Future Business Trends: Doomed Industries

Future Business Trends
“If you can look into the seeds of time
And say which grain will grow and which will not,
Speak, then, to me, who neither beg nor fear
Your favors nor your hate.”

After my two posts of earlier this week, (newspaper paywalls and lessons learned from a changing world) I’ve been thinking about how much the world has changed over my lifetime, and future business trends over next forty years.

Change isn’t bad for all companies. I remember visiting a historical park fifteen years ago, and setting eyes on a weigh-scale that had “International Business Machines” prominently displayed on it. IBM has certainly had ups and downs over the past century, but they are still very much a going concern. This is because they have adapted to changing times and have not gotten complacent with their business. IBM’s initial business has long since gone the way of the Do-Do, but not all companies are as nimble. It might be instructive to go through a list of previously great companies that have recently withered and died : Enron, Lehman Brothers, Kodak, Eaton’s, and RIM, currently hanging on by the skin of its teeth. But that’s not what this post is about. This post is about fearlessly predicting which currently-great companies (or industries) may stumble in the future. These predictions will all seem ridiculous now, and I’ll probably be wrong on most, if not all of them, but it’s still a good idea to keep an open mind about a changing world.

 

For what they’re worth, here are my fearless predictions of companies or industries that may have their best days behind them:

  • Coke As the world becomes more aware of the dangers and consequences of diets too rich in sugar, Coke might be one of the companies that feels changing habits and laws the most. Crazy? Though ultimately unsuccessful, New York Mayor Michael Bloomberg thinks its a good idea. In the 60’s and 70’s, similar discussions about curbing smoking were greeted with the same sneer you probably have on your face right now. Yes, I know, Coke has several other products, but they all rely heavily on sugar, and that may turn out to be a very bad thing.
  • Banks This sounds ridiculous at first, especially here in Canada, where our banks are often held up as models of stability. But a comment I heard the other day has stuck with me. Because banking is such an integral part of the economy, it makes sense to have it controlled by the government. Many other too-important-to-leave-to-market-forces parts of our daily lives are run by the government, including education, healthcare, and infrastructure. The more I think about this, the more sense this idea makes. “Basic” banking – deposits, small consumer loans, even mortgages –  would work very well if they were run and controlled by the government. More involved functions like investing and business loans could, and probably should, be left to private enterprise, but I think there is a lot of wisdom in people knowing that their deposits are directly in the hands of the government, as opposed to the hands of private businesses that may fail. Indeed, in many countries, banking is done (or, at least can be done) at the (government controlled) post office.
  • Accounting This one worries me, because I’m taking accounting courses right now, with a view to perhaps changing careers in the future. The thing is, with information so very easily transportable, and with the increasingly widespread adaptation of IFRS accounting standards, I have trouble understanding why accounting isn’t already more outsourced than it is. Thinking about it objectively, it seems to me that accounting, with its increasingly complex software, and its increasingly international standards, is a much better candidate for overseas outsourcing than call centres, which rely on being able to find people who (ideally(!)) can communicate clearly and easily in a foreign tongue. Yet we all know that foreign call centres are very common. What is the difference between communicating with the accounting department in another city, which s very common in larger companies these days) versus communicating with the accounting department on another continent? It would seem to me that it’s easier to move an accounting department than it is to move a factory, and it’s no secret how that’s gone the last three decades.
  • Oil Industry This is heresy, I know. For better or worse, oil and gas extraction have pumped billions upon billions of dollars into the Canadian economy — and the oil sands are really just getting started. I recently read an article that says that oil sands production is set to double by 2022. In terms of jobs, taxes, and pickup truck sales, this has been a great run. But some day, somebody is going to find a practical way to store energy gathered from the wind. Some day, somebody is going to develop a highly-efficient solar panel. Some day… the oil industry will be a thing of the past. It might be 10 years (probably not), 50 years (possibly) or 100 years (most likely) but I firmly believe that some day, taking our energy from the ground will only be read about in history books. Let’s hope the Alberta economy is sufficiently diversified by then!

Well, that’s it for me for now; my crystal ball is getting kind of foggy. How about yours? What future business trends do you foresee? Which companies or industries do you think may be gone, say, twenty to forty years from now? All ideas and comments welcome.

 

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