Trends shaping the future: Technological, Workplace, Management, and Institutional Trends.

Editor's Note

Technologies are altering the way we work--and the way managers and institutions optimize that work. These are among the key trends shaping the world of the next two decades and beyond, which have been tracked for four decades by Forecasting International Ltd. president Marvin J. Cetron and his long-time collaborator, science writer Owen Davies.

This article (and its companion, published in the previous issue) updates the special report published by the World Future Society in 2001. Part II focuses on breakthrough technologies and trends in the workforce, management, and institutions. For each trend, the authors also offer a succinct conclusion about its implications for decision makers.

Technology Trends

* Technology increasingly dominates both the economy and society.

* In all fields, the previous state of the art is being replaced by new high-tech developments at an ever faster rate.

* Computers are fast becoming part of our environment, rather than just tools we use for specific tasks. With wireless modems, portable computers give us access to networked data wherever we go.

* Mundane commercial and service jobs, environmentally dangerous jobs, and assembly and repair of inaccessible equipment such as undersea cables and space-station components in orbit increasingly will be done by robots. Personal robots will appear in the home by 2010.

* Global sales of packaged software are growing at a rate of more than 15% per year.

* Wireless links such as satellite-based telephone systems and Internet connections will simplify relocation of personnel, minimize delays in completing new installations, and let terminals travel with the user instead of forcing the user to seek out the terminal.

* By 2005, artificial intelligence, data mining, and virtual reality will help most companies and government agencies to assimilate data and solve problems beyond the range of today's computers. Al's uses include robotics, machine vision, voice recognition, speech synthesis, electronic data processing, health and human services, administration, and airline pilot assistance.

* By 2005, expert systems will permeate manufacturing, energy prospecting, automotive diagnostics, medicine, insurance underwriting, and law enforcement.

* Superconductors operating at economically viable temperatures will be in commercial use soon after 2015. Products eventually will include supercomputers the size of a three-pound coffee can, electric motors 75% smaller and lighter than those in use today, practical hydrogen-fusion power plants, electrical storage facilities with no heat loss, and noninvasive analyzers that can chart the inter-action of individual brain cells.

* The engineering, technology, and health industries all will grow rapidly, and many new biotechnology jobs will open up as new developments continue to appear.

Implications: New technologies often require a higher level of education and training to use them effectively. They also provide dozens of new opportunities to create businesses and jobs.

Automation will continue to cut the cost of many services and products, making it possible to reduce prices while still improving profits. This will be critical to business survival as the Internet pushes the price of most products to the commodity level.

New technology also will make it easier for industry to minimize and capture its effluent, a crucial ability in the environmentally conscious future.

* Research and development play a growing role in the economy.

* R&D spending is growing most quickly in the fields of information technology, electronics, biotechnology, aerospace, pharmaceuticals, and chemistry.

* Throughout the 1990s, R&D outlays rose steadily, ranging between 2.4% and 2.7% of U.S. GDP, and future increases will pace the growth of GDP.

* R&D outlays in Japan have risen almost continuously, to nearly 3% of GDP. In Britain, they have declined as steadily, to less than 1.9% of GDP. In Russia, they fell from about 2% of GDP in 1990 to under 1% in 1997, the most recent year for which figures are available.

* Jobs created by high-tech exports are more than replacing those lost to competition under the North American Free Trade Agreement (NAFTA) and similar agreements, providing a net gain in employment in the United States. Some 2.9 million American jobs are now supported by exports to NAFTA countries, more than double the number of jobs believed to have been lost from low-tech manufacturing industries. Canada and Mexico report proportionally greater gains.

Implications: The demand for scientists, engineers, and technicians will continue to grow, particularly in fields where research promises an immediate business payoff.

However, by inhibiting stem-cell research, the United States has made itself a less attractive place for cutting-edge biomedical scientists. The United Kingdom is capitalizing on this to become the world's leader in stem-cell research. In the process, it is reversing the long-standing "brain drain" that deprived it of top scientists.

Low-wage countries such as China will continue to take low-wage jobs from advanced industrialized countries such as the United States, but those jobs will be replaced by higher-paid jobs in technology and service industries.

Countries like India, China, and Russia will continue to suffer a substantial brain drain as those with high-tech skills emigrate to the United States and other high-demand, high-wage destinations. This will adversely affect the economies of the "donor" countries.

* Advances in transportation technology will speed travel and shipping, both on land and in the air.

* By 2010, New York, Tokyo, and Frankfurt will emerge as transfer points for passengers of high-speed, large-capacity supersonic planes.

* Airline crashes will decline and will involve fewer fatalities, thanks to such technical advances as safer seat design and flash-resistant fuels.

* Following European practice, the U.S. airline industry will begin to replace the spokes of its existing hub-and-spokes system with high-speed trains for journeys of 100 to 150 miles.

* There are more than 500 million cars in the world, and the number is growing quickly.

* The average life of a car in the United States is approaching 22 years.

