What Comes After the Great Recession?
by Glen Hiemstra on 08/05/09 at 5:48 am | 
My year as a consulting futurist and speaker began on January 8, 2009 with a speech on future trends for Cobalt, a company that does websites and other marketing and computer services for the auto-dealer community, historically General Motors dealerships. They obviously face some big challenges in 2009.
In that speech I said, for the first time, “This is not your father’s recession, but it could be your children’s renaissance.” Since that time most observers have suggested that when we come out of this recession the world economy, national economies, and our personal economic outlooks, will be different. As one friend, formerly a city manager, now CEO of a municipal development corporation put it, people hoping to get back to normal are going to be surprised the learn that the next normal does not look like the old normal.
So, here is my question. If what emerges on the other side of this economic chasm is something new, what does it look like? I hope SNS blog readers will weigh in on this via comments.
In the video interview below, I suggest some preliminary thoughts. The interview was conducted by Brenda Cooper, futurist, science fiction writer, and technology executive. Brenda happens to be a featured speaker at FiRe 2009 in the program slot on the final day, where we look “further ahead.” (I will be interviewing Brenda on-stage.)
We live in a time where exaggeration of all things is the norm, and thus it is easy to become caught up in the idea that “everything is going to change,” (a familiar phrase, no?) because of the economic meltdown. We need to be cautious with our forecasts. But a few things seem likely – a less debt-driven consumer culture which translates to slower growth in consumer spending, a financial culture focused more, for a while at least, on investing in innovation and productive capacity rather than merely manipulating digitized money in the global casino, a more cautious corporate culture when it comes to debt financing, ditto for the construction industry. Most of all, a shift in societal values toward sustainability and back to thrift as admirable habits. These value shifts may manifest most of all in the newest generation, the Millennials, if we believe what they say they want. Admittedly, we will have to see if these value-shifts hold and become long lasting as the long climb out of the recession continues.
The video interview also explores what keeps me up at night: the chance of a run-away negative feedback loop if Arctic methane meltgets out of control and we get a quick spike in global warming, and also the deep political divides in this nation that lead people to prefer to be right rather than happy. The latter shows up especially when people express a hope that certain economic remedies fail, and fail spectacularly, so that a particular point of view can be proven right, never mind the consequences for communities.
And finally, in the interview with Brenda I discuss the concept of optimism, about which I am asked all the time. To be optimistic is to believe, as I think Mark Anderson once said, that human beings have the capacity, when it matters, to choose the right problems and apply workable solutions to them. This is not guaranteed, but always an option.
Let’s hear from some of you: If the world on the other side of this recession is actually different from what came before, what are a few of its new features?
Here is the video interview of Glen Hiemstra on the future and what comes after this recession.
[This blog entry is cross-posted at the Strategic News Service blog site.]
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Cathy
May 9th, 2009
Good piece. I think the interesting shift is how do we balance consumerism with sustainability. Everyone wants the economy to shift, but agree it can’t be on the backs of consumers. What’s going to replace. Or if better, can we have a successful economy that is not based on growth. This is an ancient model that might need to be rethought.
Dick Nepon
May 10th, 2009
I would suggest that recreation will be the growth employment sector, and that includes art, music, theater, comedy, as well as the broadcast industries. It can be done by individuals, or large corporations. We will have a shift to investment in corporate entities, such as manufacturing, distribution, and marketing that are generally run technologically rather than employee centric.
Harley Davidson, for example, will flourish, through enhanced techo-manufacturing techniques, and an enhanced recreation market. It may not have the familiar rumble, but it will fulfill other desires of the open road.
Cities will become sustainable, because there is no alternative.
Growth will be measured in terms beside dollars generated. Perhaps in terms more familiar to those now involved with trade/exchange organizations. Change will be monetized, perhaps. Innovation will be monetized. Entertainment will continue be monetized. Educational opportunities will be monitized. Value will come from the unique, the unattainable elsewhere, the specialities that make for differences in experience. It will not come from things, which will be readily available through improvements in just in time manufacturing, computer aided manufacturing, even 3-D faxing, maybe teleportation.
