Five Ideas That Matter

I’ve been playing this evening with the World Economic Forum’s interactive charts, logging the different criteria that go into innovation readiness – in this case “readiness” means do you have the communications technologies, business environment, regulations and education system that set you up for greater things.

First I was looking at venture capital availability versus technology availability. What is of interest to me below is that Sweden and the USA are equally equipped with VC availability and technology but Germany, which is a more successful economy right now, lags both in VC availability. This adds to my feeling that the VC as an engine of innovation is faltering.

I also took a quick look at availability of venture capital vs intensity of local competition. Here we see everybody lags Germany in local competitiveness.

Now look at the state of cluster development vs good math and science education. The US, Germany and Sweden as well as Japan are strong on clusters but Finland and Singapore outstrip them on math and science, as well as  being more or less equals in cluster development.

Finally here is cluster development against venture capital availability. In this diagram it looks as though Germany lags its main rivals in cluster development and in VC availability. The USA however scores high on both clusters and VC availability. The conclusion you might want to draw is that neither VC availability nor clusters are as critical as intense local competition.

I wasn’t aware of Howard Gardner’s book Five Minds when I started working on Metatrends but they seem to be analogous to the way we are trying to track key attitudinal changes. I took this Publisher’s Weekly quote from a review on Amazon:

“Psychologist, author and Harvard professor Gardner (Multiple Intelligences: New Horizons) has put together a thought-provoking, visionary attempt to delineate the kinds of mental abilities (“minds”) that will be critical to success in a 21st century landscape of accelerating change and information overload. Gardner’s five minds-disciplined, synthesizing, creating, respectful and ethical-are not personality types, but ways of thinking available to anyone who invests the time and effort to cultivate them….”

Here’s the book cover. It’s just gone onto my reading list.

Mary Meeker‘s presentation from Tuesday’s Web 2.0 summit is rapidly approaching Sequoia momentum (mementum?), but still worth a good close look for anyone that’s been living in a cave for the last couple of days.

Great data in particular on the underplayed market potential of mobile, although readers will not be surprised to learn that we view the heavy emphasis on Apple with some skepticism

Mary Meeker’s Internet Presentation 2009

If I was a CEO or leader of a significant organisation, my response to claims that my company is threatened by, say Chinese competitors or climate change or indeed recession, would be, no: it is either safeguarded or threatened by my ability or inability to understand the changing patterns and dynamics of social interaction.

Everyone around me is equally affected by how people’s intentions change and what that says about their shared thought processes – the mutual future we are always building. Not understanding the speed with which people now recreate futures is why politicians are failing.

There is good harmless fun trend projecting and a couple of years back pure blogging listed a bunch of sites that do it well.

You can review those sites here. And we will review them all here soon.

My apoplectic response to apocalyptic trend spotting and critique goes something like this. Here is a dead easy futures portfolio.

1. The recession will last for a hundred years and you are all going to die. Pessimism sells well – in fact the author of Buyology Martin Lindstrom has shown the science of buying and selling is at one with fear. There is no shortage of futurology that tells folks it is all getting worse and will continue to do so until you listen to me.

2. The second version of futurology goes like this – Gen A (it could be x, y or z) is the ultimate slacker generation and determined to prove its slackiness is purer than the slackers who came before them (the mathematical formula is Gen = n [tusg]p where p = the present and tusg = the ultimate slacker generation.

3. The third category of doom apocalypse thinking is a combination of arguments that all say the condition of the world spells a sticky end soon. Climate, ascent of China, population growth, health care spending.

Behind each of these arguments lies a formulaic response which goes something like – if we get smarter, if we rely become more creative, adaptable, flexible, innovative (innovation is the new progress) then we can just overcome these problems.

When Chris and I started thinking abut metatrends one of the first things we noticed however is how well, how quickly and how imaginatively people are adapting to new circumstances. The brain and behaviour are the things we can change very quickly – curious fact, people continually talk about having attitudes and/or new ways of doing things in their DNA – my understanding is that genetic change takes about 40,000 years to work through in humans. Very little changes in our DNA – other than it becoming damaged or mutates.

It stands to a little bit of reason that change is therefore mostly social and interactive between people and the web is the place a lot of that interaction now takes place.

Here is a case in point During the recession the number of money saving blogs has been increasing as have their readers. This comes at a time when, the FT recently pointed out, old fashioned mutualism is dying out rapidly enough that Governments are trying to save it. American thrifts have had their day and European mutual societies got the high risk, high reward bug. Read all about it here.

By way of contrast we see a different mutualism growing. It is based around using the web as a source of mutual support and the primary weapon is not money but information.

Having said that, money is a focus of a new generation of peering systems, led of course by the ZOPA model. Even here in money, to date, information rules and includes the likes of wesabe and many more on that model.

In other words the adaptation of social DNA (the information repository for persistence) is well under way. We have written about it recently but only in private client papers. Hopefully we can approach the issue publicly soon. Understanding these trends and what they mean, before the opposition do is more important than the thought apocalypse.

The HBR reports this is the first recession ever with recorded decline in household debt

What it also means is people are digging out all those forgotten subscriptions and cancelling. And companies that rely on the monthly transfer are starting to see it dry up.

While we’ve been digging around for trend intelligence like this we’ve also been undertaking our own pilot study using web comment as our primary data source.

Results to date are starting to firm up….. yes, we note that people are not just paying down debt. They are especially focused on paying down credit card debt. And we are logging a revealing structure in the way people make points of view online.

For example we are seeing people interpret recession and recovery much more in terms of personality than in terms of institutions – ie they talk people not banks. We see people in the USA and UK take quite different views of what needs to be done.

In the UK the preference for fundamental change in the economy is strong; in the US not so.

Now we’re back from holiday, time to start cranking out the stats.

The Harvard Business Review this month has a couple of sections on trends in an issue devoted to the new world business order.

One of our obsessions on fiveideas is/will be to collect and collate trends from elsewhere. These are interesting because the HBR headlines themas 10 Trends You Have To Watch. The authors  (Eric Beinhocker, Ian Davis, and Lenny Mendonca) all work with McKinsey Global Institute.

The trends are:

• Globalisation under fire
• Resources under strain
• Trust in business running out
• Management science under question as data models prove unequal to the task in banking
• Shifting consumption patterns
• A bigger role for Government
• Asia rising
• Leading companies reshaping their industries during recession
• Innovation having less momentum
• Price stability under threat.

The observation I want to make about the list is its eclectic quality. I think there are far more profound forces at work and I think these trends are not supported by good data but that anyway is often the case with trend forecasting. It’s the eclectic nature I believe diffuses the focus.

Which of these trends is a result of recession, which are contributories to recession and which are not really related to recession? And are any of them as significant as, for example, the tendency of the web to create irrational markets? Now that is a permanent feature of human activity that we haven’t begun to understand.

A stalled commitment to innovation on the other hand is a very temporary phenomenon and could hardly be called, convincingly, a widespread trend.  Falling trust in business – is it temporary or permanent and if so what are the consequences? A larger role for Government, equally.

We need trend analysis that uncovers new developments so the list leaves me wanting a debate with the authors to uncover what is new. Where can I do that? Here at landscape.hbr.org I’m going there now.