2009: The Status Quo versus The Long Emergency
Again, stop whatever elese you were doing, like reading things I wrote about 2009, and read Jim Kunstler’s forecasts about 2009. The author of The Long Emergency is experiencing the unenviable task of seeing dire structural change ahead, change that won’t be mollified by new gadgets, and being right about its consequences.
Some highlights:
He’s not a fan of techno-solutions. (not unlike yours truly)
The various tech industries are full of MIT-certified, high-achiever Status Quo techno-triumphalists who are convinced that electric cars or diesel-flavored algae excreta will save suburbia, the three thousand mile Caesar salad, and the theme park vacation. The environmental movement, especially at the elite levels found in places like Aspen, is full of Harvard graduates who believe that all the drive-in espresso stations in America can be run on a combination of solar and wind power. I quarrel with these people incessantly. It seems especially tragic to me that some of the brightest people I meet are bent on mounting the tragic campaign to sustain the unsustainable in one way or another.
He sees Dow 4000:
A consensus in the blogoshpere says that the stock markets will rebound strongly during the first Obama months. This is possible just on the basis of pure “animal spirits,” but the Obama Bounce will occur against a background of continued dismal business and financial news. It will appear to defy that news. By May of 2009, the stock markets will resume crashing with the ultimate destination of a Dow 4000 before the end of the year.
He believes that you’ll actually need positive cash flow to make a business run (old-fashioned, but radical!):
We’ll turn around early in 2009 and discover that we are a much poorer nation than we thought because from now on credit will be extremely hard to get for anyone for anything. The businesses that survive will have to keep going on the basis of accounts receivable…Giant enterprises requiring giant loans to get from quarter to quarter will tend to not make it. Borrowing from the future will become a practical impossibility as past bad debts from previous borrowings continue to unwind, cease performing, and get written off.
Real change. Not new technologies for old philosophies. Nobody will save the day. We’ll need to make workable solutions for many different types of people.
And still - people will need things. Goods and services will be required, perhaps just different types.
Business development will need to be on its toes! Are you ready?
The high-resolution society: the future is in small companies
Stop everything you are doing, click here, and read this fantastically thought-out article from Paul Graham on why the future of economies will no longer depend on giant, hulking organizations, but small, nimble startups - and why this is socially disruptive.
Large organizations will start to do worse now, though, because for the first time in history they’re no longer getting the best people. An ambitious kid graduating from college now doesn’t want to work for a big company. They want to work for the hot startup that’s rapidly growing into one. If they’re really ambitious, they want to start it.
This doesn’t mean big companies will disappear. To say that startups will succeed implies that big companies will exist, because startups that succeed either become big companies or are acquired by them. But large organizations will probably never again play the leading role they did up till the last quarter of the twentieth century.
Commercial developers headed for bankruptcy, naturally asking for a bailout
The most important part of thinking about the future is systems thinking. In our Future Intelligence method, the first part of every project or exercise is to map out the system of any business, activity, or market. Thinking about the beer market? Don’t just stop at consumer tastes, think about packaging, trasnportation, distribution, leisure, sports, etc. That way, you think not just about one kind of change, but the relationships.
This financial crisis is one long lesson on the interconnected nature of all industry, governance, finance, and geopolitics. This is going to surprise you all, but now, since they are part of the whole system, the commercial developers are now asking for bailouts from the federal government.
Let us not consider the merits of such a proposal, but just marvel at how much all of these industries are interconnected. Every actor in the system requires certain behavior from the others in order to survive. When one actor changes (e.g. suddenly ballooning the amount of credit) all the others respond.
Subprime mortgages are now changing the dynamics of the construction of mini-malls around the world.
It’s a mess, but at the very least it’s interesting.
If retail and commercial development are melting down, what comes next?
Earthquake: General Electric no longer providing quarterly guidance
Amazing news that General Electric will no longer provide quarterly earnings guidance.
