After all that has happened these past few years with respect to the global recession, pundits everywhere are concerned with predicting when, where and how the next subprime-like “bubble” will occur. Speculation runs rampant, as analysts who adhere to determinist principles assume they can accurately predict the next iteration/s of such an economic bubble.  Two interesting examples of sectors where some analysts see warning signs are listed below:

1) Microfinance in India Lending to the poor has proven so profitable in India that microfinance institutions saw their loan portfolio jump from $252 million to $2.5 billion in two years, raising fears of a subprime-like microfinance bubble. Critics say that the expansion has been too large, too fast, and too geographically concentrated – pointing to incidents of mass default in pockets of the country.With an estimated 400 million people lacking access to formal banking services, India is considered one of the world’s largest microfinance markets.

2) Higher Education in the U.S. The Senate Health, Education, Labor and Pensions Committee has initiated a new investigation into federal investment in higher education. Congress last instituted reforms in the for-profit education sector two decades ago, but federal aid to students at for-profit schools has rapidly increased, approaching $24 billion last year – with an additional $36 billion Pell Grant boost approved in March. A report released recently by chairman Senator Tom Harkin found that up to 90% of for-profit schools’ revenue comes from Washington and that for-profit students are graduating with more debt than students at public or private nonprofit universities. With 96% of proprietary students taking out loans, and nearly half of them defaulting, taxpayers foot the bill. At current increasing enrollment and loan rates, there could be $330 billion in defaults in the coming decade. According to some analysts, government money, lightly supervised institutions, unchecked supervising bodies and debt-trapped students all sound similar to the subprime-mortgage collapse.

Are these analysts shrewdly observing the makings of future bubbles, or are they serving more as alarmists who capitalize on today’s climate of fear among the general public? Whatever the answer, we are undoubtedly going to see increasing speculation, and consequently — more industries/sectors coming under fire from global regulatory bodies.

i-Dosing is the new gateway drug.  The trend is a supposedly “legal” and “safe” way to alter one’s consciousness.  These “digital drugs” use “binaural, or two-toned, technology to alter your brain waves and mental state,” producing a “state of ecstasy” for the user.  i-Dosers listen to these atonal tracks while sitting motionless with headphones on.

It may sound benign, but parents, educators and law officials are worried that i-Dosing could be addictive, harmful, and a gateway “drug” to other illegal substances.

i-Dosing tracks like “Gate of Hades” can be found on YouTube and give listeners a free taste for i-Dosing. According to Wired.com, “those who want to get addicted to the ‘drugs’ can purchase tracks that will purportedly bring about the same effects of marijuana, cocaine, opium and peyote. While street drugs rarely come with instruction manuals, potential digital drug users are advised to buy a 40-page guide so that they learn how to properly get high on MP3s.”

As we delve deeper into the inner-workings of the brain, we are uncovering more and more as it relates to addiction.  This emerging society of addiction will also have numerous consequences for the workforce.  Productivity could be greatly affected as people get sidetracked into more appealing pursuits, young unemployed people could become more alienated from the mainstream economy, and the marketing skills needed in organizations will change from the traditional to the more sociopsychological realm.   This is just the tip of the iceberg.

In his book 1984 (published in 1949), George Orwell depicted a future where civilians were subject to the surveillance of a ‘Big Brother’ society. Orwell may have been very prescient with his predictions of the future, but his writings may have actually served as a self-defeating prophecy. In raising public awareness about the possibilities of government surveillance, Orwell may have actually spurred the development of eventual protections and legislation that would limit this sort of dynamic.

Let’s fast forward to today, where we see a fascinating reversal of this principle. Civilians are now leveraging the myriad technologies at their disposal to assume the role of ‘Big Brother.’ In doing so, they often serve as watchdog to government and law enforcement officials.

The issue has come to light recently, due to civilian-taken cell phone video footage of an incident involving a Seattle police officer. That particular footage is the latest in a series of incidents catching public figures in questionable, and at times legally suspect, conduct.

This is somewhat related to the trend of civilian as “reporter” (e.g., when civilians using mobile devices are best able to report on and give alert to crimes, riots, natural disasters, etc.). However, civilian as “watchdog” may truly shift the balance of perceived power in society. Few things are left to “he said – she said” anymore — particularly in developed societies, as almost everything is technologically captured from someone’s vantage point. This will undoubtedly have profound implications for the increased monitoring and accountability of elected public officials, law enforcement officers and other public servants — including teachers.

