Not the Beginning or the End

SYSTEM FAILURE. A simple two-word error message summarizes virtually every major news headline over the past five years. In fact, it is difficult to name a single public institution which we hold in high esteem. Government. Healthcare. Education. Religion. Even libraries are being brought into question regarding their relevance for the future.

How did we get here?

Economic historian Carlota Perez says that we’ve been here before, many times in the past. For over two centuries, we’ve seen new technologies wreck and repeatedly rebuild our social institutions.

• The Industrial Revolution (started 1770)

• Age of Railways (1829)

• Age of Steel and Electricity (1875)

• The Age of Oil, Automobiles and Mass Production (1908)

• The Information Age (1971)

Each technology boom follows a pattern: an initial breakthrough, followed by speculative frenzy and misallocation of resources, leading to a collapse in finances and public restructuring, eventually transitioning into a period of broader deployment, productivity and rising affluence. The process finishes with near-universal integration of revolutionary technologies into existing systems.

cycle_of_capital[1]We’re not in the beginning or the end of this cycle, but in the middle. The “messy middle” is a turning point when public finances are still in a state of disarray, and a significant gap exists between the efficiency of our institutions and the productivity of our newest technologies. It is a time when the public feels the most dissatisfied and the least confident.

This particular turning point may have been delayed, as government efforts to “fix” the financial crisis have interfered with the mechanisms that restore equilibrium via what economist Joseph Schumpeter refers to as creative destruction.

At the World Future Society Conference last summer, a friend and colleague of mine, Patrick Tucker, presented material from his upcoming book, The Naked Future: What Happens in a World that Anticipates your Every Move. He comments that we are in a time of “declining institutions and rising individuals.” In the Information Age, nothing empowers individuals more than the internet.

So, what if institutions were as easy and convenient as online shopping at Amazon? Can schools develop personalized curriculums just as easily as Netflix finds good movie recommendations? What if hospital costs were competitively-priced, like hotel rooms on Hotwire? Will peer-to-peer lending networks become more successful than traditional banks? Is it possible that a network of autonomous electric vehicles might eventually solve our public transportation issues?

We are still a few years away from the next golden age, but at least we can see it on the horizon.

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On the Garland Report

Eric Garland is wayyyy too interesting (and funny) not to be on prime-time. So, catch his Garland Report on the internet while you still can. Yesterday, I was a guest and we had great conversation on the weak recovery, alternative economics, and emerging technologies.

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Technological Revolution and the New Golden Age

Great short video that makes the connection between environmental and economic resurgence. Carlota Perez is a “big thinker” that I first heard about two years ago — well worth watching!

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Google Watching

As I pass my 44th birthday, it is easy to look at everything that Google is doing with a certain degree of wistfulness and envy.  Now just 15 years of age, Google has already surpassed many of my accomplishments.

• While not yet old enough to get a driver’s license, Google’s self-driving car logged-in 500,000 miles without a single accident.   It (presumably) has a much better sense of direction and doesn’t “space out” at stop lights.

• My grasp of the French language is so confused that I can get native speakers lost in their own country.  Meanwhile, Google’s online tools can translate over 70 different written languages to English.  The company is also extremely close to practical real-time speech translation for the Android operating system.

• From the perspective of personal health, my vision is fairly good — yet the new Google Glass can potentially have near-perfect facial recognition and see into something called “augmented reality” – using digital overlays to project location-specific information onto the real world.  My personal OS is still stuck in version 1.0, a freeware project better known as “an overactive imagination.” Continue reading

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The View is Better from the Edge

A few years ago, sci-fi author William Gibson famously commented in a radio interview that “The future is already here, it just isn’t very evenly distributed.”  This suggests that the future can be tracked and (sometimes) found.

Some have lost their reputation, even their sanity, in pursuit of this elusive beast.

Trend hunting would be altogether much easier if only you knew where the future wants to live.  It might simply be question of finding the right habitat.

In his book, The Medici Effect, Frans Johansson explores where creativity and innovation is most frequently found.  Johansson writes that innovation wants to live at the edge of things.  More specifically, innovation thrives at the intersection of cultures and  geographies.   This explains why the U.S., with its melting pot of immigrants, has such a dynamic culture.  Also, why coastal cities — such as Boston, New York, and San Francisco, tend to attract the best and the brightest.

Johansson also shows that the most interesting and accessible intersection might be at the edge of academic or scientific disciplines, where concepts are allowed to “clash and combine, ultimately forming a multitude of new, groundbreaking ideas.”

Charles Darwin was geologist when he stumbled upon the theory of evolution.  It took an astronomer to explain the extinction of the dinosaurs.   Similarly, Clay Christensen notes in The Innovator’s Dilemma  that disruptive change often comes from outsiders.

Biomimicry has been credited with the aerodynamic shape of the Toyota Prius, which is modeled after the shape of the box fish.  Neurofinance has been a hot area of study for several years now – it goes a long way towards explaining why human behaviors and heuristics create market inefficiencies.

StratFI can be found at the intersection of strategic foresight and investing.  We offer a new perspective, keeping in mind that “the view is better from the edge.”  In coming articles,  we’ll go big-game hunting for some of the dominant investment themes of the next decade.    Meanwhile, I’ll share some of my own favorite “hunting grounds” for new trends — follow the link here to the resources section of our website.

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Live from the Queen Theater at TEDx Wilmington

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A Revolution in Batteries?

BatteryFor all the buzz, Tesla’s electric cars still rely on lithium-ion batteries, a technology that was commercialized by Sony over twenty years ago.  Today, these batteries power everything from sports cars to laptops and cellphones.

It is time for a recharge.

Lithium-ion batteries are by far the most expensive component of electric cars, adding about $10,000 per vehicle.  This is one reason why the electric and hybrid vehicles still rely on economic subsidies.  But there are other concerns, too.  Li-ion batteries don’t hold as much energy as petroleum-based fuels, suffer from slow recharge times, and have lingering safety issues.   Clearly, this is a transitional technology.

Significant progress is being made in the effort to update the rechargeable battery.  Three new approaches are gaining the most attention: Continue reading

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