Competitive Futures is launching a new multi-client research project over the next six months on the future of social media and customer relationship management. This white paper details the insights that lead us to take on this important topic on behalf of our clients.

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Competitive Futures White Paper: Social media and customer relationship management

This episode of the CompFutures Podcast features Australian futurist Paul Higgins, founder of Emergent Futures. Paul has a fascinating background, a veterinary surgeon who turned toward foresight after a simple ad for a futures studies grad program. In this episode, he describes when executives should think about the future versus tending to execution, how the future of trust will be key to our social institutions, and why Australia is a fascinating vantage point from which to think about global business.

Back once again with the fantastic Pam Atherton on A Closer Look Radio, Eric ties together the disparate topics of locavore restaurants, revolution in Egypt, and fake government shutdowns to what it all means for YOU and your business.

I’d like to underline the most important point from our podcast with World Future Society president Tim Mack yesterday. The study of the future is about fifty years old at this point, a fact that might escape you given the astonishment of major media every time they mention it. Futures is almost as old as most of the serious disciplines of modern management: market research, marketing/PR, some kinds of finance.

That said, the discipline is growing up rapidly. The point Tim Mack makes with such eloquence is that much of the interest in foresight during past decades came from technophilia and pure optimism. That is to say, people wanted to know about the future because of how much more awesome it would be, from a scientific and social point of view. This makes complete sense when you think of the number of people who died in childbirth, died from simple infections, suffered wildly during surgery, went hungry and then…didn’t. Every decade there were miracles that represented remarkable progress in the ability of the human race to control its environment and shape its own destiny. It would only stand to reason that one would expect the future to full of nothing but such success.

The past couple decades have been telling a different story. It is becoming increasingly clear that our modern technology and social outlook can produce failure and catastrophe right along side progress and miracles. Today, you must learn to study the future to appreciate its implications both good and bad. This is not as much fun as anticipating awesomeness. But so what – that’s life. Maturity is all about taking the good with the bad. If foresight is to be a serious discipline that provides real value, this must be its destiny.

And we’re getting there.

It could be the most important time to be part of this discipline.

Tim Mack is president of the venerable World Future Society, the world’s largest group of people interested in and dedicated to the future. With somewhere around 40,000 members, you get a sense that there is a serious movement around foresight. The group has been around for almost fifty years, publishing magazines and journals, assembling international conferences and now engendering discussion in cyberspace.

In this episode, Mr. Mack talks about how the study of the future is growing up, moving from technopositive excitement about an ever-improving tomorrow toward a discipline that helps manage complexity and uncertainty in good times and in bad. We couldn’t have a better expert on the subject, so enjoy.

No, this is not something I believe in content or tone, but it is the ardent belief of the narrator of my second book, currently titled HOW TO PREDICT THE FUTURE and what to do about it so you WIN.

As you read this, I am poring over the final details of the book, whose ambition goal is to prove why forty years of futurism has not resulted in organizations that think about the future. We can. We should. But we don’t. And before we write any more books of methodology or trend spotting, somebody has to wrestle with that question.

In this book, which will be available in eBook and dead-tree formats, I will wrestle with it, but more in sort of a jello wrestling theme. Imagine Jon Stewart getting really liquored up and attempting to rewrite my first book, Future Inc. It’s going to be sort of like that.

Featuring a handy list of 25 ways not to think about the future, this manual will enable you start a billion-dollar hedge fund by the end of the year, with zero risk! Or something like that.

More later, after I consume dangerous levels of decaf coffee and finish this thing.

That’s the working title for the follow up to my first book, Future, Inc, and it’s due out sometime in February.

The subject matter is new ground for futurism, an exploration of not how to think about the future, but why we usually don’t.

Humor is used liberally, so be forewarned.

More details to follow.

Pour nos lecteurs (et clients!) francophones, voilà un court film qui accompagne un livre important qui va sortir prochainement de nos collègues canadiens Michel Cartier et Jon Husband, La société émergente du XXIe siècle. Leurs perspectives deviennent de plus en plus trenchants chaque fois que nous regardons ces films.

Êtes-vous prêt pour le 21e siècle from Michel Cartier on Vimeo.

I remember forecasts back as far as 1999 that by 2015 or 2020, the biggest user of the Internet by far would be other machines. Medical diagnostics, vending machines, cars – they numbered in the billions and all would have great reasons to share information – to say “I’m broken,” “I’m out of soda” or “Hey, you have early signs of cancer – go to the doctor.”

Now that we have WiFi throughout the industrialized world and emergent adoption of IPv6 (offering unlimited discrete IP addresses) this future Internet of Things could be right on schedule. Cisco’s chief futurist discusses this in a recent live broadcast, in addition to some basic ideas for how innovative companies use futurists to drive growth and profit.

In studies of the future, we typically define for leaders a number of potential outcomes. Obviously, nobody can be certain of the exact future, but through rigorous study of strategic trends, we can at least understand many of the major uncertainties, and plan ahead accordingly. These uncertainties are often boiled down into “scenarios,” a tool with which many people are familiar.

Scenarios must be defined and presented in a certain way if they are to inspire leaders to consider all the possibilities. There are risks if scenarios are done wrong. Present only one scenario, and the rest is considered blasphemy. Present two, and people are forced to take “sides,” both of which may be misleading. Present three scenarios, and people will usually fixate on the “moderate” scenario, even though it is no more reasonable or reliable than one with more impacts. For these reasons, we recommend no fewer than four scenarios, a broader set of uncertainties that stimulate discussion as to our course of action.

The image at right gives only one way of presenting a variety of scenarios, though probably my favorite way. The impact of these potential futures vary from mild, to wild. Note particularly the “wildcard scenario” – low probability, high impact. It probably won’t come to pass- but if it does, all bets are off. In our experience, wildcards are often discarded as too improbable to be worth the potential lost time discussing some doomsday scenario. Many executives avoid a serious consideration of wildcards, preferring to focus on scenarios with brighter upsides.

The BP spill, now in its 43rd day, is the definition of the wildcard, and the best possible argument for why they should be considered in advance.

True, planning for low-probability, high-impact events is not the quickest way to juice up revenue and profit. But it could mean the survival of the company.

Everybody wants a profitable, just, humane, creative, interesting, healthy future – it’s just that while we are working in groups to achieve it, a bunch of other stuff happens along the way. Such is life in a world defined by bureaucracy, and instead of complaining about it, we need to realize why we’re having so much trouble actually thinking about the future. Until we recognize our collective problems, all the trends and scenarios in the world won’t help us create organizations with a strong sense of foresight.

The above statement is the central thesis for my next book, which will be a detailed, rich manual on exactly how NOT to study the future. I have identified twenty-five common traps into which leaders fall when attempting to think about the future. Before you get flogged with any more reports about nanogenetics or the rise of the Ghanaian automobile industry or reports on cell phones implanted in your molars, we need to look back at the past fifty years of futurism and see why it didn’t necessarily result in a world full of visionary futurists.

Given my new mission, I was excited to find this beautifully-presented look at cognitive bias in groups.  The authors outline for us all the ways our group dynamics can result in dangerously inaccurate thoughts about the future:

• The 19 social biases
• The 8 memory biases
• The 42 decision-making biases
• The 36 probability/belief biases

I love this presentation in the way in does not invite to blame or ridicule – these are natural phenomena that occur within groups of people. I may have committed 75 of these mistakes before breakfast myself – it’s that easy. When we come around to such self-analysis with a touch of humor and understanding, we may finally be in a position to move on to organizations that are more sophisticated and more effective.

