Expand Your Horizons with Scenario Planning

Have you ever wanted to learn a bit more about scenario planning as a tool to expand your planning horizon?

This past summer I had the opportunity to lead a group from the National Association of Electrical Distributors in a workshop on future trends and preferred future planning. The participants, all part of the Lake Michigan Club, were owners and managers of companies that ranged in size from small businesses to large national distributors and manufacturers. Their business is to supply the building and construction industry with an A-Z supply of electrical equipment, from conduit to switches to fixtures. Of course it is an industry struggling to manage during the construction down times we are in. Here is a short video about their annual meeting, with a brief clip of me discussing preferred future planning.

Following the workshop, I was invited by the Association to produce for them a "Scenario Planning Playbook" and a short video encouraging their membership to take a look at it. Scenario planning can be an excellent tool for companies that faced with a volatile and uncertain future environment, because considering alternate scenarios enables you to plan flexible strategies.

The association has made the Scenario Planning Playbook available through their website, where you can also watch the video. If learning about scenario planning has been on your agenda, check it out.

Glen Hiemstra is a futurist author, speaker, consultant, and Founder of Futurist.com. To arrange for a speech, workshop or consultation contact Futurist.com.

Will Austerity Create the Future?

This is the kind of thing that government built the last time we had such a deep economic problem and employment needed a boost.

Are we building anything for the future, today, to help get out of the jobs crisis? Just wondering.

Here are some alternate ideas to austerity as the path to prosperity, offered to the UK Government.

Perhaps there are better alternatives to what we are doing?

Glen Hiemstra is a futurist speaker, author, consultant, blogger, internet video producer and Founder of Futurist.com. To arrange for a speech contact Futurist.com.

Occupying Wall Street and Economic Futures

I began thinking about the long term impact of the growing gap between rich and poor, and the flat-lining of middle class incomes, several years ago. I began the chapter on The Great Divides in my 2006 book by discussing the growing wealth divide, and in a 2006 keynote for the American Red Cross I called out the looming rich poor gap as an issue for philanthropic organizations.

Since 2006, the situation has gotten worse, of course, with the collapse of 2008, and the long non-recovery recovery that has followed. But now the issue has leaped from speeches about future trends to the front pages.

For over three weeks Occupy Wall Street protestors have been rallying against a number of grievances focused on a jobless economy and the Wall Street, regulatory, corporate and other policies that they see as combining systemically to prevent improvement. The website for Occupy Wall Street claims that,

The one thing we all have in common is that We Are The 99% that will no longer tolerate the greed and corruption of the 1%. We are using the revolutionary Arab Spring tactic to achieve our ends and encourage the use of nonviolence to maximize the safety of all participants.

Street demonstrations are a quintessential American tradition and right, and thus the demonstrators are carrying on in the footsteps of many who have come before them. What makes Occupy Wall Street unique is the intent to carry on an occupation as a tactic. Momentum for Occupy Wall Street has gathered speed in the last several days with the inclusion of local labor unions in the protests, and the spread to cities in almost every state in the Union. While many mainstream media and financial commentators have expressed opinions that range from confusion to disgust, others are beginning to catch on that something is happening here. Even President Obama has said Occupy Wall Street protests are a reflection of a ‘broad-based frustration about how our financial system works’, though I am not sure he grasps how much of the frustration is with his own ineffectiveness in dealing with that financial system (along with the rest of Washington DC).

Many of the Millennial Generation are involved in this protest, lending credence to the generational theory forecast that the Millennial Generation would be an activist generation. Amongst the thousands of protestors, hundreds have been arrested or aggressively handled in some way by the police, which is evident in the following video.

So what does it mean and where do things go from here? I have two primary observations today.

First, when in recent months I have mentioned the "rich poor gap" to business audiences, I have noticed that while some are glad to hear this reality pointed out, others bristle. I will put up a chart like the one below, and explain that I am not making a political statement, rather simply pointing out that the rich poor gap, which had closed between 1946 and 1979, has been widening due to a combination of factors including economic, global, technological, tax and government policy issues, and then I ask whether we really think that a society in which such a gap continues to grow can be a functioning society?

