Global shifts will cause a new social order to emerge
As I started pulling my notes together for 2009 trends, I instantly became overwhelmed by the sheer volume of changes currently in the works. The number of moving parts seems to exceed the number of stationary parts. All of our markets, systems, and technologies have become incredibly fluid, and much like a floating vessel, we are heading to parts unknown.
To a futurist, the chaotic nature of interconnecting trends and the extreme possibilities appear at times like a spinning compass needle. The disarray that we find ourselves in cries out for answers – some glimpse of the uncharted waters that lie beyond the horizon. So I’ll give it my best shot.
1.) Desynchronization. Different aspects of our society are moving at radically different paces. Businesses that are flying executives around the world, marshaling resources to capitalize on new opportunities, and working teams 24-7 to meet deadlines, face a rude awakening when they have to interface with a government agency operating at a pace that makes a turtle yawn.
In his recent book Revolutionary Wealth, Futurist Alvin Toffler describes how the desynchronization of society has created more and more speed bumps along the fast lane, and with a nearly unlimited set of options for circumventing anything that slows them down, systems are becoming marginalized at a record pace.
While the radical pace differential is not just between government and business, it is precisely this desynchronized relationship that is driving the disruptive changes we’re seeing around us, the most radical of which are happening on a governing level.
Much like laminar airflow coursing over the fabrics of society, we are first seeing a “peeling apart” of business, industry, and social structures. This “peeling apart” is creating a number of vacuum spaces between the rising gaps in the social structure. While disruptive on one level, these vacuum spaces also create an array of new opportunities for business and industry.
The stage is set for myriad transitions to begin to shape an era that has not only become unrecognizable to generations past, but implausible as well.
More than ever, the world is looking to the US for leadership as they find themselves lost in the wake of the storm.
2.) System Crisis. The incoming Barack Obama team will bring fresh new energy to Washington but we will find them spending the majority of its time in a reactive mode as opposed to a proactive mode.
Many of the global systems we currently have in place are on the verge of breaking. Most global systems have evolved out of a patchwork of kluged-together national systems, and have not been designed to properly manage the speed, volume, and excessive nature of today’s society. We are in need of a complete systems overhaul, transitioning us from national systems to global systems.
Because we have had little ability to experiment with new systems in the past, we will be taking blind shots in the dark, best-guessing our way forward. National systems will fight to survive, but will flounder because of complexity overload. It has become all too apparent: If we don’t change our systems, our systems will change us.
Look for major failures to occur in most systems over the coming years including our tax systems, justice systems, social security, monetary systems, and much more. On the flip side, also pay close attention to the opportunities these failures will create.
3.) The Coming “Empire of One.” As a general rule, 7 percent of the recently jobless will attempt to start their own businesses. While those who create our next breakaway success story will be but a tiny fraction of this phenomenon, we will see a strong entrepreneurial push and a realignment of the systems supporting entrepreneurs.
With financial markets being pinched, the most popular form of startup will the Empire of One, one-person businesses with far reaching influence. Technology is driving a trend of placing unprecedented power and capability into the hands of the individual. That trend coupled with skyrocketing costs of employment make this a perfect environment for a no-employee business to thrive.
Look for rapid growth of support structures, management systems, and outsourcing options. Even colleges and traditional business schools will see this emerging trend and start to teach courses on one-person entrepreneurship.
4.) Business Colonies. The movie industry has long used a project-based business model where talent swarms and forms around specific projects. Directors, cameramen, lighting specialists, scriptwriters, and makeup artists all form around the production of a movie or television show. Once the project is complete, workers swarm and form around another project.
Business colonies will emerge as next generation, industry specific incubators with an economic development component added in. Colonies, such as nanotech colonies, gamer colonies, and alternative health colonies, will be formed in cities to serve as an industry focal point and breeding ground for startup businesses. Owing to their nature, colonies will be both virtual and physical, but people living and working in close proximity to the colony will derive the most benefit.
Colonies will form around shared resources. Equipment that is too expensive for one person to own will be owned by the colony for all to share. Colonies will vary in size and structure as communities begin to experiment with the essential ingredients needed to make it successful.
5.) Smart Electrical Grid. In September, Google and General Electric CEOs Eric Schmidt and Jeffrey Immelt proposed the idea of creating a “smart” electric power grid to promote clean energy. Their plan is to create a grid that uses electricity more efficiently and allow more power generation from cleaner sources.
However, both concur that public policy is a major impediment to building a 21st century electricity system and the benefits of renewable electricity cannot be fully realized without updating US power transmission lines into a “smart grid” that lets people track and control what types of power they use as well as when they use it.
Yes, this may be a self-serving play with GE positioning itself to receive many of the major construction contracts and Google could profit as the designer of the overall operating system. The clout of these corporate giants along with stimulus money flowing toward key infrastructure improvements could push this proposal to center stage in the coming year.
