possible”. Europeans do not understand this–at least

they do not understand it when it comes to China. Instead of trying to learn from what is happening in China, we invest a considerable amount of energy in explaining why what exists in China does not really exist. Or if it does, then it is only temporary and lacks foundations, that pace is unsustainable, and the internal tensions in Chinese society are such that eventually the whole thing will fail politically… So instead of learning and understanding that whatever exists is possible, we want to explain it to ourselves. This is because everything that exists in China and is possible pushes us further down the ranking. Instead of accepting this fact and wanting to learn, we are busy trying to prove the opposite. Therefore, meeting Chairman Guoli can perhaps save us, Hungarians from this European problem. Ladies and Gentlemen, The ultimate reason why I finally accepted the invitation, however, was Professor Lámfalussy himself. This is because, as Mr. de Larosière has already pointed out, today we are remembering a great man, who was a great friend of our country – and continued to be, even after the communists forced him to flee Hungary. he had to escape as far as Belgium; still, he remained a Hungarian and a good friend of Hungary throughout. He could distinguish between the political regime of the time and his homeland – and this is a virtue which we should honour. He was also a good man, as you may

have heard. In our culture, there is a core principle: “…on earth peace, good will toward men”; Professor Lámfalussy was a man of good will, and therefore he received peace, love and respect from us all in return. If this were not enough in itself, I should also tell you that he was a colleague of mine. Please forgive me for boasting: he worked with me as an advisor, and was my supervisor, in an intellectual sense of the word. He regularly warned me against my youthful excesses with these words of caution: “This will cause trouble, Viktor”. He was also our messenger and authenticator in the Western financial world, so we owe him nothing but gratitude. In addition, we could also learn from him, and it is well worth following certain examples from his life in ours. He was an open-minded man, and this has special significance in Western democracy. Our mindset–our Hungarian or perhaps we can also say our Central European mindset–is that good democracy is based on reasoning; we therefore support such a vision of democracy. This, however, requires openminded people; it requires an open spirit and a forthright character. And Professor Lámfalussy had both an open spirit and a forthright character, thus we could say that he embodied the best traits of our kind, the Hungarian people. I could also learn from him that in the end it is always character that counts–these may well

have been his very words. There are difficult intellectual questions which must be considered and require a good brain. This is very important. Open brackets: you can even buy brains–especially if you are prime minister, close brackets–, as you can hire the smartest people. And there you are: you have brains. That is how simple it is in our line of business–easier than in other jobs. So, you have the brain, and you have the difficult questions, and you have the intellectual challenge. But at the end of the day, Professor Lámfalussy said, when one must make a decision it always comes down to one’s character: “So Dear Viktor”, he continued, “once a year you should go out for a week-long walk in the desert, just like I do”. And this was the case: as long as his physical condition permitted, the dear Professor always kept to this habit. But the most important thing I learnt from him was the result of a provocative situation. Elders may still remember that at the beginning of the nineteen-nineties there were cutthroat ideological battles about what the character of the post-communist regime should be like: whether it should be liberal, Christian, or whatever. These were difficult times, full of provocation. On one occasion when the Professor, who was widely known to be a Christian, came home to Hungary, he could not have foreseen that an ill-mannered journalist would

Prime Minister Viktor Orbán’s speech at Lámfalussy Lectures Conference

“A prerequisite for a strong economy is that the representatives of the financial world and politics should pull the cart in the same direction.” Ladies and Gentlemen, A prerequisite for a strong economy–and we also learnt this from him–is that the representatives of the finan-

ask him if he was a Christian. This was a flagrant breach of the Christian rule that we don’t ask each other such a question. Nevertheless, he was asked this question, and I think his answer, which I have kept in my pocket or close to my heart ever since, was the right one. With an air of perfect calm, he said: “I try, but I don’t always succeed”. Ladies and Gentlemen, These are the memories, therefore, which I believe are worthy of evoking at a Lámfalussy Conference. I do not believe, however, that these are the reasons why this award has been named after Sándor Lámfalussy. Perhaps a more likely explanation is that in Hungary he is regarded the father of the euro. Once, when I nominated him for a state decoration, my supporting argument was that he was world-famous outside Hungary as well. Perhaps our guests do not quite understand what I was getting at, but I think we Hungarians understand. He was the Hungarian who was not only called “worldfamous” in Hungary, and this was probably because of the role he played in the creation of the euro. I am not sure he would have agreed to naming this award after him, because he did not regard himself as the father of the euro. When I talked to him about this, he said that naturally, a great variety of work had to be done,

but the truth is, for the euro the skills of an economist were not the primary need; these were helpful, but a strong political will was more important. Therefore, he said, one should not seek the father – or founders – of the euro among economists, but among the politicians of the time; and in this department, France and Germany were particularly distinguished. I asked him how he found the courage to advise politicians to create a monetary union without a fiscal and political union to back it up; whether he felt it was brinkmanship. His answer shocked me, because he said that in the end politicians will realise that it is necessary to create a fiscal and political union to back up the monetary union. This shocked me, because it is rather risky to entrust a historical enterprise of such proportions to the common sense of politicians. So far, time has not shown the Professor was right: it has rather vindicated our doubts. In essence, President de Larosière’s presentation was also centred on this doubt: whether European decisionmakers will have the wisdom to make the decisions necessary for the survival of monetary union. I do not know the answer to this question – all I know is that this is the biggest question for the future of Europe. The conclusion I can draw from this story is the following: we have also learnt from Professor Lámfalussy that the basis of successful economic policy is politics, particularly its stability.

cial world and politics should pull the cart in the same direction. Time has shown he was right. If we look at the recent history of the National Bank of Hungary, we can reasonably conclude that when the National Bank of Hungary was in opposition to the Government–it was not so long ago, we can still remember that–, politics and finance were heading in two distinctly different directions, and Hungary went through a great deal of unnecessary suffering. Since the national bank stopped being in opposition and started seeking cooperation with the political leadership of the day, we have observed such spectacular economic growth, which has also been mentioned by previous speakers. Ladies and Gentlemen, Now I should talk about the fact that since the economic crisis of 2008, referred to as the “wake-up call” by our French speaker, the world economy and world politics have witnessed a paradigm shift, and today the success of European countries is measured whether they have been able to adapt promptly to this shift: which ones responded immediately, which ones reacted more slowly, and which ones are still only in the process of waking up. The message of this paradigm shift–a somewhat pretentious term, of course, but it makes sense–is that the world had an old system, an old paradigm, within which thoughts were born and placed. And, to use another elegant linguistic innovation, after 1990 this paradigm was called “the unipolar world”, in fact, a world order with a single centre, a single centre of power. We lived in this world for almost twenty years. The world’s lines of power were arranged in a system around a single centre of power. The essence of the new paradigm is that there are multiple centres; I would rather not use the term “multiple poles”, because in the Hungarian language that means two: a northern and a southern. That

is not the same as what I am talking about, because here there will be more than two poles, but these are not the ones I am talking about, because there will not be two poles, but even more, therefore it is perhaps more accurate to use the term “multiple centres”, “multiple centres of power”. A necessary consequence of this paradigm shift is that there is no consensus about it. Does it exist at all? Among European political leaders today there is no consensus on whether the crisis afflicting Europe after 2008 is a cyclical one or a structural one related to competitiveness. If you were to interview the 27 EU prime ministers, you would see that there is no consensus on this. In other words, a necessary concomitant of any paradigm shift–now as ever–is that the followers of the old order must engage in fierce debate with the followers of the new order. We Hungarians could talk about this at length, in relation to our economic policy since 2010.

“The essence of the new paradigm is that there are multiple centres…” Ladies and Gentlemen, When one speaks at a conference such as this, the first question to be straightforwardly and openly asked and is appropriate to be attempted to answer is how to interpret the global situation in which the conference itself is taking place. In addition to the economic figures which we heard earlier, the decisive element is, of course, the new president of the world’s largest military power, the United States, his inauguration, and the policies that he is proposing. I have been listening to analysts and commentators: the followers of the old paradigm, if you like. Even though we have had Brexit, this US presidential election result and a referendum in Italy, they continually try to convince us that there is less to this than meets the eye, and that you cannot possibly bring about the sort of changes that the US president is aiming for, or that we usually contribute to US presidents. I would like to point out that this is foolish. Whatever exists is possible–and this is true not only of China, but also of the United States. Naturally it is still too early to assess the extent and magnitude of the changes which the current shift in the character of the Western world will bring about. I would advise all of us, myself included, to exercise caution, but I think that last week we heard a key phrase, and we must take this key phrase seriously.

Prime Minister Viktor Orbán’s speech at Lámfalussy Lectures Conference

If we understand this correctly, we shall understand everything in this respect. This key phrase is not the one quoted by most people–“America First”–but this: “it is the right of all nations to put their own interests first”. This represents a great change. These words could not have been uttered by an earlier US president. Now they have been uttered. This means that multilateralism has come to its end, and the era of bilateral relations has dawned. For us this is good news, because it is an unnatural state of affairs when, influenced by external pressure, one dare not state that one’s own country comes first when governing, making decisions, or considering what the central bank should do. This unnatural state of affairs is over. We have been given permission, if you like, from the world’s highest secular position, that we, too, care allowed to put our own interests first. This is a great thing; it is a great freedom and a great gift.

“…multilateralism has come to its end, and the era of bilateral relations has dawned.” Ladies and Gentlemen, I am convinced that in the world economy a single pole necessarily entails a single model, while multiple poles entail multiple models. This means it is very difficult to arrange a number of different models into a single system with multilateral agreements, and therefore new opportunities will emerge for bilateral agreements in military policy and economic policy as well. Consequently, there is no single “one size fits all” economic policy which would be equally successful for nations with very different positions and capabilities. In fact, today the world economy is growing–or at least this is my understanding, or the conclusion I drew from our Chinese speaker’s presentation–and economic growth is being sustained around the world precisely because there are different models, and because there are different approaches to economic policy. If China were to imitate us, I find it hard to believe that the world economy would grow at its current rate. Consequently, we should welcome the rise of new poles or new centres, rather than see them as a threat. This is a decisive issue, because logically today’s world leaders–that is, we westerners–might perceive this as a threat, as a loss of status, and as a risk. If this is how we approach the rise of multiple new centres, however, I am convinced that we shall doom ourselves to failure.

“A world order with multiple centres has opportunities to offer.”

Lámfalussy Lectures Conference, 2017 Prime Minister Viktor Orbán’s speech

A world order with multiple centres has opportunities to offer. Here is China, which we’ve already spoken about. We can clearly conclude that it is not a comet, but a fixed star, that will have a determining role in the world economy for many decades at least. To bring up a light issue–an easy, safe topic–here is Russia. Russia–let us be honest–has survived Western attempts to isolate it and overthrow its regime change. It has survived low oil prices, it has survived sanctions, and it has survived the free, impartial, internal activities of NGOs – which can hardly be described as pro-government, and which lacked external interference. It has survived all that, and there it is. It is therefore unreasonable–and particularly unreasonable in Europe–to ignore the power and the opportunity that Russia represents. This would naturally require more European self-confidence, and we should be able to honestly claim–but probably the reason we don’t is because it is not true–that we Europeans can defend ourselves militarily, without external assistance. But we do not dare to say that, because it is not true. I would like to add a sentence to this later, in connection with something one of our other speakers said. For now, I would just like to observe–and here I apologise for interfering in France’s internal affairs– that we have good reason to welcome the fact that a man who I hope will be the next President of the French Republic will be visiting Berlin today or tomorrow and the most important issue he will raise will be that of a common European defence alliance. This would be something that could open the way to self-confidence; and after self-confidence, to negotiation capacity in all directions, including Russia. And we have not even mentioned India yet–perhaps this is not why we are here today–but which still has plenty in reserve, and which is performing at the highest global level in areas which will have a major impact on the world economy over the next twenty years. Ladies and Gentlemen, New centres are therefore emerging, and long-forgotten trade routes are revived. With due respect, we should mention that in 2013 it was President Xi Jinping who launched the “One Belt, One Road” initiative, which was the first in a series and which, I believe, will

be followed in the period ahead. In a presentation such as this, the second question we should touch upon is how Europe is perceived from a Central European perspective. The answer can be summed up in a single sentence: we can barely recognise it.

“New centres are emerging, and long-forgotten trade routes are revived.” Europe is struggling with four major crises at once, and recently it has been unable to respond to any of them satisfactorily. It has a growth crisis–or, more precisely, a competitiveness crisis. It has a demographic crisis; it has a public security and terrorism crisis; and it has a foreign policy crisis, illustrated by the fact that we are unable to exert any influence whatsoever over events in the regions that directly affect our lives. Here we could mention Syria, or even Ukraine. This is a foreign policy crisis. Europe is drowning in debt. Perhaps there is no need for me to quote the figures here, as you know them better than I do. The countries which form the European

Union generate a deficit of some one thousand million euros every single day. As we have heard from Mr. de Larosière, economic growth is extremely sluggish: over the past decade it has averaged just over one per cent annually, with the Eurozone’s growth rate being under one per cent; and since 2008 six million jobs have disappeared from the European labour market as a whole. Today I increasingly hear voices of resignation, as if experts–but decision-makers may slowly follow as well– were saying that also in the decade ahead European growth will barely exceed one, or perhaps two, per cent. Europe is now nowhere near as safe as it once was. Living alongside us, there are hundreds of thousands of people about whom we do not know what they are doing here, why they came here, or exactly what they want. The following may sound uncharitable, but it is true all the same, and, rather than imagining what we would like to see, we must face up to a harsh reality. And the harsh reality is that wherever immigrants have settled down in Europe in large numbers, crime rates have increased immediately–not later, but immediately!–and we must take account of the consequences. In summary, the European continent is becoming ever weaker. It has been reduced from a global player to a regional player, and soon it will be forced to struggle even for the status of a regional player.

Prime Minister Viktor Orbán’s speech at Lámfalussy Lectures Conference

Ladies and Gentlemen, In a presentation like this–and in particular when we talk about Lámfalussy and open democracy based on reasoning–we cannot avoid the question of how this could happen. Why is this so? There are as many answers as there are people. For my part, I do not demand that anyone should accept my answer as the only possible one–I would rather just contribute to the debate. I am convinced that Europe have set itself some ambitious goals, and has failed to achieve a single one of them. I was Prime Minister for the first time back in 1998, when we had to make preparations for EU accession negotiations. So, I have the advantage– or disadvantage–of remembering those negotiations with the heads of government at that time. Chirac and Kohl sat with us at the negotiating table, and we made grand plans for the euro to become the world’s second reserve currency, alongside the dollar. That plan has failed. We said that we should create an independent European security policy. That plan has also failed. And we then set out to create a Eurasian economic zone, which, we said, should extend all the way from Lisbon to Vladivostok. That is now completely off the agenda, so that plan has failed as well. So when I try to identify the reasons I am not talking about some general decline, which would lead us to a perpetual debate on civilisation, but about the failure to achieve specific goals. My explanation is that Brussels has become enslaved to a utopia. The name of that utopia is a supranational Europe and recently it has turned out to be an illusion. There is no European people: there are only European peoples. And if there is no European people, you cannot build a system of European institutions on the foundations of such a non-existent European people. You must accept the fact that in Europe there are nations, and a pan-European system can only be built upon the policies, intentions, will and cooperation of the nations. We got all this wrong. In recent times this distinction has been lost. Perhaps those with more experience than me can back up my view that if we look to the European continent’s successful periods, we can see that Europe was never strong – or at least, not over an extended period – when it was directed from a single centre of power. We were strong when multiple centres of power existed within Europe. And today it is the policy of Brussels to transform these centres of power into a single centre of power. This, I believe, answers the question of how we got to where we are today.

And now, Ladies and Gentlemen, we must ask one last question. If things stand as they do, how can we make Europe competitive again? Mr. de Larosière gave us an appealing and ambitious answer to this question. For my part, I shall also try to give an answer, but keeping low, at the level of political reality. In my view, for Europe to be made competitive it must first abandon the illusion of federalism. We have come to the brink of the abyss, the ground under our feet has run out. The world’s fifth largest economy has left the European Union. This process will not stop if we carry on like this, thus we must abandon the illusion of federalism. Consequently, Europe itself must also be made multipolar. If you look at what the Visegrád countries are doing in this regard, you can see that we have set exactly that goal for ourselves. As a region, the Visegrád countries want to become one of the poles of the European Union; we want to become a strong region that also competes with Europe’s other regions or poles, and that increasingly contributes to Europe’s overall performance.

“…how can we make Europe competitive again?” Another milestone on the path to competitiveness is for us, Europeans to enter into new types of cooperation. First of all, we should seek a new arrangement with the United States, instead of the doomed free trade agreement. There is no point in persisting with that: it’s dead, it doesn’t exist. Perhaps we shouldn’t discard all the results of the work done so far, but nonetheless that agreement will not come into being. So instead, we must enter into something different. We should find the appropriate contractual mechanism in which the United States and Europe can conclude an agreement. We should develop and conclude an agreement. We should seek out opportunities and come to agreements with China. We should place the issue of Russia back on the agenda, and we should try to engage in a process which today can be described as a competition for concluding agreements – a competition which in the past we Europeans have been continually left out of. On the path to competitiveness I think it is important for us to reconsider the financing of the individual European national economies. We have just heard an excellent presentation on this issue. I am convinced that we cannot fire up our economies if we have nothing to invest. In this respect, Central Europe is not doing badly,

as, first of all, I think there is a European bank which can see the right direction. This bank is the EBRD. It would be in our best interests to expand its activities across the entire continent–but in Central Europe in particular. And we are in an advantageous position, because we have friends–including the Bank of China–who have stood by us and support us on issues of financing. And finally, the last milestone I can see on the path to competitiveness is innovation: let us place more emphasis on innovation on a European scale. I would note that Hungary is in a fair position among Central European countries, and we are performing fairly well in terms of the sum our central budget devotes to innovation as a proportion of GDP. I think that this performance is commendable, but it is still not enough, and the amount spent on innovation from the Hungarian budget should be increased. And now, in the style of Mr. Lámfalussy, I would like to refer back to two important thoughts raised by Mr. de Larosière. The first is the question of demography that he raised. Naturally I shall give a political answer, which is by its nature different from the answer of an economist. In my opinion a nation or a community that is unable to reproduce itself does not deserve to exist, and judgement will be passed on that nation in the highest place possible. This cannot be disguised with chicanery; it cannot be disguised with immigration, migrants or guest workers because the problem is more deeprooted. A community which is unable to sustain itself demographically does not believe in its own future, and therefore waives its right to exist. This is also the gravest problem that we Hungarians face: our house is on fire, but so too is that of all Europe. I am convinced that

if a community is unable to reproduce itself independently but seeks assistance and a solution from outside it must give up its former national identity – in part, or perhaps in full. In such a case that nation is no longer the same nation. This is written in the book of fate – or at least, this is what I as a politician interpret from that book. I am convinced that Europe must find a solution, because this is its existential question. Hungary has a family policy which is already producing results, but let me repeat: our house is also on fire. Returning to demography, I say this to President de Larosière: the reason I dare to use such forthright language on this matter is that we are a people with extensive experience on this subject. Forced relocation, forced settlement, population exchanges, and all their consequences–this knowledge is coded in our genes. We know precisely that if we resort to such means this will end in a loss of nation, and a loss of our country – we can see this by, for example, looking back in Hungarian history to the period of Turkish occupation. This is why we have the courage to take such a firm stand on an issue that appears to be so scientifically complex; after all, politics is a practical pursuit, not a theoretical one. As regards foreign policy, European foreign policy and security policy–as the President suggested–, here is another serious question, which we must be addressed in the frank style of Professor Lámfalussy. The question is the following: can we protect the continent against any–and, I repeat, any–external threat without America, or, in a bolder manner, without the Anglosphere? This is the great question for the future. The key to solving this question is something that appears to be the

Prime Minister Viktor Orbán’s speech at Lámfalussy Lectures Conference

simplest thing in the world: German-French security and military cooperation. I am talking about a common army and a common security system–or whatever we choose to call it. This sounds simple enough, but when you think about it, this is something we have never had. And, despite its simplicity, this demonstrates the complexity of the matter. The question is whether we–or those concerned–will be able to create such a defence alliance. Well, the talks that I have already mentioned in Berlin today or tomorrow will give us some guidance.

“…the policy of eastward opening also forms part of the Hungarian model.” Ladies and Gentlemen, Finally, as I am standing here before you as the Prime Minister of Hungary after all, I should also say a few words about Hungary – primarily perhaps on account of our guests from China and France. They may find it strange that a country that accounts for just 0.2 per cent of the world’s population–that’s us–states its opinion on issues of world politics in such wide-ranging terms. And I can understand your reservations, because in politics, too, the most important rule is that everyone should know their place. Just as in private life, a country must know its place–based on its defence capabilities, GDP, population and territory. And once it has occupied its appropriate place, it should know exactly which issues it is free to speak about, and which ones it is not free to speak about. So perhaps Hungary volunteering its own ideas on issues such as these requires some explanation. There is a British proverb, which may sound somewhat awkward when translated into Hungarian: “Nothing succeeds like success”. This explains why the Hungarians have the courage to take a stand on these issues; if we look at the period from 2010 to 2016, or before 2017, we can see that Hungary has turned from a black sheep into a success story. Of course, not everyone acknowledges this, but it is important that the facts and the truth should be acknowledged even when they are in favour of Hungarians. Therefore–just to take two more minutes of your time– we should recall the fact that in 2010 we had no economic growth: virtually none. State debt had risen to over 85 per cent. Inflation could not be forced below six per cent. The budget deficit had soared to 7 per cent, while unemployment stood in the range between 11.5 and 12

per cent. Out of ten million Hungarians, fewer than 3.7– three million, seven hundred thousand people–were in work; and only half of them–one million, eight hundred thousand–were paying taxes. Therefore, our revenue was next to zero, while our expenditure was fixed, given that the state, businesses and families were all deeply in debt. It is hardly surprising that the first country to seek a bailout package from the IMF was not Greece, but Hungary. This is where we started from. Today we can say that our debt-to-GDP ratio is on a declining path, the annual budget deficit is permanently around two per cent, the economy is growing by approximately three per cent annually, the unemployment rate stands somewhere around four and a half per cent, closely approximating to full employment. Our foreign trade balance also repeatedly closes each year with a large surplus. At times like this, the question is how this was achieved: how one can turn a country around 180 degrees in six years. Without trying to give advice to anyone, we would like to draw your attention to the following facts. The first and most important thing is political stability: if it is true that politics–stable politics–is the basis of good economic policy, political stability must be created. Without political strength and political stability there can be no successful economic reforms or successful changes in economic policy. Political strength is not always an appealing thing–especially in intellectual circles. Analysts do not like it at all, and there are also some politically poorly trained financial experts who believe that the banking sector should have more room for manoeuvre. But the truth is that those who want a predictable business environment always have a vested interest in strong and predictable politics–not to mention 95 per cent of the constituents. The second important thing that led us to success was strict fiscal policy. All I would say about this–referring back to the presentation of President de Larosière, who said that either it is accepted or not–is that the people must accept that there are times when strict fiscal policy is necessary. My view is that the people will only accept strict fiscal policy if they find it just. A simple statement in a complex sentence. The people accept strict fiscal policy if they perceive it to be just. Every nation will have a different recipe for this. In Hungary, for instance, it started with a fifty per cent reduction in the political elite. We did not introduce strict fiscal measures of any kind until we had slashed the number of politicians by half: a parliament with half as many MPs, and local councils with half as many councilors, just to men-

tion one thing. And I could list many other elements as well. All I want to say is that an economic recovery programme based on strict fiscal policy is politically both manageable and possible. This is why I am standing here, and this is why–having put the country’s fiscal affairs in order–we did not lose the elections in 2014. Winning those elections is proof that this is possible; it is possible, but complicated, and should not be approached in a conventional manner. This means that the issue of justness should be included in the viewpoints of fiscal policy. The third thing that could explain Hungary’s success is the creation of a workfare society, instead of a benefitcentred society. Naturally, it is not my place to tease, but I would be intrigued to see the government of a Western European country–say of France–announce that the maximum period for which unemployment benefit can be claimed has been reduced to three months, after which there will be no benefit of any kind. Instead there is public employment: those who work receive a salary, while those who do not receive neither a salary nor benefits–and we wish them the best of luck. This is a very harsh statement to make–one that is almost inconceivable for most Europeans, but which is not far from fairness and justice. Hungarian people took the view that they did not want their taxes to be spent on supporting people who are capable of work, and it is the duty of the state to arrange for these people to receive wages rather than benefits. And if the market cannot take care of this, then the state should devise some temporary bridging solutions. But the essence of the matter is that everyone should feel that the taxes they pay are well-spent. As a result, it was later possible to reduce taxes. I shall not list them all, but in Hungary corporate tax is at 9 per cent and we have a proportional income tax with a rate of 15 per cent. The next path leading to success, and one on which we have a great many battles ahead, is the establishment of a dual training system. This means bringing an education system that is far removed from European economic reality closer to that economic reality. The aim is to ensure that at the end of their studies students do not discover that, while the knowledge we have given our children may well be fine, noble and valuable in theory, in reality it is utterly useless. Europe’s school and higher education systems suffer from this phenomenon. The only way to solve this problem is by descending somewhat from our refined intellectual heights, and bringing the school and training system closer to the oil and sweat of the real economy. This, perhaps,

accounts for a major part of the Germans’ success. In other words, jobs instead of benefits: every Hungarian must be given the opportunity to work. And, finally, the policy of eastward opening also forms part of the Hungarian recipe, the Hungarian model. After 2008 we Hungarians took the view that Europe was unable to grow by itself: there would be no economic growth if we only trade with each other, without opening towards the East. This sounds fine, and it also sounds simple, but there is something here that the Europeans must understand. We cannot simply decide to open economically towards other countries to the East–say towards China–and then every morning proceed to lecture them on human rights. That is not how it works. It is simply untenable to expect the kind of alliance in which we seek access to your market, and we want your economic cooperation, and we also ask you for investment, but we do not at the same time give you the very level of respect that is due to every single independent nation in the world. Such an approach only results in an opening towards the East which exists at the level of rhetoric, but not that of reality. At the heart of eastward opening lies respect, and those who do not accept that respect takes priority over ideology will never be able to open to the East, because they do not understand the peoples of the East. In this respect, we are luckier, because we are an eastern people which was infused with Christianity; and this gives us a special perspective, enabling us to understand all that is happening in China. Furthermore, since we are talking about a disciplined country, we also understand why they do not respond to criticism from the West, which should instead recognise the achievement represented by, say, the success and value represented by the masses of people lifted out of poverty and hopeless economic situations. From a moral point of view, this is the most important argument China can cite in its own favour. If we do not accept this, there will be no eastward opening; there will only be trade, which is not the same as eastward opening. Hungary strives to achieve eastward opening. Ladies and Gentlemen, Thus, the Hungarian model comprises four elements: political stability, strict fiscal policy, a workfare society and eastward opening. With due modesty, but also appropriate self-confidence, this is what we can present to the world for consideration. Thank you for your attention. (For the transcript of the speech visit www.orbanviktor.hu.)

tHE COOPERATION OF “ONE BELT, ONE ROAD” AND HUNGARY Dr. Chen Zhimin, the Dean of Fudan University and Dr. Yan Xuetong, the Dean of Tsinghua University are important figures of the scientific community, whose work influences the way the Chinese government thinks about the external world. The key findings of their speeches delivered at Lámfalussy Conference on the topic of the possible cooperation between China and the European Union and Hungary are presented below.

Chen Zhimin Professor Chen Zhimin thinks globalisation is still a major development trend of the world. As a result of globalisation, new networks evolve, including the “One Belt, One Road” cooperation. The basis of the “One Belt, One Road” plan is constituted by connectivity in five areas (coordination of state-level policies; shared infrastructure; unblocked trade; financial integration; reinforcing relationships between people). A higher-level connectivity also marks a new era of world history: the international regulations perceived as unalterable before are replaced by a more flexible regulation, and shared benefits serve as the basis for cooperation between countries. The relationship of China and the European regions shall be interpreted within this framework. The cooperation between China and Europe can be examined on three different levels. First, on the level of state-level, bilateral relationships, which tend to work very well. Second, on the level of regional relationships, such as the “16+1” cooperation. China has less experience in operating such institutions, and usually cannot easily align different state needs. finally, the third level is represented by the cooperation between the EU and China. China finds cooperation on this level extremely difficult, and their relationship has been hectic for a long time. Chen thinks that the 17th EU-China bilateral summit and the “Juncker Plan”, however, may rep-

resent a breakthrough in the relationship of the parties. Problems, however, persist. A most recent development of the European-Chinese relationships is China’s increasing economic activity on the European continent (e.g. the dynamic emergence of Chinese working capital), which is still not perceived clearly positively. The main reason is that the exact purposes of Chinese investments are unknown; and there are differences in regulations and practices. These may lead to misunderstandings, which burden the relations, thus future development is required in this respect. The process of globalisation, and, in particular, the relationship of China and the EU, are considerably and mostly negatively affected by one or two phenomena gaining strength in the world, such as increasingly emerging populism; introversion (with Brexit as a symptom); and the stagnation of global trade. The new president of the Az USA, Donald Trump further increases uncertainty, since he has come up with ideas – both during the presidential elections and before his inauguration, which particularly affect the relation of the USA and China: first of all, considering the revision of the “One-China principle”, then imposing a 45 percent tariff on imports from China, revision of security guarantees provided for Europe, etc. Chen thinks the USA is no longer in the position to run the world as a hegemonic superpower, therefore he

agrees with the statement made by China’s President Xi Jinping at the World Economic Forum in Davos: the global leader’s role suggested by China is not a dream but a reality of the present. Yan Xuetong Referring to Xi Jinping’s speech delivered in Davos, Professor Yan Xuetong agrees that globalisation is a “„double-edged sword”, having its winners and losers. The free flow of capital, workforce and other factors are conventionally regarded as positive effects, while we find the decline of the manufacturing Industry and the deteriorating situation of workers on the negative side. In recent years, the negative elements of globalisation have been underlined, and, as a result, there are many who expect the end of globalisation and the revival of regionalism. Globalisation, however, is an irreversible trend. The second characteristic of globalisation is that in principle it presumes unified global governance. However, there is no world government: there is an anarchistic system, with states still being dominant. Consequently, the process of globalisation is also governed by sovereign states, they, and not regional organisations, must find opportunities for cooperation. Taking all these into account, Professor Yan outlined two principles for the cooperation between China and Hungary. First, focusing on sovereignty: there is no need of the consent of others to improve relations.

In the collaboration of the Chinese and the Hungarian party, the multilateral government and subregional organizations can play rather a complementary role. Second, the principle of “two ways”: a bilateral relationship becomes really fruitful if both parties contribute to the planning phase. In the course of the implementation of “One Belt, One Road”, for example, the fact that Central Asian countries are unilaterally dependent on China causes problems. In the long term, a viable relationship cannot be maintained without a balance between the two parties. Political and other contributions may also form a part of mutual offerings, in addition to economic ones. Drawing on China’s example, the Hungarian party should consider other proposals as well. He highlighted that currently the private sector accounts for 75 per cent of China’s GDP, thus a cooperation with it may entail one of the greatest opportunities of the future. He regards one of the greatest advantages of Chinese politics and economy that “Chinese features” are attributed to everything, adapted to local needs and peculiarities, whether it is an external effect, a scientific achievement or a product. This is the key to the success of adaptation. If Hungary follows China’s example, it can successfully apply the formula of learning from others, synthesis and incorporation. Hungary must shape specific intellectual currents and achievements with Hungarian characteristics, maintaining the uniqueness of the country, which is extremely important in the eyes of the external world.

GEOPOLITICAL

THINKERS OF ST THE 21 CENTURY

GEOPOLITICAL THINKERS OF THE 21ST CENTURY

Authors: A nton Bendarjevsky, Ráhel Czirják, Viktor Eszterhai, László Gere, Péter Klemensits, Eszter Polyák, Fruzsina Simigh, Zita Vajda

It is remarkable how differently the foreign policy thinkers living in different regions and countries view our world and international affairs. The place of origin, as a kind of initial stigmata, determines the way we look at the globe around us. A geopolitician grown up in the United States–and in its imperial shadow–looks at everything through an American prism, through America’s supremacy. Russian thinkers, having survived the fall of a great empire, believe in a multipolar world, while East-Asian thinkers, witnessing the fabulous rise of China, talk about entirely reforming the existing world order. We intend to present these exciting and very different thoughts and geopolitical concepts to our readers. We have selected six significant geopoliticians, the well-known geopolitical thinkers of the early 21st century: Henry Kissinger, Aleksander Dugin, Yan Xuetong, Sanjaya Baru, Robert D. Kaplan and George Friedman.

Henry Kissinger Henry Kissinger, former United States Secretary of State and National Security Advisor, who used to actively shape foreign policy and international affairs, has already explained his views on geopolitics, history, economy and politics. His most recent work, discussing the challenges of the world in the 21st century, was published in autumn 2014. In World Order, the renowned author endeavours to analyse the challenges threatening our times, also drawing on his own experiences. By providing an overview of historical examples, he also makes geopolitical predictions. In his opinion, it is necessary to build a shared international order, despite divergent historical perspectives; at the same time, it can address risks that violent conflicts, proliferating technology and ideological extremism pose.

Kissinger thinks that world order describes the concept held by a region or civilization about the nature of just arrangements and the distribution of power thought to be applicable to the entire world. A successful world order must be based on the combination of power and legitimacy. To his mind, there has never been a “true world order”, since in history civilizations defined their own concepts of order, considering themselves the centre of the world and envisioned its distinct principles as universally relevant. Today, due to the collision of these divergent systems caused by globalisation–without a consensus on rules–tension is mounting in the world. The veteran diplomat thinks the only way these divergent systems can found common ground is to create the fundamentals of a new order and a “global secondary culture”. In his book, he describes the examples of four world orders: the European (the Westphalian one), the American, the Chinese and the Islamic one. In Europe, following the Peace of Westphalia ending the

Thirty Years’ War, the principle of sovereignty of nation-states evolved, as a result of which legally equal countries had fair chances to create a pluralistic international order. The integration of diverse societies in the Westphalian system was definitely a positive development, the author notes. He depicts the Islamic world order as one in which Islam represents a religion, an ethnically divided superstate and a new world order at once. Iran adopted this concept long ago, and has favoured spreading Islamist governance. Its rivalry with the United States is not only a conflict between nations, but can also be regarded as a combat determining the “nature of the world order”. As for Asia–although an Indian as well as a Japanese world order exist–, Kissinger, hardly surprisingly, focusses on China. There is an ancient concept that China is the only sovereign power in the world, with the emperor at its pinnacle. The author thinks this concept persisted in the Communist era, although today’s China may be regarded rather a sovereign nation-state in a Westpahalian sense. Kissinger also expresses criticism when it comes to the word order of the United States. Although the country served as a role model to the majority of the world due to its democratic principles and the American culture, “the conviction that American principles are universal” has introduced a challenging element to the international system, creating considerable tension. He thinks the USA cannot maintain its role as a leader; nevertheless, it is an essential actor of global security. In order to avoid decline, it must refrain from unilateral actions and consider a multilateral solution. The lack of international cooperation, aggravated by the lack of appropriate historical and geographical knowledge, has had an adverse effect on America; suffice it to think of Iraq or Afghanistan. Initially, Kissinger supported the overthrow of Saddam Hussein, but has revised his position, arguing for the failure of the operations in Iraq, since this country of the Middle East is far from being a real nation-state, where democratic transformation would be possible. He also highlights that since the second world war, four or five of the USA’s wars ended with withdrawal, and only the Gulf War resulted in a decisive victory. While analysing events of history, Kissinger pays particular attention to the actions of the Nixon and the Reagan administrations, emphasizing, if applicable,

Henry Kissinger

his own role. After having presented post-Cold War events, he focusses on the present and then offers compelling insights into the future. He thinks the coalition formed against the Islamic State is capable of defeating the terrorists but he also warns that an air campaign alone will not be sufficient; the deployment of special land forces is also required. The “victory”, however, won’t change the extremely complex geopolitical situation of the region, which Is akin to the Europe of the Thirty Years’ War. Since the borders of Iraq and Syria have been drawn by European major powers, these countries are not viable as real nation-states. Regarding the Eurasian landmass, the West must be very cautious, especially with Russia and Ukraine. Kissinger suggests that the fact that Ukraine is perceived by Russians as an inextricable part of their own patrimony should always be remembered. The crisis can easily be escalated if both parties make their decisions on a rational basis. Although Putin has engaged in an adventure beyond his strength, the West should not make the same mistake, otherwise it would shove Russia into the arms of China, creating a significant vacuum of power on the Eurasian landmass. Kissinger’s World Order, in addition to summarising and analysing historical and current processes–without any bias–identifies several new factors of geopolitical thought. He has been among the ones to notice how much technological development, the Internet and the power of information alter decision-making and the course of events. During the Arab Spring technology helped and at the same time impeded the transformation of power; in the next presidential elections of the USA, internet communication experts will undoubtedly have a distinguished role, he concludes. Therefore, Kissinger emphasizes the necessity of wisdom and foresight, which is not an issue for technology only.

GEOPOLITICAL THINKERS OF THE 21 ST CENTURY

Aleksandr Dugin Aleksander Dugin is one of the most known figures of contemporary Russian geopolitical thought, and one of the creators of Neo-Eurasainism. At the beginning of the 2000s, in 2001, the “Eurasia” movement evolved and later transformed into a political party called “Eurasia”. The party, however, was short-lived: it was transformed into the “International Eurasian Movement” in November 2003. The International Eurasian Movement, still in operation, officially is a non-governmental platform, having branches all over the world and Dugin as President. His public career started after 1990, when he was given a show on Russia’s Channel One (he prepared documentaries on declassified KGB archives); then he worked for newspapers and published books. In 2008 he became a professor of the Lomonosov Moscow State University, and was Head of the Department of Sociology of International Relations from 2009 to 2014. Aleksandr Dugin’s Eurasianism is deeply rooted: the concept has its origins in the Russian émigré community in the 1920s, although to some extent, Eurasian ideas were suggested by the Russian Slavophil movement in the 19th century (by Danilevsky, Klyuchevsky, Fadeyev and Mendeleyev). In 1925 Nikolai Trubetzkoy argued that Russia was not an heir to the Kievan Rus but the Mongolian Monarchy. He even observed that the state of Moscow was continuously forced to defend itself from western conquest, which, he believed, Ukraine and Belarus failed to do and were taken under the rule of Catholic Poland. As it seems, the idea that the Principality of Polotsk, situated in the territory of present-day Belarus, voluntarily integrated into the Grand Duchy of Lithuania in the 13th century did not occur to him. He thought, nonetheless, they could return to the Eurasian world of “ancestral Eurasian and Russian lands” under Moscow’s rule “with great difficulty”. Interestingly enough, Eurasianism had different meanings and was associated with different values in different periods. According to the representatives of the Eurasian thought in the 1920s, it meant that Russia was different from the western system of values, and its mercantilism, and the Asian culture, which they identified with some degree of heroism, was much closer to it. therefore, according to the Russian Eurasianism of the early twentieth century, Russians are rather descendants of the Asian culture and

Source: dugin.ru

Aleksandr Dugin

not that of Europe. By comparison, the Eurasianism of the twenty-first century has adopted an aggressive orientation: denying western values has become its most important factor, replacing the emphasis on the proximity to Asia and the Asian relationships. Neo-Eurasianism, nurtured by an anti-western mindset, views the decades of the Soviet Union with tragic nostalgia, contemplating the Soviet community in a positive light, and dreams of creating a new postSoviet empire. Aleksandr Dugin, as opposed to those who saw the end of the Cold War as the dawn of the era of global piece, believes that the opposition between the West and the East is permanent. Since their geographical conditions and features are permanent, conflicts will also persist. His views spread in the late 1990s, when Russia was in a state of shock due to the collapse of the Soviet Union, and consequently losing its status of a great empire. Conspiracy theories were rampant: someone had to be found to be blamed for Russia’s problems. The Foundations of Geopolitics can be regarded Dugin’s most important work: it has been published four times since its first publication in 1997, and has been adopted as a textbook at universities. The ideas Dugin formulated has had a large influence within the Russian military, national security and the police. Conspiracy theories have found fertile soil within the Russian Silovik elite, who already thought that the West and the United States had a hand in all the problems of Russia.

the above-mentioned Eurasianism of the 1920. It was Dugin who infused the original Eurasian ideas of Russian historian, anthropologist and ethnologist Lev Gumilyov with geopolitics and the idea of the Soviet Union as a Eurasian superpower. Dugin, who supports Putin and advocates an active foreign policy, sees the world in black and white. He can see hostile, destructive forces even in the circles of the Russian elite: he thinks Russian political elite is full of spies and saboteurs working on the collapse of Putin’s Russia, and one of their toolkits is spreading liberal views. Apparently, Dugin’s views have been very influential on the leading Russian elite, and perhaps the Russian President, Vladimir Putin himself, although the Russian Silovik elite, who perceived the collapse of the Soviet Union as a great shock, has brought along ambitious empirical ideas into power. Several theories of the foreign policy pursued by Putin’s Russia, however, resemble Dugin’s major theses. With centralization launched in the early 2000s, Vladimir Putin consciously started to build a Eurasian empire based on post-Soviet fundamentals. In an interview given at the beginning of the 2000s, the Russian head of state dubbed the Soviet Union's collapse "the greatest geopolitical catastrophe of the 20th century”, also indicating the long-term goal that he had set.

The goals were defined in an article published at the end of 2011. “We are not going to stop there, and are setting an ambitious goal before ourselves – to get to the next, even higher, level of integration – to a Eurasian union. (…) We are not talking about recreating the USSR in one form or another. It would be naive to try to restore or copy that which remains in the past, but close integration based on new values and a political and economic foundation is imperative.” (…) We propose a model of powerful, supranational union, capable of becoming one of the poles of the modern world. (…) The Eurasian Union is an open project. We welcome the accession of other countries, primarily that of the CIS countries.” Not only did Putin mark a Eurasian roadmap for the region, to be implemented–naturally– with Russian leadership, but he also circumscribed the circle of those whom are welcome in this new formation. Putin, on the other hand, went into battle against the unipolar world dominated by the USA, and made clear that Russia believes in a multipolar world and develops its geopolitical aspirations accordingly. It is much harder to decide what role Aleksandr Dugin and his ideology played in this.

Aleksandr Dugin’s geopolitical map. Source: evrazia.org

After 2002, Dugin got increasingly engaged in the concept of Eurasianism, which could be called NeoEurasianism, very different in nature and values from

GEOPOLITICAL THINKERS OF THE 21 ST CENTURY

Yan Xuetong Yan Xuetong, Professor of the Institute of Modern International Relations at Tsinghua University, calls attention to the oddities of our reflections about the international order. He says we often talk about the challenges that the current international order must face, but fundamentally it has never been clarified what we mean by “international order”.

ceived, by having deployed 60 per cent of its navy forces in the Pacific region within the framework of the so-called Pivot to Asia, to have fundamentally altered the balance of power in the Eastern Asian region

mean the same thing to each and every region? Different values, norms and institutions exist in different regions, and their security architecture might also be different. The same framework cannot be expected to meet all challenges.

The second element of international order is normative regulation, which determines the behaviour of states and ensures a pacific solution of conflicts. It is a source of conflicts if there is no norm in some international areas, such as cybersecurity, as we can see that in the case of Chinese-American relations. Since there is no requirement, the parties cannot be sure whether the other party has understood the norms or not. Thus, clearly established norms are required to create an international order.

Consequently, if the United States intends to establish an Asian version of NATO in East Asia to counterbalance China (as it was expressed in the Pivot to Asia programme), this pursuit is doomed to failure, Yan believes. In his opinion, if we want to maintain global order–with the objective to prevent the outbreak of wars–it is necessary to build security architectures that embrace various, regional peculiarities. Although the security situation in East Asia and Asia Pacific is burdened by tensions (because of the South China Sea, the North-Korean nuclear issue or Taiwan) but Yan thinks they are of no great significance. Although they generate pressure in the relations between China and the USA, as well as between China and other countries, the regions remain to be able to avoid wars. The strategy of nuclear deterrence prevents the outbreak of any

The third factor is the institutional system which forces states to respect the rules. On the one hand, it rewards the country for respecting the norm; on the other hand, it penalizes their violation. Unfortunately, the existing institutional forms–including the United Nations–currently do not have adequate capacity to ensure compliance with international rules. The United Nations for example adopts several resolutions but cannot enforce them.

Yan Xuetong

In Yan’s interpretation, international order basically consists of three elements. The first element is a set of generally accepted values, upon which international rules are built. These values serve as a system of reference to decide whether there is order in the international state of affairs or not. If there is no consensus on values, disputes evolve. For example, the United States is concerned that China’s further strengthening poses a challenge to the United States and the international order. On the contrary, in China the USA is generally per-

major war in the region, primarily between the USA and China. There might be so-called proxy wars but Yan still thinks that as long as it is in the interest of both China and the United States, tensions remain manageable in the Asia Pacific. Furthermore, the two major powers can take a balancing role, which prevents war between smaller states in the region. The Chinese-American strategic and economic dialogue, however, must advance to create an important mechanism which enhances the principle of transparency and regulates the behaviour of states. Yan thinks China conveys the message of establishing regional order to the USA. If the parties can accept and are able to create a transparent mechanism that sets the rules, it might prevent the escalation of tensions into wars. The mechanism itself will not necessarily reduce tensions, but it might be adequate to help the world avoid wars resulting in disaster.

What challenges does global order face? First and foremost, global order is not coherent and homogeneous. In one part of the world (e.g. North America), stability is full, while other regions (such as the Middle East) are on the brink of chaos. Europe and East Asia are situated between the two extremes. If we compare the order in East Asia and Europe, we can notice a very interesting phenomenon. On the one hand, the rise of China represents a serious source of tension in East Asia; but we can also see that no war has broken out in the region since 1991. In Europe, on the other hand, there is much less tension, but minor wars often break out, e.g. in Kosovo, Georgia and Ukraine. Thus, East Asia and Europe have different orders. Yan considers the definition of order very simple: settling disputes by peaceful means, to avoid wars. Thus, if we want the existing order to meet the challenges, first we need to accurately define the challenges that different regions must face. The number of these challenges is relatively low. Most likely, the most widely known problem threatening the world order is terrorism. But does terrorism

Sanjaya Baru

“... the most important fundamental thesis of Baru’s views is the fact that today we are living in the age of geo-economics.”

Sanjaya Baru Sanjaya Baru is one of the most influential and renowned opinion makers of India on politics and economy. He has been an advisor of the International Institute for Strategic Studies (IISS) since 2008, and is currently serving as Director for GeoEconomics and Strategy. One of the starting points and the most important fundamental thesis of Baru’s views is the fact that today we are living in the age of geo-economics. In this respect, he is of the same opinion with Edward Luttwak, author of the now classical work of geo-economic thought, in many aspects. In his essay From Geopolitics to Geo-Economics – Logic of Conflict, Grammar of Commerce published in 1990, Luttwak observes that commerce is displacing military methods, with disposable capital in lieu of firepower, civilian innovation in lieu of military technical advancement, and market penetration in lieu of garrisons and bases. 38

In his ideology, Baru also reflects on this thought. One of his governing principles is that today economic activity is a source of power, and the power of military activities is replaced by commercial activities. Economic power will be increasingly important in determining the primacy or subordination of states, which is evident in the current processes of world politics. The number of tanks, missiles, weapons and the size of the military are no longer the instruments of power; production efficiency, supervision of markets, strong currencies, currency reserves, ownership of foreign companies, factories and access to resources are.

Baru adds that the Cold War was not ended by a military action, either; the USA was continuously defeated (e.g. in Vietnam), but due to its leading role in economy, triumphed over the Soviet Union. Furthermore, in the future military conflicts are unlikely; however, geoeconomic ones, incurring similarly grave geopolitical consequences, such as new alliances between specific countries, are alarming. Baru’s another often voiced concept is the opposition between globalisation and regionalism in today’s world. Earlier we could talk about a bipolar world order (the Cold War era), or a single global power (today’s several thinkers confer this title on the USA), but this is not the “natural” state, but the existence of the regional powers is. Globalisation was exceptional; he even dubbed it as deviant. Conversely, he regards regionalism a normal, regular world order. Three hundred years ago, there were no superpowers in the world. He thinks today a re-balancing, a kind of regionalism of the global world order is taking place, that is regional powers, including his country, India, and Brazil, Russia, China, South Africa are gaining power. He also regards Germany and Japan successful examples of regional powers, as countries that recognized the importance of economic power and the access to resources (the importance of a geo-economic mindset). Baru highlights that previously all international systems were established by the West, and the rest of the world complied with the rules of the founders. These international systems, however, are not capable of adequately responding to developing economies, therefore they are creating their own systems. That is what he means by the regionalism of the global world order. In the twenty-first century, we are returning to an earlier, multipolar system, in which multiple centres exist, not just one. In fact, he regards the economic crisis of 2008 the failure of the globalized world, and regionalism can be a way out. Great multilateral institutions are going to be replaced by regional cooperation, and he believes the new world will be the world of developing economies, which have considerable economic potentials. The fundamentals of Sanjaya Baru’s concept of world order are heavily influenced by the fact that he comes from India, one of the developing economies of the world. His thoughts, however, are worth considering, since there is every chance that the economic weight of the BRICS countries for example will become increasingly significant in the economic and political processes of the world. 39

Robert D. Kaplan Robert D. Kaplan (born 23 June, 1952 in New York City) is the author of fifteen best-selling books on foreign policy and travel translated into many languages. Currently, he is a Senior Fellow at the Center for a New American Security and co-editor of The Atlantic, which has been publishing his works for three decades. He was chief geopolitical analyst at Stratfor (between March 2012 and December 2014), a visiting professor at the United States Naval Academy, and a member of the Pentagon’s Defense Policy Board. Foreign Policy magazine twice named him one of the world’s “Top 100 Global Thinkers.”

Robert D. Kaplan

Besides The Atlantic, Kaplan’s essays have appeared on the editorial pages of The New York Times, The Washington Post, the Financial Times, The Wall Street Journal, and The Los Angeles Times, as well as in all the major foreign affairs journals, including Foreign Affairs. He has been a consultant to the U. S. Army’s Special Forces Regiment, the U. S. Air Force, and the U. S. Marines. He has lectured at military war colleges, the FBI, the National Security Agency, the Pentagon's Joint Staff, the Defense Intelligence Agency, the CIA, major universities, and global business forums. He has briefed presidents, secretaries of state, and defense secretaries, and has delivered the Secretary of State’s Open Forum Lecture at the U. S. State Department. He has reported from over 100 countries.

deb, the Strait of Hormuz). The Indian Ocean, writes Kaplan, is “the world’s preeminent energy and trade interstate seaway.”

The Indian Ocean, writes Kaplan, is “the world’s preeminent energy and trade interstate seaway.” “The old borders of the Cold War map are crumbling fast, and Asia is becoming a more integrated unit, from the Middle East to the Pacific.” If Kaplan is right, Southern Eurasia, which borders the greater Indian Ocean, may become the new “Heartland” of the continent (Mackinder in 1904 and 1919 identified northern-central Eurasia as the “Heartland”. /In

Mackinder’s Heartland theory, Heartland is the area the control of which ensures a hegemonic position for the conquering power/). Kaplan characterizes the India-China naval rivalry in the region as a “maritime Great Game,” and he recommends that the United States should rely on its naval power and “multiple regional …alliances” to act as a “stabilizing power.” Kaplan’s article does not outline an entire world order, but he places a new centre of power onto the map. His above proposal suggests that the USA remains to be a superpower on the global stage, and even a re-evaluated and strengthened Indian Ocean region does not threaten its position, and is still capable of acting as a “stabilizing power”. This view is similar to the new bipolar world order that Dominique Moisi described in his essay Renovating the World Order: an Asian power rises to serve as world leader alongside the USA (the article names China), but their relationship is lopsided, the USA still possesses important advantages.