A few months back, we introduced the Transposition of East & West as a pervasive trend in which there is a two-way influence of not only traditional Western values, traits, and characteristics on Eastern cultures (via “Westernization,” or “Americanization”) – but traditionally Eastern values, traits, and characteristics on Western cultures to an extent perhaps unforeseen in recent times. Eastern cultures traditionally perceived as more conservative are opening up, while Western cultures traditionally viewed as more progressive are becoming more restrictive.

The concept of government-backed web censorship is usually associated with nations where human rights and freedom of speech are routinely curtailed. However, if plans for a mandatory Internet filter go ahead, Australia may soon become the first Western democracy to join the ranks of Iran, China and a handful of other nations where access to the Internet (or at least part of the Internet) is restricted by the state.

As could be expected, the push for this Internet reform is being met with resistance from several groups in Australia. What will this all mean for the future of Internet expression in other countries previously viewed as “Western” and impenetrable to the forces of filtering/censorship? Does this signal a longer-term shift in Australian thinking, or is this merely an anomaly borne of the current political climate?

In previous posts, we talked about the eight distinct growth areas of the emerging Metaspace economy. One of these growth areas is design space (See our past blog post about design space here). We continue to scan interesting sites and blogs for emerging design applications that fit with not only the growing design imperative…but also with important marketplace trends.

Currently, and for the first time in history, more than half the world’s population lives in cities. This is a tremendous milestone with myriad long-term consequences. Urban planning, civil engineering, and architecture are among the disciplines that will be most profoundly impacted by the urbanization explosion. As the world becomes more urban, it inherently becomes more “vertical.” We often talk about the bourgeoning development of vertical farming as a future engine of both economic and environmental sustainability in dense urban centers. However, intriguing new design applications are also emerging that could one day redefine what it means to “live” vertically.

The longstanding norm of linear apartments stacked perfectly on top of one another in linear structures may soon be complemented by an entirely new paradigm. Those who desire urban living, but lament the forfeiture of many of the benefits of suburban/rural living may soon enjoy “stacked houses”. Could these types of designs ever take hold in a major urban metropolis? Surely, they would command a premium — not just for square footage, but also for cost of construction. However, this is a great example of cutting-edge engineering with an eye toward both the current design imperative and the global trend toward “vertical.”

Urban Chinese society is also undergoing changes, as the rituals of courtship, and traditional definitions of family, are challenged.  Rapid modernization has led the country to undergo enormous changes.  Sex ratios are becoming skewed in much of the world thanks in part to a growing global imbalance of male-to-female ratios.  It is estimated that by 2020 there will be approximately 300 million more men than women in the world.

China has seen an increase in the number of bachelors because there are not enough women for their men to marry.  Currently, there are 120 boys born for every 100 girls, an imbalance reinforced by the one-child policy and a cultural preference for sons.  The normal male/female rate at birth is 105 males for every 100 females.  Gender imbalances will have a profound impact on everything from family to education to the economy. Because of the disproportionate number of men in China, this may also create an upsurge of problems related to the trafficking of women, forced marriages, prostitution and surrogate motherhood.

India’s rate is about the same as China’s.  And throughout West and Southeast Asia, the trend is similar—in Vietnam, for example, the rate is now 111/100.

In addition, a surplus of young males competing for scarcer women will almost certainly result in increased violence. In the meantime, there is likely to be a backlash against women working outside the home, as the Chinese males will need to compete for the better jobs in order to attract desirable (or any) women.  Since women have made tremendous strides in the economic advancement of China, it will be interesting to see how this plays out.

By 2020, China will find itself with 30 million more men of marrying age than women. But what else could this imbalance mean?  Here are 4 other hypotheses:

1. A rise in imported mail-order brides

2. An uptick in gay relationships: Homosexuality is not especially well-tolerated in China, but that could change as men — and society — run out of options. Currently, it’s believed that 90 percent of the estimated 25 million gay Chinese men marry women. Some gay couples are even marrying lesbian couples.

3. A real estate bubble: As women become scarce and harder to impress, men may be forced to attract mates with premium real estate.

