Outlook 2005
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By Glen Hiemstra, December 2004
Biggest Stories of 2005
Peak Oil
“Venture capital is increasingly attracted to clean technologies, in energy, manufacturing, water, agriculture and transportation.”
Oil prices will remain near $50. Significant new global supplies will continue to exist in theory but not in practice. Debate will appear regarding whether the global peak in total oil supply is near, or, perhaps, even past. Consensus will continue to be that the peak is a couple of decades away, but this consensus will be chipped away at. As an Energy bill is re-debated in the U.S., old powers will insist on exploiting all sensitive areas for possible oil, while new voices will point to growing possibilities for freeing ourselves of dependence on all oil, not just foreign sources.
Many companies are in the wings, developing next energy generation technologies. Leaders include Konarka, developing nanosolar cells, printed on thin films of polymer, and ECD Ovonics, already selling thin, flexible solar cells, while developing hydrogen storage technology.
Investment in Cleantech
Venture capital is increasingly attracted to clean technologies, in energy, manufacturing, water, agriculture and transportation. According to Nicholas Parker, of the Cleantech Venture Network, more than 200 start-ups in the sector drew in 6.4 percent of all North American venture investments in 2003, up from four percent the previous year. Numbers for 2004 are pending. ?Clean tech is now a larger investment category than semiconductors, IT services, financial services and media,? says Parker, who adds that some of the big-name venture firms such as Draper Fisher Jurvetson, Technology Partners and Kleiner Perkins have gotten into the game. (Quote from EMagazine.com)
Withdrawal from Iraq?
Elections in Iraq will likely go ahead at all costs, and the costs will be high. The chief reason for forging ahead may turn out to be providing a fig leaf for the U.S. that enables a relatively quick withdrawal of armed forces. (?See, we brought democracy to the Middle East and freedom is on the march, so now we can go home.?). Iraq will likely then continue its descent into a civil war that will determine its true future.
Biggest Technology Breakthroughs in 2005
More Nanotech Products
Nanotech based materials, such as the stain-free clothing from Dockers and Hager, will take the next steps. More materials will become stain free, requiring only water to remove dirt, while the first stain and odor-fee material will debut. This material will contain molecularly manufactured components that resist bacteria. Meanwhile prototype development and human trials will continue with devices like nano-solar cells, and medical smart bombs.
Wi-Max
High-speed wireless, spanning 1-10 miles, will become a significant part of the Internet world, impacting both cities and small towns, even rural areas. Who pays how much, and the appropriate mix of private and public initiatives will be contentious.
Wireless entertainment on phones
Downloadable games for cell phones will grow in popularity especially among the younger, digital native generation. Led by growth in Asia and Europe, we will see increasing use in the U.S. and elsewhere. Games already rival, and by some measures surpass, Hollywood movies in basic revenues, and this trend will keep growing. Multi-player games also will grab more market share. Cell phones themselves will continue to evolve toward the convergence of a phone, PDA, camera, game player, and wireless internet device, a model long predicted but now coming true (making the devices larger and more clunky, but more useful).
Note: Lexus Hybrid delayed to 2005
Outlook 2004 predicted that the Lexus RX hybrid SUV, set to debut in 2004, would provide the psychological tipping point into the next energy era. But, Toyota has delayed the SUV debut until late Spring 2005. At the same time, reports are that this car has the most pre-orders of any car in history, so the core prediction, while delayed, may yet be true.
Biggest Wild Cards
Rethinking Terrorism Threat
The idea that anti-U.S. terrorism is linked to U.S. foreign policy and not to some vague hatred of freedom began to receive public attention late in 2004. Since this view was being written not just by theorists, but by Pentagon and CIA research teams, the view was gaining credence at year-end. As this more subtle view gains momentum in 2005, U.S. foreign policy vis-?-vis Israel & Palestine, occupation of Islamic countries, and support of autocratic rulers in Islamic countries will come under review, finally. Those in charge will wildly resist any policy change, but the winds of such change will begin blowing around the edges.
