It’s blue skies over the Midwest as I travel to work with clients here in St Louis. Driving into the orderly, clean, rapidly-revitalizing downtown district, I cannot help but make a comparison in how different this city’s economic development has been compared with Baltimore.

Both cities had thriving manufacturing sectors early in 20th Century. Both cities hollowed out in the 1970s, expanding in endlessly-sprawling suburbs in all directions. Both cities left the infrastructure of their downtowns to rot. And both began projects of revitalization in the 1990s, hoping to heal the scars of gross economic inequity and re-center their civic life.

Baltimore launched a massive redevelopment centering around national big-box retail and major attractions. It is bankrupt.

St Louis redeveloped slowly, around local retailers, local investors, small projects. Block by block, it has gotten a little better each year, improving real estate, increasing access to services, getting a bit cleaner, a bit prettier. Nothing too drastic.

The value in slow growth seems to be showing itself…slowly.

We finally have video and audio of last week’s Intelligence Collaborative event at which I discussed the impact of social media on what passes for authoritative information, and thus on decision making.

If you are professional strategic analyst – or want to be one – you must use forecasts. If you want to improve your chances of success, make sure you and your analysts are using Real Forecasting.

Having trained thousands of executives in the art of foresight, we know that now, more than ever, we need a clear view of the events coming in weeks, months and year, or we risk making decisions on faulty assumptions. What passes for business media is scarcely a help in this area. If you listen uncritically to the forecasts offered up in most channels, you have to base your view of the future on:

• Sunny economic forecasts based on stock speculation instead of shrinking incomes and unemployment
• Chairmen of the Federal Reserve forecasting the rise housing prices just before the detonation of the entire economy under the weight of fake mortage-backed securities
• The US Government predicting world oil supply as stable or steadily growing while key oil fields go extinct and China and India put millions of cars on the road
• Healthcare debates that appear to ignore the impact of the Boomer retirement, shifts in employment contracts

If you are a professional analyst, we want you to be able to:

• Know good forecasts from bad
• Identify who can you trust in a world without defined authority figures
• Make critical decisions based on the best information

Our short course entitled Real Forecasting for Professional Analysts is perfect for busy analysts and managers who want a professional-level refresher course in the evaluation of forecasts. Our course, featuring 60 minutes of content and 30 minutes of Q&A, will show you how to:

* Find the right sources
* Identify what type of forecast is on offer
* Explore the assumptions of the author
* Pick out the trends used to make the forecast
* Identify implications of the forecast
* Assess the probability of the future described
* Communicate this infomation to other people

At the end of the day, we want our clients to be ready to evaluate forecasts, understand who is writing them, ascertain their assumptions and know what it all means so they can better plan for the future.

This course will be delivered electronically, and will allow for group interaction.

Click here to reserve your seat now.

Well, social media isn’t the problem – but social media DOES disrupt what passes for authoritative information, and that concerns us as intelligence professionals and as leaders.

These slides are from my Pecha Kucha style presentation for the Intelligence Collaborative, a group that considers such issues.

Envision, if you will, rioting octogenarians, phalanxes of retired teachers, government office managers and firefighters protesting the sudden cessation of payments from their pension funds.

Imagine some way that American states are going to overcome the apparently one trillion dollar gap in state pension funds while simultaneously dealing with an economy so clearly in transition.

Pause with me, as I add a little extra whisky to the morning coffee. That’s trillion with a T.

The Pew Center for the States sure had a headline for us all today with that report, especially speaking as we are about fiscal “challenges” that are popping up, threatening to return Greece to an olive-based economy, put Spain back in the Conquistador business, and convince us to give California back to Mexico if they agree to keep making the lease payments.

ZeroHedge points out that JP Morgan has now taken out a $3 billion reserve to hedge against the potentially faulty judgments of their quantitative analysts.

For those of us in the world of largely qualitative analysis, this is a fairly unprecedented move, one that cuts across the grain of most schools of modern managerial thought. As my colleagues in intelligence often say, fake numbers will trump real insight almost every time. For example, consider that 87% of all statistics are made up on the spot to support faulty arguments. (Ahem.)

We’re not against hard numbers; collect as many of them as possible in every analysis. Still, you should be able to analyze the assumptions behind those numbers. Speaking of which, the ZeroHedge article pulls a shocking statistic out of the history of the subprime debacle. Check out what the quantitative model predicted subprime losses to be, as opposed to the actual losses, factors of 100 greater. Holy cats…

I might add, if you prefer real forecasting to fake numbers, we’re teaching a course on the subject around lunch time, March 4. Why not join the class?

People often ask us what kinds of information they should be collecting if they want to see what’s coming next. This short video explains what kinds of intelligence you should be gathering and why if you want to maintain profitability and growth in the years to come.

Between the Greeks staying in the European monetary union, or Detroiters keeping their dry cleaners and doggie-daycares afloat, there is a considerable amount of talk about the role of currency. The crux of the European issue is that the Portuguese and Greek economies are so different from the French and German ones, it is difficult to keep one currency with the same rules and assumptions in play. The fringe actors are no longer able to keep up the facade required for membership in the club.

We are seeing a microcosm of this in local towns in America, and the issue comes down to the ability to maintain a central currency. We note with interest an uptick in stories about local currencies not seen since the banking meltdown of 2008 and 2009.

Last year, two Detroit tavern owners were sitting at the bar, sampling their beverages and bemoaning the local economy — no one in the city had cash, and when they did, they spent it in the suburbs. Then the pair hit on a solution: Print their own money.

It is, after all, perfectly legal for anyone to issue currency, as long as it doesn’t look too much like a U.S. dollar. Thus was born the Detroit cheer, a local scrip accepted by a handful of city businesses, including a pizzeria, an electrician and a doggy day care center.

But why would people go to such trouble? Money is money, right?

When the Treasury prints billions to bail out banks and automakers, people look for alternatives. These folks may look nutty now, goes the quip, but wait till the dollar goes the way of the Argentine peso. Then you’ll be exchanging a wheelbarrow of cash for a bay buck, local currency boosters say.

What could this mean in terms of business strategies? One of the most likely implications would be a return to local distributors, those able to deal best with the local market and even local currencies. Compare this to the recent trend of market consolidation in a variety of industries. It just doesn’t match.

First Greece and Portugal, but they are on the outskirts of civilization. First Detroit and Western North Carolina, but those places aren’t prime time.

Next…California? Spain? Iceland? New York State?

Last week I had the enormous pleasure to speak with Pam Atherton on A Closer Look radio. She’s a bona fide radio professional with a profound understanding of society, the media, information, wisdom, and how to ask great questions. This hour-long interview on the future of energy and local communities could have gone on much longer, and felt like in went by in a few moments.