Center Stage for the 21st Century (2009) In his work entitled Center Stage for the 21st Century, written for Foreign Affairs in 2009, Robert D. Kaplan explores the pivotal nature of the greater Indian Ocean region to the geopolitics of the current century. Kaplan explains that even in this era of globalization, “politics is still at the mercy of geography.” A map of the region accompanying the article shows why the greater Indian Ocean will likely define global geopolitics for the foreseeable future: the rising powers of China and India are vying there for influence and power. The region also hosts the heart of the Islamic world as well as the energy resources of the Middle East-Persian Gulf area. Equally important are the waterways and strategic chokepoints that dot the region (such as the Gulf of Aden, the Gulf of Oman, the Bay of Bengal, the South China Sea, Bab el Man-

GEOPOLITICAL THINKERS OF THE 21 ST CENTURY

George Friedman Hungarian-born George Friedman is one of the most renowned geopolitical forecasters of the world. His books have ranked on top of best-selling list in recent years. In his analyses, he forecasts for even a hundred years ahead, predicting the rise and decline of states. The mentality of the world is always determined by the hope that after a major war the era of peace comes, when nations, recognizing their shared responsibility, cooperate to create and maintain a world order to prevent future wars and conflicts. The idea driving it is that one coalition has won the war, thus in the system following it everybody wants to participate assuming equal privileges and duties. This happened also after the Cold War, when the common thought was that the only threat would come from rogue states and nonstate actors such as North Korea and al Qaida. This is what George H. W. Bush talked about to the Congress in 1990, but Friedman thinks the real New World Order, which determines the geopolitical system of

our times, commenced on 8 August, 2008. It was on this day Russia, a nation-state attacked Georgia, another nation-state, out of fear of the intentions of a third nation-state, the United States. He thinks the new twenty-first century, with all its conflicts and peaces, will be no different than any other century, whatever our hopes might be.

â&#x20AC;&#x153;In his analyses, he forecasts for even a hundred years ahead, predicting the rise and decline of states.â&#x20AC;? This system is suffering from two imbalances. First, one nation-state, the United States, remains overwhelmingly powerful and no combination of powers are in a position to control its behaviour. Despite of all its economic problems and deficien-

George Friedman's presentation at PAGEO Club

cies, the reality is that the American economy has remained the largest, the U.S. military controls all the worldâ&#x20AC;&#x2122;s oceans and space, thus its military supremacy is also unquestionable. The second imbalance is within the United States itself, precisely due to its enormous political capacity: its ground forces and the bulk of its logistical capability are committed to the Middle East, considerably limiting its ability to exercise that power in the short run. This creates a window of opportunity for other countries to act, consequently the United States is frustrated. This internal frustration, however, does not originate only from the committed resources, but also from a paradox that the USA, the superpower of the new world order, must resolve, otherwise it might contradict itself. The United States is the youngest major power (which is hard to tackle, since why the citadel of democracy would label itself an empire?), hardly a generation old. Friedman compares the USA to a fifteen-year-old teenager, who falls from one extreme to the other as a maniac in depression while trying to cope with responsibility and power that it received and would happily give to someone else. However, thanks to its capacities and its undoubtedly overwhelming

power, it is obviously the one that must bear these burdens. It must adapt to this new environment, to make the twenty-first century actually the American century. What about the other actors of the global scene? It is Russia that launched the new world order, but Friedman thinks its military power will collapse by 2020, and the country will re-sink onto the level of a regional middle power, despite all appearances. Many see China as the next challenger and the superpower of the future, but Friedman warns that China is struggling with extremely grave internal social, political and economic problems, and its room for manoeuvre is also very limited geographically. Europe has been past the zenith of its power since the second world war, when the right to make decisions about war and peace shifted to Moscow and Washington. The sole powers that can influence the course of the twenty-first century, alongside the American one, are Poland, Turkey and Japan. First and foremost, however, the United States remains dominant. It was the first state to recover from the economic crisis, disappointing all who were counting the last hours of the superpower and capitalism. The American century is yet to begin.

THE NEXT 100 YEARS Author: George Friedman

The Next 100 Years by George Friedman was published in Hungarian with the assistance of Pallas Athene Geopolitical Foundation. Excerpt from Overture.

THE TWENTY-FIRST CENTURY ...the United States has been on an extraordinary economic surge. It has turned from a marginal developing nation into an economy bigger than the next four countries combined. Militarily, it has gone from being an insignificant force to dominating the globe. Politically, the United States touches virtually everything, sometimes intentionally and sometimes simply because of its presence. As you read this book, it will seem that it is America- centric, written from an American point of view. That may be true, but the argument I’m making is that the world does, in fact, pivot around the United States. ...Given the cost of building naval power and the huge cost of deploying it around the world, the power native to both oceans became the preeminent actor in the international system for the same reason that Britain dominated the nineteenth century: it lived on the sea it had to control. In this way, North America has replaced Europe as the center of gravity in the world, and whoever dominates North America is virtually assured of being the dominant global power. For the twenty- first century at least, that will be the United States. The inherent power of the United States coupled with its geographic position makes the United States the pivotal actor of the twenty- first century. That certainly doesn’t make it loved. On the contrary, its power makes it feared. The history of the twenty- first century, therefore, particularly the first half, will revolve around two opposing struggles. One will be secondary powers forming coalitions to try to contain and control the United States. The second will be the United States acting preemptively to prevent an effective coalition from forming.

If we view the beginning of the twenty- first century as the dawn of the American Age (superseding the European Age), we see that it began with a group of Muslims seeking to re- create the Caliphate–the great Islamic empire that once ran from the Atlantic to the Pacific. Inevitably, they had to strike at the United States in an attempt to draw the world’s primary power into war, trying to demonstrate its weakness in order to trigger an Islamic uprising. The United States responded by invading the Islamic world. But its goal wasn’t victory. It wasn’t even clear what victory would mean. Its goal was simply to disrupt the Islamic world and set it against itself, so that an Islamic empire could not emerge. The United States doesn’t need to win wars. It needs to simply disrupt things so the other side can’t build up sufficient strength to challenge it. On one level, the twenty- first century will see a series of confrontations involving lesser powers trying to build coalitions to control American behavior and the United States’ mounting military operations to disrupt them. The twenty- first century will see even more war than the twentieth century, but the wars will be much less catastrophic, because of both technological changes and the nature of the geopolitical challenge. As we’ve seen, the changes that lead to the next era are always shockingly unexpected, and the first twenty years of this new century will be no exception. The U.S.–Islamist war is already ending and the next conflict is in sight. Russia is re-creating its old sphere of influence, and that sphere of influence will inevitably challenge the United States. The Russians will be moving westward on the great northern European plain. As Russia reconstructs its

THE NEXT 100 YEARS

power, it will encounter the U.S.- dominated NATO in the three Baltic countries–Estonia, Latvia, and Lithuania–as well as in Poland. There will be other points of friction in the early twenty- first century, but this new cold war will supply the flash points after the U.S.–Islamist war dies down. The Russians can’t avoid trying to reassert power, and the United States can’t avoid trying to resist. But in the end Russia can’t win. Its deep internal problems, massively declining population, and poor infrastructure ultimately make Russia’s long- term survival prospects bleak. And the second cold war, less frightening and much less global than the first, will end as the first did, with the collapse of Russia. There are many who predict that China is the next challenger to the United States, not Russia. I don’t agree with that view for three reasons. First, when you look at a map of China closely, you see that it is really a very isolated country physically. With Siberia in the north, the Himalayas and jungles to the south, and most of China’s population in the eastern part of the country, the Chinese aren’t going to easily expand. Second, China has not been a major naval power for centuries, and building a navy requires a long time not only to build ships but to create well-trained and experienced sailors. Third, there is a deeper reason for not worrying about China. China is inherently unstable. Whenever it opens its borders to the outside world, the coastal region becomes prosperous, but the vast majority of Chinese in the interior remain impoverished. This leads to tension, conflict, and instability. It also leads to economic decisions made for political reasons, resulting in inefficiency and corruption. This is not the first time that China has opened itself to foreign trade, and it will not be the last time that it becomes unstable as a result. There are some who believe that the trends of the last thirty years will continue indefinitely. I believe the Chinese cycle will move to its next and inevitable phase in the coming decade. Far from being a challenger, China is a country the United States will be trying to bolster and hold together as a counterweight to the Russians. Current Chinese economic dynamism does not translate into long- term success. In the middle of the century, other powers will emerge, countries that aren’t thought of as great powers today, but that I expect will become more

powerful and assertive over the next few decades. Three stand out in particular. The first is Japan. It’s the second-largest economy in the world and the most vulnerable, being highly dependent on the importation of raw materials, since it has almost none of its own. With a history of militarism, Japan will not remain the marginal pacifistic power it has been. It cannot. Its own deep population problems and abhorrence of large- scale immigration will force it to look for new workers in other countries. Japan’s vulnerabilities, which I’ve written about in the past and which the Japanese have managed better than I’ve expected up until this point, in the end will force a shift in policy. Then there is Turkey, currently the seventeenthlargest economy in the world. Historically, when a major Islamic empire has emerged, it has been dominated by the Turks. The Ottomans collapsed at the end of World War I, leaving modern Turkey in its wake. But Turkey is a stable platform in the midst of chaos. The Balkans, the Caucasus, and the Arab world to the south are all unstable. As Turkey’s power grows–and its economy and military are already the most powerful in the region–so will Turkish influence. Finally, there is Poland. Poland hasn’t been a great power since the sixteenth century. But it once was–and, I think, will be again. Two factors make this possible. First will be the decline of Germany. Its economy is large and still growing, but it has lost the dynamism it has had for two centuries. In addition, its population is going to fall dramatically in the next fifty years, further undermining its economic power. Second, as the Russians press on the Poles from the east, the Germans won’t have an appetite for a third war with Russia. The United States, however, will back Poland, providing it with massive economic and technical support. Wars–when your country isn’t destroyed–stimulate economic growth, and Poland will become the leading power in a coalition of states facing the Russians. Japan, Turkey, and Poland will each be facing a United States even more confident than it was after the second fall of the Soviet Union. That will be an explosive situation. As we will see during the course of this book, the relationships among these four countries will greatly affect the twenty- first century, leading, ultimately, to the next global

“In the middle of the century, other powers will emerge, countries that aren’t thought of as great powers today…” war. This war will be fought differently from any in history–with weapons that are today in the realm of science fiction. But as I will try to outline, this mid-twenty-first century conflict will grow out of the dynamic forces born in the early part of the new century. ...But underlying all of this will be the single most important fact of the twenty- first century: the end of the population explosion. By 2050, advanced industrial countries will be losing population at a dramatic rate. By 2100, even the most underdeveloped countries will have reached birthrates that will stabilize their populations. The entire global system has been built since 1750 on the expectation of continually expanding populations. More workers, more consumers, more soldiers–this was always the expectation. In the twenty-first century, however, that will cease to be true. The entire system of production will shift. The shift will force the world into a greater dependence on technology–particularly robots that will substitute for human labor, and intensified genetic research (not so much for the purpose of extending life but to make people productive longer). What will be the more immediate result of a shrinking world population? Quite simply, in the first half of the century, the population bust will create a major labor shortage in advanced industrial countries. Today, developed countries see the problem as keeping immigrants out. Later in the first half of the twenty-first century, the problem will be persuading them to come. Countries will go so far as to pay people to move there. This will include the United States, which will be competing for

increasingly scarce immigrants and will be doing everything it can to induce Mexicans to come to the United States–an ironic but inevitable shift. These changes will lead to the final crisis of the twenty- first century. Mexico currently is the fifteenth-largest economy in the world. As the Europeans slip out, the Mexicans, like the Turks, will rise in the rankings until by the late twenty-first century they will be one of the major economic powers in the world. During the great migration north encouraged by the United States, the population balance in the old Mexican Cession (that is, the areas of the United States taken from Mexico in the nineteenth century) will shift dramatically until much of the region is predominantly Mexican. The social reality will be viewed by the Mexican government simply as rectification of historical defeats. By 2080 I expect there to be a serious confrontation between the United States and an increasingly powerful and assertive Mexico. That confrontation may well have unforeseen consequences for the United States, and will likely not end by 2100. Much of what I’ve said here may seem pretty hard to fathom. The idea that the twenty- first century will culminate in a confrontation between Mexico and the United States is certainly hard to imagine in 2009, as is a powerful Turkey or Poland. But go back to the beginning of this chapter, when I described how the world looked at twenty- year intervals during the twentieth century, and you can see what I’m driving at: common sense is the one thing that will certainly be wrong. Obviously, the more granular the description, the less reliable it gets. It is impossible to forecast precise details of a coming century–apart from the fact that I’ll be long dead by then and won’t know what mistakes I made. But it’s my contention that it is indeed possible to see the broad outlines of what is going to happen, and to try to give it some definition, however speculative that definition might be. That’s what this book is about.

World Economic Forum 2017

Xi Jinping

Authors: Anton Bendarjevsky, Viktor Eszterhai, László Gere, Péter Klemensits, Eszter Polyák

The 47th Annual Meeting of the World Economic Forum was held between 17th and 20th January, 2017 in Davos, Switzerland. Its main theme was responsive and responsible leadership. The event hosted approximately 3,000 participants, mostly political leaders, and the representatives of academic, economic, financial, business and research life from more than a hundred countries all over the world.

EUROPE’S PROBLEMS Although Europe’s future and related challenges were in focus from the very beginning, several leading politicians, such as German Chancellor Angela Merkel or the European Committee’s JeanClaude Juncker, did not attend the meeting. British Prime Minister Theresa May’s keynote speech on Brexit was the most-anticipated of all speeches and it attracted considerable interest from the political and business elite. In fact, the Prime Minister’s speech did not contain many novelties about the Brexit strategy, but took a clear stand for globalisation and talked about strengthening the global role of Great Britain. She hoped for a greater cooperation on behalf of politicians and finance to ensure positive outcomes from the era of globalisation for the majority of society. British Chancellor of the Exchequer Philip Hammond blamed Tony Blair for Brexit, who was not willing to introduce transitional arrangements to limit the flow of immigrants after the accession of Middle and Eastern European countries. He argued Brexit was contributed to the anti-immigrant sentiment, which consequently evolved. According to Hammond, the process negatively affects the British economy, and he expects an economic growth of merely 1.5 per cent for 2017. London’s Mayor Sadiq Khan warned that Brexit was not beneficial for either the British or the EU, a since the companies leaving Great Britain will not be likely to re-locate on the continent, but rather opt for the United States. Access to the common European market is still a crucial interest for the UK.

Germany's Federal Minister of Finance responded primarily to Theresa May’s statements made in London, in which the British head of government envisaged slashing taxes to attract business should Brexit talks with the European Union fail to strike a deal. As a global economy, Great Britain still has got to stick to what has been agreed globally, and cannot become a low-tax heaven, either, Wolfgang Schäuble argued. In addition to Brexit, the crisis of the EU was another central theme. Dutch Prime Minister Mark Rutte declared that the idea of a European superstate had failed, Brussels must respect the sovereignty of Member States and, in the light of Brexit, internal movement of people within the EU also needs to be brought under control. He was firmly rebuked by European Parliament President Martin Schulz, who said that European heads of state used Brussels as a scapegoat, failing to tell their citizens that they were responsible for the decisions made there. Schultz thinks the European Member States are unable to survive in the worldwide competition in which we are living, and the survival EU is a common interest shared by all of us. Frans Timmermans, the First Vice President of the European Commission, spoke of the middle-class frustration at falling living standards, which is fuelling a populist rejection of the European Union, thus the politicians’ criticism against European institutions can lead only to negative consequences.

XI JINPING: China leads the World? One of the most significant speeches of the World Economic Forum in 2017 in Davos was delivered by Xi Jinping, who was the first President of the People’s Republic of China to come to Davos, further increasing the significance of his address. His speech is also important because he was clearer about China’s future relation with and ideas about the existing world order, continuously reflecting on the policy expected from Donald Trump, winner of the presidential elections of the USA. Xi’s message was clear: China claims a new leadership role in the world. Xi’s speech can be divided into several logical units. His first, powerful meassage was that China is the engine of world economy, a major power of the future. In his speech, the president called attention to the fact that–despite the unfavourable global economic environment–China’s economy grew by 6.7 per cent in 2016. China’s prospects are excellent to become the world’s leading power, especially if it can act as the primary representative of developing countries. In his speech, he referred to a fundamental turn going on in world economy: the importance of former centres of economy is fading, and the role

of developing countries is dynamically increasing (in 2016, developing countries contributed to 80 percent of the growth of the global economy). The second important message of the speech was that China is a status quo power in world economy. Although China is criticised by many for aiming at upsetting the order of world economy, President Xi emphasized several times that their country is committed to restore the institutions of world economy and their rules of operation. The Chinese president highlighted that globalisation is often identified as a problem today–as, for example, Brexit and the outcomes of the American presidential election demonstrate–, but in fact it is an irreversible trend. Furthermore, globalisation and free trade have greatly contributed to reducing global poverty, with China as one of the greatest winners. Many problems troubling the world are not caused by economic globalisation; rather, it is the consequence of excessive chase of profit by financial capital and grave failure of financial regulation. Xi pointed out the importance of international agreements (e.g. adherence to the Paris Climate Agreement), and condemned pursuing politics driven by national

World Economic Forum 2017

interests only. It was a double criticism for the USA: it was a criticism of Trump’s policy promoting the supremacy of national interest, and it also pointed out that the USA is unwilling to fulfil the tasks ordained by the institutions that were mostly created by the USA after the second world war. As Xi can see it, the world has been left without a leader, and this position will be fulfilled by China, understanding the sign of the times. He also added that that fulfilling the leadership role is not just China’s ambition but also the aspiration of the international community. The third message of the President’s speech delivered in Davos is that China is a responsible major power: in addition to contributing to the growth of the word economy–first of all, by promoting domestic and international innovation (e.g. facilitating the fourth industrial revolution)–the country leaves its gates open to other countries as well. He added that China fosters the modernization of other countries and contributes to their rapid economic growth. This is, again, a double criticism directed towards the United States, attacking, on the one hand, protectionism, and the USA’s failure to provide the common good for smaller countries. The fourth message of the President is that China, by reforming international regulations within the existing international framework, has opted for a more just system, which is more responsive to the needs of developing countries. The current system of world economy could not keep pace with the changes in the world, which inevitably led to mistakes, and China is determined to correct these. The President thinks developing countries–first and foremost, China, although not mentioned by name–must be ensured a greater share from global governance. The need for a more active participation in international politics was reflected by mentioning the regulation of the global financial system. However, this changed environment, Xi argues, also requires new fundamentals of new principles and values, with mutual benefits as key elements. This means that China, pursuing a low profile of foreign policy on the global scene for decades, intends to act as a regulator in the future. China, however, unlike the USA, does not wish to take a hegemonic role or provide a universal model to be adopted by everyone else, but encourages to find individual paths.

It can be concluded that despite grand visions, Xi’s speech still reflects the pragmatic approach of Chinese foreign policy, which is in line with the national interests of the country. Xi expressed his hope that other countries would also leave their doors open to Chinese trade and investors because, he stressed, no one will emerge as a winner in a trade war. To sum it up, we can conclude that in the Chinese leadership’s view, the American presidential election has caused such a shift in the international positions of the USA that enables the fast enhancement of China’s role. Although the reality of the above-mentioned objectives, the relationship between theory and practice is highly debatable, Xi Jinping’s speech in Davos may be regarded as one of the important moments in the period following the USA’s hegemony. THE UNITED STATES America’s outgoing leaders For the USA, this year’s World Economic Forum was organized on the brink of a new era. Joe Biden, Vice President of the outgoing Obama administration, outlined the history of world order, in which they professed faith in peace through institutions and alliances. The world order on which the successes of the late twentieth century are based has been facing increasing pressures recently, and Biden thinks it is imperative that we act urgently to defend it. Globalisation has deepened the rift between the rich and the poor, as an impact of globalisation, which is destressing; but the fact that globalisation has also lifted millions of people in the developing world out of abject poverty cannot be ignored. The achievements of the fourth industrial revolution may further increase inequalities as there is a shrinking demand for labour, but technological advancement cannot be undone–nor should be attempted. Implementing a tax system where everyone pays their fair share and providing access to tertiary education would make much more sense. Biden also highlighted the small-mindedness of extremist ideologies: populism, protectionism and isolationism lead to wars. On the contrary, they need to tap into the big-heartedness that conceived a Marshall Plan and proposed a United Nations. In addition, the outgoing Vice President

talked about the fight against cancer, on which he would work as head of the National Cancer Moonshot initiative after leaving office. Economy For the Forum, IMF released its most recent projections, which had been slightly modified since instead of emerging markets, it is Europe, the USA, Japan and China that will be responsible for the increase of expected economic growth in 2017 and 2018. After the turmoil in world financial markets in the first half of 2016, growth has stabilised. A significant repricing of assets followed the U.S. presidential election and the dollar strengthened while the yen weakened. The adjustment of asset markets, however, reflect the future expectations of the USA’s internal affairs; IMF have moderately raised its projections for U.S. growth because of the likely shift in its policy mix. Some countries are now operating at close to full capacity, including the USA; they should focus on long-term investments and a more equitable tax reform. The final conclusion of the analysis reflects the opinion of most speakers of the forum: sustainable growth must also be inclusive growth.

Latest growth projections Global economic activity is set to pick up in 2017-2018 (Percent change) Estimate 2016 World Output 3.1 Advanced Economies 1.6 United States 1.6 Euro Area 1.7 Germany 1.7 France 1.3 Italy 0.9 Spain 3.2 Japan 0.9 United Kingdom 2.0 Canada 1.3 Other Advanced Economies 1.9 Emerging Market and Developing Economies 4.1 Commonwealth of Independent States -0.1 Russia -0.6 Excluding Russia 1.1 Emerging and Developing Asia 6.3 China 6.7 India 6.6 ASEAN-5 4.8 Emerging and Developing Europe 2.9 Latin America and the Caribbean -0.7 Brazil -3.5 Mexico 2.2 Middle East, North Africa, Afghanistan, and Pakistan 3.8 Saudi Arabia 1.4 Sub-Saharan Africa 1.6 Nigeria -1.5 South Africa 0.3 Low-Income Developing Countries 3.7 Source: IMF, January 2017 World Economic Outlook update.

Projections 2017 2018 3.4 3.6 1.9 2.0 2.3 2.5 1.6 1.6 1.5 1.5 1.3 1.6 0.7 0.8 2.3 2.1 0.8 0.5 1.5 1.4 1.9 2.0 2.2 2.4 4.5 4.8 1.5 1.8 1.1 1.2 2.5 3.3 6.4 6.3 6.5 6.0 7.2 7.7 4.9 5.2 3.1 3.2 1.2 2.1 0.2 1.5 1.7 2.0 3.1 3.5 0.4 2.3 2.8 2.3 0.8 2.3 0.8 1.6 4.7 5.4

World Economic Forum 2017

The future of free trade deals and protectionism are continuously on the agenda of global economic debates. Roberto Azevêdo, Director-General of the World Trade Organization (WTO) expressed his concern after having attended the meeting of Ministers of Trade, including 29 WTO members. The trade war envisaged would not create jobs, but result in a severe crisis–even talking about it is harmful. Focus on Donald Trump “The beginning of a new era” was the term most frequently mentioned in connection with the United States. According to Anthony Scaramucci, Head of the White House Office for Public Liaison, the great majority has misunderstood the new President: it was just his style that was harsher than the one that leaders were used to, and he is actually anexcellent strategist, a geopolitical thinker with the best political instincts, who values human relationships. It was populism that put Donald Trump into the fore, and the trust of voters placed in their leaders has been undermined in several other countries in the world. Eric I. Cantor, Managing Director at Moelis & Company investment bank and former House majority leader also backed Trump, since he thought the country needed a powerful leader, especially in economy. Belgian Deputy Prime Minister Alexandre De Croo called for caution, saying the combination of fear and identity in politics is very toxic, and we must be careful about the language that leaders legitimize. The root of the problem is, however, that if mainstream politicians do not listen to the general population, it ends up with extreme forms of politics. The participants of the conversation hope that young people can possibly stop populism. Since the event took place in the run-up to the inauguration of Donald Trump as US president, several participants expressed that they still sit on the fence. Jack Ma, Founder of Alibaba, would give Trump more time, and thinks that America and China should never have a trade war. John Kerry, outgoing US Secretary of State, does not believe Trump will reverse his achievements, such as the agreement with Iran, which is supported by several allies of the USA. As for trade, he can’t wait to see how the incoming administration deals with technology, the main cause of unemployment. Igor Shuvalov, First Deputy Prime Minister of Russia, hopes Trump will be as superb as president as

suberb he was as an entrepreneur, and, holding a dialogue, agree with Russia on how to solve Ukraine crisis. Jeanine Hennis-Plasschaert, Minister of Defence of the Netherlands, hopes for retaining a strong Transatlantic Alliance, while Isabel de Saint Malo de Alvarado, Foreign Minister of Panama, expects gender correct communication from the new US President. America’s future Ideas around Trump’s presidency are fundmentally defined by isolationism, protectionism and the fears of a multipolar world left without a leader. Former Secretary of State Henry Kissinger was also interviewed about the future of the United States and the world. He argued that the world order which we were familiar is disintegrating, and he called attention to the new possible international order in the economic field put forward by China’s President Xi Jinping.

“President Trump will have to define what and where American can lead and where it must contribute to the creation of an international order.”

re-examined in the face of new challenges. Decades ago, the USA and Europe started constructing the Atlantic Partnership with different attitudes, thus roles must be redistributed now. The issue of global security, and in connection with that, the new American leadership, appeared in several roundtable discussions. In the field of security policy, the relations with Russia and their impact on the Middle East may be the first item on Trump’s agenda, and the China-USA relations will also be handled with priority. Certain risk factors, such as the history of relations between Russia and Ukraine, are clear indications; and North Korea poses a high nuclear risk. Tzipi Livni, who also participated in the security forum, claims it should be clarified what the slogan “Make America great again" actually means; if it meant that the USA is a very important global player and wants to defend its values, the vision would gain greater support. RUSSIA AND DAVOS This year’s Russian delegation to the World Forum in Davos was represented by First Deputy Prime Minister Igor Shuvalov and Minister for Economic Development Maxim Oreshkin. Several representatives of the Russian business life also attended the event, including Herman Gref, CEO of Russia’s largest bank, Sberbank; Andrei Kostin, President of Russia’s second largest bank, VTB; Anatoly Chubais, head of the Russian innovation centre, RUSNANO; and Russian tycoon Oleg Deripaska.

President Trump will have to define what and where America can lead and where it must contribute to the creation of an international order. One of the major achievements of President Obama was to withdraw America from some positions; but giving up its indispensable role of leadership in many countries caused concerns in many parts of the world. As for the policy on Russia, Kissinger agrees with Trump's general attitude of being less confrontational, since Russia is a country with a very special history. He hopes for a serious dialogue which would limit military pressure, and that should be a major priority for Trump.

Head of the Russian delegation, Igor Shuvalov mostly talked about the positive tendencies of the Russian economy. He said the government was expecting a GDP growth of 1 or 2 per cent in 2017, and an infloew of direct foreign investments was also expected again after the divestments of 2014. Those who do not invest in Russia now, “will regret later”, he added.

In a multipolar world, the Atlantic Partnership is crucially important; world order is required in a world where any key actors can disturb the equilibrium anywhere and any time. Without the alliance, the Transatlantic region would be threatened; the relevance of institutions, however, should be

Shuvalov’s presentation gave the impression that the Kremlin was not sure about the evaluation about what this year would bring, but did its best to convince its partners that 2017 would be a turning point, and Russia’s economic crisis was over. The first time when the country was represented by

Igor Shuvalov was two years ago, in 2015; and he had a much harder task then. He had to prove that international efforts and isolation did not affect Moscow’s positions and the Russian leadership had everyone behind its back. “We will survive any hardship in the country”, he said back then. Russia’s official appearances this year, taking place under much calmer circumstances, conveyed a much different message: the precursor of Russian rapproachment. In 2018, presidential elections will be held again in Russia, and, in view of international events, Vladimir Putin’s policy does not seem eccentric at all, but perfectly fits international trends. There was no mention of reforms in Shuvalov’s presentation–unlike in Dmitry Medvedev’s speech in Davos in 2013–; stagnation itself was more important than development, because it may mean a recovery from crisis. It des not matter whether the sanctions will be lifted or not–although Shuvalov suggested that everyone would benefit from cancelling the sanctions. Despite external circumstances, everything will fall into place, the Russian economy, albeit not significantly, but has started to grow, the Russian ruble is stable and oil prices are also increasing. In his speech, Russian tycoon Oleg Deripaska (who is the owner of RUSAL, the second largest aluminium company in the world) reinforced this passive message, although in a more moderate tone: he thinks sanctions against Russia will remain this year as well, and they must adapt to this. The businessman thinks Trump is over-evaluated, and the new president will not cause significant changes to Russia’s economic circles. For Moscow, it is much more important who governs Germany, one of Russia’s major business partners, Deripaska added. From the USA’s behalf, former Vice President Joe Biden made accusations against Russia in Davos. Biden argued Russia’s actions had proven the necessity of sanctions, which must be upholded. Biden thinks Europe should decrease its energy dependency on Russia, and devise effective defence against cyber intrusions, learning from the hacker attacks agains the USA. Geopolitician and former Secretary of State, Henry Kissinger, however, had an entirely different view. Speaking via live stream at the World Economic

World Economic Forum 2017

Forum, Kissinger said that he agrees with Trump's general attitude toward Russia. The geopolitician said America needed to be less confrontational with Russia, and that that should be a major priority for Trump. China’s paramount leader Xi Jinping’s meeting in Davos with Ukraine’s head of state Petro Poroshenko was remarkable. After the meeting, Poroshenko expressed his hopes that China could act as a mediator in the Ukraine conflict on the international stage, which would mean another opportunity for China’s diplomacy. There is very little chance that Russia would let China be a partner in resolving the Ukraine crisis, but the action of the Chinese leader

As Hewlett Packard’s CEO Meg Whitman put it, “Technology is now disrupting every single industry and every single job. And my view is that the pace of change is only going to accelerate.”

is symbolic, indicating the existence of China’s aspirations in Europe. Trade in goods between Ukraine and China has been gradually increasing in recent years, and China was Ukraine’s second most important commercial partner in 2015..

inclusive. Next, pay attention to those people who are 30 years old, the so-called internet generation. They will change the world, they are the builders of the world. Third, let’s pay attention to the companies who have fewer than 30 employees. Ma thinks these 3 trends will define the future: 30 years, 30 years old, and 30 employees.

TECHNOLOGY, INNOVATION The World Economic Forum also pays special attention to the economic impact of technological inovations; several panels were directly or indirectly dedicated to this topic this year as well. These conversations concluded that we inevitably stand on the brink of the fourth industrial revolution, whether we are ready for it or not; but obviously, countries should prepare appropriately if they intend to retain competitiveness. All conversations of this panel were centred around how fragile countries can cope with the overall impact that the online era, artificial intelligence and automatization have on the labour market. All speakers agree that long-term thinking is needed to be prepared for the significant changes ahead of us. In this process, the role of responsible leaders is to give workers the opportunity to acquire the skills required in the future.

“Digital innovation is reshaping industries by disrupting existing business and operating models.”

Jack Ma

Jack Ma, Founder of Alibaba thinks that the next 30 years are critical for the world, since every technological revolution takes about 50 years, and in the first 20 years, we witnessed the rise of technology giants like eBay, Facebook, Alibaba and Google. Now we need to focus on what comes in the next 30 years, and this period of time should be about handling the implications of this technology. The most important thing is to make the technology

“Jack Ma, Founder of Alibaba thinks that the next 30 years are critical for the world….” Sergey Brin, the co-founder of Google, said he didn’t expect an artificial intelligence revolution of such scale, since none of the experiments with AI conducted in the 90s worked. Google Brain, the company’s AI research project, has advanced so much that it now, touches every single one of their main projects, ranging from search to photos to ads. Now that AI is widely used across numerous fields, its future and potential uses have become even more difficult to predict; there are practically no limits. AI is the natural continuation of the industrialization of the past 200 years, Brin added, but what does this mean for education, skills and employment?

Transformation White Paper, with the aim to give insights into the impacts of a digital economy on companies and on broader society over the next decade.

“Ma thinks these 3 trends will define the future: 30 years, 30 years old, and 30 employees.” Some studies indicate that automation may threaten half or two-thirds of current jobs. Yet the world is already slated to need 500 million new jobs by 2020. “The coming jobs crisis needs more political attention, or the political backlash we’ve

already been seeing will amplify,” said Philip Jennings, General Secretary, UNI Global Union. Policymakers summarised in three main options how the situation can be handled: • Develop apprenticeship programmes for young people. Education should not mean merely knowledge transfer (in a classical school environment) but skills development and preparation for the world of labour. • Provide lifelong training: flexible training programmes are required to keep pace with continually changing economic needs. Governments need to cooperate more closely with business. • Give rights to workers in the platform economy: with the growth of self-employment (such as Uber) there is a greater need for establishing the legal framework to protect these workers.

Digital innovation is reshaping industries by disrupting existing business and operating models. But it is also having a profound impact on society, presenting a series of opportunities and challenges for businesses and policy-makers. The World Economic Forum has compiled a Digital

MUNICH SECURITY CONFERENCE

Munich Security Conference

Authors: Anton Bendarjevsky, Viktor Eszterhai, László Gere, Péter Klemensits, Eszter Polyák

The world’s most significant security policy meeting, also dubbed as the Davos of themes on foreign affairs, the 53rd Munich Security Conference, was held from 17 to 19 February 2017. More than 500 invited participants, including 47 foreign ministers and 30 defence ministers, joined the event for discussions on major international security challenges.

For more than fifty years, with the participation of more than 500 decision-makers and leading politicians, Munich has been hosting an annual event to discuss major issues of international foreign and security policies, the Munich Security Conference (MSC). It was Ambassador Wolfgang Ischinger who, as last year, chaired the event this year, and the list of participants included Senator John McCain; Boris Johnson, Secretary of States for Foreign and Commonwealth Affairs, United Kingdom; Petro Poroshenko, President, Ukraine; Angela Merkel, Federal Chancellor, Germany; Michael Pence, Vice President of the USA; António Guterres, Secretary General, United Nations; Sergey Lavrov, Minister of foreign Affairs, Russia; Haider Al-Abadi, Prime Minister, Iraq; Wang Yi, Minister of Foreign Affairs, China; Adel bin Ahmed Al-Jubeir, Minister of Foreign Affairs, Saudi Arabia; Mevlüt Çavuşoğlu Minister of Foreign Affairs, Turkey; and Bill Gates. Without doubt, the presidency of Donald Trump and the related security policy insecurities and challenges dominated the agenda of this year’s Munich Security Conference, inflecting every discussion on Syria, Russia or China. Russia was the second most frequently discussed topic of the Conference held from 17 to 19 February. On the sidelines of the Munich Security Conference, Russian Foreign Minister Sergei Lavrov and NATO Secretary General Jens Stoltenberg met on Friday. Although the meeting did not produce any real results, the parties discussed the situation in Ukraine, and both admitted the need for dialogue.

The most important topics of this year’s event included: • The Future of the European Union: United or Divided? • The Future of the West: Downfall, or Comeback? • The Future of NATO: “Obsolete” or “Very Important”? •H ealth Security: Small Bugs, Big Bombs •C limate Security: Good COP, Bad cops •C ountering Radical Extremism and Terrorism •P acific No More? Security in East Asia and the Korean Peninsula •T he Fault Lines of Eurasia •A tt(h)acking Democracy •U S Foreign Policy: A Congressional Debate •S yria: Meddling Through

is searching for new common ground. Regarding Ukraine, Pence promised a firm commitment and consistency. In the conference, Michael Pence also signalled to the NATO allies of the USA: the US VP reminded everyone of a minimum security commitment of two percent of their gross domestic product on defence. As of this moment, only five of the 28 NATO members meet this basic standard of two per cent. Washington, in line with Donald Trump’s earlier remarks, was going to be a lot tougher about insisting everyone met their obligations, which also means significant increases in Europe’s military spending in the coming years, if the commitment of the two per cent of the GDP on defence is fulfilled.

RUSSIA IN THE FORE At the very beginning of the conference, the tone of the debates on Russia was set by the speech of US Vice President Michael Pence, who was rather assertive, in contrast with Trump’s Russian rapprochement, which seemed to surprise Moscow’s representative, Russian Foreign Minister Sergey Lavrov. The US VP said the United States will continue to hold Russia accountable for the conflict and demand that they honor the Minsk Agreements. Pence argued the security challenges posed by Russia’s aggression cannot be ignored, even as the USA

Several other US Senators delivered speeches at the conference, stressing that the Senate would object and prevent Trump’s foreign policy towards Russia, no matter what it indicates. Republican Senator Lindsey Graham, for example, promised that Congress will press ahead with a bill to sanction Russia for interfering in the U.S. presidential election with hacking attacks. Graham said if the American head of state did not take necessary action, the Senate would. Senator Chris Murphy reiterated the point that Russia had paid very little price and would be held accountable.

Michael Pence’s critical speech–especially in the light of Trump’s earlier statements–might have surprised the Kremlin. Soon after the speech, the upper house of the Russian Parliament, the Federation Council also responded, and, according to the Financial Times, Sergei Lavrov, Russia’s foreign minister seemed disappointed during his speech delivered in Munich. The Federation Council thinks the US stance “gives Kyiv the opportunity to perpetually sabotage the Minsk Agreements”. The Russian Foreign Minister, who spoke after the American Vice President, did not really hide his disappointment. He was in a difficult situation, since it had been unknown what position the US foreign policy would take alongside Trump’s statements suggesting rapprochement, thus after Pence’s speech he even needed to improvise. That is why he ironically said, Russia “will not lift its sanctions against the European Union until the Minsk agreements are implemented.” Lavrov also mentioned the Cold War in his speech, arguing that NATO remained a Cold War institution. “It is said that wars start in people’s heads, but according to this logic, it is also in people’s heads that they should end. This is not the case yet with

munich security conference

Russia’s Foreign Minister Sergey Lavrov

“POST-TRUTH, POST-WEST, POST-WORLD ORDER?” Before the Conference, the Munich Security Conference Foundation published its annual report on key issues in international security in Europe and the world. The report says the international security environment is arguably more volatile today than at any point since the second world war. The authors consider 2017 crucial for Europe. Donald Trump does not care about Europe; he regards the European Union as a project intended to counter US influence. Should the Trump administration strike a meaningful deal with Moscow, this will not bring peace, but make war more likely, the report highlights. THE FUTURE OF EUROPE AND THE TRANSATLANTIC PARTNERSHIP

the Cold War. Some statements by politicians in Europe and the United States seem to confirm this particularly clearly”, Lavrov said in Munich. Lavrov also stressed that the NATO expansion had created a level of tension in Europe unseen in the last thirty years. With regard to the United States, he said, “we want relations based on pragmatism, mutual respect, and understanding of our special responsibility for global stability.” Despite Donald Trump’s conciliatory statements, the United States took several actions against Russia in the last two months. On 29 December, in the last days of Barack Obama’s presidency, 35 Russian diplomats were expelled from the country and two facilities of Russian diplomacy were closed (by reference to intelligence activities). The last time an anti-Russia action was taken had been on 16 February: a bill that would give lawmakers 120 days to block any move to lift anti-Russian sanctions using a congressional oversight mechanism based was submitted to the US Senate, and would adopt President Obama’s decrees imposing

anti-Russian sanctions (the most important provisions of the sanctions were stipulated by four presidential decrees). This would block lifting the sanctions, which was hinted by Donald Trump. Most of the speech delivered by Angela Merkel, who was also present at the Munich Conference, was also centred around Russia. The German Chancellor thinks, for the interests of Germany, it would be very important to restore good relations with Russia, but the principle on which the European peaceful order has been based since the second world war, the territorial integrity of nation-states shall not be ignored. Russia violated exactly this extremely important principle with the annexation of Crimea. „we (…) have not been able to establish stable and permanently good relations with Russia in the past 25 years. But Russia is also a neighbouring country of the European Union. Russia is situated at our external border and is a neighbour of ours”, said Merkel at the Conference.

Europeans paid particular attention to the controversial relationship between new American administration and the European Union. As German diplomat Wolfgang Ischinger also stressed, one of the most important tasks for this conference is explaining the value and the resilience of European integration to the Trump administration. The European standpoint was represented most explicitly by Angela Merkel, who–as a response to American criticism–insisted on the relevance of international organisations, and argued for enhancing the efficiency of the UN, the NATO and the EU. The Chancellor thinks Europe alone cannot effectively address today’s challenges, such as Islamist terrorism, and it needs the alliance with and the support of the United States. She stressed that developing the defence capability of the EU is a matter of great urgency, but it can never be seen as an alternative to NATO, thus the significance of Transatlantic relationships is beyond question. Merkel also reasserted that the increase of military budgets of NATO member countries is a target, and reassured American Vice President Michael Pence that by 2024 Germany would significantly increase its defence spending; for example, it had increased it by eight per cent in this year's budget over last year. (At present, the German government is spending 1.2 per cent of the budget on defence.) Regarding Islamist terrorism, Merkel explained

that Muslim countries should be included in the coalition to fight against terrorism, but expects them to distance from terrorist actions, while she regards taking in refugees Europe’s responsibility.

“…by 2024 Germany would significantly increase its defence spending” Jens Stoltenberg, Secretary General of the North Atlantic Treaty Organization, agreed with Merkel that only the Transatlantic alliance is able to address security challenges effectively, and a strong Europe is unconceivable without the USA’s support. Federica Mogherini, High Representative of the European Union for Foreign Affairs and Security Policy, talked about the close cooperation of the NATO and the EU, highlighting that 42 joint projects had been lunched in the past seven months, aiming at resolving complex security issues ranging from cyberspace to maritime security. Most European politicians agreed that the goal is to create a feasible, constructive cooperation with the USA, that is maintaining good relationships. The suggestion made by German Minister for Foreign Affairs Sigmar Gabriel had a cold reception; he suggested that, under the current circumstances, the EU should prepare for a disengagement with the USA, and therefore should take its fate in its hands, and take action to strengthen the organisation. In the opinion of the majority, however, it would harm Transatlantic relationships and may provoke the USA’s dislike. Brexit fundamentally affects the joint European defence. Great Britain and Germany attempted to find a solution for this problem within the framework of a bilateral project. As Britain’s Secretary of State for Defence, Michael Fallon and Germany’s Minister of Defence, Ursula von der Leyen agreed, the most important goal is to maintain a close defence cooperation with the United Kingdom later as well, since it is a common interest, and it would be rather unfortunate to charge the costs to other EU Member States.

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Wang Yi, Minister of Foreign Affairs of the People's Republic of China

voiced standpoint is that the tension between the great cultures of the world has extremely grown and it will end up with a clash of civilizations. And finally, there are some people who think that the conflict of interests between emerging and status quo major states will inevitably result in war.

“China thinks the time has come to take the role of the world’s leader.”

In the discussions, Europe’s future was a central theme; however, like the World Trade Forum held at Davos, the participants had a heated debate, primarily about the integration and the division between the interests of nation-states. Frans Timmermans, First Vice President of the European Commission talked about diverse societies and shared values, stressed the necessity of complying with EU resolutions, and warned that the independent paths of nation-states were not viable any more. Witold Waszczykowski, Poland’s Foreign Minister, however, would expect Brussels to respect national constitutions, and advocated preserving sovereignty. Wolfgang Schäuble, Germany’s Finance Minister, and Dalia Grybauskaite, President of Lithuania tried to mediate between the parties during the discussion, and praised the merits of integration, regarding its continuation essential. Norbert Lammert, President of the German Bundestag also said that no national state was in a position to overcome problems alone. He regards the growing strength of nationalism and populism in Europe a great threat, which should be countered with facts and tenacity.

CHINA: NEW LEADING MAJOR POWER OF THE WORLD The statement by Wang Yi, Minister of Foreign Affairs of the People's Republic of China, was a smartly formulated message, portraying China, pursuing its national interests, as a responsible major power committed to resolve the problems of the international community, consciously contrasting it with the United States of America, which was perceived as more of a challenge also at the Munich Security Conference. Wang repeated President Xi Jinping’s message communicated at the World Economic Forum in 2017: China thinks the time has come to take the role of the world’s leader. In his statement, Wang listed the challenges that the world is facing: terrorism, weak world economy, growing geopolitical tensions, the migration crisis, the setback in the globalisation process, etc. He highlighted that a growing number of people blamed globalisation for these problems, recommending isolation and protectionism as a remedy. Others think the major cause for the problems is the lack of world order, and propose the creation of a new international order. Another frequently

If the international community chose a wrong pathway for the problems above, the world would be bound to be marching towards war, Wang argued. Therefore, an adequate leader is required, and this leader is China. What is this standpoint based on? First, Wang mentioned China’s long row of diverse historical experiences on development, enabling it to adequately address the challenges. Second, China has the resources that the leadership role requires. Third, the country is determined to actively participate in shaping international politics. So, the question arises: what is China’s approach to the above-mentioned problems? First, repeating Xi’s speech delivered in Davos, Wang argued that globalisation was an irreversible trend. Countries, therefore, should have an open attitude and not a protectionist one. Not only did Wang flick at the US leadership, but he also kept China’s interests in mind. For the Chinese economy, which is still strongly dependent on export, growing mercantilism and isolation may mean a serious blow. Wang called attention to the fact that the international community should not be afraid of globalisation, because together they could shape it. Second, Wang took a stand for maintaining the world order that was built after the second world war. He also aimed at reassuring the international public opinion, hinting that the world order led by China would not be completely unknown to the other countries. It is China’s national interest to stick to the existing international order: this order has benefits for the country that have been ensuring its dynamic economic growth for decades. Nonetheless, Wang claimed, he did not believe in the end of history and in development having one

single model only; thus, he did not state that China, while maintaining the international order, would not want to shape it along its interests (for more on the topic, see Fu Ying’s speech delivered at the Munich Security Conference in 2016). Wang called upon the international community to combat problems, for which all the tools are at our disposal. What are these tools? 1) Multilateralism, with its top product, the UN. Wang thinks the root cause of the problem is that UN principles are not implemented. The UN should not be discarded but strengthened and made more efficient. Although he dismisses, by reference to China’s experiences throughout history, the opportunity of a hegemonic international system, multilateralism would actually mean the weakening of the leadership role of the USA and, simultaneously, the increase of China’s significance. 2) Transforming the cooperation between major powers. Although states are legally equal, larger states have more resources and capabilities, and consequently more responsibility and obligations, to play a greater role. China is such a major power, Wang argued. He does not deduct it from China’s international role, but is also sending a message to the USA: China is willing to cooperate with the Trump administration. Again, a kind of dual strategy can be seen here: on the one hand, he argues for China’s new, chosen role, but also defends China’s own national interests with the message conveyed to the USA. When talking about the cooperation of major powers, Wang highlighted the good relationships with Russia and the EU, which obviously strengthens the previous factor, multilateralism, decreasing the role of the USA. 3) Global governance. According to Wang, the imbalances in world economy (e.g. poverty, unemployment, widening income gaps) can be addressed only with cooperation on a global level. Wang argues that “ joint development” may be the new basis for development. International cooperation in the field of innovation would undoubtedly give a significant push to China’s own national development programme, increasingly built on R&D and innovation. In addition, Wang also calls attention to the fact that the role of emerging countries should be enhanced in global governance. Here, China

munich security conference

does not just warn of a real dysfunction, because the support of emerging countries would further improve the positions of China, which often refers to itself as the leader of emerging countries. 4) Regional cooperation. Wang claims regional cooperation is still needed, despite its initial throwbacks. In his opinion, “One Belt, One Road” is the most significant one (for more on this topic, see HUG issue No. 3), which is a common good provided to the world by China. Naturally, “One Belt, One Road” is also capable of weakening the international positions of the USA, critical voices claim. In summary, at the Munich Security Conference China reasserted its goal to become the leading major power of the international community. This, however, does not mean abandoning its pragmatic foreign policy. The main direction of China’s foreign policy for the coming years seems to have crystallised. PACIFIC NO MORE? SECURITY IN EAST ASIA AND THE KOREAN PENINSULA The Munich Security Conference focused on the East Asian region while addressing security challenges. According to the Munich Security Report 2017, the risk of a major security crisis is higher than it has been in many years. The regional tension between China and the USA might be one of the major global security challenges, since even Australia would now support a China-led TPP, and Philippine President Duterte announced his country’s separation from the alliance network of the United States. The division and the nuclear challenges of the Korean Peninsula might as well result in a USA-China conflict, thus North Korea’s weaponisation increases the security risk of the region. The panel discussion entitled “Pacific no more? Security in East Asia and the Korean Peninsula” of the Munich Security Conference was related to the Report’s chapter on Asia. Several Asian politicians contributed to the debate, including Yun Byung-Se, Minister of Foreign Affairs, South Korea, Ng Eng Hen, Minister of Defence, Singapore, and Fu Ying, Chairwoman of the Committee on Foreign Affairs of the National People’s Congress, China. Remarkably, the event was a rare public exchange of views of differences between the U.S. and South Korea on the one side, and China on the other.

Yung Byung-Se talked about several challenges erupting simultaneously, which shake the region, such as territorial disputes, maritime ad cyber security, and mentioned the return of geopolitics and geo-economics, the most significant challenge of which is the nuclear programme of North Korea. He referred to the fact that when North Korea was admitted to the UN in 1991, it pledged to be a peace-loving state, and saw the time had come to act on international level, in the form of more severe sanctions. He does not regard negotiations effective enough, and although South Korea is open to dialogue in principle, they expect complete, verifiable and irreversible dismantlement of the nuclear

proud that her country has finally gained strength, and China’s security is an integral part of global security. She divided the security of the modern AsiaPacific region into two parts: the twenty years after the Cold War, and the period since then up to this day. The first twenty years saw conflicts all over the world while the Asian region was relatively peaceful, and working on regional integration and economic growth. The South China Sea disputes were already present but China was able to settle these through negotiations with ASEAN and their neighbours. In the second phase, which has lasted for almost a decade, tensions are more prominent, evoked by China’s growing stronger and the uncertainty it has

Regarding North Korea, Fu Ying did not agree with the Minister of South Korea. Dismissing negotiations would only drive the country in the wrong direction further. Alaska’s Republican Senator, Dan Sullivan, however, backed the Korean standpoint, and, in the name of American people, encouraged China to use its influence on North Korea in a

programme, also counting on the UN’s support. An unsuccessful intervention would entail a nuclear threat expanding beyond the borders of the region, but, if successfully reunited, the peninsula could be the forerunner of international peace.

caused. On the other hand, the competition with the USA also led to this, since the Chinese party felt as if it were in crossfire due to the policy of rebalancing, especially from the viewpoint of territorial disputes. Fu Ying thinks the problem derives from the fact that the USA appeared as a party participating in the dispute in 2012. China was concerned about this stand, resulting in defending Chinese interests and sovereignty.

more constructive way. Lassina Zerbo, Executive Secretary of the Comprehensive Nuclear-Test-Ban Treaty (CTBT) called for urgent dialogue based on mutual respect, with the Treaty serving as the platform as a first step, since if the CTBTO were not in place today, North Korean activities would still be unclear. Fu Ying thinks North Koreans are trying to arm themselves because of their weakness, therefore turning away is not a solution.

Ng Eng Hen believes the US-China relationship would be the key consideration for the stability of the region, and with a new US administration at the helm, it is particularly important at this juncture for both the US and China to articulate their overarching foreign policy objectives towards Asia. The Singaporean Minister quoted the words of John F. Kennedy, who promised to protect liberty at any price, which provided the "legitimacy" for the expansion of U.S. influence in Asia. The question for the current U.S. leadership is: On what basis will the continued US presence and influence be legitimised under an "America first" policy? If the USA continues to pursue an anti-China foreign policy, it will be a frustrating decade for the region; however, there will be an opportunity for the USA to provide a security umbrella for China in exchange for other privileges or gains. China as a rising power has to articulate its vision, which will serve China’s interests but not exclusively. The Minister sees that certain initiatives, such as AIIB and OBOR, serve common interests, and existing platforms, such as the ASEAN Regional Forum and the East Asia Summit, should be lined up to fulfil a mediator role for a better mutual understanding.

In the future, the main issue of the security of AsiaPacific will be choosing inclusive or exclusive security: will the USA also consider the security of nonallies? Fu Ying said that also President Xi Jinping had stressed the importance of the common security of the Asian pathway, emphasized by the ASEAN.

Regarding military development, Fu Ying said that China wishes to keep its defence budget at 1.5 per cent of its GDP, which is less than the NATO’s target of 2 per cent. Still, China is often faced by the fact the foreign journalists regard Chinese weaponisation a source of danger. As a Chinese citizen, she is

vision 2050

FUTURES STUDIES IN HUNGARY

50 Years of the Futures Studies Centre at the Corvinus University of Budapest Author: Erzsébet Nováky, Doctor of Economics, Professor Emerita

The Futures Studies Centre (which forms one organisational unit together with the Economic Geography Centre) formally established in 2015 at the Institute of Economic Geography, Geoeconomy and Sustainable Development of the Faculty of Social Sciences and International Relations of the Corvinus University of Budapest is almost 50 years old. The beginnings of its history date back to 1968.

by futurology they can overcome difficulties more easily, they can give constructive and forward-looking responses to challenges and they live their life and educate the new generation by demonstrating responsibility for the future.