Nano-tech energy breakthrough
A key to a clean energy transition is economical retrieval of hydrogen. One solution gaining momentum is home-based fueling stations to extract hydrogen from widely available natural gas. But the preferred alternative in the long term is to extract hydrogen from water, which is so plentiful and leaves no residue (even the oxygen is used in the process of extraction). Wind, solar, and nuclear power have been considered the prime candidates for providing the necessary electricity. Once freed from water, hydrogen could become an excellent source of energy for transportation, the primary user of oil. We are a long way from making that transition, but 2005 could mark the beginning of the beginning.
For example, a molecular scale catalyst has been developed over the last decade at Virginia Polytechnic and State University. There, ?researchers have developed a large molecule, or supramolecular complex, that combines sub-units that absorb light with sub-units that accept electrons.? When used as a catalyst, this super molecule can use sunlight to generate electrons in quantities sufficient to free hydrogen from water. The molecular ?complex could be used to produce hydrogen for clean-burning combustion engines and fuel cells.?
Tepid Economy
Rosy predictions for ?unprecedented? economic growth in the U.S. economy will falter. Instead, growth will be perhaps half that predicted, on the order of 2-2.5%. Sustained high oil prices, continued growth in the U.S. federal budget deficit, a weak dollar, and the final denouement in Iraq will contribute to a general malaise in the job market. Average wage earnings will remain stagnant.
Globally, the picture will be brighter, as regions of the world not pre-occupied with (though not ignoring) terrorism will be psychologically free to concentrate on innovation and growth. Look for above average growth in Europe and Asia.
Old Europe in particular will confound experts, who continue to anticipate decline based on demographics and over-regulation. Instead watch old Europe for innovation in technology and in social-economic systems.
Biggest Opportunity Not Taken
Saving Social Security
We all expect a 2005 effort by the U.S. Administration and the Congress to ?save? Social Security. But this effort will in reality be a hoax, in the long tradition of saying one thing, but doing the opposite. The real agenda is transferring billions from public coffers to private investment, while significantly increasing the value of current stock holdings. While it is true the Medicare and Medicaid, which are not part of the Social Security retirement fund, face large financial problems in coming decades, the same is not true of Social Security. In fact, a very small adjustment to current Social Security tax rates would make it solvent through the 21st Century. If longevity continues to increase, some occasional adjustments to the retirement age could compensate and take care of remaining budget shortfalls. This scenario presumes that Social Security taxes collected are used to pay Social Security benefits, rather than being raided for other government programs, as has been done historically.
Why so many people wish to destroy the most cost effective and successful government program ever is something of a mystery. Some suggest that the true agenda is, as noted, one of transferring billions to investment companies, and raising the value of stock holdings through increased competition for stocks, without needing to actually improve the companies themselves. Others go so far as to argue that some privatization zealots do not like the idea of a successful large government program, which enables average wage earners to retire without the threat of poverty. (In the good old days, more than a third of the U.S. population retired into abject poverty.) Let?s hope this effort to undermine and eventually destroy the program is defeated.
See Paul Krugman in the New York Times for explanation in ?Inventing a Crisis,? Dec. 7, 2004.
Biggest Opportunity Rekindled
Script-based entertainment
A novel idea will grow in the world of Hollywood television. The idea will be to hire people called ?writers? to make up stories in the form of scripts. Then people called ?actors?, who are not ?real people?, will be hired to pretend to be real people as they act out the scripts in fake places called ?sets.? Thus will be born television shows called situation comedies as well as dramas. There will be resistance to this idea as too revolutionary and too risky, but the idea will catch hold and most new television shows that debut in the Fall of 2005 will be ?make believe.?
(Note: this revolutionary concept was recently explained on Mad TV)
Glen Hiemstra is a futurist speaker, author, consultant, blogger, internet video host and Founder of Futurist.com. To arrange for a speech contact Futurist.com.
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