* Advances in automobile technology such as road-condition sensors, continuously variable transmissions, automated traffic management systems, night-vision systems, and smart seats that tailor airbag inflation to the passenger's weight will all be in common use by 2010.

* The first commercial hybrid gas-electric cars are available already. New models will begin to win market share from traditional gas guzzlers between 2005 and 2010.

* To reduce the number and severity of traffic accidents, trucks on the most heavily used highways will be exiled to car-free lanes, and the separation will be enforced.

Implications: One of the fastest-growing transport industries is trucking, in part because computers encourage "just-in-time" inventory management. Deliveries for Internet-based companies are an expanding market for shipping. This field will grow more efficient as GPS-based truck tracking and other new technologies spread through the industry.

More-efficient vehicles, especially with hybrid power trains, should begin to reduce the demand for oil by 2008, easing one of the few remaining sources of inflation.

By 2010, "smart car" technologies will begin to reduce deaths due to auto accidents in Europe and, slightly later, the United States.

Cities increasingly will struggle to reduce auto congestion, either by limiting the use of private automobiles--as in Munich, Vienna, and Mexico City--or by encouraging the development and use of mass transit, as in Copenhagen and Curitiba, Brazil.

Technology may offer other alternatives. One proposal is "dualmode transportation," in which private cars would be used normally on short hauls but would run on automated guideways for long-distance travel.

* The pace of technological change accelerates with each new generation of discoveries and applications.

* The design and marketing cycle--idea, invention, innovation, imitation--is shrinking steadily. Thus, products must capture their market quickly, before the competition can copy them. As late as the 1940s, the product cycle stretched to 30 or 40 years. Today, it seldom lasts 30 or 40 weeks.

* Computer-aided design in the automobile and other industries shortens the lag time between idea and finished design.

* Eighty percent of the scientists, engineers, and doctors who ever lived are alive today--and exchanging ideas in real time on the Internet.

* All the technical knowledge we work with today will represent only 1% of the knowledge that will be available in 2050.

Implications: Industries will face much tighter competition based on new technologies. Those who adopt state-of-the-art methods first will prosper. Those who ignore them eventually will fail.

* Important medical advances will continue to appear almost daily.

* Medical knowledge is doubling every eight years.

* Half of what students learn in their freshman year about the cutting edge of science and technology is obsolete, revised, or taken for granted by their senior year.

* The Human Genome Project has already begun to yield promising new treatments for genetic disease. Early results include possible cures for hemophilia, cystic fibrosis, familial hypercholesterolemia, a number of cancers, and AIDS. Eventually, some 4,000 hereditary disorders may be prevented or cured through genetic intervention. As many as 300 such treatments are expected to enter clinical testing by 2005.

* The discovery that human chorionic gonadotropin (hCG) appears in all cancer cells tested thus far, and (among adults) only in cancer cells, seems to promise the development of a generalized "cure for cancer." If early tests pan out, by 2010 or sooner, tumors could be treated routinely and successfully with simple injections in the family doctor's office.

* Our growing knowledge of biochemistry, aided by advanced computer modeling, has made it possible to design drugs to fit specific receptors in the cell. Drugs created through this technology often are much more effective than natural derivatives or the products of "synthesize, scan, and hope" methods, and they are much less likely to cause adverse side effects.

* By 2005, artificial blood will begin to stretch the supply of blood, which is expected to fall short of demand by 4 million units per year for the next 30 years.

* Memory-enhancing drugs should reach clinical use by 2010.

* New computer-based diagnostic tools are providing unprecedented images of soft and hard tissues inside the body, eliminating much exploratory surgery.

* "Bloodless surgery" using advanced lasers is reducing patient trauma, continuing to shorten hospital stays, and helping lower medical costs.

* "Magic bullet" drug-delivery systems will make it possible to direct enormous doses of medication exactly where they are needed, sparing the rest of the body from possible side effects. This will improve therapeutic results in cancers and many other conditions that require the use of powerful drugs. Laparoscopic and endoscopic surgery are providing similar benefits.

* Brain-cell and nerve-tissue transplants to aid victims of retardation, head trauma, and other neurological disorders will enter clinical use by 2005. So will heart repairs using muscles from other parts of the body. Transplanted animal organs will find their way into common use. Laboratory-grown bone, muscle, and blood cells also will be used in transplants.

* Other transplanted tissues will come from cloning and related technologies used to grow stem cells. Radical new treatments for diabetes, Parkinson's disease, perhaps Alzheimer's, and many other refractory disorders can be expected to arrive within the next five to 10 years. Whether American physicians will be allowed to use them is still being debated. Forecasting International believes that cloning and related methods will be accepted for the treatment of disease.

* Surgeons working via the Internet will routinely operate on patients in remote areas, using robot manipulators.

* In the next 10 years, we expect to see more and better bionic limbs, hearts, and other organs; drugs that prevent disease rather than merely treating symptoms; and body monitors that warn of impending trouble. These all will reduce hospital stays.

