It’s tough to make predictions, especially about the future.— Yogi Berra
This is the time of the year when all of the crackpots with crystal balls (most of them cloudy or cracked as well) try to predict the future. I’m going to join that crowded club (some might say I’m a charter member!) but I’m going to focus on communities.
Right away, you know that any predictions are going to be fuzzy – our communities are too diverse in size, in culture and in structure for any prediction to be universally true. Thus, I will highlight relevant trends for the coming decade (and beyond) and in a later post I’ll try to project how these trends will impact communities and their resilience.
Let me set the stage by taking a quick look back at the decade just past (the Twittering Teens?). Globally, it likely was the best decade ever. For the first time less than 10% of the world’s population was mired in extreme poverty. Global income and wealth inequality – especially in Africa – was reduced. Infant and child mortality fell to record lows. Famine became all but extinct. Malaria, polio and heart disease are all in decline globally. Globally, life expectancy continues to rise (except for middle and lower class white men in the US). The world also is on a more sustainable path – in much of the first world the use of resources to make “stuff” declined; not only on a per capita basis but on an absolute basis. Look at how little raw bauxite goes into aluminum cans now compared to 50 years ago, for example. We need much less land for food production – one-third to produce the same amount of food than was needed 50 years ago. Not to mention dolphins back in the Potomac for the first time since the 1880’s!
However, in the developed world there has been a growing sense of unease. The cultural clash between populism and statism – between Big Everything and the Little Guy – has become downright vicious. Brexit and Boris; Bernie and the Donald; the Elite and the Deplorables are manifestations of societies in which Big Everything (government, business, unions…) is all about the numbers and seemingly has lost the ability to care about – or even listen to – individual people. As a result, we see more and more anti-social behavior: little things like people making U-turns in the middle of a four lane road; bigger things like preventing speakers we don’t like from speaking. This has led to near-gridlock on the national level, which is trickling down to many communities.
This cultural clash has been compounded by social media that have devolved into echo chambers. From where we live to where our kids go to school to who we interact with on Facebook and Twitter to what we watch on TV, too many of us are only hearing what we already believe from those like ourselves. Too few of us are willing to listen to thoughtful people who see things from a different perspective. As a result, we seem to be stumbling around the problems that surround us because our ideological red- or blue-tinted glasses keep us from seeing those problems and their possible solutions in proper perspective.
Perhaps one of the most important trends for communities center around population. Toward the end of this decade, and especially in the next, the Baby Boomers will start to exit the stage. They’ll take with them their pension liabilities and their health issues. If communities can survive the pension woes coming this decade, they’ll likely have more to spend in the 2030’s.
However, many communities will have a hard time doing that. The exodus from the high tax states (e.g., CA, NY, IL and NJ – the ones with likely the most unkept promises to retirees) will continue. Florida, Texas and the other southern states, and some of those in the western US, will experience growing pains as they try to accommodate the newcomers (Austin’s problem with homelessness – and the city’s non-solutions – sounds like something from California.). Immigration will add to these stresses.
College towns are likely to feel an even bigger pinch. The much smaller generations born after 1965 will lead to closures of many institutions of higher education (one study predicts one in six), or mergers (one study predicts one in five). If the push for free public education reaches fruition, private IHEs – relying as they do on tuition – will put in a vise. In turn, this will reduce the financial, human and social capital of their home towns.
Economically, the US will – at best – muddle through; the economies of much of the rest of the developed world are essentially stalled. Even China’s amazing growth seems to be slowing. There likely will be another recession within the next five years in the US (maybe sooner; Europe is probably already there), with the potential to rival the Great Recession in impact. However, the Federal Reserve and other central banks (with their near-zero to negative interest rates) and national governments (with their mountains of debt) will have even more difficulty responding to this one; recovery will be even slower. And it appears that the policies of the Federal Reserve and other central banks will continue to punish savers and inadvertently promote wealth inequality. The coming recession will reduce the apparent wealth at the top end, tbough. I intend to examine the “wealth gap” in a later post – closing it in a wise manner could have a huge impact on our communities.
A recession will likely accelerate two other trends: business consolidation and the growth of e-commerce. The growth of government regulations and the pressure of global competition has led to a situation in which every major industry is dominated by only a few companies. Credit Suisse estimates that by 2025 over one-fourth of all the malls in the US will be closed. E-commerce will make up to at least half of the retail economy by the end of the decade. Recession, business consolidation and e-commerce together spell big trouble for small businesses. After the Great Recession, job growth was dominated by intermediate and large companies for the first time; generally smaller businesses have been the driver of recovery. And small businesses are the lifeblood of the downtowns of many small and intermediate size communities. They’re the ones who sponsor youth sports teams; notices about community events are posted in their windows; they are often the anchors for the community’s sense of place.
Small businesses are also the entry point for most young people into the workforce. Spain, Greece and our own experience in the Great Recession point to disproportionate youth unemployment (This is also an unintended consequence of raising the minimum wage). Some of these youth will become isolated from their communities; with the potential for increased crime and drug use.
In fact, youth unemployment, in fact all employment will continue its inexorable change. As my friend Andy Felts is fond of tweaking me about, AI (and, more broadly, automation) will continue to erode the need for low-skilled workers. Past revolutions/evolutions in the nature of work have generally led to the need for roughly the same workforce in terms of numbers, but very different skill sets. Less farmland needed for food production and consolidation have led to fewer farms and farmers. We frankly don’t know what the advent of self-driving trucks and cars may mean for employment of cab and truck drivers, for example.
And perhaps the least recognized trend – the compression of time: the accelerating pace of change. Our communities are being assailed by demographic and social change, changes to their economic and environmental landscapes, and most of all changing expectations by their members. These are coming at communities faster and faster. As pattern seekers, our community leaders generally expect to have as much time to respond to these changes as they had “the last time,” but that expectation is no longer valid. To adapt to these changes requires both time and a willingness to take action. This places a premium on a community’s ability to foresee change and think strategically. I’ve written about this before, but I’ll explore this further in a later post.