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.
The Journal of 2020 Foresight
Monday, July 17, 2006
Time for Doing What We Love, Living Where We Want, While Leaving a Legacy
Chapter Four: The Tribal Territories
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
“That’s where it happens. There’s a beautiful map of Greendale that’s drawn by some old Greendale person, I suppose. You know these maps where everything’s flattened out, it’s like you see it but it’s on a big piece of paper. You see city hall and a little drawing of city hall. A very nice map. Right at the end of the map, Highway One, Coast Highway, right there on the edge is where this happens.“
Neil Young & Crazy Horse “Greendale”
DOUBLE NICKEL RANCH. For a growing majority of Baby Boomers looking at the decades in front of them, wrestling with elder care issues today and empty-nests today or tomorrow, there’s a growing sense that now is the right time to figure out how we can do what we love, choose where we want to live, and leave a legacy by truly making a difference.
Journal of 2020 Foresight: I want to invite Lone Eagle and bring Pathfinder back into the discussion about this generational snapshot in time.
Pathfinder: It’s the extended Boomer family, stupid!
J2020F: Tell us what you really think!
Trailblazer: I agree. We’re in a transition to a work force and consumer society that is almost entirely populated by Baby Boomers , Generation Xers, and the Millennial Generation Yers.
Eagle: We already know the majority of baby boomers have already reached their forties and for two decades most will edge into their late fifties and early sixties.
Pathfinder: At the same time, those in generation X will be reaching their 30s, while the millennial generation will begin to enter the workforce for the first time.
J2020F: So, this clearly means that virtually the entire work force will be composed of people ages 19 to 65, those who have grown up with computers.
Trailblazer: The overwhelming majority of people in their peak consuming years will be largely computer-literate, and that has never happened before -- a convergence of demographics, technology and economic forces.
Pathfinder: In the last five years we've suffered through the perfect storm of economic, technological, social and political shifts beginning with the melt down of dot-coms, the millennial madness of the 9/11 attack-and-response and an economic recession that drove jobs off-shore to cut costs and bring company after company into a sustainable alignment with the spending habits of their customers.
Trailblazer: At mid-decade we're witnessing an economic turnaround, but within the darkening cloud of a possible real estate bubble boom
-- but without any real job growth characterized so far as a jobless recovery.
J2020F: In an ever more interrelated and interdependent world, region, national, state, and local economies what will the next five years be like?
How can we predict its impact on our work and home life?
What's in store for industries, markets and local employers?
Who will lose and who will win?
How will terrorist-targeted cities fare?
Eagle: With so much change and uncertainty, where can we live, work, invest, or retire confident in the knowledge that we will be safe and secure, we can afford the absolute minimum of our daily expenses, doing what we love to do in the one place in the world where we enjoy the community and our involvement in it?
J2020F: And we can look ahead with a greater degree of certainty that we made the right choices and career decisions in our peak earning years to afford a future where we won't outlive our nest egg.
Trailblazer: What do we need to know to make the right choices? Let’s start with the technology convergence. Harry Dent popularized his analysis of the 80-Year Generation Wave.
Pathfinder: Similar to Howe and Strauss.
Trailblazer: Correct. He says that every 80 years an innovative generation is born that revolutionizes technology, introduces fresh social trends and builds entirely new industries from the ground up.
J2020F: What does that mean in terms of what we should know?
Trailblazer: It fundamentally and predictably impacts every aspect of the economy from inflation to housing starts to stock prices.
Pathfinder: Even I know that our current Generation Wave, the era of the baby boomers, began when the birth index peaked in the early 1950s.
J2020F: So you have a birth wave, then what?
Trailblazer: You have the Innovation Wave peaks when this generation enters the workforce, generally between the ages of 19 and 22 rippling through the economy.
J2020F: And then?
Trailblazer: You have what Dent calls, The Spending Wave. It peaks when the innovative generation enters their forties.
Trailblazer: The result is a booming economy. But, that’s not all.
J2020F: What’s not all?
Trailblazer: Next comes The Power Wave. It peaks when these innovators enter their 50s and 60s.
Pathfinder: As the Boomer Generation is today.
Trailblazer: That’s right. They assume positions of corporate power en masse, they stimulate a revolution in business practices that truly exploits the advantages of the new technologies.
J2020F: So, let’s recap. The Boomer Generation in masse has reached its peak spending years. Its spending power drives new technologies and exclusive products?