* "Nutraceuticals" and "foodaceuticals"--nutritional supplements and foods with drugs either added or genetically engineered into them--will be one of the hottest new areas in the health-care industry for the next 20 years.

* By 2025, the first nanotechnology-based medical therapies should reach clinical use. Microscopic machines will monitor our internal processes, remove cholesterol plaque from artery walls, and destroy cancer cells before they have a chance to form a tumor.

Implications: Even without dramatic advances in life extension, baby boomers are likely to live much longer, and in better health, than anyone now expects. This will reduce the cost of health care well below most current projections, but is likely to raise dramatically the cost of Social Security, Medicare, and the few remaining fixed-benefit pension plans.

High development and production costs for designer pharmaceuticals, computerized monitors, and artificial organs will continue to push up the cost of health care far more rapidly than the general inflation rate. Much of these expenses will be passed on to Medicare and other third-party payers.

Severe personnel shortages can be expected in high-tech medical specialties, in addition to the continuing deficit of nurses.

* The Internet is growing logarithmically and globally.

* Net users now number around 500 million worldwide; various forecasts put that figure at between 709 million and 946 million by 2005.

* One reason for this fast growth is the rapid expansion of Net connectivity in some developing lands. India had only 170,000 Net subscribers in 1998; by mid-2000, it had 1 million, and in 2003, no fewer than 23 million Indians are expected to use the Internet.

* China's population of Net users is growing by 6% per month, to an estimated 33 million users in 2003.

* As of mid-2002, some 26 million households in Japan had computers and used them to access the Internet, up from 12.5 million in early 2001. Nearly 60 million people--about half of Japan's population--access the Internet via computers, cell phones, and other devices.

* Most Internet communication is commercial, business-to-business, rather than personal e-mail.

* Internet-based commerce is growing rapidly. Total online consumer sales, excluding auctions, reached $6 billion in July 2002; about half of that went to online travel services.

* In 2000, only 500,000 Iranians had access to the Internet. By mid-2002, that number was estimated at 1.75 million and was expected to grow to at least 5 million in the next five years.

Implications: Americans made up 42% of the total Net-using population in 2000, dropping to less than 37% in 2003.

Estimated world savings in business expenses thanks to B2B sales and services on the Internet: $1.3 trillion by 2002. Total B2B sales on the Net will reach $3.95 trillion in 2003, up from only $403 billion in 2000.

Internet-based operations require more sophisticated, knowledgeable workers. Once the current economic downturn is clearly over, people with the right technical training will find a ready market for their services in the next 15 years, as major businesses compete to hire them.

Cultural, political, and social isolation has become almost impossible. Even China's attempts to filter the Internet and shield its population from outside influences have proved ineffective, as "hackers" elsewhere provide ways to penetrate the barrier. Similar Iranian efforts have been even less successful.

Trends in Labor Force and Work

# Education and training are expanding throughout society.

* Approximately 130,000 additional K-12 teachers will be needed in the United States between 2000 and 2010, according to the National Center for Educational Statistics.

* Also needed: An annual $10 billion increase in federal spending for programs such as Head Start, aid for disadvantaged children, the Job Corps, and the Job Training Partnership Act.

* The half-life of an engineer's knowledge today is only five years; in 10 years, 90% of what an engineer knows will be available on the computer. In electronics, fully half of what a student learns as a freshman is obsolete by his or her senior year.

* Eighty-five percent of the information in National Institutes of Health computers is upgraded in five years.

* Rapid changes in the job market and work-related technologies will necessitate increased training for virtually every worker.

* In the next 10 years, close to 10 million jobs will open up for professionals, executives, and technicians in the highly skilled service occupations.

* A substantial portion of the labor force will be in job retraining programs at any moment. Much of this will be carried out by current employers, who have come to view employee training as a good investment.

* Schools will train both children and adults around the clock. The academic day will stretch to seven hours for children; adults will use much of their remaining free time to prepare for their next job.

* We already are seeing a trend toward more adult education. One reason is the need to train for new careers as old ones are displaced or boomers grow bored with them. The other is the need of healthy, energetic people to keep active during retirement.

* In the United States, education is moving rapidly to the Internet, as small, rural grammar and high schools supplement their curricula with material from larger institutions, while universities increasingly market their programs to distant students.

Implications: Even small businesses must learn to see employee training as an investment rather than an expense. Motorola estimates that it reaps $30 in profits for each dollar it spends on training.

Both management and employees must get used to the idea of lifelong learning. It will become a significant part of work life at all levels.

As the digital divide is erased and minority and low-income households buy computers and log onto the Internet, groups now disadvantaged will be increasingly able to educate and train themselves for high-tech careers.

# Specialization is spreading throughout industry and the professions.

* For doctors, lawyers, engineers, and other professionals, the size of the body of knowledge required to excel in a particular area precludes excellence across all areas.

* The same principle applies to artisans. Witness the rise of post-and-beam homebuilders, old-house restorers, automobile electronics technicians, and mechanics trained to work on only one brand of car.

