Introduction:
The world in 2035
THE FOUR POTENTIAL WORLDS OF 2035
What could the business world look like in 2035? How will it be influenced by evolving international regulations and the widespread adoption of advanced technologies like AI? And what are the implications for finance leaders?
We worked with experts from the realms of business and academia — providing insights across areas such as international relations and diplomacy, technology policy, financial analysis, corporate finance, and cybersecurity — to map out four potential scenarios for businesses in 2035.
Scenario 1
DIGITAL UTOPIA
In this world, regulatory convergence is driven by the ‘pull factor’ of a thriving global market. The economic boom is driven by the rollout of next-generation ICT, which encourages the world to go digital.
International regulatory convergence provides a ‘win-win’ for both developed and developing countries, resulting in a global digital economy. Internet access has become universal and more than two billion additional people come online worldwide. Governments have an overriding economic incentive to cooperate on harmonious standards and regulations in key areas to avoid missing out on the booming market.
Firms are even more reliant on digital networks and devices than they were ten years ago, and digital trade accounts for a much larger share of the economy. Extended reality (XR) and the Internet of Things (IoT) become a routine part of business, reducing barriers to remote work. Digital identity is also ‘cracked’: after several false starts, a secure, reliable blockchain-based system is developed and standardized internationally. However, advanced technologies introduce new security threats as regulation lags behind transformation.
Implications for the CFO:
GDP growth reaches 4%, with emerging markets doubling that. Increased automation and the globalization of labor markets prevent wage-price spirals, allowing central banks to keep interest rates relatively low. This is also the scenario with the lowest cost of capital.
Initially, transnational supply chains become more diversified, with firms having learned from the disruptions of the early 2020s. However, as new products emerge and global competition intensifies, many businesses are once again tempted to cut costs and enhance efficiencies at the expense of resilience.
Scenario 2
THE CYBERSPACE RACE
In this world, international competition drives an economic boom as each region competes to build the next-generation digital infrastructure. Regulatory divergence is a consequence of this competition, as each region pushes for technology that aligns with its own infrastructure and political values.
As the world inevitably becomes a collection of fragmented economies, regulators struggle to keep up. Many countries become vulnerable to increasing cybercrime. The rise in digital technologies creates demand for ‘internet sovereignty’: the idea that data should be kept at home.
The defining technological innovations in this scenario are around personal AI (PAI), with AI ‘companions’ playing the role of friend, private assistant, and finance manager. People use PAIs to handle communication, scheduling, and even purchasing decisions, with or without a ‘human in the loop’.
Implications for the CFO:
The world economy grows at 3%, driven by 6% growth in India and Southeast Asia. Global divergence limits international transfers of data, negatively impacting business. The average cost of capital rises with the division of the global financial system. The competing sides attempt to dominate the industries of the future, giving businesses access to finance at preferential rates.
In many cases, it is uneconomical for firms to develop in-house AI systems due to the range of low-cost, specialized cloud-based services on offer. However, these services are not generally traded internationally due to differing transparency and security requirements.
Scenario 3
A CRISES COALITION
In this world, regulatory convergence is driven by the need to respond to global crises, such as climate change, the impact of aging populations, and cybercrime as technology growth hits limits. The world is forced to cooperate despite political differences.
‘Homeshoring’ and ‘nearshoring’ continue, driven by climate-focused goals. Regulations channel technological innovation into areas deemed necessary to address global crises. These regulations create a level playing field, forcing firms across markets to compete to produce compliant goods and services.
The pace of technological change slows as AI reaches its limit. Cyberattacks become more frequent and costly as the IoT rolls out and hackers outpace the ability of cybersecurity providers. This becomes a major barrier to adoption and a bottleneck to economic growth.
Ongoing climate negotiations and rapid introduction of new rules and commitments result in an extremely unpredictable regulatory and policy environment.
Implications for the CFO:
GDP growth averages 2% in developed economies and 4% for emerging markets. Labor markets tighten as workforces age and shrink, driving a wage-price inflationary spiral. Business operations and transportation are disrupted by weather events. Utility costs rise for industry due to water scarcity and emissions taxes. The cost of capital for businesses rises due to uncertainty around the exposure of firms to risk from extreme weather and cyberattacks, and investors opt for safe assets. ‘Clean compute’ also becomes a major issue, with businesses required to report on their data usage as an integral part of their environmental impact.
Scenario 4
THE SILICON CEILING
In this world, technological progress hits limits and social resistance impedes digital innovations. Governments prioritize resilience over ease of doing business, making it more difficult to achieve a global consensus on regulations.
