The global economy could follow markedly different paths over the next 25 years, with four scenarios modelled by think tank Boston Consulting Group Henderson Institute (BHI) indicating that global GDP growth could slow to about 1.8% a year or rise to 5% a year and the global economy could reach anywhere from 1.6- to 3.4-times the size of the current global economy by 2050.

Similarly, the different scenarios indicate that global trade could fall to about 35% of GDP – near Cold War–era levels – or remain near current levels of about 60%, while low-carbon electricity could account for between 55% to 90% of power generation by 2050.

The institute modelled a Competing Blocs scenario in which geopolitical tensions divide the world into competing blocs, reducing cooperation and reshaping global trade.

In this scenario, global trade falls to about 35% of global GDP, down from 57% in 2024 and reversing decades of globalisation, and defence spending rises to about 7% of global GDP, as countries prioritise security and self-sufficiency.

In the Competing Blocs scenario, global GDP growth slows to about 1.8% a year by 2050, which is the lowest across the four scenarios, underpinned by government spending on national security, pensions, and climate mitigation.

BHI also modelled a Digital Darwinism scenario in which rapid technological progress continues under limited regulation, driving strong growth while concentrating wealth and power among leading companies and technology-rich nations.

In this scenario, global GDP grows at 4% per year, resulting in a near tripling of GDP, and the richest 1% holds nearly half of global wealth, while the middle class continues to shrink.

Further, gig-style and short-term contract work expands as AI and automation displace routine knowledge work, and defence spending rises to about 4% of GDP, up from 2.4% in 2024, as the global order becomes more fragmented.

However, global trade and supply chains remain open under this scenario, driven by commercial interests, BHI says.

The institute further modelled an AI Abundance scenario in which global cooperation on AI standards leads to faster productivity growth, wider access to technology, and abundant low-carbon energy.

In this scenario, global GDP more than triples, growing by about 5% a year from 2025 to 2050, and average working hours fall by about 25%, with four- or even three-day work weeks becoming common in some regions.

Additionally, AI-supported advances in new materials and carbon removal put the world on a delayed but credible path to net-zero emissions in this scenario.

The final scenario BHI modelled is Climate Coalition in which a series of extreme weather events in the late 2020s push governments, industries and consumers to prioritise climate resilience, thereby accelerating the shift to low-carbon energy and infrastructure.

BHI expects global warming to stabilise at about 1.8 °C in this scenario, and for carbon markets to expand globally, with most major economies participating by 2040.

This Climate Coalition scenario also indicates that the share of fossil fuels in the energy mix falls from 81% today to 35% in 2050, while electricity is generated almost entirely from low-carbon sources.

This scenario also forecasts that global GDP growth will average about 2.5% each year, which reflects a focus on the climate transition, slower population growth, and ageing societies.

RESPONSES
Organisations should enhance structural resilience by rebalancing toward resilience over efficiency to maintain operations in a more volatile environment.

Companies should also build strategies for inter-generational work, more flexible roles, and talent mobility, as well as recruit more widely, especially from emerging labour markets.

BHI also recommends that organisations build digital flexibility and trust and take a modular approach to technology and data stacks that accounts for rapidly changing technologies.

Similarly, organisations should build the capability to act on changes in regulation, geopolitics, resources or technology quickly.

Finally, organisations should embrace a broader societal role and shoulder more responsibility for workers’ wellbeing, local resilience, crisis management and community needs, the institute recommends.