Our friend Doug Stephens, the world’s top retail futurist, reminds us that one of the issues in bad customer service is due to the social tension between those working behind the counter and those buying in front of it. As economic inequality grows, social tension will likely grow with it.

Over the past 30 years , the economic distance between the lowest paid Americans (many of whom are front line retail workers) and the highest paid, has been widening at an alarming rate. The likelihood that retail workers are serving someone outside their economic bracket is escalating. A mere 20 percent of all consumers now account for at least 40 percent of total retail consumption — a figure expected to increase to 50 percent of consumption by 2015.

At the same time, roughly half of the nation’s front line retail workers earn less than $10 per hour — which raises the question, how can a retail sales associate relate to the consumer who may be spending more on pair of pants than the sales associate themselves will gross that day? The simple truth is that the front line retail worker of today is less like their customer than they have been in more than 100 years.

Henry Ford believed that the future of the United States economy was tied into the ability of his workers to be able to afford his products. Broad income equality, to Ford, was the only way society could function and companies could profit in the long-term. Since U.S. policymakers decided long ago that America would be a mercantile nation rather than a manufacturer, how strange that fewer and fewer people will be able to participate in that retail which makes the lifeblood of the economy.

This chart says some interesting things about the post-2008 business world in America. Specifically, it screams that if you are involved in business, the world probably looks very different than it does if you are a teacher, a carpenter, a senior depending on fixed income, or a new grad looking for work.

Over the past 30 years, there have been ups and downs, but if you are a publicly traded large company, you can definitely expect more than five percent return on your capital, and often you can expect much more than the average investor. But what really interests us is that in the post-2008 world of crazy gloom and doom and bailouts – the profit margins look like we’re in a golden age.

Ask the average American, the consumer on whom this success is supposedly based: Are we in a golden age? Does it feel like we’re in a golden age?

Most systems depend on there being a shared sense of meaning. Post-War American success was shared by a broad range of people on the socio-economic spectrum, many of them recent immigrants. The notion of free markets succeeding over a communist enemy provided a certain cohesion to the narrative of what was happening. Are we getting richer? Well, we have a better system and we’re all prospering.

What does this system say about us? Does it make sense? Does it speak to a variety of people?

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.

Is empire cyclical, doomed to birth, consummation, establishment, decline and desolation? Or are there other futures for large regimes? Can large complex systems create new kinds of future, or are the winds of fate far too strong? Can we predict decline, change it, improve things, create order out of chaos?

Nobody is better at exploring the large questions than Niall Ferguson. This lecture is long and well-considered, not a candidate for viral videohood. Given the subject, that is perfect.

Retirement will be impossible, but maybe that will be OK in a world of knowledge workers, says Harvard Business review.

Actually, when you read in medical literature that retirement is the surest highway to alcoholism, depression, and death, this may not be that alarming a forecast.

You know what they say, aging is terrible, but it sure beats the alternative.

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.

For the first time ever man is becoming a majority urban creature. It’s hard to overestimate this change. Since the Fertile Crescent in 10,000 B.C., cities were only a fraction of human population, even if they were the centers of technology and culture. Humans throughout history have been mostly villagers, mountain people, hunter/gatherers.

In 1800 only 3% of humans lived in cities. Most people never saw a city, and the vast majority didn’t trust city folk when they came to town. They earned nasty terms like “city slicker” and “vilain,” which is just old French for “city slicker.”

By 1900, in the midst of the Industrial Revolution, only 6% resided in urban areas. Plenty of economic opportunity was to be had in the fields and in the mines of the countryside. Manufacturing and intellectual work still represented a minority of the jobs available.

Now in 2009, more than half of humanity lives in cities. Upward of 88% of all economic activity happens in cities – and this is increasing. Job opportunities in the countryside are disappearing as the knowledge economy makes physical capital less valuable and makes innovation the main driver of competitiveness.

Not all cities are created equal. Amsterdam, San Francisco, Singapore, Hong Kong, and Paris are monuments to culture, economic vitality, and learning, blessed by sufficient infrastructure and social stability. The urban future also means Lagos, Nigeria, Mexico D.F., Cairo, Egypt, Manila, Philippines, Calcutta, India, and more – cities of five, ten and twenty million inhabitants with critical sanitation problems, insufficient water, crumbling roads, and few jobs for the refugees from even deeper rural poverty.