What can’t be manufactured will become the valuable items, or maybe not even items, but more experiences. The ultimate outgrowth of reality TV will be the marketing of experiences.
Lewis
May 11th, 2009
Economically, the major shift is that the baby boom generation is done with its peak spending. Spending on large homes and other material trappings will slow. What the baby boomers will spend money on is health related and “experience” related. A very large chunk of boomers is now going to have to keep working for a few more years due to the hits their portfolios have taken.
What is encouraging is the seemingly higher level of entrepreneurialism we are seeing from the Millenials. Why would anyone want to go to work for a large corporation these days? As the world economy continues to globalize, young people from the US will have to do what young people from other countries have historically done–leave your country of origin to seek your future and fortune.
From a political standpoint, neither of the major parties gets it. Both are bereft of any game changing ideas. The Dems. are ascendant for the time being until they attempt to “fix” health care by “covering everyone”. If anyone really believes that costs will go down is completely fooling themselves. Once people realize that “cap and trade” is code for a carbon tax, they will not buy it.
Under any circumstances, though, there is great reason for optimism. We will see some amazing breakthroughs in both health and energy that will improve lives and help the planet.
glen Hiemstra
May 12th, 2009
Interesting comments so far. Thanks for weighing in.
Cathy – I think that a Nobel prize awaits the person who can re-develop a more or less steady-state economic model. This was written about in the 70′s a limits to growth of course, but I think the time is right for some new thinking. Steady state is not really feasible – in systems dynamics that equals death – so the question is what can grow and what cannot, if consumption levels of goods goes fairly flat?
Dick – has part of the possible answer when he suggests growth in recreation, though he includes some manufactured goods in that equation.
Lewis – makes three points that make sense, a slow down in boomer spending(see peak spending theory), that Millennials may be more entrepreneurial out of desire as well as necessity, and finally that neither party fully understands the shifts that seem to be coming. I think that some Dems get it better than other pols, but when you live in the political bubble you do not have time to learn much about the big and longer term picture. It is an occupational hazard. Think of politicians as the soldiers holding the fort while waiting for the calvary to arrive with new ideas from the outside. They do not promote many new ideas because, literally, they are not in a position to see them. And, of course, they serve entrenched interests vested in preventing change.
jaqueline
May 27th, 2009
What does a sustainable society look like? When has the world last seen one? Was it the nomadic lifestyle lost in the nineteenth century?
Personally, I think we have surpassed the possibility to enjoy a sustainable world, let alone find some blend of “consumerism and sustainability”.
One can smoke “pipe dreams” into oblivion, but the fact remains; I type on an unsustainable computer, this conference will be travelled to in unsustainable manners, millions will consume unsustainable dinners tonight. Millions more will starve. Tomorrow, we shall do it all again, perhaps with greater zeal!
Real sustainability requires positive and negative feedback loops on SMALL scales. Build bubbles around cities, move the masses onto small islands, build those feedback loops. Let the localities discover what happens when you use up all the water, expel vast quantities of noxious fumes, or “consume uncontrollably.” We would definitely have a new world, but I am not sure I would call it a renaissance.
Perhaps once those loops were in place, we could talk about sustainability.
Until then, making reference to the North Atlantic thermohaline circulation being disrupted by an amorphous “Arctic methane melt” (I assume this is the “short term spike in global warming” you refer to) is neither useful nor helpful. It is exactly what has been played over the past thirty years, and people need better direction.
People need real, tangible actions and measures in order to work towards sustainability in a long term manner.
If future generations choose to look back at the current failure we currently call modern civilization, they will most assuredly refer to the mentioned “optimism” as the opiate which dulled our senses while we cruised to failure.
If we are lucky, this will be the worst depression to ever strike humanity. A depression that lasts for a generation, and completely resets the values of our world. We will beg for the luxuries of today (see James Howard Kunstler)
Would it be devastating? Absolutely. But it is perhaps the only thing that could destroy the mechanism which has created this predicament which we find ourselves tangled in today.
It is surely a better road than the “all out war” being prepared as an alternative.
