Tis the time of year for predicting what lies ahead. But it’s also a good time to reflect on the past and to hold ourselves accountable. After all, it’s easy to make predictions if no one ever goes back to check!
2009
So here are my predictions for 2009 from a post I wrote two years ago. I was surprised how many of them turned out to be true. I missed the boat on the Facebook phenom, but it may have been too early for that. For the most part, they were not only prescient, but can still be cut and pasted for 2011. So here’s what I wrote in December 2008:
1. Economic growth, as measured by GDP, will be negative for all of 2009 largely due to the contraction in consumer spending and investment. The only segment that has the potential to offset these declines is reduction in the foreign trade deficit. We will import less, but we do not have the manufacturing capacity to increase exports by any significant amount. Net effect: economic contraction with significant loss of jobs and consumer spending in freefall.
2. Adaptations by consumers as they struggle to cope. Emphasis on frugality and thrift. Aversion to messages that trumpet luxury and excess.
3. Growth of the “other economy” that produces goods and services that do not get counted in GDP. An upswing in cooking at home, vegetable gardening, crafts, DIY projects and repairs, at-home entertainment over going out, “staycations”. Consumers will take pride in self-sufficiency and taking part of their economic life back into their own hands.
4. Related to this, growth in consignment stores and resale businesses, as people sell what they are not using in order to raise money and simplify their lives. Or, when they do buy, look for second-hand bargains. An increase in bartering – for childcare, professional services, etc.
5. Growth in home-based and small businesses as people struggle to find ways to make a living when there are very few employers willing to hire.
6. Greater importance of digital media sites like YouTube, Twitter and Craigslist, using them as tools to connect, do business and gain access to free information and entertainment.
7. I believe we are experiencing a major shift in consumption patterns that will last for many years. Already, I am hearing people talk about the silver lining in this economy – the reemphasis on simple pleasures and a home based life, the demise of greed and selfishness, and the hope that eventually everything will be fine. Let’s hope the optimists are right.
2011
Ok, back to the future. Here’s what I see for 2011:
1. A roller-coaster economy, with a lack of certainty pervading all public and private decision making. Mood swings from cheery optimism to gloom and doom. All that is certain is that there will be a strong demand for any services that promise to reduce uncertainty.
2. Mounting anger from the bottom about the widening income gap and the lack of accountability of the financial sector. A loose coalition of right and left united in their disdain for Washington and their sense of hopelessness. Foreclosures will see another upswing and the housing market will see another dip, especially in areas that had not seen much damage until now.
3. Focus on local, not just of the green “locavore” variety, but more broadly to include spending money where you live. And this will include mounting opposition to military spending on the grounds that the money could best be used domestically.
4. Facebook fatigue and the splintering of social media into special interest groups.
5. Continuing adoption of values that emphasize simplicity, self-reliance and frugality.
No market research predictions here. There are several other people doing a great job predicting how the industry will go. I prefer to think about the broader context and admit that I am very uncertain about everything except the bear market in anything that promises to temper uncertainty.
In the meantime, we can choose to live our individual lives with kindness and be grateful for the beauty and wonder of all natural things.
Thank you for taking the time to read my ramblings on this blog. Wishing you personally and professionally a very happy new year!
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