A new global report has warned that the world economy could follow sharply different paths over the next 25 years, with outcomes ranging from an era of AI-driven abundance to a future marked by geopolitical rivalry, climate pressure and widening inequality.
The research by the BCG Henderson Institute (BHI), the think tank of Boston Consulting Group, outlines four plausible scenarios for the world in 2050, arguing that business leaders must prepare now for multiple possible futures instead of betting on just one direction.
According to the report, titled Beyond Tomorrow: Four Scenarios for the World of 2050, global GDP growth could slow to about 1.8% a year or accelerate to 5% annually, depending on how technology, geopolitics, climate and society evolve over time.
What does the BCG report say about the future of the global economy?
The report says the global economy in 2050 could be anywhere between 1.6 and 3.4 times larger than it is today, showing the huge uncertainty facing governments, businesses and investors.
It also projects major changes in trade, energy and defense spending.
Under some scenarios, global trade could fall to around 35% of GDP, a level similar to the Cold War era, while in other futures it could remain close to current levels of about 60%. The report also suggests defense spending could climb as high as 7% of global GDP, while low-carbon electricity could make up between 55% and 90% of total power generation.
The study was based on a century of historical data and analysis of more than 100 megatrends across technology, geopolitics, climate, society and economics.
BCG says next 5 years will shape next 25 years
Nikolaus Lang, global leader of the BCG Henderson Institute and coauthor of the report, said leaders must stop thinking of the future only in extremes.
“The decisions made in the next 5 years will shape the next 25,” Lang said.
He added that the future is often framed as either total collapse or total abundance, yet real-world outcomes are likely to fall across a wider range of possibilities that leaders must prepare for in advance.
What are the 4 possible futures for 2050?
The report identifies four scenarios that could define the global economy and business environment by 2050.
1. AI Abundance
In this scenario, countries cooperate on AI standards, productivity rises rapidly, access to technology widens and low-carbon energy becomes abundant. Global GDP grows by about 5% annually from 2025 to 2050, making it the fastest-growth scenario in the report.
The study says average working hours could fall by about 25%, with three-day or four-day workweeks becoming more common in some parts of the world. AI-driven breakthroughs in new materials and carbon removal also put the world on what the report calls a delayed but credible path to net zero emissions.
2. Battling Blocs
This scenario envisions a more divided world shaped by geopolitical tensions and competing power blocs. Cooperation weakens, trade contracts and countries prioritise security and self-sufficiency.
Global trade falls to around 35% of GDP, down from 57% in 2024, while defense spending rises to about 7% of global GDP, the highest among all four scenarios. In this future, annual GDP growth slows to around 1.8%, the lowest level in the report.
3. Climate Coalition
In this future, a string of extreme weather events in the late 2020s pushes governments, businesses and households to prioritise climate resilience. The result is faster investment in low-carbon infrastructure and energy systems.
The report says global warming stabilises at about 1.8°C, carbon markets expand across major economies by 2040 and the share of fossil fuels in the energy mix drops from 81% today to 35% in 2050. Electricity generation becomes almost entirely low-carbon, while annual GDP growth averages 2.5%.
4. Digital Darwinism
The fourth scenario describes a future in which rapid technological progress continues with limited regulation, creating strong economic growth but concentrating wealth and power in the hands of major firms and tech-rich nations.
Under this path, global GDP grows by 4% a year, nearly tripling by 2050. However, the richest 1% control almost half of global wealth, while the middle class shrinks and gig-style contract work expands as AI and automation replace routine knowledge jobs. Defense spending also rises to about 4% of GDP as the world becomes more fragmented, even though trade and supply chains remain open.
What should business leaders do now?
The report says there are several “low regret” moves that businesses should begin making immediately, regardless of which scenario eventually unfolds.
These include strengthening resilience instead of focusing only on efficiency, redesigning talent strategies for aging populations and AI disruption, and building more flexible and trusted digital systems. The report also urges leaders to improve their ability to track regulation, geopolitics, resources and technology trends, and to respond more quickly when conditions shift.
Businesses are also being encouraged to prepare for a broader role in society, including greater responsibility for worker well-being, community resilience and crisis response.
Experts warn against planning for only one future
Alan Iny, a partner and director at BCG, a BCG Henderson Institute Fellow and coauthor of the report, said the forces shaping the future are already visible today.
“No one can predict exactly what 2050 will look like, but the forces shaping it are already visible,” Iny said.
He warned that planning for only one possible future is risky, adding that businesses with the strongest advantage will be those that prepare for multiple scenarios early and help influence the direction events take.
