Insolvency, inflation and instability will dominate the global environment for some time to come conditions that will affect organisations’ ability to effectively handle their talent issues, the chief economist of The Economist Intelligence Unit (EIU) warned a London audience last week.

The recent economic downturn reflected “the end of a 60-year period of continued credit expansion based on the dollar as the reserve currency”, Robin Bew said. He added that while much of the UK’s economic news recently had focused on the gloomier aspects, the UK had experienced “a sharp uptake in corporate profitability for most of the last 18 months”. The UK has actually experienced growth, he said.

However, he added, “some things could pose real threats to global growth over the next few years”, such as insolvency for both consumers and countries such as Greece, Ireland, Portugal and possibly Spain, inflation and political instability as seen this year in the so-called Arab spring.

Contributing to inflation, he said, was the addition of 1bn consumers from China and India to the economy whose desire for modern technology and other purchase drives up the cost of commodities with which to make them.

Countries included in the EIU’s “vulnerability index” had the world’s youngest populations. For instance, two-thirds of the population of Yemen, classified as vulnerable and currently undergoing political turmoil, is under 25, Bew said.

“A lot of the changes we’re seeing are, in part, generational changes,” he said.

As emerging markets continue to grow, they will eventually outpace the traditional Western economic strongholds of the US and Europe, he predicted. Even some existing business sectors will start to be dominated by the emerging markets, in a similar way to how Japan rose to control the automotive market, Bew said.

“The world as it feels today will not exist in 10 years’ time,” Bew said.

He was speaking at The Economist’s Talent Management Summit at the Dorchester Hotel.