Erzsébet Nováky The members of the almost 50-year-old Department of Futures Studies played a major role in the establishment, organic development and research results of futures studies in Hungary. The research results and publications of the Hungarian subject matter experts trained during this period have gained recognition and appreciation for the Hungarian futures studies and its professionals among the international futurologist community. Two generations have been educated for whom the scientific treatment of the future and the utilisation of its results in everyday work in several areas of the national economy and the private sector alike is absolutely natural. They represent the attitude of attention to changes, a complex, far-sighted approach in their work, and a way of thinking that focuses on alternatives. These professionals make use of their knowledge in futures sciences and other subjects in developing their personal careers as well. Young people understand that with the information acquired

In the twenty-first century, futures studies will become an integrative discipline that–in addition to developing its philosophical theory by increasingly practical means–promotes that scientific work generally, and within the framework of futurology as well, can improve cooperation of humanity and decrease unrest. FUTURES STUDIES CENTRE AT THE CORVINUS UNIVERSITY OF BUDAPEST AT THE MILLENNIUM From 2000 the Department of Futures Studies continued working as part of the Institute of Environmental Economics (Director: Sándor Kerekes) at the Corvinus Business School renamed as Futures Studies Research Centre. In 2004, the Research Centre was again classified Department of Futures Studies–as a recognition for its merits. It operated as a department of the institute until 30th June 2012, when–after repeated re-elections–Erzsébet Nováky’s mandate as head of academic department expired. From 1st July, 2012 the Department of Futures Studies became an equal partner of the Department of Economic Geography and formed the Department of Economic Geography and Futures Studies (Head of Department: István Tózsa).

From 1st September 2015 the Economic Geography and Futures Studies Centre (lead by István Tózsa, Márton Péti) was founded in the Institute of Economic Geography, Geo-economy and Sustainable Development of the Faculty of Social Sciences and International Relations, and it constituted the university base for futures studies. The Futurology Group, Division, then Department of Futures Studies (1974-1998, then between 1999 and 2006, over to the next cycle) enjoyed the support of the Hungarian Academy of Sciences through the external department of the Longterm Complex Futures Studies Research Group, then Complex Futures Studies Academic Research Group. Between 1974 and 2012, the Department of Futures

The results of futures studies contributed to long term planning and the development of macro level, industrial and regional concepts. In this period, when studying world models, we examined how global problems appeared in Hungary and what answers could be given to them.

Studies–with academic and state funding–established a 3,000-volume futures studies resource library that was managed by Ferencné Bujna.

velopment of futurology in Hungary. The methods’ systematisation and adaptation to the Hungarian circumstances have brought the discipline closer to practical application, which was completed by studies on reliability of predictions.

Futurology is an interdisciplinary science that–thanks to its complexity– can easily ‘communicate’ with other disciplines. The fact that the Department of Futures Studies has been part of all three faculties of the University during the past decades clearly shows that futurology is an interdisciplinary science that – thanks to its complexity – can easily ‘communicate’ with other disciplines, and is capable of providing a unique framework of approaches and methodology. This feature of futures studies is evident in university education, where the discipline is treated horizontally. The futurology subjects are available for the students of all three faculties, they are informative and their topics and examples discussed at seminars are adapted to the specific needs of the given faculty. MAJOR RESEARCH RESULTS OF THE DEPARTMENT OF FUTURES STUDIES The theoretical and methodological results of the early period clarified the position of futures studies in the system of scientific disciplines.

Among the methodological questions we put special emphasis on the question of knowability and determinedness of the future and on the definition of the place of heuristics, quantification and alternativity. The identification of the different time range cycles and linking them to each other managed to break the barriers socialism had put in the way of the de-

The enormous global changes in the 1990s (spread of globalisation, aggravating issues of multiculturalism, appearance of international terrorism, global financial crisis, environmental catastrophes also caused by human activity) impacted Hungary too, where profound social, economic and political changes occurred. Only part of these changes was foreseeable. In the new situation that was brought about by these changes, earlier trends were broken, instability and uncertainty grew, and new, unexpected events happened very often clearly as a result of human activity. As a scientific reflection to these phenomena, futures studies started focusing more on signs that are barely detectable in the present but are significant and definitive from the future’s aspect, on the lay people’s relationship with an attitude towards the future. This situation not only consolidated the renewed methodology of futures studies, but also made complex future vision studies rely consciously on the broadening methodological principles of futures research. Changes made it clear that the future is not so much the more or less unchanged continuation of past and present, but rather a new consequence of the changing present, the creation of which is growingly impacted by man – man who often thinks for short terms only and acts without complex contemplation. The future defining power of expectations was increasingly recognised.

FUTURES STUDIES IN HUNGARY

SCIENTIFIC RESEARCH AND EDUCATION The Futures Studies Centre – as a scientific research workshop – is responsible for studying the theoretical and methodological issues of futures studies and – as an educational and training facility – for improving students’ futures studies knowledge and enhancing their future-orientation. Researches of the Department of Futures Studies, financed by the Academy, the Ministry, the Research Fund and different research institution funds, were conducted in the following topic areas: • theoretical and methodological topics of fu-

° Future-orientation of companies and enterprises, MKM PFP, 1997; ° Future-orientation of service providers, MKM PFP, 1998; ° Futures research foundations of the Hungarian settlement network development, NFGM, 20082009; ° Futures research foundations for strategies, Ecostat, 2009; ° Formulating the future vision of the knowledge economy in the Central-Hungarian region with interactive foresight, BCE, 2010-2012).

tures studies Development of futures studies methodology ° with special focus on the application of chaos theory in futures studies, OTKA 1992-1994;

tional and education development purposes. •T ransforming theoretical, methodological and

° Modernising futures studies’ methodology in the era of transition, OTKA, 1995-1997;

practical solutions of modern futures studies

° Developing the theoretical and methodological basis of futures studies, FKFP, 1997-1998;

programme for postgraduate education) MKM,

° Applying evolutionary models in preparing forecasts, OTKA, 1998-2000;

•P reparing a collection of futures research case

° The problem of space and time in contemporary futures studies and philosophy, FKFP, 20002002; ° Paradigms in futures studies, OTKA, 2001-2004; ° Change and future, OTKA, 2003-2006;

into an educational programme (foundation 1993-1994; studies and mediatised resource materials, MKM, 1994-1995; •F urther development and application of the method of scenario writing in university level futures studies education, MKM, 1997).

° Futures studies in the interactive society, OTKA, 2005-2009;

We participated in two significant international

• elaborating complex future visions

•C OST Action 22 – Advancing Foresight Method-

researches:

° Hungary at the Millennium, ÉVM, 1967-1970;

ologies: Exploring new ways to explore, European

° Chances of realisation of long range future vi-

pean Science Foundation, 2004-2007

° Hungary after tomorrow, OTKA 1997-2000;

sion, science intensive production and service development strategies, OTKA, 1992-1994;

° Hungary 2025, MTA, 2007-2008-2010; • practical forecasting

° Planning and forecasting environmental protection, KTM, 1982-1985;

° Futures research and environmental protection, KTM, 1986-1990;

A substantial part of our research served educa-

Cooperation in Science and Technology, Euro•T he AUGUR Project: Challenges for Europe in the world of 2030 (scientific coordinator: Pascal

It also became obvious that the future is not a scene of the social and political activities of a few people, multinational companies or countries, but it is formed as a result of activities and acts of communities. This is exactly the reason why the feeling of responsibility for the future has significantly grown among experts and non-experts alike following the regime change. New questions required new types of answers, because our attitude towards the future changed (it became more direct and multilayered), the actors of futures research changed (the number of people dealing with the future grew), the desire to explore the future became stronger (we wanted to understand the future’s dynamics, how it retains the traditions of the past and present while being renewed). Futures research thus renewed its methodology and the applicable methods. This renewal meant that futures research studied the dynamics and changeability of processes simultaneously (including the possibility of breaking lasting trends and the great social impacts of small changes), and also the aspirations of society actors to shape the future, tried to find and identify the forces shaping the future. We paid special attention to the definition of the notion of future-orientation (the Hungarian definition became internationally accepted), to the observation of the future orientation of the Hungarian population by examining those factors that can determine and enhance the positive approach to future in the individual. The researches into future orientation constituted a kind of bridge that connected the past-determined, so called consequence futures and the farther off future visions that can be interpreted normatively. They facilitated a range of empiric researches about the future (between 1993 and 2011).

Petit) Socio-economic sciences and the Humanities Theme 8, FP7-SSH-2009 Our research results were published in 25 articles in international and 120 articles in national scientific journals, 25 reference books and also pre-

° Present and future of vocational training in socioeconomic processes, MM, 1992-1994;

sented at international and national conferences.

° Development of vocational training in relation to the changes in the socio-economic environment

number of scientific publications is about 500,

from the turn of the century to the millennium,

and 300 of the references were made in foreign

NSzI, 1995-1996;

language publications.

The number of book excerpts is over 120. The total they have been referenced almost 1000 times,

It’s worth highlighting among the new phenomena in futures studies that the importance of statistical probability decreased, while the importance of subjective probability and subjective assessment increased. We made it clear that there’s no possibility to create one, high-probability future version (prediction), but rather to produce several future versions of more or less the same probability. This was expressed by the preferred application of the scenario building method. We pointed out that sudden, low probability changes can create futures that are different from the previous futures, and

expectations about the future can prefer different futures as well. We understood that alternative future options and expectations about the future can give significantly different future alternatives with similar probability. We understood that the future shaping power of society grew and can generate and realise changes within the latitude defined by the objective trends. In this period, there was special focus on the future visions of nonprofessionals and stakeholders, and the foresight approach to future. Evolutionary researches – with evolutionary models – opened a new path in searching explorable future patterns. Treating time and space with a new approach appeared not only in linking the two notions together but also in the interpretation of the fine-structure of time. We clarified that the three dimensions of time, past, present and future appear simultaneously in all time horizons and it depends also on the individual’s attitude which dimension is more emphatic. The changes in futures research methodology brought agent modelling, evolutionary models, statistical tools of economic and market research, methodology of artificial neural networks, research of the overlapping fields of futures research and information technology, especially the future aspects of data mining in economic informatics, into the fore. We made the ties between economics and futures research tighter. The appearance of foresight, and the interpretation of forecasting and foresight also date back to this period. The growing significance of lay people’s role brought forward participatory futures research that was closely connected to the phenomenon of activity and action orientation. Lay individuals and social groups demonstrated greater demand for changing the future and it appears in more and more varied fields of action. Collective responsibility (and irresponsibility) as a synthesis of the various individual and group activities significantly impacts the future. Thus responsibility towards the future highlights the responsibility of not only the futures researchers but also of stakeholders and lay people. These issues have come together as a single methodological problem by now, and this is why we consider the role and participation of lay people in shaping the future to be a possible scope of research related to futures studies. The force that shapes the future has

broadened, a lay individual can promote the realisation of favourable forecasts with his actions and also he can thwart even the most desirable forecast with his “non-actions”. The individual’s constructive or destructive aggressive behaviour may play a major role in this. The unstable situation strengthened future researchers’ long range approach, complex thinking (approaching from different angles at the same time and taking vague signs into consideration as well), participatory approach (recognising the participation of stakeholders and lay people in defining alternative futures), and the importance of cross-impact analysis, responsible future orientation and alternative approach. The application of these – especially the accentuated – futures research methodological approaches is necessary not just for making scientists understand unstable situations better but also for bringing future forecasting and planning closer to stakeholders and non-professionals so that they could create such versions of the future together that can be acceptable for wide layers of the population concerned locally and considered feasible by scientists. In this approach the role of creativity and interactivity became more important. Similarly to other disciplines, the different futures studies trends became more diverse and recognisable in the 1990s. Some characteristic paradigms appeared: in addition to positivist futures research there were the evolutionary and critical paradigms, later the paradigm of integrated futures research also appeared and presented the possibility of synthesising the various approaches. SPECIAL FEATURES OF HUNGARIAN FUTURES STUDIES A typical feature of Hungarian futures studies is that complex national future visions were worked out on a regular basis. The first Hungarian future vision was drafted at the end of the 1960s with a time-range until 2000. In this top-down forecast we regarded the GDP, the change in the structure of employment and the growing importance of research and education as particularly significant. The second complex forecast was made at the beginning of the 1980s. It followed the bottom-up methodology and explored the changes in human needs. Both forecasts proposed substantial

changes. In the first forecast we indicated a significant improvement in the amount of means of production needed and the efficiency of capital assets and accumulation, and a thorough transformation and modernisation of the economic structure until the turn of the millennium as requirements. In the second forecast we concluded that scientificallybased growing needs until 2020 could be satisfied only by developing science-intensive production and services. The third and fourth complex Hungarian future visions were worked out in the spirit of the renewed futures studies. The approach of these visions is different from the one used when creating the visions 30 years before. The fundamental dilemma of working out the third complex future vision at the turn of the millennium was that it was impossible to draw up a single, most probable version or vision of the future. So we opted for a combined application of the top-down and bottom-up approaches to work out plausible future alternatives. In this framework we were able to compare the possible versions of the future offered by the economic and political conditions, and the versions of the future desired by society and its members. We weren’t seeking the optimal or the desirable future alternative, but wanted to present alternatives that were acceptable under the given circumstances and against the expectations. The criterion of being acceptable was that the future alternative should allow society and its members more room for maneouvre, that it allows charting different courses (i.e. different life and professional careers in case of individuals) and progress along those. This type of investigation of the vision of the future breaks with the notion that the level of development and the future course of development of the economic subsystem unequivocally determines the society of the future, so a minor role Is attributed to the numerical forecasting of conventional macro indicators (e.g. the GDP), while more attention is focussed on questions reflecting the interests and values of the members of society (such as the future orientation of individuals). Based on the alternative options and branches we worked out eight future versions. Only one of these was unequivocally acceptable for broad layers of society, the one that calculated with a favourable regional integration, the application of an economic philosophy guaranteeing the

protection of the country’s rights and a steady and balanced development within the EU. In this future version new social values (new consumer and life patterns, diverse life forms, environment-friendly values) may be realised, new individual goals (such as peace, family safety, happiness and material wealth), and new values (credibility, responsibility, courage, sense and helpfulness) may appear. The version was very acceptable from the aspect of the individual’s aspirations. The diversity of future versions showed that Hungary’s social and economic future was not yet decided, there still was possibility to shape it. We created the future alternatives approaching from the side of opportunities and expectations. We worked out four complex future

alternatives that were the different combinations of possibilities of renewal and unchangeability, stability and instability. We drew two very important conclusions from this work. First: understanding the stable or unstable character of processes can protect society and the individuals from investing energy in vain into trying to change intractable phenomena thus distracting attention and energy from things that can and should be changed. Second: futures that are acceptable for the Hungarian society are among the ones that embed changing objective conditions along with altered subjective factors. So we have to strive to capitalise on the advantages of changes.

A közel 50 éves Jövőkutatás Központ rövid története

TEACHING FUTURES STUDIES The teaching of futures studies in higher education in Hungary began simultaneously with the beginnings of cultivating this field of science at the Futures Studies Department from the end of the 1960s. Teaching started with the research seminar titled ‘Long-range perspective and planning’. The result of scientific work at the seminar was the elaboration of the syllabus of the full term courses titled ‘Futurology’ and ‘Long range futures research’. The courses were available from 1971. Teaching futures studies entered the education in 1975 as a subject named ‘Futures Studies’, and it was a compulsory subject for students in teacher training and optional for economics students. With its successful adaptation into the university’s educational profile, futures studies earned the recognition of both university leadership and students. Especially students in teacher training sensed the importance of the future orientation of the subject. This momentum was halted by the Bologna Process. After the introduction of the BSc and MSc system the number of futures studies subjects decreased, the contents and teaching methods also changed. We teach Futures Studies at BSc and MSc level in the framework of optional subjects. At MSc level the subject ‘Alternative future visions’ is available as optional Futures Studies subject. The subject ‘Social and economic forecasting’ was developed in the Business Development Department taking the educational purposes of the department into account. The mandatory subject ‘Methods for Regional and Environmental Analysis’ contains some futures studies methodology references. The methodology of teaching also changed: the emphasis moved from the discussion of theoretical correlations and concepts to practical issues and tasks. This is supported by the use of the Internet at the seminars and also by interactive forms of contact. We started the subject ‘Introduction to Futures Studies’ in the Institute of Economic Geography, Geo-economy and Sustainable Development of the Faculty of Social Sciences and International Relations with a lower number of classes and a higher ratio of practical knowledge. Since 2006 we have been teaching Business Futures Studies in an unchanged form in the framework of foreign language training. Every year there were 4-8 students joining the department to participate in the Students’ Scientific Association (TDK) Conference,

several of whom won national prizes (OTDK). Since 2008 our futures studies students have successfully been participating in the annual international science competitions of the Association of Professional Futurists (APF), which students can enter by submitting longer (mainly) English language PhD, MSc and BSc papers and videos as individuals or in teams. Except for 2015, we have had winning students every year. It’s a welcome fact that our English language publications are cited and referenced in theses of students at prestigious universities teaching futures studies. Although the subject’s spectrum of the training at BSc and MSc levels narrowed, it was compensated by the fact that the Futures Studies Programme was launched in the Doctoral School of Business Informatics in 2009. The Programme contains 6-10 special subjects dealing with different aspects of futures studies (communication, information technology) beside the mandatory ‘Future Studies’ subject. Currently we work together with 4 PhD students in the field of Futures Studies. Taking the advantage of the departments good international relationships, between 2005 and 2010 several students who took future studies managed to participate in the international distance learning courses ‘How can we explore the futures?’ and ‘Futures Methods’ provided by the Finland Futures Research Centre at the University of Turku. They earned 7.5 European credits. We further strengthened the international relationships of the department with the biennial international futures studies postgraduate course titled ‘Budapest Futures Course’ between 1999 and 2005. We organised professionally prepared courses in a friendly atmosphere for the 30-50 young futurists from all over the world each time, and these courses served as models for summer universities in other countries. In 1992 we published the first university futures studies lecture notes in Hungary (edited by Erzsébet Nováky), that gave a comprehensive view on the theoretical and methodological questions of futures studies, and discussed the current futures research methods. The department’s relationship with students was spiced up with the regular Futures Studies Film Club, where we discussed exciting, controversial questions of the future (robots, influencing personality). Sometimes we went on debating so long that we risked being locked in the university building for the night.

PARTICIPATION IN THE SCIENTIFIC COMMUNITY The fellows of the Futures Studies Department played a significant role in designing the programmes of Hungarian futures studies conferences and also took part in the organisation. These occasions gave opportunity for our young fellows for participation and contribution. We became known in the international scientific community mainly for our role in the World Futures Studies Federation and later as member of the International Advisory Board of the Finland Futures Academy. The Chair and several members of the Millennium Project Hungary Node were fellows of the Department. The Department’s members are regularly asked to review publications for several Hungarian and international magazines (e.g. Futures, European Journal of Futures Research). INTERNATIONAL RELATIONSHIPS The international relations of futures research in Hungary started with the socialist countries within the COMECON, then, our contacts widened by our active participation in teaching together with the Finland Futures Research Centre (in Turku) and by cooperating with the World Futures Studies Federation (WFSF). Members of the WFSF Executive Board between 1997 and 2005 were Erzsébet Nováky (responsible for research fields), then Tamás Gáspár. Both of them played a major role in defining the direction of the World Federation’s work. The really successful 19th world conference of the World Futures Studies Federation titled ‘Futures Generation for Future Generations’ was organised by the Futures Studies Department in 2005. The section meetings of the conference dealt with the topic areas of cultural patterns in the interactions of generations; values and wisdom in an intergeneration context; teaching and education; intergenerational communication; appearance of cyberspace; economic foundations of coexistence; new generations of forecasting procedures. An account on the results of the conference can be found on the WFSF website on a subsite. We regularly participate in international futures studies conferences and world conferences as lecturers and section leaders.

It has internationally recognised significance that we were the first in the world in 2001 to compile and publish a collection of studies on the history of futures studies in the former socialist countries in Europe: ‘Futures Studies in the European Ex-Socialist Countries’ (ed. by Erzsébet Nováky, Viorica Ramba Varga, Mária Kalas Kőszegi). CURRENT TEAM OF FELLOWS AT THE FUTURES STUDIES CENTRE Erzsébet Nováky - futurist since 1970, Doctor of Sciences in Economics at the Hungarian Academy of Sciences since 1991, Professor Emerita since 2015, internationally known and recognised futures researcher. Her research fields are: futures methodology, complex futures research methodology, forecasting the socio-economical future of Hungary, participators futures studies and the responsibility of the futurist. Éva Hideg - 1974-1990 Academic, from 1990 University status, Doctor of Sciences at the Hungarian Academy of Sciences since 2012, university professor since 2014, internationally known and recognised futurist. Her research fields are: theories and methodology of futures studies, social future models, integral futures studies, methodology of interactive forecasts and foresights. Eszter Monda - PhD candidate, assistant research fellow since 2015. Her research fields are: scenario building, application of futures studies methodology, futures studies methods supported by information technology. Currently working on finalising her PhD thesis. Gergely Tyukodi - PhD candidate. His research fields are: supply chain forecasting, business forecasting - business application of futures studies, future management. Mihály Retek - PhD student. His research fields are: interactive modelling, scenario building. András Márton - PhD student. His research fields are: strategic management, applying forecasts in the economy. The list of publications from the members of the Centre can be found in the Hungarian National Scientific Bibliography (Magyar Tudományos Művek Tára).

THE FUTURE OF WORLD ECONOMY IN 2050 Authors: Eszter Polyák, Viktor Eszterhai

Forecasting the global economy for such a long term is a very complex task, but in this article we attempt to present major future trends and identify the economic driving forces of the twenty-first century. EXPECTABLE GENERAL CHARACTERISTICS OF WORLD ECONOMY: THE RISE OF EMERGING COUNTRIES AND THE ASIAN CENTURY In the next decades, global growth will slowly overcome the consequences of the economic crisis in 2008, returning to a stable growth rate of over 3 per cent. As a result, the global economic output will be tripled by 2050. The growth rate will significantly slow down after 2020, as the rate of expansion of several emerging countries, such as China, moderates to a slower, but more sustainable level. In addition, demographic shifts will also influence the slowdown of growth in world economy: the proportion of working age population will decrease in ageing societies. Developing countries are the drivers of world economy, but projecting the economic performance of these countries of very different political regimes and level of stability poses a greater challenge than that of the countries with developed institutional structures in operation. Thanks to the stable growth of world economy, even today’s hopelessly poor countries have very good chances to reach the current living standards of middle-income countries by 2050, while the per capita income of middle-income countries will be comparable to the development of the Gulf countries. The fastest growing regions over the next four decades in terms of GDP and GDP per head, will be Asia (4.7%), followed by sub-Saharan Africa (4.4%), then by the Middle East and North Africa (3.9%). The growth rate of Latin America (3.3%) and Eastern Europe (3.2%) substantially equals with the expected growth of world economy. The

Top ten economies in 2050 at market exchange rates

Average annual growth (%) by regions

Regional share of global GDP (%) slowest growth is expected in the developed regions. In the long term, the principle that the higher the level of development of a country is, the slower the economic growth will be prevails in the case of developing countries, too. According to the longterm macroeconomic forecasts of the Economist, Asia is playing an increasing role in world economy, and by 2050 it will account for more than 50 per cent of global GDP. The Middle East and Africa will be the only regions to increase their weight, while traditional centres of power, such as the European and the American continents will become increasingly less important. Viewed in historical context, the dominance of western countries is a relatively recent phenomenon, thus the shift of the economic center of gravity to Asia can be perceived as a

rebalancing of global economies, a paper by PricewaterhouseCoopers suggests. According to the long-term macroeconomic forecasts by The Economist, China is expected to overtake the United States in the 2020s, and its GDP will be even one and a half times more than that of the USA in 2050. India is expected to become the third, while Indonesia the fourth largest economy of the world by 2050. Conversely, according to the analysis of PricewaterhouseCoopers, the economic centres of gravity will continue to shift in the next decades. China might overtake the USA in terms of nominal GDP in 2024, and India is expected to become the second largest economy in purchasing power parity. The analysis of Citibank, however, suggests that India might take the world’s number one spot in terms of GDP at PPP in 2050. These all mean that the hegemony of Western countries in world economy will be over. Success, however, requires deliberate structural reforms, and this is also true for developing countries, which might overtake current major economies by 2050. These are likely to include Turkey, Indonesia, Nigeria and Vietnam, but also Columbia, Malaysia and Poland have very good prospects. The current fast growth rate, however, is not a guarantee for later sustainable growth, since the development of an adequate institutional and infrastructural background, as well as political stability are required. Countries heavily dependent on raw materials might find themselves in a difficult situation if they do not pay proper attention to other, renewable resources as well: new technologies and the free flow of talents. Regarding absolute numbers, there will be

a wide gap between the three biggest economies, i.e. China, India and the USA, and the rest of the world by 2050. Although more and more developing countries will oust European countries in the league of the ten biggest economies of the world, GDP per capita remains much higher in advanced economies. World economy will be dominated by the three biggest economies by 2050. The power ranking of the world economy will evolve by 2030, and the top three economies of the world will be China, the USA and India. These three economies will have more economic might than the next five put together. This is expected to mean that the three economic major powers will define the operations of world economy, international politics and international institutions. DRIVERS OF ECONOMIC GROWTH Although the economy of the future is analysed with the conventional indices, factors indicating new opportunities and challenges to growth must also be considered in the projections. In the past decades, economies have been heavily affected by globalisation and technological development, and they will be even more significant in the future. There has never been such a free room for manoeuvre for wealth and labour force, and this openness serves faster development. Technological development is also moving into the same direction, since, with the help of innovations, greater value can be generated within a shorter period of time.

THE FUTURE OF WORLD ECONOMY IN 2050

By 2050 the working age population of the world (aged 20–64 years) will grow up to 5.3 billion – in 2010 thus figure was only 3.9 billion – 70 per cent of whom will live in emerging countries. China, today having the largest working age population, will be overcome by India in 2030. Population and their rate on the global labour market will grow most dynamically in the poorest countries, primarily in Africa: the current population of 380 million of the 48 countries belonging to this category will grow over 950 million by 2050.

Global dominance of the top three economies (Nominal GDP, 2050)

In addition to the abovementioned factors, the fact that higher level of general development results in faster catch-up is a new one. The development level of smaller economies converges to the high level of big ones, enabling them to “leap frog” several stages of growth. Consequently, greater global development can be achieved within a shorter period of time.

Population and labour force For poorer countries with a young population, openness, developing a market economy, and investment in human capital and physical infrastructure will be important factors as preconditions for their breakout. Only natural disasters and political instability can derail adequate decision-making, but the latter one may be avoided.

Globalisation and Trade Globalisation is a trend of world economy, and this trend will continue, despite possible setbacks. In fact, globalisation has not gone as far as people tend to think: direct foreign investment accounts for merely 10 per cent of all fixed assets; only 2 per cent of the world’s students study at universities outside their home countries; only 3 per cent of people live outside their country of birth, etc. Thus, currently we live in an era of semi-globalisation at most. Developing countries, and primarily Asia, are expected to benefit the most from the further globalisation process. The catch-up of developing countries will have a significant and dual effect on trade: it will be less and less profitable to outsource production into developing countries, therefore the expansion rate of trade in goods is expected to slow. Services (e.g. financial ones), on the contrary, can look forward to a promising future. Since China will be the most important participant of global trade, it is expected to act as a regulator in the international regulation of trade.

One driver of economic expansion is population growth. In this respect, the young population of developing countries can benefit the most, while it has an adverse effect on developed countries. China’s phenomenon, due to the one child policy, is especially interesting, since the growth rate of the population converges to zero. Today, 84 per cent of global GDP is produced by the 32 countries shown in the chart below , and these countries will continue to determine world economy. Certain developing countries, such as Nigeria and Vietnam, as newly emerging economies, will be capable of outstanding growth rates, to which also a rapidly growing, young population contributes in the case of Nigeria and Bangladesh. However, the living standards of catching-up developing countries will not reach those of the advanced economies in 2050, and the income per capita in the emerging economies will still be only one-quarter to 60 per cent of the level in Western countries. As we can see, population growth alone will not be sufficient to boost economic growth extensively.

Many people believe that redirecting the abundance of labour force in other parts of the world could mean a solution to the declining old-age dependency ratio of ageing countries. According to the forecasts of OECD, this would hardly alleviate the problems. Given the future growth of the migration rate, migration would be unable to offset the adverse consequences of population ageing on the labour force, and the labour force participation rates of migrants in European countries will not surge in the future, as it has not done so until now. Like the raising of capital, the growth of working age population will be less and less determinant of the growth of emerging countries, while the rapid enhancement of productivity will become the most important factor. The reason is that the efficiency of the labour force is very low in emerging countries, but it is relatively easy to improve. As economy develops, the growth of productivity naturally slows down. This phenomenon, however, projects that certain countries start to catch-up with leading economies, and this process will become increasingly dynamic. The productivity of future labour force will be greatly influenced by the increasing length of schooling. Again, currently developing countries are expected to develop significantly in this respect. A publication by Richard Nelson and Edmund Phelps, winner of the 2006 Nobel Prize in Economics, in 1966 claimed that methods and techniques enhancing productivity diffuse faster in countries where labour force is better educated. Thus, the expected growth of education will present a relatively fast catching-up opportunity for emerging countries. The next chart shows how significant it is. The expected trajectory of catch-up due to productivity growth in China and India calculated with Nelson and Phelps’s calculation method and on the basis of the traditional calculation of the Asian Development Bank:

Services vs Industry and Agriculture Thanks to the rapid development of services, the share of industry and agriculture in GDP will continue to decrease in the future. Population in developing countries will be increasingly wealthier. Consequently, they will spend a greater part of their income on services. Furthermore, manufactured goods will become ever-cheaper, due to the increasing efficiency of production, and decreasing levels of cost. Appreciation of exchange rates as growth The GDP figures of emerging countries projected to 2050 are distorted by an important factor: as an economy is catching up with leading economies, its currency starts to appreciate. Poor countries tend to have cheap currencies; thus services and locally produced goods tend to be cheaper. As the economy starts to develop, these start to become more expensive. This effect adds up to the real economic growth in statistics (see next chart)

Rise due to the growth of real GDP and rise due to the appreciation of the real exchange rate

A világgazdaság jövője 2050-ben

NEW FACTORS IN WORLD ECONOMY The Issue of Water Scarcity and Water Quality It is important to mention the characteristics of the future world economy in terms of appreciating raw materials. The prices of oil and other raw materials are likely to rise further, and the rising prices of agriculture will ensue the issue of food security, which will become more urgent than ever. In addition to the resources listed above, the role of fresh water supplies will also become more important. Areas rich in water constitute considerable competitive advantage, since today’s trend is that several companies regard sufficient water supplies a priority in decision-making. The growing population of the world and fulfilling their needs will create an increasing demand for water, therefore water supply will be one of the key issues of the economy by 2050. According to the OECD’s forecasts, the world’s demand for water is likely to surge between 2000 and 2050, due to growing demand from manufacturing (+400%), thermal electricity generation (+140%) and domestic use (+130%). In the face of these competing demands, there is little scope for increasing irrigation water use in agriculture, which is further aggravated by the fact that 3.9 billion people, i.e. over 40 per cent of the global population is projected to be living in river basins experiencing severe water stress. The population of these areas will be under the pressure of agricultural and food safety problems. According to the World Resources Institute, half of the countries most likely to be water-stressed in 2040 are in the Middle East; Central Asia is also likely to be especially endangered, but people living in Chile, Namibia, Namibia, Botswana and Estonia could also face an especially significant increase in water stress. The world’s largest economies, the USA, China and India will have to face water risks of their own, which might affect their economic growth. The research conducted by the International Food Policy Research Institute (IFPRI) indicates that high risk is run if the current business and agricultural practices remain unchanged. They found

that 4.8 billion people – more than half the world’s population – and approximately half of global grain production will be at risk due to water stress by 2050 if status quo, business-as-usual behavior patterns are followed. Expressed in economic indicators, 45 per cent of total GDP ($63 trillion) will be at risk due to water stress by 2050. In addition to water quantity, water quality is also a determinant of economy. Although more and more people will have access to installed water intake points, the water extracted from them will often be of poor quality. Despite improving circumstances, by 2050 1.4 billion people are projected to be still without access to basic sanitation, and polluted water means a competitive disadvantage for developing countries against economies with a more developed infrastructure. With the help of continued evolution of technology and infrastructure improvements, 1 billion people will no longer be at risk of unsustainable water supplies by 2050, IFPRI claims. Some of the sustainable procedures applied today (for example, in the fields of wastewater collection and treatment) have proven viable, and their diffusion could bring about a revolutionary breakthrough in certain countries. New business models and innovative techniques create more sustainable systems, which can mainly aim at reducing the losses generated by water management. The private sector would be given a greater role in financing, and since investors are increasingly taking water supply into consideration during their decisionmaking processes, it might be both sustainable and profitable.

“New business models and innovative techniques create more sustainable systems, which can mainly aim at reducing the losses generated by water management.”

Increase of the economic role of oceans In recent years, OECD has undertaken a project in extensive collaboration to research the economic role of oceans. The results achieved so far show that the huge water bodies around the continents will serve as an important source of livelihood and a significant factor of economic development around 2030. The ocean economy encompasses ocean-based industries, such as shipping, fishing, marine biotechnology and offshore wind, but also the natural assets and ecosystem services that the ocean provides. The economic role of the global ocean economy is already significant: the ocean economy's contribution in 2010 accounted for 2.5 per cent of world gross value added (GVA). Economic activity in the ocean is expanding rapidly, driven primarily by developments in global population, trade and technology. However, an important constraint on the development of the ocean economy is the current deterioration of its health. These unexploited, huge water bodies can be relied upon if proper attention is paid to improving their state. In 2030, ocean industries will have the potential to make an important contribution to employment growth, employing 40 million full-time equivalent jobs (mainly in offshore wind energy, marine aquaculture, fish processing and port activities). The ocean economy can serve as a fundamental cornerstone in fulfilling the needs of global population expanded by two billion by 2050, and its growth would also triple the shipping industry, already significant today. Environmental Protection and Economy Although in September 2015 the General Assembly of the UN adopted the agenda for sustainable development, and member countries undertook the practical implementation of the goals from 2016, the protection of the environment might increasingly influence the operations of economies in the future. As it could be seen in the case of fresh water and the ocean economy, renewable natural resources can provide great economic benefit if proper attention is paid to their maintenance. Curbing climate change will also be a precondition for economic growth in the future. In the OECD’s

outlook to 2050, climate change and environmental protection were given a distinguished role. The analyses of the organisation found that huge losses of future GDP would be generated if the fundamentals of an economy with a low carbon-dioxide emission level and adaptable to climate change are not laid down. The economy, quadrupling by 2050, has an increasing demand for energy carriers and raw materials. If current trends are projected, fossil fuels are likely to account for 85 per cent of energy carriers in 2050 as well, most of them used by BRIICS countries. The processes that it entails, however, further damage the state of the natural capital, which might jeopardise the rise of living standards in the next decades.

“Curbing climate change will also be a precondition for economic growth in the future. In the OECD’s outlook to 2050 climate change and environmental protection were given a distinguished role.” Regarding costs, prevention is far cheaper than continuing the current practice. By regulating the prices of fossil fuels, the emission of greenhouse gases can be reduced by 70 per cent, which would slow the growth rate by 0.2 percentage-points annually, costing 5.5 per cent of global GDP in 2050. Without such regulation, however, loss of income due to natural damage could be as high as 14 per cent of global per capita GDP. Action against climate change places a financial burden on the entire international community, which has to work on ensuring that each country has its fair share of the costs. On the whole, reaching a consensus can have positive outcomes for the entire population of the globe.

DEMOGRAPHY AND SUSTAINABILITY Author: Thierry Gaudin, President of Fondation 2100, member of the board of WFSF

First, let’s recall some fundamental facts about year 2050. The children born in 2020 will be thirty years old then, and they will be still alive in 2100, as their life expectancy implies. In 2050, members of the “baby boom” generation, i.e. people born after the second world war, will be no longer alive, while in Russia, the declining fertility tendency, observable after the fall of the Iron Curtain (1990-2000), will be represented by the ageing generation, later replaced by a younger one.

In China, the implications of the peculiar one-child policy will still be felt, at least in the mature generation. Africa, India and South America will be under demographic pressure. We can reasonably expect them to be able to reject the economic subordination that they are subject to today. Since access to information on Internet and via portable phones has simplified by today, it will be even easier in the future, and the cultural gap between people born in different countries will be much more narrow. The current leading role of the Anglo-Saxon culture is quite likely to be just a memory. We can witness the revival of ancient cultures, since we will perceive the limits of the planet more and more intensively. The approach of the limits relates first to the socalled “revenge of Malthus”. At the end of 18th century, after having completed a long visit to different continents, Thomas Robert Malthus came back formulating his demographic law: In every civilization, the population grows up to the saturation of resources, and then inevitably stabilizes or declines. A similar statement was made nearly 40 years ago, in the early 70’s, by the Club of Rome in his famous report “Limits to growth”. It is important to notice, regarding our 2025 horizon, even if the evolution of technology has been able to push the limits, leaving place for a surplus of growth, that most Meadow’s models predicted a collapse of our civilization during the first quarter of 21st century. Similar conclusions, taking into account

technological evolution, were made in 1990, in the “2100, récit du prochain siècle” study, operated by a team of the French ministry for research on request of the minister Hubert Curien. Nowadays, many more signs of saturation appeared. They are detailed in the first part of the report, particularly on warming, water management, biodiversity and demography. One can estimate it would be difficult, if not impossible, to push again the limits. Technology undoubtedly makes miracles, but it would be unwise to carry forward our children’s safety on miracles. Therefore, the foresight landscape splits in two basic scenarios: The first scenario is a tragedy, giving to the word “tragedy” the meaning it had in the antique Greek theatre: a tragedy describes an evolution in which the actors, caught in their prejudices, are unable to escape their tragic destiny. In Shakespeare performances, many die at the end, and their death bears a meaning, expressing the contradiction between their deep identity and their destiny. In the case of the present world, the trend can be described as follows: globalization of the market economy, excessive consumption and throw away mentality, after having invaded the so called developed world, spreads over the developing countries, faced to global warming and energy scarcity. It appears to lead to a global collapse. Some experts even foresee an extinction of human species and many others species as a result of mankind behaviour. They call this sixth extinction

the “anthropocene”, as due to humans (anthropos), differing from the preceding extinctions, at least the one of the dinosaurs (-65M years) and the biggest one at the end of the Permian period (250 M years), that were probably caused by the impacts of meteorites.

natural resources per capita should have been cut approximately by half, at least in the so called developed countries, and the greenhouse gases emissions totally compensated by absorption. These would be the conditions to leave a living planet to our grand children.

The second scenario is self-control of mankind. But how can we expect 6.5 billion humans to reduce their consumption and restore the equilibrium with natural resources? Certainly not with a laisser-faire policy! Therefore, a major task of foresight is now to estimate the nature and the magnitude of the constraints and incentives that might be generated by the consciousness of the limits, and also the ways these constraints and incentives may be decided and operated. According to the presently available data, the order of magnitude of this necessary selfcontrol appears important. The ecological footprint analysis initiated by WWF2 points that, after having consumed non renewable resources, assuming a standard of life comparable to the Europeans by year 2000, the planet would be able to carry 2.5 billion humans, compared to the present level of world population: 7 billion, 8 to 9 being expected in 2050. One must add to this rough evaluation the need to control rapidly the greenhouse effect, the droughts and floods pushing climate refugees out of their land and the rise of the level of the oceans. It can reasonably stated that, before the end of 21st century, the reduction of the world population should have started, the consumption of

THE DEMOGRAPHIC/NATURAL RESOURCES TENSION “Connected with the spread of modern contraceptives and the increased educational levels is the fact that young western adults can experiment more extensively with union formation before settling down and start a family. As a result, patterns of union formation (and dissolution) have changed substantially: unmarried cohabitation has increased, marriage takes place later and divorce occurs more often. Childbearing has become a result of deliberate reflections (i.e. unwanted pregnancies are getting scarce) and occur much later in people’s lives; The best way to understand fertility behaviour is via birth cohort (birth year) analysis, not via period (calendar year) analysis. If women postpone childbearing (Phase 1) i.e. they have their first child later in their life than women born in previous cohorts, one will observe a rise in the age at first birth and, as a consequence, a drop in the number of children born per calendar year (period Total Fertility Rate – TFR). This ‘tempo effect’ may sometimes lead to

DEMOGRAPHY AND SUSTAINABILITY

‘dramatically low’ TFR levels, like currently in several Central and Eastern European countries. Because the first postponing couples start to catch up having children but those from subsequent birth cohorts are now postponing. Phase 2 is characterized by a more or less stable low period TFR. When the increase in the age at first birth starts to diminish (Phase 3) or stalls completely (Phase 4) people are catching up having children that were postponed before, and the period TFR increases substantially again. However it will not reach the initial higher (cohort) level, since a later start normally leads to a lower ultimate number of children (quantum decline). Making a forecast with keeping lowest low TFR constant in a period of a rising age at first birth may lead to a very inaccurate picture of the future. There is increasing evidence that it may be easier to influence the timing of children than the ultimate number of children. If policy measures appeal to people they may be stimulated to have a child rather soon, but not necessarily have more children in their lifetime. If all of a sudden children are only born earlier, one will observe a baby boom, together with stagnation in the increase of the mother’s age at first birth, followed rather rapidly by a baby bust (see Sweden 1990-1995). It will be an enormous challenge to get population sizes more sustainable, and, more important, their life style? If that would be similar to what is normal now in the USA or in Europe then there is a major food and energy challenge. We do not know what is neither the maximum nor the optimal world population size, and have probably only ideas about the optimal worldwide life style. Both the optimal population size and life style depend on food and energy supply, on peaceful international cooperation, as well as on where these persons prefer to live (cities or countryside)”. "According to ILO’s projection, total population is to increase from 6.6 in 2007 to more than 8 billion people in 2025. The most important increase will come from Africa (North Africa, SADC and Rest of Africa should have around 404,000 extra persons), India (around 267,000 extra person), Asia (without China and India around 264,000 extra persons) and China (+144,000 extra persons). China increase appears limited considering its current total

population. China will start to lose active population over the period: it should reach its maximum in 2015 at around 830,000 persons and decrease to 809,000 by 2025. As a consequence, China will be in a comparable situation with the countries from the previous Soviet bloc and developed countries with an aging population. This is apparent as well in the shares of the future world population. China’s share is to shrink by 2 percentage points, the European Union by 1.4 points, while Africa’s share should increase by 3 points."

“It will be an enormous challenge to get population sizes more sustainable, and, more important, their life style.” AGEING POPULATIONS AND YOUNG ONES “The current process of population ageing that started already more than 100 years ago is ‘unprecedented, pervasive, profound, and enduring’ (UN, 2007). World wide the percentage of persons of 60 years or over was 8 in 1950, 11 in 2007 and it is expected to rise to 22 by 2050. Almost no country escapes from this trend. Europe is frontrunner but also the first to see some relief by mid-century. Variation within Europe is large; specifically Eastern Europe was hit by the world wars, which is still visible (also because of its recurrent effects in the next generations). As ageing basically results from falling numbers of children, the process normally shows that first the youngest age groups get smaller, but with time running the following age groups are ‘affected’. Gradually the labour market population will start ageing as well, first due to lower entrance streams, many years later due to larger exit streams. Then a boom in retirement follows (which is expected at short notice when birth cohort 1946 turns 65 years), later on followed by a boom in the number of very old people. Consequence of this process is of course that the dependency ratios are changing

Population Pyramid Graph of the EU in 2050

fertility rates. It covers very different situations: African countries still have a high fertility and an important base of young generations, as shown by the following graphs: The demographic regulation of Europe and North America is already at work. The one of Asia and South America is taking place between now and 2025. And the one of Africa will not be operating before 2040, according to the projections made by professional demographers22. Anyhow, some countries, Russia for instance, who suffered an important demographic slow down during the past decades; tend to foresee the possibility of a future “baby boom” before 2025.

fundamentally as well, in the sense that the number of dependent people per independent person will rise substantially. Currently the ‘window of opportunities’ or ‘demographic bonus’ is in many countries relatively large: the number of 0-19 years together with the number of 65+ years compared to the number of 20-64 years (the potential labour market population) is around the lowest point, i.e. those who are economically active have only to care for a small number of dependents (who were mainly youngsters in the past, but now increasingly older) The attitude of the politicians and the press regarding ageing is ambiguous. They may agree that the planet is overcrowded, but the ageing in their country is still perceived as a problem. Ageing is not a disaster but a challenge. Ageing will challenge intergenerational solidarity due to changes in family patterns (more unmarried cohabitation, later marriage, more divorce, more repartnering, smaller family sizes, and later childbearing). This will trigger social protection systems in finding social cohesion to support people to interact as much as possible within and between generations, both in countries with cultural traditions of stronger or weaker family ties. Measures in support of child and elderly care as well as measures that make work-family balances more compatible can strengthen intergenerational solidarity”. The projection above shows at the same time the growing share of elderly people and the end of growth of world population around the middle of 21st century, as a result of the decline of global

“Demographic forecasts are traditionally the most secure predictions for the long term.” Demographic forecasts are traditionally the most secure predictions for the long term. In our present situation, it is however necessary to point some important uncertainties regarding 21st century’s evolution. Stabilization or maximum followed by a slow down? Since the end of the 80’s, the common knowledge of the demographer’s community describes the present evolution as a “demographic transition”. It means more precisely the transition between an evolution with high fertility and high mortality to an evolution with low fertility and low mortality, leading to a stabilization of the world population around 10 Billion, with an average fertility of 2.1 children per woman. But according to the fact that fertility rates are lowered by female education and urban way of life where both members of the couple work; according also to the fact that a world population of 10 billion reaching a consumption level of natural resources close to the one of the average European in 2000 would not lead to a sustainable world by a factor of 4, it is more realistic to predict a maximum followed

DEMOGRAPHY AND SUSTAINABILITY

by a slow decline lasting one or two centuries. That hypothesis would fit with a stabilization of the birth rate around 1.8 children per woman, instead of the 2.1 stabilization hypothesis. Mortality evolution. Inside the demographer community, an important debate is taking place about mortality. Here is a graph made out of the official World Health Organisation figures: Some demographers, following the medical community, point the progresses in vaccination and treatment of developing countries diseases like neonatal, diarrhoea, tuberculosis, malaria… Other experts point the deterioration of health conditions in so-called developed countries, due to unhealthy food, stress, lack of exercise, leading to obesity, tobacco alcohol and drugs, hard working stress and poor living conditions. The above graph shows the growing importance of vascular diseases and cancer, which are typical of modern urban environment. The demographers also point the growing proportion of elderly people, which may be felt as a burden by younger and less numerous new generations. These elderly may suffer less care than the previous old people who, having many children, could expect to be assisted and live peacefully over 90. All these factors would lead to estimate not a reduction of mortality as during the previous half century, but on the contrary an increase of mortality rates. This debate shows clearly that medical research is not the determining factor. It may help to cure difficult illnesses like AIDS. It has no influence on the environment factors that determine most modern pathologies. Looking at mortality globally, as shown by the above graph, the question is raised to the social and economic organization, to social sciences and governance rather than to hard sciences. The third question mark about demography is the one of migrations: MIGRATION TO CITIES The first and massive migration in 21st century is the one to cities. Urban population passed 50% in 2008: 3.3 billion. Urban population grows twice faster than total population growth (1.78% vs. 0.95% annual rate for 2005-2030): projected resulting 4.9 billion (about 60% of total population) by 2030 (out of 8.2 billion) 1.8 billion urban population will be added in 2005-2030 out of which 1.1 billion will be added in Asia.

Growth of cities in Asia

Spatial distribution of global warming

cities being built on the seashore, another 135 million displaced people should be added (OECD). The conclusion of these estimations is that huge public works should be expected (reshaping town, water supply, ocean cities…), which will probably determine the shape of 21st century’s economy. THE FUTURE OF POVERTY

Cities in Asia: 11 out of 20 world mega-cities (over 10 million), 17 out of 30 cities of 5-10 million, 184 out of 364 cities of 1-5 million, 225 out of 455 cities of 0.5-1 million. From these data, we can make a simple and clear statement: 21st century is, at least during the first half, a period where the majority of world population lives in cities. And the majority of these city dwellers are in Asia. The first impression given by these facts is that the new “centre of the world” (if there is any) will be Asiatic. The second impression relates to daily life. Most mega cities are highly energy consuming, they contribute massively to carbon dioxide emissions and they experience enormous traffic congestion, air pollution and unhealthy environment. Some of these negative points may lead to popular protests and rebellions. And, as it happened previously in history, at the middle of 19th century in Europe for instance, the public authorities would launch in response huge reshaping programs, including common transportation, green spaces, energy conservation, floating structures for the seashore towns (as quoted previously), and many other initiatives aiming at ecological sustainability. MIGRATIONS INCREASED BY CLIMATE REFUGEES “International migration has become a larger player in demographic trends. International comparable statistics are scarce, also because the definition of what is a migrant varies. Migrants are mainly driven due to economic reasons or to political instability (refugees / asylum seeking), in the future likely more often also to natural disasters of which some may be the result of climate change.

Migrants orient towards countries where they have historical or cultural bonds with (including language bonds), or where already larger groups from the same country of origin have settled and have send positive information. UN estimates suggest that about one third of all international migrants in the world live in Europe (i.e. persons born in another country). These 64 million persons make up 9% of the total European population. North America (44 million) and Oceania (5 million) have lower absolute numbers but higher shares of their population being born in another country than where they live, respectively 13 and 25%”.

Ray Hammond writes: "Within our societies inequality will continue to increase, as it is increasing today. Even though the poorest groups in developed societies have become much better off over the last twenty-five years (and will be very much better off comparatively by 2030) the wealth of the richest in our society has grown far faster. This trend will continue and although the middleclasses will continue to expand and become more affluent, the super-rich will become mega-rich and then hyper-rich. And there will be many more hyper-rich people in the world of 2030." Displacement of tenth of million people means an increase of poverty, even in case of important solidarity mobilization. The fast urbanization process, often due to the migration of poor peasants searching for survival opportunities in a big city, is also generating poverty.

Observing the present movements, it is possible to anticipate strategic questions that may come on the front of the stage before 2025. Important flows of migrants silently move from overcrowded countries to places less occupied and with a low birth rate. Three places of the world can be mentioned: United States and Canada, target of an important flow from Mexico, South America and from different Asiatic countries; Europe, target of an important flow from North and sub Saharan Africa and Turkey; Siberia, target of an important flow from China. The key question is raised by the cultural difference of the migrants and the tensions it may generate with the existing population.

The classical economic definition, often quoted in international talks, considers as poor a person earning less than 2$ per day. According to this kind of definition, one third of mankind would be in a situation close to poverty. But we should remind that our ancestors lived in the countryside earning less, and survived producing freely for their own consumption. Many civilizations: Aborigines, Inuits, some Amerindians and Africans still survive that way.

Regarding climate refugees, the estimation by Norman Myers, published also by IPCC is 150 million in 2050. It shows an order of magnitude of the climate impact on migration comparable to the one of international migrations for economic and social motivations at the end of 20th century. It should be added to these figures that the estimation of climate effects in terms of hurricanes (like New Orleans Katrina), floods and drought are rough ones. And if, as explained previously, the rise of the ocean level would reach 3 meters, most mega

It is necessary to take a distance with the previous definition. It is the one that suits to the merchants, which are not interested by people not using money. Anyhow, if we follow Toffler’s analysis on the rising “prosumer” attitude, we must take into account the development of investment strategies aimed at escaping the merchant power by developing self-production systems. Seen by the merchants, it looks like impoverishment (economists would call it recession), but seen by the end user, it looks like an improvement in safety and comfort.

DEMOGRAPHY AND SUSTAINABILITY

The important point, anyhow, is that, in a big city, survival is difficult or even impossible with 2$ a day because, there, survival needs a minimal compulsory consumption. A recent analysis in France shows that compulsory expenses (housing, electricity, telecom, but food not included) mobilizes in average more than 40% of the revenue of the households. And this percentage has grown approximately 5% during the last 5 years. In spite of the increase of their revenues, the citizens feel a decline in their standard of living, because their freedom of choice is reduced. In many cases, poverty occurs when the prices increasing and the debts too, compulsory expenses grow over the level of the income of the household. Such situations are exemplified by the “subprime” crisis (2007, 2008…) in United States.