Cognitive Biases – A Visual Study Guide by the Royal Society of Account Planning

I have no idea how I managed to miss this incredible video for so long:

Are You Ready for the 21st Century ? from Michel Cartier on Vimeo.

A couple years after the world financial system quite predictably melted down, it seems some of the more mainstream journalists are becoming interested in what we call “wildcard scenarios.” Kevin Drum sat down with Reuters’ Felix Salmon and learned:

We should all be more worried about the potential of a mass casualty event — an epidemic, a gigantic earthquake, a massive hurricane, etc. — to annihilate the insurance industry and take out the rest of the financial system as a side effect. The AIDS epidemic nearly did it, Felix says, and missed only because most of its victims weren’t insured. A really big hurricane hitting Long Island could do it, though.

Yes indeed, why don’t we think more about low-probability, high-impact scenarios? It’s not because these are new concepts, oh no. Herman Kahn from RAND Corporation introduced scenario analysis in a modern context to deal with the possibility of nuclear war. He made his entire reputation by bringing leaders unwanted outcomes (notably, destroying the planet) and walking them backward (“backcasting“) toward ways to avoid negative consequences (such as everybody dying). We’ve had fifty years to absorb Kahn’s messages.

Why don’t we think more about wildcard scenarios? It’s not that they haven’t become popular in the business world. Shell’s scenario group supposedly got on the right side of the oil crisis of the 1970s and built the next forty years of success on their understanding of probable outcomes. Those responsible published heavily and built wonderful speaking careers telling others about how to think in terms of scenarios.

Heck, I even wrote a book about how anyone, from a high school kid up to a CEO, can use trend analysis, scenarios and implications for anything. Why didn’t I end up on Oprah’s couch, telling everybody how to save the world with scenario analysis? Now available to the masses in non-jargony language and using the future of beer as a case study! Fun for the whole family!

Let me ask you the reader – how prevalent is scenario thinking in your organization? How many of your senior leaders are willing to entertain the possibility – however slight and “wildcard-y” – that the world may turn out in a way that could make their decisions the wrong thing to do?

And, a better question, what percentage of executives would take such intellectual exploration – hypothetical, mind you! – as a direct challenge to their authority?

How many public relations and communications staffers would find conjecture about potential futures, turning up unfiltered on social media ,as a direct challenge to the message they are trying to craft?

These are the cultural questions of bureaucracy we in the intelligence and strategy world need to deal with before turning out anymore 1500-page analyses of potential world events. We should save the toner cartridges until we deal with how organizations actually work.

With a hat tip to August Jackson, Lloyd’s of London schools us further in the outlandish corporate risk due to the telephone.

Had I not seen this, we might have started using such dangerous technology recklessly.

I loved this graphic, picked up on Twitter. (Click to enlarge) Not sure who Bozarth is, but it’s a clever comparison of social media to the original electric social medium, the telephone.

A few observations, picked up from our years of discussing innovative technologies and new social trends with leaders:

• When people say “It can’t be done,” they usually mean, “We can’t control what will be done with it.” Control, or more accurately the perception of control, is considered FAR more important than creating the forward motion of innovation. Control is almost always the most important value in a large bureaucracy,  more important than revenue generation and even profit.

• Most new communication technologies are tested out informally before they become official way of doing “work,” and thus are usually classified as “fooling around, wasting time.” Consider that back in 1996, in the days before Competitive Futures, while using the Internet to research competitors for my then-CEO, I was taken aside by a junior manager who accused me of “playing video games at work.” The video game in question, incidentally, was the EDGAR database of the Securities and Exchange Commission.

• Most every generation underestimates the tech savvy of the generation succeeding it, while simultaneously overestimating the complexity of the next generation of technology. Back in 2000, we did a landmark study of the future of information technology for the construction industry in which we predicted the increased use of cell phones, laptops, GPS, and electronic building plans. Many of the older executives rejected the notion that “construction guys” would be using “the Internet and computers” by 2010. Two assumptions here were faulty: that computer skills were the dominion of the educated, and that “computer” meant “giant, clunky desktop” instead of a smart phone or Toughbook. Today, even the poor kids have Playstation and cell phones, and intrinsically understand electronic menus and text messaging. The generation is more tech savvy, and the tech is simpler.

• The argument of late technology adopters is usually predicated on the idea that they have a CHOICE as to whether the new technology impacts their business. If history is any guide, you can either adopt major technology shifts or wait to see what your competitors will do with the technology. If this is still a question in your mind, why don’t you ask the music industry what it’s like to deny the inevitable.

As such, Competitive Futures is bullish on the long-term impact of social media. It seems inevitable for a host of technological and sociological reasons.  Pause for a moment to consider its impact on your customers and your internal management.

Usually, it’s the job of tin-pot dictators like Chavez and Ahmedinejad to trot out their intelligence services and declare that the world is out to get them.

But when the Spanish intelligence service says the country is under attack from speculators in a clear conspiracy, it’s a sign of something deeply interesting. First, it’s a telltale sign that people high in the Spanish government are concerned that greater instability is on the way from the sovereign debt crisis, and they are attempting to control the narrative.

For those of us practicing future intelligence, this is a call for us to examine the broader political trends at play. Most views of the future take the Euroland to be a stable economic entity for all scenarios. Generally, a meltdown of the single currency and a brushfire war between Belgium and Portugal are considered far out.  At the very least, most people consider the continued operation of the EU to be a given – after all, it has resulted in one of the most successful, peaceful, prosperous times in the history of the continent, especially after the tumult of the early 20th century.

Still, it may be that the success of Euroland has required all countries to play a part for which they are ill-suited. Spain still has 20% unemployment. Greece’s debt is out of control. In the days before the single currency, each country would have been free to fail, unsupported by the largesse of France and Germany. Today, they have been supported through their use of a stable, global reserve currency. Like so much, this may be borrowed equity, and borrowed time.

Imagine a future for your business, and indeed your nation, in a world where Europe re-fragments. It may be less far-out than previously thought.

Last year we did a series of forecasts for the short-term future, mostly as a reaction to the crisis in world financial institutions. Normally we try to avoid reactions to the 24-hour news cycle, but since a new bank was bursting into flames every 24 hours, it was appropriate.

For 2010, we’d like to follow on last year’s short-term forecast with…

REAL forecasts. Longer-term analysis. A marriage, once again of the strategic with the tactical. For 2010, the future is back.

We’re gratified to say that most of the collapse of 2008 and 2009 was easily predictable through the analysis of basic strategic trends that play out over five and ten year periods. It took nearly a decade for the central banks to help blow a real estate bubble. It took a decade of unregulated derivative financial products to bring Wall Street to the brink of collapse. It will take five to ten years for the Boom generation to rip our social security programs to shreds. Peak oil will have increasing effect on the economy in the next decade. On it goes.

Understand the real future now. Invest early. Mind your short-term management of your organization with a sense of what’s next. This is what we’ve always believed in, and now that panic is subsiding in favor of a stable decline of many 20th century institutions, people will be more apt to take the time to listen.

