A few years ago a small company moved into a former gas station in my neighborhood and erected a sign out front that advertised auto rust-proofing. Now the sign says "The Car Preservation Center." Those folks are still in the rustproofing business but today they also restore paint, refurbish interiors, clean vinyl tops, and do just about anything else you can think of to keep an old car looking new. So far as I know, this company has never heard of the Naisbitt Group and assuredly never subscribed to The Trend Report it puts out for $15,000, three times a year. But John Naisbitt would most certainly recognize and applaud what the former rustproofers have done: They have "reconceptualized" their business in response to a trend.

The trend in question, of course, is based on the simple fact that, because of high prices and higher interest rates, Americans today are keeping their cars longer than ever before. It is the kind of trend Naisbitt makes his living spotting. Naisbitt thinks that a lot of Americans, and American companies, will have to reconceptualize in the years ahead to stay in business. His job is to help them do so by alerting them to the trends that will shape their futures.

For the past 12 years Naisbitt has been taking familiar information, rearranging it, and selling it back to some of the largest corporations in the United States. For the minimum annual fee of $15,000, his corporate clients, mostly giant companies like General Motors, Sears, and American Broadcasting, receive The Trend Report, plus a chance to send top executives to seminars Naisbitt and his colleagues sponsor to help the executives interpret the information. The Report is a loose-leaf binder filled with pie charts, bar graphs, and reports on subjects ranging from overcrowding in day-care centers to a census of religious sects.

What Naisbitt sees when he looks 12 to 18 months or more down the road is not a gee-whiz kind of future: no personal aircars in every backyard, no push-button factories, no food pills or smell-o-visions. His visions are different, but not divorced, from the present. In large measure this is a result of the techniques he and his two dozen employees use to prepare their forecasts. The primary method used is called content analysis, and it has been around for a while.

During World War II, for example, U.S. intelligence officials used content analysis to track conditions inside Germany. While the Germans were unlikely to announce to the Allies that food supplies were running short, local German newspapers carrying stories about lengthening lines at meat markets made the fact crystal clear. The Central Intelligence Agency still uses content analysis in similar fashion, as do some academic researchers.

Content analysis, as the Naisbitt Group applies it, is also largely based on reading newspapers. Each day, company researchers in the Naisbitt Group's Washington, D.C., and Denver offices, and in the offices of an independent Stamford, Conn., database company, pore over the daily papers of cities in the United States with a population greater than 100,000, plus papers covering all state capitals regardless of population. These newspapers reach, collectively, 94% of the total U S. population every day. The researchers clip every local hard-news item sort them into 1 of 13 broad categories then sort them again into some 200 additional subcategories.

Then two things happen. First, the number of lines devoted to each topic are counted. Newspapers have only limited space for news, explains Naisbitt. So if one story goes in, another has to come out. Keeping track of the changes in the amount of space given to specific topics from quarter to quarter gives his analysts a way to measure quantitatively the society's changing concerns and priorities, by broad category and by subtopic.

Second, the clips from each of the 13 categories are read by the same person each month. Any changes in behavior patterns, even one or two anomalies from different parts of the country, "tend to jump out at you," says Jeffrey Hallett, co-owner and president of the Naisbitt Group. Analysts who cover all 13 categories then sit down together and compare notes. Changes in one category are related to changes in others. Out of all this comes a set of emerging trends.

For example, the final Trend Report of 1981 revealed that news stories relating to the law, crime, and prisons declined fairly steadily between 1975 and 1980, from 13% to a bit more than 8% of the total news space. But in 1981 the proportion jumped up again to 13.5%.

In that broad category, stories about lawyers, police ethics, gambling, white-collar crime, and victimless crimes got more attention during the last four-month measuring period of 1981 than during the earlier period. At the same time, the proportion of stories related to police and violent crimes fell. A "trend alert" in the law and justice category resulted, advising clients that "white-collar crime will be increasing rapidly along with individual financial difficulties and the increasing sophistication and computer literacy of employees and the general population."

The upshot, one would suppose, is that companies alerted to the trend would move to beef up their internal controls and security.

What is this kind of information worth to Naisbitt's clients? Quite a bit, apparently. John Snow director of corporate public affairs planning and research for Sears, Roebuck & Co., says The Trend Report tends to pick up changes earlier than public opinion polls, "when they really aren't highlights yet in people's minds." Paul Wagner, manager of corporate affairs for American Broadcasting Los., says Naisbitt's analysis tells him "what people are likely to have on their agendas maybe 12 to 18 months down the road."

