The Rome Scenarios

Imagine the World to 2050

The Rome Scenarios explore the chaos of ‘Dark Ages’, a world of public health, economic and climate failures that accelerate at exponential rates, beyond the adaptive capacity of national and international leaders. ‘Walled Gardens’ is a world of enlightened and inclusive nationalism, a patchwork of winners and losers. ‘Renaissance’ describes a vision of mutual understanding and multi-lateral collaboration that many people might like to create for future generations.

The underlying question is how the complex narratives beneath these simple headlines may play out.

Scenarios are not predictions. They are frameworks within which to navigate: to set a course that may have many possible destinations.

The Rome Scenarios are best seen as ‘scenarios as a service’—a strategic framework, from which to explore how companies, sectors, countries or global institutions can develop their own ‘portfolio of options’.

We embed and link ‘weak signals’ to each scenario. As these vital signs gain momentum, we can see how one scenario is becoming more likely than another. The weak signals are developed by domain experts, using specialist futures research methods and state-of-the-art artificial intelligence.

We identify, track and interpret emerging narratives, putting into practice what Robert Schiller has popularised as ‘narrative economics’. The difference is we explore macro-economic indicators, politics, global health, cultural change and leading-edge technologies.

We also monitor potential wild card events—events that are certain and will have a major impact— such as pandemics. We scan intellectual property landscapes for early signs of breakthrough inventions. In other words, we systematically explore extreme possible future worlds and the earliest signs of disruption.

Think not just of the world ‘in 2050’, but changes over time: ‘towards 2050’.

Post-COVID-19

Each scenario begins by exploring post-COVID-19 worlds, then examines how countries, sectors, regions and the international community may respond to everything from climate change to artificial intelligence. We explore possible worlds—three imagined futures.

The scenarios are shaped by the ‘high impact uncertainties’ of early 2020, the outcomes of which will drive structural change, from public health in a post-pandemic world and global warming, to the fragility of the biosphere and the world’s cities. We explore nationalist politics, localisation, trade and investment, machine-driven innovation, artificial intelligence and ‘virtualisation’. We look into worlds of remote services and 3D manufacturing, robotics and the outcomes in the race for military and technological dominance. We follow pathways from cyberwar to the future of misinformation and propaganda.

The world is shaped by major events, many of which reveal weaknesses in governance and stewardship. Looking back on catastrophic events like 9/11, the Challenger disaster, hurricane Katrina and the financial crisis of 2008, ‘failure of the imagination’ and ‘too little, too late’ are recurring themes. The pandemic follows the same pattern.

We have extended the timescale of the scenarios to 2050, aligning with the requirements set out by regulators such as the Prudential Regulator Authority (PRA) and the Financial Conduct Authority (FCA). These rules, which call for insurers and financial institutions to take the long view about climate risk, develop scenarios and produce strategic responses, are part of a global cultural change. Governance and long-term stewardship are paramount.

Similar rules are being adopted by other regulators around the world. The FCA has adopted many of the principles of the Task Force on Climate-related Financial Disclosure (TCFD) which calls for listed companies to use scenarios to stress test resilience and again, take the long view, decades ahead.

Radical change

It is rare that all scenarios describe radical change. These do. This reflects the fundamental complexity that pervades not just human geopolitical and economic activity, but human interaction with the natural world. There are no business as usual outcomes. Even more extremes are possible. We explore them in separate ‘Long Reads’ and ‘Briefings’.

The principle is that history is made not simply by events, but by how people act in the face of imagined futures, which can drive revolutionary change, as recent developments amidst the COVID-19 crisis have demonstrated.

These are not forecasts, but rather answers to the question ‘what might happen?’ They are based on the principle that extreme futures are critical to political and corporate leaders, policymakers and investors alike as they attempt to navigate an increasingly uncertain world. They provide not only stress tests, but a framework within which to develop strategic options in answer to the question ‘what might we do?’

Imaginative responses to these two questions represent the fundamental challenges to decision-makers. Strategies and policies without scenarios amount to flying blind. Scenarios without strategy are empty exercises, with no answers to tough questions.

Policymakers have demonstrated over the last two decades and more that they are ill-equipped to meet these challenges. There is a contradiction: on the one hand, political leaders, economists and central banks have begun to understand the nature of an increasingly interconnected, complex and uncertain world. Yet they have continued to produce linear forecasts, wrapped within single narratives.

The result? First, the forecasts are invariably wrong. This has undermined the credibility of the so-called ‘elite’, who have been forced to acknowledge their lack of understanding and the limitations of their models. The COVID-19 pandemic will undermine public trust in some of the most exposed countries.

Second, the forecasts have often become entrenched in strategy and policy terms, which leads to poor judgment and a failure to anticipate and adapt to rapidly changing operating environments.

From Scenarios to Hedging Strategies

The approach outlined here aims to meet some of these limitations. To illustrate, in this context, resilience is defined as strategic options that will work in any future scenario. In other terms, this amounts to a fully hedged strategy or investment portfolio. At worst, options will work in none, raising fundamental, even existential questions.

Think, for example, of the intersections between industry sectors and asset classes–such as water, energy and agricultural production. Innovation in these areas is vital to resilience and so becomes a major source of future value, even in the ‘Dark Ages’ scenario.

Similarly, the race to find treatments and vaccines to respond to COVID-19 is characterised by exponential innovation, driven by breakthroughs in machine-aided bioscience, invention and knowledge sharing. Systemic invention in sensors and artificial intelligence will be a primary driver of growth.

The creative and cultural industries will also likely continue to grow, particularly in ‘Walled Gardens’. So too, from another perspective, privacy and security technologies.

On the other hand, the endgame for the fossil fuel industry is already part of mainstream investment narratives.

Over time, the signs that one or more of the scenarios are more likely than others will begin to emerge. The scenarios will be updated as circumstances change.

Think of this as a little time travel, something we all do naturally. Suspend disbelief.