* The information-based organization depends on its teams of task-focused specialists.

* Globalization of the economy calls for the more independent specialists. For hundreds of tasks, corporations will turn to consultants and contractors who specialize more and more narrowly as markets globalize and technologies differentiate.

Implications: This trend creates endless new niche markets to be served by small businesses. It also brings more career choices, as old specialties quickly become obsolete, but new ones appear even more rapidly.

# Services are the fastest-growing sector of the global economy.

* Retail sales in the United States grew by nearly 41% between 1995 and 2001, according to the Census Bureau. The same trend is apparent in other countries.

* Service industries accounted for 83% of private nonfarm employment in the United States in 2000, a record 95 million jobs. In the decade ending 2010, services are expected to account for virtually the entire net gain in U.S. employment.

* The U.S. health-care budget will more than double from $1.3 trillion in 2000 to $2.8 trillion by 2011, predicts the Centers for Medicare and Medicaid Services.

* The service sector employed 70% of the U.S. workforce in 1990; it soon will grow to nearly 90%. Europe and Japan are not far behind.

* Service jobs have replaced many of the well-paid positions lost in manufacturing, transportation, and agriculture. These new jobs, often part time, pay half the wages of manufacturing jobs. On the other hand, computer-related service jobs pay much more than the minimum for workers with sound education and training.

* Some of the fastest growth is in some of the least-skilled occupations, such as cashiers and retail salespersons.

Implications: Services are now beginning to compete globally, just as manufacturing industries have done over the last 20 years. By creating competitive pressure on wages in the industrialized lands, this trend will help to keep inflation in check.

The growth of international business will act as a stabilizing force in world affairs, as most countries find that conflict is unacceptably hard on the bottom line.

# Women's salaries are beginning to approach equality with men's.

* Women's salaries in the United States grew from 61% of men's in 1960 to 74% in 1991. This figure soon will top 83%. In Japan, women's salaries are rising less rapidly, but rising nonetheless.

* In the future, women's average income could exceed men's. College graduates enjoy a significant advantage in earnings over peers whose education ended with high school. Today, some 64% of young American women enroll in college, compared with only 60% of young men.

* To the extent that experience translates as prestige and corporate value, older women should find it easier to reach upper-management positions. They will strengthen the nascent "old-girl" networks, which will help to raise the pay scale of women still climbing the corporate ladder.

Implications: More new hires will be women, and they will expect both pay and opportunities equal to those of men.

Competition for top executive positions, once effectively limited to men, will intensify even as the corporate ladder loses many of its rungs.

One-fourth of executives today, and nearly 20% of corporate board members, are women. While this is still too few, it is far more than in any previous generation, and their numbers can only grow.

# Workers are retiring later as life expectancy stretches.

* Data from the Organization for Economic Cooperation and Development (OECD) show that people are retiring earlier in the developed world, but this is only part of the picture. Americans often return to work and delay complete retirement for several years. This trend will spread to other industrialized countries as the retirement-age population grows and the number of active workers to support them declines.

* People increasingly will work at one career, "retire" for a while (perhaps to travel) when they can afford it, return to school, begin another career, and so on in endless variations. True retirement, a permanent end to work, will be delayed until very late in life.

* In the long run, it may prove impossible to maintain the tradition of retirement, except through personal savings and investment.

* By 2010, we expect the average retirement age in the United States to be delayed well into the 70s. Benefits may also continue their decline, and they will be given based on need, rather than as an entitlement.

Implications: Since the penalty on earnings of Social Security recipients has been rescinded, more American retirees will return to work, and those not yet retired will be more likely to remain on the job.

Older workers will partially make up for the shortage of entry-level employees. The chance to remain in the workplace will reduce the risk of poverty for many elderly people who otherwise would have had to depend on Social Security to get by.

Retirees will act as technical aides to teachers, especially in the sciences.

# Unions are losing their power.

* In the United States, unions enrolled 23% of employed wage and salary workers in 1980, but only 16% by 1995. By 2005, despite several recent successes in organizing, contract negotiations, and strikes, it will fail under 12%.

* In South Korea, where organized labor once was invincible, the government has increasingly stood up to strikes by doctors, electrical workers, car makers, and other trade groups.

* In Britain, where the Thatcher government broke union power in the 1980s, labor has recovered little of its former strength.

* One reason for this decline is that jobs now are free to move around the globe from heavily unionized areas to regions where unions are less well-established. Companies also contract out a growing proportion of business activities to nonunion firms.

* Another reason is that the increased use of robots, CAD/CAM, and flexible manufacturing complexes can cut a company's workforce by up to one-third. The surviving workers tend to be technicians and other comparatively well-educated semiprofessionals, who always have tended to resist union membership. The growing industrial use of artificial intelligence will further this trend.

* A third reason is the high cost of strikes. The once-wealthy Teamsters Union spent an estimated $15 million on its strike against UPS in 1997, leaving only $700,000 in its coffers--this after substantial borrowing from the AFL-CIO. In 2002, they settled without a strike.