Societies’ dominant values are now reflected in their laws and regulations — a bid to preserve national and cultural identities in the face of uniformity due to the digital boom. The concept of ‘internet sovereignty’ gains traction.
The ‘AI bubble’ bursts as deep learning fails to live up to the hype, and industry awaits the next fundamental breakthrough. There are local and nationwide worker backlashes against technological disruption. Technological change is incremental as businesses and governments find novel applications for technologies developed in the 2010s and early 2020s. Cyberattacks cause major disruption to business.
Implications for the CFO:
Average growth falls to 1% in developed markets and 3% in emerging markets, due to the realignment of supply chains along geopolitical lines. However, growth is spread more evenly between markets, and central banks can cut rates to shore up weak economic growth.
As countries struggle to adapt to a world of confrontation, protectionism rises and the world adopts a ‘one company, many systems’ approach, localizing expertise and workforces. Increased sanctions lead to disrupted supply chains, reduced efficiency, and increased compliance costs. ‘Homeshoring’ and ‘friendshoring’ become priorities, spurred by government incentives.
A unified vision for the future
Our study reveals that business leaders and investors in our study are unified in their vision of the world in 2035. The majority of CEOs, CFOs, and line of business (LOB) managers believe we are headed toward a world shaped by tech-powered growth and international regulatory convergence: a Digital Utopia. Notably, investors display the most positive outlook.
INVESTORS’ AND BUSINESS LEADERS’ PREDICTIONS FOR THE WORLD IN 2035
TECH POWERED BOOM
INTERNATIONAL REGULATORY CONVERGENCE
Scenario 1
DIGITAL UTOPIA
INVESTORS
CFOs
LoBs
CEOs
Four-fifths of investors (80%) and 70% of business leaders (CEOs, CFOs, and LOB managers) believe that, in 2035, international regulatory standards will be largely harmonized. This would accelerate digital transformation, streamlining the adoption of advanced technologies and enabling the seamless exchange of data.
In addition, three-quarters of business leaders (74%) and investors (75%) believe that, in 2035, there will be global financial reporting standards, closing the gap between the US and the EU. Comparable data will help to streamline auditing practices and facilitate crossborder transactions.
THE PROPORTION OF BUSINESS LEADERS AND INVESTORS WHO BELIEVE THAT, IN 2035, INTERNATIONAL REGULATORY STANDARDS WILL BE…
Largely harmonized
Divergent
CFOs
73%
12%
CEOs
73%
12%
LoB Managers
64%
12%
Investors
80%
4%
In addition, the majority of investors (81%) and business leaders (72%) believe that, in 2035, technology, including AI, will supercharge economic growth and productivity. The same proportion of investors (81%) believe that in 2035, AI and automation will have completely reshaped organizations’ finance functions. This belief is supported by 74% of CFOs.
THE PROPORTION OF BUSINESS LEADERS AND INVESTORS WHO BELIEVE THAT, IN 2035, TECHNOLOGY, INCLUDING AI, WILL…
Supercharge economic growth
and productivity
Have a limited impact on economic
growth and productivity
CFOs
73%
12%
CEOs
73%
16%
LoB Managers
76%
9%
Investors
81%
4%
THE PROPORTION OF BUSINESS LEADERS AND INVESTORS WHO BELIEVE THAT, IN 2035, AI AND AUTOMATION WILL HAVE…
Completely reshaped organizations’
finance functions
A limited impact on finance functions
CFOs
74%
14%
CEOs
70%
15%
LoB Managers
76%
16%
Investors
81%
5%
The increasingly strategic role of the CFO
Two-thirds (65%) of business leaders (CEOs, CFOs, and LOB managers) anticipate that the role of the CFO will be more important in 2035 than it is today. This includes 27% who believe the role will be significantly more important. Business leaders believe a key driver of this increased importance will be CFOs’ ability to leverage advanced technologies such as AI to enhance financial decision-making.
Investors have even greater expectations for the status of the CFO: 88% anticipate that the role will be more important in 2035 than it is today, with 48% believing it will be significantly more important.
Three-quarters of CFOs report that expectations on CFOs have multiplied over the last 3–5 years. As this pressure intensifies, impactful CFOs will need to develop and balance a diverse range of skills beyond financial acumen.
“
The role of the CFO is more expansive than it was 20 years ago. CFOs have a bird’s-eye view across the enterprise and investors expect them to be more strategic. In 2035, businesses will need CFOs who can anticipate global market trends and provide accurate, timely insights to help businesses navigate disruption.”
Bill Koefoed, Chief Finance Officer, OneStream Software