1. April, 2009 visit us at www.locomoshun.com I,1
Five economic trends you might
not hear on the nightly news
by Evan Morris
________________________
To repeat a quote from Andy Grove of Intel, future. I wanted to take a moment to point
out what I believe are changes that have
this may be a good time to heed his advice. helped us land at this juncture. These are
Andy said: five trends that you are likely not to hear on
“You need to try to do the impossible, to the nightly news.
anticipate the unexpected. And when the Because these trends carry a lot of
unexpected happens, you should double your gravity and broad scope, there is no reason to
efforts to make order from the disorder it become depressed. To the contrary,
creates in your life. The motto I’m understand the dynamics and allow these
advocating is, ‘Let chaos reign, then rein in facts to help guide your strategies for success
chaos.’ as we move forward. The current era is
Does that mean that you shouldn’t profound and may be as significant as our
plan? Not at all. You need to plan the way a post WWII economy. If we think of
fire department plans. It cannot anticipate recessions as a period of decline followed by a
fires, so it has to shape a flexible organization recovery, then this is not your normal
that is capable of responding to unpredictable recession. But, by definition, it’s true that we
events.” have recessionary signs: at least two
consecutive quarters of declining GDP.
___________________________ The five trends include:
As President Obama is off to the G-20 1. Putting our spouses to work
Summit in England, let’s all hope the meeting increased our ability to consume. We
is productive and that we are not going to don’t have any more spouses to deploy.
give up on the Western Capitalistic model. In WWII, as most of our men were overseas
There is an exhaustive list of current fighting, our factories filled with women who
economic events and actions that have given were coined as Rosie the Riveter. They
us more bad news than we need. There is learned how to weld, how to rivet, how to
also a surplus of quick fix ideas that grab our fabricate metal, and how to build the heavy
daily headlines. instruments of war that were shipped all over
We can weep at current market the world. This was liberating for these
conditions and fall into a stupor but nothing women. They not only got out of the garden
will help us as much as remaining positive and kitchen and landed in factories but in
and making sure we are part of the solution. exchange for their efforts, they reaped
It has taken us many decades to arrive economic payment. This gave them an
at this situation and as much as our leaders in irreversible view of a new life – a genie had
the media want to offer a quick fix there are been let out of the bottle.
two things to realize: 1.) it is going to take a Immediately after the war, most of the
while to get things corrected, and 2.) there women returned to the home as our men
are aspects of the current change that will shifted from soldier to worker but the
leave lasting impact for many years into the paradigm shift our women went through was
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2. permanent. As the Baby Boom generation from those nasty people that were part of
was created, our country deployed our Nazi Germany and the Japanese military
spouses in the workplace and over several prison camps.
decades, we became a nation of two-income The benefits derived from these
families. The impact of dual incomes intellectual riches drove our economy and
dramatically increased the consumption enabled the United States to offer advanced
capacity of millions of households and this, in technology and superior products to many
part, was a driving force of our economic nations around the globe.
engine for many years. With near full Japanese manufacturing evolved from
deployment of our spouses, we cannot look to the slipshod to better than world class, West
this part of our population to increase Germany reawakened with excellent
consumption and thus boost the economy. manufacturing methods and as we now know,
many parts of the world caught up with us
2. Those who enjoyed living beyond and in some cases have surpassed the United
their means fueled our economy, the States in their ability to present at least the
party is over: This must have been a lot of perception of superior value to the American
fun, addictive and a powerful drug indeed. consumer over domestically produced goods.
Our country has been euphoric with American ingenuity and manufacturing
consumption after the war: Levittown, NY; efficiency gave us a competitive advantage
lacing the country with interstate highways; for many years but now we seem to have lost
radical new car designs every year and in that edge across many industries. The loss of
many states, speed limits that were wages paid to American workers negatively
reasonable and proper. Society was full- affects our economy and will continue to do
throttled, unbridled and had a robust appetite so. We are not going to restore this
for consumption supported by credit. For phenomenon quickly or easily.
forty years (the 1950’s through the ‘90’s) we
learned how to live beyond our means with 4. The United States in linked to the
common people living like turn-of-the-20th- world and the world is linked to the U.S.:
century aristocrats. It wasn’t enough that our All of us on this small blue marble are now
adult population indulged but we became so interdependent – in unprecedented ways.
