Is the Western World losing its grip?

December 2024

The term “the West” is often used in media discussions, but its meaning and implications remain underexplored. Historically, global hegemonies rise, flourish, and eventually fade. Could the Western world—the current global hegemony—be entering its period of decline? By examining demographic, economic, and political trends, we gain insights into this transformation and its implications.

Shifting demographics of power

The Western world, encompassing countries like the US, Canada, the UK, much of Europe, Australia, and New Zealand, accounts for just 11 percent of the global population in 2023. Even when including “West-Adjacent” nations such as Japan and South Korea, the total reaches only 14.5 percent. This is far below India and China with 1.4 billion inhabitants each or the continent of Africa, which are set to grow dramatically. The UN projects Africa’s population will more than double to 3.5 billions by 2100, while Europe’s is expected to decline.

Demographic stagnation, ageing populations, and declining fertility rates pose significant challenges to Western economies and societies, but soon also in China. With fewer young and people in working age to support expanding elderly populations, pressures on pensions, healthcare, and labour markets intensify. By contrast, rapid population growth in Africa could exacerbate global inequality and migration pressures, particularly as climate change renders certain regions uninhabitable.

Economic power: From dominance to decline

While the West represents a small share of the global population, its economic influence remains significant. In 2022, the combined GDP of the West and West-Adjacent countries accounted for nearly 58 percent of global output. However, this marks a stark decline from 80 percent in 2000. Meanwhile, Non-Western economies, led by China, and a group of more Neutral countries, led by India, have seen their combined share grow from 20 percent to 42 percent over the same period.

This economic rebalancing challenges Western dominance in global markets and innovation. Chinese foreign investments and dependency on critical raw materials from nations like China and Russia highlights vulnerabilities in Western economies. Even if democratic governance has historically supported economic development, there is also a risk that increasing inequality and regional disparities within Western countries undermine social cohesion and economic stability.

Political landscape: Democracy under pressure

Globally, democracy is retreating. As of 2024, 71 percent of the world’s population lives under autocratic regimes, an increase from 50 percent in 2003. While the West remains largely democratic, internal pressures—including populism, polarisation, and democratic backsliding in some countries—threaten this status. In Non-Western and Neutral nations, autocratic governance dominates, further amplified as countries like China and India increase their share of global GDP.

If democracy is to survive in the West, its benefits in terms of economic development and growth must be perceived as fair and accessible to all, across different population groups, regions, cities, and neighbourhoods.

Military dominance: A Balancing act

Military power has historically underpinned global hegemonies, and the West continues to maintain significant capabilities. The US alone accounts for 40 percent of global military spending, with Western and West-Adjacent nations collectively comprising 65 percent. However, this is a decline from 79 percent in 2000, as nations like China invest heavily in military expansion.

Despite this shift, a balance of power persists, with nuclear arsenals serving as a deterrent to large-scale conflicts. Yet, rising tensions, regional conflicts, and military buildups increase the risk of local escalations spilling over into global crises.

European Union: A weaker part of the West

The EU exemplifies the broader challenges facing the West. With a shrinking population, declining competitiveness, and lagging innovation, the EU is losing ground to global rivals, as well as within the Western bloc. Projections suggest that without immigration, the EU’s workforce will decline by 10 percent by 2050, threatening economic growth and welfare systems. Increased immigration could be seen as potential in this respect.

Reports like Mario Draghi’s “The Future of European Competitiveness” highlight the urgent need for transformative investments in innovation, research, and digital infrastructure. Furthermore, the reliance on US defence capabilities, and the pressures of populism complicate the EU’s ability to act cohesively.

Towards a multipolar world

As the West’s dominance wanes, a multipolar world is emerging. The rise of China, India, and alliances like BRICS, now encompassing nearly half of the world’s population and over a quarter of the global GDP, signals a redistribution of global power. While this may seem equitable, it gives more power to autocratic regimes and introduces new uncertainties in an era of climate change, resource scarcity, and geopolitical competition.

A power vacuum resulting from Western decline and a growing China, though its economic engine shows signs of slowing, could lead to increased protectionism and conflicts. Moreover, the spread of autocracy and domestic polarisation within major powers like the US raises questions about the stability of this new order.

A call to action and increased need for Territorial Cohesion

The West is undoubtedly losing its grip on global dominance. Yet, this transition does not have to be synonymous with decline and misery. But, the West has to redefine its role in a multipolar world by embracing innovation, fostering inclusive economic growth, and addressing global challenges like climate change and migration.

In Europe, Territorial Cohesion faces increasing and shifting challenges:

• Low birth rates and aging population strain tax revenues and skills provision, while rural outmigration and urban polarisation in marginalised areas foster anti-democratic tendencies. Territorial Cohesion must be strengthened to improve matching on labour markets through efforts to enhance local attractiveness and the connection between cities and rural areas.

• Economic competitiveness is weakened by competition from China and the US, aggravated by protectionism, but Europe has potential in green transition industries and cultural tourism. Strengthening innovation, securing skills, and addressing rural contributions to renewable energy and raw material extraction are critical, while ensuring compensation for rural areas affected by increased resource use.

• Rising geopolitical uncertainty requires Europe to enhance its defense capabilities and ensure greater self-sufficiency in food and raw materials. Rural Europe is part of the solution.

• Last, but not least, Cohesion efforts must promote equitable development across all regions and territories to sustain democracy and resilience in an increasingly volatile world.

This blog post is based on a recent Territorial Thinkers’ Briefing by Sverker Lindblad. The full text is available here (Abre numa nova janela).

by Sverker Lindblad