"You can use content analysis on almost anything -- on your in-basket, for example," says Naisbitt. "If you did it, say, every April you could find out how your job was changing from year to year." His inspiration to apply the technique came in 1970, when he was running a Chicagobased nonprofit organization devoted to research on urban problems. The morning after he finished reading a Civil War history in which the author had based his story of the period on material gleaned from newspapers, Naisbitt went to a local newsstand and bought more than 50 out-of-town papers. "I couldn't believe what I learned about various sections of the country from just one day's editions," he recalls. "I even began seeing some patterns. I thought if I could systematize it I could really learn a lot about what was happening in the country."

All you need to see Naisbitt's view of the future is an awareness of the changes taking place today. He uses the Singer Co. to illustrate how paying attention to change can help a company move from one business to another. Singer, he says, watched women leave their sewing machines when they moved into office and factory jobs. Sewing machine sales are down now, but Singer revenues have not fallen proportionately, because the company moved into the production of aerospace and electronics products years before the trend caused serious damage to its earnings.

Both the Car Preservation Center and Singer reconceptualized the nature of their respective businesses in anticipation of change in the external business environment, rather than after the change had put their corporate backs to the wall. They weren't forced into quick fixes or bailouts. They had time to think about what they did best and how that might profitably fit in with what the world of a year, or 2 years, or 10 years later might want to buy. They could pick and choose among options. That, says Naisbitt, is the value of being able to detect signs of change before the consequences of change are staring you in the face.

Last year, nearly 40 corporations subscribed to The Trend Report to help them stay on top of change. This year, for those of us who don't have $15,000 to pay for early warnings, Naisbitt has a special offering. For $15.50 you can buy Megatrends: Ten New Directions Transforming Our Lives (Warner Books New York). In the book, Naisbitt identifies 10 "megatrends" that he believes are already reshaping our world. You can't stop these trends, but you can think about them and apply what you learn -- perhaps -- to help you reconceptualize your business in anticipation of change.

Megatrend #1. We are in a "megashift" from an industrial to an information-based society. Naisbitt's first entry, and its importance, pervade the rest of the book. We have heard this trend stated so often that its inclusion is likely to provoke a response of "Ho hum. Don't I know that already?" But listen: This is no longer an idea, but a reality. The problem is that people still act as though they don't know it. It is a fact, however, that only 13% of the U.S. work force is employed in manufacturing, while 60% either produces or processes information. Yet we still gauge the health of the stock market with the Dow Jones Industrial Average and bemoan the state of the economy when industrial production falls off. Of course it is falling off, says Naisbitt. But that has little or nothing to do with the health of the economy.

Manufacturing, the production of industrial hardware, is irretrievably moving out of the country. You can mourn its passing, but you can't stop it. "Reindustrialization" will only turn dead industries into expensive employment programs, concludes Naisbitt.

A cheerful side of this megashift, claims Naisbitt, is that we are better at producing information and ways to process it than anyone else, including the Japanese. "I think we should stop worrying about Japan," he says, "and get on with our own business."

Most of the other nine megatrends are consequences of the single most important change -- our transformation into an information-based society.

Megatrend #2. For every high-technology action, there is a "high-touch" reaction or the technology will be rejected. This is another way of saying that you can't force technology on an unwilling population. You've got to leave room for the human elements. For instance, the intrusion of high-technology life-support systems into death, the most private human act, led to the Hospice Movement, so that people could choose to die in peace if they wished. Today's computers would permit many of us to work at home. Most of us still go to the office. People need to be with people. Technology development advances rapidly, and, in general, well in advance of the willingness of a large portion of the population to adapt comfortably to it. The ultimate lesson, perhaps, is that the world will beat a path to the door of the creator of the better mousetrap more slowly than the creator might like.

Megatrend #3. Our economy is becoming part of a global structure, moving away from isolation and national self-sufficiency. As a result, we will no longer be the world's dominant force. "Oh yeah?" you say "When we get our steel mills and factories rolling again, we'll show them who's No. I." No, we won't. All the industrial countries, including Japan and Germany, are beginning a phase of deindustrialization. By the year 2000, the Third World will be manufacturing as much as 30% of the world's goods. They have got the work force and can produce basic goods for less. Shared production will expand. All but 5% of the baseball gloves used in the great American pastime are made in Japan from American cowhide, which is tanned in Brazil.

If we can avoid turning our old industries into expensive employment programs, the U.S. economy can and will restructure itself. Generally speaking, the government should stay out of the way, although at all levels it has a role to play in helping workers retrain themselves. Retraining, however, can take place within the private sector.

