Here are the predictions I released on December 12th at our SNS New York Dinner. You will notice that, at least in a few cases, moves have already been made that seem to be underlining these trends, including a reversal in oil pricing back to the high side, a new ruling by the FTC that will require permission-based marketing for certain online customers, and an internal memo by IBM CEO Sam Palmisano on international technology markets outflanking those in the U.S.
These predictions come from the last issue of the Strategic News Service, a paid subscription letter which you can obtain off this page. This issue has been opened to the public, and has since been quoted by the NYTImes, the San Jose Mercury, and, most recently, a Middle East gulf states newspaper.
Please feel free to link to it, and or quote from it, with attribution.
Â» Top Ten Predictions for 2008
We had another great time in New York last week, now our third go-round at turning the Waldorf=Astoria Conrad Suites into an SNS brainstorming event, focused mostly on the next year and technology markets.
In doing my own homework on making these predictions, I look around at various issues and landscapes, with the perspective that events donâ€™t devolve in a vacuum, that all issues are eventually global issues, that technology markets are directly affected by political, social, and economic climates, and that accurate predicting requires input from these, and other, levels (such as CEO behavioral profiles).
I am not going to repeat the entire speech here, for two good reasons:
1. I would rather focus on ten specific results, and
2. You can now hear and/or see the speech, via streaming video or MP3 file, at the URLs listed at the end of this letter.
Something unusual happened this year, in making these â€œlandscapeâ€ projections: I ended up with some predictions that may be more important than those in our Top Ten.
The one that may mean the most to people in the tech industry is the one that Steve Lohr of the New York Times picked up from that evening, for his own blog:
The global economy has now essentially â€œoutgrownâ€ the U.S., particularly in IT markets.
If this were a question, most economists would answer with an unqualified â€œNo.â€ But my bet is that, for the first time, IT spending will continue to grow so quickly outside the U.S. that a decline in U.S. markets will not pull down total spending.
It didnâ€™t hurt that IBM CEO Sam Palmisano came out with an internal memo saying the same thing within hours, according to Steveâ€™s blog.
In other words, in the Information Technology universe, the U.S. matters; it just doesnâ€™t matter as much as the rest of the world.
And that, if it turns out to be true, is a first.
Most large IT corporations now make more than half of their revenues outside the U.S., and most other countries are showing GDP growth rates that will remain robust, even with a dip in the U.S. China now depends more on Europe than on the U.S. (and, interestingly, Europeans fear Chinese trade policies more than Americans do â€“ 59% to 50%). India increasingly is doing work that may be outsourced, at the very high end (doctors reading medical imaging, engineers reviewing structural requirements), or may be destined for domestic or other non-U.S. clients.
Certainly, all of these economies would be hurt by a U.S. recession. But large IT companies, for the first time ever, may be positioned to do better than the original mass IT market.
What else is worth keeping in mind as we look forward a year? Here are a few more important landscape calls:
2008 is the first year of Rapid Response to the Climate Crisis. Just playing along no longer cuts it; now revenues and profits will begin flowing directly to those who are implementing positive change on this issue. This is the largest-scale trend of the year.
Interesting corollaries: the Beijing Olympics will probably create a very unintended anti-Chineseâ€“pollution backlash.
Oil will find a new floor at $70, the average will be higher, and weâ€™ll see a second run at $100 at, or just after, next year end.
Look at the picture of the Fed raising rates, trying to end inflation, and then coming back down when commercial banks failed to follow. Label that picture â€œCapitulation,â€ and file it under â€œThe Fed has lost control of the U.S. economy.â€
The U.S. real estate markets will hit bottom in 12-24 months.
Inflation in the U.S. is running much higher than government-supplied figures in the 2% realm; the real figure is probably 5-6%. (Note: the government subsequently published a high-for-them figure of 4.3% for Q4. Theyâ€™re starting to get it.)
And here is one the crowd seemed to like; itâ€™s totally sincere. Given the recent election of Kevin Rudd in Australia, and his first three official actions (signing the Kyoto protocol, announcing one-to-one computing for all students in K12, and creating a new Cabinet-level position in charge of Broadband):
In 2008, Australia will be â€œThe New Canada.â€ (SNS Members will know that this means â€œa great investment target.â€)
With the U.S. economy in struggle mode, Europe faring passably, and the rest of the world growing at record paces, here are my Top Ten calls for the coming year:
Ten Predictions for 2008
1. The Users Revolt. As advertisers focus in on social networking sites, users revolt against this trend, and power shifts in the worlds of Social Networking from owner to user, on issues ranging from Second Life rules and Facebook privacy to Cellphone Billing. Users will gain new leverage.
As Facebook fades with its Beacon Blunder, people realize their private/public spaces are for proactive networking, not advertising and privacy invasion. Social networking sites become the hub of all applications; rules tighten. New sites show increased privacy protection, smaller numbers, and tighter segmentation.