And Competitive Futures will be there.

Happy New Year!

At a recent meeting with business students, Warren Buffett has proclaimed that all cars on the road will be electric in 20 years:

Goetgeluk asked what Buffett thought of the peak oil theory — that oil production has peaked and will only decline in the future — and what he believed would replace carbon fuel.

Buffett told him that in 20 years, he believes all the cars on the road will be electric. He’s already invested in a Chinese company working on the technology to make it happen.

Buffett is really famous and really rich, mostly from his defiance of conventional wisdom and some excellent timing, so people are naturally attracted to what he thinks about the future. He hasn’t given us much context to this forecast, but it’s still important to consider. Even though Buffett is an authority of strategic-level business issues, let’s pick apart this forecast. I’ll use a rigorous method of forecast assessment I learned working with the great Joe Coates:

Forecast:

• “All cars on the road everywhere electric in 2029″

Author:

• Warren Buffett, chairman Berkshire Hathaway, Omaha, NE

Type of forecast:

• Expert opinion/conjecture

Assumptions:

• All cars means all continents will have electric motors – Africa, Asia, Latin America included
• Electrical “fuel” will be more competitive than petroleum as fuel for transport
• All new electrical refueling infrastructure implemented in the next 20 years across the globe
• Sufficient increase in electrical power supply across the globe to meet new energy requirements currently fulfilled by liquid fuels

Implications:

• Massive recycling of existing cars and engines
• More liquid fuel available for long-haul trucking (assuming “cars” only means passenger cars and not electric trucks)
• Retooling of all auto factories starting in 2010
• Trillion dollar business opportunities everywhere from rebuilding local electric grids, recycling old batteries
• Increase in demand for coal and wind generated electricity to make up gap in supply of electricity
• Increased demand in solar

Probability:

• Extremely unlikely

Assessment:

This forecast is pretty glib coming from Mr. Buffett. All cars running on electricity in 20 years? Fifteen percent electric cars I could easily see, 50/50 I might buy as an extreme scenario – but 100% electric cars by 2029? It’s nigh on ludicrous. The system effect of a TOTAL shift on all cars everywhere would be practically an act of a minor deity. Perhaps Mr. Buffett is “talking up his book” and this new Chinese company in which he has invested.

Not all forecasts are created equal.

I’m very excited for our upcoming inaugural meeting, this Thursday of our new, increasingly global, professional society, The Intelligence Collaborative.

The following video explains what intelligence is, why we need to collaborate, and why now is the perfect moment.

Have a look at the video, and if you’re anywhere in the MidAtlantic region, consider a trip to our nation’s capital this Thursday. Tickets are free – just bring your interest in how social media will change the practice of intelligence.

At times, it seems repetitive to tell people how to look at the future. In many ways, like golf, it’s a simple process you must practice. No shortcuts. Giving the same advice time and time again can feel like a nag.

However, how about giving people bad advice they can ignore? This is a new pedagogical approach, one I am working on for my next book. The power of negative thinking!

I am partially inspired in this effort by this all-too-true blog post on how to lose wars American style.

If you really want to lose a war, follow these easy steps:

1. Underestimate the enemy.
2. Avoid learning anything about the enemy.
3. Explain the invasion to the American public in simple moral terms suitable for middle-school children at an evangelical summer camp.
4. A misunderstanding of military history helps. Besides, comprehension would only lead to depression.
5. Do not forget that a military’s reason for existence is to close with the enemy and destroy him. An army is not in the social-services business.
6. Intellectual insularity should be a primary goal, as it avoids distraction.
7. Keep up to date with the latest nostrums and silver bullets. Organize your military as a lean, mean, high-tech force characterized by lightning mobility, enormous firepower, and extraordinary unsuitability for the kind of wars it will actually have to fight.
8. It is a good idea to bracket your exposure. Be ready for wars past and future, but not present.
9. Insist that the US military never loses wars. Instead, it is betrayed, stabbed in the back, and brought low by treason.
10. Avoid institutional memory. Not having lost of course means that there is nothing to remember.

Mindset is more important than capital, more important than information.

Further to our series of “Forecasting Works” blog posts, dig these ads for AT&T from 16 years ago, 1993. They forecast, based on their own knowledge of technology and some educated guesses:

• E-books
• Telepresence
• EZ-Pass digital toll collection
• Online concert ticket sales
• In-car GPS navigation

Were they completely accurate in these visions? Not entirely, but you’ll have to admit that it is all frighteningly close.

They engaged in a rational process of thinking about the impact of current trends, and it helped light the way.

You can do likewise.

Today, the airwaves are filled with advertisements for consumer foods that aren’t simply nourishing but portrayed as practically medicine. A slew of softdrinks are marketed as hangover cures, energy, memory enhancers, cognitive enhancers, help with clairvoyance, and fuel for flight. Fish isn’t just fish, it’s OMEGA-3 FATTY ACIDS. And somewhere along the way, trans-fats replaced “Ebola virus” as the world’s deadliest substance. Is this random or could you see it coming?

Food as medicine was a theme we predicted for 2010 way back in 1999 when studying the future of food and health for a group of global consumer product manufacturers. The world seemed to be at a turning point at that moment, with a number of trends appearing to collide in the decade to come:

• Super-size and family value packs had reached their apex, due to increasing penetration of fast food and big-box retail throughout the world
• Obesity epidemic reaching a pitch, not only in America but also in unexpected places like France, Greece, China
• Litigious American culture had finally apexed with its war on cigarette liability, and a new target was likely to be next
• Biotechnology was promising new technological abilities for all plant life (this was the era of the Human Genome Project and techno-positive rhetoric was off the chart)
• Boomers were aging, and increasingly interested in immortality on the cheap
• Sustainability was increasing as a concern, and farming would be one of the most effected industries
• The “Slow Food Movement” was beginning to point back to heirloom breeds of livestock and produce and encourage local diversity in favor of industrial solutions

Basically, it was clear that the strategic trend of increasing portion sizes was about at an end. Food packaging technology had a bit more life in it, especially smart packaging to assure safety and freshness for delivery to developing nations. Genetically-modified organisms were causing a firestorm, and the promise of efficiency in factory farms simply wasn’t attractive enough to overcome the concerns over safety, particularly in Europe and Asia. Something else had to come next other than size and convenience.

Food itself hasn’t changed in the last ten years; a salad is still a salad. Food still grows in the ground. The major cause of starvation remains war, not lack of productivity.

What has changed most has been the industry of food. Most players in the food industry have changed significantly since 1999, and their actions have been in response to trends clearly visible at that time. Most all manufacturers are concerned with portion size, putting out “100 calorie snack paks” and “smart size” formats. McDonald’s stopped “supersizing” and began offering more salads and healthier food for kids. (Other players, like Hardee’s turned headlong into the storm and began to offer even more life-threatening beef-tastic products.) Kellogg’s cereal has reduced-sugar versions. Coca-Cola has diversified into all forms of beverages, and their new offerings are calorie-reduced, often featuring nutrients that are marketed as cures. Whole Foods has gone from a niche player to a major alternative grocery store in almost every urban area in the United States. Lawsuits are being filed for obesity.

