Classic counter-trend

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Apparently sales of fountain pens are on the rise. For instance, according to Amazon, sales have doubled this year compared to last and are up 400% on 2010. But why?

I suspect the reason is that this is a counter-trend. Things have swung too far in the direction of email and texts and people want something more tactile and ‘special’.

A tweet or text saying “Sorry for your loss ;-( ” doesn’t carry the same weight as a handwritten note. As they say (well, as I sometimes say), ideas come and go, but often they come and stay. The serious point here is that very strong trends tend to create weaker counter-trends moving in the opposite direction. These are either growth opportunities or risks depending on your orientation.

More on this from the BBC here.

Some impacts of ageing on business

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“Over the next couple of decades nothing will impact OECD countries more profoundly than demographic trends.” Jean-Philippe Cotis, Chief Economist at the OECD.

We all know the numbers: People over 65 will grow from 7% of world’s population to 15% by 2050; 1/3 of US workers now aged 50+; More than 1/3 of the babies born in the UK today will live to 100+; This year there will be 14,500 contrarians in the UK. By 2035, there are expected to be 110,000

What does this actually mean going forward?

The interesting thing to me is why most organizations have only just noticed this. It is not like demographic data is highly unreliable or that we cannot see this coming from a great distance. It’s the classic elephant in the boardroom.

I think the reason for business blindness is twofold:

First, it’s a classic case of something that’s important, but not urgent. Second, most organizations are run by relatively young people and they struggle to come to terms with what ageing really means. It’s not just ageing either. It’s shifts such as the decline of the nuclear family, ethnic diversity, blended families, extended financial families, same sex couples and single person households too.

Perhaps people think that because demographic trends move slowly it’s something someone else can worry about later on. That’s true, up to a point, but they are missing a growing segment (a segment with pretty much all of the money) and they are also falling into the trap of thinking that ageing is about ‘them.’ This is, of course, utter nonsense. Ageing is about ‘us.’ Ageing impacts everyone eventually.

With the constraint of time in mind, what are some of the key trends coming out of changing demographics that business can respond to?

Let’s briefly consider 3 trends:

Trend #1: Simplicity.

I offer myself up as a sample of one here. I am confused. I am perplexed. There is too much information, too much choice and too much complexity everywhere. I would like things to be simpler. I want supermarkets to stop trying to sell me 40 types of toothpaste and edit their selection to 10 or perhaps 15. I want my bank to stop selling 20 types of loans and filter it down to 5. I want a washing machine that doesn’t give me 100+ ways to wash my socks. I want to stop people saying that if I don’t want choice I can’t have it. I was happy with 3 TV channels. I don’t want 200. I feel I am not alone.
Apple is on to this. So is Philips. But I struggle to think of many others.

While I’m on the subject of simplicy, will retailers please start to produce packaging that people with older hands can actually open? Also, pack sizes that are friendlier to older people with smaller appetites. Some retailers are quite good about this. The Co-op is one. Morrison’s is another. The rest are rubbish.

Remember also that smaller pack sizes are not just about ageing customers. In the UK, 34% of households contain just one person. In the US it’s 28% (up from 9% in 1950). This is reality now, although, many retailers still have in their head the idea of a nuclear family – hence the ‘family pack sizes.’

 

Trend #2: The changing workplace.

When are employers going to wake up to what’s going to happen here. The biggest trend around is ageing. People aren’t dying like they used to. This means people consuming for longer, but it also means working for longer to pay for the things we consume. But there’s a twist. Younger people tend to buy goods. Older people tend to buy services and guess what? Services are people intensive. The problem is that as well as people not dying like they used to, they aren’t being born like they used to either. We are facing a fertility crisis, which means significant shortages of skilled labour going forward, especially labour to provide services for older consumers.

The good news is that older people will keep working (Actually that’s one of the biggest questions around– will we work for longer?). We’ll do this to pay for the fact that we are living and consuming for longer. However, we won’t do this if employers make working longer too difficult. Older workers need extended periods off for health reasons. They also require workspaces that are designed for ageing bodies. Some companies woke up to this long ago. Ford and BMW have designed factories to attract older workers.

Meanwhile, Wal-Mart, HSBC and McDonald’s have all found that older workers are friendlier and more loyal that younger workers and have a natural rapport with their older customers (the ones with all the money remember!). B&Q have found much the same thing, re-hiring retirees that have skills in various trades that intersect with the DIY market.