In another scenario, named “on the move” it is assumed that in 2030 the proportion of the world population who live and work outside its mother country has doubled compared to year 2000 (from 1.5 to 3%), due to economic globalization, rural to urban shift and global warming. Deregulation removes the obstacles to migrations. Informal economy is accepted, except in the case it shelters criminal activities. The social and health services are harmonised internationally.

OUTSIGHTS SCENARIOS

Another approach for Europe has been published in Futuribles. It focuses on states or EU intervention, either through financial and education support of the poorest or even declaring misery outlaw. Obviously, the weakness of all these scenarios lies in minimizing the role of NGO’s. This difficult question of poverty should be analysed also through historical references. A global change concerning at the same time technology and civilization as a whole, like was the Industrial revolution in the 19th century, generates huge social difficulties. During a first period, the technology provides new unexpected services and brings satisfactions to the customer. In a second stage, the new activities displace the employment of the old ones and may generate a social crisis. It was the case in Europe in 1848, when the competition of industrial manufactures had cut down craftsmen’s market. Migration to towns and poverty increased, as described in the novels of Dickens (Oliver Twist) and Victor Hugo (Les Misérables). The 1848 revolution, all over Europe, gave the powers to new teams who operated a new set of policies: great public works (Haussmann’s urban planning in France for instance) and compulsory popular education, in order to give to the lower class access to the minimal knowledge necessary to operate in the new technical system. This effort lasted for half a century and was successful.

In 2004, the “outsights” consultancy has been commissioned by UK department for international development to elaborate scenarios for the poorest in 2030. In one of them, named “moral warming”, the companies begin to sign up the UN declaration

Clearly, 21st century is also a period of transition between an old technical system, the industrial one, and a new one, quoted as the “cognitive civilization”. Therefore, a similar strategy of the ruling class is to be expected: huge public works

It shows at least that poverty has two faces: the one for instance of refugees in a poor country, and the one of decay in wealthier countries for those who has lost access to the minimal survival needs. Therefore, the “wealth of nations” should not be measured through their GNP but, as suggested by Amartya Sen, at least by the non-compulsory expenses for which the average citizen keeps a freedom of choice. In many countries, very rich people and very poor people live close to each other, particularly in big cities. But very rich people may have a great freedom of choice, without having time for it. Cognitive saturation lowers also governance awareness, increasing the gap between rich and poor. Deep poverty escapes to present statistics. But common sense would accept that when a human being has to sell a part of his body (the kidney for instance), or to get his food out of municipal waste piles (like in some Brazilian towns), or to sleep in the street, or to accept situations offending his dignity to survive, she/he is in poverty. But this is not the case of most village traditional communities, in spite of their low purchase power.

of human rights, the shareholders police the ethical codes of conduct, the consumers turn to fair trade and ethical products and the super rich host philanthropic foundations.

and popular education. Public works, necessary to reshape the cities and face global warming consequences, will provide employment. Renewed education will be necessary to get familiar with the new tools (Internet) and the new goals (planetary gardening). CONCLUSION: GOVERNANCE AND CONSCIOUSNESS The word “governance” has been promoted during the last decade as an alternative concept to overcome the difficulties emerging around the words “government” and “power”. It implicitly refers to systemic analysis and tries to put decision-making processes under close examination. It refers also both to legitimacy and efficiency. The state of governance is poorly considered when decisions are slow and formalities heavy. But it also pays attention to legitimacy. Dictatorship, in spite of its fast decisions may not be considered as ideal governance. To make it short, governance relates to the rules of the game, their clarity and acceptability. But it bears also the idea that collective decision-making is feasible. Anyhow governance assessment is not yet established as a discipline in social sciences. The transition from industrial to cognitive world Our investigation leads to a vision of the period between 2010 and 2025 as a time for disruptions. Local, economic, social, technological disruptions that will all result of a major change: the transition between

1-the industrial civilization, which started during the 18th century, using the nation state divide established in 17th century, and giving birth to the present so-called “democratic” forms of governance, and 2-the cognitive civilization, which started at the end of 20th century. In this new civilization, the dominant activity is no more production. It is nature care and information handling. The communication network crosses the former institutional frontiers and renders progressively obsolete the former divides, including the nation state one. The word “cognitive” is here preferred to the classical “knowledge based economy” mantra because it bears the assumption that, as quoted first by Alvin Toffler, hyperchoice and cognitive saturation appear as a specific problem in that civilization, facing the industrialization of the persuasion activities. This transition, because of its magnitude, will take several generations and probably transform the societies in shapes that are now difficult to foresee. Regarding the next 33 years, what should be expected is a shift in the consciousness, occurring amongst both conflict and cooperation processes. This difficult shift in consciousness, we call it the challenge to reason. It is a challenge involving a change in the representation of life. Most political views of the late centuries were inspired by the Darwin-Spencer idea of the “struggle for life”. It was interpreted in terms of revolution by the late Marxist ideology and as economic competition by the free market ideology. Knowing the limits of the planet, both assumptions are false.

ON THE ENERGY VISION Authors: Zsolt Hetesi, Viktor Kiss

Today, energy production and consumption face several challenges having global repercussions, but the problems themselves are of very different natures. While in parts of the third world energy scarcity and achieving energy safety cause problems, the BRICS countries face significant challenges in the field of energy efficiency and sustainability, and, in the meantime, the developed world is on the brink of a significant technological transition due to the challenge posed by sustainability.

Naturally, other events affecting the future trajectory of energy supply are also taking place in the world. One of the major changes is the instability of our climate system, unpredictable global climate change, to which the energy supply sector contributes by 35 per cent. If we also add transport and the share of industrial emissions deriving from energy consumption, we end up with 64 per cent. In this article, we will have a closer look at current trends, which include both positive and negative changes. One example for the former is the headway of renewable energy resources, while an example of the negative ones is the increase in consumption, which extinguishes the former effect, or another example is a change in extracting methods of fossil sources, which enhances the greenhouse effect and increases environmental pressure. The solution cannot be provided by one single invention or intervention, but by a comprehensive transformation of the entire energy system, including the following elements: development of a smart energy system, appearance of related smart facilities, installation of smart storages. With their help, currently available, randomly supplying energy sources could be integrated on a larger scale. However, the questions to what extent the energy sector can be made carbon-free by 2050 and whether it will be able to achieve what SDG ha set as a target, i.e. ensuring access to affordable energy for all, remain. The issue of decarbonisation several problems, such as abundancy and substitutability. Regarding its most important achievements (rail

and road transport, aviation, shipping, power grid), the current energy system has been developed in at least seventy to a hundred years by using fossil fuels. For the next leap, energetically less reliable sources must be handled within the framework of one system. In some specialized fields (power machines and aircrafts), the technology representing an alternative has not been devised yet. As for the solution, we describe some scenarios to outline the possible future, and with the backcasting method we examine what action is needed to be taken until 2020 and 2030 to make a smooth transition. We need to tell a few words about the fact that it is not just the usual increase of demand and population that is responsible for the increase in the need for energy, but if mankind wants to live on Earth permanently, the enormous environmental damage caused in the last century must be repaired and this task creates a considerable need for energy.

2430 Mtoe to 4247 Mtoe in 43 years, that is, it almost doubled (IEA’s report 2016). However, other changes have taken place in the past 30-40 years. The oil crisis in 2008 highlighted that the era of cheap oil was over. Instead of a gradual replacement of the energy system built on fossil fuels such energy types came to the fore that had not been exploited in great volumes before, due to their low profitability and high costs. The extraction of tar sand, oil shale and shale gas has begun. At present, the extraction of exotic oils accounts for approximately 14 per cent of the total output, including LPG and biofuels. The extraction of natural gas has seen similar changes: due to horizontal drilling and hydraulic fracturing, natural gas can be extracted from such porous rock formations that used to be inaccessible. Most of the impacts that these technologies have had on climate change have been adverse, also having negative consequences in terms of the future of energy production. • The largest extractors are not OECD countries; thus, a considerable part of their economic growth can be contributed to oil exports. Their economy is highly energy-intensive, their productivity is low

High-quality, easily accessible reserves of fossil fuels are extracted first and as they are running out, deeper-lying and poorer quality energy sources are exploited. Comparing the energy content of the fuel produced to the amount of primary energy used in extraction yields a simple ratio for energy return on investment (EROI). The higher this figure is, the higher the ratio of one unit of net energy produced and one unit of energy used will be. For oil, this figure was around 100 for oil in the 1900s, in the 1970s it was 30, and currently it is between 8 and 15, that is 8 to 15 units of energy are produced for each unit of energy used in the production process. In the case of “filthy” sources the figures are lower, around 2 at maximum, according to calculations based on Shell’s data. since they have as much oil at their disposal as they wish (Russia, Saudi Arabia, Ukraine, Egypt, etc. can be seen in the inefficient and low productivity group in the chart). As soon as the net energy content of extractable oil deteriorates, more gross quantity is used to achieve the same economic output. As a result, the carbo-dioxide emission of Middle East countries increases.

THE CURRENT ENERGY SITUATION OF THE WORLD – HIGHLIGHTS Fossil fuels are getting filthier Between 1971 and 2014, the world’s total primary energy supply (TPES) was multiplied by almost 3 times: it was 5523 Mtoe 1971, and 13 700 Mtoe in 2014. In the 43 years elapsed between the two dates, consumption hardly changed its structure. Although oil fell from 44 per cent to 31 per cent of TPES, it means that oil consumption grew from

Solar Energy Park, Shanghai, China

ON THE ENERGY VISION

Electricity demand Renewables1 Desired rate in the lowcarbon economy IEA projection2

2010 17,000 TWh 3,250 TWh

• Due to the deteriorating net energy content, an increasing amount has to be mined from unconventional reserves to replace high quality fossil fuels that are running out, which exerts considerable environmental pressure, especially in the case of shale oil. • The time and urgency pushing the energy sector towards transition is lost, because unconventional sources seem to be available in quantities unseen before. • Unconventional sources will never be able to replace certain fossil fuels, because access to them in one time unit is about one order of magnitude lower, and it cannot be upgraded. CAPITAL INVESTED IN RENEWABLES IS INCREASING – AND SO IS THE WORLD’S ENERGY DEMAND The exploitable global technical potential is a dependent of, among others, market circumstances and political willingness. If started today, opportunities can be projected until 2030; after that, only visions can be outlined. At the moment, technical potential depends on several bottlenecks: without substantial infrastructural transformation, the current energy system is not capable of integrating renewable energy sources in any quantity, production capacity is also finite, and the lack of scarce metals can also be felt, since they are mostly mined in China. When analysing the learning curves of solar panels, we can see that between 210 and 2016 installed capacity multiplied by five times, from 41 GW to 226 GW. Supposing this accelerating development remains, the installed capacity of solar energy production in the world will multiply by 10 times by 2030. In terms of price, it will produce a decrease by about 50 per cent by 2030. The calculation has considered the following factors: the current PV capacity of 226 GW will be multiplied by ten times by 2030, and the increase follows a logistic curve. The most significant factor of the fall in price is the increase of produced power capacity (according to an

2030 27,300 TWh 14,600 TWh

2050 43,800 TWh 21,100 TWh

50%

95%

25-30%

nincs

analysis conducted in 2002, it accounts for 43 per cent of the price), the cost decrease during production can be described by the equation Ct=C0

( ) pt

-b

in which Ct denotes the costs depending on time, pt is installed capacity depending on time and b is the learning parameter. In my calculation, I also presumed that market circumstances remain unchanged, for instance, no lack of scarce metals occurs. If the abovementioned goal is achievable, 2,200-2,500 TWh of the world’s energy production will be generated by solar energy by 2030, which is 10 per cent of the energy demand projected. Wind turbines have similar potential; therefore, these two sources may account for 20 per cent of energy production by 2030. If the current trend continues, the rate of modern, clean renewables is likely to grow faster than the electricity demand of the world. In addition to electricity demand, however, renewables must be mentioned in relation with heat and motor fuels, because electricity generation accounts for only about 10 per cent of the entire energy mix. The data of biomass used for heating worldwide are just estimates and not exact numbers. It can be estimated, however, that the total biomass use (including biofuels) was about 1,370 Mtoe in 2014-ben and according to the IEA’s scenarios, will grow by 38-39 per cent by 2035. It includes the diffusion of biomass-based heat generation and biofuels. 1,4 million barrels of biofuels were produced, which accounts for 1.5 per cent of total oil consumption; this rate has been almost unchanged for years, and decreases very slowly. The following conclusions can be drawn from current trends: • the further use of biomass should be almost doubled by 2030, which the ecosystem of the planet cannot tolerate • the rate of biofuels has been under 2 per cent for years; its significant increase endangers food production directly (by reducing use of agricultural land) and indirectly (destroying Indonesian rainforests for palm oil)

• if the production of intermittent renewable (solar, wind) power plants is not impeded by any factor, their capacity might be multiplied by ten times by 2030. ENERGY CONSUMPTION IS INCREASING WORLDWIDE The energy consumption of the world has been continuously increasing since the early 19th century. Naturally, there have been minor setbacks (such as the second world war or the decrease in consumption due to the global economic crisis in 2008), but increasing primary energy consumption is unquestionable. The trend is not expected to change, despite the fact that increase has been below average, 1.1% and 1.0 percent annually in the last two years. The regional differences of energy consumption, however, provide important information, since an increase in energy consumption tends to be accompanied by economic growth. A publicaton, annually published by British Petrol (BP), Statistical Review of World Energy contains the following data (see table). It can be seen that Asia and the Pacific region have been obviously dominating in recent years. If we examine the rate of development, growth is obviously the most dynamic in the two Eastern (Middle est and Asia Pacific) regions, while the European and Eurasian regions, representing the Western world, are stagnating, and North America even shows a decreasing trend of energy consumption. The primary energy resources that the different regions used to Mtoe North America South and Central America Europe and Eurasia Midle East Africa Asia Pacific

feed the increase in their primary energy consumption is also worth examining. Africa and the Americas still “feed” their economies primarily with oil, while Europe ans Eurasia, as well as the Middle East do so with natural gas. Coal as a primary energy resource is still dominant in the Asia Pacific region, accounting for almost 51 per cent of the energy consumption in the region. The European and Eurasian regions are the most diversified, since here none of the energy carriers accounts for one-third of the total consumption. In this category, the Middle East represents a counterpole, where oil and natural gas cover almost the entire energy mix (98 per cent). This illustrates that the growing energy demand of the world is primarily covered by fossil fuels, which is not a good trend, regarding the dangers of climate change. It is good news from the viewpoint of global climate change that the share of renewables in energy consumption is slowly but steadily growing. The growth of renewables was 15.2 per cent on global level, which is just slightly below the ten-year average of 15.9 per cent. Last year, the percentage rate of the growth of renewables was of two digits in all the regions but North America, although unfortunately this means a marginal nominal change in the case of the regions starting from a very low figure (Middle East, Africa). Although continuous growth is a promising sign, it is obvious that robust economic growth is primarly fed by non-reneawable resources. Coal is still the main driver of economies in the Middle East; although manufactured goods

Primary Energy Consumption by Region 2010 2011 2012 2013 2,779.8 2,781.2 2,725.4 2,795.6 633.9 658.0 673.8 688.5 2,948.5 2,934.2 2934.3 2,898.0 742.1 755.3 784.3 821.6 390.2 390.1 405.4 413.6 4,686.8 4,931.6 5,098.9 5,255.9 Total 12,181.3 12,450.4 12,622.1 12,873.2

Change in Primary Energy Consumption by Region, in % Mtoe 2010 2011 2012 2013 North America 0.1% -2.0% 2.6% South and Central America 3.8% 2.4% 2.2% Europe and Eurasia -0.5% 0.0% -1.2% Midle East 1.8% 3.8% 4.8% Africa 0.0% 3.9% 2.0% Asia Pacific 5.2% 3.4% 3.1% Total 2.2% 1.4% 2.0%

2014 2,826.0 698.2 2832.3 849.2 428.2 5,386.6 13,020.5

2015 2,795.5 699.3 2,834.4 884.7 435.0 5,498.5 13,147.4

2014 1.1% 1.4% -2.3% 3.4% 3.5% 2.5% 1.1%

2015 -1.1% 0.2% 0.1% 4.2% 1.6% 2.1% 1.0%

ON THE ENERGY VISION

Regional consumption by fuel 2013 (percentage)

Source: BP, World Energy Outlook, 2016

are relatively cheap, it is just a volatile benefit and the climate suffers. The entire growth of the world’s CO2 emissions is basically generated in the Asian economic region! ISSUES TO BE RESOLVED Integrating intermittent cheap renewables The fact that wind and solar energy are not accurately predictable and continuously available, that is, they are so-called intermittent energy sources, which might cause problems when energy is fed into the power grid, is often raised by the critics when it comes to attack renewable energy sources. This problem is difficult to overcome until storage capacities of adequate capacity and cost are developed. Partly, the critics are right: the intermittency of wind and solar energy might cause difficulties for the power grid operator responsible for the balance of the system. The problem, however, is far from being insurmountable, since several widely-used solutions exist to utilize these renewables within the grids. The first problem arises from the current structure of power grids. When they were developed and constructed, the growing share of intermittent renewables was not – could not be – considered. The majority of grids is optimized for being fed into by centrally operated, high-capacity, controllable

power stations. This system can extremely quickly and effectively respond to the fluctuation in demand by adequately modifying the performance of feed-in capacities. With the appearance of intermittent renewables, however, fluctuation both in demand and supply should be continually managed. For example, if the performance of the wind turbines feeding the grid significantly drops, a power station capable of increasing its performance quickly-typically a natural gas fired one-should compensate within moments. The feed-in of intermittent renewables, however, is not completely accidental, but moves within certain predictable limits. The chart below shows the solar irradiance of the city of Pécs for a year. Nocturnal drop is natural, but daily potential maximum is relatively accurately predictable. However, certain factors, such as the formation and movement of clouds, cannot be so accurately mapped. Here, a larger cloud, or in the case of wind turbines a sudden fall in wind force, can cause a problem to be handled in seconds. One of the most apparent solution is the spatial distribution of renewable capacities, which reduces the relative volatility of accrued performance. That is, distributed capacities are much less likely to be prone to loss of performance at the same time than centralized ones. Theoretically, the operation of a centralized intermittent capacity of 200 MW

Million tons North America South and Central America Europe and Eurasia Midle East Africa Asia Pacific

Variance of Renewables Consumption 2014 2015 76.1 82.6 19.9 24.2 124.1 142.8 0.4 0.5 2.7 3.8 93.4 110.9 Total 316.6 364.8

requires the readiness of a controllable capacity of the same size (e.g. a natural gas fired power station). However, if adequately diversified physically, the size of the required spare capacity exponentially decreases. A more efficient prediction seems to be feasible as well, since both sunlight and wind force are generated by natural processes. Both the increase of data volume and the development of technology serve accuracy, which, in return, significantly facilitates the injection of renewables into the electricity grid. However, current central grid operation is capable of handling intermittent renewables up to a certain level only. There is much debate about where this limit is. However, it is certain that the current central power system needs to be replaced by a decentralised system of several small injectors and flexible users operating through smart grids if we want to transfer to an electricity grid using completely renewable energy (which sooner or later we will be compelled to).

6.5 4.3 18.7 0.1 1.1 17.5 48.2

Variance

8.5% 21.6% 15.1% 25.0% 40.7% 18.7% 15.2%

EMISSIONS CUTS, DECARBONISED ENERGY USE EU guidelines and the Paris Agreement require urgent action on decarbonisation. The EU’s objective is to reduce CO2 emission by 45 per cent by 2030

and by 80 per cent by 2050. The energy sector will play an important role in this, since only nuclear energy and renewables are allowed to remain by 2050. This requires the complete transformation of the energy system between 2030 and 2050, and innovations that will have substantial roles only after 2050 should be used before 2030 – these are listed below.

a) Carbon capture systems, intermittent renewables In the transition period, until about 2040, the power plant type currently known as peak-load electricity generation installations will remain part of the electricity system. Their task is to counterbalance

Ecological footprint of our planet in 2015

Source: worldmapper.org, http://www.worldmapper.org/display.php?selected=322

the fluctuation of randomly injecting energy resources (solar energy and wind) and to provide electricity at consumption peaks. For this purpose, gas turbines are being used in Germany, where the share of renewables in electricity generation is 31 per cent (and of the total energy mix is 15 per cent. The issues of equalization and adequate storage have not been fully resolved yet. Consequently, if a German renewable power station overgenerates, cheap electricity starts to go to neighbouring countries, challenging electricity grid operators what to do with it. Germany itself is trying to resolve the changes in generation by renewables by regulating natural gas- and coal-fired power plants. For this reason, the fossil fuel power plants are likely to retain their regulating role until smart grids and micro rings, capable of handling intermittency, are developed. In the case of such power plants, greenhouse effect gases emitted through chimneys are needed to be captured, therefore various CCS (carbon capture and storage) systems have been developed. In this process, carbo-dioxide is transported from point sources such as chimneys and is stored in geological formations until technology is developed to process it (e.g. to transform it into methanol with the help of renewable energy resources later). The energy demand of such power plants increases by 20 to 50 per cent – accurate experiences are not available, because only one such power plant has been operated under semi-industrial circumstances in Germany. The price of the electricity generated is 50 to 90 per cent higher. b) Transport, heating/cooling While in electricity generation a full transition is likely (more details are to follow), in the case of industry and transport it is harder to imagine the same. The energy consumption by sectors in OECD countries shows that in transport the share of oil is still 90 per cent and that of renewables is below 5 per cent. The EU intends to increase it to 10 per cent by 2020, and to 60 per cent by 2050. Again, such technological advancement is required that does not yet readily exist. It is another problem in cities and densely populated areas that heating systems are mostly based on natural gas directly (gas convectors or gas boilers) or indirectly (district heating). For the present, settlements which have favourable characteristics or have the opportunity for heating consumption based on renewables as a by-product of utilizing renewables for a different purpose are scarce. Such settlements include Gyergyószentmiklós, where 96

the heating plant of the town was built on the byproduct of the woodworks, which produces heat and domestic hot water, or Pécs, where the Pannon Heat Power Plant generates renewables-based electricity (from wooden waste and hay), making district heating in the city completely green.

objectives can be achieved by combining smart grids and the Internet of Things. The latter one means appliances that can be reached and controlled conveniently, via the internet (refrigerators, batteries of household solar power supply systems, etc.) By this,

c) Smart grid, micro ring The concept capable of managing the above problems by integrating the electricity grid, heating/ cooling and transport already exists: this is the system of the smart grids. Since, apart from industrial plants, cities are the largest consumers, these systems are worth being implemented first in certain metropolitan areas, where energy density per spatial unit exceeds 5,000 kWh/m² per annum. The consumption habits of the population, the offices, typically located in the city centres, as well as the plants of industrial rings add up to a daily pattern of energy consumption. At the moment, the transmission task of power plants and electricity grids is to cover it every moment, but in the future, small power producers, in multi-storey car parks and in other ways, buffer capacity in the near of industrial plants and a controllable consumer base will exist here as well.

– consumption peaks may be lowered by controlling residential electronic consumers in an automated way through the grid, therefore peak-load electricity installations are not needed to operate to cover the daily peak loads, and the operation of traditional power plants is more economical due to more even generation

d) New generation nuclear plants and fusion technology In the case of larger production units, visions are likely to include breeder reactors, as traditional uranium reserves are slowly running out. Currently, two different technologies are promising: the plutonium- and the thorium-based ones. In these two types of reactors, 238U and 232Th – otherwise not utilizable – transform into fissionable atomic nuclei (becoming 239P and 233U), thus the range of nuclear fuels significantly widens. Another option is represented by the fusion of small atomic nuclei. By 2030, a working prototype is likely; at the moment, EU’s ITER project in France and the USA’s LIFE project seem promising.

In such a system, the role of control is to manage smart consumers first, then surplus renewable electricity is stored in direct facilities (electric cars, pumped storage units) and indirect facilities combined with transformers (methanol/hydrogen). Stored electricity can be easily retrieved from direct facilities, and with the help of gas engines or gas turbines from indirect storage facilities. In transport, internal combustion engines remain for a while, they cannot be replaced yet, especially in larger power machines.

VISIONS OF THE FUTURE Since integrating intermittent renewable energy sources into the central distribution system is still a difficult task, one of the objectives of the future is to influence the load curve, reducing the load on rarely used peak-load electricity generation installations, and the other objective is for electricity operators to manage intermittent injectors by automatic intervention in larger volumes. The following

– in the case of residential and small power producers’ (> 50 MW(e)) intermittent injection, the smart grid system is capable of controlling intermittent renewables on a large scale, no limitations on the feed-in volume are necessary, renewables-based electricity generation can be given priority, the amount of greenhouse gases emitted during the course of burning fossil fuels decreases, and with a fully developed system in place, control can be ensured by filling buffers and using them later (battery storages, producing and storing methanol).

Synthesising plastic waste accumulated on Earth into fuel can be a viable solution for aviation and diesel engines, since when combusted, the synthetic fuel produced this way produces carbo-dioxide and water, but no soot or ash. The CO2, which was bound in plastic and now is released, can be bound by afforestation. A part of the additives remaining from the plastic in conversion and the production of synthetic fuels can be bound by using surplus energy or the molecules can be dissolved, eliminating the negative effect. Most of the electricity is generated by renewable resources, while another part of it is generated by nuclear plants in the complex energy generation systems of the future. Random feed-in is

The sustainability of a natural system can be basically described by three features: 1. Using local resources 2. Recycling of materials, zero-waste 3. System built on renewables. If we create such an economic system (a Blue Economy), economic output will not be harmful to the planet, thanks to zero-waste operation and carbon-neutral cycles. Mankind, however, has been polluting the environment extensively in the past century, and the ecosystem spectacularly degenerated. Therefore, the other task of the energy system based upon cheap, renewable energy sources will be to restore the state before pollution and waste can be eliminated from the natural system.

balanced by smart grids, surplus electricity is stored in pumped storages, batteries or converted. Green fuels produced by conversion serve as a base for heating and cooling while the gas engines in which they are burned also generate electricity. Fuel cells, which can convert methanol for instance into electricity at higher efficiency than an internal combustion engine can, represent an alternative solution. Heating/cooling is partly provided by heat pumps – these are always driven by continuously available clean electricity. Considerable advancement should be achieved in energy saving and efficiency by 2050, but saving half of each currently used kWh of energy seems possible. Gas turbines operated by stored methanol/hydrogen (produced by surplus electricity) are capable of balancing the daily fluctuation of consumption with directed electricity generation. Some agricultural by-products produce biogas, which can also be used for heating and transport purposes. The system is managed and consumers and producers are controlled through the grid (IoT covers all areas of energy supply). The backcasting method, looking back from 2050, shows that significant decarbonization of transport, electricity generation and residential energy consumption is possible, but new innovative technologies must be implemented by 2030, such as smart grids, increasing the share of electric transport, methanol-based storage and redistribution, diffusion of energy cells, and a breakthrough in nuclear technology. 97

FUTURE OF CITIES Authors: Ráhel Czirják, László Gere

Cities, embodiments of human civilisation, existed already in the millennia before the Common Era. However, the percentage of urban population compared to the total population of the Earth remained very limited until the industrial revolution, when technological development and socio-economic changes induced explosive growth. In the developing world, this modern urbanisation started only after regaining freedom from colonial rule. Despite the one and a half or two century backwardness, the urban population of the global South today far exceeds that of the developed world and the difference will remain. But what will the future bring? What trends can be expected until the middle of the century and what will our cities look like in 2050? We are trying to find answers for these questions in the present article relying on different forecasts and predictions.

DEMOGRAPHIC TRENDS From a settlement aspect, 2007 was a turning point in human history, because since that year more than half of humanity have been living in cities. The tendency is going to continue, so we can state that we live in an increasingly urban world. According to the UN’s forecast named World Urbanisation Prospects (2014), 66.4% of the Earth’s population will live in cities by 2050, which means over 6.3 billion people. At the same time the growth rate of rural areas tends to decrease. While the growth rate was average 0.26% at the turn of the millennium, until today this has fallen to 0.07%. The UN expects the growth to have a negative rate between 2020 and 2025, by 2050 the rural population will decrease by 0.4% annually. In absolute numbers this means growth in rural population until 2020, when it reaches a peak of 3.38 billion. After that a slow decrease starts and by 2050 only 3.2 billion people will live in rural areas. The growth of urban population is not a uniform process in the different regions of the world. The most urban areas of the Earth are in the developed world according to the UN classification: Europe, North America, Australia, New Zealand and Japan. Latin America and the Caribbean also belong here as kind of odd ones out. In these regions and countries, the urbanisation rate (that is the proportion of urban population within the total population) is over 78%

on the average, and by 2050 it is s expected to grow to 85.4%. As opposed to this, the urbanisation rate in the emerging world (Africa and Asia) has not yet exceeded the 50% turning point, and will be 63.4% by 2050. Considering the absolute numbers, the area is not legging that far behind. While there live less than 1 billion people in the cities of the global North and their number will be around 1.1 billion by 2050, the number of people living in urban environment is already over 3 billion, and this will grow to 5.2 billion by 2050. In other words, the major portion of urban population growth – 94% – is predicted to be realised in the developing world. In a continental distribution we can say that the most rapidly urbanising region is Africa, where the urban population grows by an annual 3.4%. The pace of growth will decrease by 2050 – it will be ‘only’ 2.56% – but this huge population growth will cause the urban population to grow from the present 505 million to 1.3 billion until 2050. Considering urbanisation rate, the most urbanised continent of the Earth is America. In the Northern region, the urban population proportion is 82%, in Latin America it is 83%. This means an absolute of 817 million people. Due to the particularly high percentage of urban population, the growth rates are not as significant as in Africa: in North America 1%, in Central and South America 1.3%. The growth is projected to slow down

FUTURE OF CITIES

in the future: until the middle of the century the urban population growth in the northern part of the continent will be an annual average of 0.6%, while in the southern part 0.44%. These tendencies will result in having an urban population over 1 billion people in 2050. The ‘Old Continent’ has a similarly high urbanisation rate, too: it’s currently 74% and is forecasted to grow to 82% by 2050. However, there is a significant difference behind these figures in comparison with Africa if we consider the absolute urban population number. In Europe 550 million people live in urban areas and their number will grow with maximum 30 million until the middle of the century. Considering the proportion of urban population within the total population, the third place among the continents is taken by Australia and Oceania, where 70.8% of the total population live in cities. According to forecasts, the ratio will slowly grow to 73.5%, that is the urban population number will grow from the present 28 million to 42 million on the continent by 2050. Regarding the absolute population, Asia is standing out of the other continents, because the urban population is already over 2 billion and it will grow to 3.3 billion until 2050. This means that by the middle of the century half of the world’s population will live in the urban areas of Asia. Size of urban population in 2050

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CITIES AS GLOBAL POWER CENTRES As opposed to the dynamism of economic, social and technological forces, politics and governance seems to be fairly static. The Westphalia system of nation states has been dominant for almost five centuries, but global governance still remains weak. And this gives an opportunity for cities to rise. The rapid urbanisation of the developing world will shift the centres of gravity from West to East and from North to South by 2050. In 2014, half of the world’s urban population came from Asia. Another very illuminative comparison says that half of the world’s urban population come from altogether seven countries (also in 2014), which are (in descending order of urban population): China, India, the United States, Brazil, Indonesia, Japan and Russia. Cities have a growing economic power and 80% of global GDP is already produced in cities. If all the major global cities in the city ranking of the Brooking Institution (New York, Los Angeles, Tokyo, Paris and London) formed one state, it would be the third biggest economy in the world after the United States and China (in terms of GDP). A shift to the East is already being experienced today, and as trends predict, it will be even more significant in the future. The above-mentioned

Tokyo

Osaka

Delhi

New York-Newark

Shanghai

Mexico City

Mumbai

São Paulo

Beijing

Mumbai

Dhakka

Calcutta

Osaka

Karachi

Los Angeles-Long Beach-Santa Ana

Beijing

Cairo

Seoul

New York-Newark

Lagos

Buenos Aires

Cairo

Mexico City

Cairo

Dhakka

São Paulo

Delhi

Karachi

Kinshasa

Rio de Janeiro

Buenos Aires

Osaka

Paris

Calcutta

New York-Newark

Moscow

Istanbul

Calcutta

Figure 3 The world’s 15 most populated cities in 1990, 2014 and 2030 (thousand people; symbols indicate the changes in the position since the previous date)

Source: UN World Urbanisation Prospects 2014, edited by author

city ranking has several categories for Asian cities: it treats the group named Asian anchors (Beijing, Hong Kong, Seoul-Incheon, Shanghai and Singapore) separately, discusses 22 cities in the category of the Chinese industrial cities, the category of emerging gateways deals with 28 large cities 13 of which is located in Asia (10 in China). The growth of cities is an indispensable prerequisite for the economic growth of the given countries – this is one of the basic assumptions of the study prepared by the McKinsey Institute about the urban population of China, that will grow to 1 billion by 2030, which requires developing a well thought-out urban planning strategy. It is because productivity can be increased most effectively with a higher degree of urban concentration. The study says that the concentrated growth scenario predicts 20% higher GDP than the scenario about scattered development. In 2014, 28 megacities (cities with a population over 10 million) were home to one in eight of the world’s urban dwellers. Most of the megacities and large cities (cities with a population between 5 and 10 million) are located in the global South, as opposed to the situation a few decades ago. China alone has six megacities (Shenzhen, Tianjin, Chongqing, Guangzhou, Shanghai, Beijing) and 10 large cities, and it will add one more megacity (Chengdu) and six more large cities by 2030. Four of India’s large cities presently are projected to become megacities in the coming years (Chennai, Bangalore, Hyderabad, Ahmadabad), for a total of seven megacities projected in the country by 2030 (the three existing ones are Delhi, Mumbai

and Calcutta). Outside these two countries there were 7 megacities and 11 large cities in Asia in 2014. The 3 megacities of Africa are Cairo, Kinshasa and Lagos, but by 2030 another three cities will reach a population over 10 million (Dar es Salaam, Johannesburg and Luanda). By 2030 the number of megacities will rise from the three in 2014 to twelve. The four megacities of Latin America (Buenos Aires, Mexico City, Rio de Janeiro and São Paulo) will be joined by two others by 2030: Bogota and Lima. The population of the current megacities (e.g. New York, Tokyo, London, Paris, Moscow), however, will minimally increase or even decrease, so their global significance will probably be smaller (although it is important to know that global weight is determined not only by the size of population, but also by various other factors like economic performance, education, accessibility etc.). So – according to forecasts – the power and influence of the cities in the global South will substantially grow by 2050. ENVIRONMENTAL SUSTAINABILITY IN FUTURE CITIES At present 2% of land is occupied by human settlements and infrastructure, but with continuing population growth and urbanisation, this ratio may double by 2050. Cities – due to their high concentration of population – put increased burdens on the environment both in terms of input and end products of resource utilisation. Per capita energy consumption has doubled since 1950, and it can grow by another 50% until 2030,

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according to the World Economic Forum’s forecast. The International Energy Agency projects that this will mean doubled consumption in Asia. Although thanks to various technological developments the application of renewable energy sources is moving to the fore these days, the rapidly growing energy demand will be satisfied using mostly fossil fuels.

numerous environmental challenges for urban regions, the solution of which is of key importance for the Earth. These challenges can be answered among others by changing consumption habits, actions from environmental policies and new technologies. TECHNOLOGICAL SOLUTIONS OF FUTURE CITIES

This will considerably increase greenhouse gas emission, half of which is already released by cities. The OECD’s Environmental Outlook forecast warns that by 2050 air pollution will be the leading cause of deaths related to the environment. Air

Technological changes can have negative effects; it is enough to mention the uncompetitiveness of human labour in certain jobs as opposed to robots. As a result of automation and globalisation,

pollution shows significant regional differences; developed countries are expected to start reducing air pollutant emission, while in emerging countries this will happen one or two decades later. Air, soil and water pollution levels are very high globally and forecasts say it will continue to grow, especially in Asia. The major pollution emitters are cities, so the urbanisation trends detailed above will most probably lead to growing environmental pressure if there is no change in environmental regulation and technologies. The future holds

production and manufacturing industries – and the related jobs – have moved to the developing world. Currently the same is happening to several office jobs of the service industry. But cities will continue to benefit from technological changeseven if it’s only contributory and sometimes harmful. Technological changes enable cities to access global markets, discover new opportunities in education and training, develop medical services, gather and utilise big data and several other examples could be brought.

Technological changes will alter a whole city’s operation by 2050. This can be witnessed now, because different smart city solutions have started to spread already, and we will make big steps forward in optimising the processes in the future. It will be even the more indispensable because there’s still significant growth going on in cities in the developing world, to which public utilities have to be adapted. This can be most easily and cost-effectively done through IT and technological solutions. Here are some ideas about future cities: – g reen cities: since environmental pressure is concentrated in large cities, the expansion of green areas becomes more emphatic, on the surfaces of buildings as well (this is the so-called vertical forest, a fairly widespread construction form). The Paris 2050 visualisation is a fine example of the green city (where vertical farms also appear). – s mart infrastructure in cities: the process of making all public utility services measurable and closely monitored will become extended and in the future integrated systems will control and manage the city’s operations in several areas

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from water supply and public lighting to transport and air quality. Such technology is already available, we can even identify areas of application, but in 2050 we’ll have more widespread and much better systems. – g iant buildings: large housing units are nothing new. At the beginning of the 20th century several designers (the most famous is probably Le Corbusier) dealt with the idea of buildings accommodating the population of a whole city. The dramatic growth of population is still a problem in several cities in the middle of the 21st century, so it is conceivable that housing needs will be satisfied by giant buildings that are much larger than those that exist now. – e nergy efficient cities: numerous projects and urban cooperation programmes have set the goal of transforming cities into low-energy cities through complex infrastructural investments. For this the integrated cooperation of several areas (power generation, waste management, transport, architecture, public utilities etc.) is necessary.

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TECHNOLOGICAL VISIONS â&#x20AC;&#x201C; 2050

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TECHNOLOGICAL VISIONS – 2050 Author: László Gere

Technological development is a continuous process, but since the second half of the 20th century we have been witnessing changes that are faster than ever before. Almost all researchers agree that the acceleration of innovations will not stop, but rather it will speed up. Therefore, technological changes are perhaps the most difficult to forecast. There surely will be solutions in 2050 that have no signs today. There are developments that do not yet work, or not with the efficiency required for their spread, but in a 30-year perspective this is sure to change. This analysis is mainly focusing on these key areas.

MEDICAL SCIENCES / BIOTECHNOLOGY Child mortality is expected to substantially decrease in the future. Between 1990 and 2012 there was a significant decrease from 90 thousandths to 48. This tendency is going to continue down to even 31 thousandths – as the Copenhagen Consensus Center’s assessment puts it. The most dramatic decrease (due basically to the currently very high levels) is expected in Africa. According to the Business Insider, taking the current medical science trends into consideration, several diseases will be curable or prevented by vaccination by 2050. We understand better how our immune system works, what its relationship with viruses is, we will be able to cure for example Alzheimer’s disease and treat cancer (with nanoparticles for example). With the computerisation of the human brain we can achieve “eternal life”. Brain researchers and neurobiologists say that by 2050 the human brain will be uploadable to computers, theoretically our mind can live forever in a robotic body or as a hologram. According to several futurologists, the necessary technology will be available for this by then, although some consider that it will be a privilege

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of the richest. Around 2075-2080, however, it may become a routine procedure. Artificial organs have already appeared at research level. The isolation of stem cells made the reconstruction of any body cell possible; in the future, they will be used to build tissues and organs as well. The development and mass application will happen in the foreseeable future. With the spread of artificial organs, bodily deficiencies will disappear, which means a significant progress if we take into consideration that in the US alone an average of 18 people die every day while waiting for organ transplantation. Organs grown in labs would provide a solution for this problem, and the required technology will be available within 30 years (such organ transplantations are already being tested). Genetic engineering enables screening for genetic disorders: in 2050 we may be able to “create” genetically perfect people, to determine even the tiniest features like teeth, height, hair colour, eye colour or eyesight. The supporters of genetic engineering claim that this is not different from teaching our kid to play a musical instrument, because both are aimed at developing a skill. Similar to several medical breakthroughs and innovations, the massive expansion of this is obstructed by legal and ethical concerns rather than technological feasibility.

“there surely will be solutions in 2050 that have no signs today” ROBOTICS / ARTIFICIAL INTELLIGENCE Now researches are conducted into the development of freely moving robots that surpass people both physically and intellectually, and are capable of managing whole companies on their own. People can have more time for social, recreational and artistic activities, similarly to the current retired or well-off classes. Artificial intelligence already exists; it is used every day. It is not just Apple’s Siri, IBM’s Watson or the Google Now assistant, but it is present in everyday devices like a washing machine, too. Today a washing machine with appropriately developed electronics is already capable of nearly human behaviour, it can individually assess the situation and work out a response based on the data measured by itself (this is the so-called Fuzzy technology, with which the

device is capable of modifying its working while in operation, if it detects something that differs from the optimal). The term ‘machine learning’ related to artificial intelligence shortly means that a system is capable of recognising regularities and rules by observing patterns, then making decisions based on them. Applying the algorithms of machine learning will be indispensable for companies to retain competitiveness. The technology is already applied in several areas, from spam detection through character recognition to photo labelling and different analytics (it can optimally be used for analysing big data, basically this was the reason for the emergence of the need for machine learning). With the understanding of the functioning of the human brain, artificial neural networks will also be possible to create, which will mean a new breakthrough in machine learning. Bill Joy, the leading researcher of Sun Microsystems says that this superhuman artificial intelligence will bring about such exponential technological development that will practically end the era of humanity (this is the so called technological singularity)

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2020

2028 2024

Focus of U.S. power on destabilising the Asia Pacific region

2021

2023

Greenland starts to become independent

5 billion internet users

First artificial kidney

Cure for malaria

India first sends human into space

Holographic television

The ShenzhenZhongshan Bridge is finished

híd Afrika és a

2022 India is the world’s most populous country Germany's nuclear energy phase-out

Laser inertial fusion energy

Greatest refugee crisis of history

Brain implants to store memories

Manufacturing clothes with 3D printing

Borneo’s rainforests vanish

Drills on the southern pole of the Moon

Extinction of gorillas in Central Africa

First Chinese space station

2020 - 2050

Arctic can become completely ice-free

Carpooling reaches critical level

2025 Producing organs by 3D printing Spread of vertical farms Russia first send human into space Global crowdfunding market of $100 billion

Human is sent to asteroids close to the Earth

2021 - 2025

China builds the world’s largest particle accelerator

2026 New cure for Alzheimer’s disease La Sagrada Família is finished

2025 - 2050

2029 Human-like artificial intelligence

Dismantling the International Space Station

2027 BRICS’s performance surpasses that of G7

Shops and retail system becoming automatized

Electronics made by printing End of the printing press in the UK

Exhaustion of silver reserves

Revival of extinct species

Very high rate of global unemployment

2025 - 2030

2035

2030 Desalination is in general use USA’s global power is declining The size of Muslim population grows significantly Half of US shopping malls close

Very high risk of bioterrorism; the army starts hypersonic missiles

2031

2032

Exhaustion of global lead reserves

4th generation nuclear energy

Web 4.0 Chocolate becomes a rare luxury

Nuclear power accounts for one-third of Saudi Arabia’s energy production

2033

Self-driving cars become common

Human is sent to Phobos Mining asteroids

2034

Hypersonic flights

Internet speeds of terabits

2025 - 2035

Lead reserves of the Earth exhaust

Switzerland phases out nuclear energy

Robots control battlefields Global air force doubles (compared to 2015)

All TV channels are internet-based; human lands on Moon

2045 Confidential relationship between humans and robots can develop

2040

2039

2036

2037

Manufacturing of cultured meat Skills of bionic eyes surpass human eyesight

2035 - 2040

Full virtual reality

The USA presents its 6th generation military aircraft

Final collapse of the European Union; Russia is a global food producing major power

2038 Teleporting complex organic molecules

Majority of manufacturing jobs disappear USA’s population is 400 million

2035 - 2045

India’s economy becomes China’s and the USA’s competitor

Air accidents stop

Fusion energy is placed on the market

High-‐speed maglev train Chūō Shinkansen is ready

Revolution of consumer goods due to “programmable matter” High-speed NorthEastern Passage

2041 Temperature rises by 2 °C (compared to 2009)

2042 The world’s population is 9 bn Whites become a minority in USA

2043 Slovenia closes its only nuclear station

First real proof of extra-terrestrial life

technological visions 108

2044 Melting pf permafrost areas becomes irreversible

Super-hurricanes are threatening Gulf countries

2050 Almost half of the original area of Amazonian rainforests is deforested

2047

2046 Japan’s population drops below 100 million Retirement age above 70 years in the UK

2045 - 2050

“One Country, Two Systems” model is implemented in Hong Kong Completely autonomous, smart military aircraft is introduced

2049

2048 Revision of the Antarctic Treaty

Robots become widely used in homes and workplaces The Dead Sea dries out

Smart buildings Energy “supernetworks” of a size of a continent China announces the world’s largest draining project

First real proof of extra-terrestrial life

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TECHNOLOGICAL VISIONS – 2050

major role. This would be a huge step forward also because the global energy consumption is likely to be the double of the current by the middle of the century. As far as mining is concerned, the raw material appetite will probably grow along the population growth, says the forecast of the World Economic Forum on the mining industry in 2050: this means a demand of 50 billion tons by 2050 if calculated with the current 4-4.5 tons/person/ year global demand. There are researches and recommendations concerning sustainable mining. A primary aspect in mining is environmental protection and repair or remediation of environmental damage, increasing the intensity and efficiency

of establishing a Mars colony. Amazon also starts engaging in the 21st century ‘space competition’ that can present genuinely new perspectives in the long run.

of extraction, and improving the recycling of raw materials.

cidents and by 30 thousand less deaths and the time spent commuting will decrease by 4.8 billion hours. The reduction in the number of accidents, fuel costs and production loss will result in saving 500 billion dollars per year, says the Milken Institute in its study. Electric cars will also become common by 2050, which will mean a 30% reduction of road carbon dioxide emission; with the wider spread of the technology the petroleum consumption will also be substantially reduced. With the development of the technology, there are five factors that contribute to the major improvement of the electric cars’ situation: production costs of batteries will drastically decrease (already by 2022 they will be real competitors of traditional cars as far as the full life cycle is concerned); their range will become much longer at an affordable price; electric recharging stations will spread; the car industry itself will invest considerable resources into electric car production, more and more models and types will appear; there will be a global pressure on car manufacturers to reduce pollutant emission and to ease the dependence on petroleum, writes Roland Hwang, Director of the Energy and Transport Programme at the Natural Resources Defence Council in the US. There were numerous attempts in the near past to develop high-speed rail; solutions will most probably be found by 2050. One of the most promising plans is the Hyperloop announced by Elon Musk, which in his formulation would mean a new transport method, but its structure will be similar to that of railway lines. The concept is about an evacuated pipe system, where people can travel in capsules with a speed of more than 1,000 km/hour. The prototype was planned to be built between San

SPACE TECHNOLOGY

Most of the working processes can already be automated, and even more will be in the future. According to the pessimistic forecast of Roshe Vardi, Professor of Rice University, this can lead to an unemployment rate of as high as fifty per cent. Even more probably, due to these changes, work, income generation and the social benefit system will transform substantially, and it’s sure, that people in 2050 will do jobs that currently don’t even exist. Another aspect is that by 2050 robots will most probably be capable of expressing emotions, what is more, they will have their own feelings, will be able to have meaningful conversations with us, and even emotional relationships will possibly occur between humans and robots, which raises several moral and other questions. David Levy, international chess master, who is engaged in researches about artificial intelligence in relation to chess, wrote a book titled ‘Love and Sex with Robots’. By 2050 3D printers will be present in our homes. 3D printing, with the help of which threedimensional objects can be printed using digital models, has been available since the 1980s. Its main application area is prototype printing, but with the advancement of the technology (that has had an exponential trend in recent years)

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huge perspectives will open up for applying it in the industry, medicine or education. The possibilities offered by 3D printing are practically endless: we can make any dish with it (this technology is available today!), we can reuse our old clothes by printing new ones from them, but its industrial utilisation is also diverse. 3D printing can totally transform mechanical engineering (even airplanes will be printable).. RESOURCES According to a WWF study on renewable energy sources, if we invest enough in developing and installing renewable energy sources, almost all of our energy consumption can be supplied from renewable sources – and the greenhouse gas emission of the energy sector can be decreased by 80%. But for this serious effort would be required and preparations should be started right away. Especially because this would not use irrationally huge resources, two per cent of the global GDP would be sufficient and development could be done with technologies currently available. The largest ‘energy suppliers’ would be the Sun and the wind, other important energy sources moving to the fore would be the oceans (wave energy), biomass, geothermic energy and hydro power plants would also play a

By 2050 we will be able to cover most of our resource demand from space. Currently researches are conducted into how raw materials can be extracted from asteroids or the Moon. The area can substantially develop in the future (some authors compare the significance of the future of space resource exploitation to that of the great geographical discoveries, or they even dub the possibilities as the space ‘gold rush’). NASA researchers consider that by 2050 it is realistic to build a settlement on the Moon, the purpose of which will be to launch the mass extraction of the Moon’s mineral resources and to extend the opportunities of space tourism common by then. Strategic planning at NASA extends until 2100.

“By 2050 we will be able to cover most of our resource demand from space.” What concerns space travel, NASA currently focuses on the Earth-Moon relation, but it is hoped that by 2050 there will be at least one opportunity to send a human to Mars. Other experts go even farther, in their opinion by that time there will be human settlements on Mars. Beside government aspirations, private enterprises become more represented in space industry. SpaceX led by Elon Musk plans Mars trips for the 2020s and has set the goal

TRANSPORT Car transport will be far safer, simpler and cleaner in 2050: the advancement of self-driving cars is not a novelty today; experts say that by 2035 we will travel exclusively by such vehicles. Self-driving cars are safer, because accidents that happen due to distraction can fully be avoided. Just in the United States there will be by 4.95 million less ac-

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Francisco and Los Angeles, but the project is halted by high costs and other uncertainty factors, and it is little known what phase it is in. However, with appropriate financing, the idea could be implemented within a few years. Many experts forecast the future ‘renaissance’ of railways, because environment-friendly transport forms are moving to the fore and railways can transport large numbers of passengers relatively fast without pollutant emission. The vision of 2050 by ARUP engineering consulting firm says that significant railway developments can be expected mainly in the developing, quickly urbanising Asian/ African regions in the following decades. COMMUNICATION / MASS MEDIA Harish Shah, Singaporean futures researcher thinks that in 2050 computers in their present form will be no longer needed, instead of the monitor and the mouse we will have a foldable, flexible, pocket size device that will not require power source because it will be charged by body heat. It will receive voice commands and we will be able to control all our other devices (from our self-driving car to any smart device) with it. Its ‘screen’ will be projectable to anywhere, but also we will be able to ‘see’ it directly through our eyes as augmented virtual reality. There will be a comprehensive social network through which we will be able to communicate with anyone in the world in a much simpler way than today (we will not have to remember any passwords or user identifiers). In certain cases, if voice commands

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would be disturbing, there will be an option to control our devices by thoughts, with the help of socalled neuroimaging. However futuristic this may sound, this technology already exists. Jonathon Porritt environmentalist (author of the book The World We Made) forecasts that the Internet will reach every corner of the Earth: by 2050 8 billion people, 97.5% of the population then will have access to the internet. At present 40% of the population has internet access and 68% of users are from developed countries, 32% from emerging countries. This means around 2.85 billion people. The MIT centre dealing with collective intelligence sees the online expansion as one of the greatest innovations of modern history: it opens up innumerable possibilities for humankind and creates a certain collective consciousness (but to a much larger and developed extent than today). Internet will affect traditional media products more directly. Since 2010, it was in 2015 when the number of printed magazine copies dropped most dramatically, and at the same time digital publishing shows an increase. According to Bradley Wilson, Professor of Midwestern State University, if the drop in printed paper copy numbers continues the current trend, by 2050 the whole sector may disappear. With the advancement of translation technologies, language barriers will diminish: by 2050 automatic simultaneous interpretation will become default

TECHNOLOGY DOESN’T SOLVE EVERYTHING Although numerous positive developments can be expected, certain processes, like global climate change, present a worrying outlook. The consequences will aggravate by 2050 and it is a question whether technological achievements will offer solutions: – hundreds of millions of people will probably be displaced; – Dengue fever and malaria may spread and cause casualties even in the USA because of hotter and more humid summers; – significantly bigger territories will be burned by wildfires (eight times as much land by 2100 as in 2010); – additional 8% of the world’s population will experience water scarcity; – hurricanes will cause 10-20% more intensive destruction than today; – millions will be affected by sea level rise in coastal cities; – wheat and maize yields will be threatened; – wildlife of reefs and several islands will be endangered; – territories suffering from droughts will face greater risks; – 63% of wine regions will be at risk.

all over the world. We will be able to speak a foreign language with the help of special glasses and a mobile application (the text appears on the glasses like subtitles) or other devices. These technologies are present already in test versions; by 2050 they will be perfected. In the context of expanding opportunities provided by information technology, the internet and by the spread of artificial intelligence, virtual and augmented reality will permeate our everyday life and drastically transform our habits. Among others, it will make it possible to do the shopping without actually leaving home, shopping will be done virtually. We will select goods virtually (we can even try on clothes), service is done by artificial intelligence instead of real shop assistants, delivery will be done by drones, as Engineering UK describes a possible future vision in its report about the research on ‘The Future of Shopping’.