* In 10 to 15 years, American labor unions will compete with AARP to lead the battle for the rights of late-life workers and for secure retirement benefits. They face an inherent conflict between the interests of workers in what once would have been the retirement years and those of younger members, who rightly see the elderly as having saddled them with the cost of whatever benefits other generations enjoy.

Implications: For large companies, this promises greater stability in employee wages and benefits.

Unions eager to regain their membership will target any substantial firm with less-skilled employees to organize. This could raise labor costs for companies that unions once would have considered too small to organize.

Democrats have been losing support from unions as organized labor declines. However, the three groups replacing unions in the power bloc--the AARP, Hispanics, and African Americans--also have tended to vote Democratic.

The old paradigm of unions vs. corporations is obsolete. In today's economy, workers negotiate alongside management, winning shared bonuses.

# Second and third careers are becoming common, as more people make mid-life changes in occupation.

* The fast pace of technological change makes old careers obsolete, even as new ones open up to replace them.

* People change careers every 10 years, on average.

* A recent Louis Harris poll found that only 39% of workers say they intend to hold the same job five years from now; 31% say they plan to leave their current work; 29% do not know.

* Boomers and their children will have not just two or three careers, but five or six, as dying industries are replaced by new opportunities.

Implications: "Earn while you learn" takes on new meaning: Most people will have to study for their next occupation, even as they pursue their current career.

In many two-earner couples, one member or the other will often take a sabbatical to prepare for a new career.

Self-employment is becoming an increasingly attractive option, as being your own boss makes it easier to set aside time for career development. This is especially true for generations X and dot-coin.

Retirement plans must be revised, so that workers can transfer medical and pension benefits from one career to the next--a change that has long been needed.

# The work ethic is vanishing.

* Tardiness is increasing; sick-leave abuse is common.

* Job security and high pay are not the motivators they once were, because social mobility is high and people seek job fulfillment. Some 48% of those responding in a recent Louis Harris poll said they work because it "gives a feeling of real accomplishment."

* Gen X'ers watched their parents remain loyal to their employers, only to be downsized out of work. As a result, they have no corporate loyalty at all. Many will quit their job at even the hint of a better position.

* For generation X, the post-baby-boom generation, work is only a means to their ends: money, fun, and leisure.

* Fifty-five percent of the top executives interviewed in the poll say that erosion of the work ethic will have a major negative effect on corporate performance in the future.

* Ethics at the top are no better: Enron, WorldCom, Tyco International, Adelphia Cable, and ImClone just begin the list of companies under investigation for deceptive accounting practices, looting of corporate assets, and other misdeeds with dire implications for stock values.

* Seeking the root of such problems, a Zogby International poll of college seniors found that 97% said their studies had prepared them to act ethically in the future. However, 73% said professors had taught them that right and wrong are not susceptible to uniform standards, but depend on individual values and cultural norms.

Implications: The new generation of workers cannot simply be hired and ignored. They must be nurtured, paid well, and made to feel appreciated. Training is crucial. Without the opportunity to learn new skills, young people will quickly find a job that will help them to prepare for the rest of their career.

# Two-income couples are becoming the norm.

* In 75% of U.S. households, both partners will work full time by the year 2005, up from 63% in 1992.

* The percentage of working-age women who are employed has grown steadily throughout the industrialized world. In the United States, it's grown from 46% in 1970 to 68.8% in 2000. The lowest are Italy, Spain, and Mexico, with just 40% of working-age women employed, according to the OECD.

* Look for families that usually have two incomes, but have frequent intervals in which one member takes a sabbatical or goes back to school to prepare for another career. As information technologies render former occupations obsolete, this will become the new norm.

This emphasis on work is one big reason the richest 25% to 50% of the U.S. population has reached zero population growth. They have no time for children and little interest in having large families.

Implications: Demand for on-the-job child care, extended parental leave, and other family-oriented benefits can only grow. In the long run, this could erode the profitability of some American companies, unless it is matched by an equal growth in productivity.

Two-career couples can afford to eat out often, take frequent short vacations, and buy new cars and other such goods. And they feel they deserve whatever time-savers and outright luxuries they can afford. This is quickly expanding the market for consumer goods and services, travel, and leisure activities.

This also promotes self-employment and entrepreneurialism, as one family member's salary can tide them over while the other works to establish a new business.

# Generations X and dot-com will have major effects in the future.

* Members of generation X, now in their 30s, and especially of generation dot-com, now in their 20s, have more in common with their peers throughout the world than with their parents' generation.

* There are approximately 50 million people in Europe between the ages of 15 and 24; 30 million more are between 25 and 29. The under-30 cohort represents about 22% of the European population.

* The under-20 cohort is remaining in school longer and taking longer to enter the workforce than before.

* Generation X should be renamed "generation E," for entrepreneurial. Throughout the world, they are starting new businesses at an unprecedented rate.