For this reason Competitive Futures took a closer look at the future of what is likely to be our most common environment, the urban area. Enjoy.

It is impossible to fix any problem while continuing to use the mindset that created that problem. This is an old saw, used to extoll the virtues of examining your assumptions.

Naturally, if you want the opposite of the Wall Street-speculator-growth-at-all-costs model, you need to talk to people who remember lots of past and have been around to see lots of future – Native Americans. I have the great honor of working with Mr. Jack Soto, director of the Washington Internship for Native Students (WINS) program at American University on issues of tribal leadership and the future. Jack’s program brings native students from around the continent to Washington to connect them with the mechanistic workings of Washington.

In this podcast, we go deep into the difference in perspective between US corporate, suburban culture and the constant rebirth going on in the native communities, what it means for their nations, and what we can learn from each other about the recreation of communities.

And we’re not diving into the typical, “Native Peoples Are More Holistic” claptrap. During the hour, we get into the deep background in complex business transactions that most tribes have, their process of constantly recreating nations and governments to suit evolving reality, casinos and their effect, Jack Abramoff (“Live and Learn“), why natives aren’t really environmentalists, and much more.

Enjoy.

Seth Godin stands conventional wisdom on its head:

The Prius was developed after the marketing thinking was done. Jones Soda, too. In fact, just about every successful product or service is the result of smart marketing thinking first, followed by a great product that makes the marketing story come true.

This makes quite a statement about the inherent value of products and services. Is something only ever as good as we are convinced it is? Is perception now 110% of reality?

Due to a highly interesting debate on Twitter, I’d like to recast the spontaneous debate between Mr. Keen and myself regarding the potential use of Web 2.0 technologies.

For the record, Keen does not say that Web 2.0 is doomed to fascism, he says it’s “fucked.” He believes that as economic realities get more dire, fascist elements could seize Web 2.0 as a tool to whip up frenzy. It is not certain that Web 2.0 will lead to fascism, but he believes that social media could be even less democratic than the media used in the pre-web industrial era, media that was dominated and guarded by experts and official sources. His typical argument, well expressed in his books and articles, is that most people on social media can hide behind anonymity, whereas professional sources are incentivized to stay professional and accurate. I am paraphrasing, but his argument seems to be that Web 2.0 risks being seized by fascists, capitalizing on that anonymous, vituperative, snarky spirit in some corners of the Internet to whip up sentiments for nationalism. A provocatively-titled piece in the Daily Beast called The Internet is Bad For You explores this risk.

My retort is that fascism worked much better with few sources of official media, broadcasting owned by central sources and manipulated by the concentrated power of elites in a nationalistic government. While Web 2.0 surely can be used as a tool for fascist elements in society, I think they had a better deal when it was really expensive to own radio and television towers. Web 2.0 allows nearly infinite social networks, and while many of these could be angry, nationalistic, and sympathetic to fascism, the structure of the technology works against its fundamental logic of conformity. Fascism worked well with single arguments, uniforms, flags, and national anthems. Web 2.0 leads more to a giant jumble of micro-niches, groups that only ever really come together to watch clips of British talent shows and similarly democratic events. The rest of the time, it’s herding cats.

Keen is right, though – the real risk is poverty and injustice. Prevent that, and the fascist gangs should remain at bay.

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.

This is perhaps the top entry in the Guinness Record Book of Complete Philosophical Reversals.

Jack Welch, “Neutron Jack,” the great father of steroid-pumped management, “Flourish Elsewhere” human resources, cutting the bottom 10%, and evangelist of shareholder value as a singular strategy, has now declared the whole “money for Wall Street” thing is the “dumbest idea in the world.”

For those of you who have heard the term “shareholder value” abused in every possible context, a phrase used as a placeholder for an actual strategic thought, this reversal is akin to hearing the Surgeon General come out and say, “You know Marlboros and tequila get a bad rep – I think they are part of a healthy breakfast.”

This too is an overcorrection. People who bet their money on the performance of a for-profit enterprise will expect a certain level of return compared to stockpiling gold or letting money sit in a savings bank (assuming you can find a solvent bank these days.) Jack is right, shareholder value is a result and not a strategy – but it’s still a fine goal.