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Singularity University Author: László Gere

Singularity University is a think tank organizing educational programmes in Silicon Valley and an incubator hub encouraging launching new businesses. It was founded in 2008 by Peter Diamandis and Ray Kurzweil at the NASA Research Park in California. The founders and sponsors include companies like Google, Cisco, Nokia, Autodesk, IDEO and LinkedIn.

According to its website, the institution is a global community using exponential technologies to tackle the world’s biggest challenges. A learning and innovation platform has been created to empower individuals and organizations with the mindset, skillset, and network to build breakthrough solutions that leverage emerging technologies like artificial intelligence, robotics, and digital biology. The community is made up of entrepreneurs, corporations, investors, development organizations, governments, and academic institutions. Singularity University serves these audiences with custom educational experiences that transform leaders, and conferences that inspire and prompt action, and innovative labs that incubate and accelerate corporate innovation and social impact projects. Units and activities include: – Innovation Partnership Program: founded in 2013, IPP is a joint venture between the XPRIZE Foundation and Singularity University and in alliance with Deloitte. The programme includes events and workshops with the participation of executives from the largest hi-tech companies. – Global Impact Challenges: organized in the Netherlands in 2016 to find the most innovative Dutch entrepreneurs. – E xponential Conference Series: annual conferences focused on exponentially accelerating technologies, and their impact. Singularity Hub: a media website founded in 2008, providing news coverage of sci/tech breakthroughs. Numerous articles published by Singularity Hub

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focus on future technological and scientific trends and opportunities: There could be as many as 10 million cars with selfdriving features on the road by 2020. Surveys suggest there will be fewer car owners and more driverless vehicles in the future. Car ownership will be much less attractive – and ridesharing leaders like Uber and Lyft are banking on it. Autonomous vehicles are likely to have the largest impact on cities in the near future. Currently, there are three different segments competing with each other: on-demand companies like Uber, traditional car companies and technology leaders (Google, Apple, Tesla). Each year nearly 1.3 million people die in traffic fatalities, 90 per cent of which are the result of human error. The hope is that autonomous vehicle technology (AVT) will help to mitigate this figure. Nonetheless, it will be decades before self-driving cars are capable of fully navigating complex urban streets in autonomous mode. The autonomous car industry could be worth in excess of $2 trillion globally over the next two decades, thus it is a significant segment. The internet is part of our everyday life, making multiple aspects of our lives considerably easier, faster, and cheaper. But in the developing world, it’s a different story. 4.3 billion people lack regular internet access; in the world’s 48 UN-designated least developed countries, 90% of the population lacks any kind of internet connectivity at all. Several companies see a market opportunity in this, and are trying to provide internet access to the whole planet. Elon Musk’s company, SpaceX, as well as Google and

Facebook, are engaged in this endeavour. The solutions range from launching satellites and balloons to drones. The objective is to provide full coverage over a designated area (and ultimately, to provide global connectivity). In the future, robotics and artificial intelligence will reach such a level that makes emotional connections between people and human-like possible. Although it sounds somewhat bizarre today, it is not inconceivable at all that technology takes this turn. For the present, Japanese people have the most empathy and acceptance, where robots have long been an “organic” part of culture and social life

not only essential for our direct needs (drinking and cooking but necessary for agriculture and several industrial activities as well. recreation and healthy environmental ecosystems. It is predicted that by 2050 more than 4.8 billion people and half the world’s global grain production will be at risk due to water stress. Therefore, water purification technologies, desalination, filtering waste water are getting increasingly important. By 2050, it is expected that two-thirds of the world will be residing in cities, and a large proportion in megacities (defined as 10+ million people). It is conceivable that space-based solar power will meet most of their energy demand.

The financial system will completely change in the future, due to digitalization; some people regard the appearance of bitcoin as a forerunner of this process. No middlemen will be needed; financial processes will become decentralised and global, thus if one part is in trouble, the others will balance it (it is similar to the operation of the internet: if a server fails, it is automatically taken over by another, service remains uninterrupted. One of the major crises of the future will be caused by the struggle for clean drinking water. Water is

According to a recently presented feasibility study by Stanford University, we will be able to move to 100 percent by 2050 using only renewable energy sources which are s already available (wind, water and solar power). The Great Barrier Reef off the coast of Australia is dying and not expected to survive past 2050. A solution to stop the extinction of species is hoped from storing cells in a cryo vault, that is “hibernation”. If the method is perfected, species deemed to become inevitably extinct can be saved.

Singularity University

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THE FUTURE OF EDUCATION

Authors: Eszter Polyák, Zita Vajda

Due to the dynamic growth of technology, science and the international community, we can expect major changes in multiple aspects of life in the next decades. Today’s new digital technologies and the spread of the internet have created numerous new opportunities for the education of the future. Not only schools and universities but also executive training and other professional courses of study will be affected by the emergence of new technologies. With the appearance of virtual classrooms, we are advancing towards global education.

QUESTIONS OF THE FUTURE IN THE LIGHT OF EDUCATION The questions that we need to address include: will new forms of education take over the role of traditional education? How value certain are degrees obtained traditionally? What new educational products and services can we expect in the future? What impact may AI have on the students of the future? DEMOGRAPHIC PROJECTIONS Demographic prospects strongly influence the planning of educational development, since an expanding or declining population requires different tools to raise or maintain the standards of educational systems. According to the 2015 revision of UN’s World Population Prospects, the world population is projected to exceed 9 billion in 2050. More than half of global population growth between now and 2050 is expected to occur in Africa, followed by the population growth in Asia. Growth will occur even if there is a substantial reduction of fertility levels in countries currently having high fertility rates. In Africa, fertility will fall from 4.7 children per women today to 3.1 in 2050, and the trend may continue after 2050. In these countries, the globally high growth rate of the population will entail the expansion of the population under the age of 15, further enhanced

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by improving infant mortality rates. Today, 41 per cent of Africa’s population is under the age of 15, and the 27 least developed countries situated on the continent will produce the highest fertility rates in the future. The young people of developing countries will have less children of their own, which also entails an increase of the age at childbearing, which may indicate an improving level of education and higher general living standards. In the poorest countries, however, social disadvantages may be permanent, which primarily could be addressed by better social services, including the provision of education. In developing countries, there is an increasing demand for high-quality education, and learning is the most effective tool of emerging and increasing the quality of life. For this purpose, new tools must be used both in terms of pedagogical methodology and technical devices. By contrast, Europe will be the only region where population will decrease, and the proportion of people aged over 60 is projected to increase within the declining population. By 2050, the number of working age people per dependent may drop below 2 in 24 European countries, posing further challenges to both the economy and education, especially in the light of the problem that workforce migrating from developing countries represents. European and North American trends show a declining rate of students, which might also transform schools. These children will often have professions that are non-existent when they go to school,

therefore educational institutions will have to adapt flexibly to continuously changing circumstances. Let us have a look at how present-day education researchers would eliminate these problems by 2050. TODAY’S EDUCATIONISTS ON FUTURE SCHOOLS A book written by Canadian educational philosopher Kieran Egan in 2008 contends that schools need to be reformed because they are built on three flawed and incompatible goals – academic growth, social growth and developmental growth. After an overview on the history of education, he concludes the new system should be built from the basics. He created a 50-year education project, in which creativity and the ability to innovate play a prominent role. Jim Parsons also envisaged the future when he outlined the demographic and educational status in 2050, primarily focusing on Canada. Canada, as well as other developed countries, will become an urban country with an ageing population. Canada will become a majority minority country, and its leadership will change genders. Digitalisation will completely transform education, the importance of reading and writing might be challenged, consequently the system of school

“New digital technologies and the spread of the internet have created numerous new opportunities for education.” tests will also transform. Computers will make old books unnecessary and widen the digital gap between generations. But this age gap is trivial compared with the consequences for educational quality if the gap between the technology haves and have-nots widens. Values change worldwide, for example society is eschewing traditional leadership and hierarchies, and these influences are seeping into schools. Today there are some initiatives that create problem-based curricula, which are not conveyed frontally to students but they can become an active part of them. As a long-term consequence, learning is foreseen to occur at any time of the day and at any place, with teachers remotely facilitating self-directed learners and classrooms will become iterative spaces where learners access, network and discuss knowledge. Most educational resources are likely to be free. The evolution towards free access to digital

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content is already happening. The changes occurring in other fields of the world will also influence future students’ attitude towards knowledge, work and values, therefore the envisioned education of the future may be greatly modified by these yet unknown events. CLASSROOMS IN 2050 In his blog Technology Enhanced Learning, David Hopkins discusses what classrooms will look like in 2050. It is conceivable that classrooms in their current sense will not be needed any more, and students can access education anywhere they may happen to be, with the only requirement being a laptop, a camera, and a wi-fi connection. As technology advances and multimedia devices are more extensively used, teachers will have more time for students and education will become customized. The education of the future will be determined by the teachers’ commitment to this new type of education method. Tutors will not just present the curriculum but act as a coach or caddie. The era of talk and chalk is over. Even college classrooms will not be physically fixed; this trend has already begun with flipped

classrooms (online courses outside of class) and MOOC courses. Technical literacy of students will increase in the future; therefore, interactive and collaborative tasks will play a central role in the classrooms of the future. COMMUNITIES CENTRED AROUND KNOWLEDGE Some ideas, including the thoughts of Dee Dickinson of Johns Hopkins University, suggest that the centre of knowledge sharing shifts into communities. As “lighthouses of knowledge”, such communities can evolve in which families and tutors create a cheap and friendly environment for learning, mutually supporting each other. These lighthouses, once known as the local library, will transform into a community focal point. Open twenty-four hours a day year around, lighthouses are accessible to everyone and many of the resources are free – a library of real books and rooms for shared virtual realities. Adults eager to learn can use the rooms for the purposes of the Global University, with personal collaboration remaining important, but students can join virtually.

Businesses can rent space and use services, and these fees support the facility, and make space available for non-profits at low costs. In raising children, an extensive network of daycare centres that are free will play a great role. Their integration in the educational system will result in more children coming into school with the skills they need to learn successfully. Prospective parents can also take parent prep classes in the centres. Most children from age 6 to 16 will attend community learning centres that take many different forms to choose from: some may be connected to or located in workplaces, farms, museums or hospitals. Schools, financed by the local government, respond to the needs of the immediate community and are closely connected to the system of social services. Interaction with peers will still play an important role in learning, but electronic personal tutors (EPTs) that are able to recognise children’s needs and adapt assignments to their actual knowledge level will appear. Different subjects will be retained by these centres, although students must use and interpret what they have learnt in a broader context, such as projects. There is much emphasis on developing interpersonal skills and learning empathy. Each classroom, thanks to technology, can be can be adapted to a current theme. Several audio-visual and other devices are applied, providing a complex experience. The role of teachers will transform, learning specialists will be held in high esteem in the community and are paid accordingly. Their role in educating will have expanded, with lexical knowledge transfer being less important. The vision outlined above seems just an extraordinary utopia, but Dickinson affirms it is the result of the collaboration of an international network of researchers called New Horizons for Learning, reaching similar conclusions about potential solutions worldwide. . TECHNOLOGICAL TRENDS Ted Talks, MOOCs with thousands of enrolled students as well as online tutoring platforms radically change the way education is taking place.

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“Since the emergence of the electric computer and the internet technology has played a crucial part in the development of new trends.” Larry Ellison (founder and CEO of the Oracle Group) declared, “The Internet changes everything, I really mean everything." Thus, continuous integration of technology into education is not a novelty. Today, with widely available broadband internet and established app stores for all kinds of devices, technological progress marches on. While overhead projectors and chalkboards have been state of the art for decades, today teachers are increasingly employing more technologically advanced education materials. The interaction between humans and computers is radically changing, and there are ever more direct ways of interacting with our high-tech devices. These trends lead to digital education. Online courses have now been incorporated in the programmes of higher education institutions. According to the definition in a study by Allen & Seaman, online courses are those in which at least 80 percent of the course content is delivered online. Interestingly, there are numerous academic programmes (including universities such as the University of Maryland University College, Western Governors University, Rio Saldo Community College) where teaching and any other administrative functions are delivered via the internet. The extent of changes that online technology will bring about in education is not apparent yet, but it is known that technological changes take place at a much faster pace than we imagine. This fact provides the opportunity to learn more and more every day and use this knowledge more creatively. Trends expected in education on the basis of the CDTM Future of Education Trend report and The Future of Higher Education by Lasse Rouhiainen are presented below.

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Virtual reality

Source: http://www.digitaltrends.com/mobile/galaxy-s7-how-to-watch-vr/

M-Learning: Smartphones and tablet computers have been part of our daily lives for only a decade now. Most teenagers have smart phones, mobile data traffic has increased significantly, and there are countless learning apps to choose from. Mlearning is deemed to be successful because students spend a lot of time commuting, and they could learn on the go. Furthermore, these education apps supporting learning allow students to prepare for a test or exam in interactive and exciting ways. Big Data in education: As technology advances, large amounts of data is processed. Amazon és a Google already utilize big data in a very efficient manner. Educators also see an important role of Big Data, which has led to new courses such as “Big Data in Education”. In the coming years, big data will make student performance more easily measurable and teachers can deliver much more customized courses from the information retrieved. Big Data will correlate with other trends in education, such as m-learning and online courses.

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Virtual Reality: With the appearance of virtual headsets we are just one click away from everything, may it be a distant place or a special location. Virtual reality might have great impact on the education of the future, since it has limitless potential. Positive impacts include: • I t provides a strong emotional experience to students. What they learn this way is much better stored in their memory. It enhances motivation, because it teaches in an exciting manner. The acquisition of the material taught this way takes less time. • S imulations provide more efficient education experiences. In fact, any kind of human activity can be illustrated through virtual reality, for example, medical students can have a try at any simulated operations, or chemists can experiment with chemicals safely. • I t takes less time and money because students can practice virtually (for example, driving a car or flying a plane). • I t will be easier to get familiar with new cultures.

Augmented Reality: Augmented Reality (AR) adds artificial, computer generated objects to our perception of the real world. This technology might open up new prospects in education as students can learn in their homes, with their tutor appearing virtually. AR can create such learning environment that has been unprecedented. In the coming years, 3D elements are likely to enrich this educational trend. Artificial Intelligence: “Just as electricity transformed almost everything 100 years ago, today I actually have a hard time thinking of an industry that I don’t think AI will transform in the next several years”, Andrew Ng said. Artificial intelligence basically means a computer system that can perform equal to or better than human intelligence. Widely known examples already exist, such as Apple’s “personal assistant”, Siri, which is capable of understanding basic human language and communicate with the user. Artificial intelligence is seeping into every aspect of our life, as lot of devices have it. The role of artificial intelligence in education goes beyond physical robots and rather means a cloud-based technology. It will greatly help tutors to work with personalised curricula, which has not yet been possible. “Assistants” with artificial intelligence can facilitate the work of tutors, by, for example, identifying struggling students, or posing new challenges to high-performers. Programs with artificial intelligence can help create new, creative tools and games. The lack of socialisation might be one of the pitfalls of learning through artificial intelligence, as students will spend an increasing amount of time with a multimedia device. Therefore, more online platforms that combine the elements of artificial intelligence and social learning will be needed. Massive Online Open Courses (MOOC): Quality education will be accessible for everyone with internet access. MOOC is an online college level course of study with publicly shared curriculum. As a major step towards global education, it allows massive numbers of people worldwide to access a diverse range of quality content via web, which may otherwise be impossible to people. These internet-based courses give opportunities to full time employees to acquire new knowledge, while undergraduates can use MOOCs for exam

preparation. The content has trended in the form of digital books, short videos, interactive content, quiz and assignments. The students can interact via message forums, facilitating learning with others. Currently, the market leader is Coursera, which offers courses from more than 100 universities to 5 million students online. The future of MOOCs may rely upon creating high quality, reputable and employer acceptable MOOC as well as an adequate curriculum and assessment system. 3D Printers in Education: Although their price remains relatively high, it is likely that 3D printers will be available in a growing number of schools and universities. Things previously only visible in textbooks could soon be 3D-printed to be touched and played with. This new technology could, for example, be applied in physics and math classes (modelling atoms), as well as architecture lectures at universities (designing buildings) or medical students can print and study life-size organs. Modern classes could combine digital 3D modelling with actually creating something tangible to prepare children for new tasks that become commonplace in the future. Personalised Learning: It involves defining the pace and strategy of the learning experience tailored to the individual’s own needs. Individualised learning is focussing on the learner and not on the general curriculum. For example, in the FlexPath program of the Capella University, students can work through material that fits best to their already acquired skillset. Moreover, the rise of assistive technology (AT) devices and services also creates opportunities to include people with

The role of 3D printers in the classroom

Source: http://www.materialise.com/blog/submit-ideaadding-3d-printed-items-classroom/

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According to a study by Oxford Analytica, the major milestones in the evolution of gamification include: • 1 958 – “Tennis for Two”, the first game to use a graphical display, simulated a game of table tennis using an oscilloscope • 1 984 – Tetris is launched • 1 993 – Doom, a first-person shooter, is released • 1 999 – Everquest, the first online role-playing game is released, • 2 007 – James Paul Gee publishes his book “What video games have to teach us about learning and literacy” on what skills can be developed by video games • 2 011- The Oxford English Dictionary adds gamification to its word of the year shortlist. • 2 015 – Fantasy Geopolitics, a gamified website designed to encourage students to learn about the world’s news, is released • 2 016 – Oculus Rift, the first commercial PCbased virtual reality head-mounted display, is set to be released

disabilities, meeting the growing number of consumers with special needs. These technologies support students with writing, reading, communication, seeing, hearing, organization, problem solving, exchanging ideas, learning processes and speech recognition. “Edutainment”: edutainment is primarily educational content with an entertaining value. Thanks to the continuous development of technology, delivering classes this way will be more and more relevant. Classes will be enriched with audio-visual content and playful or game-like elements. Today, there are several examples of this type of education, such as Duolingo, which employs gamification, and was found to teach language learners content three times faster than traditional classrooms. Another example is represented by TED talks, which are presented in highly stylised and entertaining ways and are increasingly popular. In the future, an increasing number of such apps are expected to appear and reach new demographic groups like the elderly or people with little or no income.

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Gamification: Gamification – defined as the introduction or application of elements of games into non-game contexts – is a relatively new concept but an old practice. Games, and the elements that make up games, have been incorporated into other areas of life, including education, throughout history. All games share three fundamental characteristics: they have a clearly defined set of rules; a rapid feedback system; and a well-established goal. Among the many elements that games consist of, three of particular relevance to education are: mechanical elements (incremental progression, instant feedback, goals-subgoals, quests, onboarding); personal elements (avatars, collective responsibility, and leaderboards or rankings); and emotional elements (the psychological state of flow). Gamification is expected to play a greater role in the continuously changing educational system. Information-sharing will be cheaper through digital readers and tablets, computer programs enable instant feedback, therefore students will not require so much of full teacher supervision.

Lifelong Learning: Previously, the elderly were constrained in lifelong learning by the difficulty of access to educational material; but today they have access to online courses that enable them to acquire knowledge. Higher technical literacy and more user-friendly interfaces allow the elderly to engage with learning. MOOCs are increasing opportunities for adult learners. In western societies, the population is aging. Hence, this market will continuously expand in the future. In the future, learners will have a greater opportunity to learn a wider variety of skills. SCHOOL IN THE CLOUD The School in the Cloud is a platform, driven by a global community, that connects Self-Organised Learning Environments. Anyone can create a SOLE – the goal of the movement is to provide more inclusive, universal education. Independent schools created this way build upon the curiosity and independent problem-solving abilities of children, in an environment that is freer than usual and by using the internet extensively. The initiative was launched by Indian-born Sugata Mitra, recognizing one of the major issues of his home country: education opportunities, which are of variable quality and often hard to access.

ROBOTS IN THE FUTURE OF EDUCATION Richard Branson, founder of the Virgin Group, launched the Virgin Disruptors programme. Its events and media coverages serve one goal: to rouse the public, break entrenched habits and switch to a solution previously regarded impossible. The future of education, and new technologies that might determine learning methodology in a couple of decades, were also in focus. These include NAO Robots, created by Alderbaran. They are humanoid robots which can be programmed to understand and respond to you. They can act as a teacher e.g. to teach languages, or they can be used as avatars for students when they can’t be present in the classroom.

NAO Robot6

The TED Prize professor intended to create the education of the future, which surpasses traditional methods in terms of its cloud-based nature and its approach. The learning process takes place like this: students are given a big question or are challenged to think of their own. Students form small groups to find an answer. During a SOLE session students are free to move around, and take the discussion in any direction to find a solution, there is not one single correct answer. Towards the end of a session they have the opportunity to share what they learned with the whole group – by the end of the process, both educators and students have experienced more than in traditional, frontally delivered classes. BEYOND COMPUTERS Although computers seem the most prominent educational tools in today’s education, we cannot think there will be no other technology in

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the future that will replace our most important device. In the future, an integrated approach to education can become dominant, which places cloud computing in focus. Holistic education differs from previous approaches in its aim to form the processes of teaching and learning into a whole, involving all aspects of life. This so-called interdisciplinary approach transforms the role of pedagogy, teachers do not have to bear the burden of being the only persons responsible for transmitting information, and students have more freedom to manage their own earning process. Cloud-based services create the technological background to organize the actors of the educational system into a network, and make learning a convenient and flexible experience. School on the Cloud (SoC) is such an initiative, connecting education to the cloud for digital citizenship network. Experiences gained so far show that the cloud promotes cost effectiveness, make the system flexible and effective enables real-time access and sharing, and mitigates the risk of obsolescence. The World in 2050 â&#x20AC;&#x201C; The Future of Global Talent In its anthology published in 2016, Diplomatic Courier brings aspects of the labour market and young employees to the fore, thus, also in terms of education development, it focusses on todayâ&#x20AC;&#x2122;s

challenges and practical applicability. In the future, in addition to a high-level knowledge of mathematics, language arts and science, such skills and abilities will be given priority such as critical thinking, persistence, collaboration, problem-solving and curiosity. GLOBAL TALENT MOBILITY Since human capital is becoming an increasingly important factor of development, the quest for talents will happen globally. The services sector, which is an important engine of job-creation, requires highly skilled youth, and it can tap into the pool of experts trained in China and India, where the education of the young population is improving. The shortage of trained youth can be mitigated by a cooperation between governments, industries and the academic sphere, since systematic interventions in education will pay off if the real needs of businesses are considered. Fresh graduates face a skill-gap, that is a difference between skills acquired in the educational system and those relevant to the labour market. In this respect, developed and emerging countries are addressing the same challenges. In the future, Western countries will rely more on highly skilled Chinese and Indian experts, creating large-scale global talent mobility.

Changes in education CONCIDERING EDUCATION

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NATURE OF LEARNING

PARADIGM

MonoDisciplinary

Fragmented Learning

Teacher Centered Instructing

MultiDisciplinary

Descriptive Learning

Student Centered Learning

InterDisciplinary

Prescriptive Learning

Community Centered Knowing

NATURE OF TEACHING

PRACTICING EDUCATION THE MOST IMPORTANT SKILLS IN 2050

Instruction Constructivism Integrated

Traditional Computer Technology Cloud Computing

Students will not be satisfied with receiving only information. They need such management skills and interdisciplinary knowledge that empower them to resolve unknown problems. Lasse Rouhiainen believes the following skills will be the most sought after by 2050: self-awareness and self-evaluation, emotional intelligence, social intelligence, interpersonal intelligence, empathy, cultural flexibility, passion, respecting common good, awareness, meditation, physical activity and story-telling.

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HUMAN RESOURCES OF CYBERSPACE

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HUMAN RESOURCES OF CYBERSPACE Author: Mrs Józsefné Kilin

During the times of the currently ongoing fourth industrial revolution, Industry 4.0, informatics and technologies undergo large-scale and very fast development, which significantly impacts society and technology. This fast-paced development found most societies unprepared, their knowledge and creativity have to be improved substantially so that they could be able to capitalise on the opportunities presented by informatics. For corporate development, the “Big Data” data analysis technology arrived, while the IoT (Internet of Things) delivers smart cities, smart cars, and intelligent robots capable of learning. The new achievements transform the workforce needs of companies as well as the contents of roles. New professions are born, while others disappear. Anywhere in the world, changes make it necessary to rethink the educational systems and the contents of education.

INTRODUCTION In the virtual world of cyberspace, the amount of information uploaded to the World Wide Web grows exponentially every day. The cost of internet publishing is practically nothing, so it makes several services viable that are not operating on a commercial basis, have very narrow target groups, or ones that have publication as their only goal. The type of information stored in this virtual space, however, is not uniform. Structured data stored in databases, written texts, tables, graphs, still and moving pictures can all be found on the internet. Even sensitive and classified data are stored on the internet, but the current study deals only with topics related to publicly accessible information, discusses the workforce requirements of the near future and also the different forms of training. THE INTERNET: AID FOR SCIENCE AND EVERYDAY LIFE Science is coming to age, it steps from the age of manufacturing into the age of the industrial revolution, which is to a large extent due to the fast development of cyberspace. The professor of Hungarian descent at the Johns Hopkins University, who thinks that storing and processing data is

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the most important question nowadays, brought his own example to support this. Professor Szalay built an astronomical database with his friend, Jim Gray, the legendary computer scientist, which made astronomy social and industrial. The gist of the project is that they have been organising all the data that are recorded by the project’s own telescope into one gigantic database since 2000. This database is public, so any scientist or civilian can access it from anywhere in the world. If an astronomer wants to observe a phenomenon, first he can look around with the “virtual telescope” of the database in minutes, absolutely free of charge. If astronomers want to observe a phenomenon, they do not have to wait for telescope time first and then analyse the data for themselves. The database transformed the longer-than-a-year observation into a five-minute process. Their success proved that the popularity and weight of subjects in education will change for the training of the near future’s scientists: “At MIT, Harvard and Stanford the classes with the largest number of students were always ‘Linear algebra’ and ‘Introduction to physics’, but today these are ‘Statistics’ and ‘Computer science’. The new data science has to be built in all sciences in the next decade. Data science is the basis for all sciences and this is how it should be incorporated into education.” The

Massachusetts Institute of Technology (MIT), one of the most famous universities of engineering and technology supports the freedom of science and learning via the internet. The MIT uploaded the material of more than 2,400 of its courses to the World Wide Web. The MIT is famous for mainly its researches into engineering, physics and other technologies, but you can find programming, quantum mechanics, anthropology and other arts subjects as well among the uploaded materials. The Netherlands, holding the presidency of the EU in the first six months of 2016, is also considering a similar, breakthrough system in Europe. All results of scientific research and publications of the EU are intended to be made accessible for free from 2020. According to plans, all state universities – and other institutions that join the initiative – would have not so much the opportunity but the obligation to upload their scientific

work results. Not all scientific documentation would be stored in the system, but beside the results, the data serving as basis for the conclusions would also be made public. Only cases of serious copyright or security issues would be exempted from this obligation. The Dutch government would moreover ruin one of their successful enterprises (called Elsevier) with this step, which clearly indicates their commitment towards common causes. In their opinion, scientists should be ranked not so much based on the number of their publications or on how many other publications refer to them, but rather based on the social impact that their work has. CLOUD-BASED SERVICES The opportunity to store information in clouds brought about a new era in the development of informatics. The data stored in clouds can

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HUMAN RESOURCES OF CYBERSPACE

data flood, and this means a lot of challenges for them. Data centre operators are forced to change in several areas: automation has to be raised to a new level, more equipment has to be overseen by smaller staff, utilisation has to be optimised and operations have to be ensured with more flexibility. Experts consider that the solution lies – instead of databases managed in local computer centres – in cloud-based services. In their opinion this technology provides more flexibility and efficiency, supports innovation, guarantees better control and security, enables high quality services and self-service options with cost-effective operations, and thus meets new needs.

be accessed any time by the authorised users through smart tools (robot, computer, tablet, smartphone, smartwatch etc.) – via the internet – so the information gained does not have to be stored on each of their tools, since their queries are always directed towards the same set of information. Additionally, users can be sure that they can always access up-to-date information from their tools, provided the data hosts appropriately maintain their database. The user can also synchronise documents on the given tools, there is no redundancy, no problem with timeliness, what is more, this technology enables real time group work as well. It can be stated, that in the majority of the OECD countries, 95% of large company employees and 85% of medium-sized company employees use the internet on a daily basis for work, and this ratio is 65% for small enterprises. Because of the rapid technology changes, however, mobility and the usage of cloud-based services require new

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skills. Three quarters of the digital data traffic in the European Union is moving through smartphones and tablets via the Wi-Fi network. Nowadays companies face a lot of challenges and have to meet several requirements in order to keep up with the pace of technological development as well as with the growing amount of data and changing needs of their customers. This is the only way to perform their business activities with as modern and fast solutions as possible. Nevertheless, the ever-narrowing budgets and the requirement of returns on investment in as short a period as possible also have to be taken into consideration when companies try to find balance between invested sums and operating costs. “A huge amount of data is produced every day in the world. Every minute, there are 204 million e-mails sent, 3 million Google searches done, 6 million YouTube videos watched and 590 thousand tweets written.” (NetIQ Novell SUSE Hungarian Agency, 2016) Companies and data centres have to keep pace with this rapidly growing

But before a company would start its journey into the cloud, it is worth considering and summarising its business requirements and obligations, together with the expected results. After this it is practical to examine the organisation’s internal expectations and available resources for delivery. As a next step, transformation of business processes has to be planned in order to make the most of the private cloud, and decisions have to be made about the services to be supplied. It is also necessary to pay attention to the background infrastructure required to support the services and clarify what self-service functions support the operations within the organisation.

“Nowadays companies face a lot of challenges and have to meet several requirements in order to keep up with the pace of technological development as well as with the growing amount of data” With the introduction of the cloud-based technology, the infrastructure of a company changes substantially. Desktops lose their function as

independent workstations, they will operate as terminals. The data stored in the cloud, however, have to be appropriately structured, because this is a prerequisite for making them available for quick and easy query. For the IT specialists of the company this means new challenges and training obligations, because specialised professional knowledge in a business has also be taken into consideration when talking about development. “The European Commission prepared a blueprint for cloud-based services and world-class data infrastructure to ensure science, business and public services reap benefits of big data revolution. Europe is the largest producer of scientific data in the world. But insufficient and fragmented infrastructure means this big data is not being exploited to its full potential. So, by bolstering and interconnecting existing research infrastructure, the Commission plans to create a new European Open Science Cloud that will offer Europe's 1.7 million researchers and 70 million science and technology professionals a virtual environment to store, share and re-use their data and information provided by big data across disciplines and borders. This world-class infrastructure will ensure Europe participates in the global race for high performance computing in line with its economic and knowledge potential.” (Computerworld, 2016) Developing the technology is a prerequisite for making the European research data and documents public (with free queries). Commissioner for the Digital Economy and Society said: "The European Cloud Initiative will unlock the value of big data by providing world-class supercomputing capability, high-speed connectivity and leading-edge data and software services for science, industry and the public sector. With this initiative, our ambition is to be in the global top-three in high performance computing by 2020. We will also be looking into the potential of quantum technologies which hold the promise to solve computational problems beyond current supercomputers." The European Cloud Initiative will make it easier for researchers and innovators to access and reuse data, and will reduce the cost of data storage and high-performance analysis. Data-driven innovation can help boost Europe's competitiveness by benefitting start-ups, SMEs and – in the

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fields of medicine and public health among others – it can even spur new industries. (Computerworld, 2016) “The public and private investment needed to implement the European Cloud Initiative is estimated at €6.7 billion, financed from EU development programmes, member state resources and private investment. The Commission also plans to design a guide that will help educational institutions and (future) employees to orientate in the ‘digitised’ world.” (Voith, 2016) NEW METHOD FOR UTILISING THE INFORMATION STORED IN CYBERSPACE: BIG DATA The era of Big Data arrived in science first and is becoming more significant in a growing number of disciplines. (Szalay, 2016) Tibor Vámos, Member of the Hungarian Academy of Sciences, writes in his book, Sysbook (2016): “When working with disorganized or apparently unmanageable volumes of data, various mathematical tools are used to highlight relevant signals and signal connections (Big Data). This is how businesses monitor consumer behaviour of individuals and groups; health experts keep track of diseases and their causes and spreading trends; and physicists deduce the effects of certain particles from the image data of large colliders. This is what data mining is about. With the spread of connected devices, by the use of the internet and by the use of wearable sensors, the sampling technique, computer methods assisting users and the processing of the resulting huge amount of information (Big Data) become more and more common.” ‘Big Data’ gains more and more significance in the activities and development of economic operators, especially economic entities. Processing the huge amount of data available on the internet as public data requires hardware and software environment different from the previous one. Widely recognised experts of certain subject matters – who also have programming skills – worked out target-oriented methodologies of data mining that can derive information that is relevant for the client from the gigantic data amount. Based on these, scientists and decision makers are able to carry out appropriate analyses and also some earlier unknown information or solutions can

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be revealed, e.g. analysing consumer habits and researching entire markets become possible. But videos, although they take up incredibly large storage space, are not part of data processing. Thus, Big Data means not only the quantity but also the processing method, which means that we can talk about this application only in case of processable (structured) data.

Information technology is the basis of the digital economy

The effectiveness of the methodology is highlighted by the Economist, which says: “DataminR, a New York start up that analyses tweets, can alert customers five to ten minutes before an event occurs (for example an earthquake), so practically this is about real-time data analysis. DataminR sent an alert about the death of Osama bin Laden 23 minutes before any other medium reported it. Their prognosis was based on a credible-sounding tweet saying he was dead, and others saying that Barack Obama was calling an unscheduled news conference.” (DataMiner, 2014) We can mention the Hungarian Meteorological Service as an example, where – for a given purpose – a large amount of data has to be processed in a short time for preparing forecasts. For them it is a marginal question whether they have a supercomputer, because the essence of data processing is the set of algorithms run on the hardware, the spirit. (Sepp, 2016) According to Szalay (2016), the era of Big Data soon brings enormous changes in everyday life, too. In Japan, for example, there are plans of residential areas especially for the elderly, where people travel in automatic wheelchairs, robots do the shopping, portion medication for them, or even bath the ones who move with difficulty. The appearance of self-driving cars will dramatically decrease the traffic in cities. The technology of self-driving cars is ready and available; their implementation depends solely on the market. INFORMATICS AS THE FOUNDATION OF DIGITAL ECONOMY There is hardly any job today that can be performed without a minimum of computer skills. In the future, machines and robots will play more and more significant roles in every sector. It is generally accepted that the world has entered the era of cognitive business and computers. Thanks

to the development of the past years, cognitive computers have matured to a level where they are capable of processing and analysing text-, picture-, sound- and video-based information. Computers can identify correlations between pieces of information, which they can learn from, make deductions, thus helping companies and people with valuable insight and advice. (Kis, 2016) In January 2016, the first robot that was capable of reading human emotional reactions and body language was presented in Tokyo. It uploads the gained information into a cloud where other robots can access and learn them. In Sepp’s (2016) opinion there are five steps for a business to become cognitive. After creating a strategy, the company has to decide what data it is going to collect and how those data will be prepared. Then the cognitive cloud has to be accessed, the cognitive infrastructure be built and appropriate protection has to be ensured. Businesses today cannot escape accelerating digitisation. It is not enough to increase productivity and cost-effectiveness any longer, they have to evolve into cognitive businesses. Businesses have to understand their innovation needs, work

out their organisational learning strategy and explore the specific features of human relationships across the business. The contents and timing of digitisation significantly affects the weight of organisational units within the company and also their place in the decision-making and executive hierarchy. While these days we can observe the convergence of operational and information technology organisational units (the significance of informatics in decision-making decreases), the development and implementation of new technologies, especially cloud data storage and Big Data technology may result in strengthening the positions of informatics and in raising it to a higher level in the hierarchy. IT specialists underpin their claim for this by the explanation that they always use the same methodology when analysing data, so they produce an objective picture for the decision makers of the company before the decision is made, thus preventing potential business failures in the future. Some experts, however, tend to support the appropriateness of a given decision by providing reports prepared by using random methodology so that they could ensure their jobs’ stability.

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THE INTERNET OF THINGS, THE IOT The Internet of Things (IoT) poses a growing challenge for today’s IT specialists. “According to the McKinsey’s study, the Internet of Things stands on the threshold of dramatic expansion. The number of sensors, tools and other equipment connected in a network is growing at a staggering pace. We have been acquainted with the notion of the Internet of Things for more than a decade, but it took a while until it has appeared in our everyday life. Nowadays more than 12 billion tools around the world are connected to the internet. In the next decade, this number will grow sharply, to an estimated 50 billion

Some pessimistic opinions are also present in connection with the IoT, because robots that are capable of learning might also cause unpredictable situations dangerous for humans. Since we cannot evade development, we have to achieve appropriate developmental and evolutional results through necessary foresight, regulation and compliance. Developing artificial intelligence is not reassuring from all aspects but “this has never stopped humanity from doing something.” (Szalay, 2016) EXPECTABLE TIMING OF THE DIGITAL ECONOMY’S DEVELOPMENT

to 1 trillion.” (Tóth, 2016)

THE FOURTH INDUSTRIAL REVOLUTION (INDUSTRY 4.0) The PwC’s (PricewaterhouseCoopers) researchers asked over 2,000 respondents from 9 major industrial sectors in 26 countries in their global survey about the fourth industrial revolution (Industry 4.0) and especially about building the digital enterprise. The study presents the processes through which today’s leading industrial companies digitise their vertical operating processes and cooperation with horizontal partners. They refine their product and service offerings by introducing digital functions and innovative, data based services. Among the digital technologies that contribute to Industry 4.0, we can find cloud computing, augmented reality and wearable devices, Internet of Things platforms, locating methods, advanced human-machine connectivity, verification and family recognition technologies, 3D printing, intelligent sensors, big data analyses and mobile devices. According to the PwC research on the 4th industrial revolution, effective data analytics is the prerequisite for successful implementation of digital enterprise applications. Half of the

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surveyed companies have established dedicated data analytics functions, either on a corporate level or on a business unit level. Industry 4.0 accelerates globalisation, because it creates digital networks that will span the globe. As a result, both developed and developing markets benefit considerably from the industrial revolution. Companies in Japan and Germany are furthest ahead in digitising internal operations and partnering across the horizontal value chain. With high investment in technology and employee training, they view their digital transformation primarily in terms of gains in operational efficiency, cost reduction and quality assurance. Companies in the US are also planning to invest more heavily in developing digital business models, as companies move quickly to digitise their product and service portfolios. China’s industrial companies stand out in all aspects of digitisation, they are highly flexible and open to digital change. “China is one of the countries that can benefit a lot from automating and digitising labour-intensive manufacturing processes and needs to find a solution on how to raise employee remuneration.” (Mészáros, 2016)

In the McKinsey experts’ opinion, the innumerable devices of the connected world in the era of the Internet of Things will be able to communicate unnoticeably with each other; the emerging digital businesses will strengthen the economy and create new business models. In countries where the government is farsighted and sets up an appropriate regulatory framework, where networks are fully built and a strong economic environment is established, the spread of the IoT will accelerate. Just like the industrial revolution, the Internet of Things will build up in several stages. The Internet of Things will probably overshadow all the technical wonders of the past, the printing press, the steam engine or electricity. The Internet of Things is the evolution of the internet. Among the IoT solutions the most appealing ones for private users are the smart home alarm, smart parking system, smart car, smart home and smart meter applications. The smart home alarm device monitors the home in the absence of the owners and sends a text message notification if any anomaly is detected. The smart parking system searches for a parking space for the driver, the smart car perceives the location of other vehicles and pedestrians, thus reduces the risk of accidents. With the help of the smart meter the public utility provider receives real-time information on gas and hot water consumption, the consumer is informed about his expenses. In the smart home the household equipment and devices can be controlled remotely, with the help of smartphones. (eNet, 2015)

Chakravorti, Tunnard and Chaturvedi (2014) developed and published a new index calculation methodology in their study titled “Where the digital economy is moving the fastest?” They examined the digital economy indicators of 50 countries between 2008 and 2013, and developed the Digital Evolution Index for each country. They identified how many scores each country gets on an index scale of 100, and presented the changes of digital development compared to the index. Based on the performance of countries on the index the authors assigned them to one of 4 trajectory zones: Stand Out, Stall Out, Break Out, and Watch Out. • S tand Out countries have shown high levels of digital development in the past and continue to remain on an upward trajectory. • S tall Out countries have achieved a high level of evolution in the past but currently are losing momentum and risk falling behind. • B reak Out countries have the potential to develop strong digital economies. Though their overall score is still low, they are moving upward and are poised to become Stand Out countries in the future. • Watch Out countries face significant opportunities and challenges, with low scores on both current level and upward motion of their DEI. Some may be able to overcome limitations with clever innovations and stopgap measures, while others seem to be stuck.

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COUNTRIES BUILDING DIGITAL CAPACITY AT UNEVEN RATES Break Out countries such as India, China, Brazil, Vietnam, and the Philippines are improving their digital readiness quite rapidly. But the next phase of growth is harder to achieve. Watch Out countries like Indonesia, Russia, Nigeria, Egypt, and Kenya have important things in common, like institutional uncertainty and a low commitment to reform. Most Western and Northern European countries, Australia, and Japan have been Stalling Out. The only way they can jump-start their recovery is to follow what Stand Out countries do best: redouble on (intellectual and technological) innovation and seek markets beyond domestic borders. WORKFORCE NEEDS OF THE IT SECTOR At economic entities – including service providers – there Is hardly any job today that can be performed without a minimum of computer skills. In the future – due to the rapid development of the discipline – machines and robots will play more and more significant roles at almost every workplace. Thus, it is indispensable that employees – beside their professional knowledge – have appropriate computer skills as well.

At the same time, the industrial actors are increasingly looking for experts with special skills. When selecting them, the most important aspects are whether they are capable of performing the special tasks they are required and whether they have reliable knowledge and experience in a given field. Currently almost 24 million people are looking for a job in the European Union with a population of 500 million. Despite this, enterprises face serious difficulties in hiring qualified IT specialists. The most serious lack of IT specialists is in Germany, but all around the EU – especially in Italy and the United Kingdom – the situation gets more severe if specialists are not trained in the necessary numbers. When selecting workforce, companies cannot rely on requiring a special skill set, because the discipline changes very rapidly and the modern employees should need an ever growing diversity of skills and knowledge. Natural sciences specialised in several fields earlier, but today a new convergence can be observed among them. In the past companies searched for and employed mathematicians, then applied mathematicians and physicists to perform IT tasks. Nowadays the information technology (IT) experts are trained at business informatics, information technology and engineering, and software design departments.

CompTIA, a leading tech association, compiled

14 IT support analyst (helpdesk support analyst,

a list of those information technology skills and

technical support analyst, issue manager): has

special knowledge that were the most demanded

wide-ranging technical knowledge, good at prob-

by employers in 2016. Companies currently focus

lem solving, has good communication and liste-

on the Internet of Things and the processing and

ning skills, is patient and has diplomatic skills.

analysing of Big Data. It is an eternal problem that

15 Network engineer (hardware engineer, network

– in the field of computer science – new techno-

designer): has specialist network knowledge,

logies emerge continuously, but there is always a

good communication and analytic skills, is able

shortage of experts who are good at implementing

to plan and is good at problem solving.

and operating such technologies. (Mészáros, 2016)

16 Technical consultant (IT consultant, application

IT specialists who have one (or maybe more) of

expert, organisation level information specia-

the skills listed by the CompTIA can surely expect

list): has good communication and presentation

exceptionally high salaries. The following areas of

skills, understands the technology and the

expertise are prioritised:

business, experienced in project management, is capable of working in a team.

• IT support

17 Technical sales representative (sales manager,

• information security

account manager, sales executive): understands

• programming, program development, engine-

the product, is persuasive, has good interperso-

ering • software testing and quality assurance • infrastructure administration

nal skills, has drive, is mobile and has business awareness. 18 Project manager (product planner, project le-

• strategic planning

ader, master scheduler): has good organisatio-

• business management

nal, communication and problem-solving skills,

• information management and data analysis

thinks clearly and has the ability to stay calm under pressure.

The report of TargetJobs, however, summarises

19 W eb developer (web designer, web producer,

the general requirements expected from appli-

multimedia architect, internet engineer): un-

cants for different IT jobs. It presents the 10 most

derstands web technologies on a basic level (cli-

popular IT jobs, explains their main points, the type

ent, server and database side), has good problem

of degree expected and the skills required to take the job.

solving skills and analytic thinking, is creative 10 S oftware tester (test analyst, quality assurance software tester): is able to pay attention to

These IT jobs are the following:

detail, creative, has good organisational skills,

11 Software developer (software engineer, soft-

capable of analytic and investigative thinking.

ware architect, systems programmer / systems

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engineer): has analysing skills and logical think-

There are only two jobs (software developer,

ing, capable of working in a team, has attention

network engineer) where the author states that

for detail.

a degree in IT is required, in all other cases it is an

12 Systems analyst (product expert, systems

advantage or not necessary at all. There is only

engineer, solution expert, technology designer):

one job where extensive programming skills are re-

able to gain and analyse data, has good com-

commended (web developer). The vast majority of

munication skills, is persuasive and sensitive.

the skills mentioned is either “soft skill” or a skill

13 Business analyst (business architecture and

you can acquire, or rather a capability. (Mester,

organisation level information specialist): has

2016) We can conclude that in case of IT jobs more

good communication and presentation skills,

than one profession is expected, and the growth of

experienced in project management, good at

corporate knowledge is unimaginable without the

problem solving.

convergence of different areas of expertise.

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The World Economic Forum’s (WEF) report on The Future of Jobs also claims that the general changes in the business models will have substantial impact on the labour market in the following years. A report was made for this year’s World Economic Forum as well, which aims to discuss all possible dimensions of the changes in the labour market. Előd (2016) presents the most interesting ones: • T he most frightening statement of the report is that as many as 7.1 million jobs would be displaced in the world’s 15 major economies in the next 5 years. This will be almost entirely the result of artificial intelligence and automation. Impacts from automation have thus far impacted mostly blue-collar employment; the coming wave of innovation threatens to upend white-collar work as well.

Along with computer skills, serious financialeconomic, technological and statistical knowledge is also required from students. According to the CIO Insight magazine (CIO Insight/HWSW, 2006) “already in 2007 the blurring of the line between informatics and business life appeared to be one of the most important trends”, which means that the mixing of the knowledge and activities of IT specialists and non-IT experts was observed. This was true for managers, decision makers and employees alike. More than one third of the young (below 40) IT managers asked by the American magazine told for example that they have an even level of IT and business knowledge and background simultaneously. Expectations towards business skills is the more relevant the bigger the company is. This aspect has become even more significant in decisions about promotions. FUTURE OF THE LABOUR MARKET Globalisation and the rapid economic growth of the emerging countries have substantial impact on workplaces, which has recently resulted in significant cultural diversity. Companies have quickly extended their business activities to other countries and are recruiting from outside their local environment. Thus, employees work on different continents and in different time

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zones. This process has the consequence that the jobs of the future will be substantially more varied and developed, characterised by diversity of language, cultural and working methods. This is why business leaders have to establish a multicultural working environment that embraces and supports diversity. (Mészáros, 2016) The labour market of the future will be greatly impacted and changed by the industrial revolution happening today and the digitisation level of a given company that results from that revolution. In 2014 the Pew Research Center research institution asked 1896 experts whether they thought that the spread of automation and robotics would be good or bad for the labour force in the next decade. Experts are surprisingly divided over the question: 52% of them is optimistic, but 48% thinks that society will not be able to appropriately handle the new challenges, so there will be more losers than winners in the new situation. Those who are not afraid of the future argue that several technological innovations were implemented without having any negative impact on employment, what is more, they have been a net creator of jobs. In their opinion, although the spread of robotics will threaten a lot of jobs, the new ones created as a result will compensate for them. Technology will free us from day-to-day drudgery, and allow us to define our relationship with “work” in a more positive and socially beneficial way.

• T his loss of 7.1 million jobs is predicted to be offset by the creation of 2 million new jobs, mainly in other sectors for the more specialized roles that require highly skilled workforce for performing tasks that can be less automated. Adding up the positive and negative impacts, the result is the loss of 5.1 million jobs in 5 years. These data are interesting mainly because of the pace of the change, compared to the total number of jobs it’s not many. Today 1.86 billion people work in the researched countries, which means 65% of all the workers in the world. • Displacement of jobs will affect sectors differently, there will be areas that will definitely flourish in the near future, while others will be forced to make significant amounts of employees redundant. According to the scientists’ calculations, two thirds of the displaced jobs will be office administrative jobs, but those working in production, construction and assembly will also face hardship, moreover, there will be a decreasing demand for human labour in the entertainment industry too. • I n addition to the reduction in the number of jobs, there will be other significant changes in the world of labour. Atypical, flexible forms of employment will spread, which will give new opportunities for the well-trained, but generally will increase uncertainty around employment and require a higher level of awareness from the

employees. The demand for engineers and IT specialists will increase. The health care sector will become more significant in the aging societies, while in the emerging economies with a younger population, education will require a large amount of workforce. The ratio of female labour will increase, and probably more women will be in managerial positions than today. It is almost sure that a lot of new types of jobs will emerge in the near future. These new jobs might be ones that we now cannot imagine being viable under market conditions, but later there will be entities to pay for them. The following years will probably bring several new needs in the IT sector as well. • A ccording to the report, one third of the most important skills required by employers will be replaced by skills and capabilities that are not at all in the top league today. This will also be true in a different proportion for the different sectors. The media and entertainment sectors will change the least in this respect, while the financial and investment sectors the most. • I t is a question, though, how education will keep pace with these changes. Pessimists say that mostly not at all. Those with more positive visions also admit that there’re serious problems here. Currently we already face the situation in the rapidly changing sectors, that by the time the students graduate, almost half of the material learned in the first year is considered obsolete. In addition, many countries (including Hungary) have not yet realised that from primary school on, students have to learn things that are absolutely not considered useful in the world of the internet. • T his is why the role of employers has to change in the future. A great deal of the transformation will be done by multinational companies. Although they employ only the smaller part of the 3 billion employees of the world, they nurture several small enterprises locally. Therefore, a lot depends on how these large companies deal with problems and how fast they can adapt to changed requirements. (The full study was published in the volume “Geopolitics of the Virtual Space” with the support of PAGEO.)

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DIGITAL ECONOMY Author: Miklós Barsy

Now a digital generation has grown up, digital communication, digital media and digital commerce have become part of our everyday life. Knowledge of information technology devices and software, their everyday use and building the online image of the individual have become a general expectation. Part of the traditional economic and commercial models has collapsed and now a considerable proportion of products and services are sold through online commercial sites that take advantage of the most important trends of digital economy. Social media applications that determine the reactions of the market operators and consumers have come to the fore.