4. A war to thin out excess men: Chinese officials are clearly worried about the gender imbalance, and if their current propoganda-based efforts to dissuade parents from killing or aborting female offspring don’t work, a war to cull the surplus males is in the realm of possibilities. A surplus of frustrated, low-status males is bound to spell trouble for society. A generation of single, more affluent and independent women will not only change employment demographics, but will also affect family and household formation.

A wealth of emerging data signals a profound shift in our understanding of “contagion.” Traditionally, there are two different paradigms of contagion – On the one hand, researchers have long discussed the concept of contagion from a physiological perspective – someone involuntarily transmits and/or contracts something. On the other hand, marketers are increasingly focused on the social process of “viral” marketing – the means through which consumers consciously and voluntarily virally pass along opinions and attitudes regarding products or services. We now see an emerging hybrid of these two paradigms – an involuntary social contagion developing among people whose interpersonal, psychological and attitudinal characteristics are being passed virally along to others with little or no conscious awareness that it is even happening.

Perhaps most profound is the reality that this social contagion will only increase as social networking and personalized mobile technology continue to become more ubiquitous. The sheer volume of people’s interpersonal connections is increasing by the second; People now have many more surface-level and/or indirect connections than they ever had before. This could be complementing or even replacing the traditional notion of having fewer, but deeper, interpersonal connections. As a result, the average person’s network of “exposure” for social contagion is becoming wider – and connections that lie on the
periphery of that person’s network may still represent a vehicle for social contagion.

Emerging evidence of this dynamic includes the following:
Loneliness can spread among people. People likely catch the loneliness “bug” through negative interactions. An odd look or phrasing by a friend that would not even be noticed by a happy person could be seen as an affront to the lonely, triggering a cycle of negative interactions that cause people to lose friends.

Self-control is contagious. Watching or even thinking about someone with good self-control makes others more likely to show the same restraint, and the opposite is true as well. People tend to mimic the behavior of those around them, and bad habits such as smoking, drug use and obesity tend to spread through social networks. Thinking about someone who exerts self-control by regularly exercising, for example, can make someone more likely to stick with their financial goals, career goals or anything
else that requires self-control.

Blaming mistakes on others is socially contagious. Simply watching someone defer responsibility for their failures to someone else can make a person do the same to protect their own self-image. The result can be detrimental to everyone involved, particularly in the workplace. In organizations where blame is the norm, group members are likely to be less creative and perform poorly.

There is now even evidence surfacing that people exhibit similar physical traits (e.g., obesity) to those people who are as distant as third-degree connections on social networking platforms like Facebook. The implications for this are profound. Regardless of any variables of chance or causality,  the fact that people’s physical traits — and thus the underpinning lifestyles/behaviors — show correlation out to the 3rd degree on ubiquitous platforms like Facebook suggest that social contagion is potentially a very powerful force.

Green concerns have penetrated the global psyche, and people everywhere are increasingly aware because of the multitude of messages geared toward sustainability and conservation.  But, it seems that as people learn more about the environment and climate change, a greater amount of people have turned away from the idea that human activity is responsible for the warming of the planet.

According to a recent New York Times article, climate change in Britain was such a popular priority that in 2008 Parliament enshrined targets for emissions cuts as national law.  But since then, the country has evolved into a home base for a thriving group of climate skeptics who seemed to have convinced many that the threat of warming is vastly exaggerated.

A BBC survey in February found that “only 26 percent of Britons believed that climate change is happening and is now established as largely man-made.”  This is down from 41 percent in November 2009.  Another poll, conducted for the German magazine Der Spiegel found that 42 percent of Germans fearer global warming.  This was down from 62 percent four years earlier.

The lack of enthusiasm about climate change is also true of the United States.  According to a March Gallup poll, 48% of Americans believed that the seriousness of global warming was “generally exaggerated.”  This is up from 41 percent a year ago.

This is just one of many signs that a counter-trend to the green movement is emerging.  For companies and organizations, those who currently see environmentalism as an important social cause, and use it in their cause-related marketing, may increasingly get less traction from this message.  That is because, in the future, the public will expect every organization to be a good environmental citizen, and will look to them to take the lead, making decisions and actions cheaper and easier for members of the public.  At least for now, however, consumers generally expect that companies will accomplish these things without imposing any real burdens on the public.

