616-786-2500 Alan Greenspan’s book, The Age of Turbulence, has a prophetic title for current economic times. The book provides an interesting history of monetary policy in the United States, as well as a look into the future. In it he describes the Federal Reserve’s efforts to maintain a stable economy as an inducement for economic growth and his thoughts about doing so.
We are indeed in an age of turbulence. However, with change comes opportunity. What opportunities and challenges does this situation present? First of all, it is important to realize the “financial crisis” is somewhat contained within the financial service sector. The economic consequences have spilled over into the rest of the U.S. economy, but not the world’s economy. The rest of the world is no longer dependent on the U.S. market for its economic vitality.
Here are ten opportunities that I see.
- With a dollar devalued against other world currencies, our products and services are “on sale” at a 20-30% discount. It is also means that imports are at a 20-30% disadvantage when selling in the U.S. Of the fifteen projects our firm is engaged in, six are outside of the U.S.
- With $100-per-barrel oil, alternative energy companies, including those providing production of solar, wind, water, and geo-thermal energy, are becoming extremely busy. One U.S. company is now selling 95% of its solar shingle production to Germany and is sold out for the next two years’ production.
- Recycling has been given a boost by increased raw material cost. My brother’s salvage yard is doing a booming business recycling scrap while cleaning up the environment. As raw materials escalate in value, we will become ‘recyclers.” What was a feel-good thing to do will take on economic importance. What once went to the landfill will go back into the production cycle.
- We are simplifying our lives by determining what is important. We struggle in this country under the weight of abundance. We are the only nation in the world that spends $22.6 billion on self-storage as a place to put our “extra” stuff. Perhaps it is time to “ebay” our basements, garages, and storage units.
- Currently, the U.S. is the largest consumer per capita of energy on the planet. Finding ways to reduce our carbon footprint through re-thinking our transportation system, including our vehicles and the way we use them, opens up many possibilities.
- Becoming mindful consumers is another opportunity. We can choose based on who, what, when, where, why and how something is produced. Being conscious of our choices and the consequences of those choices will let us shape the future.
- Begin with the end in mind. The Research Triangle Park has a fifty-year plan. Are any of us thinking in those terms? What will the world and our little corner of it look like in 2058?
- A world without oil is an opportunity to create whole new industries. As oil production begins to decline, new exploration will get a boost and what was not economically feasible will become so. We will find new ways to meet the world’s energy needs.
- Global investment patterns will encourage investment from abroad. Indian companies invested $10 billion in over 70 merger/acquisition projects in 2007, for example.
- With the emergence of 150 million new middle-class consumers in India and China, the opportunity to serve their needs is hard to imagine. What an enormous opportunity to develop new markets, new products and services!
What about you? What opportunities do you see? How will you make the most of these opportunities? Let me know what you see and I will summarize them in a future Whittaker Report. Send your thoughts to me at dean@whittakerassociates.com.
barrels of conventional oil worldwide.