Companies had to grow their market share, sell and develop in the same virtual space. Business models and management strategies had to be drastically transformed. Adaptation to the new market access, communication and marketing strategies has become vital. Companies have to develop IT systems that can ensure modern commercial, payment and data analysis methods. If a company fails to adapt permanently to virtual space, to win and retain market share, competition that evolves rapidly in cyberspace will shortly take over the market and the consumers. We have to accept that cyberspace develops either with or without us and we can either keep up the pace and make use of its advantages, or shortly we will drastically drop behind. CURRENT SITUATION OF DIGITAL ECONOMY Digital economy has undergone and exponential development throughout the past years. Economic circumstances and methods have changed from several aspects. With the evolution of digital economy, the traditional notion of state borders partly diminishes, and with the help of the internet – individuals and companies can access to such services, goods and knowledge sources that were unimaginable earlier, even in the near past. With the rapid spread of communication, devices and networks, the global consumption of goods

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and services has become a part of meeting our daily needs. As a result, cyberspace, its level of infrastructural deployment, financial and technical opportunities of access, and the supply of advanced technical devices undoubtedly determine a significant, booming segment of the economy. A typical example is the development and change in the number of mobile phones and computers. The mobile phone has transformed from a luxury tool of a narrow, privileged layer of society into an indispensable accessory of everyday life. We are living in a new type of economy that is controlled by ever smaller and smarter communication devices. We can conclude that a substantial part of the economy is now network economy, and it also determines the directions where the rest is developing even if the economic operators do not know about this. Economic operators potentially depend on communication and the direction of the network economy’s development. Rudolf Jekler summarises this very accurately in his study about the information networks saying that “there are three main features of this economy. Global; values intangible things, ideas, information and relationships; and finally, it is intricately inter-connected. These three features create an absolutely new type of market and society that is built on ubiquitous electronic networks.” (Rudolf Jekler, 2009)

“It can clearly be stated that a substantial part of the economy is now network economy...” As a result of the development of communication, a uniform environment is established through cyberspace between people and economic operators that are separated as regards their geographical location, country and physical presence. In this environment people, businesses, workers and technologies – independently of their geographical location – play or design new software together without perceiving physical distance, difference in time zone, the culture or state in their real situations. Very good examples for this are the online commercial sites or the cloud based applications and systems of multinational companies. Everything is practically at the same distance in cyberspace, activities are limited only by the hardware and software used. With the help of information technology devices geographical distances and time zone differences can practically be eliminated.

Consequently, understanding the specific economic cyberspace is also very difficult. Economic cyberspace differs from other spaces that it is used for economic purposes and specially developed software is applied. At different levels of the economy there can be numerous cyberspaces that are partially interconnected and partially have independent functioning. Let’s take an example: an executive of an American multinational company sitting in his limousine while on a business trip in Eastern-Europe can make an economic decision with the help of the decision-making systems on his notebook that concerns certain operators of the American economy, opportunities and contracts of the Hungarian companies connected to them and also might affect the availability of a credit offer from an international banking group. Practically at the same time – although not physically in the same moment, but within a few minutes – he can also order a product from a Chinese webshop with the help of the applications on his smartphone and have it delivered anywhere in the world. He can do this by connecting the infocommunications service provider of a foreign country through the modern technology available for him, while sitting in his car on a highway. Meanwhile, it is possible that only in

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a few kilometres’ distance from him there is a little village among the hills where the population struggles for daily living and has practically no idea what infocommunications is and their learning, life and communication opportunities are strongly limited. But in practice the environment was filled with cyberspaces that were independent from each other but served the same person or company. Some of these cyberspaces were live only for the time their user accessed them, while others – like the mobile net and the mobile phone service – remained live in the area. In economic life, some cyberspaces can cover small areas and exist for a short time (e.g. ones for performing transactions), others can be complex, global and long term spaces that serve economic and individual personal interests across continents (e.g. amazon.com, alibaba.com, google.com, facebook. com). Additionally, there

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are several variations of the above that can be independent from each other or connected in time and by information technology spaces. The development of infocommunications raises several issues that are difficult to handle with the methods and tools of traditional economy management. These issues are in conflict with the traditional economic principles or require international legal regulation. In a networked economy “a mass of data that gathers together at a place attracts new visitors, so the amount of accumulated information there grows further, and so does the value of the place”. The so far valid economic model in which the value of gold was derived from its rarity is in contrast with the internet, where a website that has few visitors has no value at all. The new economic mechanism

works the other way round. The higher number of visitors creates value. An internet application is successful and creates high value or generates growing revenue only if it is highly visited, applied or downloaded by a lot of users with their purchases. With the development of cyberspace applications, the market share of traditional professions may decrease or be lost (landline phone services, book printing, taxi service or local merchandise of durable goods), but at the same time new industries can start developing (e-commerce, data mining, web mining, pay-pal). GOOGLE EFFECT Search systems have become part of our everyday life. It started with Yahoo, but nowadays nobody would question Google’s leading role in the world. With the rapid development of internet search engines the start page of the majority of people is the same. We are more likely to enter a few key words and search for the topic we are interested in, rather than think about it, try to remember, or communicate about it. We can get thousands or even millions of hits about the given topic from all over the world in a few seconds. Because of the immediate appearance of the hits we tend to neglect the real contents, relevance or reliability of the hits. It does not occur to us that we have become an element of a systematically designed marketing system of a profit oriented company by keying in our query. Search engines memorise (Adam Raff and Shivaun Raff, 2015) our every step, every search, our interests, the time we spent on websites and which direction we left the website. They can map our areas of interest, knowledge and habits based on this information, and they can drive us to the hits that generate the most revenue for them, because websites pay for the search companies to direct interest towards them. The average internet user on the one hand does not deal with his cyber exposure, on the other hand does not check the trustworthiness of the appearing data. He unconditionally accepts the information and supposes that if something is not among the data, it does not exist. The internet is around us, present everywhere, the answer is always quicker to search than to ask for, look up in the resource literature, or recall from our own knowledge. “All this weakens our motivation to learn and remember facts. We call this the Google effect, or in its full-fledged

form, digital amnesia.” (Wtop, 2015). It also has to be mentioned among the effects that we think that we know more now than in the past, which is only partly true. Huge amounts of knowledge are lost with printed literature being pushed into the background. With digital searching, and not memorising will cause significant disadvantages in the long run. At the same time, we have to admit that for the internet users who speak foreign languages, the daily usage of cloud-based search systems changes perception and remembrance. The substantial part of the world’s knowledge repository opens up and they can have access to such applications and masses of digital professional materials that were unimaginable just a few years ago. The internet “has become the external drive for your memory” (Daniel M. Wenger, 2013), as the Scientific American put it on its website. According to scientific studies, the internet is developed as a kind of “transactive memory system”, and we activate it whenever needed. We don’t store the specific information, but the fastest way to access it. Since the answer for the query is fast, in most of the cases we don’t check its completeness or appropriateness. An additional feature of Google is that by almost totally penetrating the international cyberspace it creates new opportunities of learning and understanding (Google view, Google maps, Google translate). Slowly but confidently it conquers traditional GPS navigational systems and applications. Similarly, the translation and dictionary applications, the document management application that enables downloading our digital materials from the cloud anywhere any time have become integral parts of our life now. Electronic dictionaries have integrated in many people’s lives to such extent, that – in my opinion – traditional dictionaries slowly lose their significance. What concerns Google’s mailing system, GMAIL, we can clearly state that it is the world’s largest mailing system if we consider the number of users. We should as well accept that this company totally maps, influences, directs and documents our cyber habits, behaviour, stores our search queries, letters and documents. What is more, it can obviously control our movement in the world. Simultaneously, Google strives to achieve hegemony over its sector, but does not want to pay taxes after its gigantic

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income to the countries where that income is really generated. The attempts to change this have all failed. It is unpredictable how far Google can get in extending its power over the internet, but we have to notice that we are talking about one of the biggest and most influential companies. THE INDIVIDUAL AND THE DIGITAL ECONOMY A decade ago neither Google, nor Facebook were familiar for the majority of people, but today they are essential parts of life especially for teenagers and young people in their twenties. The generation, supported by IT devices, that cannot imagine life without modern communication tools excludes the alternative of the disruption of network connection and keeps digital contact through multiple channels over several hours a day in the developed countries. Members of this generation continuously use the communication and social media applications on their telephones, tablets, or computers. The dominance of this infocommunicational contact can be observed in the relationships during travels, in social spaces and in friendships, too. It defines people, destinies, friendships and business relationships. Currently several employers check the Facebook profiles of candidates and recruitment goes on in cyberspace (e.g. LinkedIn) at international level, as one of the Kelly’s studies of 2014 showed. Nowadays the individual also would find difficult to imagine everyday life without regularly using cyberspace applications. Individuals also have to be active in the social media spaces. If you want to achieve a significant business position and accomplish your goals, you need to build and maintain your own profile. State, economic and personal contact is kept through this profile. Infocommunications systems, personal computers, notebooks, tablets, smartphones and lately smart devices are becoming more and more integral parts of our life, just like webshops and contacts through social media networks. Banks and state institutions also prefer digital contact. All this means ubiquitous networks, new way of life and ever expanding digital communication. Cyberspace intertwines all our life. We more often establish connections, even global ones, make purchases and financial transactions electronically on a larger scale. But many do not take into account that they leave digital footprints that can be used against them

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and make them controllable by external organisations (state, banks, trading companies). These people do not even recognise the attacks against their sovereignty in time. Private individuals recognise very rarely and to a very limited extent how much vulnerable they are in the digital space. More people more often become victims of cyber criminals or cyber-attacks. Their data, money or assets become vulnerable. In many cases, natural persons do not really understand that the “targeted popup advertisements and ‘best offers’ are in reality sent to them after their complete personality, purchase and payment habits were mapped”. (Kellys, 2014) DIGITAL CITIES Urbanisation is growing all around the world. The informatics needs of urban and suburban population for digital services is increasing. With the proliferation of information technology devices citizens duly expect from their elected leaders that they provide information for them about the operations of government and local authority bodies, the economic opportunities, and to ensure digital administration options. The economy, especially tourism and the private sector requires the enhancement of the digital opportunities’ completeness. These needs and requirements lead to the emergence of IT solutions called the ‘digital city’ (Wikipedia.org: Smart_city; 2016). “Infocommunication helps organize the life of a city to be more comfortable, simple, efficient, economical and environment-friendly, from public services through urban transport, healthcare, education and commerce to the support of the local, self-organizing communities.” (T-systems: For More Liveable Cities of the Future, 2016). Data become freely accessible, city dwellers can access data that are interesting or relevant for them with their IT devices. Digital platforms and data are free to download and ensure interactive communication. A real-time communication is established between the city leaders, government bodies and citizens. The efficiency of public services can thus be significantly improved. New infocommunication channels can be built for “contact with the public that provides opportunity for quickly and cost-efficiently informing people

and for immediately responding to reports or complaints from citizens. Complex security systems help to improve the public safety of the city, which contributes to creating a more liveable and likeable city. Quick and simple administration anywhere any time. In the concept of the Digital City technological innovation comes together with increasing economic competitiveness, sustainability and people-centred city management.” (Microsoft CityNext: Urban Development XXI, 2016) In the cities where the IT solutions of the digital city are implemented, technological innovation significantly accelerates, obtaining information becomes easier and faster, administration gets more efficient, public safety improves. Additional advantage is that – due to the favourable economic environment – economic competitiveness and the willingness to invest also increase. With the continuous development of digital competence, the city’s competitiveness as well as opportunities to invest and retain highly qualified workforce improve, both in terms of businesses and private individuals.

EXPANSION OF SHARING ECONOMY In the past few years we have been witnessing the expansion of the “sharing economy” (Wikipedia: Sharing Economy, 2016). This hybrid market model appeared together with the spread of social media, and it has become a significant segment of economy by now. In this business model the users use an online site or digital platform to order and pay for the service or goods they need from the ones who own and share them. Its spread provokes extremely fierce reception. Although it has huge advantages, several countries or local authorities take legal actions against it. Among the advantages of the sharing economy we can mention a more sustainable economy, effective utilisation of existing infrastructures and tools, significant cost savings on the users’ side compared to the prices of professional service providers. At the same time, it is a disadvantage that traditional sectors (taxi services, travel agencies, real estate rentals, real estate agencies) may become practically uncompetitive shortly after the launch of sharing economy applications. On the state’s side, substantial disadvantages are realised, because from a taxation point of view it is difficult to control the income and financial

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transactions of economic operators that avoid state administration. One of the problems is that it is impossible to determine the tax residence, and tax evasion appears on a system level. This is why in many countries – including Hungary – the toughest legal measures are taken against the participants (legislation, bans, blocking the applications). It is an undoubtable advantage though, that the existing equipment and infrastructures can be more efficiently and more cheaply used. The spread of this hybrid internet resource sharing method within a regulated legal framework would decrease the consumption of natural resources, because it would provide a cheap opportunity for people who need goods or services to use the extra capacity of existing infrastructures of businesses, individuals and households. One of the most significant and most widely known applications of the sharing economy is the Uber start-up, which organises taxi service sharing between drivers and passengers in 45 countries. In many countries acts were taken against them: in certain states of the USA, Australia, Great-Britain, Belgium, Germany (Gábor Sarnyai, 2016) and Hungary. The reason is unfair competitive advantage, tax evasion and circumvention of legislation. Despite all this, the company is now worth 50 billion dollars (Douglas MacMillan, 2015) and develops further. Regardless of the disadvantages causing loss of income for states and professional groups detailed above, this internet industry develops rapidly. By now Boston, San Francisco and New York signed cooperation agreements with Uber. Despite all bans and attacks, the big businesses of the internet see great opportunity in the sharing economy, and countries that promote digital development support and develop this area. In China, Apple bought shares of the Didi Chuxing ride-sharing company, thus acquired a part of one of the potentially fastest developing markets in a leading industry. The most important spread of sharing services occurred in the areas of passenger transport, long distance transport (carpooling), real estate agency, room reservations for holidays or for rent. It also develops quickly in hiring industrial devices or household appliances and sports equipment. New opportunities that have not existed before

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also appear, like borrowing occasion wear or handbags from private individuals, renting parking or office space for certain occasions. Very positive new opportunities – that even have environmental benefits as well – are community solar panel parks and sharing free power storage capacity. The fintech companies of the financial sector have also benefited from this competition. Several forms of community financing have already appeared in the economy. (bantrr. com: Four Types of Crowdsourcing, 2010) Community financing performed through cyberspace (Wikipedia.org: Crowdfunding, 2016), and financing community innovation developments and investments (Crowd Creation) have become a considerable opportunity at international level. Rigid state administration and traditional economic and organisational structures are incapable of following these advanced and widely spreading innovations, so in the majority of cases these new developments face resistance or intervention from the state and authorities. The countries that are not flexible enough try to benefit from the advantages of these new approaches, or at least permit their operations too late, when the companies with the patent have already gained global monopoly and have grown into multinational companies. States and companies that want to remain and develop in the global market should follow the internet economic trends and react immediately and flexibly by adapting the legal and economic framework when the favourable internet application appears, and support innovation while utilising common benefits. In reality, most of the times states try to use legal measures to hinder the spread of innovations in order to protect the interests and market status of certain regional or small economic groups. VIRTUAL REALITY Virtual reality is a “reality simulated with the help of multimedia tools and computers” (Wikipedia. org: Virtual_reality; 2016). The person wearing the VR equipment is in a simulated physical presence in a non-existent, imaginary digital world that enables him to interact with virtual features or items. In virtual reality, sensory perceptions like moving, seeing, touching, hearing and smelling are artificially manipulated.

The application of virtual reality underwent exponential development even if we consider only the year 2016. While two-three years ago it was used only as special educational and designing tool for the few, nowadays it is available in several fields thanks to the $100 price of the 3D virtual glasses. The applications of the big mobile phone manufacturers and service providers have significantly contributed to this development along with the spread of GO-PRO, 360-degree recording cameras and 3D mobile phones. VR applications in medical sciences, methods of education and recording of events and experiences are fundamentally transforming towards this direction. There are VR and 3D applications that offer the possibility for a team of doctors at one place to directly participate in a surgery at another place, or doctors and viewers can watch the operation live in HD and 4K resolution as if they were personally present on the spot. Samsung and Facebook cooperated in designing some very interesting applications (Lauren Hockenson, 2016), the promotion of which is obviously based on shares on Facebook and YouTube. The “spread of films recorded in 360 degrees and VR devices is going to bring about substantial changes in the content consumption habits in the years ahead.” (24.hu: “Tériszonyos videóval kampányol a Facebookon a Samsung” - Samsung launches a campaign with a vertiginous video on Facebook, 2015). The BeFearless project (Samsung.com: Launching People #BeFearless, 2015) developed the Samsung Gear VR 3D glasses and applications that help to cure the so far untreatable vertigo or agoraphobia in a few weeks (Vrscout. com: Projects Overcoming Your Fear of Heights with Samsung Gear VR 2016); or public speaking anxiety can be overcome (YouTube: Launching People, 2016). It is a very interesting phenomenon that Samsung relies on social media, mainly Facebook and YouTube, in popularising its advanced 3D virtual reality product. We have to acknowledge that social media is a digital organisation with 1.59 billion people (Mark Zuckerberg, 2016), where new high-tech products can be made widely known within a few hours through shares, targeted advertising, shares of friends and with the support of high quality YouTube video commercials. In such cases, at the time when the competition would start developing,

the project is almost over or the producer is in monopoly. VR applications are soon going to determine communication, games, education, training, planning (design of objects, buildings, cities), film industry, therapeutic and medical applications. Additionally, companies have entered the VR boom competition in several other fields. HTC has also entered the market with its own product named VIVE (Htcvive.com, 2016). To illustrate the magnitude and intensity of this market, it is enough to refer to the fact that after launching VIVE, 15 thousand items were sold online within 10 minutes in the value of 12 million dollars (PCWorld, 2016). A full array of cameras and sensors were built in the glasses, and even individual computer was also embedded in the HOLOLENS, which makes it possible for its user to merge reality and virtual reality for hours. Whole new perspectives have opened up for developments of applying virtual reality in any environment. During the virtual reality boom many new companies emerged from nothing and rapidly develop their devices – like the Zhuoyuan 9D Virtual Reality VR Simulator, which offers a full realistic experience of a car (Guangzhou Zhuo-yuan Group, 2016). VR education also develops speedily (Cybersceince3d: Bringing Learning to Life in VR 2016), laying the foundations of a completely new and very effective dimension of education. Its advantage is that it fully controls the perception of the individual. The learner is not learning in the traditional sense of the word, but learns to exist, move, communicate and feel in the space of the process. This way the activity that is imprinted in the memory as if it really happened is directly experienced. The VR tools and small 3D glasses (Wearable. com: Project Morpheus Feature, 2016) can now be connected to computers (Getfove.com: The World’s First Eye Tracking virtual reality headset, 2016), mobile phones (Samsung.com: gear-vr 2016), or game consoles to create virtual realities wherever the user wants to, even if he is in motion. Taking the pace of the development into consideration, it is impossible to predict where the application of VR and 3D devices are heading. But itis sure that if we fail to join the market trends and opportunities of both the hardware and software

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industry, we will be at a disadvantage and have no possibility to break in the market within a short time because of special guaranteed rights. In that case, we will be only buyers in the market but not active operators. However, the negative side also has to be considered: the dependence on computers and telephone applications may become stronger in virtual reality and may make the users even more influenceable. This can be especially dangerous, because our perception and assessment of reality is electronically manipulated in virtual reality. At the same time, we can state that these devices substantially facilitate education, skills development, improve the efficiency of communication and can significantly accelerate scientific research. APPLICATION OF DATA MINING AND BIG DATA TOOLS FOR POLITICAL AND ECONOMIC PURPOSES In the background of the e-commerce revolution a new industry was born, and after growing beyond the boundaries of trade, by now it is present in several areas of the economy and plays an ever bigger role in making strategic and operative business decisions. Processing the online data generated by the huge amounts of commercial transactions, and the need for the online analysis of data from internet search queries and buyer habits have brought the use of statistical programs into the fore and gave rise to data mining tools. Later the demand for online processing of immense amount of data stimulated the development of Big Data programs (Wikipedia.org, 2016). These economic data processing and analysing programs have spread to practically all areas of the economy. Apart from the trade sector, Big Data, data and text mining programs, and complex applications have gained ground in the banking system, insurance services, medical services and other areas of the economy. These applications – thanks to the considerable technological development of IT tools, the appearance of cloud services, the spread of related applications and making them available for free – have appeared in the small and mediumsized enterprises as business applications and also become part of IT and economics education. With the appearance of a growing number of professionals, the wider spread of economic applications

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is clearly predictable. The data mining programs (Wikipedia.hu: Adatbányászat - Data mining, 2015) are suitable for discovering patterns in large numerical data sets through the contribution of professionals and built-in algorithms, and predict possible solutions of gaining required economic information. One of such solutions is structured data mining, which looks for patterns and trends based on existing data, or web mining (Jaideep Srivastava, 2015), which analyses patterns in web processes, succession of clicks in time, and also text mining (Dr. Kovács László, 2015), which provides a profile of potential buyers or the appropriateness of the product on the basis of text and data analysis of communication and media comments. Biometric data mining (Francisco Gutiérrez, 2016) also has to be mentioned here, which identifies target persons or potential buyers based on the mouse movements and keystroke dynamics, and directs them towards the marketing goal. Predictive analysis is one of its fastest developing tools. It “makes presumptions on future behaviour in a given situation (this is where the name ‘predictive’ comes from) on the basis of data clusters created taking special characteristics and past behaviour into consideration”. A special tool of the area is HADOOP (Sas: Hadoop, 2016), which is an open-source software framework used for distributed storage and processing of datasets of big data, and is suitable especially for managing different types of data. Its split file management and applications make it installable to an average computer and can be used for both personal and small business purposes for extracting and analysing data. The quick spread and education of data mining is supported by the growing number of free license and open-source tools. The R language, an open-source specialised programming language (Wikipedia.org, 2016), and the partly free data and text mining programs like Data Miner and Weka program families are good examples of them.

Barabási Albert László 2016), who played a major role in the development of network theory, and who is Distinguished Professor and Director of Northeastern University's Center for Complex Network Research (CCNR), member of both the American Physical Society and the Hungarian Academy of Sciences. The physicist won recognition and fame in the world of information technology and science with his concept of scale-free networks and researches in complex networks. His books, “Bursts” (2010) and “Linked” have become reference books in network research education in several leading information technology education institutions in the world. Through his description of the topol-

maximum six steps. He discovered that in a growing network “preferential attachment means that the more connected a node is, the more likely it is to receive new links. Nodes with higher degree have stronger ability to grab links added to the network.” (Barabási Albert-László, 2010) Facebook achieves its enormous successes by applying these network theory basic principles which serve as basis for advertising campaigns, electronic trade and banking sales systems. “Banks, insurance providers and trading systems also apply these to make decisions on customer acquisition, pricing and customer value definition.” (Benedek GáborLublóy Ágnes-Szenes Márk, 2007) One of network

ogy of the World Wide Web and mapping of the systems of non-linear networks he explored the context and systematic relationships of network components. A new discipline emerged behind a seemingly informatics theory, a discipline that can be applied in sociology, biology, cellular structure research and medical sciences. It has been used in researching and defining the DNA chain structure and cell connections. With mapping the internet, applying the “Six degrees of separation” idea (Wikipedia.org: Six_degrees_of_separation 2016), and designing the related software, he proved that anyone can be connected to anyone through a chain of acquaintances, where the distance is

theory’s important features is that the individual’s measurable behavioural habits have become predictable with high probability, and this can be utilised by both the state and the commercial applications. Network theory can also be applied for mapping tourists’ travelling habits, or monitoring and predicting financial transactions, and last but not least, it enabled the detection of terrorist cells with the utilisation of the appropriate applications and mathematical methods. (The full study appeared in the volume “Geopolitics of the Virtual Space” with the support of PAGEO.)

DEVELOPMENT OF NETWORK THEORY, PREDICTABILITY OF ACTIVITIES, PERSONAL AND ECONOMIC VULNERABILITY One of the most significant successes of cyberspace research is connected to the name of Professor Albert-László Barabási (Energiapedia.hu:

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SECURITY POLICY CHALLENGES AND TRENDS IN THE MID-21ST CENTURY Authors: Viktor Eszterhai, Péter Klemensits

What will be the major challenges and trends of security policy by 2050? Based on current research and information, certain trends and processes can be forecasted. In recent years, an increasing number of papers and analyses were published on the security policy issues of the mid-century.

Although it is almost impossible to predict the future, experts attempt to make projections and forecasts about the future development of our world. On the basis of our current knowledge we can state that the occurrence of some processes or events is quite certain, only the exact time is unknown. If we add historical experiences, we can identify certain trends, which helps us prepare for the possible outcome of the predicted events. Examining the processes of security policy is of great importance for decision-makers, since the outbreak of potential conflicts and crises will undoubtedly affect our everyday life even decades later. THE WORLD IN 2050 According to the policy outlook The World Order in 2050 by Carnegie Endowment for International Peace, the United States will still dominate the world in the middle of the century, but the global South, due to a shift in economic power, will have a much more prominent role in international institutions than today. In a survey conducted by the Post-Crisis World Institute, containing the opinion of 303 economic

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and political experts of 63 countries, almost two-thirds of respondents think that major powers will completely redraw their spheres of influence by 2050. They expect the developing countries, primarily China and other BRICS countries, to expand their spheres of influence, weakening Western powers. The re-division of the world, however, is likely to result in a growing number of geopolitical crises in the future. U.S. technological advances are likely to help the USA maintain its position as leader of the international community, but European states can only hope for regional alliances and a collective foreign policy. China and India will represent the majority of the world’s population in their preferred institutions, which is increasingly difficult for the USA to counterweigh. It is rather doubtful whether the simultaneous application of American hard and soft power (a “ flexible geometrics”), by establishing new institutions and alliances, will be able to maintain the global hegemony of Washington by the late 21st century.

ethnicity, and polls show they appraise international institutions, such as the UN, much more. Transnational threats, including climate change and terrorism, and the struggle between declining and rising nations in the new international order will require a much more cautious balancing of American foreign policy. ALLIANCES AND THE NEW INTERNATIONAL ORDER In his article published in Foreign policy, Stephen M. Walt, a professor at Harvard University, expressed his opinion that we cannot be confident that NATO, although it has proven its relevance all through its history of several decades, will play a prominent role in maintaining global stability. If Russian power continues to decline and the United States focusses more and more attention on Asia, it is hard to imagine NATO playing an active role in the USA’s effort to balance China. The USA is expected to establish new alliances to address China’s rising power, but one should not bet on their effectiveness. In addition, it is easy to imagine that if Chinese power continues to rise, closer security ties will be formed between

Beijing and some countries in the Western hemisphere. Walt claims it is conceivable that significant realignments in the Middle East will also take place, especially if Iran eventually gets out of the penalty box and becomes a more active and accepted player in the region. In 2050, power will still lie with nation states, but there is little chance that multinational political entities, like the European Union, will be formed. However, some smaller states will probably emerge. The economic power of specific states can limit their international influence, and in this regard the USA, China, Russia and the EU, as well as India and Brazil, can be considered as major strategic players. THE SIGNIFICANCE OF MARITIME POWER Leadmark 2050, prepared by the Canadian Royal Navy, aims at defining the potential role and the maritime strategy of the country by the mid-century. It claims that 90 per cent of global commerce travels by sea and this proportion will not change any time soon, and even expects the volume of maritime trade to double in the next 15 years. For major powers, economic prosperity is

Global maritime trade routes

Demographic processes, however, can adversely affect American foreign policy, since by 2060 one in three American citizens will be of Latino

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SECURITY POLICY CHALLENGES AND TRENDS IN THE MID-21ST CENTURY

dependent on uninterrupted maritime trade and the rule of high seas. Especially, because navies on the oceans will remain the principal guarantors of world peace and good order. The Indian and the Pacific Oceans are likely to become increasingly important in geopolitical terms. If the USA cannot find ways to accommodate China’s rising ambitions, the development of Chinese navy and its global ambitions may entail grave instability in the region, bringing with it heightened prospects of regional interstate conflict. India, Russia and Brazil should be considered as well. Polar ice is melting and this process is likely to result in enhancing the economic and strategic positions of the latter two countries. In developing 2050 Africa’s Integrated Maritime Strategy, it is recognized that the coastal waters have vast potential for wealth creation, which might be the source of considerable economic and security issues. The document mainly focusses on the threats that transnational crime, terrorism and illegal, unreported and unregulated Fishing – IUU Fishing – pose, while trying to implement a close cooperation between the countries of the continent until 2050, aiming at economic development. DEFENCE EXPENDITURE AND FUTURE TRENDS OF MILITARY FORCES DEVELOPMENT The document Global Strategic Trends – Out to 2045, prepared by the researchers of the United Kingdom’s Ministry of Defence presents a rather accurate picture of the expected security expenditure of major powers in the mid-21st century. The defence expenditure of the two largest powers, the USA and China are likely to rival, and together are estimated to account for 45 per cent of global defence expenditure by 2045. India’s defence budget will be third largest, reflecting India’s growing economic strength, while Russia’s is likely to be the fourth. European countries (the United Kingdom, France, Germany) are likely to continue to spend substantial amounts on defence, although no single European country is likely to have a defence budget comparable to the major powers. Higher defence expenditure do not necessarily lead to greater military influence, and this might be the case in India in particular. The cost of latest platforms of military equipment

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is increasing, suggesting that by 2045 only the USA and China would be able to afford a large and cutting-edge air force and navy. A variety of yet unknown new weapons are likely to be available by 2045, as well as laser systems, being currently in the test phase, and sophisticated sensors. EXPECTED CONFLICTS A team of researchers led by Norwegian professor Håvard Hegre studied the events of the past forty years, then obtained predictions through computer simulation. In the essay Predicting Armed Conflict, 2010–2050, Hegre concludes that the global incidence of conflict between governments and political organisations is likely to decrease significantly from the current level. He believes about 7 per cent of the world’s countries will have internal armed conflict in 2050. The decline in the amount of conflict is driven by a combination of smaller population sizes, higher education levels and economic growth, which makes war increasingly unacceptable and cost-effective. Norwegian researchers predict conflicts akin to the Syrian one are not likely to occur in the coming decades, but forecasts imply that conflicts are likely to commence in India, Nigeria, Ethiopia, Tanzania and Sudan in the next forty years. However, Stephen M. Walt warns that the number of global conflicts has been showing a decreasing tendency since 1945, but we should not hope for a 2050 to be much more peaceful than the present, due to the events of the past years and tensing China-USA relations. The study of the United Kingdom’s Ministry of Defence calls attention to the fact that the risk of the outbreak of a major state-on-state conflict cannot be ruled out, especially regarding the fact that the rivalry between two or more emerging powers have usually ended in conflict, and there are plenty flashpoints in the world now, which might explode any time until 2045.

growth. While in the twentieth century a geopolitical competition took place for fossil fuels, by 2050 battle for access to water will be just as decisive. In addition to a water deficit, food scarcity is likely to ensue serious problems. UN has predicted the world’s population to grow at such rate that global food production must double by 2050, otherwise the number of people affected by hunger, which is more than one billion people in the world, will multiply, leading to global dissatisfaction. The way of managing conflicts is also likely to change in the future. The analysis of the Post-Crisis World Institute shows negotiations and compromises will continue to play the greatest role in resolving internal conflicts. However, due to the ineffectiveness of the UN and other international organisations, as well as the world’s becoming multipolar, the main platform will be provided by the framework of civilisation. Civilisations will create their own norms and rules based on them, thriving at decreasing the effect and intervention of the international community. WARS OF THE FUTURE Military experts worldwide have come up with various theories about the equipment and methodology of warfare in the future, projecting

technological development. In summer 2016, Mad Scientist Conference was held at Georgetown University Georgetown University. The main theme of the event was describing the strategic security environment in 2050. By the middle of the century, providing advanced protection for armoured vehicles will be a major challenge because of increasing costs, the participants concluded. A report prepared by the experts of the U.S. Department of Defense and national security researchers, visualising the tactical ground battlefield in the year 2050, has come up with considerably bolder concepts. It concludes that robots will greatly outnumber human fighters, who will not be able to keep them under close control but play a decision-making role in the combats of robots. Human fighters will still be needed, but they, due to the fast development of genetic engineering and biotechnology, will possess capabilities that seem superhuman today. By combining the human body and technology, however, mankind will step onto an unpredictable path, along which we will not be able to control the extent of development and its effects, the report warns.

How the war map will change based on the research of Professor Håvard Hegre and his co-researchers

(Source: http://www.dailymail.co.uk/news/article-2237378/ Peace-time-Scientist-makes-bold-prediction-war-wane-halve-40-years.html)

POSSIBLE CAUSES OF CONFLICTS According to the collective analysis by experts of the Post-Crisis World Institute, lack of resources will be the world’s gravest problem, as the globe cannot meet the needs generated by population

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2050 â&#x20AC;&#x201C; THE PARIS AGREEMENT

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(THE PEACE OF WESTPHALIA 2.0) CLOSED THE FIRST THIRD OF OUR CENTURY

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2050 – the paris agreement

(THE PEACE OF WESTPHALIA 2.0) CLOSED THE FIRST THIRD OF OUR CENTURY Author: Dr. György Matolcsy – Governor of the Hungarian National Bank

Mark Twain said, “history does not repeat itself but often rhymes”. We often separate history and contemporary politics, exiling it into the past, and depriving it from its most valuable treasure: self-reflection and projection. Parallels and rhymes, however, are indispensable to avoid the errors of the past, and repeat its successes, as Santayana also warns us. I invite my dear readers to an experiment of the mind. We will travel thirty-three years ahead in time, into distant 2050, where the historians of the future will characterise the first half of the twenty-first century as the Era of the Second Thirty-Years’ War.

WHY AND WHEN DID THE NEW THIRTY-YEARS’ WAR START? After having studied the structure of the first war, the proposal that America should commence the second thirty-years’ war against its competitors, as a faithful copy of the armed conflict taking place between 1618 and 1648, was made in the political and military engineering workshops of the USA around 2000. This proposal, and the subsequent decision did not come from nowhere. As early as in early 1970, the USA had to face the dilemma that its former allies had become its competitors, then rivals in retaining and obtaining global economic and financial power. Japan and Germany, which used to be defeated empires, had first become political allies and weak competitors in economy, but later had endangered the global economic role of the USA to an increasing extent in the intensifying competition. In 1971, President Nixon cut the dollar's ties with gold, allowing subsequent exchange and interest rate wars to happen. In agreement with the Soviet leadership, they implemented two oil price explosions in the 1970s, draining Western Europe’s and Japan’s profit and capital first to oil exporting states, then to the U.S. bank system. The oil wars just partly achieved their goal, because Germany and Japan overcame higher carbo-hydrogen prices by leapfrogging in competitiveness.

Who has the oil?

The Peace of Westphalia In 2050, the second thirty-years’ war will have long ended, just as a new Chinese-U.S. conflict will. While in the first thirty-years’ war about four hundred years ago, in the seventeenth century, France triumphed over the Habsburgs, the war fought in the first third of the twenty-first century was won by China over the USA. The war between 1618 and 1648 took place in European battlefields, while the second war between 2003 and 2033 was of a global nature. The major battlefield of the first war was the Holy Roman empire until 1635; basically, the military activities of all other European powers

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were centred here. In the second conflict, the European Union was the major theatre of war until 2020, with war-related efforts of other global powers concentrating here. After 1635, in the long closing French phase of the first great war, German territories were not any longer the main battlefield: the French-Spanish conflict shifted the geographical lines of the war. This happened in the twenty-first century war as well: after 2020, the main theatre of war shifted into the U.S.-Chinese buffer zones of global space, primarily into Asia, and more specifically in the Northeast Asia zone.

Source: BP Statistical Review, 2009

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against Emperor for Emperor

1643

1648

Poland

1643

Papacy

1638

Spain

1638

Transylvania

1633

Savoy

1633

England

1628

France

1628

Sweden

1623

Denmark

1623

Dutch

1618

Russia

1618

Brandenburg

Then, just like Sweden replaced Denmark as the supporter of Protestants in the third phase of the first Thirty Years’ War, Russia went to war replacing the United Kingdom. A powerful, centralised Holy Roman Empire, belonging to the Habsburg alliance was not in the interests of Sweden; and similarly, a consolidated European Union, centralised by Brussels and belonging to the American alliance was not in the interests of Russia. In the new conflict of the twenty-first century, Russia supported countries, within the European Union and elsewhere, which advocated nation-states instead of centralisation, fought against the dollar’s being the

indirectly directly indirectly directly

Involvement in Thirty Years ' War

Hessen-Kassel

The U.S. engineering workshops discovered the story of the first, European Thirty Years’ War and found that its structure was convenient to address the complex challenge. The first war had a dual nature: it was driven by the interests of different religions and different powers. The second, too, became of a dual nature: the religious aspect was replaced by the open combat between international currencies, and the former obvious in-

Similarly, the first theatre of the new war was distant from the later theatres: then Bohemia, now Afghanistan and Iraq served as terrains for the first phase. As in the first war, warfare reached the main theatres of war only in the second phase. In the first Thirty Years’ War between 1618 and 1648, the second phase was initiated by Denmark’s involvement; European, more specifically German, protestants were supported by Denmark in their fight against the Habsburgs. In the second war between 2003 and 2033, it was the United Kingdom which helped member countries of the European Union fighting against Brussels’s federalism. The second phase ended with Denmark’s defeat by the early 1630s, and, similarly, the second phase of the twenty-first century war ended with the Brexit referendum in 2016. The United Kingdom left the battlefield in the years after 2015 in the same way as Denmark was out of the war.

Palatinate

Such a scenario was needed that was capable of reversing and preventing the rise of the euro, the formation of a European-Russian alliance, the rise of the Chinese currency and the creation of a Eurasian continental power at once. Only a war scenario was capable of that; the integration processes that had evolved could not be stopped with pacific means.

THE COURSE OF THE GLOBAL THIRTY YEARS’ WAR OF THE TWENTY-FIRST CENTURY

Saxony

HOW TO HANDLE THIS COMPLEX SITUATION?

terests of powers were concealed under the cover of democracy, the battle between civilisations and combating terrorism. The European nature of the first war was expanded to a global one, since European history had become global in the last 400 years. Now, in 2050, we can see clearly that basically the timelines drawn in the second war by U.S. strategists were the same which Europe experienced in the first war. In 2003, the USA went to the new Thirty Years’ War.

Bavaria

Around 2000, America made the decision that an enhanced version of the first Thirty Years’ War would be the new toolkit. At the end of it, the dollar would win over the euro and the new national Chinese currency rising in the meantime. The strengthening of the euro, gaining ground as an international currency beside the dollar, posed a risk to the USA. However, the opportunity of an unacceptable outcome of the euro and the yuan joining forces and replacing the dollar was envisaged, and, in addition to losing the global hegemonic economic role, the USA would also lose its global financial hegemonic role. Furthermore, due to a turn that took place in Russian politics in 2000, the ultimate threat that Europe, Russia and China would move together towards a unified Eurasia was also faced. From the viewpoint of the USA’s national strategy, a contiguous Eurasian continental power posed an existential threat.

“The U.S. engineering workshops discovered the story of the first, European Thirty Years’ War”

Emperor

During the 1980s, several financial and stock exchange attacks were launched to stop Japan, but Japan’s permanent economic stagnation of several decades was achieved later, in the 1990S and the first decade of the twenty-first century, by implementing a defective monetary policy. Germany could not be stopped because of the decisions of the German-French axis to strengthen the European integration; it happened with German reunification and only temporarily. The French-German euro project posed an ever-greater threat to the USA, since it targeted the global currency role of the dollar. It could not be handled with the former war toolkit: a new scenario was needed.

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sole international currency and were considering a Europe-Asia partnership, as Sweden did back then. In 2050, we can also clearly see that the situation evolved in the European Union by 2019 was the same as the one the Habsburgs’ victories ensued in the Holy Roman Empire in 1634. The USA and its allies had impaired the European integration to such degree, the economies of leading EU member states had weakened to such extent and the opportunities of the euro to become a global currency had vanished so much that the emergence of a new player was inevitable. Because the Union fell out of the global battle, China openly entered the new, global Thirty Years’ War in 2020.

China avoided being directly and openly involved in the war up until 2020, as a result of the Chinese strategy and philosophy of several thousands of years, including the legacy of, for example, Sun Tzu. Chinese leadership, however, also drew the same conclusions from the analyses of the great wars of the twentieth century. The analysis of the “long British-German world war” between 1914 and 1945 clearly outlined how smartly the USA had used the two belligerents to replace the British Empire.

In the third, Russian phase of the new thirty years’ conflict, just like in the Swedish phase of the first one, the Russians replacing the British were not able to benefit from the entire battlefield of the Union, because they were weak at the means of economicfinancial warfare, although their political means were strong. They continued the fight regionally but not in the entire European Union. The same way as Sweden, albeit weakened, went on with the war in the NorthEastern European geographical zone after 1632, so did Russia centre its war efforts on the Eastern and South-Eastern regions of the European Union, and the adjacent territories outside the Union from 2017.

war, the USA achieved only its historical goal, because the British Empire, albeit it had weakened, did not dissolve. Great Britain entered the world war as the world’s largest lender in 1914, and exited it as the world’s greatest debtor in 1918: it had staggered but did not fall onto its knees. It required the second halftime, the period between 1939 and 1945, then the independence of British colonies and the weakening of the British currency from an international one into a regional one.

From the 1920s, leading U.S. syndicates and families supported the rise of Nazism, because they wanted the dethronement of the British Empire. In the first world

America’s economic output exceeded the German, British and French economic output put together as early as in 1890, but Germany, which was building

upon the historical energies of unification and performing well in the second industrial revolution after 1870, building a naval fleet and energised by a demographic boom, had to be stopped, all his later opponents believed. It was a vital issue for the British Empire, but also the interests of other major European competitors dictated the same. Only war could stop Germany, nothing else could break its peaceful rise. China’s strategy was also built upon peaceful rise, and the fate of Germany also indicated that open and total war with the USA and its allies must be avoided. Until 2020, China first focused on gaining control over as many natural resources as possible in Africa and South America, then on making its internal growth as independent as possible from global procurement markets. It gradually developed its global system of friends and allies after 2000, then, after the British left, it focused on maintaining the previously formed Chinese-Russian alliance and energising the ChineseEuropean cooperation initiated earlier, in which China and sixteen Central, Eastern and South European EU member and non-EU countries participated. It was

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only in 2013 when China responded openly to the scenario of the American Thirty Years’ War commenced ten years earlier. It correctly assessed that in a new, global war of the twenty-first century America’s first goal was to halt the European Union, and, more specifically, to break the rise of the euro as a global currency, thus China had time to prepare for the open battle with the USA after 2020. In 2013, announcing the Silk Road initiative, promising peaceful rise instead of global war for 64 countries, was China’s response. In 2050 we know very well the story of the eventually successful Silk Roads. Initially, the cooperation started with difficulties; in the case of one route or the other, there was a lack of political will, a pacific environment, coordination and mainly money. During the China-USA war between 2020 és 2033, earlier constructions continued or new ones started in states that had not become part of the American alliance. In the Peace of Paris concluded in 2033, that is the Westphalia 2.0 Agreement, however, both belligerents acknowledged that all 128 signatory states would decide themselves about participating in the

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construction of the Silk Roads, and maintaining and using them. Therefore, after 2033 the routes were built with a great impetus, and on average, trade between the 64 member states grew by 9 per cent annually; and the trade between the Silk Roads countries and the other 64 signatory sates, which had become associated Silk Road members, grew significantly. However, maritime trade on the Silk Roads stopped from time to time even after 2033, because in some periods the USA closed the geographical key points of maritime trade. It lasted until the end of the new U.S.-Chinese war; now, in 2050, we have been benefiting from the free Silk Roads only for a couple of years. ENHANCED SCENARIOS – THE AMERICAN HISTORICAL UPGRADE

“An enhanced scenario (a historical upgrade), was imperative for the USA, otherwise it had no chance of winning.” The scenario of the first Thirty Years’ War was continually fine-tuned by both the USA and China. On America’s part, it was natural, since in the Peace of Westphalia in 1648 the sovereignty of the internal parts of the Holy Roman Empire was declared. The House of Habsburg did not gain total control over the Empire or Europe, either. Even intertwined power and religion (the one that has power has religion), that is, the principle of determining religion by the government and on the basis of land ownership did not grant Catholics exclusive rights to practice religion in the Empire, not to mention Europe. An enhanced scenario (a historical upgrade) was an imperative for the USA, otherwise it had no chance of winning. The first refinement was made to consolidate the moral grounds of warfare. 9/11 in 2001 created the emotional grounds for the Afghanistan war, and nonexistent Iraqi weapons of mass destruction gave moral authorisation for the Iraqi war. The second improvement was implemented in the battlefield of the European Union. IMF, controlled by the USA, looked away when the members of the

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southern Eurozone, with a common European currency – Greece, Italy, Spain, Portugal and France in part – got into excessive debt in the first decade following the introduction of the euro. The state, the population and the business sector had accrued a mountain of debt, which suddenly became unmanageable after the outbreak of the U.S. financial crisis timed for autumn 2008. Brussels had a similar role in this strategic modification, because a considerable part of the bureaucracy in Brussels had American and not European interests from the very beginning of the European integration process, and after the euro had been introduced, this nature even further intensified. Either the IMF, either Brussels could have stopped Southern countries ac-

enhancing the Eurozone’s revolt, it let its agony alone. The Greeks were to leave the Eurozone around 2014; instead, America agreed with transferring Greek debt into the institutions of the EU, which could not resolve the crisis of the euro, and, in particular, the Greek euro, but postponed crisis management and perpetuated its political and social burdens.

cruing excessive debts, but this was exactly the objective of the USA, since this was the refinement of its war strategy.

tary resources had to be committed to the hinterlands – and eventually this proved to be decisive. Therefore, the USA achieved a political change in Argentina and Brazil in the mid-2010s, and became able to focus on the last great battle commencing from 2020, the China-USA conflict taking place within the framework of the new war. Looking back from 2050, it also seems a right move, because after 2020, the USA needed all its resources to fight continuously strengthening China. The untimely pacification of Argentina and Brazil – although they proved to be temporary, exactly because they happened way too early – reduced the resources available for China from this region.

The third refinement was to steer the crisis management applied by the European Union after 2009 towards a dead-end. The global financial crisis of 2008, which was planned and timed, could have been managed as easily by the European Union as by the USA; but it happened just the other way round. FED saved the financial sector – and consequently the state, businesses and households – from the crisis promptly and efficiently; the European Central Bank, however, hesitated, and it could prevent budgets from collapsing, but could not prevent long-term economic stagnation. Today, in 2050, as we are writing our analysis on the present state of the world halfway between London and Shanghai, we must remember the solution devised by an EU member state, Hungary, opposing the orthodox crisis management of the European Union. The Hungarian example just shows how the crisis of the budget and government debt, the crisis of employment and growth could have been handled at once, but it would have required non-traditional, unorthodox crisis management adopted by Hungary between 2010 and 2018: a non-traditional, so-called unorthodox economic policy. The fourth refinement was made by America, basically against a defeated European Union, in 2014. Although the economic and financial system of the European Union had hit the bottom, it did not repeat the restitution policy of 1629 of the first Thirty Years’ War: everything that was taken back in the Empire from Protestants was not taken from the Union, and in particular, the Eurozone. It was a good move from the USA, because, instead of

The USA made the fifth refinement in the hinterlands. After having thoroughly analysed the first Thirty Years’ War, American strategists concluded that ultimately, Spain had lost over France because the hinterlands had revolted. The revolt of Catalonia and Portugal forced Spain to fight on two fronts, considerable mili-

The sixth refinement was attempted by a new U.S. president in 2017. The analysis of the first Thirty Years’ War revealed that the war fought with the Swedish in the Northern regions of the Empire had been fruitless for the Habsburgs: eventually, Sweden had won considerable territories, thanks to its own efforts and the alliance made with France. For the Habsburgs, these were not core areas, and were unsustainable in the long-term; their area of expansion was situated in the South and Central Europe, but not in the North. That is the reason why an American president attempted to break off the Chinese-Russian alliance in 2017 in order to detach Russia from China. The outcome of the attempt is known from history books. From the viewpoint of the U.S. strategy of the global Thirty Years’ War of the twenty-first century, the eastern brink of the European Union was not a core area, while restoring the Russian influence in the Central and Eastern European region of the European Union was one of the goals of the Sweden of our century, i.e. Russia. For the evolvement of subsequent European structures of power – only the rough sketches of which can be seen even now, in 2050 – , the role of Budapest, as

well as Berlin and Warsaw, is important, as the role of Vienna and Potsdam had proven to be crucial in the rise of two new structures – the Austrian Empire and Prussia – three or four thousand years ago. CHINA’S HISTORICAL UPGRADE

“Looking at the world from China’s viewpoint, in the first half of our century the Chinese strategy did not aim at obtaining global power.” China also considerably improved the French strategy of the first Thirty Years’ War of the seventeenth century. Looking at the world from China’s viewpoint, in the first half of our century the Chinese strategy did not aim at obtaining global power. It had a dual objective: to continue its historical re-emergence into the role of an Asian leader it used to be two or three hundred years ago, and to prevent the shut-down of the flow of resources required for its rise towards China and from China towards the world. China launches the first improvement in the early 2000s, well before the second Thirty Years’ War. It builds alliances in the global space, creates networks, which is not a response to the U.S. war strategy, but is based on the historical experiences of the Chinese Empire. Historically, China was not an extroverted conquering power, but an introverted giant using its immense internal resources. Its historical experience is being conquered by external powers several times, therefore it regards external conquest the greatest of all dangers. China’s re-emergence in the position of power and economy it had two or three hundred years ago is obviously very effective and quick: its extent and pace, however, might prompt the USA, exercising global power, to take action to curb and restrict this rise. That is the reason why China placed special emphasis on creating global and regional networks of alliances and partnerships in the first phase of China’s rise, between 2000 and 2010, and even more intensively between 2010 and 2025. Redefining Chinese-Russian relations since the early 2000s was the second improvement. For China, it was a logical step to build a Russian alliance, since under-

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taking a long northern front in the twenty-first century, while potential conflicts are likely to occur in the south, would have been risky. Avoiding a two-front war is a central element in all strategies. By forming a Chinese-Russian alliance, China concluded in due time the agreement that France and Sweden concluded in the first Thirty Years’ War. The USA’s attempt in 2017 tried to reverse this, but, as we know, eventually it failed.

the new Thirty Years’ War successfully, and participating in the Paris peace talks between 2030 and 2033. The improvement was an enhanced version of the French mercantilist economic policy. France was able to win over the Habsburgs, who had more military power, in the first European Thirty Years’ War between 1618 and 1648 because France had introduced a more modern economic and monetary policy.

China’s third improvement was bringing forward an internal, intensive modernisation building on human resources. Until 2010, China primarily implemented expansive economic development and a global commercial leap building on natural resources. Theoreti-

This was adopted and further developed by China: it made the Chinese currency an international currency, created allied financial institutions, used leading financial institutions wisely and maintained a high share of household savings. By contrast, the USA ate

cally, it could have been continued in the next decades, but it faced some high barriers, such as the deterioration of natural and urban environments, which had to be addressed also for the sake of internal social stability. It was reinforced by the analysis of the possible responses to the U.S. strategy of the Thirty Years’ War of the twenty-first century, commencing in 2003: China had to develop levels being at least on a par with U.S. development in each leading war industry.

away its financial resources, maintained the share of household savings close to zero, and cyclically saved its leading financial institutions from financial crises occurring cyclically. The USA was fighting the war with a financial imbalance, while China was doing the same with a financial equilibrium; the economic policies were their opposites. This had a crucial impact on the outcome of the second, global Thirty Years’ War.

This generated the fourth improvement: rapid and efficient creation of R&D, IT and state-of-the-art military. China launched it from the early 1990s, but accelerated it after 2003, becoming capable of fighting

The sixth improvement was to announce and build the Silk Road, the One Belt, One Road initiative. It offered psychological benefits for China until 2033, the Peace of Paris. 63 countries had been given vision and hope to accelerate their economic development

Siberia

Europe Kirov

Perm

Moscow Hamburg Rotterdam / Antwerpen

Yekaterinburg Omsk

Novosibirsk

Paris

Cologne Salzburg Münich Salzburg

Nuremb.

Northern Corridor

Krasnoyarsk Tayshet

Warsaw

Ulaanbaater Aktogay / Alataw Pass

Chop Budapest

Heihe

Irkutsk

Astana

Pardubice

Vienna

Skovorodino Chita

Minsk

Berlin

Kiev

London Lille / Brussels

Yakulsk

Harbin

Central Corridor

Ürümqi

Sofia

Istanbul

Tashkent Lop Nor

Khujand (Kokand)

Ankara

Antiochia

Rome

Damaskus Cairo

Wuwei

Niya

Teheran

Taxila

Balkh (Bactra)

Xian

China

Mashhad

Bagdhad

Shenyang / Fushun

Lanzhou

Holan (Kholan)

Yerevan Tabriz

Venice

Changchun

Bejing / Tianjin

Jlayuguan Samarkand

Vladivostok

Erenhot

Turpan

Belgrade Skopje

Tianshu / Guyvan

Lianyungang

Zhengzhou

Xuzhou Nanjing

Shanghai

Wuhan

Basra

East China Sea

Changsha / Zhuzhou

Mediterranean sea

Sevelskaya Gawan

Suifenhe

Saksaulkaya Alterau (New Sarai)

Khabarovsk

Manzhouli

South Corridor Karachi

Arab Peninsula

Tamluk

Hanoi

Barygaza

Shenzhen / Hong Kong

Masulipatam

South China Sea

Bengal Bay

The sixth improvement was to announce and build the Silk Road, i.e. the One Belt, One Road initiative

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by the construction of the Silk Roads. This emotional, spiritual but rational effect had a role in China’s final victory in the war, which should not be underestimated.