Two events in early May – the bungled attempt to set off a car bomb in Manhattan’s Times Square and the near catastrophe on Wall Street on May 6 – perfectly illustrate what we told our clients in a white paper eight years ago: they will increasingly exist in what we called “an error/terror world.”  The Times Square fiasco was an almost farcical combination of terror and error.  What might have been a massacre was averted largely because of the incompetence of the perpetrator.  There were also additional errors by the FBI and Emirates Airline.

On the stock exchanges on May 6, something triggered a massive sell-off by mindless software programs.  (A human, by the way, would have seen immediately that the sell orders were inappropriate.)

The combination of hate-driven terrorism and incompetency-fueled errors seems likely to increasingly characterize the world we all live in.  In some ways, as in the Times Square incident, they might counteract each other.  But it would not be wise to count on this too much.  It seems more likely, given current trends, that they will reinforce each other, multiplying the potential harm each can cause.

A major contributing factor is the woefully inadequate attention we have paid to the human/machine interface.  The critical need is to make sure that human judgment is not subordinated to speed and efficiency.  As someone once said, efficiency is doing things right, but effectiveness is doing the right things. As what happened on Wall Street demonstrated, software programs are good at the former but not necessarily the latter.  That is why, for at least the foreseeable future, we will have to keep humans in the loop.

Last summer, WEB authored an important working paper called The Transposition of East & West. Based on some relevant recent happenings, now is a great time to revisit the theme.

Issue Summary:

Currently,  we are seeing a two-way transposition of not only traditional Western values, traits, and characteristics on Eastern cultures (via “Westernization,” or “Americanization”) – but traditionally Eastern values, traits, and characteristics on Western cultures to an extent perhaps unforeseen in recent times. This bilateral shift is happening in profound ways. Indeed, not only is the world’s economic influence shifting, but core values – as they pertain to civil liberties, religion, education, and technology – are also in flux. Eastern cultures traditionally perceived as more conservative are opening up, while Western cultures traditionally viewed as more progressive are becoming more restrictive.

Putting a macro-lens on the economic portion of this theme, a 2008 report by the National Intelligence Council states among several relative certainties that between now and 2025, the unprecedented shift in relative wealth and economic power from West to East will continue. The report also states that the U.S. will remain the most powerful country in the world, but will be less dominant.

Recent Developments:

Updating this paper, we see that even the core Western tenet that is freedom of expression has been somewhat turned on its head with some important recent developments:

• Here in the U.S, there has been much attention given to the blurred issue of free-speech (or potential lack thereof) in the mass media with the recent South Park furor. There is also the recent resurfacing of the free speech issue — specifically within social media — among those serving in the military as it pertains to criticism of the government.

• Abroad, we have seen some surprising developments in the Middle East, where free speech (particularly as it pertains to religion) has often been quite restrictive. Hissa Hilal, a Saudi Arabian woman recently blasted Muslim clerics on live TV on a program called “Million’s Poet” — an Arabic reality TV program similar to “American Idol,” but instead based in expression through poetry. Hilal has obviously become a very polarizing figure from those who either applaud her bravery or criticize her outspokenness. Regardless, this type of issue would have been virtually unheard of in an Arabic country only a few years ago.

Consider Some Implications…

Implications of this theme are manifold. For example, in our original paper we discussed how many of the world’s largest consumer goods firms have begun adopting the process of “trickle-up innovation.” This entails creating entry-level goods for emerging markets and then repackaging them quickly and cheaply for sale in rich nations, where customers are increasingly hungry for bargains. While this concept is not all that new, it should be reemphasized in the context of this theme. Will execs at global companies fight to retain the more ingrained status quo, or will they embrace trickle-up innovation strategies?

Companies and organizations that operate globally will now have to navigate a new landscape when managing cultural norms within the global workforce, with global professionals, and among the global consumer market. Norms, values, and expectations have shifted. The terms “free market,” “civil liberties,” “innovation” and “gender equality” will be among the many that will no longer conjure up stereotypes of governments, populations, corporations or regions. East/West mixes of management, policymakers, board directors, committee members and marketers, designers and product developers will become extremely beneficial if any significant-sized entity wants to remain nimble and viable as it navigates through this transposition.