Could Shortsighted Futurists Cripple Our Economy?

The new year is in full swing and everyone is full of hope. I read the articles and see that everyone is making their new year's predictions on when the economy will return to "pre-2007 levels."

What these shortsighted futurists fail to realize is that the economic standards of 2007 no longer apply. For decades, our economic models and measures of prosperity used derivatives of industrial age standards. The Great Reset of 2008-2009 brought all those antiquated philosophies face to face with modern economic realities. The upswing in economic prosperity we're experiencing today requires new paradigms on how we measure, analyze, and monitor growth to deliver a true picture of prosperity and growth.

Few - if any - have written concrete rules on what the economy of the future will look like. Some have speculated, like William Knoke in his groundbreaking 1997 guide to the twenty-first century, Bold New World. Furthermore, Erik Brynjolfsson and Adam Saunders give us a clear look at the disruption that information technology brought to economic models in their book Wired for Innovation. These top economic thinkers from MIT examine official measures of the value and productivity of technology and suggest alternatives that better measure this economic contribution. Their explorations for the real sources of value apply not only to information technology, but other intangible inputs that drive nearly 85% of our nation's businesses, including intellectual property, services, and research and development.

To get a true sense of when we will see 2007-like prosperity return to the U.S. economy, we need to rethink our current measures, like the output of goods, retail sales, and credit card spending. True measures of gross domestic product, productivity, and prosperity will come when we are able to quantify intangible assets and integrate them into everyday practices. This means that small business lending will systematically include intangible assets in its risk assessments; service-based business valuations will be more in line with their goods-producing counterparts; information goods will take on the real value they deserve; and we will no longer rely on consumerism and debt as the driving factors for measuring consumer confidence.

According to Brynjolfsson and Saunders, information technology created the lion's share of the resurgence in productivity in the U.S. since 1995. It's time for our economic models to better measure the value that IT and other intangible assets bring to prosperity, productivity, and quality of life. Wired for Innovation delivers a first step at outlining how we can now measure, analyze, and manage the intangible assets of an information-based, mentisfacturing economy. Let's hope that our economic and government institutions catch on before the opportunity to leverage the Great Reset has passed.

What does this mean for you?
Our national economic policies have not caught up with the economic reality. That doesn't mean you have to sit around and wait for them to catch on. I've been working with a number of small business, mid-market, and nonprofit organizations who realize that they don't want to be at the mercy of misaligned economic policies. They hired me to solidify strategic plans, build strategic foundations, and map effective business models. Our process includes a gap analysis that exposes the holes in all critical area of your business model, including key partnerships, key activities, customer segments, cost centers, and revenue streams.

I invite you to take action now to optimize your products and services so that you don't get left behind by using old business models in a new economy. Call me at 206-782-4040 to schedule an initial consultation.