This paper discusses three long-term forces that are acting on the global economy and their implications for companies and policy-makers:

  1. the transition in geopolitics away from a global order based on international co-operation, or “deglobalization”;
  2. the spread of new technology, particularly artificial intelligence, through the “fourth industrial revolution”; and
  3. the steady buildup of debt—public and private—in most countries.

Deglobalization leads to reduced investment and the deconstruction of global value chains, which will reduce global potential economic growth and living standards. The fourth industrial revolution will foster a period of stronger productivity growth and low inflation, accompanied by significant labour market disruptions. High and growing debt levels raise a range of risks associated with financial vulnerabilities. As well, the coincident rise in populism with doubts about the value of central bank independence risks an alignment of incentives between governments and highly indebted households, favouring a return to inflationary policies in the future. The paper concludes with a list of inferences and long-term policy implications. It was developed from a talk first delivered at the Spruce Meadows Changing Fortunes Round Table in Calgary, Alberta, in September 2019.