6.) Cloud Computing. The shift to cloud computing will dominate much of the tech world with data centers springing to life wherever cheap energy can be found. The prospects of being able to plug into your own workspace on portable devices wherever you happen to be, and tap into cloud-based applications instead of purchasing the clunky and expensive software packages is very appealing. But for the movement to reach full steam, it will take years to complete and will be fraught with problems.
For people working in the industry, the cloud computing movement is already well underway. From a consumer standpoint we’ve been using many types of “cloud” applications for years. Google apps are a completely acceptable replacement for MS Office for the average user. Much of todays email is already transacted through the cloud via IMAP or Gmail or Hotmail. And things like .Mac or Dropbox are quite usable for people needing a cloud based hard drive.
The term “cloud computing,” however, has only recently gained traction among business communities with things like Amazon’s Web Services, Google’s App Engine, etc.
Technical hurdles still remain when moving a desktop app up to the cloud, such as databases requiring a different architecture in the cloud. This will make the conversion of traditional-apps to cloud-apps somewhat painful.
But an even bigger problem is the lack of high quality, high speed internet access. Services like Verizon FiOS are a good start, but until we start to see 50- 60 Mb/sec. available everywhere, web based applications will still be at a disadvantage. The telcos are still holding us back, just like they did during the last recession.
However, cloud computing is destined to become a steamroller movement forcing many to alter the way they do business. Look for the smart power grid to play a major role in this development.
7.) The Green Movement Loses Steam. As with the life cycle of any cause, the Green Movement has passed its prime. The weight of any overarching philosophy becomes unwieldy over time, so as a result, many of the movement’s core tenets will break into niche groups that will soon supersede the rapidly diffusing Green Movement.
Also reaching the end of its useful life is the overly vague concept of Sustainability. To be sustainable, the Earth’s resources must be used at a rate at which they can be replenished. While we all want to preserve the beauty of nature, the movement’s current approach remains an ineffective method for curbing excessive consumption, especially when regional and national economies are at stake.
As a result, both the Green Movement and Sustainability will splinter into more manageable segments and transition to more innovation-based approaches. Look for several new innovation prizes to be created as a way to draw attention to specific issues.
8.) Battle of the Alternative Energy Sectors. Even though big oil has taken a beating in the press, and an army of innovators are working overtime to develop alternatives, oil remains our most important energy source, the lifeblood of the American economy.
However, the push for alternative energy has only begun. Over the coming years, alternative fuels will expand exponentially, moving into additional areas beyond energy production, into energy transmission and energy storage. Legislators will attempt to legislate change and innovators will attempt to innovate change.
In the area of production, the familiar alternatives of wind, solar, biofuels, geothermal, and hydrogen will continue to jockey for position. But while each is battling for market share, Hyperion’s home nuclear reactor concept could emerge quickly from underdog status to give a fresh new face to nuclear power.
In the area of power transmission, the smart electric power grid will dominate early discussions. But look for wireless power concepts to build momentum as the nation wearies of its unsightly transmission lines, regardless of how smart they are.
Energy storage, on the large city and regional scale, is surprisingly absent from our playbook. State of the art science involves pumping water to a higher altitude lake during off-peak times and letting it drain down through hydroelectric generators during peak times. Look for a new surge of innovation to occur in this area over the coming years.
9.) Two Wars. Contrary to what many had hoped for, the wars in Iraq and Afghanistan will not end soon. Both countries went through a tremendous brain drain when the wars began, with prominent citizens and working professionals moving temporarily to other countries waiting for stability to return. Their plan was to return home once the country regained stability.
Problem is, stability has taken far longer to return than anticipated. Ex-patriots are growing more comfortable with their new digs and news from the war zones is not encouraging.
This leaves both countries with a Catch-22 problem. The most talented people won’t return until the country is safe, yet at the same time the right people are not available to build a stable, credible government.
The Obama teams will attempt several new plans of action in hopes of stabilizing the new governments. But in the end, the most stabilizing force in both countries will be the announcement of long-term US involvement, such as setting up permanent bases.
10.) Feeding Frenzy. The proposed US government stimulus packages will cause a massive feeding frenzy to occur as money gets released in Washington DC. Not only will we see lobbyists and politicians jockeying for position to feed their constituencies, but virtually every organization in the world will set in motion some angle to position their grasping hands under the trickling flows of money.
While the allocation of funds will happen quickly, the distribution of money to actual recipients will take years to complete. These vast amounts of cash will infect many with greed, and an outbreak of rationalizations is bound to follow. Expect to hear comments like: “Hey, there was over a trillion dollars in play, and I only wanted an insignificant million dollars.”
The size of available money will also inspire countless conspiracy theories, both real and imagined, along with countless incidents of graft and corruption. Unlike FDR’s New Deal of the 1930s, today’s society clicks to a far faster metronome, and the public mindset operates with a far looser morality. Checks and balance systems will be difficult to monitor as the courts begin to fill with unscrupulous people caught with their fingers in the cookie jar.
