Insights · December 23rd, 2008
Watch the video of my Outlook for 2009 as a futurist, speaker, and consultant.
This is my final blog entry of 2008, before we take a couple of weeks off. I am cautiously optimistic about 2009. This may surprise you. Here is why.
Future of EEE – Economy, Energy, Environment
Economy: When I recorded Outlook 2008 in December of 2007, I predicted that the economic slump driven by the debt crisis would be worse than experts were suggesting at that time. In fact I had just heard Steve Forbes say in a speech that the debt crisis would be a minor inconvenience in 2008 involving a couple of billion dollars and was nothing to worry about. But of course it was a huge iceberg, into which we have crashed.
However, all is not lost for 2009. The key drivers in how the world deals with the economic crisis will be 1) the amount of the U.S. stimulus (plus that of other nations), 2) more importantly how this stimulus is applied, and 3) the psychological impact of the new U.S. administration. As it looks now the stimulus package(s) will be very large by historical standards, and critically, will be applied in the U.S. to job-creating endeavors rather than simply being poured into banks as most of the money so far has been. Assuming the money can get flowing to real projects the impact will begin to be felt by year end.
The psychological and emotional impact of a new direction is generally underestimated at this time. Last night I saw video of the election celebration in Grant Park, Chicago, on November 4, 2008. While not all shared in celebrating the Obama victory, I do not think we can accurately calculate how large the positive feeling will be when the new administration finally takes office and begins communicating its full plans.
When combined, these three drivers – amount of stimulus, its application, and psychological uplift will, I believe lead to such increased confidence that the economy will turn faster than assumed by the end of the year. This applies particularly to consumer and equity markets.
The housing market is another matter, as we have far to go before housing values match actual incomes. It is in the housing arena along with transportation that we face an important realization. The recovery that begins in 2009 will not return us to business as usual but to a new kind of economy, one that is more modest, more sustainable, and more equitable. If this is not the direction we go, then things will get worse instead of better, for the long run.
Energy: In Outlook 2008, I suggested that we’d see $140 oil by mid-year, which we did, followed by falling prices. But no-one, including me, anticipated a crash in prices like we have seen. Now, however, it appears more likely that by the end of 2009 we will see oil prices climbing to $80 rather than falling further or staying stable. In fact, do not be shocked if by the end of 2009 we are again talking about, if not quite yet seeing, $200 oil. The simple fact is that discovery and development of new oil does not keep pace with oil usage, and has not since the 1970’s. The slightest increase in economic activity will shift prices upward again, while for the time being new investment is stalled.
Environment: The new U.S. administration promises a sharp turn in environmental policy, toward paying attention to climate change. We will see lots of positive action within the stimulus plan and via general investment, in making the built environment more sustainable (retro-fitting public buildings, schools), taking steps to enhance the electricity grid for increased used of solar and wind power, and we will see more breakout activity in nanotech solar energy.
Future of Health Care
The U.S. economy cannot fully recover until and unless the health care crisis in the U.S. is addressed. This crisis includes 50 million uninsured, and health care expenses which on average are up to two times those of the rest of the industrial world, for quality of care that by many measure is no better. The underlying issue is that U.S. health insurance is still mostly attached to employment. Lose your job, lose your insurance. Individual policies are hard to get, and very expensive, as much as $12,000-15,000 per year. In addition, U.S. employers are burdened with the expense, in comparison to international competitors, as we can see in the comparison of U.S. auto makers to their competitors.
Here is the critical issue for 2009. Health care reform will be at the head of the table. But, I was there in 1992-1993, early in my futurist work, when health care reform failed under the Clintons. It failed because the entrenched professional lobbies fought it off. The same result will occur in 2009 and beyond, if the current terms of the health care debate do not change.
The one item so far claimed to be “off the tableâ€ is universal coverage in the form of something like Medicare for all. If the policy debate is formulated only around re-arranging the pieces in the health care system, and not fundamentally changing the players, do not expect much change. What deserves at least serious exploration is a Medicare for all approach, with private companies providing supplemental insurance, and removal of health insurance as an employer expectation. I do not know that such a system can ever be designed and approved in the U.S., but it ought to be considered.
The most exciting tech areas in 2009 will be 1) continued development in mobile Internet, via the array of phones now accessing the net along with nearly universal wireless access, and 2) growth in touch and gesture based interfaces, as with iPhones, the HP touch screen and the Microsoft surface computing initiative. Expect more and more Internet access to be mobile and touch/gesture based.
Glen Hiemstra, futurist speaker, is the author of Turning the Future Into Revenue: What Businesses and Individuals Need to Know to Shape Their Futures, from John Wiley & Sons, publisher, 2006. Glen is the Founder and Owner of Futurist.com, a website in the public interest, a blogger, consultant, and Internet video host. He lives and works in Kirkland, Washington, providing presentation, consultation, and research services. For more information contact: www.futurist.com