This is not just a decision by a public company to change its relationship to Wall Street, but a sign of a much bigger change in industry itself. It’s not just that people are going to take the longer view out of some appreciation of foresight or sudden development of wisdom, but out of respect for the massive changes currently facing global commerce.
Investing in Car 1.0 on the eve of Car 2.0
The new Tom Friedman article is essential for its analysis of the coming shift in business models. Like every other human with a functioning brain stem, the Detroit Bailout stinks to Friedman:
…America’s bailout of Detroit will be remembered as the equivalent of pouring billions of dollars of taxpayer money into the mail-order-catalogue business on the eve of the birth of eBay. It will be remembered as pouring billions of dollars into the CD music business on the eve of the birth of the iPod and iTunes. It will be remembered as pouring billions of dollars into a book-store chain on the eve of the birth of Amazon.com and the Kindle. It will be remembered as pouring billions of dollars into improving typewriters on the eve of the birth of the PC and the Internet.
And I did not know this about gas mileage 100 years ago:
Do not expect this innovation to come out of Detroit. Remember, in 1908, the Ford Model-T got better mileage - 25 miles per gallon - than many Ford, GM and Chrysler models made in 2008. But don’t be surprised when it comes out of somewhere else. It can be done. It will be done.
And it will happen to more than just this industry.
Gerd Leonhard interview on the future of media
More insightful stuff from Gerd Leonhard on the future of media, which is useful the day after the Tribune Company melts down.
Great point: water is technically “free” in the developed world, but the global water industry is worth $100 billion, four times the size of the music industry.
Just because a business model blows up doesn’t mean the service no longer has billions of dollars in value
The future of intellectual property: “Game over for protection”
As a creator of content, you wonder how you are going to get paid if you can’t control the rights to your output.
Gerd Leonhard is likely the world’s top “music futurist,” a job title that appeals to me in many, many ways. He says that control is overrated.
That, my friends, as the banks melt and industries scatter about as if you dropped a box of ball bearings from ten feet up, is the theme of the year.
Check out Gerd’s keynote for more thought provoking insight:
University education: Obsolete by 2020?
Hat tip to Jon Lowder, who just suggested this interesting SlideDeck about the future of the university.
Is it too late?
And who will fill the void?
Positive Vibrations: Why all this churning will mean more business opportunities
CHAOS MEANS BETTER BUSINESS DEVELOPMENT OPPORTUNITIES
If you look through the last several posts on this blog, you may ask yourself, “Is this guy a total drag at parties, or what?” Most of the blogposts these past several weeks indicate a world in traumatic transition, and I guess I can’t apologize for that. The world is evolving quickly and is shaking off old, useless institutions like a golden retriever getting rid of fleas. It’s quite scary and often painful.
Please put on a Bob Marley record now to feel the positive vibes
I’d just like to say that we here at Competitive Futures are actually more positive than we’ve been in some time. People are just as smart and savvy as they ever have been, the world is in fact more peaceful, and we have a new global system of information exchange that is probably the coolest thing humanity has ever built. The institutions will fall if they don’t match reality, but the future of people, communities, and business is as strong as ever.
Positive cash flow will require a new mindset
That’s not to say that all of this new business and effective government will come easily. In fact, people are going to have a difficult time adjusting from old ways of thinking to new (dare we use the word) paradigms.
We believe that that name of the game in 2009 will be business development in a complex, changing world. There are infinite new ways to profitably serve customers - especially while your competition is at least as confused as you are.
So, banks blowing up? Great. Housing market in disarray. Fantastic. Global warming still progressing? Wonderful. This chaos will be useful to those who are paying attention and starting new businesses - lean, mean, high-speed, low-drag businesses.
I hope that’s a more fun, positive message at parties this Christmas season. It’s what we will be discussing all through 2009.
Monty Python: a new business model, with a smile
This clip of Monty Python’s official YouTube site seems to me to be the ideal way to communicate when you’re faced with a game-changing industry trend.
Humor: imagine the power.
Be social