There are a number of major “super trends” driving massive change in our world, with three of the most powerful being Globalization, Technology Accelerators and the Global Age Wave. Each in its own right is powerful – the convergence of the three at this point in history is creating the “industrial revolution on steroids,” a period of change that will likely rival anything recorded in human history.
Of the hundreds of megatrends and sub-trends we’ve studied under each of the Super Trends, here are five potential game changers that will have an enormous impact on how we live, work and invest in the next 10 years.
- Consumer spending – It was widely believed in early 2009 that the Great Recession would cripple consumers, who represent two-thirds of the economy in the United States. The recession and collapse of easy credit certainly dinged many market segments, but overall consumer spending in a number of categories has recovered reasonable well. Several segments of the baby boomers as well as the more affluent greatest generation and silent generation (over age 65) account for a good part of this impact.
Trend: Positive – McKinsey & Company research has determined that Boomer consumer spending peaks at age 62, while spending by the previous generation peaked at an average age of 47. Similarly, surveys consistently show that an increasing number of Boomers plan to work well past 65.
- Inflation – It is widely believed that inflation will be “out of control” at some point in the next few years due to the massive printing of money by the Federal Reserves of developing nations, led by the U.S. More accurately, the increase in the money supply (M2) has, in some past time periods, caused “too much money chasing too few goods,” the classic definition of inflation. Today, we have “too much money just sitting around, barely chasing a surplus of goods.”
The Super Trend forces on inflation are primarily the convergence effect of globalization (inexpensive labor markets – a positive effect), technology accelerators (higher quality goods at falling prices – a positive effect) and the global age wave (an increasing number of consumers, especially in emerging markets, chasing food, health care and energy – a negative effect).
Trend: Mixed – Expect inflation to be high in some areas of higher demand and actual deflation in other areas affected by technology accelerators. Hyper-inflation for a typical U.S. family budget overall is unlikely in the next 3-5 years a de-leveraging world.
- Creative destruction – At the heart of capitalism is the idea that if it isn’t broke, break it and fix it better. In a Super Trend convergence world, experts we have worked with believe that as many as 30 to 40% of jobs will either be marginalized or disappear altogether in the next 10 years. They will be replaced by an equal number of new jobs that haven’t even been invented yet, and some that are morphed versions of current jobs.
We will be “living history”, which many people say they would love to do, but in practice is very stress producing on the average citizen.
Trend: Mixed – Creative destruction (along with a retiring boomer population) will create many good opportunities for our youth. For those who are not looking ahead, it will create unexpected problems in their career or business. Reinvention will become one of the great themes of the next 10 years.
- Demographics – Going forward, the birth rate is expected to fall even faster than it has over the past 40 years. According to projections from the UN’s World Population Prospects, populations in 50 of the world’s countries will actually shrink between now and 2050. A shrinking labor force means a smaller tax base, at a time when there will be more pensioners to be supported. Those who doubt this scenario need look no further than 21st century Japan. Today, Tokyo has a birth rate of 1.09 children per woman, and the average for the nation as a whole is 1.37, both well below the replacement rate of 2.1. As a result, Japan’s population is projected to drop from nearly 128 million in 2008 to 95 million in 2050. This spells trouble for the young people who will be faced with the task of supporting an aging and ailing population with an average lifespan of 80 to 86 years.
Trend: Mixed near term, Positive longer term – Life-cycle research shows that consumption peaks somewhere between 47 and 62 years of age, depending on the study and the population. So a nation of older people consumes less, making the economy progressively less vibrant. This shortage of young native-born workers and consumers in developed countries, coupled with large youthful populations in countries with limited economic opportunities, such as India and Mexico, has provided the impetus for another sub-trend, global migration.
Many young, bright people from the emerging world want to get to the U.S. – this will help bridge our skills gap (there are more than 2.5 million unfilled, higher skilled jobs in the U.S today) and help our aging population.
- Personalized medicine – It is generally perceived that the aging U.S. and world population will create breaking point pressure on health care systems in the next 30 years. Thank goodness for the Super Trend Convergence! Technology accelerators in the form of handheld diagnostic tools and targeted therapies specific to each patient will cost trends and potentially alleviate the high cost of end-of-life treatments. Google “personalized medicine” and you will find a host of new areas in various stages of development.
One reason this trend will be powerful is the breakthroughs in gene mapping that have happened just in the past 10 years. Now, more powerful computers coupled with changes in health care business models will deliver health care in new, more productive (and in some cases less costly) ways.
Trend – Mixed near term, mostly positive – We are on the cusp of a new revolution in health care. The early stages, especially with political wrangling and intervention over recent health care reforms, will make the landscape very messy. The effect in the latter part of this decade should be nothing less than spectacular. However, existing health care professionals, especially higher paid ones, will be living the “creative destruction” rollercoaster.