The difference in the next economy will be that half the world won’t be investing through Wall Street for the basic societal functions of assuring a dignified retirement for aging citizens. Once the pensions set to grow at 8% fail (coming soon to an economy near you!) people will get even more hesitant to invest in nameless, shapeless glass and steel buildings. Investing in for-profit companies will return to where it ought to – a risk undertaken by the very professional and very observant.

Will corporations really see employees as their number one constituency, as Jack suggests? He obviously saw value in firing over 110,000 employees in his tenure at General Electric – but it sounds like a nice idea.

The future may look like more of a balance between durable human relationships and the need to keep the doors open by making money.

If you don’t read Jim Kunstler on a regular basis, you ought to. His book “The Long Emergency” predicts the end of peak oil and more importantly the end of suburban consumer life in America and around the world.

He sees a significant strategic shift – to put it mildly – in the coming years. His doubt about the stimulus package is caustic:

The attempt to restart “consumerism” will be equally disappointing. It was a manifestation of the short peak energy decades of history, and now that we’re past peak energy, it’s over. That seventy percent of the economy is over, especially the part that allowed people to buy stuff with no money. From now on people will have to buy stuff with money they earn and save, and they will be buying a lot less stuff. For a while, a lot of stuff will circulate through the yard sales and Craigslist, and some resourceful people will get busy fixing broken stuff that still has value. But the other infrastructure of shopping is toast, especially the malls, the strip malls, the real estate investment trusts that own it all, many of the banks that lent money to the REITs, the chain-stores and chain eateries, of course, and, alas, the non-chain mom-and-pop boutiques in these highway-oriented venues.

Here’s a huge question then: are we merely (!) at a major disruption in the economy that will eventually right itself, or in a complete shift away from old values, something that will require major restructuring of the global economic system?

Either way – is Keynesian economics going to work this time around?

Jump in the discussion at The Future Forum.

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.

MUST READ, from intelligence thought leader August Jackson:

Social Networking More Popular than Porn: What it Means for Competitive Advantage « augustjackson dot net:

Policies in information security, public relations, human relations, marketing, sales… the list goes on all have to take this reality into consideration. Old “sledgehammer” strategies are not going to work going forward. The best and the brightest are going to go where they can maintain and grow their self actualization through social tools both inside the company, with partners/customers and their social lives. Many boundaries are going to collapse as a consequence. It’s not going to be all flowers and happiness because everybody involved is going to have to be a lot smarter.

August is on to something big. The drive for social connection is incredibly powerful, more powerful than all other forces including the sex drive. As he points out, the companies may change in social media, but the social trend is here to stay for the rest of our lives.

This will change all organizations, all strategies.

With the release of Future, Inc. in Korean and Chinese, I’ve had the great opportunity to do interviews with Asian business magazines. I find that they ask more interesting, more insightful questions than many of their Western counterparts, so they are often fun interviews. The only problem is, once they are translated, I have NO IDEA what they said.

I just finished an interview with Korea’s KRX Magazine, which covers the Korean stock market and business in general, and I decided to post the whole text in English, so someone can appreciate it.

The questions:

Companies have hard time in business due to the global financial crisis. What new trends can we look for?

The most important trend is away from the philosophy of growth at all costs. For years, particularly in the United States, management has followed a typical playbook – get big, quickly, through borrowing money from private venture capital or public offerings. Then, you can go national or international, reaching bigger markets and gaining leverage over vendors and distributors. Once you have leverage over vendors and distributors, you cut costs by firing excess employees and force downward price pressure on the market. With the extra cash from operating expenses, you buy more national or international companies. For around forty years companies have repeated this formula.

The theme here was BIG BIG BIG. The problem with “big” is that it sometimes comes at the expense of “smart.”

The financial crisis in the United States illustrates this theme perfectly. Financial institutions were merging at an unprecedented rate, devouring already huge national banks until only a few savings banks, investment banks, and insurance companies remained. The international approach leaves managers little room to be creative or to make exceptional strategies. Once you are at a global size, you are less able than ever to adapt to a changing world. All these companies had the same goals and the same risk models. To obtain profits for their international stock holders, they felt obligated to balloon the size of the housing market – even though this ultimately destabilized the world economy. Presumably, smaller companies would have had the agility to choose different strategies in response to these unprecedented changes.