In short, the future of food was plainly visible ten years ago if you look at the trends. Are their inaccuracies? Of course. Given the hyperactive coverage of the Human Genome Project and the height of the Dot Com Bubble, many people dreamed that genetic engineering of plants would be letting us grow most materials and chemicals and pharmaceuticals in the field as opposed to the factory. Instead, it looks like farmers’ markets are back.

Do we have food-as-medicine? Yes, but most of it is fake. Your doctor still recommends lots of veggies, a little less cheese and time in the gym as opposed to some beverage full of vitamin B12 and açai. However, the overall understanding of food as a major component of health has gotten more press, despite still-climbing rates of heart disease and diabetes.

Some of this stuff took ten years to fully blossom. I remember when my colleague John Mahaffie started talking about trans-fatty acids in 2000 as the next ticking time bomb, and I had no idea what “fat tech” could have to do with the future food. And yet New York City banned cigarettes and trans-fats around the same time.

Does forecasting give you an understanding of the strategic direction of the future of food? It did to our clients who were first on the market with new products.

• “It’s impossible to tell the future.”
• “Nobody could have seen this coming.”
• “ These days, things are so unpredictable, we just focus on the short-term.”
• “We have entered into a period of history of high instability – forecasting is practically impossible.”

The above are classic canards used by the media and some authority figures to argue against the intellectual exercise of thinking critically about the future. They have been used with alarming frequency since the bank meltdown of last year. The collective shrugging of the shoulders of our banks and Treasury officials was often accompanied by sighs of “How could we have know what was coming? It was all TOTALLY random. That’s just the way of the world now.” Ergo, we needn’t think hard about the possibilities of converging trends, we should just check in to be told what’s going on.

This is wrong, and it is counter to how smart leaders act. None of that has changed, bank catastrophe or not.  Think about the future and you will improve it. Ignore it, and other people will create your future for you.

This week marks my tenth anniversary as a forecasting professional. I can now look back on forecasts we made a decade ago with today as the target date. Thinking about a decade of predictions, scenarios, visions and forecasts, I can say I am more excited than ever about this intellectual discipline. In short, it works, it helps, and I still recommend it to every executive on Earth.

This week, I’ll be sharing some of my favorite stories of forecasts we made in the heady days of the Dot Com Boom. If ever there was a period of irrational exuberance, that was it. And we still saw into 2010 with some clarity – enough so that I’m proud to discuss our successes and amusing failures.

If you watch the TeeVee Box, the world and its institutions seem inherently irrational. It’s a world of crazy risk, cataclysmic downfalls, nonsensical solutions from people who ought to know better.

One of America’s high priests, Ben Bernanke, has just been taken on for a second term at the head of the powerful and enigmatic Federal Reserve bank. See my post from yesterday to understand why this surprised me. For a moment I had the all-too-common though:

In a world this nuts, why even forecast? I mean, why study housing prices, water tables, healthcare expenditures, and all the rest if the world comes down to the actions of a select, semi-rational few.

Then I thought it over. The last year has unfolded in a strictly rational way. The trick to understanding the future (and the method I teach) is to analyze a combination of three things:

• structural trends
• actor decisions
• wildcards

Understand what’s happening, the options available to actors in a system, and the crazy stuff that can happen when you’re not looking.

Look at the economics of 2008 – 2009 through that lens and it all makes sense.

This is the subject of today’s podcast, so KEEP THINKING.

There are certain classic responses you will hear from people when they resist strategic ideas about the future. Let’s say that you recognize a threat to your current business and suggest a course of action. One of my all-time favorite reactions you are likely to hear is:

“We tried that once in 1980s…it didn’t work! So, you know, it can’t work now, either.”

Everything on earth, including perpetual motion machines, dividing by zero, and drinking red wine with fish was tried, to no avail during the 1980s by now-depressed executives. As a result, these jaded, weary bureaucratic warriors will attempt to shoot down anything that even smacks of an earlier attempt at greatness. Their tool of choice will be to compare the current strategic situation to the decade of neon and shoulder pads.

The way around this roadblock is a rigorous comparison of both strategic situations, today and yesterday. A non-aggressive way to handle this is to say, “Alright, it sounds like you learned a lot back then. Perhaps we could discuss how both situations compare?” Then you can go through all the things that have changed and see if you can unpack this person’s assumptions about their view of the future.

*Note of caution!* Some classic strategic blunders will always apply, and should be taken mostly at face value. Pay attention when you hear, “Don’t invade Afghanistan. We got the Soviets to do it in the 1980s, and it’s really nasty.” This one is true! They learned it in the 1980s, 1950s, 1920s, 1890s, 1120s, and so forth back to Alexander the Great. It’s a good bet.

*Additional note of caution!* Getting a puppy for a studio apartment, betting on stock tips from inlaws, tattooing the name of recently-met paramours on easily-visible parts of your body – you might want to avoid these mistakes as well, with or without rigorous analysis.

Now, let’s explore this technique in an economic situation rapidly unfolding before us. Many of my regular readers may be aware of the somewhat significant difficulties in the banking industry due to developments in the housing sector. (Ahem.) Everything – how do you say? – caught on fire and burned to the ground after people around the world decided that their three-bedroom ranch with a 1950s kitchen was worth EIGHTEEN MILLION DOLLARS, and then the banks developed ingenious financial instruments around this unusual state of affairs.

This you probably know. Now, if you’re a consumer of national television networks and some major print publications, then you may be hearing lots of protestations about how there’s never been a better time to buy! After all, we’ve seen it all before, especially in the boom-and-bust Eighties. (See “Scandals: Savings and Loan.”) This is a perfect time to ask whether this cycle is like the 1980s, or perhaps something new that requires new analysis and several scenarios.

My hero Mish is pumping out excellent analysis of the global economy, inexplicably free, and he came up with the following list of strategic conditions that are sharply different from just a few years ago:

Tougher lending standards: no more liar loans, bigger down payments, closer look at incomes, etc.

Tougher appraisal standards

The difficulty of finding jobs

Wage and benefit cuts shrinks affordability for those who do have a job

Huge bank-owned shadow inventories

Huge developer shadow inventories, especially in condos

Consumer willingness to “walk away”

Rising delinquencies and foreclosures due to rising unemployment

Rising taxes

Overleveraged consumers

Pent-up demand to sell in a “please get me out mentality” if prices rise just a bit

The upcoming boomer retirement downsizing event

A change in consumer attitudes regarding housing as an investment

A new frugality in consumer attitudes towards debt in general

This is a textbook perfect example of how to argue for a new approach to the strategic future. Seen this real estate market before, and you know for certain it’s going up? Then how do you think the overleveraging of consumers will impact the situation? What about all those empty condo towers in Florida with one family each? What about all those Boomers who were going to sell their houses anyway to move to more exciting or warmer or less busy places? What about the banks now waterlogged with houses nobody wants to buy?

You don’t want to discount people’s experience – it can sometimes be useful to hear of how the past can inform today’s decisions. It’s also acceptable to logically deconstruct the future into systems and trends (See: Future, Inc.) and to ask people if their assumptions about the future meet such demonstrably different trends at play. You may still get resistance, but at least people will be clear about where they are coming from.

In forecasting, it is often useful to show trend lines in a graphical fashion. This way, you may see a pattern forming, and get the jump on a profitable strategy. I outline this method in greater detail in a book called Future Inc.