11.) Severability. The current economic turmoil has given us strong signals that our current debt load has become unmanageable. The stimulus packages seem to indicate a general effort to inflate our way out of this problem, making past debt relatively small in comparison to the value of future money.
Individual countries are tightly interwoven with their financial institutions and many are now taking extraordinary measures to shore up their currencies and teetering banking systems. In doing so, several are now on the brink of a national bankruptcy. Since we’ve had little experience dealing with national bankruptcies, we have a poor understanding of the global ramifications. But rest assured, no country wants to find themselves in this position and will take extreme actions to prevent it from happening.
As a result, many large multinational financial companies will begin to shift some of their riskier divisions or portfolios into separate companies, and base these companies in small countries to both sever responsibility and transfer blame. Portfolios will be “sold” to newly created companies, and some may go so far as to create these companies in newly minted nation states. In many cases, this approach will be mandated by the host country as a measure to protect its own people.
12.) Speed of Government. The US government, as in most countries, has been designed to react in a slow and thoughtful manner. Many governmental agencies have built-in processes and planned delays to slow the rate of change. But widespread governmental foot dragging will soon end.
Unlike the “turn-out-the-lights-our-office-is-now-closed” approach to running agencies, staffers and department heads will be placed “on call” with teams working 24/7 schedules as government syncs to the needs of business and other global demands.
Not only will we see a host of new early warning systems with real-time tracking of economic indicators, but virtually every level of government is being primed for a top-to-bottom “efficiency overhaul”. Huge opportunities await the companies that can provide the right solutions here.
13.) Total Collapse. A sufficient jolt from the national defibrillator on our aging society’s heart might get us going again, but we run a risk approaching 80 percent for an economic meltdown. We won’t know the actual shape and form of the collapse until it is already upon us.
The word “collapse” has some very ominous overtones associated with it, but think more in terms of it being a “managed collapse.” The world doesn’t end. Rather, it changes abruptly.
One of the more extreme scenarios has a number of smaller countries declaring insolvency. With the interconnected nature of our global society, an accelerating domino effect could collapse nearly every economy in the world in a matter of weeks as nations hit the panic button.
In this scenario, the result will be a two-to-four week shutdown of all banks and monetary systems as global leaders convene an emergency session and create a plan for emerging from the disaster – uncharted territory indeed.
Unlike economic disasters of the past, our current global infrastructure demands a far more rigorous level of attention and involvement. Without a fluid monetary system in place to keep all of the balls in motion, we invariably create treacherous stumbling blocks that will force change with or without our blessing.
14.) Creating the New Normal. After the stimulus money is spent, perhaps the most daunting task will be to establish a new standard for what it is to be “normal” again. Investors are confused by a directionless Dow Jones that swings erratically 1,000 points from day to day. Regaining a sense of value in a post-stimulus economy will be challenging.
Over the years, we have seen a growing number of companies add “infraction fees” to the bills we receive as consumers. These range from late payment fees, to over-limit fees, to inactivity fees. Because of this constant barrage of fee assessments, consumers have become very wary, and frankly, tired of living under these conditions. When government turns a blind-eye to corporate abuse, it destroys consumer confidence and destroys system confidence. Over time it erodes our ability to discern right from wrong, and our capacity for making good decisions. Freedom means little when we feel like victims.
Few tears are shed when a bank collapses because most people on the street see it as justice for a corrupt institution. Cannibalized bank accounts leave a lingering, long term animosity from people who number in the millions.
The notion that companies have free rein to penalize their customers for bad behavior is consistent in a world that rewards a widespread breach of ethics and principles.
Until recently, the phrase “bank on it” was a term that translated to an assumed confidence in institutions. That phrase is in danger of extinction. A return to normalcy is not possible without meaningful change, change that is reassuring to shaken investors and depositors. Standards of practice need to reflect attention to re-establishing integrity and ethics. Perhaps what is needed is a standard bill of rights for people doing business in the new economy.
In the famous words used by John F. Kennedy at Rice University, “We choose to go to the moon in this decade and do the other things, not because they are easy, but because they are hard, because that goal will serve to organize and measure the best of our energies and skills, because that challenge is one that we are willing to accept, one we are unwilling to postpone, and one which we intend to win.”
Curing the failing systems that are crumbling around us gives us a far different motivation. We are doing it because we have to. And yes, it will be very hard.
We’re not going to find a way out of this mess if the industry captains and political leaders do not pay attention to the simple chore of engendering trust. How much can it really cost someone who is pulling down millions to forgo a bonus? They likely won’t lose a house or a job…
Are we up to the task? Do we have the talent in place to lead us through the coming minefields? Only time will tell.
We now have a colossal need for global system architects, a job title reserved for the anointed few; people with unparalleled vision, wisdom, and determination.
But unlike many of the doom and gloom forecasters, I see the coming turmoil as a golden age of opportunity for the world. We will have the chance to experiment with new systems that in the past would have never been possible.
Ultimately, we have the opportunity to emerge as a far better world.
By Thomas Frey