The end of each year produces a jumble of reviews, predictions, and resolutions. Inevitably, we look back on the prior 12 months and go list crazy, generating reviews of the year’s best books, movies, and music; the most popular search terms; and even lists of our favorite lists. But we also look forward, predicting what’s in store for the world in the coming year and hoping that our guesses will help us claim unique forecasting insight. And many of us also reflect on our shortcomings, resolving to be better next year.
Rarely, though, do we do all three at once: reviewing our predictions in order to resolve to make better ones. We should, and that’s what I’m going to attempt here.
Each year, I produce a set of predictions. Unlike others, I don’t focus on the coming year and instead look out five years. The conventional wisdom is that predicting five years is much more difficult than predicting one year. Who could possibly know what will emerge over half a decade?
I see the future differently. To me, the opposite is true. A one-year timeframe is noisy, while a longer horizon allows you to zoom out, analyze overarching trends, and look through the short-term cross currents that domineer the day. Looking further helps identify signal amidst short-term noise. For me, this works best if I deliberately evaluate and integrate feedback about how my predictions fare over time.
In his essay “Managing Oneself,” management guru Peter Drucker highlighted the importance of deliberate self-assessment: “The only way to discover your strengths is through feedback analysis. Whenever you make a key decision or take a key action, write down what you expect will happen. Nine or 12 months later, compare the actual results with your expectations.” The end of a year is a logical point for such self-evaluation; we all should reflect on where we thought our actions would take us in the past year, and whether reality and those expectations lined up.
Since my predictions are on a five-year basis, it is too early to make definitive assessments. In the spirit of transparency, however, I’ll go over some notable—albeit highly preliminary—successes and failures in my 15 Predictions for ’15-’20. By reviewing my predictions in public in writing, I’m hoping to keep myself honest and resolve to improve my 16 predictions for ’16-’21. Watch for them in the near future.
On the global economy, a few of the trends I highlighted have borne out more quickly than I predicted. In 2015, India did indeed surpass China as the fastest growing large economy in the world. China’s GDP growth is falling, but it is unclear whether it will dip below 5% during the next four years as I predicted. It did, however, move to end the one-child policy this year, as I thought it would. Relatedly, the Chinese-funded canal in Nicaragua—which I worried would become endangered by turmoil in the Chinese economy—was jeopardized this past year, as the billionaire helping to foot the bill lost 85% of his net worth in the stock market. Clearly, China remains too important to dismiss and must be followed closely.
When it comes to oil prices, they haven’t yet rebounded as I suggested they might before 2020. Indeed, they’ve done the opposite – falling further than I expected as OPEC refused to cut production. Lower oil prices have spurred consumption as I thought they might, and interestingly, Arctic tensions are rising even as energy companies have pulled out of the area. Food prices have yet to rise as I predicted, instead falling to multi-year lows. It's worth watching consumption patterns, particularly for animal protein, as the world's middle class continues to grow.
In the realm of international politics, I also had some notable successes—and misses. Sadly, my prediction that terrorism would strike previously “safe” places was tragically confirmed with the attacks in Paris and San Bernardino. China has continued its saber-rattling in the South China Sea, and state-sponsored cyber warfare made global headlines. In Europe, the flood of inbound refugees has both increased and decreased the likelihood of Europe’s dis-integration. They may help alleviate demographic pressures, but also risk encouraging nationalism and sealed borders. The jury is still out.
Transparent feedback analysis is critical for anyone issuing any kind of forecast. In fact, it’s key to “managing ourselves” in general. As the new year rolls in, take a moment to look back and assess how you’ve been doing. Then resolve to manage yourself in the year ahead by learning from the past to navigate the future. Best wishes for a productive 2016. Happy New Year!