That’s why I love this gem, one in a long line of gems from Mish. For those who think our housing assets will hold value, he sees the value curve, and the associated thinking, as following the same pattern as the Japanese housing bubble, from which the country has scant recovered.

What do you think?

The basic idea behind futures analysis is that 1) our whole society is connected in a system 2) trends act on the system 3) people act differently due to these changes. This is a more revolutionary concept that you would think; it is met with considerable skepticism. Our culture actively supports the notion that nothing is really systemic, because otherwise it would require complex thinking to understand it, and thus wouldn’t be easily salable to the masses. This is one explanation why our major media rarely approach topics from a systems perspective – they prefer an atomistic approach that prefers celebrities and disjointed headlines to connections.

Regardless, after twelve or so years of this work, I remain steadily convinced that the basic methodology of systems thinking is the way to go if you want to understand what’s next. Because – as stupidly simple as it sounds – people really do change in response to stimuli, as they always have. Take for example our new Asian-style savings rate in the United States – 6.9%, up from 0% in April of 2008. That’s not an incremental change in consumer behavior, it’s a complete revolution in a little more than a year. This is an example of reality outpacing fiction, for if you suggested that the American consumer would on average go from spending like a pack of feral teens on methamphetamine at the mall, mortgaging their children’s future for big screen TVs, to spending nothing and stuffing money in their mattress like a wary old shopkeeper in Hong Kong in just 14 months…well, you had better be pretty convincing to get people to buy it. How did people change so radically in such a short period of time?

Well, the answer couldn’t be simpler. All you need do is scare the bejeezus out of the Boomers, who are facing a structurally uncertain retirement, and BANG, people figure out quickly that your house may be a financial boondoggle, but people still love cold hard CASH. Unsurprisingly, savings accounts begin filling up in ways they haven’t since the World War II generation was at the height if its economic power.

The common myth in America had been such that the Greatest Generation saved cash for a rainy day for the same reasons they beat the Nazis – they were just fantastic, noble, foresighted, brilliant citizens living in a finer age. Of course, this is complete nonsense. The Generation born between 1915 and 1930 was just as venal, dishonest, credulous, and short-sighted as the next batch of humans. Why did they save money where we went nuts at the TV store? There were three main reasons. First, there wasn’t nearly the amount of liquid credit available in the national banking system. Second, many shops did not take credit. And most importantly, they lived through the Depression, when all national governance failed to stop Americans from starving. Basically, they didn’t believe, as many do today, that everything would turn out okay. They knew that complex systems often failed, and many of them literally lost their farms as a result.

Why did Americans start saving all of the sudden? Was it the spirits of their long dead ancestors returned to waggle their fingers in disgust until they were shamed into a 6.9% savings rate? I can’t rule that out, but more importantly credit dried up and people got scared to death. First, credit lines were tightened up, and then people figured out that bad stuff could definitely happen. In other words, two of the systemic requirements for a high national savings rate. The system changed, and then the people responded to the stimuli. Magic.

Question for the week – what are the key parts of your business’s system that could change, and what might it mean for you. If people can start saving 7% on a moment’s notice, they can change in other ways, too.

Back a few decades ago, when in graduate school, my son, then maybe two years old, was playing outside in a common area. He fell and hit his head pretty hard. A Japanese women, wife of a grad student, saw it and said, managing as best she could with limited English: “Baby hit head, if cry, no problem. Baby hit head, no cry. Problem.”

I would say, about the current reactions to the economic scene, that the baby is not crying.

I read this comment this past week over at Gregor MacDonald’s fantastically insightful blog and it really stuck with me. So much news keeps coming at us, so many  headlines informing us of additional $60 billion obligations to our future earnings and yet people seem to be in a daze, tuning out additional rotten information.

An example: I was just in Europe working with clients on economic forecasts and scenarios, typical futurist stuff. A couple of times I was asked a most unusual question. “So, do you think the crisis is really still going on over in America?”

I asked, “Did you see that General Motors, one of the most venerated companies in the history of American capitalism went bankrupt last week?” The quick reply, “Sure.”

Me: “Well, that’s gonna sting a little.”

Them: “So, you think that’s bad.”

Me: “The bankruptcy of GM and the impending meltdown of California and stuff? Yes, that’s pretty gnarly.”

Them: “Oh…I guess…I guess that’s true.” *silence*

People, at what point did the destruction of America’s top car manufacturer become easily forgettable? Are we just so overstimulated by bad news that we’ve stopped thinking about the consequences?

Five years ago, if you had suggested a scenario that by 2010 unemployment would be at 11% and General Motors would be nationalized, your colleagues would immediately seize you and force feed you antidepressants and romantic comedies until your hyper-gloominess passed. Today, it barely provokes a response.

Are we in a fog or what? And what will it take to get us thinking again?

I just caught wind of some futures studies going on in the Netherlands, examining the twenty year future of some of their towns. I especially liked this video, showing three distinct futures for the town through animation. This is a very compelling way of actually showing people what you mean when you discuss abstract trends as well as potential policy responses. At the end of the day, futures studies are about showing decision makers and stakeholders the possibilities, empowering people, far more than “predicting” the future.

How can you make your ideas more attractive? How can you make a compelling case for change? Think of different ways to tell your story.

The challenge of futurism is in getting people to think in terms of systems. Once you seduce people into the infinite complexity of interdependent adaptive systems, getting them to see possibilities follows quite naturally. This, of course, is the trick. To understand complex adaptive systems is both to have an incredible fund of knowledge about how the world functions, and to believe that the world is complex. I constantly refer to a piece entitled The American Cargo Cult which asserts that most Americans reject the notion that the world requires complex information to understand, and moreover that those with expert-level understanding of complexity probably have their own agenda. To admit the world is complex is to put yourself in the hands of experts or to consecrate your own life to constant learning and acceptance of your own ignorance. Either way, fake certainty wins out over skepticism, comforting platitudes defeat unsettlingly complicated explanations, and blame assignation triumps all too often over simple understanding of the human condition.

In my future intelligence method, I teach a standard tool called a futures wheel, which explores the primary, secondary and tertiary implications of trends, events, and scenarios. For example, the development of the mass produced automobile resulted in obesity, sexual promiscuity and lonely grandmothers:

The reason for this is what I call superconnection, about the interconnection of all living things. I would never trademark this concept since it’s the basis of Zen Buddhism, not to mention all of ecology; I think it’s in the public domain as far as intellectual property goes.

This is, in the words of one of my colleagues, “retrospectively obvious.” As I mentioned, there is natural resistance to this type of analysis – so you have to spice it up with the references to teen sex.

Consider then, the current situation. Competitive Futures has been squaking about the real estate disaster for as long as people have been convincing themselves that townhomes in ugly, dangerous neighborhoods are now worth $1.2 million, around seven years now. We have been exploring the eventual implications of the housing bubble, which would go well beyond impacting real estate agents. Most people, however, have preferred to believe that housing was a simple equation:

MY house is now worth a lot, which is part of MY net worth. Assets must always go up, which will be good for everyone. There are no downsides to the appreciation of MY assets. Young people will one day buy this house at five times what I bought it for, with no relative inflation to reduce the value of MY other assets.