We delve into the implications of peak oil, why local gardens are the new hotness, and how organizations deal with information about the future. Definitely worth a listen.

Usually, it’s the job of tin-pot dictators like Chavez and Ahmedinejad to trot out their intelligence services and declare that the world is out to get them.

But when the Spanish intelligence service says the country is under attack from speculators in a clear conspiracy, it’s a sign of something deeply interesting. First, it’s a telltale sign that people high in the Spanish government are concerned that greater instability is on the way from the sovereign debt crisis, and they are attempting to control the narrative.

For those of us practicing future intelligence, this is a call for us to examine the broader political trends at play. Most views of the future take the Euroland to be a stable economic entity for all scenarios. Generally, a meltdown of the single currency and a brushfire war between Belgium and Portugal are considered far out.  At the very least, most people consider the continued operation of the EU to be a given – after all, it has resulted in one of the most successful, peaceful, prosperous times in the history of the continent, especially after the tumult of the early 20th century.

Still, it may be that the success of Euroland has required all countries to play a part for which they are ill-suited. Spain still has 20% unemployment. Greece’s debt is out of control. In the days before the single currency, each country would have been free to fail, unsupported by the largesse of France and Germany. Today, they have been supported through their use of a stable, global reserve currency. Like so much, this may be borrowed equity, and borrowed time.

Imagine a future for your business, and indeed your nation, in a world where Europe re-fragments. It may be less far-out than previously thought.

Somewhere between California’s budget shortfall and Vermont’s neosecessionist movement, somewhere between Arizona thinking of sell the gold off the dome in the state capitol building to Michigan pulling away police department units, somewhere between Portugal and Greece, it has become evident that just because the American and European Central Banks could solve “the crisis” through deficit spending, not everyone would be able to keep up the illusion.

Tyler Durden at Zero Hedge says it in typical brilliant, pithy, fin-de-siècle wit:

The only thing in this world worse than Hank Paulson showing up in Congress with his initial 3-page TARP proposal giving him unlimited control over the US printing press? 12 non-Hank Paulsons, all of whom speak different languages, all of whom are hell bent on bailing everyone and everything out (just not on their political or physical dime…or 10 eurocents as the case may be), and all of whom have no idea how to bail out others’ (and soon their own) economy… oh, and none of whom have access to Hank’s reserve currency printer. In short, more than 24 hours after announcing a “bailout” of Greece, nobody in Europe has any idea what they need to do to actually “bail” Greece out.

The larger issue here is the primacy of centralized banking authorities, central currencies, even central governments. Those large and unwieldy organizations can resist a great number of insults, and they have more options available to them that their smaller counterparts – but they are not invincible. When faced with a large enough catastrophe, they too must feel the pain, react, choose a new path.

It’s time to think in terms of scenarios. One scenario would be that the world’s central banks manage to keep the cash flowing among countries and banks and bond holders and municipalities, even in the face of expensive entitlements, shifting asset values, rising unemployment, and stagnant wages. Status quo. Now, what are the chances that things don’t change in the face of the trends that are so evident.

One other scenario is a series of defaults from smaller nations, regions, and municipalities unable to make their minimum payments, challenging the legitimacy of central control, requiring additional taxes levied on those areas who are tax-cashflow positive. What happens when entire cities, regions, and sovereign nation-states simply withdraw from the global system? What happens to currency? Which geopolitical tensions will flare up? What goods and services might stop flowing? What could happen in the next phase?

Look, if you’re running a business of any size, this is probably pretty heady stuff. Most of us never went to school to remake the geopolitical and financial systems. Nobody woke up this morning hoping to re-justify the fiscal reasoning behind the European Union, or the constitutional relationship of the U.S. federal government with the States.

Then again, nobody really wanted to be all that interested in subprime versus Alt-A mortgages, nor their relationship to CDOs and CDSs, did they? But we all got a good lesson.

If there’s a forecast in here from us, it’s this: we have a surplus of complexity in the world’s fiscal and financial dealings. Nobody can really understand them, which is why they are so hard to manage, even from New York, Washington, Brussels, and Hong Kong. And for that reason, things may get much less complex in the years to come.

Think about what that means.

Tim Geithner says the United States will never lose it’s AAA bond rating.

Sure it will: if it does those things that cause countries and corporations to degrade their credit ratings. Those things specifically include printing lots of money – which the United States is doing, and has been doing for decades. And all this before the Boomers start to really tap Social Security and Medicare and cease flipping homes and buying new cars and receiving taxable income. And last time I checked, the United States is still engaged in two sprawling wars in Central Asia, noted to be a bad idea. Those cost money, too.

In the world of professional futurists, the words “never” and “always” indicate a rich vein of assumptions which leaders refuse to examine. They almost always beg us to examine the potential implications of the scenario which is never to occur. For example, “What if the United States loses its AAA bond rating.”

That said, there is a way Geithner’s forecast could be true. If bonds are rated according to the assumption that the United States is the gold standard, as the governor of the Bank of Israel indicates, then perhaps bond ratings might disappear or become quite un-indicative of reality rather than ever betray that standard.

But by that point, what would all this analysis of central banking really matter? We would be well on our way to new systems of investment and public financing, however painful the transition might be.

It looks like the United States and England aren’t the only countries facing billions in bad loans.

When you read “trillions of renminbi of defaulting loans already in China that no one is doing anything about,” you perk up about the coming crises in sovereign debt and realize it is truly global, with global repercussions.

Sign up for the free Competitive Futures Trend Report for more analysis on this topic.

Yes, it sounds dorky, but these are the weak signals that portend the coming revolution in telepresence.

Will h.264 prevail? What about Ogg Theora? This may seem like a strange debate for anyone not deeply involved in technology analysis for enterprise-quality video, but consider Cisco’s recent purchase of Tandberg, Logitech’s purchase of strange bedfellow LifeSize – there is a clear megatrend for video becoming a mission-critical technology for running businesses and keeping in touch with friends.

But many chess pieces are about to be moved. Check it out.

At the Tastee Diner this morning I had the pleasure of sitting next to a retired man who now makes his extra fun money driving a hearse. Little did I know I would be hearing about strategic trends and secondary implications of the economy’s transition.

Just two days ago, when lecturing at American University, I heard MBA students using the funeral industry as an example of the longer trend in industry consolidation, and simultaneously as an example of profitable opportunities resulting from the global megatrend of aging populations. The professor then spoke up to mention that formal funerals, which regular cost a five-digit sum in America, are sharply down in favor of cremations, around 25% year-over-year.

During breakfast, my new companion informed me that cremations are up, about 25% year over year – and that fewer funeral homes are able to afford their own hearses since their use is becoming comparatively more rare. The cause is assumed to be the lasting effects of the recession.

