The Dangers of Overly Social Media
With a hat tip to Where’s My Jetpack, it seems that social media really would have sounded bizarre as a scenario:
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?
“Carbon assets:” global banks still addicted to speculative markets
The McKinsey Quarterly trumpets that “a new regulatory environment for greenhouse gas emissions could hold good news for banks.” They bandy about figures such as “trading volume could grow to €2 trillion by 2020!” Banks such as Barclays and Merrill Lynch will be investing in carbon credits, which apparently will grow in value over time, which is why they would be worth the speculative risk.
Quick question: When did carbon become an asset? I thought it was a pollutant that was melting our ice caps and destabilizing our climate?
Ah, carbon isn’t the asset, it’s the right to emit carbon which will be decided by national governments in the U.K., Sudan, Burkina Faso, and Canada. The banks will invest in the right to emit pollution, which is…um…I guess an asset. If you squint.
Much of our recent economic trouble is that we imagined that we were creating value through a housing bubble and an unregulated credit glut. This approach was so wrong that most of our financial system has collapsed. But the way out is through investing in carbon “assets” that are entirely encased in an artificial market that will be run by the same federal governments now trying to run banks, insurance companies, car manufacturers and other industries?
Who can explain to me how carbon can be an “asset” with a value that will appreciate?
Better question: what real good or service will you be providing to people in 2009? There will be billions of people who want things, need help, require something of real value.
Will you be aiming to provide that, or will you be betting on assets created out of thin air?
Future Trends 2025: We need better foresight from our government
The following is a response to “Future Trends 2025″ from the Office of the Director of National Intelligence (http://www.dni.gov/nic/PDF_2025/2025_Global_Trends_Final_Report.pdf.)
Despite its goal of looking incisively at the next 17 years, its total inability to provide insight on the future is a danger to all of us. With our institutions failing at around one per week (!) it seems it’s time for a real discussion.
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The meltdown of the financial system; the collapse of the automotive industry; the impending bankruptcy of several American cities — these events tell even the casual observer that our institutions are weak when it comes to the ability to perceive and act on future trends. Most people might say that this is part of the human condition, the result of our natural short-term thinking in a complex, rapidly changing world. But this shortcoming of foresight is reaching a dangerous level that can no longer be considered acceptable. We must develop an institutional capability in the public and private sector to have frank, courageous discussions about the implications of strategic trends - and the actions they require - if we are to guide our society safely and prosperously into the years ahead.
A recent release by the Office of the Director of National Intelligence shows how pervasive the lack of a professional method of foresight has become, even in the places where we expect it and need it most. The ODNI just published a report entitled “Global Trends 2025,” a major effort of the nation’s sixteen intelligence agencies and several think tanks, supposedly intended to inform the new presidential administration. Given the resources committed to such an endeavor, one would expect the project to be a tour de force of professional foresight, a foil for stimulating discussion among leaders everywhere. Instead it is a cautionary tale of group think, narrowness of scope, and faulty methodology.
The content of the work offers little insight for those would guide our institutions in uncertain times. The summary of these global trends is: “By 2025, the accelerating pace of globalization and the emergence of new powers will produce a world order vastly different from the system in place for most of the post-World War II era.” In other words, the next seventeen years are unlikely to be like the last sixty years. This is not exactly “actionable intelligence.”
The individual trends detailed in the report are just as weak, combining unexamined assumptions and sclerotic analysis. Other projections in “Global Trends 2025″: include:
• “Russia’s emergence as a world power is clouded by lagging investment in its energy sector and the persistence of crime and government corruption.” Poverty, lack of investment and corruption in Russia has been going on for about 1000 years. What’s new?
• “A worldwide shift to a new technology that replaces oil will be under way or accomplished by 2025.” This is wishful thinking at best. The International Energy Agency’s recent forecast sees fossil fuels continuing to supply the vast majority of the world’s energy through 2030. This report offers vague hopes for biofuels, and assumes oil will be on the way out – a canyon-jumping leap of faith.
• “The likelihood that nuclear weapons will be used will increase with expanded access to technology and a widening range of options for limited strikes.” This forecast has been written repeatedly, on a regular basis, for the past 50 years. What should we do differently?
• “The impact of climate change will be uneven, with some Northern economies, notably Russia and Canada, profiting from longer growing seasons and improved access to resource reserves.” This is a landmark entry in the annals of positive spin, and one that ignores that the most important part of global climate change will be the actions we take in response.
The bland, inaccurate and un-provocative content, shows that while these agencies go through the motions of a foresight methodology, they have lost the spirit of the exercise entirely. It was the threat of thermonuclear holocaust that led these very organizations in the 1960s to invent futures research in the first place. The tools of forecasting and scenarios were designed not for their capacity for prophecy, but to provoke an examination of our cherished - and potentially harmful - unexamined assumptions. To become lost in groupthink in 1960 was to perhaps lead our country aimlessly into nuclear annihilation. Foresight was intended to make us think while there was still time.
The DNI’s latest report seems to show that our intelligence agencies no longer study the future with rigor and intellectual stimulation as the goal. Instead, we see a view of the future that was agreed upon by committee: unoffensive, ambigious, and of minimal utility to leaders attempting to think deeply about the challenges to come.
A rigorous, courageous approach to foresight is no longer a luxury, reserved to times of plenty or relegated to philosophers. Leaders of all organizations - everywhere - must commit themselves to developing an organizational capacity to understand future trends, examine their impact completely, and to motivate others to action. To fail in this challenge is to continue to suffer the fate we see in our critical institutions today.