Instead, we got superconnection, which is resulting in:

• Failed banks
• Crony-socialist bailouts involving federal interventions that would have made Trotsky a bit wary
• Hyperinflationary monetary policy
• A collapse in Manhattan’s commercial real estate market
• The end of big box retail
• Deserted housing developments being torn apart rather than allowed to turn into crackhouses

Quite a list of current events, no? None of these developments were predestined in some sort of Calvinist way – we could have turned back from this bubble as recently as 2005 and saved ourselves a lot of chaos and pain and debt and hassle. But here we are, staring into the maw of the strategic implications of our own national policies. And you no longer need to talk about teen sex to get people into the concept – real, serious changes are occuring every day, and the roots of this change are evident.

As you read this, we are clearing away the last vestiges of our preternatural belief that everything will turn out all right, that the system always come back to some sort of equilibrium. 2009 was supposed to be a year of change, and boy howdy, is it ever. We’re out of the realm of theory and clever PowerPoint explanations. The fundamental theory of futurism is materializing in our destroyed banks, our scarred communities, our families moving in with in-laws, our eventual inflation. It’s real now.

This news is not happy, not in the giddy, hallucinatory way that leads us to think simply, but it is good news none the less. This is real. Leadership is real, with serious consequences. Moving forward will require that we master complexity, reject old bromides, and remain open to the possibilities. That is the only type of leadership that produces results. And it’s the only kind that this moment will allow.

The future is not an academic exercise. It is about blood and tears, treasure and poverty, dreams achieved and destinies averted. It is about sweeping healthcare reform and the atrocity of war. As professionals, we are all too often trapped in our powerpoints, distracted by our petty intellectual rivalries, lost in the language of technocrats. But this is life and death, success and failure.

I am reminded of this as I read the wonderful Dinokeng Scenarios, a view of three possible futures for South Africa. Knowing the situation in that country – violence, hope, unemployment, illness, and burgeoning democracy – the stakes could not be higher. To quote the project:

We are at a crossroads, but what is wrong in South Africa can be fixed. South Africa is a country of great possibility. We have a reasonably strong asset base. But we also have a deficit – we are badly served by our leadership. There are dangerous seeds in our present which have the potential to lead us to disaster, possibly even authoritarian rule. This is a moment of choice that requires strong decisive leadership.

The project presents three guiding scenarios: Walk Apart, Walk Behind, Walk Together, representing the possibilities represented by allowing the status quo, expecting a government to provide solutions, and depending on community integration, respectively.

I suggest you download them all, for two reasons. First, to see how futures can serve as both professional and inspirational documents, since this project represents the highest level of professionalism and spirit in the world of foresight. Second, you owe it to yourself and to our neighbors in South Africa to understand their struggle, if perhaps to understand your own.

We are all in this together. When one person fights to make a brighter, more just, more humane, healthier, more prosperous future, we must all join in.

Ron Paul says we can’t just create capital nor simply reinflate the bubble.

Is it the end of the Federal Reserve system?

A couple months old, but as we anxiously wait the ultra-scientific “stress tests” on banks, we need to consider whether banking as a system is at the end of an era.

I’m excited when people get away from looking at the current crisis in comparison with 1995, and start viewing the longer trends at play, ones that take decades to unfold.

Check out this graphic by Charles Hughes Smith, in which he sees considerably larger patterns of wages, credit, and energy.

1. Peak oil, or the depletion cycle/end-game of the global economy’s complete dependence on inexpensive, readily available petroleum/fossil fuels.

2. The cycle of credit expansion and contraction (approximately 60-70 years), which is now beginning the transition from unsustainable credit expansion (bubble) to renunciation of debt (credit collapse) and global depression.

3. The generational cycle (4 generations or approximately 80 years) of American history which leads to nation-changing social, political and economic upheaval. (The American Revolution: 1781 +80 years = Civil War, 1861 +80 years = 1941, World War II + 80 years = 2021)

4. The 100+ year cycle of price inflation and stagnation of wages’ purchasing-power which began around 1901 is now reaching the final stage of widespread turmoil, shortages, famine, war, conflict and crisis.

As promised these are the slides from this afternoon’s talk about telling negative stories with a positive, business development spin.

I found this gem on Slideshare, a wonderfully brief charting of the history of the world’s schools of futurist thought, from the 1920s to present day, courtesy of Portuguese analysts António Alvarenga and Paulo Soeiro de Carvalho. It’s great that they call out the French school from its European and US counterparts, as they do represent a very different approach to foresight. Some of the Asian school is missing, but given the lack of translation of Japanese, Korean, and Chinese documents to Western languages, this hard. If you speak Portuguese, you can probably work your way through French and Italian papers and journals, but the distance between English and Korean is significant indeed. Hopefully, one day we’ll have more communication between East and West when it comes to thinking about the future.

I am glad to see Douglas Ruskoff weigh in on our current situation. He’s a fantastic thinker, humanistic and often contrarian, the author of many books including the recent Get Back in the Box: Innovation from the Inside Out, which is about the foolishness of senseless innovation. If I read Rushkoff correctly, he sees economics as a distinctly human, connected enterprise, and the absolute opposite of where our commercial leadership has taken us.

He presents some major, major ideas:

• The recent goal of business has been to make every company a holding company, one whose purpose is the acquisition and/or management of debt as opposed to a group of competent people who do things for other people
• People at all levels have become more interested in the perceived value of assets (homes, shares of companies, CDOs) than the actual value that they might ever produce
• Most of these ideas are supporting people who may not even be in the system – long-gone investors, maybe even dead guys
• The monetary system is not about encouraging trade, but often preventing trade
• The American Revolution came about because England forbid people from providing each other with services
• LOCAL CURRENCIES used to be very popular and could be again
• We were probably better off economically in the Late Middle Ages (the Black Death notwithstanding)

We need to revisit our total concept of value creation. It’s great that Rushkoff is lending a hand.

I’m glad to offer up this dialogue between myself and August Jackson in which we explore the uncomfortable questions about the future of competitive intelligence after the Great Recession.

What good is CI if we can’t even get out of the way of crises like the one we’re in?

Will people still respect intelligence departments?

Is it our time to shine, or will we be relegated to obscurity for the foreseeable future?

I think this has a happy ending, but we have lots of soul searching as a profession in the meantime. I hope you’ll tune in.

Right now, numbers mean very little. Sure, sure – if your bank account runs dry, you can’t buy anything. But in the macroeconomic sense, our ability to value economies, value companies, and value individual effort is sincere hobbled because the numbers don’t line up. Perhaps soon they will achieve equilibrium, and stock prices, GDP, and currency exchange rates won’t seem like some fever-dream hallucination of mixed metaphors. But for now, we’re in a fascinating period  in which we can ask not just “how to create value” but “what is it we value?”

This runs headlong into questions of culture, sociology, entrepreneurialism, poverty, Native American tribal governments, currency, finance, and more. Sound like too much for one narrative? Then check out today’s edition of the Competitive Futures Podcast.

The national pastime is now watching financial indicators reach the lows of the decade. It’s getting boring.

FAR BETTER is to see what IS going to create the next economy – entrepreneurialism. The next economy won’t be stimulated into existence, it will be built by entrepreneurs. Yes, that intrepid spirit of putting your money and time into businesses that do little but eat money and time, in the hopes that one day you will change the world – or at least turn a profit.