The second observation is that a good deal of my thinking on the likely long-term negative impacts of increasing wealth disparity comes from a quite earth shaking 2007 book by Robert H. Frank, entitled Falling Behind: How Rising Inequality Harms the Middle Class. When societies become more and more unequal, they become less healthy, less happy, less productive, less capable of producing innovation, more volatile, more prone to crime, and so on. Frank concludes his fascinating analysis of the drivers and the impacts of inequality with these two very prescient paragraphs,

Income and wealth inequality have been rising sharply in the United States for several decades, exacting a heavy toll on middle-income families. When market forces cause inequality to grow, public policy in most countries pushes in the opposite direction. That was also once the pattern in the United States. But more recently, we have responded by cutting taxes for the wealthy and reducing services for the needy. Historians will someday struggle to explain this puzzling reversal.

As the economist Herb Stein once famously remarked, if something can't go on forever, it won't. At some point, we will take steps to limit the damage caused by rising disparities in income and wealth. With a push from intelligent political leaders, such steps can be taken sooner rather than later. For even in an age of thirty-second sound bites, American voters have demonstrated their ability to see things from a different angle.

I have little doubt that the elections of 2008 and 2010, although the winning political parties differed, were both mostly a cry for addressing the decades-long economic patterns leading to the decline of the middle class, as described by Frank among others. The OWS demonstrations are likely to continue at least into the cold of winter, and then re-emerge even more full-throated in the spring. The choice they have made to call themselves "the 99%" is brilliant marketing, and the 99% will shape the 2012 elections. I concluded the section on wealth disparity in my book Turning the Future into Revenue this way,

The bottom line is simple. We can sugercoat economic statistics, point to skyrocketing housing values [in 2006], crow about GDP growth figures that mean little to average wage earners, and the reality is that the wealth divide is growing at the present time, and in the long run is deeply problematic.

3D Manufacture in Space

It has been possible for years now to do 3D design, 3D prototyping, and more recently 3D manufacture or 3D printing of more and more complex objects. Increasingly this kind of work can be done using small machines, even desktop machines.

This past summer I heard about a project to extend the concept of 3D manufacture to space. It seems like a great idea, if we are eventually going to become space faring. The concept is simple. Rather than manufacturing everything needed on earth and launching it at great expense into space, instead put 3D manufacturing machines into space, and provide a stock of raw materials, either from earth or acquired in space from asteroids, Mars, wherever. Then, when a need for a new or replacement device arises, manufacture it on the spot.

One company with this dream is Made in Space. They are pioneering "additive manufacturing," which means simply the process of building a product layer by layer. Materials can include plastics, titanium, aluminum. When Made in Space conducted their tests over the summer, they manufactured items like a scaled-down wrench, that became the first ever tool manufactured in limited gravity (they were flying on the NASA parabolic flights that simulate zero-gravity.

Glen Hiemstra is a futurist speaker, author, consultant, blogger, internet video producer and Founder of Futurist.com. To arrange for a speech contact Futurist.com.

Affordable Energy Efficient Housing for Seniors – A Future Trend

Few issues shaping the future stand out in the U.S. more than the future of housing. We tend to think just of the mortgage meltdown of the past three years when considering housing. No real solutions have appeared yet to really address this problem. But there are three additional forces, beyond the mortgage mess, that have also converged to change the way we need to think about housing going forward – the aging population, the need for affordable and “right-sized” housing for the demographics and values of the future, and the need for energy and thus economic efficiency.

This week I learned about an encouraging effort to leverage the mortgage mess and to address these three issues, in a bell-weather development on the outskirts of Houston. It is Cypresswood Estates.

I had the opportunity to discuss the project with Horace Allison, Chief Development Officer for the Harris County Housing Authority. This is a governmental non-profit corporation that promotes, and develops, quality affordable housing.

The mortgage meltdown has resulted in many foreclosed properties. Mr. Allison and the Authority set out to re-develop one such tract, while also addressing the three dominant trends mentioned – aging, affordability, and economic energy efficiency. I have to say I have not seen a more impressive effort in the nation.

They were able to tap a combination of Neighborhood Stabilization Program funds along with contributions from the State of Texas and the County to build their project. This multifamily development has been named by the National Association of Home Builders as a finalist for the “Multifamily Pillars of the Industry Award” and in my view they certainly should be in the running. You can check out Cypresswood online, but here are some of the basics that I learned from Mr. Allison.

First, the project is aimed at active adults in the +55 age bracket. Second, while some of the 88 units are market rate, most require low-income qualification. Rents range from as little as $560 in the subsidized units to as much as $1200 in market rate units. They are small, starting at 850 square feet and going to up 1050 sf. It really looks perfect for addressing what will become a huge issue in the coming two decades – providing some 70 million aging adults with housing alternatives that are smaller, and cheaper, than the large homes that people will want to, or need to, move out of.