* The younger dot-com generation is proving to be even more business-oriented, caring for little but the bottom line. Twice as many say they would prefer to own a business rather than be a top executive. Five times more would prefer to own a business rather than hold a key position in politics or government.

* Many in generation X are economically conservative. On average, those who can do so begin saving much earlier in life than their parents did in order to protect themselves against unexpected adversity. They made money in the stock market boom of the 1990s, then lost it in the "dot-bomb" contraction, but have left their money in the market. For generations X and dot-com, time is still on their side.

Implications: Employers will have to adjust virtually all of their policies and practices to the values of these new and different generations, including finding new ways to motivate and reward them. Generations X and dot-com thrive on challenge, opportunity, and training--whatever will best prepare them for their next career move. Cash is just the beginning of what they expect.

For these generations, lifelong learning is nothing new; it's just the way life is. Companies that can provide diverse, cutting-edge training will have a strong recruiting advantage over competitors that offer fewer opportunities to improve their skills and knowledge base.

Generations X and dot-com are well equipped for work in an increasingly high-tech world, but have little interest in their employers' needs. They also have a powerful urge to do things their way.

As both customers and employees, they will demand even more advanced telecommunications and Net-based transactions.

# Time is becoming the world's most precious commodity.

* Computers, electronic communications, the Internet, and other technologies are making national and international economies much more competitive.

* In the United States, workers spend about 10% more time on the job than they did a decade ago. European executives and nonunionized workers face the same trend.

* In this high-pressure environment, single workers and two-income couples are increasingly desperate for any product that offers to simplify their lives or grant them a taste of luxury--and they can afford to buy it.

Implications: Stress-related problems affecting employee morale and wellness will continue to grow. Companies must help employees balance their time at work with their family lives and need for leisure.

As time for shopping continues to evaporate, Internet and mail-order marketers will have a growing advantage over traditional stores.

Management Trends

# More entrepreneurs start new businesses every year.

* Workers under 30 would prefer to start their own company, rather than advance through the corporate ranks. Some 10% are actively trying to start their own businesses, three times as many as in previous generations.

* A large majority simply distrust large institutions. Most believe that jobs cannot provide a secure economic future in a time of rapid technological change. Examples of Silicon Valley start-ups that turned their founders into billionaires "overnight" dramatically advanced this change of values. This attitude seems to have been moderated only slightly by the failure of many dot-com companies.

* By 2006, the number of self employed people in the United States will rise to 10.2 million, according to the Bureau of Labor Statistics. However, Forecasting International believes that figure to be too low: Expect closer to 12 million self-employed Americans in 2006.

* More women also are starting small businesses. Many are leaving traditional jobs to go home and open businesses, even as they begin a family.

* Since the 1970s, small businesses started by entrepreneurs have accounted for nearly all of the new jobs created. For much of this period, giant corporations have actually cut employment. In 1995, small, entrepreneurial businesses produced 1 million new full-time jobs vs. barely 100,000 among larger companies.

* By 2005, 80% of the labor force will be working for firms employing fewer than 200 people.

Implications: This is a self-perpetuating trend, as all those new service firms need other companies to handle chores outside their core business.

It is driven as well by the attitudes and values of generations X and dot com and by the rapid developments in technology, which create endless opportunities for new business development.

Specialty boutiques will continue to spring up on the Internet for at least the next 20 years.

# Information-based organizations are quickly displacing the old command-and-control model of management.

* The typical large business is struggling to reshape itself. Soon, it will be composed of specialists who rely on information from colleagues, customers, and headquarters to guide their actions.

* Management styles will change as upper executives learn to consult these skilled workers on a wide variety of issues. Employees will gain new power with the authority to make decisions based on the data they develop.

* Information-based organizations require more specialists, who will be found in operations, not at corporate headquarters. R&D, manufacturing, and marketing specialists will work together as a team on all stages of product development rather than keeping each stage separate and distinct.

* Upper management will no longer give detailed orders to subordinates. Instead, it will set performance expectations for the organization, its parts, and its specialists and supply the feedback necessary to determine whether results have met expectations.

Implications: This is a well established trend. At this point, many large corporations have restructured their operations for greater flexibility. However, many others still have a long way to go.

Downsizing has spread from manufacturing industries to the service economy. Again, this process encourages the entrepreneurial trend, both to provide services for companies outsourcing their secondary functions and to provide jobs for displaced employees.

Many older workers have been displaced in this process, depriving companies of their corporate memory. Companies have replaced them with younger workers, whose experience of hard times is limited to the relatively mild recession since 2000. Many firms may discover that they need to recruit older workers to help them adapt to adversity.

# A typical large business in 2010 will have fewer than half the management levels of its counterpart in 1990, and about one-third the number of managers.

* Computers and information management systems have stretched the manager's effective span of control from six to 21 subordinates. Information now flows from front-line workers to higher management for analysis. Thus, fewer mid-level managers are needed, flattening the corporate pyramid.

