A Future Look at Today

The last column here placed the financial crisis within a historical context. The financial meltdown is part of the disruptive transition from the Information Age to the Shift Age. We are moving through a period of turmoil when the old order is being replaced by a new order. The nation state economic model is being replaced by a new global model. We are at a time when the old ways no longer seem to work and yet the new realignments are not yet clear.In the United States there have been three great waves that have arced over our society during the last 30 years. The incredible run up in residential real estate values since the late 1970s was the first arc. Except for a short period in the early 1980s and then again in the 1990s, the value of residential real estate seemed to go ever upward. This of course created a great sense of wealth for those that benefited. In the early part of this decade millions of households took advantage of historically low interest rates to take out billions of dollars of equity to use for purchases. This 30 year cycle obviously came to a crashing halt two years ago.

People come to this web site for well written, interesting columns on science. To some degree it must be questioned as to whether economics is a science. That being said, the current financial crisis is worthy of some commentary here as it will affect all of us to some degree. As a futurist, I see this crisis as part of a bigger transition from one Age to another. The Information Age began in the 1970s and is now giving way to the Shift Age.

All year, in speeches given around the country, I have stated that the economic downturn we are going through must be looked at from a new perspective. The ‘is it a recession or not’ and ‘is it a bear stock market or not’ is a far too narrow focus for insightful discussion. There is something much larger that we are beginning to move through.

One of Salvador Dali’s greatest paintings is called “The Persistence of Memory”.  Last week the results of a new study were published in Science magazine that conclusively prove the physical nature of that persistence.  In what other scientists have called a ‘foundational study’ a team of researchers from America and Israel have discovered and documented the physical nature of memory.   In the study, the researchers threaded tiny electrodes into the brains of 13 people with severe epilepsy.  Evidently this implanting of electrodes is standard procedure as it allows doctors to pinpoint the brain activity that cause epileptic seizures.

  It was two years ago that I first wrote about ocean dead zones. These are areas of the ocean that, due to a lack of oxygen, no longer sustain any life. While dead zones can happen naturally, they usually are caused by the results of human activity. A primary cause is nitrogen-rich nutrients from agricultural fertilizers that flow into coastal waters from rivers and streams.   Last week there was a report published in the Journal of Science that stated that the number of these ocean dead zones around the world has doubled every decade since the 1960s. There are now some 400 coastal areas that periodically or perpetually become dead due to oxygen starved bottom waters.

There have been many cultural changes so far in 2008. Some of these changes are in response to the rapid increase in the price of oil and other commodities. Some of these changes have been due to technological innovations. In both cases new behavior patterns are being established that will, to some degree become permanent and will create new dynamics in certain industries. Today we take a look at some of the predictions made here last January.   Shopping The predicted shopping trends were written with a long term view. What is interesting is that the high price of gasoline has accelerated the speed of implementation of some of the forecasts. On shopping, this column forecast:   “Shopping behavior will noticeably change……purchases will go down per capita. This will due to belt tightening but also due to the effect of the explosive growth that on-line sales will now have on off-line sales.”

  The economy has clearly become the primary subject today in America. It has become so not only because of all the issues discussed in the prior column, but also because it has also become the number one issue for voters in this significant election year.   In the “Forecast for 2008” column on January 9th of this year I wrote:  

  Regular readers know that I have long predicted the current price of oil and that we are now moving through Peak Oil These subjects were included in my “Forecast for 2008” To quote from that January 9, 2008 column: “In 2008, gas will, for a period of time reach $4 on the national level. A year ago I predicted that oil would rise above $80. Three months ago I predicted that the price would rise to $100 and that the trading range for oil will be $80 – 125 a barrel for the next year…but there could be several situations that could drive the price above $125.”

  As a futurist, I think, speak, and write about the future. A large part of what I do is to make forecasts on the future and what might happen. This forecasting is based upon analysis of trends and the underlying forces and flows that create and shape these trends. The more specific the forecast or the further out the forecast, the higher probability of error in the forecast. When I look 5, 10 or 20 years out I look at the macro forces at play in the world to predict the overarching changes and reorganizations that will occur. Here in this column the future focus is 3 months to 3 years and is much more specific and news related.

