China’s debt risk management isn’t much better
It looks like the United States and England aren’t the only countries facing billions in bad loans.
When you read “trillions of renminbi of defaulting loans already in China that no one is doing anything about,” you perk up about the coming crises in sovereign debt and realize it is truly global, with global repercussions.
Sign up for the free Competitive Futures Trend Report for more analysis on this topic.
A video compression standards war
Yes, it sounds dorky, but these are the weak signals that portend the coming revolution in telepresence.
Will h.264 prevail? What about Ogg Theora? This may seem like a strange debate for anyone not deeply involved in technology analysis for enterprise-quality video, but consider Cisco’s recent purchase of Tandberg, Logitech’s purchase of strange bedfellow LifeSize – there is a clear megatrend for video becoming a mission-critical technology for running businesses and keeping in touch with friends.
But many chess pieces are about to be moved. Check it out.
Funeral fun facts
At the Tastee Diner this morning I had the pleasure of sitting next to a retired man who now makes his extra fun money driving a hearse. Little did I know I would be hearing about strategic trends and secondary implications of the economy’s transition.
Just two days ago, when lecturing at American University, I heard MBA students using the funeral industry as an example of the longer trend in industry consolidation, and simultaneously as an example of profitable opportunities resulting from the global megatrend of aging populations. The professor then spoke up to mention that formal funerals, which regular cost a five-digit sum in America, are sharply down in favor of cremations, around 25% year-over-year.
During breakfast, my new companion informed me that cremations are up, about 25% year over year – and that fewer funeral homes are able to afford their own hearses since their use is becoming comparatively more rare. The cause is assumed to be the lasting effects of the recession.
Twice with the same unusual trend in the same week? Clearly the futurism gods are telling me to look up this development further. And lo, on the Internet you can find voluminous and interesting trends and forecasts for the “celebratory services” industry.
Today, open up the yellow pages, find some unusual businesses and ask yourself what trends they must be experiencing. You will find interesting fodder for your own strategic thinking.
Gregor Macdonald on the future of energy, economics, and society
For those of you who know Gregor MacDonald, you know you’re in for a treat with this podcast- a full hour of some of Gregor’s latest forecasts on energy, economics and society, insights you simply won’t get anywhere else.
For those of you who haven’t discovered Gregor yet, he is one of the top energy analysts in the world, and in our minds, one of the top analysts of anything, period.
This podcast covers sweeping ground:
- Why we’re at peak automobiles
- The end of cheap oil
- Coal’s role in the development of the world economy
- The return to human capital and small towns
- Why waterways are the future
- Our current period of “late phase economic decadence
- Why PAKISTAN holds the key to the Copenhagen Protocol
Crazier still, we could have spend ANOTHER hour talking to him and still not exhausted him of insight.
Enjoy.
The rap battle between Hayek and Keynes
Keynes and Hayek cutting heads, playing the dozens on their economic philosophies. Entertaining, and a fairly accurate breakdown of the Austrian school versus the resurgent Keynesianism which we are all experiencing.
That said, what if both these economic theories are dead and something new is on the horizon? Then this “battle” framework is distracting us from the hard work of original thinking.
Will Vermont secede from the United States?
There is an interesting development at the intersection of political trends and economic trends. We have been recently covering the economic fissures in some of our largest states. California, Arizona, Illinois and Michigan teeter on the brink of financial crisis, and this in turn menaces the integrity of the United States Constitution. Letting California’s bonds go to junk will have long-reaching impacts – but if the Federal government begins distributing bailouts selectively, there are bigger legal problems at stake. Other states will have recourse to ask for money from the Federal government, making the relationships of the 50 states complicated indeed.
What’s another option for states? Leaving altogether. Now that’s a new trend in these parts.
The state of Vermont has had a secessionist movement dating back over 200 years, back to the time when it was an independent republic. It’s mostly been a topic of discussion over an excess of beer in pubs – until recently. Now, Time magazine reports that seven separate candidates are running for the state senate on a secessionist platform – plus a candidate for Lieutenant Governor. One of the points they raise is that the state is a net positive to the federal government, only receiving 75 cents in services for each dollar collected in taxes. Thus, a way to balance the books for Vermont is to cease paying US Federal taxes, and to move out on its own. And they are forecasting:
By 2020, they foresee Vermont producing at least 75% of its own electricity and heat, using wind-, solar-, biomass- and hydro-power. They want to establish a Bank of Vermont owned by the people of Vermont — freed from the arbitrary controls of central bankers — as well as a local alternative currency, with Vermont pension and operating funds invested not in Wall Street but in locally owned financial institutions.
Volcker: Keep banks small
Quite interesting development: Paul Volcker is recommending that we break banks up into smaller, more secure pieces to reform the financial sector.
Very reasonable analysis, but it’s pretty rare in these days when the media praises every merger and acquisition as a way to improve customer reach, innovation, fresh breath, and more.
The crisis of American states
Obama’s State of the Union speech mentioned many classic problems facing the United States – unemployment, healthcare, security. Sure, there was some mention of the more recent banking fiascos – but how much of what was mentioned showed a nation facing unprecedented challenges requiring untested solutions?
For example, where was the mention of the fiscal crisis of the largest, most productive American states, like California, New York, and Illinois?
Investing and planning for the future? Look beyond the headlines toward the trendlines.
Small companies adding value: the rise of microbrewing
When I wrote Future Inc: How Businesses Can Anticipate and Profit from What’s Next, I chose the future of beer as a case study to illustrate forecasting methodology. The reasons were many. Beer is a 5,000 year-old product, and not as tech-driven as information technology – so you can’t fall back on techno-optimism when thinking about its future. Still, beer is wildly interconnected: it encompasses agriculture, biotechnology, transportation, retailing, government regulation, cuisine, social impacts, and much more. Despite being simple, the changes in the beer industry are rich and interesting. Plus, beer is delicious.
One of the key forecasts I uncovered while researching the book was the rise of microbrewing. The major beer brands around the world were stalling while small, local and national operations were profitably targeting a small and growing segment of beer drinkers and nascent foodies.
Here we are four years later, and the trend has continued apace. This article in the St. Louis Post-Dispatch shows how even in the shadows of the now-Belgian owned Anheuser-Busch, microbrewing is taking off at mid-double digit rates while sales of the majors now dip.
One of the reasons behind this trend actually transcends the beverage market. In our research in the field of economic development, Competitive Futures has learned that the rise in local beers often coincide with resurgences of economic vitality. Local beers become a flag around which communities rally. It often becomes associated with “local success stories” of businesses started in someone’s garage, soon requiring real capital investment in manufacturing infrastructure and jobs with good wages. Local ingredients and traditions are incorporated; cultures are revered. In short, microbrews are successful because they create value on multiple levels – for shareholders, employees, municipalities, and of course, beer lovers.
Now, can large companies create value on this level? Perhaps only if they begin thinking in this superconnected way.
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More trends and analysis to follow in 2010.
About Eric Garland
Eric is one of the world's pre-eminent thoughtleaders in forecasting and strategy. He helps leaders of business and government make critical decisions about their futures.Get Eric's blog delivered!
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