As one year comes to a close and another one starts, this is the traditional time that journalists, prognosticators, scientists and others make predictions about the coming year. For the Pallet Enterprise, the January issue presents our staff with an opportunity to look back and to comment on the most important news story from the previous year.
This year we chose not one story as the biggest news story of the year. Instead, we selected a theme that loomed in the background of almost everything we wrote. And that theme is the growing concern over the unknown and how it has affected decisions made by businesses, consumers and government leaders. While it is always present in life, this key concern has become a much bigger deal thanks to the global economic downturn. An article on the news story of the year can be found on page 23.
My column will look at how this uncertainty might play out and what predictions industry professionals may want to consider as they make their long-term plans.
Uncertainty almost always invites speculation and prediction about the future. This is our common response to the unknown. While predictions may be fun to make, they can be way off from reality. They can also point out important trends that may come true.
If you asked people at the 1939/1940s World Fair held in New York, they may have envisioned a future where people traveled on automated highways from cities to suburbs. General Motors presented this view of the future in its Futurama exhibit, which presented an optimistic view of life in the 1960s. The Futurama model depicted clean open cities with tall buildings surrounded by suburbs that had large amounts of green space and aesthetic beauty.
General Motors was right that the car boom would lead to people leaving the cities for the suburbs. But the car giant was wrong about automated highways where the vehicles would drive themselves. And of course, smog and pollution have become a reality in some cities thanks to vehicle emissions. The suburbs may have names that sound aesthetically beautiful, such as “Evergreen Estates” or “Raintree Gardens.” But most suburbs today are characterized by fairly small lots designed in a grid pattern with cookie-cutter homes and few trees.
Even people who are on the cutting edge of technology, art and culture can miss the next big thing. Darryl Zanuck, an executive with 20th Century Fox, famously said in 1946, “Television won’t be able to hold on to any market it captures after the first six months. People will soon get tired of staring at a plywood box every night.” Zanuck had made his name producing films for the big screen and couldn’t imagine people wanting to watch TV when they could go to a movie theater. I find it equally amazing today that teens prefer texting to talking on a phone.
Here are my predictions about the future. These comments are more focused on the United States as a whole instead of the forest products and wood packaging industries. I wrote my industry predictions in the July issue. Remember these thoughts are free. They are intended to spur your own thought process not be a guarantee of anything. I would love to hear your comments. Consider emailing me with your future predictions at chaille@ireporting.com.
1.) Boomers will remain in the workforce longer than expected. Dwindling financial nest eggs will mean that more boomers will have to work longer. But they will not be able to produce as much as their younger co-workers in many fields. This will force companies to make tough decisions about who to retain. At the same time more people will be in the workforce from a wide variety of ages than at any point in recent memory. These people have very different worldviews, skill sets, preferences and goals. People who can bridge the generation gap will be more likely to do well as managers in the future.
2.) Petroleum, coal and other fossil-fuel based energy sources will continue to dominate the industrialized world for the next 20 years. New energy sources will begin to become widely available as world oil reserves dwindle, but the transition to new energy sources will take longer than many people expect.
3.) Concern over identity theft, fraud, underground economies and other activity combined with improved technology will lead some countries to slowly phase-out paper and coin currency.
4.) Nanotechnology will revolutionize many industries, especially the medical field.
5.) Wi-Fi (wireless Internet access) will become a standard part of society in most major cities within 5-10 years. An increasingly connected society will mean that marketing will get pushed closer to the individual through a whole new channel of direct marketing options. This will impact everything from billboards to cell phone devices to in-store displays.
6.) Increasingly government intevention in U.S. private industry will have some unforseen benefits and drawbacks. For example, the government has started the Biomass Crop Assistance Program (BCAP) to encourage experimentation and development of new energy technologies using crops and other forms of biomass. Depending on the outcome, this subsidy program could significantly increase the price of sawdust and other wood biomass in the coming years. If these programs divert a lot of hardwood and softwood pulp logs from other markets, it could make it difficult for pallet and other low grade lumber users to obtain material without paying higher prices. Find out more information about BCAP and how it can help sawmills that utilize wood biomass for energy by visiting http://twitter.com/usdafsaenergy
7.) Homes will become smaller, more energy efficient, more customized with rooms that can serve multiple purposes. This will likely mean less total framing lumber will be used in new home construction although wood will remain popular for interior surfaces, doorways, moldings, etc.
8.) Improved coordination between retailers, warehouses and product manufactures will mean fewer inventories on hand while lowering costs for the supply chain. This will also mean that in instances that demand is not accurately forecasted, there could be severe shortages for some goods. Higher transportation and other costs will only somewhat reverse the trend of globalization. Near sourcing will become more common for staple goods and some high-end products.
9.) Government debt will grow at unsustainable levels that will cause major concerns for private citizens in the United States. This will lead to the Democrats losing control of the Senate and possibly the House of Representatives by 2012. President Obama will narrowly win re-election in 2012 although he will be limited in what he can do by the power shift in Congress.
10.) The pallet industry will develop new quality standards and an industry cooperative pool within the next five years. These developments will provide customers an alternative to the major rental pool operators. The industry cooperative pool will meet with limited success although it will get enough funding to bring adequate competition to the market.
