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Informing You - November 2013

I was watching an interesting TV programme a couple of weeks ago about the increase in the world's population. It was titled "Don't Panic" which I thought was odd as everything I had been led to believe about the future population suggested that panicking was a sensible thing to do. I was aware for example that the global population had increased 4 fold in the last 100 years and there was a further billion people being added to the population every twelve or so years. Priding myself on my maths I knew that meant in one hundred years time the population would be at least double its current level.

Oh dear, my ignorance was embarrassing. I was unaware for example that the number of babies being born globally peaked in 2000 and has actually fallen ever so slightly since. Nor was I aware (along with 90% of the public when they were asked) that the typical number of children a family in Bangladesh had was now two, the same as the UK. The programme pointed out that the reason why the world's population was going to increase in the coming years was not because we were churning out ever more babies but because the general health and well being in the world had improved to such an extent that those already born are living longer. In fact the programme suggested the world's population increase was slowing down and would probably peak at 11bn and level off thereafter.

Feeding and housing 11bn will be a challenge, but certainly not one that will be insurmountable especially as most of the growth, 3bn, is expected to be in Africa, a continent that has an abundance of potential in terms of increased agricultural production and improved irrigation. Also, even though we have seen our population soar, the proportion of the global population living in extreme poverty as defined by the UN is lower than ever. In fact the UN has a goal of eradicating extreme poverty in the next thirty years, and having seen the programme and the developments in this area I believe this is possible.

Now the presenter of the programme was not some starry eyed optimist but rather the esteemed statistician Dr Hans Rosling, who took great delight in pointing out that a group of chimpanzees randomly picking one of four potential answers would have a better track record than University graduates when it came to a test about what is actually going on in developing countries, so at least I was not alone in my ignorance.

The programme made me realise that a lot of my assumptions were based on "facts" I had heard years ago and I had never bothered to check if these were still accurate. Over the years there have been various "doomsday" predictions about the future of the human race. In 1798 a scholar named Thomas Malthus predicted the world would be exhausted of food by the mid 1900's if the population continued to increase by its rate at that time. A 1968 best seller, "the population bomb," predicted that global famine would be the norm from the 1970's and 80's onwards. Judging by the size of the people I see leaving Tesco beside my office that prediction appears to have been wide of the mark.

History has given us countless examples of when we have worried unnecessarily about things that quickly become irrelevant. In the late 1800's urban planners throughout the world held a conference about what to do with the manure produced by the hundreds of thousands of horses that were clogging up the streets of the great cities at that time. In New York alone 3 million pounds of manure was having to be cleared from the streets each day.

This was far more than the amount required by farmers and they were running out of places to put it. The problem was seen as so unsolvable that the planned ten day conference was ended after three. Predictions were made that eventually the manure would be storeys high and the streets impossible to navigate. Little did they know what Mr Benz was up to in his shed in Germany!

I would suggest that there are far more life changing technological advances around the corner than ever before and the ultimate benefits they will provide are unimaginable. One example is 3D printing, which as it develops may well revolutionise the way things are made. Rolls Royce are the latest company to announce that this is technology they anticipate using to make more and more parts within their engines. As this technology progresses the knock on effect may eventually be less need for goods to be transported and warehoused. It may sound ridiculous but the lorry, and the pollution it produces, may eventually go the way of the horse and car, with everything we need being "printed" in our own homes or at local depots. Probably as ridiculous as horses being replaced by cars would have sounded in 1880.

Who knows? One thing that is for certain is that human ingenuity normally means that we come up with solutions to our problems that cannot be predicted. Given there are more of us now than ever before and the number in University is higher than ever it would take a brave person, or a fool, to bet against the future being far brighter than you would be led to believe.

Steven Forbes
Managing Director
For and on behalf of Alan Steel Asset Management

Alan Steel Asset Management Ltd is authorised and regulated by the Financial Conduct Authority
The Financial Conduct Authority does not regulate tax advice

 


Steve
Author
Steve Forbes
Managing Director
Alan Steel Asset Management Ltd is authorised and regulated by the Financial Conduct Authority

The Financial Conduct Authority does not regulate tax advice

This letter is the personal view of Steve Forbes. Please check the appropriateness to your individual position with your adviser before taking or refraining from any action.