* Downsizing, restructuring, reorganization, outsourcing, and cutbacks of white-collar workers will continue through 2006.

* Opportunities for advancement will be few because they will come within the narrow specialty. By 2001, only one person for every 50 was promoted, compared with one for every 20 in 1987.

* Information-based organizations will have to make a special effort to prepare professional specialists to become business executives and leaders.

* Implications: Top managers will have to be computer-literate to retain their jobs and must make sure they achieve the increased span of control that computers make possible.

Finding top managers with the broad experience needed to run a major business already has become difficult and can only grow more so as the demand for specialization grows.

Executives increasingly will start their own companies, rather than trusting the old-fashioned corporate career path to provide advancement.

# Government regulations will continue to take up a growing portion of the manager's time and effort.

* Since the U.S. Congress passed regulatory reform laws in 1996, more than 14,000 new regulations have been enacted. Not one proposed regulation was rejected during this period. The Federal Register, where proposed and enacted regulations are published, was nearly 50% larger in 1998 than it had been 10 years earlier--50,000 pages in all.

* This is not solely an American trend. The Brussels bureaucrats of the European Union are churning out regulations at an even faster rate, overlaying a standard regulatory structure on all the national systems of the member countries.

Implications: Regulations--though both necessary and unavoidable--amount to a kind of friction that slows both current business and future economic growth. Their proliferation in the developed world could give a competitive advantage to countries such as India and China, where regulations governing investment and capital flow are being stripped away, while health, occupational safety, and environmental codes are still rudimentary or absent. Other lands, such as Russia, will remain at a competitive disadvantage until they can pass and enforce the regulations needed to ensure a stable, fair business environment.

Institutional Trends

# Multinational corporations are uniting the world--and growing more exposed to its risks.

* By 2005, parts for well over half of the products built in the United States will originate in other countries.

* Multinational corporations that rely on indigenous workers may be hindered by the increasing number of AIDS cases in Africa and around the world. Up to 90% of the population in parts of sub-Saharan Africa reportedly tests positive for the HIV virus in some surveys. Thailand is equally stricken, and many other parts of Asia show signs that the AIDS epidemic is spreading among their populations.

* The continuing fragmentation of the post--Cold War world has reduced the stability of some lands where government formerly could guarantee a favorable-or at least predictable--business environment. The current unrest in Indonesia is one example.

* One risk now declining is the threat of currency fluctuations. In Europe, at least, the adoption of the euro is making for a more stable economic environment.

Implications: It is becoming ever more difficult for business to be confident that decisions about plant location, marketing, and other critical issues will continue to appear wise even five years into the future. All long-term plans must include an even greater margin for risk management. This will encourage outsourcing, rather than investment in offshore facilities that could be endangered by sudden changes in business conditions.

Countries that can demonstrate a significant likelihood of stability will enjoy a strong competitive advantage over neighbors that cannot. Witness the rapid growth of investment in India now that deregulation and privatization have general political support, compared with other Asian lands where conditions are less predictable.

Major corporations also can help to moderate some risks in unstable countries, such as by threatening to take their business elsewhere.

# This international exposure includes a greater risk of terrorist attack.

* State-sponsored terrorism appears to be on the decline, as tougher sanctions make it more trouble than it is worth. However, some rogue states may still provide logistical or technological support for independent terrorist organizations when opportunities present themselves.

* Thus far, attacks on American companies have been limited to rock-throwing at the local McDonalds, occasional bombings of bank branches and of American-owned pipelines in South America, and kidnappings.

* But if American government facilities overseas are effectively hardened against terrorist assault, corporate facilities are likely to be attacked instead.

* Nothing will prevent small, local political organizations and special-interest groups from using terror to promote their causes.

* However, as the United States has just recognized, the most dangerous terrorist groups are no longer motivated by specific political goals, but by generalized, virulent hatred based on religion and culture.

* On balance, the amount of terrorist activity in the world is likely to go up, not down, in the next 10 years.

* Risks of terrorism are greatest in countries with repressive governments and large numbers of unemployed, educated young men.

Implications: Western corporations may have to devote more of their resources to self-defense, while accepting smaller-than-expected profits from operations in the developing countries.

Like the attacks on the World Trade Center and Pentagon, and the American embassies in Kenya and Tanzania before them, any attacks on major corporate facilities are likely to be designed for maximum destruction and casualties. Bloodshed for bloodshed's sake has become a characteristic of modem terrorism.

Where terrorism is most common, countries will find it impossible to attract foreign investment, no matter how attractive their resources.

Though Islamic terrorists form only a tiny part of the Muslim community, they have a large potential for disruption throughout the region from Turkey to the Philippines. Although al Qaeda has demonstrated its ability to wreak havoc halfway across the world, the risks are greatest in the oil-rich Arab countries, where Islamic extremists have high-jacked the faith and few who cling to traditions of peace and tolerance dare to speak out against them.