What stands out even more is the way that this project addresses the need for economic, sustainable, and energy efficient housing. The project is the nation’s first affordable housing project that exceeds the criteria for Platinum LEED and Emerald Green certification, the highest possible.

Super levels of insulation combined with a unique way of enclosing ductwork and sealing the exterior of the buildings begins the process of saving on both air conditioning (this is Houston!) and heating costs. Insulation is so good that many units seem able to keep cool with just the ceiling fans, barely needing to run their AC. Energy star appliances in every unit are the next step, along with the use of high end, sustainable materials. Solar panels on the roofs of several of the units provide 30% of the energy needed in this all-electric development, and enables some of the units to be “Net 0” in energy usage. Water is efficiently conserved through low-flow fixtures, rainwater reclamation, and drought-tolerant landscaping.

Since the location is not walkable for shopping, the development offers walking trails for recreation, and takes on sustainable transportation needs in three ways. First, a set of shared bicycles are available for use. Second, several high-grade automobile charging stations are built in for plug-in cars. And third the project maintains an on-site vehicle available to take residents to local stores and appointments. This attention to sustainable transportation was, for me, a significant factor in judging this development as a bell weather.

When I asked Mr. Allison about their plans for the future (this project is 50% leased and will be full by year end), he said they are eyeing four more possible projects, and that they hoped to apply several lessons learned. For example, the Authority will not do any future projects that are not at LEED standards. The cost for this project was only marginally higher, about 8-10% more per square foot, than comparable projects that do not meet the same standards. The payback on the extra investment is estimated to be as short as 5-10 years, while the sustainable benefits will last for decades. Other lessons…

• There were reservations about the cost and feasibility of adding solar energy, but they found solar more available, affordable, and easier to install and to maintain than anticipated. Several companies competed for the contract.
• In future projects the hope is to get into more passive cooling designs, such as ground geothermal.
• The hope is to do a full-on Net 0 project, as compared to a couple of Net 0 buildings in this project.
  The Housing Authority expects that Net 0 will become a standard for HUD, and eventually for other agencies (such as the U.S. Army, as I learned this year when I did projects for the Corps of Engineers).

Gorgeous looking place. Talk about being on-trend with future needs! Check it out.

Glen Hiemstra is a futurist speaker, author, consultant, blogger, internet video producer and Founder of Futurist.com. To arrange for a speech contact Futurist.com.

The future of jobs in a Changing Economy

It seems today that we are entering a permanently different, and maybe more frugal, approach to economy. In this video I pose questions about the future status of national and global economy, and also about the changing nature of jobs in terms of availability and longevity. I have lived through enough recessions now, and enough warnings that this time we will see a "jobless recover" to be careful about making that forecast again. But, as with many forecasts, at some point they often become correct. Replacement of work with technology along with the continuing integration of the global, as compared to local, workforce are causing chaos in regular assumptions about jobs. Of course, the flood of cutting government jobs at this time is part of the picture as well. But, ultimately when the economy finally returns to "normal" whatever that is, I do think we will be in a different job's landscape than we've seen before.

Writers at the Economist and CNN are wondering about the future of jobs as well.

Related Blog Posts:

Can Economic Growth Last and Other Math
Debt Crisis- from history to the future
The Future of Jobs

Future of Manufacturing

One of the most interesting, and vital, questions for the future of the U.S., and any country really, is whether it is possible to have a viable economy without any manufacturing capacity in your country. Former Intel CEO Andy Grove weighs in on this question in an interview in the current issue of Technology Review. His answer: rebuild a basic manufacturing capacity, including protecting your manufacturing sector and products. Check it out.

Can Economic Growth Last and other Math

Yesterday I discovered a really terrific website, a blog called Do the Math, by UCSD professor Tom Murphy. He is a physicist and mathematician, who began wondering if commonly held assumptions mostly about the future could be true when subjected to math. For example, in this blog and a related one he wrote earlier Professor Murphy asks if economic growth forever is possible. It has been true in the U.S. since 1650, and virtually all economic models, political reasoning, and personal hopes assume that we can just keep growing as we have. Tom notes the correlation between economic growth and the 2.9% annual growth in energy consumption in the U.S. for the last 360 years. Economic growth has been connected to energy growth. No mystery there.