Courtesy of the Phoenix landing craft on Mars we just discovered that there is ice on Mars. Now that is cool, very cool! In the last century there has been a constant fascination and debate about whether there might be, or might have been, life on Mars. Well, we still have yet to answer that question with any certainty, but at least we know that there is water in some form on the planet. Where there is water, there is a good chance there might be life.

The question is there life elsewhere in the Universe, is a fundamental human question that will ultimately be answered. I am of the school that given the infinite vastness of space, it is a statistical certainty of some other form of highly evolved life (if we can be so charitable as to place our species in that category).

  Energy costs are at an all time high.  They will continue to go up.  The price of petroleum may indeed fluctuate, but within ever higher ranges.  $125 a barrel oil will climb to $135-150.  This is creating a convergence for businesses in that the traditional business owner or CEO has long believed that ‘going green’ was an endeavor contrary to the standard operation of business.  I speak to 2-4 groups of CEOs every month.  As a futurist, I am increasingly being asked by these groups about what the future of energy looks like as most businesses are getting whacked by the dramatic rise in energy prices.  When they hear that high energy prices are the new normal, they groan.  I immediately launch into strategies that they can immediately implement that will not only lower costs, but will also mobilize employees and allow them to promote to customers and suppliers that they are being green.  A number of CEOs have started to act on these recommendations.  The first thing to do is to conduct an energy audit, usually provided by the local energy company, and if not them, then an energy audit firm.  Establish the baseline of energy consumption on an annual basis for every facility.  The next step is to mobilize the employees to help lower energy use.  For example, if a company spent $100,000 last year on electricity, set the goal of $85,000 for this year.  Present this to the employees that the company wants to do its’ part in the effort to slow global warming by lowering energy consumption.  State that the company will split savings 50/50 with the employees.  So, if electric costs are lowered by $15,000 then $7,500 will go to the employees as a year end ‘conservation bonus’. The company will save the same amount. It will amazing how much more lights will  get turned off when people leave rooms.  I promise the CEOs that they all have someone at the company that will immediately get involved and work to mobilize the other employees.  Heads nod knowingly.

There was a recent study that provided a revised view of the Internet Structure in the U.S. The Global information Technology Report was released a few weeks ago. The study was done by Insead, the French business school, on behalf of the World Economic Forum.

The conclusion was that the Internet infrastructure of the United States is one of the world’s best. This, of course, is a different conclusion than recent opinion that suggested the U.S. is lagging far behind the rest of the world. The report used an index generated from 68 variables including market factors, technological infrastructure and political and regulatory environments, rather than just bandwidth capacity and data transmission speeds. The U.S. is now ranked fourth in the world behind Denmark, Sweden and Switzerland.

As a futurist I speak and write about trends and the future. I am often asked questions about the future of one thing or another. In most cases I speak to general trends, not specific outcomes. In some areas I can be somewhat specific as I have taken the time to analyze and then cross reference what I have learned with the trends and forces I see. One of those areas is the price of oil.

In early 2007, when the price of oil was $53 a barrel I was invited on a business program to predict what I thought the price of oil might be by the end of the year. At that time I said that I thought that oil would exceed $80 a barrel and could well approach $100, though I didn’t think it would cross that barrier in 2007. The reporter, who had never spoken with a futurist, calling me a ‘so-called futurist’ was trying to contain her sputtering disbelief. The opposite side was some ‘oil industry analyst’ who spoke about a price fluctuation between $50-70 for the remainder of the year.

About eight months ago, I wrote that I thought that the near term trading range for the price of oil for the next couple of years would be $80-125. At the time I stated that while there was little on the horizon to create a downward pressure below $80, there was much on the horizon that could cause an upward pressure to $125 and that the long term trend would be ever upward and that downward pressure would provide only temporary dips.