Sorry if I rained on your parade, it looked to be a nice one.
Tod Brilliant
May 27th, 2009
“Steady state is not really feasible – in systems dynamics that equals death.”
Interesting. This statement betrays what seems to be an otherwise thoughtful person. Systems dynamics is no more than an operating principle, a theory. Yet you dismiss a potential path out of hand, simply based on the ideas of others, ideas you’ve never personally tested for accuracy. Further, I’ll argue that steady state does not equal death in system dynamics, but that’s a tangent for another time and place.
If we’re to find a ‘sustainable future’ (and I share Jaqueline’s assessment largely, though with less of a misanthropic vantage point), we’ll need to take a look at all possibilities, including steady state. Certainly, a no growth model undermines every last economic principle, but to survive (not thrive), we’ll need to blow up ever last economy ever devised, as not one, historically, has been sustainable.
My real point? If you seek to be a successful futurist, you must challenge yourself to remove all blinders, all assumptions. Wipe your slate clean, then sort and file accordingly. I enjoy your optimism about the future, and implore you and others to not only theorize about future possibilities, but to DO more about achieving a sustainable future (read Jaqueline’s challenge above). A great starting point would be to pressure our elected representatives to act boldly (something that is not happening).
jaqueline
May 27th, 2009
I am not misanthropic, sorry if my comment came off that way. Indeed one of the beautiful things about humanity is our ability to think our way out of problems, rather than just hope for the best. As a species, we have done, and I am sure will do amazing things.
I was merely expressing frustration at a general lack of doing, and a lot of speculating…
Your points are well taken, and nicely delivered. I can agree that a good starting place is to start with elected officials (think locally).
I would add that if one wanted to see what a sustainable lifestyle might look like, Jowett’s advice is a good place to start any endeavor:
“We cannot seek or attain health, wealth, learning, justice, or kindness in general. Action is always specific, concrete, individualized, and unique.”
glen Hiemstra
May 27th, 2009
Jaqueline – the question is, as you frame it well, what does a sustainable society look like, when you begin with somewhere between 7 and 10 billion people. In my 2006 book I explained why we will go into population decline and also why that presents its own problems. As for a methane-induced temperature spike, it is far fetched but possible. Too fast an increase leading to an unpredictable situation in that no one knows what would happen. On the other hand it would focus our attention and the good news is that methane is short lived in the atmosphere. There are a variety of good projects underway now to tease out what sustainable looks like on a grand scale.
Tod – I probably played a little loose with “steady state”; what I had in my mind was more that state of entropy when everything winds down and … stops. While steady state is a useful construct, I don’t think any complex multivariate system (e.g., civilization) is or will ever be steady state, short of the great asteroid strike. What I am trying to say is that civilizations, societies are always in motion, with trajectories. To me, a “sustainable” economy would essentially be no-growth in material consumption, but the dynamics of that would be far from steady state. Human beings seek growth and development. What that urge is applied to is a question for the future.
Tod Brilliant
May 27th, 2009
Glen -
I’m with you on your refined description of a possible sustainable civilization. This seems more in line with a Richard Register/Lester Brown envisioned future society. Channeling the growth, as you say, is a concept I haven’t thought on before, and for that vital parcel I thank you.
Jaqueline’s viewpoint . . . well, it’s one espoused by futurists who posit another (just as likely?) future scenario, one based on current human nature, not one that is (perhaps) idealized. That is, people are naturally inclined to take care of Self first and foremost, and the result is, well, The Globe 2009. Those who believe in a ‘dawning of global consciousness’ or some such ‘Age of Aquarius’ construct that is predicated upon either sweeping re-education or a spiritual awakening of all humanity, seem rather hopeful, and, like Jaqueline I agree that they’re a joy to watch as they plan with great smiles and hope. From them I take strength to move forward, but I also suspect I (or my children) may one day be brutally competing with them for dwindling resources…and their lack of planning for a truly harsh new era will put an end to their genetic input on the whole.
Wow. That sounds awfully harsh and dark. But from this juncture, I see more clouds than rainbows. Wish I had some different spectacles, but every time I test the glass it appears true.