Unless we can decouple economic growth from increasing energy consumption the merry-go-round will come to a stop, because energy growth cannot continue. Why? Because anything that grows at a regular annual percentage rate enters the realm of exponential growth, where things double over time. Remember the old calculation for the doubling rate? It is basically 70 divided by the percent growth rate. So, if U.S. energy consumption grows at 2.9%, then our energy use will double in 24 years. In 48 years, about 2060, we'd be using four times as much energy as today. Now factor in world economic growth (remember China) and world growth in energy consumption. In his clever blog Professor Murphy proves that if the doubling rates were to continue like this (he actually lowers the annual growth rate in energy to 2.3% so that each doubling takes 100 years) the earth would be producing, and using, more energy than the sun in 1400 years. Peter summarizes:

Let me restate that important point. No matter what the technology, a sustained 2.3% energy growth rate would require us to produce as much energy as the entire sun within 1400 years. A word of warning: that power plant is going to run a little warm. Thermodynamics require that if we generated sun-comparable power on Earth, the surface of the Earth—being smaller than that of the sun—would have to be hotter than the surface of the sun!

1400 years sounds like a long time, but limits of technology will be reached long before that. You can use less energy by increasing the efficiency of cars, buildings, computers and so on but only until they are 100% efficient and then no more (well, you can't actually get to 100%). Thus increases in the use of energy become "impossible within conceivable time frames" (less than a couple of hundred years). Implication: because economic growth, which everyone wishes for right now, is linked to growth in energy use and that cannot continue, a new economic model that enables prosperity without growth is on the horizon, or had better be.

His blog yesterday, by they way, explored whether it would be mathematically possible to build enough batteries to provide sufficient back-up power to run the U.S. if we were to convert to a solar and wind energy economy. His conclusion is no, not enough raw materials on planet earth, either for lead-acid or for variations on lithium-ion batteries or both.

Check it out.

(Coincidently I will be doing a lunch keynote for the Association for Corporate Growth in Seattle tomorrow, August 4, 2011. What should I tell them?)

Related Blog Posts
Building the Future: Do the opposite of what we are doing
Global Challenges in the Next 20 Years

Glen Hiemstra is a futurist speaker, author, consultant, blogger, internet video producer and Founder of Futurist.com. To arrange for a speech contact Futurist.com.

Growing the Idaho Economy: Moving Into the Future

Growing the Idaho Economy: Moving Into the Future is a research report that Glen and a team he led completed for the Idaho Transportation Department in 2010.

We have been sharing it with potential clients and you can download it from our In the News page.

It is a report on transportation and the possible future economy of the State of Idaho from 2010 to 2030, including current assets to leverage, driving forces shaping the future, long-range economic opportunities for Idaho including four future scenarios, risks to a preferred future, strategic implications for transportation, regional case studies, and final conclusions.

Building the future: Do the opposite of what we are doing

For a long time I have said that many of our policies in the U.S. seem, to me, to be the opposite of what is actually needed to revive the economy and build a better future. Recent evidence from Germany, which is in fact doing pretty much the opposite of the U.S., suggests this view might be valid. From a blogger named brooklynbadboy:

1. Germany faced a budget crisis to which they responded by substantially raising taxes on the wealthy and holding the line, not cutting, spending.

2. Germany then faced the financial crash by increasing debt, increasing taxes, and investing those funds in infrastructure, increased social spending, and tax cuts for things like an extensive (far bigger than ours) national cash for clunkers program.

3. Germany then dealt with the employment crisis by not laying off people, but instead cutting hours. Then they made up the lost income through direct government payments to their people.

But here we are doing the almost direct opposite of what we know is working:

1. We are extending tax cuts for the wealthy.

2. We are cutting infrastructure and social spending.

3. We are laying people off by the hundreds of thousands and then paying them a meager amount to do nothing, but only for 99 weeks at the most.

So, according to the dominant economic policy controlling both the White House and Congress, Germany should be Somalia by now, right?

Wrong:

BERLIN — Germany’s unemployment rate dipped to 6.9 percent in June as the booming economy bolstered the country’s labor market further, official figures showed Thursday.

The unadjusted jobless rate was down from 7 percent in May, and the number of people registered as unemployed was 2.893 million — the lowest figure for June since 1992. The total was 67,000 lower than the previous month and down 255,000 from a year earlier.

Strong exports and signs of a recovery in domestic demand have powered the German economy — Europe’s biggest — for more than a year now, making the country a standout in the 17-nation eurozone.

How to reverse direction here? I wish I knew. Arguments and evidence seem to make little difference. Right now ideology seems to trump pragmatism. But eventually we will have to figure things out, don't you think?