Twice with the same unusual trend in the same week? Clearly the futurism gods are telling me to look up this development further. And lo, on the Internet you can find voluminous and interesting trends and forecasts for the “celebratory services” industry.

Today, open up the yellow pages, find some unusual businesses and ask yourself what trends they must be experiencing. You will find interesting fodder for your own strategic thinking.

For those of you who know Gregor MacDonald, you know you’re in for a treat with this podcast- a full hour of some of Gregor’s latest forecasts on energy, economics and society, insights you simply won’t get anywhere else.

For those of you who haven’t discovered Gregor yet, he is one of the top energy analysts in the world, and in our minds, one of the top analysts of anything, period.

This podcast covers sweeping ground:

• Why we’re at peak automobiles
• The end of cheap oil
• Coal’s role in the development of the world economy
• The return to human capital and small towns
• Why waterways are the future
• Our current period of “late phase economic decadence
• Why PAKISTAN holds the key to the Copenhagen Protocol

Crazier still, we could have spend ANOTHER hour talking to him and still not exhausted him of insight.

Enjoy.

Keynes and Hayek cutting heads, playing the dozens on their economic philosophies. Entertaining, and a fairly accurate breakdown of the Austrian school versus the resurgent Keynesianism which we are all experiencing.

That said, what if both these economic theories are dead and something new is on the horizon? Then this “battle” framework is distracting us from the hard work of original thinking.

There is an interesting development at the intersection of political trends and economic trends. We have been recently covering the economic fissures in some of our largest states. California, Arizona, Illinois and Michigan teeter on the brink of financial crisis, and this in turn menaces the integrity of the United States Constitution. Letting California’s bonds go to junk will have long-reaching impacts – but if the Federal government begins distributing bailouts selectively, there are bigger legal problems at stake. Other states will have recourse to ask for money from the Federal government, making the relationships of the 50 states complicated indeed.

What’s another option for states? Leaving altogether. Now that’s a new trend in these parts.

The state of Vermont has had a secessionist movement dating back over 200 years, back to the time when it was an independent republic. It’s mostly been a topic of discussion over an excess of beer in pubs – until recently. Now, Time magazine reports that seven separate candidates are running for the state senate on a secessionist platform – plus a candidate for Lieutenant Governor. One of the points they raise is that the state is a net positive to the federal government, only receiving 75 cents in services for each dollar collected in taxes. Thus, a way to balance the books for Vermont is to cease paying US Federal taxes, and to move out on its own. And they are forecasting:

By 2020, they foresee Vermont producing at least 75% of its own electricity and heat, using wind-, solar-, biomass- and hydro-power. They want to establish a Bank of Vermont owned by the people of Vermont — freed from the arbitrary controls of central bankers — as well as a local alternative currency, with Vermont pension and operating funds invested not in Wall Street but in locally owned financial institutions.

Quite interesting development: Paul Volcker is recommending that we break banks up into smaller, more secure pieces to reform the financial sector.

Very reasonable analysis, but it’s pretty rare in these days when the media praises every merger and acquisition as a way to improve customer reach, innovation, fresh breath, and more.

Obama’s State of the Union speech mentioned many classic problems facing the United States – unemployment, healthcare, security. Sure, there was some mention of the more recent banking fiascos – but how much of what was mentioned showed a nation facing unprecedented challenges requiring untested solutions?

For example, where was the mention of the fiscal crisis of the largest, most productive American states, like California, New York, and Illinois?

Investing and planning for the future? Look beyond the headlines toward the trendlines.

When I wrote Future Inc: How Businesses Can Anticipate and Profit from What’s Next, I chose the future of beer as a case study to illustrate forecasting methodology. The reasons were many. Beer is a 5,000 year-old product, and not as tech-driven as information technology – so you can’t fall back on techno-optimism when thinking about its future. Still, beer is wildly interconnected: it encompasses agriculture, biotechnology, transportation, retailing, government regulation, cuisine, social impacts, and much more. Despite being simple, the changes in the beer industry are rich and interesting. Plus, beer is delicious.

One of the key forecasts I uncovered while researching the book was the rise of microbrewing. The major beer brands around the world were stalling while small, local and national operations were profitably targeting a small and growing segment of beer drinkers and nascent foodies.

Here we are four years later, and the trend has continued apace. This article in the St. Louis Post-Dispatch shows how even in the shadows of the now-Belgian owned Anheuser-Busch, microbrewing is taking off at mid-double digit rates while sales of the majors now dip.

One of the reasons behind this trend actually transcends the beverage market. In our research in the field of economic development, Competitive Futures has learned that the rise in local beers often coincide with resurgences of economic vitality. Local beers become a flag around which communities rally. It often becomes associated with “local success stories” of businesses started in someone’s garage, soon requiring real capital investment in manufacturing infrastructure and jobs with good wages. Local ingredients and traditions are incorporated; cultures are revered. In short, microbrews are successful because they create value on multiple levels – for shareholders, employees, municipalities, and of course, beer lovers.

Now, can large companies create value on this level? Perhaps only if they begin thinking in this superconnected way.

Hello intelligence mavens and followers of foresight based competitive analysis! If you are subscribed to the Competitive Futures blog on a reader, then you’ll find that after today, the RSS feed will no longer work.

Kindly sign up for the new feed at: http://feeds.feedburner.com/competitivefutures/jjFJ and enter your favorite reader.

More trends and analysis to follow in 2010.

We spied a very interesting interesting graph from Rick Telberg, who may possibly be the only competitive intelligence professional I know focused on strategic trends for tax, finance and accounting professionals. His company surveyed a very interesting question – what do you consider short-term planning?

The answer, after a billion articles about futurism, The Art of the Long View, scenario planning, technology foresight, and all the rest, is still a bit shocking.

Half of people interviewed actually considered short-term to be within three months. One out of five thought of their short-term as one week.

What could they possibly think of as super long-term? A year? Eighteen months?

How can you discuss peak oil, Boomer retirement, housing trends, the rise of Asia Pacific?

Bear this in mind as you try to discuss strategic trends.

No fancy charts. No ultra-complex matrices of trends, implications and scenarios, backed by authority figures. Today, a question:

What if every obstacle to your future is actually a strength, a challenge that will drive you toward an elegant solution?

What if, for today, you thought of everything impossible in the world as the key to your ultimate success.

Will difficulty make you shut down your creative faculties when you need them most? Or will you mentally rise to the occasion?

This presentation from Alexander Osterwalder is a terrific, brief analysis of what is broken in the business model of music, and more importantly, how it can be fixed.

Note the systemic tear down of the different parts of the industry, looking at the value chain in great detail.

This analysis can and should be used by any company in any industry.

Competitive Futures has a theme for all of our products and services in 2010: real forecasting.

