Posted By: George Deeb - 11/11/2011
As you are thinking about your business growth, startup opportunities, job moves or otherwise, I thought it would be fun to predict what th...
As you are thinking about your business growth, startup opportunities, job moves or otherwise, I thought it would be fun to predict what the world may look like in ten years so you can focus on winning categories and avoid the losers. I will either look really smart ten years from now, or really stupid, depending on what really happens. But, here it goes:
One Global World and Economy. Not only will U.S. companies go overseas at lightspeed, but international companies will enter the U.S. at lightspeed. As an example, European fashion deals leader, Vente Privee, is just now entering the U.S. to take on Gilt Group and Rue La La in their home market. And, not to mention, assume most all of the 7BN people in the world today will be online in the next decade, a 5BN person increase from the 2BN people online today, which will continue to fuel meteoric internet growth on a global scale. This most likely means, we are not that far away from one global currency, one global language and one global stock market in one tightly integrated global economy. No longer will there be country-specific silos in this new world economy, as evidenced by debt default fears in Greece and Italy, rattling the U.S. stock markets more than ever.
U.S. Unemployment Will Be Worse, Not Better. As technology continues to improve, it is usually human jobs that get replaced. And, the current U.S. workforce is not skilled in the heavily demanded skills (e.g., like the tech gurus are in India), making it harder for them to find replacement jobs. Layer on top of that the fact that seniors can no longer afford to retire at age 65, in order to cover their living expenses, which means these typically vacated positions are staying filled for a longer period of time. The advice I am giving my kids is get strong technology, strong professional or strong entrepreneurial skills. Tech will always be in heavy demand with new innovations. Skilled professionals like doctors will always be in demand. And, if you cannot find a job in a big company, an entrepreneur can always create their own job.
Most Brick and Mortar Retailers Will Close. We have already seen Borders, Blockbuster and Tower Records go under, with the move toward digital books, movies and music. It won't be long before many other retail verticals will soon follow. As an example, office supply stores like Staples already drive more than 50% of their revenues from their websites. And, their 20,000 foot stores are only 5,000 productive today, making them financial nooses around their necks. Not to mention, chains like Best Buy invest heavily in trained salespeople, only to have the customer pick their brain and buy the product cheaper online (waving their smartphones in the salespersons' noses). The only brick and mortar categories that will survive will be for things like perishables in a grocery store, restaurants, other last minute items you need same day (e.g., prescriptions) or items too expensive to ship. So, short the retail real estate business, as many chains will go under or move to smaller format showrooms.
Hyper Social, Hyper Mobile, Hyper Local. We have already seen heavy focus in these areas. But, imagine it on steriods, where your smartphone is ruling everything, anything and anywhere bringing you real-time recommendations from your personal networks for products and services within 1 mile of where you are standing. Keep your eye on Zaarly and Groupon Now, who are off to a good start in this space with real-time personalized offers from nearby locations. And, coupons will be delivered right to your smart phone in real-time as you are walking down the shopping aisle based on products you scan, not via paper coupons in newspapers (which will go out of business). No longer will you turn to Trip Advisor for hotel reviews or Zagat for restaurant reviews from random strangers, you will turn to your Facebook friends who live in the city you are traveling for hotel and restaurant recommendations from people you know and trust.
Content Intermediaries Will Not Survive. Unless they move quickly to evolve into content companies, cable companies like Comcast and Time Warner and online video portals like Netflix and Hulu are in big trouble. Why? Because their services will be replaced by the content owners themselves (e.g., Disney, Warner Brothers, Universal), who will simply stream their content through their own websites, or portal sites they build between themselves. That keeps more monies in the hands of the film studios and TV networks and aggregates customers on their own websites which they can drive additional revenues from advertising. This is why YouTube is acquiring content companies like Next New Networks, to control their long term destiny with original programming of their own, creating more competition for the traditional studios and more selection than ever for consumers. Not to mention, the TV and PC will now be cleanly merged into one device, not requiring both a cable connection and an internet connection, putting additional revenue pressure on these providers.
Long Live Open Source, the Cloud and SaaS. The cost of launching a website 10 years ago was $5MM, and today a new site can be launched for $50K thanks to open source, the cloud and SaaS technologies. Expect these types of innovations to accelerate for everything and anything, from hardware/software needs to various human services. No longer will you need to buy a new drill from Home Depot, sites will allow you to locate and borrow one from your neighbor. No longer will you engage one home building architect, you will have 100 designs from 100 architects competing for your project. No longer will you buy electricity from monopolistic ComEd, you will have 100 electricity providers to choose from. Any human service, will be available in mass and on the cheap. Any assets or software needed, will be sourced cheaper via crowd-based competition or outsourced to a third party cloud or SaaS service. This is not good news for traditional hardware and software manufacturers.
We Will Finally Make a Dent on Energy. As fuel prices rise and alternative electric vehicle technologies and infrastructure improve, people will finally afford and get more comfortable with making the switch off of petroleum based transportation. Instead of pulling into your local Shell station for a fill up, you will pull into your local grocery store for a high-speed battery recharge while doing your shopping. And, more affordable solar technologies will start to play a much greater role in heating and powering homes and businesses. As an example, there is one company that is trying to replace petroleum based asphalt roads with solar panel roads that will produce enough energy to power the entire planet.
Same Old, Same Old in Education. Sad to say, I don't expect material improvements in our education system in the next decade. Our schools are still teaching kids the same subject matter as they were 50 years ago, much of which is not relevant for this generation of jobs. And, schools are not focused on ages 0-5, where 80% of brain development is already set in stone by the time a student starts kindergarten. And, nobody has figured out how to make getting your PHD in engineering as exciting to students as becoming the next starting quarterback for the Chicago Bears. Which means, we will continue to train foreign students in our prestigious universities, for them to go back to their home countries to compete against us. Wish some smart entrepreneurs or governmental reform could fix these problems!!
Same Broken Healthcare System. There are so many inefficiencies in the healthcare system it makes my stomach turn. Major reforms are needed in malpractice claim caps, to lower malpractice insurance premiums, to lower fees charged by doctors. Major integration of disparate patient data systems are needed to avoid duplicative medical testing costs (although some progress is being made to this regard, but not fast enough). Power needs to shift from the health insurance companies, back to the patients and their doctors, to keep costs down, get the best service and attract the next generation of doctors where they can actually make a good living again. Obamacare and a bankrupt Medicare will continue to put additional strains on an already broken system. That said, I am always bullish on biotech, pharmaceutical and life science investments that take medical innovations to the next level. Especially, given the overall aging of the U.S. population, with Baby Boomers now entering their senior years.
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