When the whole world is a market for goods and services, it will also become a capital market. Small companies in Colorado can grow as easily using German money as they can using Denver money. There are now a billion telephones in the world, and you can dial direct on most of them. Thus, in the long run, importing and exporting will not be a rarity for the American small business owner, just as it is not for his counterpart in Europe or the FarEast.

Megatrend #4. U.S. corporate managers are beginning to think about the long term rather than the next quarter. To most small company owners, this isn't a new trend, but rather a sign that the big-company world is coming around to their way of thinking. Entrepreneurs, by nature, are building for the future. That is still far from true in most big American corporations, which focus on the next quarter or the quarter beyond. Wall Street and the judgments of institutional investors, who own the majority of the big companies' securities, are partially to blame for this. Small companies, though, even small public ones, are still owned more by individuals than by institutions, and can act accordingly. Naisbitt presents this trend more as wishful thinking than as fact.

Megatrend #5. Our centralized structures are crumbling. We are decentralizing and growing stronger from the bottom up. Decentralization parallels the decline of industry. We no longer need to cluster at railheads, ports or raw-material sources. Today you can start an information business with a telephone and a typewriter or a computer terminal, which, in turn, means you can live and work almost anyplace.

Power is shifting from Washington to states, cities, and neighborhoods. As voter turnout for national elections declines, the turnout for local-ballot initiatives and referenda soars. This is changing the political landscape significantly. It no longer matters so much who is President. And members of Congress spend increasing amounts of time acting on behalf of well-organized and focused special interest groups rather than legislating in the spirit of some vague national climate.

We have no real national urban policy or national energy policy. Top-down solutions are out of fashion. The power, resources, and initiatives for dealing with crises are coming from the bottom up. Regional coalitions are growing. The historic North-South controversy in the United States will pale compared with the coming East-West battle over energy.

Our national media will change shape as well. The national television networks will become the Life, Look, and The Saturday Evening Post magazines of the 1980s, as specialized cable TV and local programming proliferate. (In the spirit of reconceptualization, all three major networks have been busy repositioning themselves in cable, a business they once scorned.)

Megatrend #6. We are reclaiming our traditional sense of self-reliance, after four decades of looking to institiitions for help. After the Depression and World War II we gave our children to the schools our bodies to the American Medical Association, our problems to the federal government, and our careers to the corporations. Now we are taking them all back.

Parents are demanding and getting roles in planning courses of study, or they are starting their own schools for the kids. An estimated 1 million families now educate their children at home. Increasingly, we are also looking after our own health. Adele Davis taught us diet and nutrition. Runner's World and the like gave us exercise. In 1980, for the first time, we drank more wine than hard liquor. We check our own blood pressure, and home test kits for pregnancy are big sellers. Midwives are making a comeback.

There has been an entrepreneurial explosion. The baby-boomers may have been the bank-bombers of the '60s, but they took corporate jobs in the '70s while they saved, learned, and plotted their escape. Now they are breaking out and starting thousands of small businesses.

Megatrend #7. Citizens, workers, and consumers are demanding and getting a greater voice in government, business, and the marketplace.

Today everyone wants to participate in decisions that will affect him. The communication revolution has changed the nature of our democracy, perhaps reducing our system of representation, and the representatives, to a largely ceremonial role. It is now possible for the average voter to know as much as, or more than, his representative about relevant issues. We will keep electing members of Congress, but we won't let them do anything important without checking back with us first. The two major national political parties are becoming hollow shells, to be replaced not by new national parties but by localized parties that will operate at the state and city level -- where the real action is.

The U.S. workplace has traditionally been a totalitarian fiefdom in which workers checked their rights to due process ("Why am I being fired?") and free speech at the door. No more. Courts, juries, and legislatures are turning this around, and companies are increasingly welcoming worker participation in decision making because it is now in their economic interest to do so.

The consumer movements begun in the '60 by Ralph Nader and his ilk simply refuse to go away. Lawsuits against companies alleging responsibility for injury to people by their products -- from faulty Pinto muffler systems to illness-producing tampons -- keep being filed, and juries keep awarding substantial damages. A whole new set of concerns for corporate managers has entered the marketplace, not soon to depart.

Megatrend #8. We are moving from hierarchies to networking, the computer is smashing the pyramid. Networking is really a consequence of other changes: the shift to the information age, the rise of participatory democracy, and the growing ubiquity of computers. These changes are toppling the old top-down power structure, and as we cluster together amid the ruins to figure out what to do, networking is being born.

A network is not a thing, it is a process, a three-dimensional communication structure in which the constantly changing participants treat one another as peers because information has nothing to do with status in a hierarchy.