When we look back at the good and bad decisions of the past twenty years, we ask, “Were you looking at real forecasts or fake forecasts?” Did you listen to forecasts that told you, comfortingly that the positive scenario was 5% growth, the negative scenario 1% growth, or the “middle” scenario dead on at 3% growth? Or did you ask which assumptions were behind that view of the future? Did you ask complex questions and get mature answers?

More on this – much more – in the month of January.

In the meantime, to illustrate the difference, check out Chris Nelder at GetREAList in his blistering takedown of the EIA energy forecasts, entitled What if the Annual Energy Outlook Were Written by an Honest Person: Why the EIA Should be Statutorially Barred from Making Predictions:

Suppose you worked at the Energy Information Administration (EIA), the agency within the U.S. Department of Energy charged with keeping data and making projections on energy, and you had to produce an annual report with a scenario for the next 25 years.

Being an intelligent and informed investor, you might grapple with the $147 to $33 range in oil prices over the last year and try to imagine how such volatility might happen in the future.

You might be tempted to model a few economic factors such as GDP growth rates and credit availability, and how they affect investment in energy supply.

You might consider the price at which producing a barrel of oil or a thousand cubic feet of natural gas becomes profitable, and the price at which it becomes too expensive and destroys demand.

You might take peak oil, peak gas, and peak coal into account, since the best available models on those subjects all suggest peaks within the time frame of your scenario.

Wow, great analysis from Mr. Nelder, and an appropriately systemic approach to energy forecasting. That’s what the EIA forecasts look like, right?

But then, you’re not working for the EIA.

If you were, you’d do something like this…

You’d get out your crayons and your graph paper, and starting with your most recent data, you’d plot a nice, steady 1.5% global growth rate for energy demand over the next 25 years.

You’d do something similar for supply so that it matches demand at prices that also climb at a nice steady rate. For oil prices, call it, oh, how about 0.4% per year? That sounds pretty good.

You’d draw basically flat lines into the future for all the fuels dominant today, since you know they have serious challenges ahead, and then draw sharply rising lines for the latest and greatest technology, projecting enormous growth rates for things like shale gas and enhanced oil recovery.

You’d be sure to count all possible supply from new sources — like a new gas pipeline from Alaska — even if those projects don’t yet exist. Hey, it could happen!

You would not, however, factor in any CO2 reduction, because policies to control it don’t exist.

Naturally, you’d assume that the next 25 years would show gradual economic growth, so there wouldn’t be any troublesome issues like credit availability or depressed consumer demand to worry about.

Ouch.

If you are making forecasts about where to build a factory, planning to ship your finished goods to the markets of the world, and you are calculating energy costs per unit, whose forecasts are you going to use? The EIA is more of an authority, but then again – who’s got the more authoritative forecasts?

Great analysis from Paul Denlinger at The China Vortex about the upcoming Apple Tablet, and what its real impact will be on the market.

As Denlinger points out, most people assume that the secret of Apple’s success is their reliably sexy user interface. Sure, that’s a critical factor in its dominance of the premium computing market – the stuff works and is beautiful. What makes Apple so influential as a company is its ability to change business models, making everyone else a follower.

Sure, iPod was a great little device, but others had portable MP3 devices, however ugly. It was iTunes that got people thinking of MP3s as legitimate purchases instead of illicit stolen files. The music publishing world is still reeling, and Apple is the number one music retailer in the world. The iPhone is not only cool, it introduced the App Store that allows each phone to be user-customized, with prices set by the free market. They don’t yet own the market, but the word “app” is now an accepted concept in the business lexicon. Sexy brings you to the dance, and wonky, quantifiable, innovatively-engineered business models take you home.

And so what awaits the Tablet?

Now, in order to make the Apple Tablet a real success, it has to have certain functionality which will not cannibalize iPhone and Mac notebook sales. This is why it’s point of attack will have to be on books, magazines and the publishing industry. It will offer developer tools for Apple’s digital publishing solution. Already there is talk about Apple’s new SDK for this new platform.

My prediction is that this new SDK will make it apparent why Apple has not been friendly about offering Adobe’s Flash access to the iPhone, since Apple’s solution will offer much of the same feature set as Adobe Flash, but will be more tightly bundled in on the front and back ends to the device and to the store. (Steve Jobs likes closed ecosystems where he controls the whole experience.) Tough times for Adobe’s Flash and Microsoft’s Silverlight: all dressed up and nowhere to go.

Speaking as an author, the industry is ripe – no, begging – for disruption. And as usual, it’s the Googles and Apples who notice first.

This will be fun to watch.

Courtesy of Forrester Research, a great graphic describing the innovation of the music industry, from 25 billion euros in 2000 down to 10 billion euros today.

Competitive Futures has been using the music industry as the poster child for strategic disruption since the beginning of the decade. I remember discussions with music executives around the turn of the millennium. Mostly, they were caught in the “moral” indignation of “kids” “stealing” music when they should be paying $18 (closer to $30 in Europe!) for static music media.

My favorite discussion was with an industry exec who attempted to sell me on the notion that “Compared with going to the movies, which is $8, a CD is a great investment because you can play it again and again. It probably should be $100 or something.” Nice. Try.

The conclusion: just because you don’t want to face reality doesn’t make it have less impact.

Psychologically, many are glad to have 2009 behind us. It is difficult for people to work in conditions where so much seems out of control, ready to collapse at any moment. The moment seems to have passed. The one facet of 2009 that was clear was the willingness, often at great long-term cost, for government policymakers to keep the status quo with our major institutions. For 2010 – 2020, we can use this political reality, and make more solid plans.

This is not to say that we think that everything is back to “normal.” Have a look at our strategic outlook last year on the major drivers of disruption; none of them are fundamentally different.

Disruption will continue to be the theme of 2010 -2020; those megatrends still hold. Still, the likely stability of 2010 is something you can use.

We have one lesson for clients about studying the future: Just because there is a crisis doesn’t make it a crisis for everyone. When you make solid strategies, disruption can become massive opportunity. In the past decade, the music industry has melted down. It is not a catastrophe for Apple, who launched billion-dollar devices that changed the landscape of media, and then followed up by becoming the world’s largest music retailer. The oil crisis of the 1970s took Shell to the top of the petrochemical industry. Look ahead, think differently, make bold decisions and catastrophe for some can mean success for you.

Perhaps last year many were attempting to avoid the collective catastrophe that comes when all of our institutions catch on fire at the same time. This year, choose your own success.

Earlier this week we examined how to evaluate forecasts, a skill that will be required as 2010 approaches and people get curious about 2020. Forecasts are a component of a much more useful tool, strategic scenarios. Via Zero Hedge

SocGen – Worst Case Debt Scenario

With a h/t to Calculated Risk, hotel occupancy has reached record low levels:

In terms of the occupancy rate, 2009 was the worst year since the Great Depression (close to 55%). And last week was no exception with Smith Travel Research reporting the occupancy rate fell to 33.8 percent – the lowest weekly occupancy rate on record.