As a result, I believe the counter-trend of the next couple of decades will be SMALL, ENTREPRENEURIAL, and LOCAL. This is the opposite of many of the trends we have seen in the past decades, which is why I believe we are in such a critical moment in history. This point should be of particular interest to Koreans, since this change will have important implications for the chaebol system.

The pharmaceutical industry illustrates why small and smart companies may likely beat large organizations in the future. The past decade has seen unprecedented mergers and acquisitions in the pharmaceutical sector, making enormous global corporations like  Pfizer, GlaxoSmithKlein, and Novartis. The thought was that large corporations could combine their research and development budgets and make new, maybe even revolutionary drugs faster and more profitably. That simply hasn’t happened. New drug applications at the Food and Drug Administration appear to be unchanged since 1999. The strategy today, as a result, is to find small, innovative companies and to buy their intellectual property while it’s cheap. The implication is interesting -  it says that size is not the benefit it has been assumed to be.

What efforts should countries make home and abroad, respectively, in order to be a leading power.

The future of economic prosperity will be dependant on a number of social, economic, and political factors, but there are some characteristics that will make the winners of tomorrow.

INFRASTRUCTURE: A country’s infrastructure – railways, airports, roads, hospitals, electrical grids, telecommunications, etc. – leads the way for entrepreneurial companies to create new business. Look at Asia versus Latin America. The Western countries have moved significant portions of their manufacturing sector to Asia in the past twenty years.  The theory behind this is that companies wanted to take advantage of lower labor costs – after all, China is a long way from France and the United States!

But wait, if all America needed was cheap labor, Latin American countries featured low-cost labor forces, all of whom speak a language closer to English than Mandarin, and much, much closer. The difference was infrastructure – the port of Shanghai can process container ships in a few hours, while the ports of San Salvador can require WEEKS of wait time. Interconnected rail, roads, airports, and seaports made the difference in the economic fate of nations.

You can thus see the potential winners of the future today. China is investing 9% of its GDP in infrastructure. The Korean government’s “Vision 2030” program focuses heavily on infrastructure investment, which you can see in that it has the best Internet connectedness in the world (I believe.) Meanwhile, the United States is investing less than 2% of its GDP in infrastructure – and our levies are bursting (Hurricane Katrina) and bridges are collapsing for no reason (Interstate 35 in Minneapolis.) Europe is fixing bridges and building more high-speed rail.

Another part of infrastructure is EDUCATION. This will be particularly interesting in light of the trend in online education, which could bring all sorts of training to the developing world. We’re evolving into a knowledge economy, moving to higher value-added products. Education and job skill training will determine who will win and lose in the coming decades. Once again, I am particularly worried for the United States, which has been increasing the cost of education at a rapid pace without increasing the quality. As a result millions of our young people enter the job market with thousands of dollars in debt.

Also part of national infrastructure is HEALTHCARE. Since the population of the developed world is aging at such a rapid pace, success will come to those countries who can provide their citizens with good quality healthcare without overly taxing businesses and citizens.

What strategies and blue prints for the future should business leaders have?

ANY plan for the future would be nice. I think that a professional approach to foresight must be standard skills for every leader of business and government. I travel the world talking to executives, and it shocks me how few leaders are able to answer the following question: “What are three major trends in the world, and how will they affect your organization in the long-term.”

So I don’t have specific recommendations for future blueprints – I simply recommend that leaders learn how to make them.

What would happen in the global economic landscape when all the dust in the financial markets settles down?

My prediction is for an increase in trade barriers, slowing of globalization, and increase in national regulations.

Globalization is positive in the way it has increased prosperity and alleviated poverty – but the downside is that it is very hard to manage. We can trade together, but it quite difficult to manage multi-national problems such as global warming and the credit crisis because all leaders must answer to their own citizens, each with a special set of values and goals. The credit crisis has been particularly toxic, since so much of it began in the United States and its decisions about regulations in finance and housing. What do you do if you are affected by one set of decisions, but you can’t really influence them? I think the answer will be to insulate nations from the decisions of other countries, at least in the short-term.