Bailouts make us ask: what is the future of the corporation?
Next up on the bailout list: car companies, cities, healthcare, schools. I guess nobody’s business model is 
working very well, and now everybody needs money from the U.S. federal government, which of course is half a trillion in the red this year. Companies losing billions want loans from a government that’s losing billions.
I think that a lot of things are going to need a redesign in the next few years, to put it mildly.
Regardless, yesterday’s stars were the automotive CEOs who flew into to Washington DC to plead for the U.S. government to provide aid to its most important companies.
But wait, are they American companies? Chris Kelly at the Huffington Post provides an excellent bit of polemic, reminding us that Chrysler is actually owned by a $60 billion hedge fund called Cerberus Capital which owns, in addition to Chrysler:
A Japanese bank called Aozora
A Japanese real estate company called Showa Jisho
A Japanese golf course company called Kokusai Kogyo
An Israeli bank called Bank Leumi
A German bank called Handel und Kredit Bankhaus
A reinsurance company called Scottish Re, with headquarters in Bermuda
A British TV rental chain called Boxclever…etc.
This is a great point - we’ve spent decades making global capital so fungible, so fluid that it readily cros
s borders, ignores nationality, changes hands without making news. So can a corporation possibly be a national entity for which a certain government (and its taxpayers!) might claim responsibility?
If Chrysler isn’t a potent enough example, how about Citibank, which is getting “trouble asset relief” from the U.S. Treasury but is now is owned to an even greater extent by Saudi princes?
This begs HUGE questions. What is a corporation? To whom does it belong? What is the relationship between a corporation and the nation-states of the world?
If you’re in business today, and plan on staying in business through 2009 and beyond, these aren’t just philosophical discussions. This is your future. Give it some thought.
“Nobody could see it coming,” schadenfreude edition
One of the most outrageous things I heard about this current financial crisis was that “Nobody could see it coming.” Early warning was written all over this systemic collapse - and people actively made fun of this view.
Watch this video of economist Peter Schiff and the ridicule he must endure for accurately predicting the systemic weaknesses in the economy.
Think about this kind of dynamic the next time you need to spread news of a systemic disruption in your organization.
Future Leaders Now! Slides from the ASTD meeting
It was a fine time last night with the Washington chapter of the American Society for Training and Development. I enjoyed the opportunity to interact with the people who will be finding and training the next generation of leaders.
Last night we focused on the major challenges that lie ahead. Below are the slides we used as a conversation starter.
Want to discuss more? Have us out for a workshop or panel!
The Top Ten Forecasts from the World Future Society
Shout out to my colleagues up the road at the World Future Society. Have a look at their annual top ten list of forecasts. I do not agree with all of these, but they are provocative, which is the whole point. 
The Top Ten:
1. Everything you say and do will be recorded by 2030.
2. Bioviolence will become a greater threat as the technology becomes more accessible.
3. The car’s days as king of the road may soon be over.
4. Careers, and the college majors for preparing for them, are becoming more specialized.
5. There may not be world law in the foreseeable future, but the world’s legal systems will be networked.
6. Professional knowledge will become obsolete almost as quickly as it’s acquired. An individual’s professional knowledge is becoming outdated at a much faster rate than ever before.
7. The race for biomedical and genetic enhancement will-in the twenty-first century-be what the space race was in the previous century.
8. Urbanization will hit 60% by 2030.
9. The Middle East will become more secular while religious influence in China will grow.
10. Access to electricity will reach 83% of the world by 2030.
Check your assumptions - it appears to be the hot new style
How funny that the tools and principles of foresight are coming into vogue, this time without even the mention of a flying car or a rocket pack.
Take my friend Jim Cramer for example, host of CNBC’s Mad Money, textbook definition of an extroverted personality, and one of the greatest fund managers in history. Even he’s doing it. Last night’s show was entitled “Don’t Assume - You Know They Say,” and in it he spent the entire half hour inciting his audience to challenge all of their assumptions about the global economy.
You know, CRAZY intellectual exercises like challenging your assumptions about the price of oil around the global (under $60!), asking if America will have an automotive industry, wondering if the United States will keep taking cues from Evo Morales’ socialist administration in Bolivia. To play with the different possibilities that come out of each tweaked assumption - it’s a good practice for everybody.
Wait, if all the television hosts start thinking this way, what will we do for a living at Competitive Futures? I suppose I’ll go back to playing Latin music and enjoying our new intellectual Golden Age. For the moment, I think I’ll keep showing up at work.
Common sense, key to clairvoyance
Alan Greenspan is apparently shocked that the financial crisis was so broad reaching.
Greenspan also blamed the problems on heavy demand for securities backed by subprime mortgages by investors who did not worry that the boom in home prices might come to a crashing halt.
A quick question: did nobody in the banking industry stop to ask whether doubled home prices might cause a problem for future homebuyers?
Did they really think that Generation X and Y would start their lives with massive student loans and a $500,000 starter home?
Nobody even pondered whether doubling home prices would have a impact on other systems. All it would have taken is to talk with a young person and ask them if they can imagine purchasing such a home.
Not everyone is so blind to the broader implications:
“It wasn’t deregulation that allowed this crisis,” Rep. Tom Davis, a Virginia Republican said. “It was the mish-mash of regulations and regulators, each with too narrow a view of increasingly integrated national and global markets.”
Broad thinking is the answer. Short-term, parochial thinking locked in the current business model leads to missing even the biggest trends.
Be social