At CompFutures, we are waiting to see what the retail numbers are for Q4 2009, specifically to see if this pushes retail and commercial real estate over the edge.

Last year we did a series of forecasts for the short-term future, mostly as a reaction to the crisis in world financial institutions. Normally we try to avoid reactions to the 24-hour news cycle, but since a new bank was bursting into flames every 24 hours, it was appropriate.

For 2010, we’d like to follow on last year’s short-term forecast with…

REAL forecasts. Longer-term analysis. A marriage, once again of the strategic with the tactical. For 2010, the future is back.

We’re gratified to say that most of the collapse of 2008 and 2009 was easily predictable through the analysis of basic strategic trends that play out over five and ten year periods. It took nearly a decade for the central banks to help blow a real estate bubble. It took a decade of unregulated derivative financial products to bring Wall Street to the brink of collapse. It will take five to ten years for the Boom generation to rip our social security programs to shreds. Peak oil will have increasing effect on the economy in the next decade. On it goes.

Understand the real future now. Invest early. Mind your short-term management of your organization with a sense of what’s next. This is what we’ve always believed in, and now that panic is subsiding in favor of a stable decline of many 20th century institutions, people will be more apt to take the time to listen.

And Competitive Futures will be there.

Happy New Year!

Professor Karl Moore from McGill, who did that interview with Michael Porter the other day on the future of business’ role in society, is back with a TED talk he gave on the future of post-modern management. He notes that as the internet creates a system of “algorithmic authority” and tears down the rigidity of authority, “leadership” and “management” will have less impact on team-building than partnership, especially for those under age thirty-five.

Given the role of larger and larger bureaucracies in many key industries, this reality will be quite disruptive.

We take this business of telling people what’s coming pretty seriously. Competitive Futures works with leaders of large, medium and small businesses to help them interpret weak signals in trends and forecasts to help them make wiser, more profitable decisions. There are no guarantees for outcome, only a rigorous methodology that can produce insights.

For these reasons, we pride ourselves on methodology, and constantly check ourselves. The bulk of our work is based on longer-term strategic trends in society, economics, and technology. We were challenged to think much more short-term in 2009 due to the fissures in so many critical institutions that seemed on the point of collapse. Back in 2008 we made some short-term predictions about the year to follow. In the spirit of intellectual rigor – let’s look back and see how we did.

#1: The future is now. No, seriously.

We thought there would be precious little concern for long-term futures in 2009, given the potential for the collapse of central banks, food riots and alien invasions that seemed possible during the hysteria of the meltdown in late 2008. While we saw few alien invasions or mass food riots, 2009 was perhaps even more short-term-focused than the average year. The vast majority of leaders with whom we interacted were more concerned, rightfully, to seeing which institutions were going to self-destruct before thinking too much about the long-term. After all, when you see General Motors and AIG go down within weeks of each other, it’s probably not crazy to get defensive. Cash flow management trumped weak signals intelligence until the latter half of the year. Given the signs of Western governments to preserve their institutions, many executives are permitting themselves to think about the long-term.

However, it is important to recognize that this was a particularly American view in 2009. Asia Pacific and Europe seemed to view the year as at least stable, allowing them to look beyond short-term catastrophes.

#2: Global problems. No global solutions. (Yet)

We predicted that this year would test the ability of nations to create solutions to complex problems. The financial system seems to have righted itself with most industrial nations working together to make sure the whole thing doesn’t collapse due to a lack of confidence in the system. Naturally, this has been only made possible by “quantitative easing,” just printing money to cover bad debts. The long-term implications of this will be serious- note that cases like Dubai show that just because large countries can cover themselves doesn’t mean the system isn’t fraying at the edges. For now the world proved a willingness to keep its institutions in tact.

We were in fact predicting a bit more chaos in the global system than really happened. Europe and America are keeping their alliance intact in the Soviet-style quagmire in Afghanistan. America’s radical fiscal decisions didn’t appear to rupture ties with its Chinese counterparts where its massive industrial partnership is concerned – though this tolerance may not last forever. The Copenhagen talks seem a bit unproductive from our point of view, but at the very least it doesn’t look like a session of Taiwanese Parliament.

Frankly, the deterioration of world institutions often predates wars, so we’re glad to be wrong here. This issue is broad and will require monitoring.

#3 Barack Obama will not fix the world in 2009, but will do really boring things to improve the function of the U.S. federal government.

Obama sure hasn’t saved the world. Instead, he has shown a willingness to prop up American institutions despite the inevitability of their demise. Where the American financial system has been collapsing under the weight of its own ephemeral value proposition, Obama has offered cash bailouts. Where urbanization is increasing demands public transit, Obama’s stimulus rebuilds interstates and bails out car companies straight from the treasury. Where the impending Boomer retirement requires a structural re-understanding of the healthcare system, the bill produced by the Administration and Congress changes a few procedures without addressing the fault lines that will cost the country trillions. In fact, these early decisions may hamstring any substantive changes Obama may intend to make in later years. Given the importance of the government in shaping markets – to put it lightly – it is essential to predict the direction of policy.

As far as improving the function of the Federal Government, the word in Washington is that there is certainly more of  a meritocracy in place that during the hyper-political Bush years. These improvements pale in comparison to the Administration’s more sweeping decisions regarding saving automobile manufacturers at taxpayer expense.

#3: Home prices will continue to fall, because they were never worth as much as we pretended.

The Case-Shiller is down 8.9% year over year, though prices have stabilized. The American government has spent considerable money shoring up mortgage-backed securities in an effort to stop the slide of asset prices. Were the market allow to function, the Case Shiller might have slid back to reflect the actual state of the U.S. economy, the one with double-digit unemployment, and drop back to 1999 levels, in line with our flat GDP growth.

#4: Out: Organized labor. In: Communities of labor that happen to organize

We said: “Labor unions the world over will come under suspicion, rightly or wrongly, for its association with the collapse of the American automotive industry. Labor unions will be weakened for being as inflexible as their managerial counterparts.”

The General Motors bailout certainly did not make heroes of the organized labor movement. Instead, for many, unions came off as just one more institution using politicians to lock in guaranteed results in a changing economy.

None of this will preclude the formation of guilds or collective bargaining, especially groups that use transparency and social media to its fullest. This practice may be quite the opposite of today’s unions that are more similar to their corporate counterparts, lacking the agility to handle the speed of current strategic trends.

#5 In 2009, it will occur to many Americans how underfunded the pension system really is.