Trailblazer: And as a mass consumer market is responsible for driving what had been specialized industries in niche markets into the mainstream.
J2020F: I can see that goods and services that once only the affluent, early adopter could afford are now within the average consumer's reach as a result of making it into the mass market.
Pathfinder: And that would account for lower prices on everything from personal computers to cell phones to specialty coffee, right?
Trailblazer: Exactly. So that answers the question about Boomer demographics and innovation, spending and organizational power curves – what got us here today.
J2020F: What about the next five years?
Pathfinder: How about the real estate bubble?
Trailblazer: One of the new investment opportunities in the second phase of the economic growth boom generated by the spending by the last of the baby boomers is resort and high-end real estate.
Trailblazer: It is in high demand because of the affluence and tastes of the aging consumer population.
Eagle: Let me jump in. Here’s what I learned. Spending on each category of real estate accelerates to peak at predictable age intervals.
J2020F: Give us some examples.
Eagle: Commercial real estate including offices and factories rises to a peak as the new generation enters the workforce en masse, between the ages of 19 to 22.
Pathfinder: As the Boomers did in 1970s and the Gen Y cohorts are today.
J2020F: The Y2 - Mainstream Singles?
Eagle: Yes. Rental apartments and retail space including shopping centers, begins to accelerate from the generation reaches age19 and peaks around age 26.
J2020F: That has to be the time of home ownership, right?
Eagle: Starter home purchases begin accelerating at around age 26 and reach a peak around age 33.
J2020F: So, the buyers would normally be older Gen Y and younger Gen Xers, right -- F2 - Young Accumulators; F3 - Mainstream Families; F4 - Sustaining Families – and Y2 - Mainstream Singles?
Eagle: Yes and trade-up homes accelerates from age 35 and reaches a peak by around age 44 – in the older Gen X and younger Boomer age range.
J220F: Is that it?
Eagle: No Vacation property begins to accelerate from age 46 and peaks around age 52 to 55.
J2020F: In the Boomer age-bracket, the M1 - Affluent Empty Nesters?
Eagle: And, Investment in retirement property begins to accelerate from the late 50s and peaks in the mid-60s.
J2020F: That’s the age-range the older Boomers are now entering – the M2 Conservative Classics & M3 Cautious Couples
Eagle: Yes. And it’s for that reason that we took our road trip across the western United States.
J2020F: You might have called it in search of the Right Boomtown.
Pathfinder: We know, from Dent’s research that there have been three distinct migration waves since 1875.
Eagle: The waves shifted our population centers from rural areas to the cities, the cities to the suburbs and from the suburbs to beautiful, small communities.
J2020F: We investigated the opportunity to buy in one of the many areas that offer both a superior quality of life and a superior opportunity for profit.
Eagle: But, not in an isolated backwaters. We identified only those communities what were fully "wired" to take advantage of the network revolution in business practices.
J2020F: We all settled on common criteria: They offer abundant open space, a village-like atmosphere to maximize quality of life and pleasant human interaction, and shared recreational, educational and cultural facilities.
Pathfinder: Not everyone can afford the higher end prices we encountered.
Trailblazer: But, remember. Housing prices will not stay this way forever. After this boom ends, deflation is almost certain to ensue for at least a decade and possibly into the early 2020's.
J2020F: So, as in most things, timing is everything.
Trailblazer: Harry Dent says, owners who decide to sell their homes at their maximum value, sometime before late 2008, will be able to buy excellent property at a lower price and lower interest once the deflation era begins.
J2020F: The last thing you want to do is to buy at the high end of the market just before prices drop significantly.
Trailblazer: Here are some long-range trends in real estate that you should keep in mind. The first trend is a broad migration pattern towards exurbs and small towns, many of which will continue to hold most of their value through the downturn, according to Dent’s analysis.
J2020F: So, try to stay ahead of the migration and demographic curves?
Trailblazer: Yes. The second trend will be a strong and consistent rise in retirement home purchases. Baby boomers will drive the market for this kind of property from 2002 into around 2030.
J2020F: That seems like a sound investment. What is the third?
Trailblazer: Look to rising demand in urban and suburban areas for rental properties after 2008 or 2009.
J2020F: So, following all of this advice, how do I find what's right for me?
Copyright ©2002 - 2006 Aarnaes Howard Associates. All rights reserved worldwide.
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