WHAT DOES MOORE’S LAW MEAN FOR THE REST OF

SOCIETY?

WorldFuture 2014

Rob Bencini, MBA, CEcD

July 13, 2014

Economic Futurist

CONNECTING THE DOTS of trends from all areas

and assessing their impact on the economy

Baseline

• You will hear things in this presentation today that you have never heard before (and may never hear again) regarding the economy. Put it in context for your benefit.

• Some of the economic projections are less than cheery. Don’t regard that as negative. Better to be prepared than blindsided. If there is time I will provide some areas of opportunity that I see.

• URGENT!

P

Abundance

Moore’s Law

Technological Advances Through the Ages

• Tools/Weapons• Metalworking• Wheel• Gunpowder• Shipbuilding• Steam Engine• Radio Waves• Automobile

• Agriculture• Harnessing Fire• Domesticating Animals• Navigation• Printing Press• Electricity• Flight• Computer

TRENDS

• Rise of the Global Economy• Technological Advances Disrupting Old Models• Revolution in Higher Education• Real Estate Woes• Private Sector Aversion to Hiring Full-Time Labor• Rise of the “Proprietor” or “Gig” Economy• Huge Demographic Changes• Urban Migration in the U.S.

CONNECTING THE DOTS

• Evaluate the connection between three different areas:– Higher Education– Generations (Millennials)– Auto Industry

• Nothing (including Moore’s Law) can be viewed in a vacuum. Everything connects.

Higher Education Due for Massive Change

Massive Open Online Courses

• Khan Academy• Udacity (Thrun)• Coursera (100 partners)• EdX• Saylor• iTunes U• Others (13 and counting)

Key Issues Moving Forward

DEGREEor

KNOWLEDGE?

• How does a potential employer ASSESS what she needs? How about the student?

DEMOGRAPHIC CHANGES

• The U.S. is getting:– Older– Browner– More Urban

• Millennials (aka Gen Y or Echo Boomers) will dominate the workplace in ten years.

Millennials

• Born between 1982 and 2000.• Civic-minded, more liberal, not as money-

obsessed, networked, techno-savvy.• Ditching television to watch on other devices.• Not going to movies.• Not getting drivers licenses or buying cars.• Not getting married and having kids.• Not buying homes.• Smartphones and banks and civic groups.

Boomers vs. Millennials

• 10,000 US citizens per day are turning 65 years old.

• 23% of Millennials are unemployed. • 42% of Millennials are underemployed.• 38% of Millennials still live with their parents.

POPULATION MOBILITY

• Since the 2010 U.S. Census, North Carolina has grown by 300,000 people. One half of the population gain has been in two counties: Wake (Raleigh) and Mecklenburg (Charlotte). 50 of the state’s 100 counties have lost population since the census.

World Auto Status

• 2005 65M vehicles produced• 2012 81M vehicles produced• China (13.6M), India (2.1M) and Brazil (2.1M)

represented more than all the growth. • US sales now back up to where they were in

1985.

World Auto Status

• GM now produces more cars in China than in the US.

• China is the world’s largest auto manufacturer and produced 2X the number of cars as the US last year.

World Auto Status

• 5% of Europe’s economy is based on auto manufacturing.

• Due to sluggish sales, Ford closed two plants and GM closed one in Europe this year.

• India: Hindustan Motors, maker of “The Ambassador” auto (since 1957) suspended operations.

Unsold New Cars

Unsold New Cars

US Auto Status

• 19% of all cars sold in the US are made in Mexico.

• GM, Ford, VW, Nissan, Honda, Mazda have built auto plants in Mexico since 2011. Audi coming online in 2016. VW choosing between Mexico and a second plant in Chattanooga.

• Mexican auto workers make $16/day.• Repeating: Millennials aren’t buying cars.

Cost of Driving in the US

• In 2010, there were an estimated 5,419,000 crashes, killing 32,885 and injuring 2,239,000 in the United States.

• In 2010 the cost of medical care and productivity losses associated with motor vehicle crash injuries was nearly $900 billion.

Google Car

Toward a Self-Employed Economy.

Real Estate Woes

• Internet sales growing 3x that of storefront operations (more if gas and cars are left out).

• U.S. has 22 sf of retail space per person. #2 in the world is Sweden, with 3 sf/person.

• The U.S. simply has an overbuilt retail presence.• Industrial. Got any empty space?• Housing. Multi-generations in one. Apartments.

Recap

• We are entering a new economic era – one where rapid changes in technological advances disrupt what we are used to.

• The old rules – the old ways of doing things -will apply less and less. And we don’t know what the new rules will be.

THE ECONOMY HAS CHANGED

• The “Job” paradigm that began with the Industrial Revolution is diminishing.• There is a rapidly rising alternate

“workplace engagement” in lieu of “jobs”.

CONNECTING THE DOTS

• The disconnect between higher education and workplace engagement will threaten the very existence of mediocre private colleges. Tens of thousands of jobs will disappear and campuses closed.

• Millennials (and Gen Z) will become educated in different ways than we were.

CONNECTING THE DOTS

• The auto industry will migrate to China and India (much like the tobacco industry). Urban populations will have fewer personally owned single passenger vehicles. Millennials don’t want cars and are very receptive to ride sharing.

• Except for “job saving” desperation moves (like protecting the tobacco industry), the acceptance of self-driving vehicles will be a personal and societal wonder. Insurance, repair and fuel jobs will disappear en masse.

CONNECTING THE DOTS

• Millennials, saddled with education debt, underemployed and still living with their parents: don’t get married, don’t start a household, delay having children and essentially tread water economically.

• Car? Furniture? Construction?

Moore’s Law

• Alternate term: Technological Deflation• Based on the other factors we just

covered (plus unpayable debt, rising interest rates from pricing in credit risk), economic deflation is a very real possibility.

• Today’s auto loans

CONNECTING THE DOTS

• The confluence of technological deflation and economic deflation may result in a very depressing economic state.

• If the primary workplace attribute of our citizens is the willingness to show up for work, they will join 40 million other Americans competing in the same role.

• With technological and other labor saving efforts, the private sector economy just won’t need them.

• Who are we looking to for “job creation?”

WHAT’S A MOTHER TO DO?

• The, U.S. Government, armed with this foresight, must incentivize the private sector to keep people on the payroll – even as they are not needed.

• For those that are still not employed, WPA or CCC “good deeds” work on behalf of the government will provide food, shelter, clothing and health care for the individual and family.

• Don’t even consider doing nothing. The societal situation will be too explosive.

TRANSITION PERIOD AND TIMING

Green Energy

3-D Printers

Baxter

Coding

Jobs of the Future

• Atmospheric Water Harvesters• Sharability Auditors – People who analyze

homes and businesses for sharable assets.• Super Baby Designers• Drone Traffic Optimizers• Avatar Relationship Managers • Bio-Meat Factory Engineers• Hospital and Healthcare Dismantlers

Thank you!

• Contact Information:

• rbencini@earthlink.net• www.robbencini.com• @robbencini• 336.215-1995