This didn’t make big news in 2009 except in one place – California. Their pension system could be underfunded by as much as $48 billion, a number that even makes their Governator tremble. This could be why Gregor MacDonald has been doing so much groundbreaking strategic work on state’s future.

Hat tip to Tim Powell of the The Knowledge Agency who has been following this potential black swan for years – that many pension funds are calculated for 8% returns (!) in order to stay solvent.  Given the disruptive potential of the trend, this will be a major story in 2010 and beyond.

#6: America’s private healthcare system will not ask for a bailout – that’ll be 2011.

This one sure seems on track. Unfortunately.

#7: Small entrepreneurial businesses will attract more attention, good will and capital in 2009 than giant world corporations.

2009 was actually quite a year for the large, the important, the too-big-to-fail. Bonus checks for bankers came straight out of the federal treasury. General Motors got a new majority equity partner – the U.S. federal government. The tech sector began another round of mergers and acquisitions. Banks further combined and became even more unlikely to behave according to market forces.

Still, in the background, smaller companies are getting even more nimble. The barriers to entry in a variety of businesses are falling. Unemployment is rising. Talent is becoming available. Real estate in de-industrializing places is becoming cheaper. The environment is becoming fertile for startups to flourish, and not in the cash-up-front, $1000 Aeron chair, debt-soaked manner of the late 90s tech boom, but small and smart.

An aha moment came for me walking in the streets of Paris near the Paris Chamber of Commerce (CCIP) and seeing a giant banner draped across the building  that read, “That’s it, I’m starting my own company! But how do I get started? CCIP can help.” This in a country that used to use the English phrase “one-man-show” as a semi-epithet, where the elite aspire to work in government agencies. Clearly, the need for fresh creation of business value is at a critical point.

This video from Chris Anderson explains this perfect moment for entrepreneurs with great eloquence.

You can see the wages of small, smart startups. We could be dreaming here, but Twitter actually posted a profit this year, in addition to fueling a popular revolt in the Islamic Republic of Iran. Not bad for a company that started as a few guys and some venture capital money.

#8 American cars will continue to suck.

We were being a bit snarky here. Then again, General Motors cars literally suck cash out of the federal treasury for every one you drive. Chrysler cars are awaiting the managerial brilliance of the Italians to save the company. Hmm. Not the triumphal image that the American automotive industry has projected in the past.

Ford, by contrast, refused help from the Federal Government, continued to innovate, and has been leading one of the more innovative corporate social media campaigns in the world. Their financials are at the very least stable, which in comparison to its rivals, is like winning the World Cup, the World Series and the Super Bowl simultaneously.

American cars won’t “suck” so much as the undeniable forces of competition will continue to exert pressure. If the U.S. federal government ceases its historic interventions, you may see some competitors actually cease operations, which happens from time to time in a free market.

#9 The media business will continue its inexorable charge toward chaos.

It sure did. Hundreds of newpapers disappeared, with others on the ropes. Major radio players such as Citadel are in bankruptcy. Book publishers laid off staff in mass. Businessweek went on sale for $1. (Not an issue, the whole publication.) This will likely only accelerate in the years to come as we discover the degree to which EBay and Craigslist replace critical revenue from the classifieds and online media offers content for free.

#10 Ideas, creativity, humanity, and community will trump authority, power, and control in 2009.

Overall, the leaders of large institutions did an admirable job prolonging that which will ultimately be susceptible to forces of nature. But it’s more clear that there’s no fixing these institutions – banking, real estate, media, healthcare. Neither might they collapse spectacularly in the short-term, something that wasn’t clear last year at this time.

This puts people in an interesting position and a stable footing for 2010 and beyond – there will be ample opportunities for entrepreneurial, creative activities, either in small companies or large companies who think like small companies.

What do you think of these forecasts, and what they mean for 2010 – 2015?

Please, sign in and leave your thoughts.

Not a happy scenario, but one you must consider:

“The November issue of Gregor.us Monthly, Coal World, has now been published and it carries an unhappy message. I am forecasting that the world will not successfully transition from oil to a broad basket of renewable energy and power sources over the next twenty years. Instead, I strongly favor an outcome in which oil, the construction fuel for the global buildout of new power generation, becomes so expensive that the world becomes energy poor, and turns instead back to coal. In case you hadn’t noticed, the process of energy impoverishment has already begun.”

This is a timely and very mature view on the changing role of business in society. Michael Porter, still the world’s leading authority on traditional business strategy, leaps out and asks some fascinating questions of private industry as a whole: does it realize the difference between its narrow self-interest and the broader society to which it is indelibly interconnected?

I particularly like how he distinguishes between multiple levels of not understanding social interconnection and responsibility. One end of the spectrum, you have the Madoffs and “banksters” of the world, pathologically removing value from society and giving absolutely nothing back. Toward the grey zone, you have businesses who may profit while destroying the social and economic fabric of the places around them, throwing on some charitable giving as a band-aid.

This talk is an important signal to private industry. Clearly, the lack of connection between business and society is so great that you not only have the occasional death threat on banking executives for taking bonuses straight from the US federal treasury, you have well-paid, world-famous consultants actually asking the question, “So why do we even have business, anyway?” Seriously, Michael Porter isn’t exactly a Trotskyite radical.

This isn’t connectivity for the sake of feeling good, it is a methodology that will lead you to provide value to your customers and withstand the forces of competition. Superconnection is the future.

Throughout the past decade, Competitive Futures has been forecasting an increased role in “government relations” and lobbying for many major industries. The pharmaceutical industry has increasing reliance on governments, who are far and away their biggest customer. The increased prevalence of Asian manufacturing has made trade regulations a bigger factor in competition. Of course, this has finally gone into overdrive this year, as governments have begun buying majority stakes in a variety of critical industries.

It should be no surprise then that political advertising in America hit $1 billion this year. Competition is becoming increasingly about policies and who is making them, less about any notion of a free and functioning market.

In addition to competitive intelligence, you need political intelligence to complete your view of strategic scenarios.

At a recent meeting with business students, Warren Buffett has proclaimed that all cars on the road will be electric in 20 years:

Goetgeluk asked what Buffett thought of the peak oil theory — that oil production has peaked and will only decline in the future — and what he believed would replace carbon fuel.

Buffett told him that in 20 years, he believes all the cars on the road will be electric. He’s already invested in a Chinese company working on the technology to make it happen.