Europe’s fate in the peace talks, as it was used by several people to demonstrate how diverse Europe used to be. Indeed, new, big city states evolved, partly restoring national borders and partly abandoning them.

THE GLOBAL STRUCTURE OF THE PEACE OF PARIS / WESTPHALIA 2.0/

The Peace of Paris is a complex document; its indepth analysis goes beyond the scope of this article. For Europe, a period lasting for 200 years ended. At the beginning of that period, after 1820, Europe first achieved the position of a global power, through their major powers of the time. Then, the great war of the first half of the twentieth century destroyed this role, which was fulfilled in Europe by the USA and the predecessor of Russia in the second half of

The Peace of Paris, prepared in Paris between 2030 and 2033, ended the most significant and longest global conflict of the early twenty-first century, the second Thirty Years’ War. Eventually, the agreement signed in 2033 had a dual structure: ended the war of global currencies, and – temporarily – the rivalry between the USA and China. In addition to the dollar, euro and yuan as well as bitcoin became international currencies; their use was regulated in full detail by the agreement. Three global currency zones evolved: the dollar had become the common currency of the Anglosphere, the euro had remained to be the common currency of core countries centred around Germany, the yuan had become an Asian international/regional currency, while the currencies of the three zones remained interoperable. Within the borders of the specific zones, states could freely use both their own national currency and the three international currencies. The enhanced role of bitcoin was limited, compared to the three international currencies, but it had appreciated, compared to other national currencies, because it had become an international spare currency. The Peace of Paris finalised the dissolution process of the European Union, which was replaced by a loose European Economic Zone. An old map also played a role in

the twentieth century, and was later possessed by global America at the end of the century and in the early twenty-first century. In fact, the group of countries constituting the European Union were the greatest historical losers of the second Thirty Years’ War of the twenty-first century. The process of European integration reversed, and the former Union did not play any considerable role in the global political, economic and monetary processes in the twenty-first century. Looking back at the causes of the outbreak of the second Thirty Years’ War from 2050, we can see that the power struggles for Europe played a significant role in the strategy of both the USA and China. The ultimate reason for that was that former European major powers, having become medium powers, dreamt a bad dream and created a wrong strategy at the end of the twentieth and the beginning of the twentyfirst century. They tried to become a global power together, to repeat their own roles as individual major powers which they used to be a century before. This provoked the USA to respond, and Europe’s new pathway to win the future was not found either during or after the China-USA rivalry. Europe’s fall is attributable to the European hubris, i.e. the European over-ambitiousness and arrogance – the direct consequence of the infinite aspiration of the Faustian will that European people are infused with, which raised Europe in the second half of the last millennium, and ended the role that Europe had dreamt about in the first third of our, i.e. the twenty-first, century. Europe’s new fate does not lie in obtaining global power, but enriching global knowledge, science and culture. We wish Europe would dream this dream, and use the infinite aspiration of the Faustian will to enrich this.

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SINGULARITY AND SYNCHRONICITY Author: Tamás Rózsás

“Look up at the stars and not down on your feet. Try to make sense of what you see and wonder about what makes the universe exist. Be curious.” This was the message that Stephen Hawking, the world-renowned scientist shared in his speech for the leading cosmologists of the world at the event celebrating his 70th birthday. To find reason in our life, in the events of the world and our – this is one of the most fundamental human needs. We do the hardest work more easily, we face the largest difficulties with lighter heart if we comprehend them, if we find the reason why something happens, why exactly to us, why at that point of time.

Comprehension makes things familiar, comfortable and makes it easier to find our way in the world. Understanding means discovering familiar patterns and simple models that help uncover causes and drivers behind things and thus make the future more predictable, less uncertain. When we want to predict the future, we look for patterns in the past and in the present, since future has not happened yet, we have no data about it. How does – if at all – the past determine the future? Does history repeat itself? Can we predict consequences from causes? Humankind have been wondering about these questions for long, but – as we’ll see – no unambiguous answers can really be given. However, as it usually happens with important questions, the act of looking for the answer takes you closer to the truth and helps to find solutions for current problems even if the accurate and final answer cannot be given to the actual question asked. CYCLES One of the most ancient and fundamental tools to calculate the future is the calendar. It is not just because when we are talking about the future, we are actually talking about time, and the calendar is a ruler for measuring time. It is also because humankind’s earliest experiences about predicting the future are related to cycles in the environment,

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Typology of business cycles

Cycle name Kitchin’s inventory-based cycle Juglar’s fixed investment cycle Kuznets’s infrastructural investment swing Kondratiev wave

Period in years 3-5 7-11 15-25 45-60

economic cycles, and in the middle of the 20th century Joseph Schumpeter and others suggested the following typology based on the time periods of business cycles. The names of the cycles refer to the author first having described them or their main promoter. Although not included in the table, but it’s worth mentioning that the election cycles marked by the time of elections appear in the typology as well.

Kondratiev cycles from the 1800s to today

changes of seasons and cycles in the movements of celestial bodies. These cyclical movements mark the spacing in the calendar as a kind of time ruler. So, when we want to predict the future, it is obvious that we try to find regularly recurring patterns of the past first. One of the most essential cycles is the Earth’s revolution around the Sun. This marks the years in the calendar and determines the seasons. Agriculture, that produces goods to satisfy our basic, physiological needs, is aligned with seasons. Now it is easy to understand that cycles are inevitably present in the economy and consequently, in history, too. The changing seasons enable making forecasts only within the year, but in several cases we would like to see much farther, so efforts are made from time to time to trace some kind of cyclicality or roots of cyclicality in the levels of economic activities and their fluctuation. The earliest attempt to find this was made by William Stanley Jevons in the 1880s. After studying the period from the beginning of the 18th century, he noticed that weaker periods in the economy – that he identified as commercial crises – return every 9-12 years, on the average every 10.44 years. Jevons considered that the phenomenon might be related to the impact of sunspot activity cycles on agriculture. Many others studied and identified

Seasons of the Kondratiev cycle

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From a historical aspect though, the most interesting economic cycle is the Kondratiev cycle, also called supercycle, great surges, long waves, K-waves or the long economic cycle. The average length of the periods in this theory is 50 years that may vary between 40 and 60 years. The cycles consist of alternating intervals between high sectoral growth and intervals of relatively slow growth. Kondratiev, who took part in the development of the first five-year plan of the Soviet Union, analysed the factors that could stimulate the growth of the Soviet economy. He published his findings in a report entitled “The Long Waves in Economic Life” in 1926. But Kondratiev’s report was viewed as a criticism of Stalin's stated intentions for the total collectivization of agriculture, so he was dismissed from his post as director of the Institute for the Study of Business Activity in 1928. He was sentenced to the Russian Gulag in 1930, his sentence was reviewed in 1938, and he received the death penalty, which it is speculated was carried out that same year. Kondratiev identified three phases in the cycle: expansion, stagnation, and recession. Today it’s more common to use the division into four periods, we are going to touch on that later. Since Kondratiev worked in the 1920s, he applied his theory for the 19th century and identified the cycles depicted in the picture. The first two cycles lasted from 1790 to 1849 and from 1850 to 1896, and culminated in 1815 and in 1873 respectively. Kondratiev supposed that a third cycle began in 1896. The additional cycles in the figure were identified later. The expansion and recession phases within one cycle are characterised by different processes regarding the different aspects of economic life – these are depicted by the following figure. The figure identifies the phases of the cycle with seasons, and describes the evolution of confidence, inflation, credit, interest rates and investment. There are several explanations for the drivers of Kondratiev cycles. One of these claims that the cycle is driven by technological innovation, another sees demographical causes behind the Kondratiev cycles, a third considers the growth or reduction of the level of debt as driving force. Many new theories appeared to explain the cycles

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and their lengths. One of them matches the following technical cycles with the growth and recession phases: • I ndustrial revolution - 1771 • Age of steam and railways - 1829 • Age of steel and heavy engineering - 1875 • Age of oil, electricity, automobile and mass production - 1908 • Age of information and telecommunications - 1971 However, both the Kondratiev cycle and the long economic waves derived from it are significant from the aspects of history rather than economics. Neither regular periodicity (even in cycles following one another and getting shorter) nor regularity in the length of each phase can be detected in real economic cycles. Economic cycles can be calculated only as far as their phases can be identified, expansion is followed by recession, peaks and bottoms alternate. An economic cycle is not a regular, predictable, repetitive cycle like the phases of the Moon. We tend to recognise seemingly regular patterns in graphs showing variation in economic activity, because we want to find meaning in chance, and those trying to do this tend to emphasise similarities in their thinking and neglect differences found in data. Thus, economic cycles are suitable for making predictions only occasionally and for short terms. Summing up the conclusions on economic cycles we can say about history in general that it is not predictable, which also means that it does not repeat itself. This does not mean though, that experiences of the past cannot be used in the present or cannot be used to make sensible attempts to consider possible future scenarios. Similar situations often lead to similar outcomes in economics and also in those geopolitical games that weave together the fabric of history as time moves forward. Human thinking with all its traps is like it is exactly because analogies help orientate in the world, heuristics that accelerate our thinking through simplifications operate often enough to make the strategy of relying on them beneficial after all. So, history does not – as the saying attributed to Mark Twain puts it – repeat itself, but it often rhymes.

NATURE OF CHANGE Besides the cyclic concept, another possible understanding of history and development is of a more or less continuous advancement. The two approaches can also be combined in a way that in certain periods we assume a kind of permanence, maybe a cyclically recurring permanence that is occasionally varied with changes. From the aspects of development and history, these periods of change are undoubtedly more interesting, so it is worth taking a closer look at the nature of changes separately. A substantial and profound change often comes with shock. Partly because one has to adapt to changes, and adaptation requires attention even if the change is favourable. On the other hand, the process of adaptation is often triggered by necessity, so shock is necessary for starting adaptation. The past two decades has seen an abundance of significant events and shocks and also with quiet milestones that did not mark change by themselves, but were indicators of important processes that had been going on for a longer time. SHOCKS AND MILESTONES The financial crisis that was experienced as a global economic catastrophe and the ensuing economic recession have been holding all the attention of analysts and decision makers ever since. Due to this, we tend to forget that the collapse of the Soviet Union happened merely two decades ago. Taking this into consideration, major events of the past years were the following: • G ulf War (or First Gulf War, 1990-1991); • Collapse of the Soviet Union (1991); • M aastricht Treaty (1992); • I ntroduction of the Euro as scriptural money (1st January 1999); • Terrorist attacks against the United States (11th September 2001); • I ssuance of Euro coins and notes (1st January 2002); • Iraq War (or Second Gulf War, 2003-2011); • Bio energy bubble (2007-2008); • Financial crisis (2007-2009). The selection is to a certain extent arbitrary, but the listed events all refer to changes taking place deeper down. In this respect, for example the

significance of the bio energy bubble that we have already left behind, turns out to be much greater than it seemed partly because of the financial crisis that followed it. There is no doubt today, that the Maastricht Treaty, containing the agreement on the introduction of the Euro, became one of the most important events of recent times, certainly in the economic sense. We have passed some milestones in the past 20 years that were much less important than the attention they received would have suggested, but at the same time, these milestones drew attention to some deeper and truly significant processes. Some points of interest worth mentioning: • I n 2002 China – surpassing Japan – became the second biggest economy in the world after the Unites States. China’s GDP was 34.9% of that of the US and it grew to 69.8% by 2010. • China overcame Japan and became the second country with the highest number of broadband internet connections. • Regarding the number of mobile phone subscriptions, China is not only the first with its 747 million subscriptions (in 2009), but also it has two and a half times more subscriptions than the US (where there were 286 million subscriptions in 2009). The second place is taken by India with its 670 million subscriptions (2010). • China is also the first in car sales. 17.2 million cars were sold in China in 2010 as opposed to 11.5 million in the US. • T he reputable British Jaguar and Land Rover brands were bought by the Indian Tata Industries back in 2008, the Swedish Volvo was acquired by the Chinese Geely in 2010. In the summer of 2012 the Swedish Saab car manufacturer was also taken over by a Chinese-Japanese consortium, NEVS1. The company plans to manufacture electric cars in the future relying on Saab’s traditions and technological expertise. • At the beginning of 2012, the Korean Samsung took the lead in the number of mobile telephone sets sold from the Finnish Nokia, that replaced the American Motorola as first in 1998. • T he euro appeared in Europe as scriptural money from 1st January 1999, then as coins and notes from 1st January 2002. The introduction of the euro might not seem to fit in this list, but it’s – just like all the other events listed a clearly visible stage, an indicator of a longer and more important process.

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Change curve illustrating the dynamics of changes

LEVELS OF CHANGE It is easier to consider the relationship between the superficial and profound changes if we try to place them on the change curve describing the dynamics of the process of change shown in the figure. If the change is interpreted at the level of the current economic crisis, the collapse of the American mortgage market can be regarded as the shock. The method of the American government’s intervention reveals that at the beginning the decision makers of the government and the financial system stuck to their conviction that the problem could be solved and localised with quick intervention. But it turned out very soon that the credit crisis was much more general than the crisis of the American mortgage market. In this process, we are somewhere around the phases of emotional acceptance, practice and experimenting today, because the crisis has been faced practically everywhere, but no solutions have been found yet. The presented change curve is quite optimistic in a sense, because no negative scenario is considered, the positive outcome is only a question of time. Bad news is that this negative scenario that was left out for the sake of simplicity is theoretically inherent in all changes, and until solutions are offered to manage the current crisis, we cannot be sure that the outcome can only be positive. It is possible to treat the changes going on in the world today at another, deeper level, of a different scale. From this aspect, we can place the shock period to the years between the mid-1950s to the end of the 1960s when the Western powers felt that they were not able to stop the communist expansion threatening their existence. The period of denial that followed lasted until the mid-1970s, when, after ending the Vietnam War and facing the 1973 oil

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crisis, the Western powers had to understand that they cannot stop the communist expansion with military interventions. This period was characterised by greater or lesser wars and armed conflicts between the two camps from the beginning of the 1950s. The Vietnam War stands out among these, because the United States suffered its most substantial losses, and, unlike after the Korean War, it lost control over the whole territory of Vietnam. The more important shock, however, was the 1973 oil price explosion. The West faced that it cannot properly counterweigh the Soviet expansion in the Middle East by strengthening Israel, because it drives the oil exporting Arab countries into one camp with the Soviets. At a third level, looking at the change from farther away, we can say that the shock was World War I, because that was the time when humankind experienced for the first time that the technology that makes their life easier is also suitable for the destruction of it. But if this is true, we must come to terms with the idea that the distribution of resources, including redistribution too, cannot serve as basis for the development of humankind, since it leads to wars that – with the advancement of technology – can destroy mankind. Denial followed again first, because we tried the same thing in World War II. It is no coincidence that it happened in the name of two collectivistic, although different in form but equally redistributionary ideologies. In this approach the period of rational understanding was the era between 1950 and 1970, emotional acceptance between 1980-1990. With the arrival of the new millennium we have been living in the age of practice, which means that we are searching for new solutions that are not yet perfect. When considering the different levels of change, many think that these days events have accelerated, changes that took decades earlier, now happen in a few years or months. This is partly true, because the higher level of technology and the significantly larger population enable faster technical development. The appearance and spread of new technology result in social changes. In addition, technical development means not so much quantitative but rather qualitative development. Think about computers or telephones: less and less raw materials and energy are required for better performance. Development is costly but production becomes cheaper per unit, thus the spread of new technologies can become faster.

“When considering the different levels of change, many think that these days events have accelerated, changes that took decades earlier, now happen in a few years or months.” However, from another point of view this acceleration is illusory. One of the reasons why today’s changes are perceived to be much faster is because we look at them from a different angle when we change scale while viewing old and recent events of history. If we look far back, we can see less details of that farther away period than of the recent past. In addition, we pay closer attention to today’s changes, because they concern us directly, we experience them ourselves. So, when focus is on the present, the picture is much sharper, details are more easily noticeable and we understand them better than the events of more distant ages. Another factor is that we do not yet know what the outcomes of the changes happening now will be, while in case of the past changes we do. Thus, we can select among the events of the past, we know already which ones were important and which were not. We do not always know which of the current events will become important, so we consider a lot of details important now that we will not even mention later. If we have to deal with less details in connection with a given period of time, we tend to see it as less eventful. Finally, it is worth considering whether it is the pace of change that really changes or it is rather the contents. Moore’s Law is often mentioned in relation with information technology. It says that computing performance available at the lowest price doubles approximately every two years. If we take the bare numbers, we can say, that this is an exponential, accelerating change. But is this really the essence of change or is it rather the fact that we live in a world where Moore’s Law has practical relevance, and we must learn to coexist with it, just

like with gravity or machines driven by other than human or animal power? If we consider change in this way, we can realise that in fact it is not a series of accelerating changes, but an intensive phase of a huge transformational process, when new technologies that have decisive impact on the new era’s paradigms spread widely, and our way of thinking switches from an old system of paradigms to a new one. The legitimacy of this approach is underpinned by the fact that, although we have gone through several technological changes through the past centuries, while the population multiplied, we still prepare bread practically the same way and we still understand the human relationships depicted in ancient Greek dramas. ATTEMPTS TO EXPLAIN THE REASONS FOR CHANGES The attempts to explain the reasons and to forecast the dynamics of economic and historical changes can be divided into three main groups. One of the groups include the explanations that attribute the changes to cycles, in case of the economy to economic cycles. Their main features are that they suppose that behind the changes there are forces that have periodical impact as their resultants, and they regard the cyclic nature as necessary and inevitable. The most widely known economic cycles are the Kitchin cycles with their 4-year span, the Juglar cycles of 10 years and the Kondratiev cycles with 50-60-year periods. In addition to these, there is the economic model of Keynes that is built on economic cycles and the corrections of their impacts. The basis of this thinking, which leads changes back to cyclicality, is the cyclicality observed in nature, the change of seasons, the motion of planets and the life cycles of living organisms. Humankind has been trying to make these everyday observations generally applicable to and valid for economic and social changes since ancient times. The idea of cyclicality is not by chance so powerful in our times as well. As a matter of fact, the notion of the world’s cyclic renewal spread together with the longest revolution of humankind, the formation and expansion of agriculture since the Neolithic period. The other group consists of the explanations that can be most expressively labelled as end-of-theworld scenarios. These assume that the reasons

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for the current changes of a given era are the total collapse of the world order as we know it and the building of a brand-new world order. These theories also consider complete transformation necessary and inevitable. Usually these explanations are less interesting afterwards, but still, they tend to emerge among the explanations of current economic and social changes.

religions, the similarities between the story in the Epic of Gilgamesh and the version in the Bible indicate that both descriptions stem from the same ancient source known since time immemorial.

Well-known examples of this eschatological thinking are the Maya end-of-the world prophecy for the year 2012, or the ancient flood myths. From today’s point of view, the above examples are quite exaggerating, but the prophecies predicting

Finally, the third group is of the evolutionaryrevolutionary models that combine the elements and moderate the extremes of the theories in the other two groups. The essence of these models is that development can be divided into slow and gradual evolutionary phases, and revolutionary phases that are quick and result in large-scale changes. The phases follow each other recurrently, they alternate.

the end of capitalism and the approach of a completely new world order are practically the same ideas put in modern language. The vision of the inevitable destruction of the existing world order is, however, not a new motif in human thinking. The end of the world, as a prerequisite of the world’s rebirth, was a widespread motif in the Mesopotamian religions already 5,000 years ago. The flood motif for example was present in the Sumer and Akkad

Despite their obvious flaws, each of the above approaches has its legitimacy, the extreme simplifications serve comprehensibility and urge to find solutions rather than providing objective analysis and factual scientific explanations. Apart from their exaggerations, these models describe the dynamics of changes more or less accurately, but do not tell anything about the reasons. So, it is

6 The Universe Wakes Up Patterns of matter and energy in the universe become saturated with intelligent processes and knowledge 1 Physics & Chemistry Information is stored in patterns formed by matter and energy

2 Biology & DNA Information is stored in the DNA, i.e. the biological hereditary material

5 Merger of Technology & Human Intelligence

3 Brains Information is stored in neural patterns

Kurzweil’s six epochs of evolution very important that we consider them as summaries of our earlier experiences with exaggerations to make them more expressive, and not laws that control things. We use them to handle changes and mitigate their effects, but we shouldn’t consider them to be factors that externally predefine our lives.

“When assessing current changes, it’s worth taking the golden mean instead of extreme interpretations.” When assessing current changes, it’s worth taking the golden mean instead of extreme interpretations. Consequently, the increased intensity of the changes permanently present in our lives indicates changes that are more profound and substantial than usual, but in no way the end of the world, not even a mystic rebirth awaiting humanity. Currently experienced changes are not cyclic, they are neither quantitative changes that might result from a mere coincidence of economic cycles, nor a return to some earlier world order. The transformations are real, the expectable changes are significant from several aspects, but no inevitable catastrophe should be expected. Rather, the real reason

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4 Technology Information is stored in hardware and software designs

is that in several different areas time became ripe for serious change almost at once, or example for a technical shift, a paradigm change, the introduction of a new approach and solutions. Synchronicity partly stems from the nature and correlations of things, partly it is accidental, but apart from the fact that looking for solutions requires much more thinking and effort than in less intensive time periods, it has no significance. SINGULARITY Accelerating development and the expectable changes cause alarm in a lot of people, the main source of which is the fear of the irreversible exhaustion of resources of the Earth and of technology’s becoming uncontrollable. To handle these two concerns simultaneously, it is worth considering an extreme scenario of the expectable direction and impacts of technological development, which is described by Ray Kurzweil in connection with the phenomenon he calls singularity. According to Kurzweil, while the human mind represents its environment in linear models, in reality the world around us changes exponentially, that is at an ever faster rate. When the pace of the changes ahead of us gets so fast that we are unable to reliably foresee their results at a point relatively close to a certain time and beyond the event horizon, we speak about Singularity. Singularity in Kurzweil’s scenario is a period in the future when

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technological changes are so fast and so profound that human life will irreversibly be transformed as a result. Singularity, however, is neither utopian nor anti-utopian. So we don’t have to suppose a completely new world in every aspect, although we have to expect fundamental changes in our environment and our way of thinking. Nevertheless, Singularity fits into the history of evolution in a broader sense that has the six epochs presented in the figure above. The main features of the epochs can be summarised as follows: • E poch 1: Physics and Chemistry. Information is stored in simple structures, in patterns of matter and energy. Although there is no agreement concerning the digital or analogue nature of matter and energy, we know that atomic structures store discrete (appearing in separate, not continuous units) information. Evolution is extremely slow by today’s scale, the rules governing the universe, however, ensure that evolution moves towards greater order and complexity. • E poch 2: Biology and DNA. Information is in the DNA, the biological hereditary material. In this epoch, carbon-based molecules form more complex structures and eventually produce the material needed for constructing a copy of themselves. DNA stores the information in a digital form. • E poch 3: Brains. Information is stored in neural patterns. Each epoch means a paradigm shift in storing information, each epoch builds on the results of the previous one. The third epoch started with the appearance of pattern recognition in the first animals. Finally, based on the patterns, man became capable of creating mental models, recreating the world in his mind and realising those ideas. • E poch 4: Technology. Information is in hardware and software designs. This epoch is characterised by the development of technology created by man. Technology got from simple tools to information and communication technology equipment that is suitable for sensing, storing and evaluating sophisticated patterns. While the most developed mammals grew their brain volume by approximately 16 cm3 every hundred thousand years, the computing capacity of computers today doubles practically every year. However, if we examine the milestones of biological and technological development, we can observe an accelerating, exponential development right from the beginnings. 176

• E poch 5: Merger of technology and human intelligence. The methods of biology are integrated into the (exponentially expanding) human technology base. Through the merger, the immense knowledge stored in our brain will be united with a technology with much larger than our computational capacity, greater speed and information sharing capability. The Singularity starts in the fifth epoch, the human-machine civilisation will extend beyond the capacity barriers of the human brain. The Singularity enhances our intelligence and creativity but at the same time increases the effects of our destructive inclinations. •E poch 6: The universe wakes up. Patterns of matter and energy in the Universe become saturated with intelligent processes and knowledge. As the aftermath of the Singularity, intelligence of biological origin starts saturating the surrounding matter and energy by reorganising their structures. Whether our civilisation fills the other parts of the universe with its creativity and intelligence fast or slowly, depends on its unchangeability. But the sixth epoch is about transforming empty material into the carrier of intelligence, which is the ultimate result of the Singularity of the universe.

“Development will essentially increase the opportunities of human life and happiness, but this is going to occupy only a fragment of the new civilisation’s intelligence.” The exact consequences of Singularity, our changed life cannot be forecasted today, but the most important features of it can be predicted relying on our abstract reasoning. Machines will become humans in a sense, intelligence similar to human will appear in them. But in spite of the large-scale growth of the intelligence of machines and technology, our civilisation will remain human, since the origin of this intelligence is biological. Development will essentially increase the opportunities of human life and happiness, but this is going to occupy only a fragment of the new civilisation’s intelligence.

Kurzweil doesn’t specify dates or periods for the epochs ahead, but argues that, taking the exponential nature of changes into consideration, they are very close in time. At the level of technologies used in everyday life, the author highlights three main areas where the majority of important changes can be expected: genetics, nanotechnology and robotics. The author is fundamentally optimistic about the effects of changes, although admits that new technologies bring about new responsibilities and new dangers. If we look at the new technical or evolutionary age as one characterised by the capability to change often and change things continuously, as opposed to the predominance of one or another technology earlier, then we cannot expect a fundamental change that would impact all aspects of human life, our prospects are basically favourable from a technological point of view. SYNCHRONICITY According to the Axiom of Causality, everything in the Universe has a cause and is thus an effect of that cause. This proposition was already formulated by Plato, and the concept of karma in oriental religions, Hinduism, Taoism and Buddhism means the same. So, the things, events, happenings are indirectly or directly connected by the chain of causes and effects. However, Carl Gustav Jung, the Swiss psychiatrist and psychologist, states that things can be connected not only by a cause-effect chain, but also by their meanings. Things and events that are connected by their meaning are not necessarily in cause-effect relationship, but their connection, that can be explained merely by a strange play of chance since causality is absent, might still be important. Jung called such connections, that seem to be accidental but are still meaningful coincidences, synchronicity.

“Thirty Years that Shook Physics” In his book published in 1966 “Thirty Years that Shook Physics - The Story of Quantum Theory”, George Gamow, the renowned physicist, gives a humorous example for synchronicity that he named Pauli effect after the key figure in the story. According to the anecdote it is generally known that theoretical physicists are quite clumsy handling

experimental equipment, they often ruin or break them. It was definitely true for the excellent theoretical physicist, Wolfgang Pauli. It was enough for him to enter a lab, something immediately broke. Once a very complicated instrument used for measuring atomic physics phenomena broke in the Göttingen laboratory of Professor J. Franck for no apparent reason, although Pauli was not even in the town. Professor Franck wrote a humorous letter to Pauli in Zurich, and soon Pauli replied in a letter posted from Denmark and said that he had visited Niels Bohr, and when the incident happened in Franck’s laboratory, his train was halted in Göttingen. There are some other, often mentioned examples of synchronicity, like when a clock stops at the time of death of its owner, or when a beloved one “gets into contact” with us or “visits” us in our mind in the moment of their death. In his essay titled Synchronicity, published in 1960, Jung presents the example of the Swedish religious leader, Emmanuel Swedenborg, who told about his vision of a fire in Stockholm to the local authorities in Gothenburg in 1759. In the given time, there really was a fire in Stockholm, but there was no explainable connection between Swedenborg and the fire. In Jung’s opinion, the vision could be traced back to the notion that the fire burnt in Swedenborg himself as well. Storm, who cites the above case in his article published in 1987, also mentions two other cases originally described by H. Wilmer. One is the case of the famous English actor, Anthony Hopkins, who, after getting the leading role of the film “The Girl from Petrovka”, tried to buy the novel that served as a basis for the film’s script, but he didn’t succeed. One day, when he was crossing Leicester Square, he noticed a book left on a bench: it was the novel “The Girl from Petrovka”. During the film’s shooting, Hopkins got acquainted with the author of the novel, George Feifer, who told him that he did not even have a copy of his own book. He gave his last copy to a friend, who lost it in London. Hopkins showed Feifer the book he found on the bench, and the writer recognised his notes in it. The other case described by Wilmer was of a woman who gave a pipe to her husband for his birthday. The husband went for a walk and sat down on a bench in a park. The man sitting next to him was smoking the same type of pipe, and later it turned out, that he had also got it from 177

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his wife for his birthday. The two men’s birthdays were on the same day and they had identical first names too. But in Wilmer’s opinion this wasn’t a synchronistic event, because the coincidence had no significance beyond the coincidence itself. An accidental coincidence that is not meaningful is outside the scope of synchronicity. How can we explicitly define synchronicity? According to Jung, two or more events form synchronicity only if there’s meaningful relationship, significant association, but no causal connection between them. An additional condition is that synchronistic events are not merely coincidences, although they usually appear to be. Of course, meaningfulness, as a key element of synchronicity, can be recognised only if a certain content becomes conscious in the psyche at the very moment when a corresponding event becomes conscious in the physical world too. Only the above event can be regarded as synchronicity in practical terms. Theoretically, however, Jung claims that a synchronistic event can still be synchronistic even if we fail to recognise its significance. When identifying events as synchronistic, we should be cautious, because we can easily make minimum two kinds of mistakes. The first kind, which is not significant from a practical point of view, is when there is a causal connection between two events, but that remains hidden because of its indirectness. This kind of mistake is not so important from a practical aspect, because there really is a connection between the events; at worst, it is not synchronicity but a causal connection. One of the key elements of the American foreign policy during the Cold War was a presupposition that there is a close cooperation behind the foreign policy of Moscow and Beijing, and that Beijing’s steps are basically dictated from Moscow. If the Americans had known about the mutual distrust between the Soviet Union and the People’s Republic of China, and the Chinese fear of a Soviet military intervention, they could have seen how far they were from the truth. The Korean and Vietnam wars were largely the consequences of this false assumption. The US regarded the Chinese influence in both countries to be much more dangerous to its security than it really was, because the USA supposed that it was actually the Soviet

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Union that expanded in Asia through China, while in reality the two countries were rather rivalling than cooperating. The above example shows that it is important to recognise those cases when synchronicity, the connection of events through meaning is only apparent. The first step to avoid this mistake is to be aware of it, to accept that strange coincidences really exist. If we encounter such false synchronicity, it can still be of use in understanding ourselves, uncovering those subjective internal reasons that make us want things to be connected. Additionally, it is important to bear in mind that – according to Jung, who introduced the notion – is a psychological process in the sense that it is always the human mind that gets into contact with the external world in synchronistic events. Using a term borrowed from medieval alchemists, synchronicity – experiencing coincidences that are not in causal connection – is a moment of unus mundus. Unus mundus, that is, “one world” refers to a deeper unity between the tangible world and internal events like dreams, ideas and thoughts. In this approach, synchronicity has three types: The first type is an internal psychological event that is connected by meaning with a simultaneously occurring external event with which it has no causal connection. The second type is an internal psychological event that is connected to an external event far away. The third type is also an internal psychological event that is connected by meaning to an event distant in time. The last two types of synchronistic events can be identified only afterwards of course. The notion of synchronicity is in close connection with Jung’s theory about the structure of the human psyche. In Jung’s opinion, the deepest layer of the psyche is the collective unconscious, which is shared by all humans. This layer consists of the patterns of instinctive behaviour, called archetypes. Archetypes can never be observed directly and they do not become conscious, they work much more as kind of source codes for more external manifestations like symbols, myths and religions. Synchronistic events occur when an archetype is activated, that is, it has an especially strong effect on our conscious behaviour or thinking.

This happens most likely when a given person goes through a crisis or something strongly engages him emotionally. When this crisis or engaged mind is associated with a lower threshold of consciousness, conditions are given for the occurrence of a synchronistic event.

“How do we know when a peculiar coincidence has significance and when it does not?” How do we know when a peculiar coincidence has significance and when it does not? How can we differentiate between mere coincidence and a synchronistic event? There is no really sound methodology, but there are some crutches we can rely on. The first is if we try to examine our intuitions or hypotheses with scientific methods. It might happen that a causal connection exists, but is not that trivial; still, the connection between the events is real. If we do not find such a scientifically verifiable connection, we can make use of self-testing to find out how much and why we want the two things to have more than an accidental connection. How large a part does our desire play in our regarding the coincidence significant? It might happen that we can neither prove nor deny a causal but significant connection between things. We might have to rely on starting to act on the perceived or actual connection, but it is practical to be focused and remain open for change or correction and for realising quickly if we are mistaken. In order to avoid mistakes it is helpful to know our environment and ourselves within our environment. As Sun Tzu, a military strategist of ancient China of the 6th century BC puts it: “...if you know your enemies and know yourself, you will not be put at risk even in a hundred battles. If you only know yourself, but not your opponent, you may win or may lose. If you know neither yourself nor your enemy, you will always endanger yourself.”

CAN THE FUTURE BE PREDICTED? In this paper, we have discussed how we can or how we try to explain the changes and events of the world and their correlations. We have given account on cycles, phases of the change process, accelerating change and its consequences, paradigms and also relations beyond causal connections. In a deeper sense, we were examining how the world can be understood, to what extent it can be understood and whether it can at all be understood in its entirety, with its complex and sophisticated system of interrelatedness. Practically, we have been trying to find out whether future can be predicted, if there is a sound methodology to avoid mistakes, errors and traps, whether we can forecast history. Models and analogies help to interpret and understand a situation, help to reduce uncertainty and avoid at least those mistakes that we have already made earlier. The responsibility of choosing the model and paradigm is ours even if there is no applicable and sound rule that would tell how we should choose among approaches and paradigms in given situations. Gödel’s theorem and its consequences related to reducing uncertainty and predicting the future is bad news. This is good news at the same time, because it means that people, human insight, resourcefulness, intuition and repeated attempts will always be necessary for making decisions. We could also say that life is beautiful and human exactly because it is unpredictable, uncertain, risky and sometimes difficult. So, it is worth living precisely for those things that have difficult or no answers, because this is life itself. Everything else is just mathematics. We started the overview with the thoughts of Stephen Hawking. As a windup, let’s quote Hawking in full: “Look up at the stars and not down on your feet. Try to make sense of what you see and wonder about what makes the universe exist. Be curious. And however difficult life may seem, there is always something you can do and succeed at. It matters that you don't just give up.”

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The connection between the most recent results of solar research and the ecological civilisation. Author: Attila Grandpierre

The Sun is the cosmic foundation of our life. In the past four decades, such facts have been revealed about the origins of solar activity that have led to recognizing the Sun as a cosmic living organism, i.e. the Helios theory, which was elaborated with the help of a scientific worldview in which the exact science of life and self-consciousness are grounded, and which harmonises matter, life and self-consciousness. Interestingly, this comprehensive worldview manifests unique series of surprising coincidences with ancient Chinese philosophy and can serve as a scientific base to build an ecological civilisation.

We could think that our life is determined by direct material relations: eating, breathing, orientation, travelling seemingly depend on our immediate environment. Surprisingly, what plays a crucial role in creating, maintaining and managing life is not our immediate, or even our broader, environment on Earth but a factor in the sky, from a distance of 150 million kilometres: the Sun. Processes that allowed life and mankind to come into existence in the universe had evolved on this distance planet. Up to this day, the physical nature of the Sun has been regarded unquestionable without any targeted analysis. As a result, the accepted scientific belief is that the Sun is “a luminous ball of gas that produces energy by the nuclear fusion” (Ridpath 1997, p. 450). This common view, however, should be re-evaluated in the light of fresh evidence emerging from several sources. Undoubtedly, solar physicists have extensive knowledge about the Sun. There is one thing, however, that they cannot explain, and this is solar activity. My research of four decades into the origins and ultimate

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causes of solar activity has led me to the conclusion that the Sun changes a billion times faster during solar activity that it is expected on the basis of the standard solar model. What process can accelerate the magnetic field of the Sun by a billion times of what is physically expected? Oddly enough, this change accelerated by a billion times, instead of slowly levelling off and dying away as the laws of physics prescribe, is continuously regenerating. The formation of the dynamo that is required to explain these changes is one of the greatest mysteries of solar physics. Not by chance. A dynamo is a very complex machine; remarkable knowledge and tremendous engineering feat are required to create one. It was invented by Ányos Jedlik in 1861, based on Faraday and Maxwell’s electromagnetic theory. How can the Sun create such a dynamo? A closer examination of these questions has led to developing a new theory of solar activity, the Helios theory. Several predictions of this theory have proven to be true, and – as it seems – it should be taken seriously. Beyond doubt, mass flows transporting magnetic

fields in the Sun’s interior are responsible for accelerating the solar activity by several billion times. These mass flows crease, smooth and disperse magnetic fields no less than several billion (!) times faster than the equations of the star structure would indicate. On Earth, only living organisms can do so, since biochemical reactions take place several billion times faster in living organisms than under laboratory conditions, in the test tube. This is the first sign that a physical approach is not sufficient to interpret solar activity. During the decades of my research a whole range of new sciences has developed, which provide a completely new context for a better understanding of the Sun. As it turned out in the last century, theoretical biology, developed by Ervin Bauer, is the only type of biology that can advance in the development avenue of modern science, and, while retaining and further developing the greatest reflections of physics, it has created its theory based on the universal life principle. Not only have I further developed the toolkit of physics, but I have also got as far as developing quantum physics. In quantum physics the detector plays a central role, and therefore it depends on the general theory of detectors, as one of the fellow scientists of Werner Heisenberg, the father of quantum physics also recognised and discussed with the author of this article. Theoretical biology, achieved by developing quantum physics further, can be regarded the biggest leap after quantum physics. I realised that the fundamental principle of the biology that Ervin Bauer developed is extending the fundamental principle of physics over the realm of life, and it penetrates the Universe more profoundly than that of physics. Therefore, the Universe can be regarded to be more of a biological nature than a physical one. And if the world is principally of a biological nature, the Sun also can be principally of a biological nature. Our aim is to revise the image created about the Sun couple of hundreds of years ago. Especially, because information theory has evolved in the meantime. If we consider it when examining the Sun, it might occur that, in addition to its light and heat, sunshine can play a substantial role in the evolution of life on our planet because of its information content. Anthropic cosmology, in fact, biofriendly cosmology, has evolved, which is based on the facts that constants in physical equations, such as speed of light, the mass of an atom, strength of physical interactions, etc. all fall within a narrow

range of possible values that is favourable for the development of life. Today, it is widely accepted that we live in a biofriendly Universe, favouring life. If the entire Universe is biofriendly, the Sun is likely to be biofriendly, too; it is high time to examine the Sun from this new viewpoint. The independent science of astrobiology has also evolved, which has become one of the fastest growing branches of modern science. Astrobiology is a science studying the relationship between the universe and life, and is based on a statement made by Nobel Prize-winning Christian de Duve: life is a cosmic imperative, coded in the laws of nature, thus it is bound to arise wherever proper conditions prevail, and even where they do not, processes are bound to reach that end. If processes all over the Universe are bound for life, then the only question is to what extent these processes bound for life prevail on the Sun.

„For the Earth, the Sun is the greatest natural resource.” The significance of all these are further enhanced by the emergence of the Gaia theory, which, again, evolved independently. James Lovelock discovered that the Earth is a self-regulating system, controlling the changes in the atmosphere, the crust and the biosphere to keep environmental conditions near the range that is most favourable for life. If one planet of the solar system is a self-regulating, life-like system, it is even more timely to examine the processes taking place on the Sun from this respect. Nevertheless, the current situation of mankind, the ecological crisis make it imperative to re-evaluate our entire worldview and to appreciate Nature. For the Earth, the Sun is the greatest natural resource. At the current rate of energy consumption, mankind consumes as much energy in one million years as much the Sun generates within one second. According to some predictions within fifteen years, while according to other predictions, within thirty years, solar energy will become the greatest, and, in addition, environmental-friendly, renewable and inexhaustible source of energy. Planting solar panels in one small corner of Spain would provide energy supply for entire Europe. The Sun will play a central role in our everyday life, and this fact considerably appreciates the Sun.

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ORIGINS OF SOLAR ACTIVITY Today’s astronomy can describe only the static, relatively permanent side of our Sun. But our Sun has another, much more exciting and scientifically still unexplained side: this is solar activity (Figure 1).

Figure 1 Solar activity generates active, moving hot spots and dark sunspots on the surface of the Sun. Sunspots are brought to the surface by mass flows taking place in the Sun’s interior. In sunspots, the magnetic field is much stronger than in their surroundings, therefore mass is thinner in them and they look darker. Great solar flares tend to appear on top of the loop-shaped bundles of magnetic flux connecting two sunspots and protruding upwards. But what generates these mass flows?

According to a currently popular theory of solar activity, sunflares emerge in the outer atmosphere of the Sun, as phenomena of electrostatic discharge similar to the lightnings of the Earth’s atmosphere. As a contrast, I have pointed out that solar activity is comparable to a volcanic activity. It must start from deep in the Sun, because there is neither enough substance nor energy in the atmosphere for solar activity, and these ‘sun-lightnings’ of the Sun’s atmosphere would not be able to change magnetic fields cyclically under the surface of the Sun. Solar activity is bound to start from within, from the depth of the Sun. I have proven that the Sun’s rotational energy is released, just like in earthquakes, in a point-like region in the Sun’s interior from time to time, when

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growing tension bursts out due to the interplanetary space braking the rotation of the Sun. Similar to volcanic magma, the rotational energy releasing suddenly heats the point-like area of the solar core to a very high temperature. I have noticed a very important factor. When this hot area evolves in the energy-generating core of the Sun, core reactions also contribute to heating. Core reactions accelerate at a higher temperature, and their energy generation multiplies. When deep in the Sun, an area gets hotter, core reactions generate energy faster due to the higher temperature. If energy is generated faster, it will become even hotter, which further accelerates energy generation – and so on. A self-accelerating, explosively heating area evolves. This area explosively broadens as long as buoyancy, exerted by dilatation, flies the entire hot bubble from the solar core towards the surface of the Sun. On its way to the Sun’s surface, the hot bubble, gaining speed because of buoyancy, reaches colder areas. The accelerating speed of the hot bubble is calculated to reach the speed of sound decreasing towards the surface near the Sun’s surface, and a sonic boom occurs. In the sonic boom, the energy of the hot bubble is transferred to a high-energy particle beam shooting upwards. This high-energy particle beam, going outwards in the atmosphere of the Sun, collides into the top of the bundle of the magnetic flux transported to the surface by the hot bubble, and the sudden slow-down of the high-energy particles results in sunflares causing bright flashes of light. Instead of solar lightnings, we can talk about solar volcanos. My theory, developed in full detail with the help of the numeric calculations of Gábor Ágoston, has raised the attention of Robert Ehrlich, Professor at the George Mason University. Our calculations have indicated that the hot bubbles generating in the solar core produce such heat waves that persist for millions of years. Since they are generated in every 11 years, these heat waves slowly add up while spreading in the Sun’s interior, and reinforcing each other’s effect, they are able to heat up the entire solar core. Ehrlich calculations suggest that these heat waves make the temperature of the solar core fluctuate and change cycles lasting either 100,000 or 41,000 years. This result has hit the headlines of the New Scientist and become something of a scientific world

sensation because exactly these cycles lasting either 100,000 or 41,000 years are the two major periods of Ice Age on the Earth. Thus, the Ice Ages on the Earth are closely related to the pulsation of the solar core. THE SUN ITSELF CREATES THE DYNAMO, THE ENGINE OF SOLAR ACTIVITY The big question is how these mass flows are able to generate magnetic fields. A dynamo is required to convert the kinetic energy of the mass into magnetic energy. The dynamo is the reverse of the electric engine, because the engine converts electricity into kinetic energy. (Figure 2)

Figure 2 The dynamo is a sophisticated machine, in which the relative movement between magnetised parts generates electromagnetic fields. According to solar physicists, the dynamo is one of the genuine “mysteries” of astrophysics. (Carpenter et al., 2005).

Since neither an engine nor a dynamo is easy to design, such dynamo cannot come into being by physical means. On the Earth, dynamos are created by people or living cells, since molecular machines are produced in cells. But only living organisms can create a dynamo on the Earth, then how is it possible for the Sun to create, then get rid of, then re-create its own dynamo in every eleven years, without solid parts, of malleable mass? This thread, connected to the dynamo, of examining the origins of solar activity also led to the question

whether the Sun is possibly life-like. In order to decide it validly, we need exact biology. As I am a Hungarian researcher, fortunately Ervin Bauer’s theoretical biology, published only in Hungarian and Russian up to this day, is available to me. The Bauer principle provides that the distinctive feature of the work performed by a living system is that it is aimed at renewing their ability to perform work. It requires special efficiency, organisation, and an extreme acceleration of processes recharging a discrepancy in energy. The fundamental principle of living organisms is represented by an inevitable occurrence of processes diverging from the thermodynamic equilibrium. The discoveries of astrobiology provided conclusive empirical evidence for the universal fundamental principle of biology (Bauer 1967, Grandpierre 2007). Life as a cosmic phenomenon is significantly independent from matter, it is not bound to carbon, proteins or DNA, because its essence does not lie in its material carriers but the behaviour of the living organisms. The activity to sustain life is necessarily and inevitably in place in the behaviour of all living organisms. This universal law of life is provided by the universal fundamental principle of biology, which provides that all living organisms use all their energy in every moment to avoid the equilibrium which should be established under the given initial conditions by the laws of physics (Bauer 1967, 51; Grandpierre, Chopra and Kafatos 2014). If the entire Universe is pervaded by the fundamental principle of biology, then the Sun should also be pervaded by it. The fundamental life principle is the law of the change of charges. These biological processes, which are against physical changes, are instinctively self-initiated by living organisms. How can living organisms initiate their own behaviour? Our mindset, being used to the exclusiveness of physical causes, finds it hard to understand it clearly. The difference between an action and an event lies in the fact that a physical event takes place as a result of merely physical causes, external circumstances and inertia. On the contrary, what makes an action is the fact that it is different from an event because it is the living organism itself that creates a cause and these biological causes direct the course of action. Recently, a collaborator and I have developed the theory of biological autonomy in full detail (Grandpierre 2012, Grandpierre and Kafatos 2012, 2013). Biological autonomy is based

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on our ability that we, as living organisms, are able to have biologically controlled energy. Decisiveness is the bridge between biological and physical causes. Our biological aims become physical realities by means of our decisions. Physical causes can enter the world of physics within the limits marked by the uncertainty principle of quantum physics. These limits are seemingly tiny, since they are applicable to the life of elementary particles. The uncertainty of quantum physics allows biological causes interfere with the physical world, within the framework provided by the uncertainty principle. But, since each elementary particle has a tiny bit of uncertainty, and the number of elementary particles in living organisms can be measured with astronomical numbers, it all adds up and even these tiny bits of quantum effects result in significant differences between the behaviour of physical objects and living organisms. AN OVERVIEW ON SOLAR ACTIVITY The Helios theory has proven that the Sun initiates quantum-level interventions from its own structural level, in a way so that they should lead to a result in line with the principle. The essence of solar activity is that the sun is continuously mobilizing its energies in an extraordinarily special way so that the conditions of the energy mobilizing activity should be continuously recreated. The changes in the energy of the Sun, that is the work of the Sun, allow the most work possible. Therefore, the Sun initiates quantum-level interventions in the solar core to create such a dynamo that generates the magnetic fields required for solar activity, aligns and consistently organizes mass flows and the changes in magnetic fields. We have found a remarkable range of evidence, implicating that the Sun initiates and organizes its own activity. Our theory is also supported by a numeric simulation and its fully elaborated version was named the Helios theory (Grandpierre 1990, 1996a,b, 1998, 2004, 2015a,b). Our prediction about the discovery of the dynamic processes of the solar core has already been justified. The new theory of the solar core predicts that the Sun can enhance the tiny effects of planets to an extreme extent if adequate internal conditions prevail. The effects of planets act as a kind of key stimuli, triggering sunquakes, sudden, point-like releases of rotational energy in the solar core (Grandpierre 1990, 1996a,b). In the

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hypocentre of sunquakes, hot bubbles are formed, which can elevate onto the surface, and there they trigger surface solar activity. Our prediction that thermonuclear runaways occur in the solar core has been confirmed by others as well (Hiremath 2010, Haubold and Kumar 2011, Scafetta 2012, Yndestad and Solheim 2016). Similarly, our prediction that hot bubbles are formed in the solar core has been supported by others (Wolff and Donovan 2007, Wolff 2009). The four decades of my research show that solar activity is initiated by the Sun itself for biological aims, to sustain its own activity. My research has led to an unexpected result: it created a new image of the Sun, in which the Sun is a living organism, that is, it is similar to the ancient view of the Sun being a sun god, Helios. After having read the English manuscript of my book on the Helios theory, James Lovelock, a prominent figure of British science, who has grounded the theory of the Earth being alive with his book Gaia, endorsed the book with the following words: “A shining book illuminated by the effulgence of our own star, the Sun. For the serious scientist a primer on Solar System Science.” AN EXPERIMENT ADEQUATE TO CHECK THE HELIOS THEORY EMPIRICALLY: THE SOLARIUM EXPERIMENT All light carries information. If the Sun is a living organism, it can carry information also about the living nature of the Sun. In this case, sunlight, due to its information content, might mean extra information for life on Earth. During its existence of four billion years, life on Earth must have learnt how to use the information content of sunlight, if there is any. We have designed an experiment to test one of the predictions related to the biological nature of the Sun of the Helios theory empirically. In a greenhouse, a tomato plant is given whatever matters in a physical sense: an abundance of nutrients and energy, creating virtually optimal environmental conditions. In comparison, the life of “wild” tomatoes grown outdoors might seem sheer deprivation, hardship and struggle. Still, tomatoes grown outdoors are tastier, have better biological effects compared to the “civilised” artificial ones grown in greenhouses. Something is missing, because if only substance and energy mattered, greenhouse tomatoes should

outdo “wild” tomatoes from all respects. However, a lot of observations contradict this. Something is missing, and this something might be, among others, informationbiological information that can play a role in the formation of life, the development of a tomato. And this can be proven or denied with experiments. If the Sun is alive, the vitamin, flavonoid and flavour content of tomatoes grown in a solarium is even less than that of tomatoes grown in greenhouses. This experiment is not very expensive, and is

relatively easy to conduct. Its significance, however, might be greater than that of extremely expensive experiments of particle physics. THE SUN IS A COSMIC LIFE FORM Consider that in the light of the revolutionary discoveries of astrobiology, life is the basic phenomenon of the Universe. Physical conditions are extremely diverse in the Universe. The ability of life to adapt to

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extreme circumstances is much greater than it has ever been presumed. Under these extremely diverse circumstances life can take extremely diverse forms. The Earth is just one example of life; we do not know what other forms it can take, even not protein-based ones. There are more than forty billion planets in the Milky Way galaxy. Life can also exist on the moons of planets and cosmic clouds, not just on planets. According to James Lovelock’s Gaia Theory the Earth behaves like known life forms: it regulates physical conditions essential for life to remain in the range most favourable for its life. If the Earth is a kind of cosmic life form, the Sun, which ensures this selfactivity in the most favourable way for solar activity,

nature of the sun is proven, in principle the Sun can process much more information per second than the information processed by terrestrial living organisms. Tribus and McIrvine have published an article in the “Scientific American”, claiming the entire energy content of sunlight is likely to contain so much organized information that its volume possibly exceeds the information processing capacity of mankind and even all terrestrial forms of life. If the term “living organism” evokes familiar, terrestrial forms of life, it is more fortunate to regard the Sun a kind of cosmic form of life and not a living organism.

cannot be denied of this. If we define living organisms as the currently known living organisms of the Earth, the Sun is not one, because the living organisms of the Earth pursue a metabolic, reproductive way of life, maintain vital relationships with their environment, and consequently an extremely rich and complex information flow takes place between them and their environment, and they have the necessary apparatus to absorb and react to information. Unlike terrestrial living organisms, the Sun relies on its own energy source. Thus, it does not need a metabolism with its environment. The lifespan of the Sun is ten to fifteen billion years, comparable with the age of the Big Bang, thus the “reproduction” of the Sun requires qualitatively different means. If sunlight carries biological information, it might play a key role in the formation of life on the Earth, and we van presume that terrestrial life is the child of the Sun.