good at this, we enabled our next generations Although recessions of the past have always
to enjoy the fruits of easy credit. We can had a limited global factor, they have never
recall the TV commercial where the guy is on been as linked to the global economy as we
his riding lawnmower, he has an expansive are currently. In some ways we are in
new house, three cars and a membership in uncharted waters. The U.S. is so
the country club – all because he is “. . . in interdependent with other countries that if we
debt up to his eye-balls”. This party is over don’t gain a consensus with groups like G-20,
for the foreseeable future and will result in it will have dramatic consequences.
much less consumption. This interdependency creates new
dynamics: many countries are now called to
3. American manufacturing ingenuity & action at the same time to solve commonly
efficiency slips from being a sole world shared problems. In prior recessions, if
leader to sharing the distinction with consumption and growth declined in the
many countries: As communications (radio United States, there may have been
& television) improved and became more opportunities in other developing countries.
prevalent around the world, countries slowly Since we have outsourced our manufacturing
learned about the riches of the United States. base to these other countries, we are now all
The world was enlightened with American linked in a tight web of common economic
ingenuity. After all we put a man on the dynamics. All this is new to us, new to the
moon. It’s amazing how much life changed in world and this is a trend that commands
this country from 1946 through 2000. different thinking.
Over several decades we capitalized on
the treasures we obtained from the war: 5. The previously mentioned trends are
German scientists, rapid expansion of our forcing subsequent generations in the
cities, bio-medical research results obtained U.S. to adjust their lifestyles downward
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3. from ours: For the first time in modern Become your own sage, add astonishing
history, our children and grandchildren are value to your customer base, be innovative,
likely to have less tangible goods than us. try to stay ahead of the curve and most
This does not have to be a bad thing and as a importantly, see the glass as half-full and
matter of fact, perhaps a simpler life might remain positive.
offer a richer sense of success, fulfillment and Becoming your own sage suggests that
happiness. To think that future U.S. you tailor and make your own economic
generations will drive significant consumption predictions based on measurement of your
is not viable for two reasons. One, there will economy, your industry and your place in that
be fewer people after us Boomers pass, and industry. National press releases and local
two, succeeding generations will be more economic forecasts are meaningful but you
frugal. need to use that information as a starting
It’s plausible that future peoples in point and from there, craft your own private
China, India, Africa and other places in the forecast of what you think can positively
world will acquire more tangible goods than happen to your company.
their previous generations but those goods Look at your local community. Why are
will likely be manufactured in those countries, some restaurants booming and others failing?
not in the United States. Why are some small banks doing well and
many are not? You need to take your own
________________________
measurements and create your own winning
The beneficiaries of the emerging global strategies to assure your company’s success.
economy will be two groups. Throughout As Andy Grove said, stay flexible and be
U.S. history our captains-of-industry deployed willing to restructure your life, be willing to
capital to build infrastructure, manufacture rapidly change your company in major ways
goods and provide services – they invested to fit the new world.
where they lived. There were at-home, An excellent example of this comes from
trickle-down advantages for all: from barons Detroit, Michigan. Recently more than fifty
to managers, to workers. autoworkers (both men and women) have
Today it’s a question of “who has the enrolled at a local college to learn how to
capital and where are they going to deploy become nurses. What a great testament to
it?” Where the capital is deployed will benefit people being willing to change and be flexible
the local citizens where the money is to continue their careers.
invested. The second group to benefit will the
capital barons of Saudi, Japan, China, India _______________________
and a dwindling number from the U.S.,
England and Western Europe. This will have Locomoshun – Moving Business Forward
an adverse affect on the average American
is a Denver based business advisory group
worker who is no longer manufacturing the
whose mission is to enable marketing
goods or providing the services.
channels to create additional selling capacity,
Capital barons will embark upon a global
improve efficiency, and enhance profitability.
shopping spree to find a satisfactory labor
Locomoshun works with individual
pool i.e. workers in China who earn $2,500
dealers and distributors; dealer groups;
per year to manufacture automobiles v. an
acceptable level of quality of those goods. associations; and, also manufacturers and
Chances are those manufacturing venues will producers to improve their channels of
be outside our borders. distribution. For further information, please
___________________________ contact Evan Morris at 303 345 3355 or
Evan@locomoshun.com Also, please visit our
Who will thrive tomorrow? You will, you can.
website at www.locomoshun.com
These different times call for tough thinking,
creative thinking, new and different thinking.
We have to be ever diligent and in tune with
our rapidly changing market and
opportunities that may not be readily
apparent to us.
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