Older employees like a nap too. Finding and keeping talent is job #1 going forward so companies should act now to ensure that they’re not missing out on people due to inflexible contracts or poorly designed workspaces.

 

Trend #3: Remote monitoring

As I’ve said, one of the key consequences of societal ageing is more people living alone. This is problematic on one level because elderly singles need care, which is expensive. One solution is to allow people to stay in their own homes for longer, but how can we do this? One solution is home-based monitoring and telemedicine.

I’ll give you some examples: MIT Media lab has developed a ‘Smart bin’ that reads the barcodes of items that are thrown away. It can tell how much someone is eating and send a message to a carer if someone isn’t. Similarly, in Japan, there’s a kettle that learns when it’s usually picked up and can send a message to someone if it isn’t. There is even clothing that knows when someone has fallen over, and possibly why, and calls for help. We’ll see more of this kind of thing, aimed not only at seniors, but at kids too.

But beware. There is the strong possibility that these kinds of technologies will create further isolation. Technology alone cannot solve these problems and we must stop sending ‘them’ off somewhere else, out of sight and out of mind. People need other people, especially when they get older. They need to be loved and to know that they are not alone and machines, even cuddly robots, cannot do this.

We need to properly integrate old and young alike into society and also banish the idea that older people are somehow a burden. This is pure nonsense. For example, people worry that ageing will impact negatively on growth. Nonsense. We are on the cusp of various technologies that will see growth explode. Furthermore, expenditure on healthcare is rising fast, but surely increased expenditure on health will grow GDP, so what is everyone worrying about? (There might be an answer to this I haven’t seen, so answers on a postcard please).

Virtual vegetables, time on screen and Call of Duty.

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Some things that I read about last week…

1) 31% of Americans aged over 18 years-of-age spend 5 hours per day on a computer, tablet device or smartphone.

2) Anders Breivik, the man responsible for killing 69 people in a shooting and another 8 in a bomb attack in Norway, ‘trained’ for the attacks on ‘Call of Duty’

3) Want to grow your own food with almost no effort whatsoever? Then try out iGrow, a virtual allotment being offered by a farm in the UK. You pick what you want to grow using your iPad or other device, get someone else to plant it, water it and look after it and grow it and tell them when you’d like it harvested.

Yes, very convenient, but surely this misses the whole point about growing your own food, gardening or life in general. If everything is instantly available then nothing has any meaning. If something requires no effort then it has no value and if something is too easy there is no pleasure to be gained from it.

The Prosperity Paradox

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Having just got back from Hong Kong this rings true. Have you noticed how ‘Bling’ is booming in developing countries such as Russia and China whilst at the same time ideas such as frugality and sustainability are taking hold in other parts of the world?

Well the reason is that consumption patterns change significantly as economic prosperity develops. A few years ago two economists called Kerwin Kofi Charles and Erik Hurst at the University of Chicago found that, all other things being equal, African Americans tended to spend more of their income on cars, clothes and jewellery. Now a new study has put a figure against this. Typically, an African American family will spend 25% more on cars, jewellery, clothing and personal care compared to a white counterpart, with the difference being made up by less expenditure on education.

This isn’t just a lazy racial stereotyping either. Looking at countries similar patterns emerge with lower income groups spending lavishly on luxury goods. So what’s the explanation? According to the economists what’s going on is that poorer people spend on luxury goods to prove to others in their immediate peer group that they are not poor. Hence what a gold Rolex says is not “I’m rich” but rather “I came from a poor background and did well”. As individuals (and nations) get richer this spending shifts from ostentatious products to more discrete services and experiences. A shift also occurs towards spending on goods that are externally directed (cars and clothes for instance) to goods that are less visible to the outside world.

In other words countries, like people, want to show off how wealthy they are but eventually this need wears off. This finding obviously has significant implications for luxury goods companies although one suspects that they know this already. As for what’s next, expect time and space to become the ultimate luxuries along with goods and services that are only available to a limited number of people that fulfil certain non-financial criteria.

