Here's a 90 second look at the evolution of the telephone, from two cups and a string, to the supercomputer in your pocket smartphone you now carry everywhere. The part of this video from the 1960's-1970's rotary dial and touchtone phones, to today's smartphones, shows the change in technology from the late Industrial Age landlines to the Information Age smartphones that are phones, cameras, video cameras, music collection, TV, and publishing machine for nearly every person now . This type of change is happening in every industry and is continuing to change how we live, work, shop, and interact at all levels of society.
I've been harping on about "The next big recession" in my blogs, since late 2017 or early 2018. This is it, we're heading into the biggest recession right now, in my opinion. After 2020-2021, it was pretty easy to figure out the big trends for 2022. Inflation was heading up, which meant The Fed would eventually raise interest rates, which would send stocks, crypto, and real estate down. I made last year's financial predictions in this blog. Here's the post with my economic predictions for 2022, from March 22, 2022. In March I called the bottom of the S&P 500 within 9 points. Getting that close was luck, the Nasdaq call was close, missed on the Dow. Good calls on interest rates and real estate.
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Predicting 2023 is something much different. This post is about the Big Picture I see happening, and why I thought five years ago that this recession (or depression/great depression?) would be such a big deal. I've written a ton about this, so I'm going to try and make it as simple and short as possible here.
The Big Transition- I have a concept I call The Big Transition, which is really an extension of The Third Wave idea, from futurists Alvin and Heidi Toffler. The concept is simple. We ARE NOT IN the Industrial Age. We ARE NOT IN the Information Age. We are in the later part of an 80-90 year transition period between the two ages. That's the concept, at its core.
This transition period started about 1956, according to the Tofflers. I estimate it will end around 2035-2045. The rate of change from Industrial businesses to full blown Information Age businesses (and all types of institutions) started very slow. Each new invention and social change built upon others before it, so the rate of change keeps increasing. I think the 2020's will be the tipping point, where most of society that hasn't shifted over, will shift. Everything seems crazy in our world because it is. Every business, industry, and institution will die off and be replaced by an Information Age version, or will evolve into one. After the technology shifts, new ways of communication, working, socializing, shopping, and life are possible. Then it takes many more years for our social norms and attitudes to shift to the new way of doing things. Humans don't like change, we say we do, but mostly we don't.
This is a huge, global shift. In the Toffler's thinking, The First Wave was the shift from hunter/gatherer, tribal life, to the Agricultural Age. Humans planted crops, settled in one place, and becsme farmers, hat took thousands of years. The Second Wave was the shift from the Agricultural Age to the Industrial Age. New machines made big factories, cities, and all kinds of new changes in life possible. That transition took 200 years or so to work around most of the world. The Third Wave shift, is happening in a single human lifetime. This hasn't happened before, that's why it seems so crazy, because it is.
Think of the type of life that went with each of those phones in the video above. As phone innovation went on, how we all could communicate changed, which led to changes throughout society. That's just telecommunications. EVERY other industry must also switch over, and then society, social organization and norms, have to shift as well. This is an incredible amount of change, and it's happening faster than ever in human history.
In addition to The Big Transition/Third Wave conept, there's another economic cycle that forecast a major recession, and likely economic depression (10% drop in GDP or 3 year downturn) or great depression (5 year economic downturn) in 2020. So there was a reason to believe we would have a major recession, possibly a full on great depression, and The Big Transition is happening, it's about 2/3 over. My thinking is simple. Economic downturns force more change and innovation. So a major economic crisis would speed up the already fast rate of change in industries and insitutions, and other social change. So putting these two ideas together, even back in 2017-2018, when I did, it looked like the 2020's would be a really crazy time of major recession and dramatic change in technology, businesses, industries, and socially, adapting to those other changes.
So that's why I've been saying, for five years now, this is going to be a serious recession/depression, and a period of change like none of us has ever seen.
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