This article is part one of a two part series. In part two, we will look at what small businesses should know.
Jack Plunkett is the CEO of Plunkett Research. Plunkett has written many market research almanacs to help businesses make informed decisions for the future. Below, Plunkett describes what is to come during the next fifteen to twenty years in technology and the economy.
Curt-What do you think is going to happen in the next decade or so in technology, with the caveat that it would have been difficult to predict the internet, or the iPad or the rise of the smartphone?
Jack-I think technology will continue to have a very dramatic impact on small as well as large businesses. The over-riding theme is going to be smaller, faster, better, cheaper—which is a continuation of what we've seen for the last 20 years. In my book, The Next Boom, I give a story about my first portable computer which weighed twenty five pounds and had a five inch black and white monitor on it. It was absolutely archaic compared to what we use today. The over-riding direction will continue to be smaller, faster and, if not cheaper in final price, certainly cheaper in terms of technology that you get for the money spent.
We've had a dramatic miniaturization trend for at least a couple of decades. That really is about to be accelerated because of the effects of nanotechnology. We're becoming able in a practical way, and not just in a theoretical way, to use nanotechnology to take miniaturization down to the smallest possible form. We can then use it to create and manipulate materials on a molecular, if not atomic, basis.
The first big impact we're going to see in terms of new advances is nanotechnology applied in a very meaningful way to dense computer memory, creating much smaller and much more powerful chips, and to advance batteries as well. We're beginning to understand nanotechnology well enough so that we can get it out of the lab and apply it in an affordable and effective way. We're creating chips right now on the 30 and 40 nanometer scale in the fabs. The next goal in the chip industry is to create them on the 5 nanometer scale, which is going to make a dramatic difference in the density of the chip and its ability to process data.
Another technology trend that will be an extremely powerful force in the next ten to fifteen years will be the advancement of wireless technology. And not just smartphones getting better, more powerful and faster, which will happen, of course. We're going to see LTE become a dominant wireless high-speed network, and we will see much more utility of data for portable users. This will drive us towards pervasive computing where we're always 'on' and it's always with us.
The revolutionary thing will be centered around remote wireless sensors. We will have very powerful, very tiny sensors in everything from precision agriculture to precision manufacturing to environmental control in terms of heating and air conditioning. They will also be used for stress testing bridges and buildings, and to preempt structural break down and make maintenance work more preventative rather than reactive.
Curt-Beyond technology, I know you have analyzed what will occur in future world economics. What do you think is going to happen in Africa over the next fifteen years?
Jack-Africa is about to become the new font of young workers. We've seen manufacturing in Asia progress from Japan after WWII, where everything had cheap and fast labor. But that cheap manufacturing moved to other nations, primarily China. At the moment, due to rising wages, Chinese low-cost manufacturing is moving to Bangladesh and Pakistan. As labor costs rise in those countries, cheap labor is evolving in Africa. Africa is going to be the home of a billion young workers eventually. We're going to see those low value manufacturing jobs move to Africa and start to raise up the continent. If you have trouble grasping that, just watch Wal-Mart -- they're moving into South Africa. Somebody in Wal-Mart obviously knows that's the consumer base of the future that nobody's tapping yet.
Curt-Wal-Mart almost single-handedly made China a growth economy.
Jack-That's exactly right. Now they're over there selling to the new class of Chinese consumers. I think there's a complementary circle that involves jobs, education, healthcare, and incomes. It may start in one place and move across the globe as long as there's some rule of law and complementary local government that can accept the movement as it reaches the country.
Curt-A couple of hundred years ago, it was a big deal to go from state to state. States were very different and today they're not. Do you see the same thing happening globally with countries where there's more unanimity of laws? For example, air traffic laws have normalized across the world because they had to.
Jack-Yes and no. There are laws that make the bare needs of travel function, like English as a required language for air traffic controllers and for international travel. There are also accepted norms for airline maintenance. Some commercial laws, although certainly not enough, are becoming standardized, although intellectual property isn't protected enough. Uniformity of law is coming, but at a very slow rate.
What I do see when I talk to business people all over the world (and I do sit down and talk to entrepreneurs wherever I go because I want to know what young people who plan to start businesses think) is that the confidence in government and rule of law in many nations, even relatively mature nations, is nowhere near as high as it is in the United States, the United Kingdom, and Germany. The real challenge is for us to get really effective commercial law, rule of law, and IP law adopted in a very effective, global way that will boost commerce.
Curt-Austin, Texas, where I live, is an awesome place but also the geographic center of paranoia. Alex Jones (a big conspiracy theorist) premiered his movie End Game here at the Alamo Draft House. Many people here are anti-globalists. What would you say to those people about globalization?
Jack-I would say that the US is only about 20% of the global economy, so why restrict ourselves from dealing as profitably and effectively as we can with the other 80%? That 20% that the US represents will remain a high number for a long time, but relative to the rest of the world, it will continue to shrink.
Curt-Do you think they have a point at all? If we get to a one-world government situation, is there no danger of it having too much power?
Jack-When you look at the record in the European Union (EU) where they've accomplished only some regional regulatory measures with a reasonable amount of buy in, I don't think a one world government would be effective on a really deep level any more than a true EU government has able to evolve.