2. The Phone and Web Worlds Will Merge. Or: Walled Gardens Get RoundUpped. Net Neutrality will prevail; carrier and ISP garden walls will fall. Box guys will win over Pipes guys. Handheld makers will win over carriers, a la Apple and Nokia. Samsung, Microsoft, and Google now join them in control.
Tribes move from phones to the Web as part of this merger. Question: How do you carry your tribal affiliations around on the Web? Widgets let you put them in Facebook, but —
3. Content Has No Boundaries. Or: By Expanding, the Web Disappears. Content will be provisioned to every device, making the â€œWebâ€ seem an outdated idea, like â€œmultimedia.â€ As it moves onto phones and TVs, it becomes invisible. I want the service; I donâ€™t want its history. The separation between print and Web providers becomes outdated. Everyone distributes everywhere.
Serious Segmentation of Online Ad Monies Defines the Spend Trend. Start segmenting by user age: the young are surrounded; the older are less tolerant of the din. Ad money will flow preferentially to luxury online and permission-based marketing.
4. High Definition Drives a Reversal in Global Standing for U.S. Bandwidth, accompanied by an extraordinary bandwidth increase. Rabbit ratios (MHz/dollar) jump worldwide, with the U.S. suddenly leading in growth rate. Provision of 5-10 Mbps will not be unusual in the U.S., which will see the most rapid bandwidth takeup increase YTY to date, as users start to demand HD-quality video everywhere. The FCC looks foolish and oh so art deco, again. Australia looks smart.
5. Fake Internets Become Serious International Liabilities, as corporations pressure countries to behave according to international business norms â€“ specifically, China, Burma, and a handful of other countries with Fake Internets. Fake Nets imply weakness, government failure, and second-class status for these countries and their citizens.
If the Net is the source of intellectual fulfillment and economic growth, exactly which citizens donâ€™t deserve access? Real Net access is on the path to becoming an international human right.
6. One-to-One Education Is Accepted As the Global Goal. Three-quarters of U.S. school superintendents are planning for it. Maine, Massachusetts, South Dakota, Michigan, Arizona, Utah; England, Australia, Brazil, Mexico, Singapore, Nigeria, India, and China are implementing it. If your state or country is not planning for this, you will be left behind in the 21st century. Using global digitized knowledge to teach and learn will become the only obvious solution in education; the goal becomes connecting every child to this knowledge via the Net.
7. U.S. Healthcare (finally) Gets Diagnosed, as a result of the presidential campaign. Reforming healthcare will challenge Iraq as the primary issue of concern during the year. (In 2009, something gets done about it.)
Among the problems weâ€™ll find:
Doctors report to HMOs (and not to patients).
HMOs report to shareholders (and not to patients).
Insurance companies dictate pricing â€“ often are primarily in the investment business, but donâ€™t share investment profits adequately when they come in, and only report directly to shareholders (not to patients).
Government programs are rife with fraud by doctors and institutions.
Defensive medicine is practiced at huge cost increase to avoid lawsuits.
Over-testing also pays fees to doctors and pays for the equipment, while acting as lawsuit vaccine.
There is very little use of IT to reduce costs; the industry canâ€™t even launch proper Electronic Medical Records. Guess what? It makes more money re-creating them each time you switch.
No one reports to the patient, and almost No one gets paid for good health outcomes.
Exhibit A: There is no penalty for killing your patients.
A few answers: cap legal awards, make doctors directly responsible to patients, and remove HMOs and insurance companies from the mix, since they contribute nothing and take much.
8. CarryAlongPCs Become Commonplace. Small personal computers (UMPCs/micro notebooks) gain their own as a category as these new â€œCarryAlongsâ€ are introduced by major players â€“ a trend expanded by the iPhone and currently best served by the Samsung Q1.
9. LEDs See a Meaningful Shift into Industrial/Commercial/Residential Use. Pricing drops aggressively, and new uses and conformations of LEDs become available.
10. 2008: The Year of the First Production and Commercial Sale of Alternative-Energy Cars in the U.S. Yes, we had the much-missed EV-1 a decade ago, and lots of golf cart-like things since, but this will be the year of never-turning-back on commercial alternative-energy vehicles. While GM dawdles over the Volt, Honda will deliver the hydrogen-powered FCX Clarity in California. The all-electric Tesla Roadster will be produced and silently speeding down our streets, with more for sale and new orders taken for its WhiteStar 5-person sedan. New electric sports cars from Altairnano, Phoenix Motors, and other California brands will make seeing an alternative-energy car on the road something new, and more common.
SmartCars will also be a hit this year, selling out the U.S. allotment, starting January.
For those who care about such things, we keep track of accuracy every year. Here are the results since we began our New York Dinners, and our Top Ten Next-Year Predictions: For 2007, 98%; for 2006: 96%; for 2005: 97%.
Summary: A cumulative score of 97% since 2005.
Streaming video of this talk is available at:
The MP3 version is at: