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Megatrends -- Then and Now Eighteen years after John Naisbitt published his mega-bestseller Megatrends, it's clear that he correctly predicted a number of important future trends, and also failed to anticipate some very big developments.  By Michael Lindemann Start Date: 3/10/99 In 1982, a then-obscure futurist named John Naisbitt published his book "Megatrends." It became a runaway sensation, spending 60 weeks on the New York Times best-seller list. Reviewers heaped praise upon it, and upon Naisbitt. The book was called "triumphantly useful" (Wall Street Journal) and "one of the most important books of our decade" (Dallas Times Herald). Not incidentally, Megatrends turned Naisbitt into a very wealthy man. Looking back across the 18 years since Megatrends' publication, two things immediately become apparent. First, Naisbitt did pretty well in predicting a number of major trends that would shape the future. Second, he did not foresee a number of very large developments that may be of equal or greater importance as we enter the new millennium. Though he took a global view, Naisbitt focused mainly on the United States. In 1982, the U.S. economy was in recession and many forecasters were gloomy. But Naisbitt said that America's future prospects were dazzling. The engine of the U.S. economy was ready for an unprecedented run of success. History has shown that Naisbitt's faith was well-founded. The decade of the 1990s has seen the most sustained economic expansion in American history. Some of Naisbitt's other observations were also spot-on. His book, divided into ten chapters, was subtitled "Ten New Directions Transforming Our Live." Among the "new directions" he profiled, at least three have become central to our current situation. It may seem obvious now, but it wasn't so obvious in 1982 when Naisbitt observed that national economies, including that of the U.S., would be increasingly integrated into a global economy. Today, this trend is termed "globalization" and is epitomized in such developments as currency consolidation (the euro being the biggest example so far), GATT (General Agreement on Trade and Tariffs), and the proliferation of multi-national corporations. There can be no question that the movement toward a totally integrated global economy continues to gain momentum. Topping the list of significant "hits," in the view of GSReport, was Naisbitt's observation that the United States in particular, and the developed world in general, was transforming from an industrial to an information society. Industrialization would increasingly characterize the developing world, while information technologies would dominate the economic growth of developed nations. This trend is undeniable. By far the greatest new wealth and economic growth in the United States since the publication of Megatrends has come in the information sector. For example, in 1982, few people had even heard of Bill Gates. (Though Gates and his partner Paul Allen founded Microsoft Corporation in 1975, Megatrends contains no mention of either the company or its founders.) Today, almost everyone has heard of Gates, not least because he is rumored to be the world's richest man. Related to the growth of the information society, Naisbitt saw another trend. He called it, "from hierarchies to networking." For Naisbitt, this meant a completely different way of managing information and distributing power. He saw in 1982 that networks of every kind would radically transform and increase public access to goods, services, data, and social influence on a global scale. He was, of course, correct. Yet, the word "internet" does not appear in Megatrends -- the term was not yet in wide use. And the worldwide web was beyond Naisbitt's imagination. In fairness, no one in the mid-1980s (not even Bill Gates) could foresee how radically the advent of global computer networking would impact human society. Actually, this trend is still not clear to most people, and the real power of global networking is just starting to kick in. But to Naisbitt's credit, he saw it coming, even if he couldn't recognize all of its parts. In Megatrends, Naisbitt said that two other major trends would be "from centralization to decentralization" and "from representative democracy to participatory democracy." Though both were and still are possible, neither one has developed as Naisbitt predicted. Today, at the turn of the millennium, there is some progress toward decentralization in some sectors, but there is also a powerful countertrend toward greater centralization. The beginnings of decentralization can be seen, for example, in the energy industry. Growth in highly centralized forms of power production (nuclear, large fossil-fueled plants) is slowing significantly in the developed world, while relatively decentralized forms of power production such as small-scale wind and solar are growing exponentially all over the world. A trend toward decentralization is also evident in the American workplace, with more and more people choosing to work from home via computer, even if their employer is a major corporation. On the other hand, the countertrend toward greater centralization is seen in such varied forms as corporate megamergers, currency consolidation, and the disappearance of small family-run farms. In general, information networking allows the possibility of radical decentralization, but it also works the opposite way -- too much so, as some see it. Computer networking makes possible the advent of "cashless society," instant credit checks and other developments that promise greater convenience but also threaten loss of personal privacy and autonomy. In Megatrends, Naisbitt did address the development of electronic money, but mostly in terms of its importance to banking institutions. He did not see the likelihood of an impending cashless society. In fact, he noted that most people (in 1982) had a strong preference for writing checks rather than using various forms of electronic funds transfers. He said this was an example of the dichotomy between "high-tech" and "high-touch." People need to physically touch important things like their money, he said. High-tech would have to leave room for high-touch, or it would fail to win public approval. Naisbitt was undoubtedly right about what most people prefer (touch), but he did not foresee that, by the end of this century, the aggressive countertrend toward centralization would be slowly winning the battle for a cashless society. Similarly, Naisbitt's optimistic prediction of a trend toward participatory democracy (he was referring mainly to the United States, but his observations had broader application) have fallen very far short. Naisbitt is hardly alone in observing that a computer in every home (which, in 1982, was still a distant prospect) offers the possibility of direct public referendums on all important social issues, including new legislation and the election of public officials. But, though this possibility does exist, there has been no significant movement in this direction since 1982, and there is no indication that any such development is in the offing. Naisbitt said that the U.S. two-party political system had become outmoded and was falling apart. He correctly observed that political power in America would gravitate toward the center, so that moderate Republicans and moderate Democrats would look more and more alike on many issues. But he also predicted a proliferation of independent candidates and the gradual dissolution of bi-polar politics. Nothing of the sort has materialized in the United States. Efforts toward formation of a third party have fallen flat. Only a handful of declared independents have been elected since 1982. And the polarization between Democrats and Republicans, conservatives and liberals, is as real as ever -- certainly well demonstrated in the grossly partisan impeachment proceedings against President Clinton. Similarly in other parts of the world: party politics is still the only game in town. Will Naisbitt's vision of direct participatory democracy come to fruition? Probably not in the foreseeable future. The aggressive global countertrend toward centralization both serves and is best served by political power in few hands, not many. Politicians as a group covet their power and have no interest in distributing it more widely. One consequence of this is alienation of the electorate. In much of the developed world (notably the U.S.), voter cynicism and apathy are now running at historically high levels. In this atmosphere, the majority of eligible voters would not participate directly in government even if the mechanism were in place. And that, in the view of GSReport, is probably how most politicians prefer it. In hindsight, Megatrends is as remarkable for what it leaves out as for what it includes. For example: There is no mention in Megatrends of communism, the Soviet Union or the Cold War. Granted, Naisbitt's focus was mainly on the United States, but certainly the radical geopolitical changes that began at the end of the 1980s have had a very large impact upon the U.S., as well as the rest of the world. Naisbitt did not even consider the downfall of the Soviet Union or the end of the Cold War. But, in fairness, neither did anyone else in the mid-1980s -- not even the CIA saw it coming. Naisbitt makes vague reference to environmental concerns, but says nothing about the impact of environmental stresses upon the global future. He did not foresee that, by the end of the century, most climatologists would agree that global climate change was underway and would have significant, perhaps devastating, impacts starting early in the new millennium. Megatrends also makes only passing reference to space. Naisbitt says that both the 1957 launch of Sputnik and the first space shuttle launch in 1981 were "far more important to the information society than to any future age of space exploration." From the vantage point of 1982, this attitude is perhaps understandable. America's brief flirtation with serious space travel -- the Apollo program -- was already a fading memory, with nothing like it on the horizon. The space shuttle was unambitious by comparison. NASA was in the doldrums, floundering about for a sense of purpose and mission. The Soviets were little better, although their launch of the Mir space station in 1986 would prove to be one of humankind's more lasting space achievements. So Naisbitt can perhaps be forgiven for ignoring the future