My colleague, the intelligence thoughtleader and Enterprise 2.0 guru August Jackson dragged me out to a mixer for group I didn’t know – Tech Cocktail. You might think that an event dedicated to technology startups would be morose in this supposedly capital-scarce, depressed economy. Surprisingly, the mood was gleeful, far more reminiscent of Monica-Lewinsky-era Washington, when cell phones were novel, Napster brought you the world’s music guilt-and-compensation free, and people were just SURE that www.e-spatulas.com was going to set the world on fire.

Wait, haven’t we learned ANYTHING since 1998? Shouldn’t we have figured out to not trust the flowing drinks, the meeting of new people, the launching of strange sounding, internet-based services, since this irrational exuberance brought us Enron and Global Crossing? Isn’t getting excited about tech companies better suited to an era of high profits, financial trickery, cheap illusions?

No, this is still where the future’s at. Sure, nobody was trying to deal with clean water, climate change or healthcare, the likely shapers of our destiny, but it’s the attitude here that is so important. Check out a few of the players:

• The Social Collective, a group the builds online communities to improve the value of conferences
• Localist, a one-stop shop to advertise local cultural events
• DeGeeked, a website dedicated to answering the simplest, most inane questions for tech n00bs
• GeniusRocket, a service to link brand builders and artists

What struck me was that this time around, all of the entrepreneurs were prepared to discuss viable business models. They knew where the money would come from, and were even realistic about their projections. Today, it’s OK to base a business off traffic and revenue from ads, even if it means you won’t be ultimately buying a Gulfstream 5 from your income. The rest generally knew who their target markets would be. These details seem to be all the difference between this round of innovation and 1999, when sites like www.goatclick.com went for $127.50 a share, and the CEO said “We’re still looking for a business model.”

I don’t care whether any of these specific businesses rescues the economy. What strikes me as important is that America is still hosting these types of events, where people come together excited to talk about building new services, manufacturing new goods, solving real problems and hopefully creating jobs. This is the only spirit that EVER builds economies.

We’re spending so much time examining the collapse, it’s time we get excited about the recovery. I know I am.

I snagged this from Don the Idea Guy, but it’s an amazing view of how right we were in 1981 to think this would be cool.

I mean, can you imagine INTERNET COMPUTER NEWSPAPERS?

Gerd Leonhard is one of the hardest working guys in the world right now, criss-crossing the globe and trying to figure out the future of making money off music, books, movies, and other content. (Guys like me really appreciate that!)

He has noticed that the “sue the customer” trick didn’t work (ahem) and that a new business model for content is badly needed.

Here, his mantra is “compensation, not control.” Watch the whole thing:

Far be it from me to criticize the man who made Michael Jackson’s Thriller.

Still, I am a struck by this interview of Quincy Jones discussing the next few decades of the music industry. It shows how often, when transformative change is upon us, the obvious answer can be impossible to see. Listen to “Q” discuss how the distribution system must be “fixed,” since in his mind, the population increase of the United States and China ought to result in an increase in the old business model. He seems to expect that one day, we will bend the new technology to the old way of doing things.

I have extraordinary respect for Quincy. He will go down in history as one of the five major figures in popular music for his playing, composition, arranging and visionary production skills.

The future, however, does not respect past achievements. It simply forges on, shaping the world using the forces at play in the moment. Cruel, but fair.

While we are all arguing about credit-swap-derivatives and Keynesian economics, science and technology moves on.

This is a holographic image of Ray Kurzweil, techno-utopian, singulatarian, author, and inventor of incredibly awesome musical instruments. Announced today was the joint venture of Google, NASA and Kurzweil on a project called “Singularity University.” For $25,000, you will be able to study artificial intelligence, nanotechnology, and biotechnology in depth over a nine week period, ostensibly to explore the concept of “singularity,” the intersection of these technologies that could theoretically mean a radical leap for humanity.

I am conflicted about this.

Let me say that I love Kurzweil as a polemicist. His book Age of Spiritual Machines posed insightful questions about the development of neural nets and advanced computing, making us consider just what our interactions with non-carbon life could look like. He asks pertinent questions with imagination and daring.

My conflict is over his more recent book The Singularity is Near, which is techno-utopianism claptrap taken to its most absurb level, a book that says mortality can be conquered and conquered soon by the magical intersection of IT, nanotech, and biotech. Specifics on this intersection are not offered, nor supported by peer-reviewed scientific literature.  The methodology for his forecasts is non-existant, a textbook example of how simple extrapolation of current trends can lead you to conclusions without validity. For example, I don’t believe that nanotech and biotech will allow us to live forever as holograms in our iPods just because we’re spending a lot on genomics and nanotech research. We don’t even know why we sleep, nor understand how proteins are coded from the genome, nor a million other basic facts about humanity. Can we learn? Sure! Are their leaps in understanding? Absolutely! Can we count on them? Not so fast – Mother Nature gives up her secrets on her schedule, not ours. And every answer obtained usually means 1,000 more questions.

Most of the healthcare community is terrified of the real future of taking care of Baby Boomers with diabetes, heart failure and Alzheimer’s, while the “transhumanist” community is going on about we can defeat death in 2023 and live forever as Second Life characters. I find the worldview frivolous at best.

But that doesn’t mean they aren’t right.

Mind you, I’m not betting on uploading my brain into an iPod anytime soon, but I don’t want to dismiss these people or these thoughts at this moment in time. I think we’re getting very distracted by the turmoil caused by globalized finance and industry. This is understandable, but anytime people are this involved in a crisis, we take our minds off the vast majority of other things going on. And while we’re fixing our monetary system – which will take years – scientific research and development is going to keep progressing. Somebody ought to be watching it and considering a broad range of scenarios. In this case, I’d rather have a guy like Kurzweil pushing the envelope. We need to consider best- and worst-case outcomes and discuss it well in advance.

Why my change of heart? Look up current progress in surveillance technology. It has come so far, and is moving so fast toward a society of constant observation- with totalitarian implications – that it is clear that science and technology is not waiting for us to clean up our 401(k)s. It’s moving along, with or without us. And all of us, Ray Kurzweil included, need to keep thinking about it.

I thoroughly enjoyed the NPR segment yesterday entitled “Obama tests Keynes” in which a couple of young guys dig into the often-bewildering rhetoric of the economic stimulus package. Funny, relevant, and worth a listen.

It’s important that in this case it’s young journalists taking a fresh approach to the economic arguments of Baby Boomers. I don’t think the Boomers at the head of our institutions often recognize that the political ideologies discussed were born long before we arrived on the scene, and often have no connection to reality for Gen X & Y. The snarkiness between taxcutters and economic stimulators often generates as much deep-seated passion as comments about “Hanoi Jane” Fonda – it’s a reference to a fight that started well before our births, and may need minutes of explanation to even make sense.

Case in point: the radio program deals primarily with the multi-decade conflict between Keynesians, who believe that well-timed government spending can save flagging economies, and market fundamentalists who belief that the entire economy can be managed through tax cuts and manipulation of the interest rate. The Keynesians protest, “government spending led to winning World War II and got us out of the Depression!” Market fundamentalists tend to argue that the slump of the 1970s proved that it’s not a cure-all – and that only deregulation, tax cuts, and Greenspan’s masterful operation of the interest rates saved us from big government stagnation.

