The Ramblings of an Old Consultant
As I view 2004 and the future, I continue to see major changes in the business world through the next 10 to 15 years. The forecast theory, known as Long Wave, states that- during the change of one century to the next, there is a period of upheaval for approximately 20 years. The 20 years is broken down in 5 years prior and 15 years after the turn of the century. During this time, there are great changes in the business, cultural, and mores of the world.
So far, this theory seems to be holding true for moving into the 21st century. We have seen great growth in the financial world prior to the turn, although it was unbridled. We now see great changes with the advent of world terrorism, and the changes it has already brought to the world politics and economy.
The intervention of the United States into Iraq may seem like just a deposing of another brutal dictator, or is it the beginning of the change in the Middle East political dynamics. If so, then the control of oil by a new democratic nation, the new Iraq, will have significant impact on the world economies. Will they play with the oil cartel, or will they go off and sell oil unbridled to garner monies to build the nation they want? At the same time, the automakers are going into the mainstream with hybrid cars, which will have significant impact on oil producing nations, and terrorism that is sponsored through monies generated by oil in the region.
The power that money creates will change in the next 15-30 years. Oil power will begin to feel the impact of change, due to technological changes in transportation. Those countries will try to limit production further, and continue to raise prices to continue the flow of monies, but it will have the effect of driving people to move faster towards efficient technologies.
The advent of technologies is just starting. The country or region that becomes the cradle of technology and controls the manufacturing and distribution of the technology will become the new Oil Cartel of the 21st century.
The low cost manufacturing of the Far East is going to disappear, due to the creation of the middle class society in the present countries that supply the present low cost labor. I believe China will move more rapidly into the world economy as a consumer. As their middle class increases, the low cost labor, of course, will decrease. The new middle class will be looking for more money to buy more. With its population size, China will become the great consumer of the 21st century.
With the change in oil and labor cost, the global companies will have to rethink the global Supply Chain. The true advent of The Lean Supply Chain will take place. The lean will apply to all cost associated with the creation and delivery of product to the consumer. The idea of regional Supply Chains will become a focus again, as it will be too costly to move across the world.