Some Worrying China Statistics

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Some worrying data coming out of China. Electricity output slumped last month, up a mere 0.7% over 2011. State investment in railways is down 44%, road building is down 2.7% and 8 out of the country’s 10 largest ship builders have not received a single new order in 2012. Housing sales were down 25% during the 1st QTR and home construction was down 28.3% last month. This last figure is a real concern because housing employs 10% of the Chinese workforce while land sales make up 70% of local authority tax revenue and 30% of central government revenue. Loans are also down significantly too. Of course this could all be planned in the sense of it being meant to slow the economy down, but it’s worth watching very closely.

India and Russia are having much the same trouble too in terms of industrial output, lending and bad loans. The big concern here is not just the BRICs going bust, but the BRIC wall of global credit collapsing before the rest of the indebted world recovers from the worst of the recession. If you have any spare cash stick it under the mattress now.

Quote of the week

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The main lesson of thirty-five years of AI research is that the hard problems are easy and the easy problems are hard. The mental abilities of a four-year-old that we take for granted – recognising a face, lifting a pencil, walking across a room, answering a question – in fact solve some of the hardest engineering problems ever conceived….As the new generation of intelligent devices appears, it will be the stock analysts and petrochemical engineers and parole board members who are in danger of being replaced by machines. The gardeners, receptionists, and cooks are secure in their jobs for decades to come.”

– Steven Pinker, psychologist, cognitive scientist and author

Why trends bend

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If one more person had said “Have a magic day” I might have hit them. I’ve been in Hong Kong for a night staying at the Disneyland Hotel. Mickey Mouse in Cantonese and Mandarin is somewhat weird. Anyway, amongst other things, I’m putting the finishing touches to a new book called The Future: 50 Things You Really Need to Know. Here’s what used to be the end before it got thrown out (I hate throwing things away, which is why have a habit of recycling them here).

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Ideas can be tricky in the sense that they often combine in novel and unexpected ways. Thus, the future rarely ends up as a logical extension of our current thinking. Some ideas will move much faster, or much slower, than we expect, either because we will underestimate the speed of technological change or because we will forget about the impact of human psychology and the inertia of history. This latter point is hugely important. Futurists, especially techno-optimists, often focus on technology at the expense of other important factors, especially the psychology of their fellow human beings, many of whom can be emotional, subjective, irrational, forgetful and stark raving mad.

Therefore, while science and technology will exert significant influence on the future, other, more prosaic, ideas or events may prove to be far more influential, especially when they combine with inherently human responses. For example, it is likely that machines will one day become smart enough to replace people in many more roles. At this point capital effectively becomes labour. But what will the human reaction to this situation be? Similarly, a major man-made or natural disaster could trigger a seemingly illogical technological regression, while a prolonged economic depression might result in anger or resentment towards other nations that ends up with a steady retreat from globalisation and many of the values, institutions and beliefs that we currently take for granted.

If you are thinking that this all sounds a little unlikely and that the future will most probably be a predictable and logical extension of the present, then consider what a handful of men armed with a simple idea, together with some low-tech box cutters and a rudimentary knowledge of flying, managed to do to geopolitics, US military deployment and the global zeitgeist on 11 September 2001.

We might also find that many of our new ideas, especially major scientific and technological breakthroughs that would benefit mankind, are constrained, modified or rejected by large numbers of people in favour of illogical beliefs and superstitions. Rather than a new enlightenment, we may enter a new dark age where it is illogical beliefs, rather than facts, that flourish. Again, you might believe that this future is implausible, but it’s already happening in some regions where the teaching of evolution is being rejected , either in favour of the balanced teaching of various viewpoints, or because religion considers such ideas to be dangerous and subversive.

Or perhaps we will abandon the internet, either because we no longer trust much of the information it contains, or because governments, or corporations, around the world start to censor it or remove many, or all, of its open and generative qualities.

We should also remember that important things happen by accident and that people often find uses for ideas that their creators did not foresee. Sending texts via mobile phones is just example of the unintended consequences of technology. Similarly, Twitter was largely created ‘on the fly’ by its users and not the unfolding of a long-term master plan. We often make long-terms plans based on an imagined future, but life then makes unexpected and unwanted turns. The challenge, to some extent, is dealing with the realities that we get rather than those we expect. Life, as John Lennon said, is what happens to you while you are making other plans.

It would also be a mistake to assume that the future will be a singular experience. Some people will experience the future sooner than others, which is much the same as saying that how you experience the future, 5, 15 or 50 years hence, will to a large degree, depend upon what age you are, where you live and what you spend your time doing. There is also the point made about prophesy by the philosopher Karl Popper many years ago, which is that the future is dependent upon the growth of knowledge, which is itself unknowable or, at the very least, unpredictable.