The radio program concludes by saying that after all the discussion about this once-in-a-lifetime event, the Obama plan is basically pure Keynesian economics. After this, we’ll be able to see once and for all if it works or if we were imagining it the 1940s. The exciting bit is, this may be the first verifiable test of classical economics!

This kind of thing makes me insane.

Here we are, heading straight into the meaty part of the 21st century, experiencing an economic emergency that could only be created by a combination of today’s special mix of globalization, Internet, post-hegemonic power vacuum, unchecked assumptions, and 6.8 billion people at an unprecedented moment in history. And the only topics our elites can discuss is:

“So should we spend a lot of money on credit or fool around with the interest rate?”

Every day, people wake up and turn on the television or radio or Web site of their choice and begin worrying about a select group of numbers that are forced at them daily. We hear these measures so often, people are mistaking them for important or relevant.

• The Dow Jones Industrial Average – a collective of large-cap equities, and the prices that Wall Street gamblers are willing to pay that day to take part in their eventual earnings
• Housing starts – the number of new suburban homes under construction, with the assumption that all human housing should eventually stretch to the planet Mars
• Consumer spending – The amount people spend on Guitar Hero and couches and other goods for their new suburban homes
• Interest rates – The rate at which money can be borrowed from banks to the Federal Reserve, to other banks, to people, through credit, through…oh cripes I have a master’s degree and still don’t really get it. Suffice it to say that the interest rate policy appears as logical as Aztec shamanism, and about as transparent as the election of the Pope
• Stimulus packages – The amount of fake money spent on real things, supposedly to be paid – with interest! – by future generations, who will repay this through all the fantastic, super-paying jobs that are right around the corner…so…uh…just let us retire in peace, um, and keep paying your taxes…

We follow these things excessively, and to the untrained eye, they don’t seem to be leading to better management of the world economy. In fact, the world has been managed exclusively through these kinds of measures, and our policymakers are stuck arguing on the radio about whether KEYNES got us out of the GREAT DEPRESSION using these numbers.

GUYS – CAN WE TALK ABOUT THE NEW STUFF HAPPENING?

U.S. manufacturing now resides in China. Our kids are in debt. The Internet is making new companies possible and other companies obsolete. Science and technology is rolling onward. This is probably just another phase of Kondratieff cycles or Schumpeterian creative destruction. We’re looking at a huge change of management between the Boomers and Gen X. The Boomers are going to start going to the doctor a LOT and will crush the private healthcare system. Mass media is about to go extinct. Europe is out of kids, while the average age of Iran in 24.

Now, how is it that the argument can still be down to deficit spending versus interest rate policy?

Here’s some new measure to try out on the TeeVee, just to inject a bit of new debate into the public sphere:

• The Gig Rate: Measure the percentage of people who just graduated with expensive student loans and got a job that pays for rent, food, and debt repayment
• The Grandma/Doctor Ratio: Percentage of grandmothers able to get to their doctors appointments as scheduled, not left at home, letting their prescriptions go out of date, because they can’t get transportation
• The Ebay Entrepreneur Stat: Number of cash flow-positive home-based jobs created through Internet technologies, allowing people to make money and still raise their kids
• The Youth Diabetes Drop: Number of young people diagnosed with Type II diabetes mellitus able to reverse their disease through diet and exercise, thus saving society billions in the long-run
• The Volunteer Volume: Number of people financially secure enough in their lives to donate time to a local charity, improving their communities at no cost to taxpayers
• The Revitalization Rate: Dollars generated through the repair of our natural and built environments, from wetland and waterways to city centers and school districts, creating economic prosperity while giving future generations even more opportunity

I don’t care if you use these – invent your own. Find a way of discussing economic prosperity in a way that doesn’t use these same, tired, busted statistics.

It’s time to leave John Maynard Keynes where he was: a Cambridge elitist who bounced around the London dinner party circuit, hating the working class and delivering all kinds of new, interesting ideas just for shock value. I think he’d be sorely disappointed in us if he thought that in 2009 we hadn’t moved past him, despite having gone to the moon, defeating communism, and inventing about 1000 new world changing technologies.

KEEP THINKING.

*Sigh.* My whole angle on foresight is ruined.

Man takes off in jetpack, wows crowd in Casa Grande

Just as the flying car gets ready for sale. I don’t know if I can handle this.

If somebody constructs a building out of nanofog, then I owe a whole lot of techno-optimists an apology.

Our world may never be the same:

We’re so excited about this upcoming SCIP meeting, I need to repost the entire meeting description:

It’s January 28th in Washington DC. You should come and be part of this discussion!

New Ways of Knowing 2.0: Social Media and the Future of Intelligence and Decision-Making

Intelligence is at a watershed moment. After decades of developing a profession to collect information and provide early warning, we find ourselves in a broad-reaching financial catastrophe that was unknown or ignored by decision makers. Despite a collection and analysis of economic information, most businesses walked unknowingly into a ruined banking sector, retail distribution on the brink of bankruptcy, housing grotesquely overvalued, American automobiles at the point of extinction – all while most leaders continued to view change as incremental.

This unprecedented current economic crisis seems to represent a failure of intelligence. After all, if intelligence cannot motivate leaders to action, then as professionals we must ask – what good is it? Many analyst voices in the desert warned about the risks in real estate, derivate markets and reliance on leverage, but it’s not clear that this led to action. Are we in our current mess because the leaders in business and government simply didn’t listen? If so, how can intelligence professionals deliver analysis that drives appropriate action?

The next generation of intelligence might solve the inherent weaknesses of Intelligence 1.0 by relying on a broad range of information, focusing on relationships over hierarchy and replacing official dogma with a continuous dialogue. Technology will be a major driver in this evolution: Web 2.0 and social media tools are moving into the mainstream– not just in the consumer space but also in business. 2008 has seen the year of “Enterprise 2.0.” Web 2.0 has gone to work to enable collaboration, smash silos and change business processes. Intelligence analysts have new tools and methods at their disposal for primary research, secondary discovery, collaborative analysis and communicating actionable insight.

“New Ways of Knowing 2.0″ will be an interactive educational event in which we will examine the potential of social media to improve the intelligent organization of the future. Participants can expect to teach as much as they learn and see connections among diverse concepts, tools, intelligence practices and business processes. Our panelists will include:

• Suki Fuller, social media maven and CI consultant
• Eric Garland, strategic forecaster, intelligence thought leader, author of Future Inc: How Businesses Can Anticipate and Profit from What’s NEXT, and principal of Competitive Futures, Inc.
• August Jackson, market and competitor intelligence analyst and Enterprise 2.0 evangelist at Verizon Business.

You will come away with this program with immediate and actionable advice about how you can incorporate Enterprise 2.0 tools into your intelligence processes to improve your ability to adapt to our ever-changing world. Discussions and highlights from the program will be posted to the new SCIP DC chapter blog at http://scipdc.wordpress.com.

Note: At EVERY SINGLE SPEAKING ENGAGEMENT I DO I find at least 20% of the room is disappointed that the future arrived and there are no flying cars.

Now, this seals it:

Mean Automakers Dash Nation’s Hope For Flying Cars

With a hat tip to Where’s My Jetpack, it seems that social media really would have sounded bizarre as a scenario:

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?