THEORY, AN INTEGRAL WORLDVIEW, ANCIENT CHINESE PHILOSOPHY AND THE ECOLOGICAL CIVILISATION

The Sun has an extremely rich internal life. Its information processing mechanisms are yet unknown. One thing is sure: the Sun’s mass consists of hightemperature plasma permeated by electromagnetic fields; partially or entirely ionized matter. Such plasma is the most complex matter of the Universe. David Bohm had the impression that plasma had a life-like behaviour, due to their surprisingly highlevel of organisation, an abundance of their cooperative phenomena and their extremely sensitive ability to react to internal and environmental changes. The temperature and the pressure in the interior of the Sun generate very favourable conditions for electric currents of a threadlike structure to form very easily, almost spontaneously, as electronic stimuli form in the neurons of the human brain. If the biological

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THE RELATIONSHIP BETWEEN THE HELIOS

The research into the origins of solar activity and the simultaneous developments of interdisciplinary sciences attach considerable weight to the conclusion that the Sun must be a cosmic life form. This outcome fundamentally concerns our entire worldview. The main aims of mankind include the development of a healthy civilisation being in harmony with life, common sense and Nature (Grandpierre 2002, 2012b, 2017b). Above all, building a healthy civilisation requires a healthy, balanced, that is fundamentally comprehensive worldview. Worldview determines what the important questions are, and how answers to them should be sought, and what is considered an acceptable answer. Worldview determines the fundamental direction of building the future. A healthy, integral and comprehensive worldview requires exact holistic science, grasping the essence of the Universe in its entirety. We propose that holistic science, embracing all really important realities can be achieved if it is based on the holistic theory of matter, life and self-consciousness (Grandpierre 2012b, 2017b). Modern science built on the exclusiveness of physics is not complete. Building on Ervin Bauer’s landmark work, it has been proven that biology has laws that are not deducible from physics. The fundamental principle of physics can be deducted from the fundamental principle of biology, and laws of physics can be deducted from the fundamental principle of physics. Consequently, physics is not the only fundamental natural science. While construing the fundamental principle of biology, it has turned out to

be inseparable from biological autonomy. Holistic science has found the fundamental principle of matter, life and self-consciousness, and demonstrated that they can be conceived as various cases of the same cosmic principle, with the life principle being the most general and fundamental of all. The comprehensive scientific approach that we had to develop for the Helios theory had to include biology. As a result, it means a scientific worldview that is broader, balanced and more profound than that of modernity. We have got to a complete, healthy worldview, which is based on exact primary principles also described mathematically. This healthy worldview can provide scientific grounds for developing a healthy civilisation in the same way as the hegemony of physics provided the grounds for modernity.

”This healthy worldview can provide scientific grounds for developing a healthy civilisation in the same way as the hegemony of physics provided the grounds for modernity.” Developing a coherent, holistic, comprehensive science is a basic aim of constructive postmodernism, associated with Whitehead. As Whitehead has put it: philosophical knowledge is an endeavour to frame a coherent, logical, necessary system of general ideas in terms of which every element of our experience can be interpreted (Whitehead 1978, PR, 3). In the opinion of Cobb and other constructive postmodernists, such comprehensive world model is possible and necessary (Cobb 2002, Griffin 2007, 5-7). The Helios theory and the comprehensive scientific worldview place physics, biology and psychology onto the same grounds and align them, based on the first principles. They provide biology and psychology with a fundamental principle of their own, attributing a theoretical basis and significance similar to modern physics. The Helios theory and a holistic natural science reconcile natural sciences, humanities and

social sciences. A clear definition of the life principle provides a scientific basis for developing ethics, in which respecting, supporting and enhancing life are regarded as major basic ethical principles (Schweitzer 1923, 94; Macer 1998, 146-147). Whitehead’s philosophical work was based on his conviction that religion and reason must be, and can be, reconciled. In these days, it means reconciling religion and science. A holistic and comprehensive science can remedy the estrangement of Nature and society, ensued by modernism. The holistic worldview remedies the secession between science and religion, because the three fundamental principles of the Universe form a coherent, harmonious whole, the unity and harmony of body and mind, matter, life and consciousness. This essentially complete worldview can remedy the detachment and disharmony of sense, sensation and intuition. Comprehensive science says matter is governed by the fundamental principle of physics; sensation and intuition are governed by the fundamental principle of life, and logical thinking is basically governed by the fundamental principle of self-consciousness. Matter, life and self-consciousness are in basic harmony, because the living Universe is an integrated whole of matter, life and self-consciousness. These basic, all-encompassing cosmic principles can be regarded the most profound essence of the Universe, the innermost core of Nature (Grandpierre 2011a,b). Remarkably, the most fundamental of these three fundamental principles, which encompasses and integrates the other two, is the life principle. The most fundamental nature of the Universe is its being alive (Grandpierre 2002, 2012b, 2017a). It is Life is that embraces the Universe; matter and consciousness are also the manifestations of Life. One day all of us will realize that life is not a tiny sparkle somewhere in the depths of our body, but the eternal cosmic flame itself, the primal reality embracing the entire Universe. Surprisingly, our integral worldview demonstrates a range of similarities with the works of Alfred North Whitehead, John Cobb, David Ray Griffin, Thomé H. Fang and Zhihe Wang, constructive postmodernism, and especially the philosophy of the high culture of the ancient Silk Road, the ancient Hungarian tradition, and, it must be emphasized here, ancient Chinese philosophy. We think the most fundamental difference between the modern Western mindset

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and the ancient Chinese one is ontological: according to modernity, exclusively matter is the fundamental being, while the Chinese mindset is that life is the most fundamental, the source of all other realities. The cosmic life principle can be conceived as an exact, scientific definition of ‘Qi’. Since life itself is the creative force, an uplifting force creating new life, an internal force that is aimed at creating the most beautiful and sublime life possible, the cosmic life principle can be identified with creativity. In this regard, the life principle of the holistic natural science is identical with Whitehead’s process philosophy (Whitehead 1978, 31), as well as with ancient Chinese philosophy. The following statement can be found in the Book of Change: “The fulfilment of Nature which is Life in perpetual creativity is the gate of Wisdom bodying forth the value of Tao and the principle of righteousness”, writes Thomé H. Fang, a prominent figure of twentieth-century Chinese philosophy. We can call such ethical features of activities righteous that help, improve and fulfil life. The life principle naturally entails the love of life, and even an emotional commitment to life manifesting in actions. Life is qualitatively more than modernity can see it, because its essence is granting victory to complete integrity and beauty of life. Since the life principle impels all living organisms to live the most complete, most beautiful, happiest and truest life (Grandpierre 2012, 2017a), life is the basis and cosmic source of goodness. Life is good because it aims at preserving, embellishing and transmitting life. Remarkably, the integral worldview discovered during the development of the Helios theory demonstrates a range of similarities with ancient Chinese philosophy. These similarities include the next six, essential elements: knowledge of the life principle, being the most fundamental principle of the Universe, change, creativity, goodness, and comprehensive harmony. The fact that six such unique features match is hardly a coincidence. Since Western modernity lacks them, it is worth overviewing the connections between these features. The starting point of holistic science is the life principle, because all existence starts from it; the cosmic life principle is the most fundamental principle of the Universe. Similarly, in Chinese

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philosophy, ‘Qi’ or ‘c’hi’ is the cosmic life principle, the ultimate basis of all beings of the Universe, the source of the existence of the Universe (Zhenyu Zeng 2011). German Sinologist De Groot calls the ancient Chinese system of metaphysics, the basis of the entire Chinese philosophy “universism” (De Groot 1912; Glasenapp 1975, p141). All Chinese traditions “converge on one essential point: The Universe, as it is, represents an all-comprehensive Urge of Life, an all-pervading Vital Impetus, not for a single moment ceasing to create and procreate and not in a single place ceasing to overflow and interpenetrate” (Fang 1987, 688).

”The Helios theory and a holistic natural science reconcile natural sciences, humanities and social sciences.” Holistic science, just like ancient Chinese philosophy, thinks that the life principle itself is the creative force, the ultimate source of changes creating new things. The same cosmic life principle is the fundamental principle of goodness. Since humans most fundamentally are living organisms, the universal fundamental principle of goodness is the universal fundamental principle of human behaviour. The same cosmic life principle unites matter, life and self-consciousness in the entire Universe, and provides all-embracing harmony. As the Helios theory has demonstrated, this cosmic life principle is the source and engine of solar activity. Developing a healthy, ecological civilisation is unconceivable without a school system built upon a healthy, ecological worldview. THE CORRELATION BETWEEN SOLAR ACTIVITY AND THE CREATIVE FORCE OF MANKIND For a long time, it seemed impossible to prove by strictly scientific means the close relationship between the human mind and solar activity. Recently, however, a scientific breakthrough has come in this field. Suitbert Ertel, a psychology professor at University of Göttingen, conducted an analysis

of a huge database by means of mathematical statistics. Ertel’s work was inspired by one of the most significant anthropologists of his time, Alfred Kroeber, who, in his book Configurations of Culture Growth, published in 1944, wrote, “it is the frequent habit of societies to develop their cultures to their highest levels spasmodically”. In terms of Western civilisation, Kroeber’s most known “peaks in cultural creativity” include the Golden Ages of the Renaissance, the Baroque, the Rococo, and the Romanticism. Kroeber studied the time of outstanding works of painting, poetry, sculpture and science. Ertel’s studies were aimed at analysing the data of painting, poetry and science. Suitbert Ertel examined the works of 40,700 painters from Western civilisation. The data on the painters, compiled by Isabella Errera, a Belgian art historian, were obtained from 1,550 sources, taking the data of exhibitions, museums, the sales of paintings, catalogues, and other sources. Ertel found two waves of creativity in painting, one of the peaks emerged in 1645. He also examined poetry. Based on the extensive collection of data by H. A. Frenzel and E. Frenzel, as well as in Bertelsmann’s Lexicodisc, a creativity peak occurred in poetry 10 years later, in 1655. After that, he compiled the Master Index of scientific discoveries, using 26 manuals, lexicons, encyclopaedias, biographies and textbooks om the history of science from 1440 to 1800. He found that scientific creativity culminated in 1670. All the three peaks, in 1645, 1655, and 1670, were significant, over the margins of tolerance, and all showed a sudden, at least double intensification of creativity. This was the age of rebirth, the Renaissance. After that, he compared these data with the second largest similar collection of data, the Chinese one, for the same period. The outcome was surprising. The Chinese data showed that the peaks of creativity in painting, poetry and science occurred exactly at the same time as in Europe: in painting, it was in 1645, in poetry it was in 1655 and in science it was in 1670. Ertel asked the question, “Is it possible for the creativity of civilisation to show several peaks of at least double intensity, all in a relatively short period of time, in all areas of culture? Furthermore, is it possible to happen simultaneously with the number of artists of an unknown civilisation, which is situated more than fifteen thousand kilometres away?”

Such a peculiar and multiple coincidence between European and Chinese data must have a common cause, and from a geophysical source, Ertel argues. Remarkably, he found a factor with which these peaks coincide – in solar activity. It is widely known that solar activity is cyclical, but it is not the same period that repeats. Solar activity has a period of 11.2 years on average. There are some solar cycles, however, that last for 14 years, and there are some that last for only 9 years. There are major irregularities in solar activity. One of the most significant irregularities is a sudden drop in the number of sunspots, which began in 1625. Solar activity almost completely stopped between 1645 and 1715. Astronomers regard this phenomenon an anomaly in the activity of the usually “well-behaving” Sun. This irregular lowactivity period is called Maunder minimum, named after Edward Walter Maunder, who discovered this phenomenon in 1898. The study of the origins and the nature of solar activity led us to the conclusion that the Sun is alive. Life is inseparable from the decision-making of living organisms. Decision-making, the self is the centre of conscience. Thus, the living nature of the Sun also entails the conscious nature of the Sun. If solar activity is a vital activity, then it is also a conscious activity. Human creativity also manifests in conscious activities. The facts that show the coincidence of the extraordinary period of human creativity in the Renaissance and the extraordinary period of the Sun are firmly grounded, have great statistical significance, and are extremely reliable due to the high volumes of processed data. These facts are rooted in psychology as well as in solar activity. These two fields are seemingly very distant, and their correlation and coincidence require explanation. What seems odd today might become clear tomorrow, with a better understanding of the relationships between the Sun and the Earth. Hopefully, the gaps in our knowledge about the nature of the effects exerted by the Sun will be filled, and we can discover their nature, and neurophysiological correlations. Ertel’s novel result, the accuracy and the methodological quality of the work he did was recognised by Hans Eysenck, one of the most prominent psychologists of the time. If this entails another explosion of human creativity, the long-awaited New Renaissance can come.

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BOOK RECOMMENDATIONS

Parag Khanna: Technocracy in America: Rise of the InfoState

Gish Jen: The Girl at the Baggage Claim: Explaining the East-West Culture Gap

Tom Miller: China's Asian Dream: Empire Building along the New Silk Road

The fundamental thesis of the book is that American democracy just isn’t good enough anymore, a costly presidential election has done more to divide American society than unite it, while trust in government– and democracy itself–is plummeting. In his newest book, renowned geopolitician and globalisation scholar Parag Khanna tours cuttingedge nations (e.g. Switzerland and Singapore) which deliver superior welfare and prosperity for their citizens. The ideal form of government for the 21st century is what Khanna calls a "direct technocracy," one led by experts but consulting the people through a combination of democracy and data. Therefore, a sevenmember presidency, a restructured cabinet and an Assembly of Governors replacing the Senate are required for the USA to retain its place in the top rankings of developed countries, following the example of the world’s most successful societies.

Never have East and West come as close as they are today, yet we are still baffled by one another. In some respects, the individual has come more to the fore and belonging to something larger than ourselves has become secondary, but the question arises how important our cultural roots are in self-realisation. Drawing on a treasure trove of stories and personal anecdotes, as well as cutting-edge research in cultural psychology, the author reveals how memories and experiences of individuals shape what we perceive and think, and our ideas about the world. The book is an obviously provocative but important study of the different ideas Easterners and Westerners have about the self and society and what this means for current debates in art, education, geopolitics, and business, and ultimately it is contributing to our understanding of ourselves and of our world.

“China,” Napoleon once remarked, “is a sleeping lion. Let her sleep, for when she wakes she will shake the world.” In 2014, President Xi Jinping declared that the lion had awoken. Under Xi, China is pursuing an increasingly ambitious foreign policy with the aim of restoring its historical status as the dominant power in Asia. In order to achieve its strategic goals, the country is trying to use its economic power, already perceptible all over the surrounding regions. Simultaneously, Beijing aims at curbing U.S. influence and developing a new world order. The author thinks that establishing new regional financial institutions, and building roads, railways and ports across Eurasia within the framework of the New Silk Road serve China’s interests. In addition to analysing the geopolitical context and China’s rise, Miller’s book primarily presents their consequences for the Asian continent.

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Robert D. Kaplan: Earning the Rockies: How Geography Shapes America's Role in the World

Keith Somerville: Africa's Long Road Since Independence: The Many Histories of a Continent

Amitav Acharya: East of India, South of China: Sino-Indian Encounters in Southeast Asia

In his latest book, bestselling author Robert D. Kaplan presents an incisive portrait of the American landscape, showing how geography continues to determine America’s foreign policy, embedded in a historical background. He depicts the major aspects of American geography through his own personal experiences, illustrating them with evocative stories. The westward expansion of the USA in the 19th century is examined here in a new light, including communalism and water scarcity, not just genocide and individualism, among the factors bending the American national character and foreign policy. Kaplan’s book leads us back to the roots of American greatness and the notions of nation and empire, enabling us to understand today’s anarchic world through an appreciation of geography.

Over the last half century, sub-Saharan Africa has not had one history, but many. Histories that have intertwined, converged and diverged. They have involved a continuing process of decolonization and state-building, conflict, economic problems but also progress and the perpetual interplay of structure and agency. The author examines these parallel stories in a new light when presenting the relationship between territorial, economic, political and societal structures and human agency in the complex and sometimes confusing development of an independent Africa. The book looks at the history of sub-Saharan Africa from the 1950s until the early 21st century, paying particular attention to the peoples of Africa and their struggle for economic development against the consequences of colonial rule and decolonisation. In addition to the inherited structures, whether the political systems or the artificial state borders, African peoples, political movements and leaders are also discussed in the book.

The renowned author overviews the history of the geopolitical rivalry between two Asian giants in Southeast Asia, India and China. The book highlights some of the key events and turning points in the evolving India-China-Southeast Asia relations, since the times of Jawaharlal Nehru’s government until the policy of the Modi government, and their contribution to the construction of Asian and global order. After 1946 India played a pre-eminent role in designing the regional architecture in Asia, but it was diluted after the Bandung era, especially post the Sino-India War in 1962, and it had become a political and diplomatic non-entity-if not a pariah-in Southeast Asia even as China emerged as a dominant regional power. The last two decades, however, have seen India making substantial inroads into the region, altering power equations. Acharya challenges the conventional wisdom that Asian order is solely premised upon US-JapanChina relations, and places India in the centre stage of the regional order of the future.

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top 10

Hungarians in the global forefront In order to preserve and to convey national values, the Central Bank of Hungary and Pallas Athéné Geopolitical Foundation intend to draw global attention to young Hungarian talents and creative communities. “TOP 10 - Hungarians in the global forefront” is a joint publication introducing Hungarian talents we can be proud of, who, as role models, encourage and inspire today’s youngsters. Because “we, Hungarians can make it into the top league in Europe and globally”. Our selection is an overview of success stories from the past three years, encompassing the fields of gastronomy, sport, culture, tourism, technology and science, highlighting such segments which usually remain hidden from the general public. Let’s take a look at those sensational Hungarians who recently added colours to the world-wide web and the map of understanding the 21st century.

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LIST OF SOURCES GEOPOLITICAL THINKERS OF THE 21ST CENTURY

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GANDEL, Stephen: Henry Kissinger Says Donald Trump Is Right about Russia. In: Fortune, USA. 2017.01.20. http://fortune.com/2017/01/20/ trump-inauguration-henry-kissinger-russia/ (06/03/2017)

ATASUNCEV, Aleksander: Санкций мало не бывает (Sanctions do not often happen) In: Gazeta.ru, 19/02/2017, https://www.gazeta.ru/ politics/2017/02/19_a_10534019.shtml (06/03/2017)

GUTTERIDGE, Nick: NO MORE SUPERSTATE’ Dutch PM says ever-closer union 'dead' and urges free movement reform. Express, January 19, 2017 http://www.express.co.uk/news/politics/756279/European-UnionDutch-PM-Mark-Rutte-Martin-Schulz-ever-closer-union-free-movement (06/03/2017)

BIRNBAUM, Michael – PARKER, Ashley: Pence and Merkel embrace NATO but differ on transatlantic partnership. In: The Washington Post, February 18, 2017. https://www.washingtonpost.com/world/

HORCH, Dan: Promise or Peril: Decoding the Future of Work. World Economic Forum, 19 January 2017 https://www.weforum.org/ agenda/2017/01/promise-or-peril-decoding-the-future-of-work (06/03/2017) KENNEDY, Simon: Anthony Scaramucci Is This Year's Surprise Davos Star. In: Bloomberg. 17 January 2017 https://www.bloomberg.com/ news/articles/2017-01-17/the-trump-curiosity-gap-makes-scaramuccian-unlikely-davos-draw (06/03/2017) KUPCOVA, Alina: Как Китай поможет Украине в войне с Россией (How China will help Ukraine in the war against Russia) In: Obozrevatel, Ukrajna. 09/01/2017. http://inosmi.ru/politic/ 20170119/238563238.html (06/03/2017) OBSTFELD, Maurice: The global economy is picking up. Now we must focus on making it inclusive, says IMF. In: World Economic Forum. 16 January 2017 https://www.weforum.org/agenda/2017/01/a-shiftinglandscape-the-latest-on-the-global-economy-from-the-imf?utm_ content=bufferb7908&utm_medium=social&utm_source=facebook. com&utm_campaign=buffer (06/03/2017) PARKER, Ceri: ’Defend the International Liberal Order’ – top quotes from Joe Biden’s Davos swansong. In: World Economic Forum. 18 January 2017 https://www.weforum.org/agenda/2017/01/defend-the-liberalinternational-order-top-quotes-from-joe-bidens-davos-swansong/ (06/03/2017) PARKER, Ceri: Donald Trump’s Inauguration: what they had to say at Davos. In: World Economic Forum. 20 January 2017 https://www.weforum.

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The World in 2050: Will the shift in global economic power continue? PricewaterhouseCooper, February 2015 http://www.pwc.com/gx/ en/issues/the-economy/assets/world-in-2050-february-2015.pdf (06/03/2017) Water in 2050: The Future of Water Requires a Sustainable, Blue Path. In: Growing Blue. http://growingblue.com/water-in-2050/ (06/03/2017) ON THE ENERGY VISION 2050 low-carbon economy. European Comission. https://ec.europa.eu/ clima/policies/strategies/2050_en (06/03/2017) CLEVELAND, C. J. – O’CONNOR, Peter: An Assessment of the Energy Return on Investment (EROI) of Oil Shale. June 2010. http://www.circleofblue.org/wp-content/uploads/2010/08/oilshale-assessment2010-for-water.pdf (06/03/2017) GDP vs. Energy Efficiency (Top 40 Economies by GDP) https://upload. wikimedia.org/wikipedia/commons/7/70/Gdp-energy-efficiency.jpg (06/03/2017) Global Greenhouse Gas Emissions Data. United States Environmental Protection Agency. https://www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data (06/03/2017) HOWARD et al. (2012): Spatial distribution of urban building energy consumption by end use. In: Energy and Buildings. Vol. 45, February 2012. pp. 141–151. http://www.sciencedirect.com/science/article/pii/ S037877881100524X (06/03/2017) The Alternative Energy Matrix, In: Do the Math, 07/02/2012 http:// physics.ucsd.edu/do-the-math/2012/02/the-alternative-energy-matrix/ (06/03/2017) United Nations: Sustainable Development Goals http://www. un.org/sustainabledevelopment/sustainable-development-goals/ (06/03/2017) WAND, R. – LEUTHOLD, F. (2010): Feed-in tarrifs for photovoltaics. Learning by Doing in Germany? http://idei.fr/doc/conf/eem/leuthold. pdf (06/03/2017) FUTURE OF CITIES FELLER, Gordon (2015). 3 Big Ideas for the Smart City of 2050. http://cityminded.org/3-big-ideas-for-the-smart-city-of-2050-14121 (02/02/2017) MUOIO, Danielle (2016): Here's what cities will look like in 2050. In: Business Insider, March 1, 2016. http://www.businessinsider.com/ian-pearson-predicts-what-cities-will-look-like-in2050-2016-2/#buildingswill-reach-new-heights-and-could-be-astall-as-18-miles-pearson-claims-for-reference-thats-more-than8000-stories-high-1 (02/02/2017) OECD Environmental Outlook to 2050: http://www.oecd.org/environment/indicators-modelling-outlooks/oecd-environmental-outlook1999155x.htm (31/01/2017) The European Environment – State and Outlook 2015: Assessment of Global Megatrends. EEA, Copenhagen, 2015. http://www.eea.europa. eu/soer (31/01/2017) TRUJILLO, Jesus Leal – PARILLA, Joseph (2016): Redefining Global Cities – The Seven Types of Global Metro Economies. In: Brookings, September 29. https://www.brookings.edu/research/redefining-globalcities/ (01/02/2017) UN Department of Economic and Social Affairs – Population Division: World Urbanisation Prospects 2014: https://esa.un.org/unpd/wup/ CDROM/ (31/01/2017) Vincent Callebaut Architectues (2015) http://vincent.callebaut.org/ category/publications/ (02/02/2017) WILLIAMSON, Lucy (2013): Tomorrow's cities: Just how smart is Songdo? In: BBC News, September 2, 2013. http://www.bbc.com/news/technology-23757738 (02/02/2017)

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O’CALLAGHAN, J (2013): By 2050 we’ll have colonies and habitats on the surface of Mars’ – An interview with asteroid miner Chris Lewicki. In: Space Answers, 12 June, 2013. https://www.spaceanswers. com/futuretech/by-2050-well-have-colonies-and-habitats-on-thesurfaceof-mars-an-interview-with-asteroid-miner-chris-lewicki/ (17/01/2017)

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Milken Institute (2014): Look, Ma, No Hands! The Future of Cars. http:// assets1c.milkeninstitute.org/assets/Events/Conferences/GlobalConference/

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DAMM, Darlene – HAAN, Nicholas: The Next Water Crisis Is Looming – How Can Tech Help? In: Singularity Hub, March 31, 2016. https://singularityhub.com/2016/03/31/the-next-water-crisis-is-looming-howcantech-help/ (06/03/2017)

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ROLD, Ana C. (ed.) (2016): The World in 2050 – The Future of Global Talent. Washington, DC: Diplomatic Courier – Medauras Global. http:// www.mazdigital.com/webreader/34272?page=2 (06/03/2017)

Global Impact Challenges, Singularity University https://su.org/gic/ (06/03/2017) HILL, David J: How Will We Meet the Energy DEmands of the Coming Megacities? In: Singularity Hub, July 8, 2015. https://singularityhub. com/2015/07/08/how-will-we-meet-the-energy-demands-ofthecoming-megacities/ (06/03/2017) Innovation Partnership Program http://ipp.biz/ (06/03/2017) MURRAY, Peter: Freezing Life: Cryogenics Is The Last Hope For Many Endangered Species. In: Singularity Hub, December 6, 2011. https://singularityhub.com/2011/12/06/freezing-life-cryogenics-is-the-lasthopefor-many-endangered-species/ (06/03/2017) PROSSER, Marc: Soon We’ll All Love Robots the Way Japan Loves Robots. In: Singularity Hub, October 20, 2016. https://singularityhub. com/2016/10/20/soon-well-all-love-robots-the-way-japan-lovesrobots/ (06/03/2017) RAMIREZ, Vanessa B.: The Race to Wrap the Earth in Internet Is Heating Up. In: Singularity Hub, November 21, 2016. https://singularityhub. com/2016/11/21/the-race-to-wrap-the-earth-in-internet-is-heatingup/ (06/03/2017)

PORRITT, J. (2013): The World We Made. Phaidon Press Ltd. London

SCOTT, Cameron: 100% Renewable Energy Is Feasible and Affordable, According to Stanford Proposal. In: Singularity Hub, March 8, 2014. https://singularityhub.com/2014/03/08/100-renewable-energy-isfeasible-and-affordable-stanford-proposal-says/ (06/03/2017)

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THE FUTURE OF EDUCATION BILLINGS, Laura: Virgin Distruptors: The Future of Education. In: EDSPACE, 07/10/2015 http://www.edspace.io/blog/2015/10/7/virgindisruptors-the-future-of-education (06/03/2017) DICKINSON, Dee (2000): Education 2050. In: Marianne Williamson (ed.): Imagine: What America Could Be in the 21st Century. http://education.jhu.edu/PD/newhorizons/future/articles/imagine/index.html (06/03/2017) HENDERSON, Hazel (2002): Education for the Third Millenium. Johns Hopkins School of Education. http://education.jhu.edu/PD/newhorizons/future/articles/third-millenium/index.html (06/03/2017) HOPKINS, David (2014): Classrooms in 2050. In: Technology Enhanced Learning Blog, July 3, 2014. http://www.dontwasteyourtime.co.uk/elearning/classrooms-in-2050/ (06/03/2017) KOUTSOPOULOS, Kostis C. – PAPOUTSIS, Panos (2016): School on Cloud: Transforming Education. In: Educational Policy Analysis and Strategic Research, Vol. 11, No. 1, 2016, pp 31-46. http://www.inased. org/epasad/v11n1/EPASADv11n1.pdf (06/03/2017) MITRA, Sugata: SOLE Toolkit – How to bring self-organized learning environments to your community. https://s3-eu-west-1.amazonaws. com/school-in-the-cloud-production-assets/toolkit/SOLE_Toolkit_ Web_2.6.pdf (06/03/2017) Oxford Analytica (2016). Gamification and the future of education. https://worldgovernmentsummit.org/api/publications/document?id= 2b0d6ac4-e97c-6578-b2f8-ff0000a7ddb6 (06/03/2017) PARSONS, Jim (2010): Envisioning Education in the Year 2050. In: ATA Magazine, Volume 90, 2009-10, 21/05/2010 https://www.teachers.

Robots: Who is NAO? SoftBank Robotics. https://www.ald.softbankrobotics.com/en/cool-robots/nao

ROUHIAINEN, Lasse (2016): The future of higher education: How emerging technologies will change education forever. CreateSpace Independent Publishing Platform The future of education. Trend report 2015. Center for Digital Technology and Management (CDTM) 2015. http://www.cdtm.de/wp-content/ uploads/The%20Future%20of%20Education.pdf (06/03/2017) United Nations, Department of Economic and Social Affairs, Population Division (2015). World Population Prospects: The 2015 Revision, Key Findings and Advance Tables. Working Paper No. ESA/P/WP.241. https://esa.un.org/unpd/wpp/publications/files/key_findings_wpp_2015. pdf (06/03/2017) SECURITY POLICY CHALLENGES AND TRENDS IN THE MID-21ST CENTURY 2050 Africa’s Integrated Maritime Strategy (2050 AIM Strategy). African Union, Version 1.0, 2012. 7-12. http://cggrps.org/wp-content/ uploads/2050-AIM-Strategy_EN.pdf (06/03/2017) Army’s ‘Mad Scientist’ initiative looks at future differently. SOFREP News, 08. 15. 2016. https://sofrep.com/61654/armys-mad-scientistinitiative-looks-future-differently/ (06/03/2017) Food Production Must Double by 2050 to Meet Demand from World’s Growing Population, Innovative Strategies Needed to Combat Hunger, Experts Tell Second Committee, Sixty-fourth General Assembly, Second Committee, Panel Discussion (AM), United Nations, 9 October, 2009. https://www.un.org/press/en/2009/gaef3242.doc.htm (06/03/2017) Global Strategic Trends - Out to 2045. In: Strategic Trends Programme, Development, Concepts and Doctrine Centre, Ministry of Defence, UK https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/348164/20140821_DCDC_GST_5_Web_Secured.pdf (06/03/2017) HEGRE, Haward – KARLSEN, Joakim – NYGARD, Haward Mokleim – STRAND, Haward – URDAL, Henrik: Predicting Armed Conflict, 2010– 2050. November 21, 2011 http://folk.uio.no/hahegre/Papers/PredictionISQ_Final.pdf (06/03/2017) LEADMARK 2050: Canada in a New Maritime World. Royal Canadian Navy, May 2016 http://navalassoc.ca/wp-content/uploads/2016/05/ Leadmark-2050-13-May-2016.pdf (06/03/2017) STANCIL, Bennett – DADUSH, Uri: The World Order in 2050. Carnegie Endowment for International Peace, Policy Outlook, April 2010 http://carnegieendowment.org/files/World_Order_in_2050.pdf (06/03/2017) SULLIVAN, Kevin B: What American foreign policy will look like in 2050. In: The Week, April 21, 2015 http://theweek.com/articles/549004/ what-american-foreign-policy-look-like-2050 (06/03/2017) TUCKER, Patrick: In The War of 2050, The Robots Call The Shots. In: Defense One, July 22, 2015 http://www.defenseone.com/technology/2015/07/war-2050-robots-call-shots/118398/ (06/03/2017) Vision–2050. A New Political and Economic Map of The World, PostCrisis World Institute, February – May 2013. http://eng.postcrisisworld. org/files/vision_2050.pdf Visualizing the Tactical Ground Battlefield in the Year 2050: Workshop Report, US Army Research Laboratory, June 2015 22-23. http://www. arl.army.mil/arlreports/2015/ARL-SR-0327.pdf WALT, Stephen M: What Will 2050 Look Like? In: Foreign Policy, May 12, 2015 http://foreignpolicy.com/2015/05/12/what-will-2050-looklikechina-nato/

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JOY, B (2000): Why the Future Doesn’t Need Us. In: Wired, 2000/04. https://www.wired.com/2000/04/joy-2/ (17/01/2017)

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KNAPTON, S (2016): Robots will take over most jobs within 30 years, experts warn. In: The Telegraph, 13 February, 2016. http://www.telegraph.co.uk/news/science/science-news/12155808/Robots-willtakeover-most-jobs-within-30-years-experts-warn.html (17/01/2017)

ARAYA, Daniel: Self-Driving Cars Will Soon Be Everywhere – But You May Not Own One. In: Singularity Hub, February 5, 2017. https://singularityhub.com/2017/02/05/what-happens-when-self-driving-isascommon-as-cruise-control/ (06/03/2017)

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LIST OF PICTURES AND FIGURES TITLE PAGE Prime Minister Viktor Orbán: kormany.hu, www.kormany.hu THE NEW ENGINE OF GLOBAL GROWTH Lámfalussy Conference: author’s photograph, Lámfalussy Conference (23 January 2017) BUILDING “ONE BELT, ONE ROAD” IN COOPERATION BETWEEN CHINA AND EUROPE Tien Gouli, Chairman of the Bank of China Ltd.: author’s photograph, Lámfalussy Conference (23 January 2017) Tien Gouli, Chairman of the Bank of China Ltd.: author’s photograph, Lámfalussy Conference (23 January 2017) Lámfalussy Conference: author’s photograph, Lámfalussy Conference (23 January 2017) A MULTIPOLAR WORLD ORDER HAS OPPORTUNITIES TO OFFER Prime Minister Viktor Orbán: author’s photograph, Lámfalussy Conference (23 January 2017) Prime Minister Viktor Orbán: author’s photograph, Lámfalussy Conference (23 January 2017) photograph, Lámfalussy Conference (23 January 2017) Prime Minister Viktor Orbán: author’s photograph, Lámfalussy Conference (23 January 2017) Prime Minister Viktor Orbán: author’s photograph, Lámfalussy Conference (23 January 2017) THE COOPERATION OF “ONE BELT, ONE ROAD” AND HUNGARY Chen Zhimin and Yan Xuetong: author’s photograph, Lámfalussy Conference (23 January 2017) GEOPOLITICAL THINKERS OF THE 21ST CENTURY „Geopolitics” (title picture): Sean K., Shutterstock.com , https:// www.shutterstock.com/image-photo/geopolitics-on-woodencubes-541652545 (17/03/2017) Henry Kissinger: MiroVrlikPhotography, Shutterstock, https:// www.shutterstock.com/hu/image-photo/new-york-september21-drhenry- 37477399?src=4dXSfmW3DPt0WHDNGzTLJw-1-0 (17/03/2017) Aleksander Dugin: dugin.ru, http://dugin.ru/photos (13/03/2017) Aleksander Dugin’s Geopolitical Map: evrazia.com, http://evrazia. org/modules.php?name=News&file=article&sid=1884 (13/03/2017) Yan Xuetong: Wikimedia, https://commons.wikimedia.org/wiki/ Category: Yan_Xuetong#/media/File:Yan_Xuetong_-_World_Economic_Forum_Annual_Meeting_2011.jpg (13/03/2017) “Geopolitics”: ibreakstock, Shutterstock.com, https://www.shutterstock.com/image-illustration/geopolitics-concept-wordcloudbackground-201226421 “Geo-Economy”: Tashatuvango, Shutterstock.com, https://www. shutterstock.com/image-illustration/geo-economy-illustrationlowing-light-effect-501278608 (13/03/2017) Sanjaya Baru: http://www.cprindia.org/people/sanjaya-baru (13/03/2017) Robert D. Kaplan: robertdkaplan.com, http://www.robertdkaplan. com/robert_d_kaplan_bio.htm (13/03/2017) The Revenge of Geographic: https://www.amazon.com/ Revenge-Geography-Coming-Conflicts-Against/dp/0812982223 (13/03/2017) “Time”: Elena Abrazhevich, Shutterstock.com, https://www.shutterstock.com/image-illustration/round-clocks-showing-differenttime-cities-512893003 (13/03/2017) THE NEXT 100 YEARS https://www.libri.hu/konyv/george_friedman.a-kovetkezo-100-ev. html (16/04/2017) WORLD ECONOMIC FORUM 2017 “Davos”: CiaranMcCrickard, World Economic Forum, https://www. weforum.org/es/agenda/2017/01/las-mejores-fotos-del-diaunode-davos-2017-aa70173e-a1ec-41a0-ac08-8fa63fb3e0e5/ (13/03/2017) Xi Jinping: Valeriano Di Domenico, World Economic Forum, https:// www.weforum.org/agenda/2017/01/full-text-of-xi-jinpingkeynote-at-the-world-economic-forum (13/03/2017) Table: Source: IMF January 2017, World Economic Outlook; author’s edition Jack Ma: Mattias Nutt, World Economic Forum, https://www. weforum.org/agenda/2017/01/top-photos-from-davos-2017/ (13/03/2017)

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MUNICH SECURITY CONFERENCE Picture 1: Kuhlmann ,Munich Security Conference 2017, https:// www.securityconference.de/en/media-library/munich-securityconference-2017/image/michael-richard-pence-a-view-fromtheaudience/(13/03/2017) Sergey Viktorovich Lavrov: Koerner, Munich Security Conference 2017, https://www.securityconference.de/en/media-library/ munich-security-conference-2017/image/sergey-lavrov-3/filter/ image/ (13/03/2017) Wang Yi: Kleinschmidt, Munich Security Conference 2017, https:// www.securityconference.de/en/media-library/munich-securityconference-2017/image/wang-yi/filter/image/ (13/03/2017) Munich: http://www.alemanhaonline.com.br/guia-de-munique/ (16/04/2017) FUTURES STUDIES IN HUNGARY Nováky Erzsébet: http://www.csaladok-jovojeert.hu/content/hirek/ tuleljuk-valsagot-jovokutatas-professzorat-kerdeztuk Budapest – Bálna: Posztos, Shutterstock.com, https://www.shutterstock.com/image-photo/budapest-hungary-june-30-2016-art445570261?src=oXfY76QT-QVVibzT_VZ2ew-1-34 (2017.04.16.) Budapest – Bálna: Andocs, Shutterstock.com, https://www. shutterstock.com/image-photo/budapest-hungary-october09-2016-balna-547209646?src=oXfY76QT-QVVibzT_VZ2ew-1-1 (16/04/2017) THE FUTURE OF WORLD ECONOMY IN 2050 Average annual growth (%) by regions: prepared by author, source: Franklin – Andrews, 2012. 123. Regional share of global GDP (%): prepared by author, source: Longterm macro-economic forecasts. Key trends to 2050. The Economist Intelligence Unit, 2015. 4. (Economist, 2015) 3. Top ten economies in 2050: prepared by author, source: Long-term macro-economic forecasts. Key trends to 2050. The Economist Intelligence Unit, 2015. 4. (Economist, 2015) 3. Global dominance of the top three economies: prepared by author, source: Long-term macro-economic forecasts. Key trends to 2050. The Economist Intelligence Unit, 2015. 4. (Economist, 2015) 3. Rise due to the growth of real GDP and rise due to the appreciation of the real exchange rate: prepared by author, source: Franklin – Andrews, 2012. 115. DEMOGRAPHY AND SUSTAINABILITY Population Ageing (1950-2050): prepared by author, source: United Nations, 2007 Regional distribution of global urban population: prepared by author, source: United Nations ON THE ENEREGY VISION Picture 1: ssguy, Shutterstock.com, https://www.shutterstock. com/image-photo/future-electrical-productionshanghaichina-246420169 (13/03/2017) Picture 2: prepared by author, source: IEA WEO 2011 Distribution of Regional Energy Consumption in %: prepared by author, source: BP, World Energy Outlook, 2016. Ecological footprint of our planet in 2015: worldmapper.org, http:// www.worldmapper.org/display.php?selected=322 (13/03/2017) Picture 3: Shutterstock.com FUTURE OF CITIES Picture 1: 3000ad, Shutterstock.com, https://www.shutterstock. com/image-illustration/science-fiction-city-glass-metallicstructures-211565350 (13/03/2017) Picture 2: iurii, Shutterstock.com, https://www.shutterstock.com/ image-illustration/future-city-on-coast-384057364 (13/03/2017) The 15 largest urban agglomerations ranked by population size, prepared by author, source: UN World Urbanisation Prospects 2014 Picture 3: Jon Bilous, Shutterstock.com, https://www.shutterstock. com/image-photo/walkway-park-skyscrapers-bonifacio-globalcity-452086900 (13/03/2017) Picture 4: Funny Solution Studio, Shutterstock.com, https://www. shutterstock.com/image-photo/aerial-panoramic-view-bigmodern-city-551109592 (13/03/2017) TECHNOLOGICAL VISIONS 2050 ”Title picture”: Zapp2Photo, Shutterstock.com, https://www. shutterstock.com/image-illustration/industrial-40-cyber-physicalsystemsconcept-476349103 (13/03/2017) Picture 1: The U.S. Food and DrugAdministration, wikimedia. org,https://commons.wikimedia.org/wiki/File:Stem_Cell_Research.

jpg(13/03/2017) Timeline: prepared by author Picture 2: Peter Potrowl, Wikipedia.org, https://ca.wikipedia.org/ wiki/Robot_industrial#/media/File:Robot_ABB_3.jpg Picture 3: U3D, shutterstock.com, https://www.shutterstock. com/hu/image-illustration/monorail-futuristic-train-tunnel-3dillustration-532978156 (13/03/2017) Picture 4: GualtieroBoffi, shutterstock.com, https://www. shutterstock.com/hu/image-photo/delivery-3d-drone-townbackground-322708988 (13/03/2017) SINGULARITY UNIVERSITY University logo: https://su.org/ (16/03/2017) Picture 1: https://gigaom.com/2014/03/04/a-day-at-singularityuniversity-where-the-future-belongs-to-glowing-plants-androboticelephants/(10/04/2017) THE FUTURE OF EDUCATION Picture 1: Wichy, Shutterstock.com, https://www.shutterstock.com/ hu/image-photo/businessman-wire-frame-hand-holding-glow387365119?src=Q2jTugREUil-e7GvLLKUNA-1-0 (16/03/2017) Picture 2: Evikka, Shutterstock.com, https://www.shutterstock. com/hu/image-photo/london-england-may-31-science-museum303360944?src=gmZjaiYoa5aGIWfVkwpEFQ-1-56 (10/04/2017) Virtual reality: http://www.digitaltrends.com/mobile/galaxy-s7how-to-watch-vr/ (16/03/2017) The role of 3D printers in classrooms: http://www.materialise.com/ blog/submit-ideaadding3d-printed-items-classroom/ (16/03/2017) Picture 3: cowardlion, Shutterstock.com, https://www.shutterstock. com/hu/image-photo/tokyo-japan-november-27-2015-national-472893964 (16/03/2017) NAO robot: https://www.ald.softbankrobotics.com/en/cool-robots/ nao (16/03/2017) Characteristics of student-centred education: https://s3-eu-west-1. amazonaws.com/school-in-the-cloud-production-assets/toolkit/ SOLE_Toolkit_Web_2.6.pdf (06/03/2017) Changes in education: prepared by author, source: KOUTSOPOULOS, Kostis C. – PAPOUTSIS, Panos (2016): SchoolonCloud: Transforming Education. In: Educational Policy Analysis and Strategic Research, Vol. 11, No. 1, 2016, pp 31-46. http://www.inased.org/epasad/v11n1/ EPASADv11n1.pdf Picture 4: franz12, Shutterstock.com, https://www.shutterstock. com/hu/image-photo/woman-glasses-virtual-reality-futuretechnology-530514940 (06/03/2017) HUMAN RESOURCES OF CYBERSPACE “Title picture”: Tcharts, shutterstock.com, https://www.shutterstock. com/hu/image-photo/smart-city-wireless-communicationnetworkabstract-490458982 (13/03/2017) Picture 1: SupphachaiSalaeman, shutterstock.com, https://www. shutterstock.com/hu/image-vector/vector-abstract-backgroundinternet-things-sphere-339377579 (13/03/2017) Picture 2: Belekekin, shutterstock.com, https://www.shutterstock. com/hu/image-illustration/cloud-computing-laptops-105420134 (13/03/2017) Picture 3: A-image, shutterstock.com, https://www.shutterstock. com/hu/image-vector/smart-home-internet-things-conceptcloud-77469792 (13/03/2017) Picture 4: StockFrame, shutterstock.com, https://www. shutterstock.com/hu/image-photo/worker-starts-engine-onglassboard-446727694 (13/03/2017) Picture 5: Zapp2Photo, shutterstock.com, https://www.shutterstock. com/hu/image-photo/industry-40-concept-hand-holdingtablet-480408787 (13/03/2017) Picture 6: NASA images, shutterstock.com, https://www. shuterstock.com/hu/image-photo/spacecraft-progress-orbitingearth-elements-this-531066583 (13/03/2017) DIGITAL ECONOMY Picture 1: ESB Professional, shutterstock.com, https://www. shutterstock.com/hu/image-photo/top-view-businessmanhandworking-modern-319414127 (13/03/2017) Picture 2: Savgraf, shutterstock.com, https://www.shutterstock. om/hu/image-vector/modern-background-business-magazinebrochure-cover-374280157 (13/03/2017) Picture 3: TitimaOngkantong, shutterstock.com, https://www. shutterstock.com/hu/image-vector/dark-blue-light-abstracttechnology-background-304056263 (13/03/2017) Picture 4: Imfoto, shutterstock.com, https://www.shutterstock.com/ hu/image-photo/kristianstad-sweden-march-20-2016-charging-396690856 (13/03/2017) SECURITY POLICY CHALLENGES AND TRENDS IN THE MID-21ST CENTURY Global maritime trade routes: Csizmadia, Norbert: Geo-moment

How the war map will change based on the research of Professor Håvard Hegre and his collaborators: http://www.dailymail. co.uk/news/article-2237378/Peace-time-Scientist-makes-boldprediction-war-wane-halve-40-years.html 2050 – THE PARIS AGREEMENT Banquet of the Amsterdam Civic Guard in Celebration of the Peace of Münster: Wikipedia, https://en.wikipedia.org/wiki/Bartholomeus_van_der_Helst (13/03/2017) The long history of oil prices: prepared by author, source: BP, NBER/ FederalReserve Bank of St. Louis, Haver Analytics The world’s oil reserves: prepared by author, source: World AffairsMonthly,http://worldaffairsmonthly.com/index. php?date=March-2011 (13/03/2017) Europe 1648: https://jessedelphinjamesarthistory.wordpress. com/2014/11/06/revolutions-in-16th-century-western-europeprotestant-reformation-its-effect-on-art/ (13/03/2017) States involved in the thirty years’ war: prepared by author, source: Wikipedia, https://hu.wikipedia.org/wiki/Harminc%C3%A9ves_h%C 3%A1bor%C3%BA(13/03/2017) Picture 1: prepared by author, source OrientalReview,http://orientalreview.org/2014/08/01/the-american-aggression-enablementact-andthe-us-eurasian-thrust-i/(13/03/2017) Top three countries by economic dominance: prepared by author, source: ArvindSubramanian City states: prepared by author, source: Anders Sundell, www.twitter.com/anderssundell (13/03/2017) SINGULARITY AND SYNCHRONICITY Picture 1: Sdecoret, shutterstock.com, https://www.shutterstock. com/hu/image-illustration/network-data-exchange-overplanetearth-520081672 (16/03/2017) typology of economic cycles: edited by author Kondratieff cycles from the 1800s until today: edited by author Seasons of Kondratieff cycles: edited by author,source: https:// northcoastinvestmentresearch.wordpress.com/2009/02/02/thekondratieff-cycle/ (16/03/2017) Change curve demonstrating the dynamics of changes: edited by author, source: Oliver Recklies: ManagingChange – Definition and PhasesinChangeProcesses, Recklies Management Project GmbH, 2001. Picture 2: Agsandrew, shutterstock.com, https://www.shutterstock. com/hu/image-illustration/fractal-city-series-compositionthreedimensional-154434914 (16/03/2017) Six epochs of evolution: edited by author Picture 3: Tung Chung, shutterstock.com, https://www.shutterstock.com/hu/image-photo/ close-old-english-dictionary-pageword-510238216 (16/03/2017) THE NEW THEORY OF THE SUN AND LIFE: THE HELIOS THEORY Picture 1: Skylines, shutterstock.com, https://www.shutterstock. com/hu/image-photo/our-earth-cosmos-bright-sun-elements-271046648 (16/03/2017) Picture 2: https://www.pinterest.com/explore/august-31/dinamó: Carpenter et al., 2005., http://www.grandpierre.hu/site/2016/07/ heliosz-elmelet-nap-mint-kozmikus-e8loleny-ipm-2016-junius-24-29/ (16/03/2017) Picture 3: Igor Zh., shutterstock.com, https://www.shutterstock. com/hu/image-photo/abstract-fantastic-background-full-suneclipse-222863752 (16/03/2017) BOOK RECOMMENDATIONS Technocracy In America: https://www.amazon.com/TechnocracyAmerica-Info-State-Parag-Khanna/dp/0998232513/ref=sr_1_ sc_1?ie=UTF8&qid=1489668346&sr=8-1-spell&keywords=tehnocra cy+in+america (16/03/2017) The Girl at the Baggage Claim: Explaining the East-West Culture Gap: https://www.amazon.com/Girl-Baggage-Claim-ExplainingEast-West/dp/1101947829/ref=sr_1_1?s=books&ie=UTF8&qid=148 9668408&sr=1-1&keywords=the+girl+at+the+baggage+claim+expl aining+the+east-west+culture+gap (16/03/2017) China's Asian Dream: Empire Building along the New Silk Road: https://www.amazon.com/Chinas-Asian-Dream-Empire-Building/ dp/1783609230/ref=sr_1_1?s=books&ie=UTF8&qid=1489668463 &sr=1-1&keywords=China%27s+Asian+Dream%3A+Empire+Building +along+the+New+Silk+Road+- (16/03/2017) Earning the Rockies: How Geography Shapes America's Role in the World: https://www.amazon.com/Earning-Rockies-GeographyShapes-Americas/dp/0399588213/ref=sr_1_1?s=books&ie=UTF8& qid=1489668504&sr=1-1&keywords=EARNING+THE+ROCKIES%3A +HOW+GEOGRAPHY+SHAPES+AMERICA%27S+ROLE+IN+THE+WO RLD (16/03/2017) Africa's Long Road Since Independence: The Many Histories of a Continent: https://www.amazon.com/Africas-Long-Road-SinceIndependence/dp/1849045151/ref=sr_1_2?s=books&ie=UTF8&qid =1489668530&sr=1-2&keywords=AFRICA%27S+LONG+ROAD+SIN CE+INDEPENDENCE%3A+THE+MANY+HISTORIES+OF+A+CONTIN ENT (16/03/2017) East of India, South of China: Sino-Indian Encountersin Southeast Asia: http://www.amazon.in/East-India-South-China-Sino-Indian/ dp/0199461147 (16/03/2017)

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CREDITS EDITOR-IN-CHIEF Norbert Csizmadia MANAGING EDITOR Anton Bendarzsevszkij EDITORIAL BOARD Ágnes Bernek Anton Bendarjevsky László Körtvélyesi Péter Szatmári György Szapáry István Szilágyi Ákos Vajas COPY EDITOR István Czene ART EDITORS Gyula Nagy PUBLISHED BY: Pallas Athéné Geopolitical Foundation H-1013 Budapest, Döbrentei utca 2., Hungary

AUTHORS Miklós Barsy Anton Bendarjevsky Chen Zhimin Norbert Csizmadia Ráhel Czirják Viktor Eszterhai George Friedman László Gere Atilla Grandpierre Zsolt Hetesi Józsefné Kilin Viktor Kiss Péter Klemensits György Matolcsy Erzsébet Nováky ViktorOrbán Eszter Polyák Tamás Rózsás Fruzsina Simigh Thien Kuo-li Thierry Gaudin Zita Vajda Yan Xuetong DATE OF PUBLICATION April 2017

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ABOUT HUG

LEGAL & PRIVACY STATEMENT

Hungarian Geopolitics (HUG) is a Pallas Athéné Geopolitical Foundation, which relies on Hungarian and foreign authors to present the most recent and the most interesting values, achievements and changes seen in the current Hungarian and global geopolitical and geostrategic scene, as well as in other related fields of science (social science, economics). HUG aims at inspiring the community interested in geopolitics, in addition to the fields of science, to create new value through extensive knowledge.

HUG (Hungarian Geopolitics) Magazine is a free publication, and not intended for sale. All information and content published in HUG is the intellectual property of Pallas Athéné Geopolitical Foundation (PAGEO). No content of the publication may be copied, distributed, published or used in any way, in whole or in part, without prior written permission from the foundation. CONTACT Please send your questions, comments and feedback to our staff at hug@pageobudapest.hu.

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An essential selection of

book workshops consisting of 4 titles

(SCENARIOS OF THE FUTURE) George Friedman and György Matolcsy

“expect the unexpected” “see the events of the world through the eyes of decision-makers”

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