# Consumers increasingly demand social responsibility from companies and each other.

* Companies increasingly will be judged on how they treat the environment. For example, nuclear power plant controversies are now seen in the light of the Chernobyl nuclear accident.

* Safety testing of children's products also enforces corporate responsibility. One company recently was forced to recall no fewer than 7 million child car seats.

* Government intervention will supplant deregulation in the airline industry (in the interest of safety and services), financial services (to control instability and costs), electric utilities (nuclear problems), and the chemical industry (toxic wastes).

* With 5% of the world's population and 66% of the lawyers on the planet, American citizens will not hesitate to litigate if their demands are not met.

Implications: For industry, this represents one more powerful pressure to adopt environmentally friendly technologies, to work with area schools and community groups, and to participate in other local activities. It also represents an opportunity to market to environmentally concerned consumers.

As the Internet spreads Western attitudes throughout the world, environmental activists in other regions will find ways to use local court systems to promote their goals. Litigation is likely to become a global risk for companies that do not make the environment a priority.

# On average, institutions are growing more transparent in their operations and more accountable for their misdeeds.

* China, rated by Pricewaterhouse-Coopers as the most opaque of the major nations, was forced to open many of its records as a precondition for joining the World Trade Organization.

* In India, a country generally regarded as one of the world's most corrupt, the Central Vigilance Commission has opened the country's banking system to more-effective oversight.

* In the United States, powerful forces are inspiring demands for greater transparency and accountability in large institutions. These include both the current wave of business scandals and the controversy over child abuse within the Catholic Church.

* The wave of support for government since the September 11 terrorist attacks has made Americans willing to accept greater transparency--that is, less privacy--in their personal lives.

* At the same time, in a countertrend that may prove temporary, the nationalist response to September 11 appears to have muted most demands for transparency in the American government.

* Wars against terrorism, drug trafficking, and money laundering are opening the world's money conduits to greater scrutiny. It is also opening up the operations of non-governmental organizations that function primarily as charitable and social-service agencies but are linked to terrorism as well.

Implications: Countries with high levels of transparency tend to be much more stable than more-opaque lands.

They also tend to be much more prosperous, m part because they find it easier to attract foreign investment.

Greater transparency seems likely to reduce the operational effectiveness of the world's drug traffickers and terrorist organizations.

* By 2005, 20 major automakers around the world will hold market shares ranging from 18% (GM) to 1% (BMW). By 2010, there will be only five giant automobile firms. Production and assembly will be centered in Korea, Italy, and Latin America.

* By 2005, just three major corporations will make up the computer hardware industry: IBM, Compaq, and Dell.

* Seven domestic airlines in the United States today control 80% of the market, leaving the smaller domestic carriers with only 20%. The most recent consolidation is the alliance between Continental and Northwest. By 2005 there will be only three major domestic carriers.

* Where local regulations allow, mergers and acquisitions are an international game. Witness the takeover of Chrysler by DaimlerBenz. The continuing removal of trade barriers among EU nations will keep this trend active for at least the next decade.

* Manufacturers often sell directly to the dealer, skipping the wholesaler or distributor.

* We are now in the second decade of the microsegmentation trend, as more and more highly specialized businesses and entrepreneurs search for narrower niches. These small firms will prosper, even as mid-sized, "plain vanilla" competitors die out. This trend extends to nearly every endeavor, from retail to agriculture.

* This trend leads us to believe that AT&T may be reconsolidated by 2010.

* "Boutique" businesses that provide entertainment, financial planning, and preventive medical care for aging baby boomers will be among the fastest-growing segments of the U.S. economy.

Implications: Thus far, industries dominated by small, regional, often family-owned companies have been relatively exempt from the consolidation now transforming many other businesses. Takeovers are likely even in these industries in the next decade.

This consolidation will extend even to Internet-based businesses, where well-financed companies will try to absorb or out-compete tiny online start-ups, much as they have done in the brick-and-mortar world.

No company is too large to be a takeover target if it dominates a profitable market or has other features attractive to profit-hungry investors.

Opacity of Selected Countries

             Corruption    Accounting    Regulatory

Most Open    Singapore     USA           Singapore
             USA           Italy         USA
             Italy         Singapore     South Africa
             Taiwan        Taiwan        Italy
             South Africa  Brazil        Taiwan
             South Korea   Kenya         Brazil
             Brazil        Russia        Kenya
             China         South Africa  South Korea
             Kenya         China         Russia
Most Opaque  Russia        South Korea   China

Source: From the Opacity Index, PricewaterhouseCoopers, www.opacity.com.

About the Authors

Marvin J. Cetron is president of Forecasting International Ltd. in Virginia. His e-mail address is marglo@tili.com.

Owen Davies is a former senior editor at Omni magazine and is a freelance writer specializing in science, technology, and the future.

This article is excerpted from their special report, "50 Trends Shaping the Future," published by the World Future Society and available for $8 each ($7.20 for Society members), cat. no. R-2428. Order online from the Futurist Bookstore, https: //www.wfs.org/bkordol.htm.