The Journal of 2020 Foresight

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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Wednesday, August 28, 2002

Oil Shocks, Japanese Invasion, Revenge of the ‘70s

Chapter One

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

“By the end of the decade (1970s), American television manufacturing was effectively dead, the US steel industry had been eclipsed, and everyone wanted to know how the Toyota Production System worked.”

Harry Dent

Journal of 2020 Foresight: Coming into the early ‘70s, US companies faced little foreign competition at home. 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.

Pathfinder: The recession in 1970 didn’t help. It was a classic over-reaction to the over valuation of stocks. Similar to the boom ending during the millennium passage from the 1990s, the stock market figured out it couldn’t sustain growth forever and corrected itself in a sharp downturn.

Lone Eagle: Not too long after the US encountered the first oil shocks when OPEC decided to control the flow of oil to the West.

J2020F: And that period was followed by a long downturn--from 1973 to roughly the mid-1990s--in profit and productivity in the US.

Lost Explorer: Joel Kotkin and Susanne Trimbath wrote, “The most important change was wrought by the arrival of Japanese corporations as major players in the world economy. In 1973-74 alone, the New York Stock Exchange composite fell by 44%. Equities did not recover until the early 1980s.”

Trail Blazer: While investors left the stock market in droves, the stock market's prolonged stagnation in the 1970s did not signify the end of prosperity.

J2020F: So, pinched on the one side by Japanese competition and, on the other, by dependence on Middle East oil, the US economy had to reinvent itself.

LoEx: And, remember like today, corporate scandals were undermining confidence in Wall Street. Kotkin and Trimbath recall, “There was even widespread criticism of the accounting profession, which was accused of financial shenanigans to justify the wild ambitions of irresponsible corporate managers.”

PF: And like today, some U.S. companies disappeared, but others cleaned up their accounting, restructured and met the next decade head on.

TB: People forget that the 1970s also permanently altered the balance of power among the country's regions. The old industrial bastions of smokestack power in the Midwest and East coast yielded to the more entrepreneurial, flexible and individualistic economies of the West.

LoEa: Economic restructuring laid the foundation for the US reemergence in the mid-‘80s, after a period of rampant inflation in the '70s and '80s.

TB: Like today, the pension funds' need for higher returns on investment were then a major factor pushing corporations in the 1980s to "restructure" and earn higher profits.

PF: Measured from 1972 to 1981, the net gain in the blue-chip Standard & Poor's 500 index was a minuscule 3.8% as investors stayed away.

LoEx. And, inflation peaked in 1980, followed by a period of deflation between 1980 and 1986.

LoEa: Harry Dent, arguing to support the tie between workforce entry by the boomers as a cause of inflation, wrote, “Inflation came down from over 20 percent in 1980 to as low as 3 percent in 1986.” The corporations had assimilated the generation and by the mid-‘80s, instead of causing inefficiencies, the boomers began contributing to the bottom line.

J020F: So, the moral to the story is that the economy endured recession, inflation, deflation, low productivity and severe investor lack of confidence. So much for the past, what about the future?

Trailblazer: It must be time to review our top 100 trends!

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