Economic and social challenges for established superpowers

Superpowers aim to hold onto their global influence, but they often face significant economic and social hurdles that can weaken their position. These issues affect long-standing powers like the USA and the EU, which have maintained dominance for decades but now encounter various pressures.

Key economic problems

Established superpowers deal with ongoing economic difficulties that impact their growth and stability.

These problems can reduce their global influence as resources become stretched:

• Debt and unemployment - High levels of debt and job losses affect all superpowers, often stemming from global events like the 2008 financial crisis, which doubled global public debt between 2008 and 2017 after the USA's housing market collapse triggered a worldwide recession.
• GDP per capita decline in the EU - The EU, formed in 1993 with high-GDP countries, has seen its per capita GDP fall as lower-GDP nations like Poland and Hungary joined in 2004, diluting overall economic strength.
• Economic restructuring - Many cities have shifted from manufacturing to service industries, leading to job losses and decline; for example, Detroit in the USA and Turin in Italy experienced significant unemployment as factories closed.
• Reliance on migrant labour - Sectors like agriculture and care work depend on low-paid migrants, but as emerging economies grow, workers may prefer those destinations, causing shortages in high-skill areas such as health and social care in Germany.
• Difficulty attracting investment - Higher wages and back-office costs push transnational corporations (TNCs) to expand in regions like Asia and Africa through offshoring and outsourcing, reducing investment in the USA and EU.

Key social problems

Social challenges add to the economic strain, often requiring more government spending and affecting workforce productivity.

Examples of social challenges:

• Ageing populations - Many EU countries have populations where people aged 65 and above make up 21% (as of 2021), increasing healthcare demands and leading to higher pension ages.
• Energy insecurity - The USA and parts of the EU increasingly rely on foreign supplies of fossil fuels, weakening their ability to control trade prices and overall power status.

Challenges from emerging powers' demographics

Emerging powers like China and India are gaining influence due to favourable population structures. These countries often have youthful populations, meaning a larger proportion of people are of working age (15-64).

The dependency ratio is the proportion of the population that must be supported by the working population (aged 15-64).

Emerging powers have lower dependency ratios, resulting in:

• Reduced social welfare costs, such as pensions and disability allowances
• An expanding economically active population, boosting productivity and economic growth

This contrasts with the higher dependency ratios in the USA and EU, where ageing populations increase financial burdens.

High costs of maintaining military power

Superpowers invest heavily in their militaries to preserve global influence, but these expenses can strain budgets and spark debates about alternative uses for the funds. In 2018, the USA spent 3.3% of its GDP on the military, while the EU spent 1.4%, totalling around US $900 billion combined.

Reasons for high military spending

• Equipment upgrades - Established powers regularly modernise weapons, which can become financially unsustainable; for example, the UK's Trident nuclear submarine programme has cost about £20 billion, with debates over further expansions.
• New technology development - Projects like the UK's Royal Air Force (RAF) introducing the Tempest aircraft by 2035, at around £2 billion each, add to long-term costs.
• Response to terrorism - Events like the September 11, 2001, attacks on New York's World Trade Center have led to increased spending on intelligence gathering and international operations to prevent future threats.

Debates around military expenditure

Many argue that military budgets should redirect funds to areas like foreign aid, poverty prevention, and education, as the focus on defence diverts resources from domestic needs.

Declining dominance in space exploration

Space exploration has historically been a way for superpowers to demonstrate technological superiority, but established powers like the USA are facing new competition. This shift reduces their exclusive control over space achievements.

Historical context of the space race

• The 1950s and 1960s space race between the USA and the USSR involved massive investments for milestones.

• The USSR achieved the first human in space (Yuri Gagarin in 1961).

• The USA prioritised the first Moon landing (Neil Armstrong and Buzz Aldrin in 1969).

Current challenges and budgets

The USA's National Aeronautics and Space Administration (NASA) had a 2019-2020 budget of US $22.6 billion, but critics suggest this should address Earth-based issues instead.

Rising competition from other nations and private companies

• India's space programme - Launched in 1962, India has sent hundreds of satellites into orbit, including its first Mars mission in 2014.
• Private enterprises - Companies like Virgin Galactic and SpaceX are investing in space tourism, making leisure-based space travel more feasible.

This competition signals a broader sharing of space exploration influence.

Challenges from emerging powers and future scenarios

As globalisation accelerates, the global balance of power is shifting rapidly, with emerging powers challenging established superpowers. Factors like population trends and resource management will shape future influence.

Key drivers of change

• Slowing global population growth - The global fertility rate dropped from 5 in 1960 to 2.4 in 2020, reducing the importance of large populations for power; instead, factors like international decision-making and climate change response may matter more.
• Unforeseen global problems - Events like new wars or pandemics (e.g., COVID-19) could disproportionately affect advanced economies, allowing emerging powers to gain ground.
• Self-sufficiency in resources - Future superpowers may be those that secure renewable resources (e.g., water) and non-renewable ones (e.g., fossil fuels and metals), enabling domestic provision and control over trade prices.

Renewable energy sources, such as wind and solar power, could enhance self-sufficiency for adaptable nations.

Possible future global power systems

The distribution of power may evolve in different ways based on current trends.

These outcomes depend on how countries navigate economic, social, and environmental pressures.