Information is power, and the Soviet power structure is worried. It needs computers to compete in the world economy, but when computers are installed, the men at the top can no longer control the information. They can't parcel it out when they want, to whom they want. The computer is smashing the Soviet pyramid, and the same thing is happening in the U.S. corporation. As a result, the way people are managed in organizations will never be the same.

Megatrend #9. The North-South shift in the United States is real and irreversible for the foreseeable future This too-familiar trend is inclnded primarily to clear up some misunderstandings. The shift is to the West Southwest, and Florida -- not to the South. The Southwest/West boom is not the cause of the North's bust, although both are rooted in three other megatrends: the shifts to an information society, a global economy, and decentralization. Another misunderstanding is that we can reverse the NorthSouthwest/West shift. We can't. The shift has already created three megastates: Florida, Texas, and California, which will act increasingly like separate nations. It is now creating 10 cities of great opportunity (see box, below).


In some respects, Houston and New York are more alike than they are different. Both have trouble transporting their residents, repairing their treets, colecting the garbage and dealing with unemployed immigrants. Neither city made the list of places where opportunity is likely to be the greatest during the 1980s according to John Naisbitt, publisher of The Trend Report.

Albuquerque. Naisbitt likes the country's 49th largest city because it keeps lowering its taxes, and, unlike other Sunbelt cities, it has plenty of water. It also has plenty of crime (the city ranks 23rd in the country). Its population is the country's second youngest, with an average age of 24.7 years.

Austin. This formerly laid-back college town might become a miniature Silicon Valley, but Austin voters are showing more interest in controlling growth. One bumper sticker reads "Keep Austin Austin."

Denver. This exploding former cow town now rivals Houston, says Naisbitt, as the energy capital of the country. He reports that one businessman told him, "The deals being made here remind me of Houston 20 years ago."

Phoenix. More than 300 days of sunshine every year and low business taxes have already attracted high-tech, information-age industries.

Salt Lake City. People here are younger, better educated, and commit fewer crimes than in the average city.

San Antonio. Naisbitt never says why people are favoring San Antonio, just that they are. Maybe it is because San Antonio is close to Austin.

San Diego. This southernmost city in California recently built a trolley line.

San Jose. It is the capital of Silicon Valley, but the Santa Clara Valley in which San Jose is located also contains 32 wineries, a situation Naisbitt calls "an attractive high-touch counterbalance to its high-tech industries."

Tampa. Again, Naisbitt doesn't say why the city is growing, only that it is. The Chamber of Commerce, he notes, won't accept just any migrating company. "If an industry can't be clean," the chamber says, "it can't be here."

Tuscon. This is not the sleepy retirement town people think it is, says Naisbitt. At age 28 2, the average Tucson resident is two years younger than the national average and three years younger than his brother or sister in the Northeast

Megatrend #10. We no longer live in an either/or, chocolate-or-vanilla world; people have demanded and are getting a multitude of choices.

Former consumers of mass-produced goods now must be offered variety, because the consumers themselves are not all the same. Only 7% of the population fits the traditional family profile (father working, mother at home, two children). The individual, not the family, is now society's building block. There are more women than men in college and graduate school today Less and less does gender define job, and fewer jobs are 9 to 5. There is part-time, flex-time, home work, shared jobs, temporary work.

Naisbitt's book, like his advice to corporations, is necessarily a broad-brush approach to predicting the future. How any specific company acts with his thoughts in mind depends, of course, on the nature of its business and the situations in which it finds itself. One might, however, consider how Naisbitt is taking his own advice and reconceptualizing his own business.

"We're unbundling, decentralizing, and going global," he says. New, regional trend reports, priced lower than the national version, will cover Florida, the Rocky Mountain states, California, the Midwest, Texas, and New England. A biweekly newsletter, priced even lower than the regional reports, debuts this fall. Trend reports covering other parts of the world will appear over the next several years. A client who buys any of these services will be entitled, by paying an additional fee, to attend Naisbitt Group seminars.

Naisbitt Group's Hallett says that the decentralization and unbundling should boost the company's revenues to $1.5 million this year, from the $500,000 level it has been stuck at for some time. "Every month or so," says Naisbitt Group vicepresident Michael Annison, who runs the firms Denver office, "we all sit down in our version of a management meeting and try to figure out what business we're really in. It keeps changing."

No matter how many new services the group introduces, however, there is one thing Naisbitt and his colleagues won't do: tell clients how to reconceptualize their own businesses. "Telling people what they've got to do absolutely guarantees that they won't do it," Naisbitt says. "What we can do is tell people about the trends and then ask them how the trends apply to their companies. But the ideas of how to change, how to reconceptualize, have to come from the client."