To conclude, the only thing that we really know about the future is that it will be different. Nothing is inevitable and equally nothing will happen in isolation.
Overall, the future offers us many wonderful possibilities, but it remains up to us whether the opportunities are embraced, squandered or ignored. The future is already here, but it’s unclear what we’ll decide to do with it.

Should we be optimistic about the future? On balance, the answer is probably yes. In the shorter term there are serious issues on the horizon and everyday life is likely to get more difficult for many people, especially in relation to food, water, energy and resources. Mankind also has a habit of doing the wrong thing at the wrong time, often due to short-term pressures, or messing things up completely by leaving things until it’s too late. But we usually muddle through and eventually fix any serious wrongdoings.

Over the longer term things are looking brighter, largely due to forthcoming developments in areas such as healthcare, energy and the Internet. These changes won’t benefit everyone, so one of the key challenges is to ensure that any newfound optimism is evenly distributed and that more of the world’s people can engage in a debate about what kind of future we would all like to live in.

Virgin Atlantic goes from bad to worse

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A while ago I was on an 11-hour flight on Upper Class with Virgin Atlantic and my laptop battery was down to 8%. I asked if there was a plug socket in the seat and the attendant said “No”. I then asked if they could recharge my laptop for me. “No, I’m sorry we can’t do that.” I don’t know about you, but I do feel that a socket – or at least the offer to recharge devices – is more important that what’s on the new menu or what’s showing on in-flight movies. But it gets worse.

What do I see in the newspapers this morning, but an announcement that Virgin Atlantic is allowing mobile phone use throughout some of its aircraft “to encourage business travellers.” We’ll here’s one frequent business traveller that will from now on be flying with someone else.

Can you imagine sitting next to someone from London to New York, let alone from London to Sydney that is either on the phone or has a phone that keeps going off when you’re trying to sleep? Long-haul flights are just about the only place left where there is still silence and you can actually hear yourself think.

I’m sitting in a rival airline’s lounge (Cathay) as I write this and my  gold Virgin Atlantic frequent flyer card is flying back to Virgin.

 

All the time in the world

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Things are speeding up right? You’ve got no time to yourself and it feels like you’re always working. Perhaps not. A couple of economists have studied how people in the US spend their time and the results are shocking. People have considerably more free time than they did forty years ago. This verdict is at odds with various studies by the Bureau of Labor Statistics and the US Census Bureau but their studies tend to focus on workplace trends. The findings looked at total time spent and found that the total amount of time spent ‘working’ has actually fallen consistently since 1965. There are problems of definition of course. If you are multi-tasking – listening to music while cleaning the house for example – is this work or relaxation?

Nevertheless, the technological revolution (for example, 24/7 services, home delivery, Internet banking) has delivered a more relaxed society where the average person has four to eight hours more leisure time each week than they did forty years ago. So why do we still feel so stressed out? The reason, apparently, is that we’ve got too much money! The growth in real incomes has made our time more expensive so lying in the sun for a day is much more expensive that it used to be.

The second reason is that we do too much. Connectedness means that we are ‘always on’ which also leads to a blurring of boundaries between work and home. Add a pinch of job insecurity due to outsourcing and you can see why we’re so rattled.

Yesterday’s futures

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I’ve been at the University of Warwick attending a conference organised by the Society of Chief Librarians. There was a good talk on scenarios by Rafael Ramîrez, a fellow in strategy and director of the scenarios programme at the Said Business School at Oxford. He said something I liked which was as follows:

“Trends are the leftovers of yesterdays futures”

I think this is largely true, especially if you are talking about distant futures. Trends tell you about yesterday. They can sometimes tell you something useful about today, but you have to be very careful about projecting them forward. Having said this, I believe that some trends can stand the test of time. Demographics might be a case in point, although even here you have to be careful. For example, the UN has just adjusted it global population forecasts due to “unforeseen” fertility in Africa.

One other thing. I was in Birmingham earlier in the week (nice new library!) and couldn’t help but notice the amount of people on the street selling grievances. There were two stalls on the street selling personal injury compensation and another asking if you’d been mis-sold financial services. There was definitely something in the air around being hard done by or wanting to claim your share of the pie.

 

Image: Futurelab.org.uk