What are the challenges for the new president of the United States regarding the financial debacle?

The challenge is to regulate while allowing innovation. It’s not fair to any one president -  an incredible task in the face of decades of policy that lacked foresight – but I believe the Obama Administration can set the stage for decades of success or failure in its reaction to this crisis.

Many American policymakers, unlike their Asian and European colleagues, have been operating under the assumption that private industry can act in its own interest with minimal guidance from national policy and regulation and that the result will be positive for both individuals and nations as a whole. The financial crisis shows that actually, companies can act in their individual interest and lead both individuals and the nation off a cliff.

The answer is NOT the establishment of giant national regulatory bureaucracies that remind us of Soviet-era politburos – it was a disaster then, it would be a disaster now. So this government has to strike a very delicate balance – it must set up a strong national economic and industrial policy, accompanied by regulators who can exact penalties on companies that commit transgressions. But it must allow those companies to be started quickly and easily and to choose innovative strategies, to keep the spirit of American entrepreneurialism alive and well.

I think the Obama Administration has a lot of work ahead of it.

Let’s say the America used to be the center of the world in the past and China would take over the U.S. in the future. What changes would the ordinary people on the globe experience in a world where China is the most powerful country?

First, it will be difficult to directly compare China directly to the United States in the post-Cold War era. The United States had an economic, industrial, political, and culture advantage in a way that might not ever be duplicated. The rest of the world has been developing economically in the meantime, and the United States is unlikely to disappear from the world.

Also, language will change how China can extend its power in the 21st century. English is currently the international language, and that is unlikely to change no matter what China does. There are already billions of people who use English as a first or second language.

What is your outlook on the Asian economies, including Korea?

One of the biggest issues is AGING POPULATIONS. Japan, China, and Korea all have unprecedented proportions of their populations reaching old age in the coming decades and an insufficient number of young people of working age to support social programs. This is no different than Europe and the United States, but both of those regions will benefit from more liberal immigration policies to attract talent workers. The future of Asian economies will depend significantly on the responses to this issue.

Otherwise, I’m interested to see how China will balance its rural populations and its newly urbanized industrial population on its east coast. The difference in the values and needs between both populations will cause much difficulty for the Chinese government, and there is already the spectre of unrest that threatens growth in the country.

Could you tell me ‘keyword of future’ that people need to know.

Entrepreneur. The future belongs to those who can create new businesses quickly in respond to rapid change. Nations need to create a culture and an infrastructure to encourage entrepreneurial activity, or these changes will appear very unwelcome.

The last question. Could you give some advice to Koreans as to what they must do to prepare for the future?

Maintain your national identity! The age of undifferentiated global brands and mass manufacturing seems to be coming to an end, and those who are thriving (nations and companies) have a competitive advantage because they do something very well that nobody else does. France still does luxury very well, as does Italy. Japan and Switzerland excel at ultra-complex manufacturing because as a people, they love details.

Besides if you give up kim chi, bulgoki, and tae kwon do, I’ll be very upset.

Mark Zuckerberg makes that comparison in a recent post on his blog. At 150,000,000 inhabitants, Facebook would be a country with more population than Japan, Nigeria, and Russia.

I’m not sure about this comparison, but the implication for politics are very real indeed. We have typically defined the nation-state as a collective that shares ethnicity, borders, language, and a common set of myths and historical beliefs.

As jobs shift back and forth across continents, old industries die, ideas flow effortlessly, and governments seem a bit clue-less about what to do next, it seems that self-organizing systems will affect how humans design their politics.

How exactly will this change the world? I’m still working on that one…

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?

This is now a Class I medical device. The Palm Pistol, allowing the elderly to continue to exercise their Second Amendment rights.

Well, I said people need to take megatrends and look for business development opportunities. Here we are!

Hat tip to Jon Lowder, who just suggested this interesting SlideDeck about the future of the university.

Is it too late?

And who will fill the void?

Steve Clemons runs The Washington Note, one of the truly essential blogs for anyone who has an interest in America’s foreign policy.