Buffett is really famous and really rich, mostly from his defiance of conventional wisdom and some excellent timing, so people are naturally attracted to what he thinks about the future. He hasn’t given us much context to this forecast, but it’s still important to consider. Even though Buffett is an authority of strategic-level business issues, let’s pick apart this forecast. I’ll use a rigorous method of forecast assessment I learned working with the great Joe Coates:

Forecast:

• “All cars on the road everywhere electric in 2029″

Author:

• Warren Buffett, chairman Berkshire Hathaway, Omaha, NE

Type of forecast:

• Expert opinion/conjecture

Assumptions:

• All cars means all continents will have electric motors – Africa, Asia, Latin America included
• Electrical “fuel” will be more competitive than petroleum as fuel for transport
• All new electrical refueling infrastructure implemented in the next 20 years across the globe
• Sufficient increase in electrical power supply across the globe to meet new energy requirements currently fulfilled by liquid fuels

Implications:

• Massive recycling of existing cars and engines
• More liquid fuel available for long-haul trucking (assuming “cars” only means passenger cars and not electric trucks)
• Retooling of all auto factories starting in 2010
• Trillion dollar business opportunities everywhere from rebuilding local electric grids, recycling old batteries
• Increase in demand for coal and wind generated electricity to make up gap in supply of electricity
• Increased demand in solar

Probability:

• Extremely unlikely

Assessment:

This forecast is pretty glib coming from Mr. Buffett. All cars running on electricity in 20 years? Fifteen percent electric cars I could easily see, 50/50 I might buy as an extreme scenario – but 100% electric cars by 2029? It’s nigh on ludicrous. The system effect of a TOTAL shift on all cars everywhere would be practically an act of a minor deity. Perhaps Mr. Buffett is “talking up his book” and this new Chinese company in which he has invested.

Not all forecasts are created equal.

A thought drifts through my head as I consider the Dubai debacle and the high-traffic/low-sales results from the semi-sinisterly named Black Friday retail festival:

Seriously, wasn’t that just a few months ago that everything was green, since the price of oil was driven so high by speculation?

Then September of 2008 arrived and suddenly things were about ethical business. After all, it was that nasty greed that ruined everything – and a lack of transparency! That’s it, now all business needs to be ethical and transparent…and green, too, of course!

Yet today, we’re thinking about just how many world banks were up to their knees in can’t-miss Dubai real estate projects and hoping that the world’s currencies don’t catch fire.

This is why leadership needs to be about long-term structural trends. The media can’t hype up the Boomer retirement, it can’t negotiate with the oil present in Brazil, nor deny that most of the world’s young people live in Latin America, Africa, and Central Asia. When we build our plans around real trends rather than hype, we don’t have to re-write our strategies every few months. Real leaders will find that comforting.

The endless oil-soaked financial Bacchanal known as Dubai, home to air-conditioned ski parks, seven-star hotels, the new headquarters of Halliburton, Roger Federer’s income, and a army of foreign servants supporting a few ultra-wealthy is now officially out of wine, the band gone home, the hangover beginning . It turns out that like so much, Dubai, or at least Dubai World, is leveraged to the edge of its financial capabilities and has ultimately defaulted on the interest payments.

In the streets of Washington and on the Internet, we hear murmurs about the crisis of confidence in sovereign debt, questions on whether Dubai is really a country, really a city-state, really real enough to matter. So many questions about future bond ratings, the effect on gold, a retreat to commodities-backed currencies, the impact on equities. Also, there is speculation on the cause: is it real estate, peak oil, an overestimation of the global ultra-wealthy, the instability of the financial services industry?

In addition to those questions, I have a few basic questions first :

1. How is Dubai any different from the United States, France, or Japan, countries swimming in massive debt?
2. Has debt as a concept somehow morphed? Is sovereign debt really expected to be repaid? If not, are the bonds issued from such debt legal financial instruments, or some form of fraud?
3. How is it that countries basing their fiscal health on debt expect the future to be so much more fruitful, profitable and taxable? Which strategic trends are they seeing to value the future performance of their assets so highly?

Basically, how is it that all these banks, companies, pension funds, and nations can be so extended, engorged on debt? Does anybody run black ink anymore? Why is the future perceived to be of greater value than the present?

I think the answers may be simple. Painful but simple. Better to make money than to owe money.

Now, who is making money out there?

It’s Thanksgiving week here in the United States, and I am very grateful to have found a video clip that features three of my favorite things:

1. Music technology
2. Weird Al Yankovic
3. Analytical tools to understand trends

You’ll admit, the Venn Diagram of such varying interests have a tiny intersection, so personally I’m going to enjoy it.

Here’s why the story of Auto-Tune is of interest to intelligence and decision making types. There’s nothing particularly universal about the software itself – it’s a “plugin” used for digital music production for the correction of vocals. If you sing out of tune, Auto-Tune drags you back into A440 pitch, using effects that range from imperceptible to robotic. As of 2009, the term “Auto-Tune” is a verb, and adjective and an Internet meme, for the reasons given in the video below. Unbeknown to the masses who know the effect through artists like T-Pain and The Gregory Brothers, the effect has been in use since 1997. Only now has it come to the cultural forefront. Why?

• Evolution of Auto-Tune from hardware to a software plugin usable with digital audio workstations
• Drop in price of Auto-Tune
• Increase in processing power and bandwidth of computing and the Internet in general
• Proliferation of free social media sites such as YouTube and MySpace

In short, the technology got cheaper, easier to use, and easier to distribute. This has led to the proliferation of an “Internet meme,” an idea that virally spawns a burst of creativity around the world on the same theme. What I love about this video from Rocketboom is their description of the four stages of an Internet meme, offering us a certain level of predictability for future memes. The stages are:

1. Introduction
2. Overexposure
3. Parody and remix
4. Equilibrium

You may not connect Lolcatz or dramatic chipmunk with economic forecasting or product management, but at Competitive Futures, we see significant similarities. Short-term fads and memes regularly invade the public consciousness, and as a decision maker you must understand their dynamics. Is green business a meme created by the media, or is it driven by structural factors? What about “ethical business,” is that just a popular reaction to the scandal in the financial world, or a development in the world of management? Is “collaboration” a marketing meme to describe the same old information technologies, or is it truly a driver of business value in the next decade?  We recommend that you collect a variety of data-driven trends to help your analysis – preferably trends that are under-reported and thus immune to the dynamics of Internet- or media-driven memes.

While you consider such heady stuff on the way into a long weekend, think it over with the Gregory Brothers, the world’s most awesome political-remix-Auto-Tuners:

Whether you love history or a world beyond PowerPoint, check out this wonderful visualization of the world’s naval powers over time.

Clay Shirky recently began exploring a significantly important idea in Intelligence 2.0, that of algorithmic authority, a new form of trust that befits the complex informational environment of the 21st century. For those of us who assemble large amounts of data for decision makers, authority is critical, and it is under major stress due to the Internet. Until recently, you could help leaders make the most informed decisions by assembling the most authoritative sources, interpret the implications of that data, and go forth understanding several potential courses of action. Today, we must also add a new dimension – evaluating the validity of the information as the barriers to entry fall in the world of printing and distribution. Shirky’s theory helps us in this regard:

Algorithmic authority is the decision to regard as authoritative an unmanaged process of extracting value from diverse, untrustworthy sources, without any human standing beside the result saying “Trust this because you trust me.” This model of authority differs from personal or institutional authority, and has, I think, three critical characteristics.

