Reports from the Knowledge Labs about our recent findings, research topics, and interviews with lifestyle leaders who are creating their own futures.

How to stimulate your own powers of foresight. Consider the following thought provokers. Ask yourself, in these categories what are the brand new trends and forces? Which are the ones growing in importance? Which current forces are loosing their steam? Which have peaked or are reversing themselves? Which are the "wildcards" about to disrupt us in the future? POLITICAL AND TECHNICAL thought for food: Electronics, Materials, Energy, Fossil, Nuclear, Alternative, Other, Manufacturing (techniques), Agriculture, Machinery and Equipment, Distribution, Transportation (Urban, Mass, Personal, Surface, Sea, Subsurface, Space), Communication (Printed, Spoken, Interactive, Media), Computers (Information, Knowledge, Storage & Retrieval, Design, Network Resources), Post-Cold War, Third World, Conflict (Local, Regional, Global), Arms Limitation, Undeclared Wars, Terrorism, Nuclear Proliferation, Weapons of Mass Destruction, Governments (More/Less Power and Larger or Smaller Scale), Taxes, Isms: Nationalism, Regionalism, Protectionism, Populism, Cartels, Multinational Corporations, Balance of Trade, Third Party Payments, Regulations (OSHA, etc.) Environmental Impact, U.S. Prestige Abroad. SOCIAL AND ECONOMIC Food for thought: Labor Movements, Unemployment / Employment Cycles, Recession, Employment Patterns, Work Hours / Schedules, Fringe Benefits, Management Approaches, Accounting Policies, Productivity, Energy Costs, Balance of Payments, Inflation, Taxes, Rates of Real Growth, Distribution of Wealth, Capital Availability and Costs, Reliability of Forecasts, Raw Materials, Availability and Costs, Global versus National Economy, Market versus Planned Economies, Generations: Y, X, Boomers, Elderly, Urban vs. Rural Lifestyles, Affluent vs. Poor, Neighborhoods and Communities, Planned or Organic Growth. Got Knowledge?

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The Journal of 2020 Foresight
Monday, August 26, 2002  

From Bob Hope to David Letterman: Innovation and Inflation

Chapter One: Basecamp

By Steve Howard, CKO
The Knowledge Labs

Table of Contents
Chapter One: Basecamp
Chapter Two: The Ridge
Chapter Three: The Outpost
Chapter Four: The Tribal Territories

“Technological innovation and transition periods occur when a generation is moving out of the school system into the work force in their late teens and early 20s. The single factor driving inflation (was) the baby boom generation's rate of entry into the labor force. Labor force growth correlates with inflation better than any other factor. The lower productivity and high investments required employers to accommodate such a generation peak about three years after entry into the work force. So periods of inflation most commonly occur during transitions between old and new technologies when we see low productivity from the peaking of the old technologies and industries. We also see the need for investment to retool old industries and to launch new ones.”

Harry Dent

Journal of 2020 Foresight: You’ve described the rise in dominance of a scientific mindset swallowing up the world. How technology and media shape the very fabric of culture with unintended consequences – shaping the way we view the world and how we see ourselves in it.

One learning expedition connected reductionistic thinking with the impact of the industrial revolution that shaped the first half of the twentieth century.

Pathfinder: That’s right. We covered the high points in terms of social and technological forces.

J2020F: What about past economic trends and political overtones? Productivity, inflation, deflation, recessions, depressions, government surpluses and deficits?

PF: One of our learning expeditions focuses on the first half of the twentieth century – actually all the way up to the early 1970s. Another traces the reinvention period beginning in the mid-70s well into the high inflation ‘80s.

Trailblazer: They first started out to discover any patterns connecting post “bubble” recoveries in the past -- ending in 1901, 1929, and 1966 -- to the most recent bubble at the end of 1990s.

J2020F: Earlier you told us about the economic significance of the baby boom generation creating havoc from the 1970s on into the inflationary ‘80s.

TB: Right. We’ll get to their impact in the late ‘70s and ‘80s in a little bit.

Lost Explorer: But let’s pick up with their grand parents and parents first. The turn of the century bust laid the groundwork for the marvels of the early industrial revolution.

PF: Peter Gosselin documents how “the price of industrial dyes fell more than 90 percent in just a few years at the end of the last century, transforming the chemical and clothing industries. Automobiles were much cheaper and better in 1920 than they had been in 1905.”

Explorer: The boom in 1929 gave way to very high government deficits, deflation and the great depression period of the 1930s. Against that backdrop, the Bob Hope generation formed their values and adult perspectives.

J2020F: They fought and won World War II and birthed a generation beginning in the mid- 1940s and lasting until the 1960s.

PF: After a depression that lasted a decade and a five-year war, the US economy enjoyed significant productivity gains from the late 1940s through the early 1970s.

J2020F: While President Eisenhower warned against the perils of the military industrial complex, military technology required to arm the US in the Cold War changed the world and America’s role in it.

Eagle: Defense R&D in the late 1950s led to the development of the integrated circuit. Factories in the US and around the world capitalized on the use of smarter machines in the manufacturing process as a result.

J2020F: Didn’t the boom in the 1950s lead to industrial overcapacity?

Explorer: The industrial revolution hit on all cylinders producing great quantities of products destined for the mass market. But supply outstripped demand, so prices fell with increasing competition.

J2020F: So, while Ma and Pa Hope enjoyed commodity prices, their children in the universities and high schools rebelled, creating the media-hyped counter culture.

TB: In the ‘60s and ‘70s baby boomers made the loss of respect for institutions (Supreme Court, Police, Federal Government, Congress) fashionable while fueling the growth of civil rights and the women's movement.

J2020F: The television, a high-priced luxury when it first appeared, by 1970 became household necessity.

Eagle: Good point. Mass-produced TVs delivered mass communications to mass markets. A phenomenon the protesting boomers capitalized on. The news networks broadcast the student revolution and the Vietnam War into everyone’s living room.

J2020F: So, up to the ‘70s when the boomers returned as veterans from Viet Nam, graduated from college and entered the workforce, the mass market enjoyed a saturation of a new variety of products.

PF: And, as we discussed earlier, the shear number created strains on our natural resource base and on the distribution infrastructure.

TB: Scarcities weren’t triggered so much by the growing federal budget deficit, but as they were by the demand for more and bigger cars, more houses and home furnishings.

Explorer: OPEC jumped in to take advantage. They raised their prices holding us hostage in the ‘70s. Overall, as raw materials became scarce, their prices increased.

Eagle: And, to your observation about the boomer’s school-to-work transition during this timeframe, Harry Dent argues, “along with technological innovation, the actual entry of a generation into a work force similarly causes both a high requirement for investment and a period of low productivity.”

J2020F: Eventually technology advances and the accommodation of the generation into the workforce push inflationary forces lower. The amount of energy and raw materials required for growth drops.

Eagle: And that’s what our learning expedition found. The great scarcities of the '60s and '70s developed into increasing surpluses in the '80s and '90s.

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