Clemons thinks like a natural futurist, always considering strategic trends in a holistic, intellectually honest manner. But he’s also is interested in new technologies like Facebook and Twitter that will connect people around the world in a way that impacts America’s diplomacy. Cutting edge stuff. Check out this speech on social media from the New America Foundation:

We just finished a long and satisfying film project for a French-speaking audience. Here, we consider some of the inevitability of immigration, and explore the meaning of adding three billion people to developing nations.

Warning: French language used unabashedly.

You know you live in interesting times when the business press reports the BIGGEST gain ever in the Dow based on the happy news that the United States is nationalizing nine of its banks!

It’s amazing how shaving a few trillion off the global economy can change things. It can even completely flip your view of the world. Just ask Mark Penn.

Penn was brought to most people’s attention as Hillary Clinton’s chief strategist, for better or for worse. This probably isn’t a fair introduction to the man, since tenure as a campaign consultant was more due to his work as CEO for public relations giant Burston-Marsteller. There, he specializes in extremely granular market research, defining people by tiny variances in beliefs and purchasing habits. He refers to this as microtrends, saying that tiny movements within a demographic add up to real change. He points to professionals with tattoos, “pet parents,” and protestant Latinos as burgeoning interest groups who will one day cause larger changes.

Pretty reasonable stuff. The only problem has been his tendancy to declare “the era of the megatrend is over.” Penn’s last several years have been dedicated to pushing the notion that these microtrends have primacy over the megatrends, that megatrends were so 1980s.

This made me discount most of what Penn had to say, because to assert that macrotrends in society and technology wouldn’t change the future is horrible, horrible analysis. Water shortage, healthcare expense, immigration, surveillance technology, global warming, skyrocketing national debts, the list of 20 – 50 year macrotrends goes on, and all of them trump the fact that 30 year-old analysts in Mark’s office were getting back tattoos.

It’s been a long couple of weeks, of course, and the effects are readily seen. For example, now Mark Penn is trumpeting the effects of megatrends in today’s Politico. It seems the impact of a collapsing world economic system does reach as far as political campaigns. (That is, if you think that Obama’s lead in NORTH DAKOTA has any significance.) Yes, but Penn unfortunately covers his most recent view of the world with a Monty Python quote, “Nobody expects the Spanish Inquisition!” meaning that nobody could have expected the world economic system to collapse.

Normally, a Python reference would warm my heart, but this is just a cover for the fact that some people would rather study what kind of Starbucks coffee people prefer instead of  examining the underpinnings of our economic system.

Mark, since you’re now into megatrends ,check this out. There’s lots more where this came from:

And welcome to the club. We need a hand figuring this stuff out.

Here at Competitive Futures we regularly tell clients, “Just because something is a disaster doesn’t mean it will be a disaster for everyone.” History is filled with stories of leaders who perceived danger early, acted appropriately, and profited.

I’m a bit fatigued of straining about this financial mess, and naturally began to ask, “OK, what’s going to be positive out of this?” Despite the ugliness here, there will likely be many positive developments resulting from this crisis of business and governance. One example is quite close to home for me.

My father is in his 28th year running the Rutland Agway, a store dedicated to farm, home, and garden in Central Vermont. Recent economic trends have sent both farming and manufacturing to far-flung states or countries. Giant retailers like Home Depot came to take a piece of the diminishing supply of disposable income in the state. For local stores, things got pretty tight for a moment.

Fleeing jobs and rocketing fuel oil prices are putting a massive financial strain on rural households. How are they responding? By going local – planting gardens like never before. Staying at home, avoiding pricey vacations – and sprucing up the backyard with fertilizer and lawn mowers. And suddenly, times are better in the home and garden business. (On top of it, Vermonters are back to eating their own delicious local foods!)

What else could be positive about this? Think it through – there will plenty of time to think about disaster soon enough.

Social trend alert! Et ben, c’est hyper important!

We all know that our friends the French, culinary inventors of Freedom Fries, are social innovators. They pioneered the art of running a major world economy on only 35 hours a week. They were the first to assure that incompetent workers could rest easy, knowing that it was illegal for them to be fired. And I believe the average paid vacation package still stands at 43 weeks per year, though that stat could be out of date.

However, the newspaper Le Figaro does much better fact checking than I do, and they are reporting that for the first time ever in France, babies born to non-married households now outnumber those born to two parents living together.

Could it be that living with men who dress like this is too painful?

Cheap shots against the French aside, (et laissez-moi vous assurer mes amis francophones, si je rigole, c’est parce que je vous aime tellement,) this strikes me as a very important signal for social structure in the future. Already, most of Europe is bracing for the onslaught of aging populations as they weigh ever more on the welfare state’s social programs. On top of it, most of Europe has a shrinking population, less than 2.0 babies per couple. Italy, Poland, and Czech Republic are just a few examples of those nations in dire straits. Here, we have even more strain on the system – a sign that one more bond of the 20th century family contract is breaking down.

Is it all bad? Well, I’m not here to judge the morals of such a trend, but I can tell you there are complications. Our governmental systems, especially in the United States, are designed to augment the social support of families, not replace them entirely. By this I mean, who takes care of Grandma if you have only met Grandma a couple of times? Our social systems sort of assume that you’ll have an emotional bond with your elders and want to care for them. But what if that ceases to be true, because you don’t spend much time together as a family?

I can already tell you that hospitals in downtown Washington DC see families abandon their old people to the state apparatus all too often – especially since the system isn’t designed to handle it. It is designed to help young people take care of the elderly, not care for them entirely.

Eldercare is just one implication here to the single, out-of-wedlock household becoming the statistical norm. Think about all the implications for new products, services, education, workforce, housing and so on.

This is big.

-Garland   

Markets are pretty efficient things. For a while, I’ve been wondering what everybody in the condo market was thinking, doubling the supply every year while also doubling the price. I mean, $700,000 for some granite countertops in a neighborhood you wouldn’t have parked in five years ago?

"The Bad News on Condos: Market Beset By Declining Sales, Foreclosures"

Ah, equilibrium.

Incidentally, I’m very interested by the new book "Pop!: Why Bubbles are Great for the Economy" by Daniel Gross. So many people have been expressing chagrin about the correction that will undoubtedly visit real estate (I mean, 38% increases in value every year?) but I think  it’s about the same as getting upset that your blood pressure is going down to normal.

The key is balance. Because points tip, and markets are pretty efficient.

I play latin music (salsa, merengue, etc.) here in Washington DC, which means I know lots of people from Latin America. (It’s their music and all.) Several of my associates have been in this country waiting for full residency, which means that they can’t come and go freely – sometimes for years.

My good friend and monstrously awesome salsa singer Verny Varela got his full papers a little while ago and finally got to return to Cali, Colombia, where he’s from. Aside from seeing his family, I asked him how Colombia was doing.

"Gringo, man, it’s poorer than when I left eight years ago."

So it’s horrible?

"No, actually life there is probably still better than here. We have real fruit down there. And you have time to see your friends. People don’t work themselves to death. My father drives a 1979 Renault, and the economy has only been good to the rich…but life is still somehow better."

I wondered if this was just the result of missing your home, so I asked a bunch of my other friends who have recently been back to El Salvador, Peru, Honduras, etc. The trend was pretty strong – people think there is definitely more money in America, but life is all about two incomes, sitting in traffic, $500,000 starter homes, and processed bland food.

Look, I travel regularly, and I’m not one of these squishy internationalists who craps all over America and loves anything "authentic." I like clean water, clean bathrooms, no dysentery, no malaria, etc. – I’m a pretty First World kinda cat.

But I remember being in Turks and Caicos on a small island last year. And the people were super dirt poor. And yet I didn’t sense they envied us our Blackberries, stress headaches, and three hour roundtrip commutes.

I’m just thinking, if immigrants come here and don’t think that the U.S.A. is the land of Milk & Honey, then what awaits us as a nation?

Is there something more to life than being the World’s Number One Economy?

Just a thought.

-Garland

There’s so much going on in technology, I find it useful to keep a keen eye on social trends, so this one
caught my eye:

Divorce rate hits 37 year low

Sure, between 1981 and 1995, it seemed like EVERYBODY was doing it, but according to the Associated Press, divorce rates have dropped to 1970 levels.

What’s the reason? Well, some people are staying married through thick and thin, but the rate of cohabitation ("shackin’ up") has also increased. I guess one way to avoid divorce is never to get married.

Does this that the blended family is likely to be around in the future, or are we returning to more "traditional" structures?