First, it takes in material from multiple sources, which sources themselves are not universally vetted for their trustworthiness, and it combines those sources in a way that doesn’t rely on any human manager to sign off on the results before they are published. This is how Google’s PageRank algorithm works, it’s how Twitscoop’s zeitgeist measurement works, it’s how Wikipedia’s post hoc peer review works. At this point, its just an information tool.

Second, it produces good results, and as a consequence people come to trust it. At this point, it’s become a valuable information tool, but not yet anything more.

The third characteristic is when people become aware not just of their own trust but of the trust of others: “I use Wikipedia all the time, and other members of my group do as well.” Once everyone in the group has this realization, checking Wikipedia is tantamount to answering the kinds of questions Wikipedia purports to answer, for that group. This is the transition to algorithmic authority.

The most important implications of any strategic trend is usually not that your organization must do something drastic, it is that your organization is obsolete and can’t respond effectively at all.

Case in point: newspapers and the Internet. It’s not so much that newspapers could have done something to maintain their business model of classified advertising, it’s that they need a brand new business model and structure to survive. If that is the major implication of the trends we track as strategic analysts, then we almost must develop skills to help organizations change quickly and painlessly.

On that note, check out this talk from Aurora WDC’s Arik Johnson on the future of organizations, recorded at last month’s Intelligence Collaborative meeting in Washington.

Round numbered years are boom times for forecasters. There is something intellectually symmetrical about round numbers that makes people hungry for the future. Back in 2000, it was really easy to get people excited about forecasts for 2005, 2010, 2020, 2050 – all divisible by ten, mathematically elegant! There is something more confusing about analyzing trends from 2007 – 2016 than there is from looking at 2000 – 2020. The brain is a funny thing.

As we begin a new decade, you will see quite a bit of retrospective about the last ten years, and copious forecasts around the year 2020. Now is a good time for executives to brush up on their skills in evaluating forecasts, so they can critically assess what is really coming down the road. Given the high level of complexity facing our economies, this is really quite important.

Assessing forecasts is more important than the act of collecting the data itself. When you see numbers about the future in particular, we are instantly attracted to their comforting certainty. Rarely do we ask, “which assumption are packed into this trend line?” For example, take a look at this projection of potential unemployment in the United States from Q4 2009 through Q4 2020. I got this forecast from the indispensable Mike Shedlock, and he got these projections from a mix of Bureau of Labor Statistics reports and assumptions.

There is also a spreadsheet on offer “detailing” the assumptions, getting into the specifics of how many jobs might be created and when they might enter the economy.

Here’s how my analyst’s brain immediately sees this in terms of the future: I want to know what will really be HAPPENING in order to create this abstract curve. Curves like this are pure PowerPoint candy, giving us beautiful visual aids to support our discussions of the future, but the lack of explicit discussion of the future leaves us an intellectual vacuum. To really evaluate the validity of such a scenario about unemployment in the United States, we can’t leave this trend line alone – we must complicate it with all the factors that will actually go into economics in the next ten years

• Aren’t the Baby Boomers retiring during this time, or at least leaving active work?
• The Boomer “retirement” will leave a talent crisis in its wake. Will unemployment mean the same thing?
• Is there a tipping point of high employment at which American society will change and become less stable? 12%? 15%? 20%?
• What about peak oil? What if economic activity is squeezed from high energy costs?
• Which industries are assumed to create the jobs? Why will they provide more value in the next ten years?
• Does this curve assume any backlash from the Ponzi scheme meltdown of the banks? What if we crash again in 2010 or 2011?
• Will US unemployment rates roughly follow the world economy, or is this trend indicative of a shift in economic power to Asia Pacific, Europe, or Latin America?

These questions are not meant to knock down the validity of such forecasts – I’d rather have an unexamined forecast that gets us talking rather than fixate on more blather from the day’s stock market trades. More forecasts lead to more discussions and better decisions.

Hopefully 2010 will be a banner year for forecasting and strategy. If you want to more, we can recommend the book Future Inc, which dives deeper into this methodology. If you want to know even more, get in touch with us to schedule training to make your analysis more valuable to your organization.

The future of video conferencing: having a physical representation of you in a room, a mannequin with your face digitally projected onto it.

Creepy? Uh, yes, that’s a word that comes to mind. But people in a few years may look for all kinds of ways to enhance long-distance communications, and this may not be as disturbing.

In the meantime, it’s an interesting technology in a phase of rapid growth.

Nokia is the poster child for futures thinking at the corporate level. They pulled off the amazing feat of transitioning their company from logging supplies, rubber boots and toilet paper over to cell phones, spurred by the transformative event of the bankruptcy of the Soviet Union. (How did they pull this off? I detail it in my book “Future Inc.”)

Finland in general, due to their somewhat obscure position in Europe and the humility of being regularly invaded by Swedes and Russians alike for centuries, has become REALLY good at foresight. Thus, it’s no surprise to see Nokia’s vision for our digital lives in 2015 laid out in beautiful graphical scenarios as in the video below.

A great interview with Arik Johnson of Aurora WDC on the future of intelligence and next-generation organizations.

Arik presents some really key ideas about how decisions need to come from the outside in, putting intelligence first and listening carefully to the external environment that is so important in understanding our future.

Some of my comments from last week’s IntelCollab meeting in Washington DC.

Bloomberg won’t allow embeds, but check out this clip with Robert Shiller of Case-Shiller Index fame as he discusses the housing market.

This guy likely understands housing better than anyone else in America, and he seems absolutely perplexed as to the banks, the stimulus, the whole thing. It defies rational analysis, in response to no structural trend in particular.

Bloomberg, as in most of the business media, has a classic position: Up is GOOD! But Bob Shiller seems more interested in talking about how quantitative forecasting no longer works as a predictive model. He just seems confused as to what just happened. As well he should be.

What is left undiscussed: the notion that a group of our institutions have banded together to defy most of the logic that underpinned capitalism: that there is a free market, and that the winners are not picked by the government. That’s why the trends don’t matter in this case. The Treasury, Federal Reserve, White House and Congress banded together to make banks the winners, to allow them to suspend marking their assets to market, and to artificially keep housing prices inflated. In an economy made by fiat, structural trends lose their predictive ability. Who cares what “the numbers” say if a small group of people can renegotiate what those numbers mean at any given time?

Ah, but this is not without cost. Unemployment, inflation, and consumer spending will still likely follow the laws of gravity. That will make the recent acts of our government a temporary solution at best. So keep your seat belt buckled.