prospects of space exploration and development. But that is now changing. Among the megatrends of today and tomorrow, GSReport confidently predicts the massive penetration of space by manned and unmanned enterprises of every kind. Near-Earth orbital space will become, within the next 20 years, a hugely productive economic zone. Space tourism alone will become a multi-billion dollar industry. While the new international space station is a typical government project beset by financial woes and diplomatic haggling, the next generation of space stations -- construction of which will probably begin within ten years -- will be glittering gems of corporate ambition and efficiency. They will be orbiting luxury hotels, laboratories and manufacturing facilities. And they will be stepping-off points for the further penetration of space, leading in time to hugely lucrative mining and manufacturing operations, as well as (in the longer term) human settlements on the moon, Mars and beyond. Another trend not appreciated by Naisbitt in 1982 is the now explosive growth of biotechnology -- which, along with space development, will likely lead the 21st century's economic expansion. Naisbitt's Megatrends was an unabashedly upbeat, can-do vision of the future. If he noticed negative trends, he tended to ignore them. He said that America would rise up out of its early-1980s malaise and charge forward to unprecedented economic success. In that prediction, he was essentially correct. GSReport expects that the next 20 years or more will also be years of growth and prosperity for the United States. But there will likely be a period of turmoil and retrenchment in the year 2000, perhaps extending into 2001-2002. This will be driven in large part by the unavoidable consequences of Y2K (another problem Naisbitt could not even imagine), particularly as the "millennium bug" impacts the economies of Russia, China, other Asian countries and much of Latin America. These impacts will be felt globally, and a global recession is the likely consequence. The first to recover will be the United States, followed by other English-speaking nations and most of Western Europe. Barring some other unforeseen catastrophe, economic prospects will steadily improve for most of the world as the impacts of Y2K recede. But certain problem spots bear careful watching -- none more than Russia. The Russian economy, already in desperate straits, will likely be further devastated by Y2K. In the post-Yeltsin era, a period of instability will favor the resurgence of ultra-nationalist as well as communist sentiments. There is a real possibility that this could re-ignite fears of nuclear war. Already, the United States has reversed course on a decade of reduced defense spending and seeks to develop a new anti-missile defense system. The near-term rationale for this -- presumed threats posed by North Korea or China -- intentionally avoids directly provoking Russia but still sends a warning that has not been lost on the Russian leadership. China also bears close watching. Progress in U.S.-Chinese relations over the last several years has all but unraveled in recent months. New revelations that China apparently acquired advanced U.S. nuclear weapon designs from a source at Los Alamos laboratory have raised new fears regarding China's war-fighting capabilities and intentions. Lately, tensions have increased over Taiwan, human rights and U.S.-Chinese trade. Unlike Russia, the Chinese economy is booming and Chinese society is relatively stable. But like Russia, China is expected to suffer major Y2K disruptions, with unpredictable consequences. All things considered, the threats of international friction and war are increasing at the turn of the millennium. GSReport also predicts that global climate change and its human consequences will be a leading megatrend in the coming century. Among other things, it will exacerbate the global stresses associated with population growth, particularly in the poorer nations of the world. Already, weather patterns are becoming more extreme almost everywhere. In the decades immediately ahead, changing climate conditions will likely require radical adjustment of agricultural practices in many parts of the globe. Storms and attendant flooding will cause unprecedented damage and loss of life -- 1998's Hurricane Mitch was an example of things to come. This will eventually lead to relocation of whole cities away from danger zones, and the virtual abandonment of floodplains (for example, in Bangladesh) that now contain tens of millions of people. These adjustments will be costly and wrenching -- and unavoidable. They will play a dominant role in the global economics of the mid-21st century. Thus, as we approach the new millennium, we see the ship of prosperity sailing precariously between the twin rocks of social disorder (especially in Russia) and climate change. Undoubtedly the dangers are very real, but for most of the globe, prospects are relatively good. It is instructive to notice how many important developments of the last 18 years were apparently unimaginable to John Naisbitt, one of our more talented futurists. No matter how discerning we may be, the future is always full of surprises.
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