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Weak signals

2011's Challenges

Agriculture, manufacturing, high tech, executive education, and deep client consulting. 2011 is off to a start of challenging work with my clientele.

Some of the watchwords for the work include volatility, the unexpected, and hopeful improvement. Energy and the economy are two of the most crucial forecasting areas as almost every client looks ahead for the next 2-5 years.

In another few months we’ll see politics ramp up even higher as the foray’s into the Iowa caucus begin. My government clients, especially in the Federal arena, are wondering if they’ll have funding for their education projects and hiring.

In agriculture, transportation, and manufacturing eyes are on the Middle East’s unprecedented developments. The tragedy and ripple effects of a Libyan civil war dominate current thinking but the possibility of Saudi unrest is the real trump card. Some of the work being done in strategy and decision-making meetings by my clients is not just interesting - it’s engrossing and both fundamentally disturbing and profoundly philosophical.

It’s an interesting time to consult as a futurist.

Tracking, January 2011

A new year and new blips on the radar screen in our practice. I post items here from time to time that we’re watching because of our scanning, clients, or upcoming engagements.

Food Prices - for well over two years we’ve tracked a steady uptick in worldwide food prices. One visual element in our briefings and conference presentations is the UN’s index of world prices which shows a steady climb that now has exceeded the “trigger point” of 2007-08.

What do we mean by “trigger point?” When riots occur in less developed nations over food. Large portions of the population in these countries spend 50% or more of their incomes on food. This is a ticking time bomb that has been known to overthrow governments and even cause wars.

The
“North Atlantic Recession” - come on, it is no longer a global recession or even the “Great Recession” when you view it from Brazil, India, or China. It’s the recession that still either cripples or impedes the US and the EU. Even Canada is out and expanding.

The
“Employment Follies” - how badly can a government manipulate statistics? Just look at the jobless in America. OK, every governing administration wants to make the news better but creating 65,000 jobs in a month when it’s going to take over a quarter million new jobs every 30 days to get back to something like 5% unemployment is not good news. Especially when most of the jobs are in hotels, restaurant kitchens, or temporary services. Employment is a key trend for America’s return to economic health. We should be realistic about it.

The Wild Card Weeks

Wild Cards are lower probability, high impact events. We’ve not seen a few weeks like the last three for some time. I’m not a believer in the adage of “threes” when it comes to these events but there are lessons and implications for the three we’ve just seen.
A volcano erupts and ash plus extreme caution by air travel regulators paralyzes a system we take for granted. Millions are stranded. Millions, by any currency measure, are lost. Alternative transportation comes into short-term vogue and overloads. Normalcy returns and we forget. But that volcano is still smoking and just because it’s not page 1 news we relax.
An oil platform explodes and lives are lost. Initial concerns about leaks are downplayed by company executives. Days pass and a slick surfaces. There’s action but no results. Now we’re staring into one of the great environmental disasters of our generation.
Initial reports of an over-reliance on a “blowout preventer” will be examined in hearings and investigations for the next 3-4 years. Recriminations from environmentalists take on stronger weight. A decision to open more offshore drilling could not have been worse timed. We realize that we’re totally unprepared for the scale of the problem, contingencies for stopping the gusher of oil on the bottom, and we’re unenlightened or purposefully ignorant about the risks of the technology.
A car bomb fails to detonate in New York’s Times Square. If it had a fireball would have killed dozens, perhaps more. Vehicles nearby would have burned and exploded. The ensuing panic would have injured hundreds. Midtown Manhattan would have emptied as reports of the notifying phone call leaked out. The caller said it was only a diversion for a larger device. Transportation would have slammed to a standstill. Offices remained empty for Monday morning. Absenteeism spiked. Broadway theaters cancelled performances. And the world’s biggest financial center would have stopped for days. The economic after-effect would have climbed into the hundreds of millions for a devices that cost only a few hundred dollars.
When the alleged bomber is arrested within 53 hours we relax. Investigations of the origin, connection to terrorist groups, evaluation of police response will come. There will be criticism of no-fly lists, airport security, even Craigslist. But when the crisis is over our thinking returns to the mundane.
Therein lies the problem. Extraordinary events like these should prompt contingency thinking and action. They should trigger better preparation, encouragement of public involvement, and planning for the next inevitable event. Too often we don’t look at the next event, only the last event.
I’m hoping the wild-cards of the past few weeks result in serious contemplation and preparation for:
  • Disruptions of air travel for substantial periods of time on the part of industry and government.
  • Development of even better alternatives to face-to-face communication to back up or reduce long distance travel.
  • Better technology and layered backup systems for the next generation of deepwater drilling like that necessary for tapping the even deeper oilfields off the coast of Brazil.
  • An acceleration of alternative energy sources and, most importantly, conservation.
  • A renewed recognition that many man-made systems have Faustian consequences that should be contemplated before adoption, not after.
  • Higher levels of vigilance among all peoples in all places for those that would indiscriminately destroy life.
  • Smooth transitions to pre-thought Plans B, C, D, and Z when the worst happens.