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.

The Big Short Exposes the Deception and Delusion that Led to Our Fall

Book Review
Lewis, Michael. The Big Short: Inside the Doomsday Machine. W.W. Norton & Company, Inc. , Hardbound: 264 pp. $27.95

I missed author Michael Lewis during his recent book tour stop in Seattle. He has lately received national recognition as author of the book that turned into the film, The Blind Side. After receiving his new book, The Big Short, it took me just a few pages to see how it quickly rose to the top of bestseller lists.

I was immediately immersed in this gripping story. The Big Short quickly dives behind-the-scenes of the mortgage-backed securities and real estate industry meltdown. Through a rich character-driven narrative, Lewis deftly weaves together how the nation’s top financial institutions profited from deception and delusion in the subprime home equity market. Lewis also delivers how those high-risk, low ethic actions have unraveled the financial stability of not just America’s lower-middle-class, but entire national economies. The outrage, intrigue, and dark humor of this peek inside the predatory operations and attitude of our nation’s key financial institutions make this a compelling must-read for anyone who wants to understand more about how these money-making behemoths function, and malfunction, to the detriment of the rest of us.

Get this book. I will definitely also be picking up more of Lewis’ work, including Liar’s Poker, a narrative about the excess and hubris of Wall Street during the end of our last century.

Great Escapes for Architecture Lovers Visiting the New York City Area

Book Review
Rosenfeld, Lucy D. and Marina Harrison. Architecture Walks: The Best Outings Near New York City. Rivergate Books (Rutgers University Press). Paperback: 288 pages. $19.99.

Architecture Walks features architectural adventures within a 2-hour drive of New York City. With 288 pages of architectural gems such as the colonial Burlington County Courthouse to Frank Gehry's modern Richard B. Fisher Center for the Performing Arts at Bard College, the authors delight the reader with nearly 100 outings that unearths the region's rich architectural history.

The thoughtful layout can help any professional who wants to "get away from it all" find a day trip or weekend adventure just outside of the bustle of downtown Manhattan. As an architect, I appreciate the ample photographs and information on how to contact local tourist bureaus. The only drawback: the book does not contain a single map. Visual representation of each attraction's location in relation to New York City would have aided both locals and travelers in orienting themselves and planning their trips. When using this book, I recommend using a service like Google Maps to plan your route.

Overall, architecture lovers in the New York area or visiting from other parts of the world will find many points of interest in Architecture Walks: The Best Outings Near New York City.