Money Trends for 2007 and Beyond
Greg Balanko-Dickson has challenged me to work on the financial section of the Trends Map. Greg, I accept your challenge.
So what’s this all about?
A couple of days ago I published a link to a very interesting Trends Map by some futurist forecasting folks. I added my comments about the financial section of that map.
Greg then came along and offered his own comments and suggested he would try to have a go at revising the Map. He asked if I would do the financial section of the Trends Map. I took him up on the challenge.
After studying the map and trying my hand at it, I finally came to the realization that a different format was needed. My version of the financial trends is laid out here: Money Trends 2007 (PDF).
Several things are different in the approach I’ve taken.
First of all, I like to see trends laid out individually, with each topic its own page. A trend is easier to comprehend when you have less information on a page. Besides, people tend to analyze one particular topic at a time, not everything all at once. So it also makes sense to look just at the trends for one topic at a time, and not try to digest them all at once.
Second, I think of trends on a time continuum. Trends — the major trends that are covered in a document like this — take hold and grow over time. And typically one behavior or trend is declining while another is growing, and so it’s important to see both happening at the same time. That’s why I presented the money trends along a time continuum, starting in 2007.
Third, the time horizon needs to be lengthened. When we are looking at trends of this magnitude, it takes years –sometimes decades — for trends to fully unfold and evolve. So, rather than looking just at 2007, I’ve looked ahead 20 years or more.
Finally, I called this document Money Trends, because that’s really what it is about: money. I have not tried to cover all aspects of all financial trends — that’s simply too big a topic.
Let me know what you think.
Lead Blogger for ReachLocal
President Of Hawkeye Management
Great job Anita, I do not understand some of the terminology, specifically, could help my small brain understand what Stored Value cards and Contactless payment systems are?
I understand what you mean by keeping one page per type of chart and I am really curious to overlay my demographic trend chart in the background to see what may correlate.
I will be in touch.
I like this version better than the subway map version, but it still seems flawed to me.
The subway map version drives me nuts because, though it’s pretty, it doesn’t give any indication of it’s own logic. Why do the bends occur where they do? On a subway it’s generally pretty obvious that geography rules the route. What force is causing these pipes to bend? And what does it mean, for example, when the “Medicine and Well Being” pipe crosses three times over the “River of Consciousness”? Inscrutable.
Your version is cleaner and easier to grasp at first glance. However, there is still no sense of scale. The space (time?) between use of debit cards and PayPal is similar to the space/time between death of coins and death of paper bills. But how much time is that? Or is the scale something other than time? It’s probably not possible on a casual chart like this, but it’d be so nice to see the individual data points (or at least some sort of aggregated version) represented by a sparkline or something.
Fun to think about though!
Hi Greg,
Yes, I spent so much time on the form of the trend map, that I did not focus on the substance.
Stored value cards are essentially gift cards, prepaid phone cards, prepaid credit cards, and similar types of cards that you purchase. Stored value cards have a fixed value — some are replenish-able, but most are discarded after the value is used up. The significance of stored value cards is that they get us closer to electronic transactions, and away from using cash or checks.
Contactless payment systems are simply credit cards or sometimes key fobs or other gizmos that have an embedded RFID (radio frequency identification) chip in them to record the payment. Several systems are on the market in the U.S.: Mobil SpeedPass, Mastercard PayPass, Blink credit card, and so on. With such systems you simply wave the card or key fob in front of the reader, or tap it on the reader, and the payment is transacted. The significance of contactless payment systems is that such systems speed up transactions. Again, it takes us closer to exclusively using electronic currency.
In essence, it is the inexorable march toward 100% electronic transactions that someday (not this year, but way far in the future) we will get to.
Again, I limited my trends map simply to money. I do not attempt to cover all aspects of finances, such as stock markets, commodities, banking systems, currency markets, etc. Those topics would require separate treatment.
Besides, in reality, most small business owners are going to be interested in the money and payment systems, because it affects how they accept payment from their customers, how they invoice and pay for supplies and services, etc. Thoee changes are being seen and felt now, even though 100% shifts will not be complete for many years to come.
Anita
Hi Bren,
Yes, you’ve hit on a good point. Time scale is hard to show — even harder to predict.
Add to that the fact that I used fairly imprecise tools to draw my map — it’s a Word document. Not the best tool for drawing graphs and maps, I know. It is hard to place things exactly where you want them. The only advantage to using Word is that it is quick and dirty.
If I could predict better the future timing for some of these trends, then I agree a sparkline or similar concise chart would be very useful.
Anita
[...] Challenging Business Environment Ahead December 23rd, 2006 by gregbd Tags:Business Owners Only Business Owners Professional Development Entrepreneur Human Resources ManagementI commented on Anita’s blog that her post titled, “Comprehensive 2007 Trend Map” analysis was interesting and yet I could not fully understand what she was saying and so Anita accepted my challenge by creating her own “Money Trends for 2007 and Beyond” chart which shows some interesting trends. As promised, here is my contribution to the conversation Anita. When I look at my chart and your chart together I see something interesting correlations. Observations On Anita’s “Money Trends” Chart As I look at Anita’s trend chart I see interesting correlations between the rise of virtual currencies, death of coins, and paper currencies with the rise in the number of Echo Boomers. Business owners and entrepreneurs better wake up and smell the coffee. Understanding Demographics and Generational Differences Times have changed and the youth of today do not think like you would expect. Check out Gen Y: These Young People Know What They Want and make sure to check out what Jeff Cornwall says in a great post that contrasts the Baby Boomers and Echo Boomers (baby boomers kids) expectations, values, and ethics. VIA Generational Differences in Expectations Of The Workplace Schwarzkopf Generation, 11.5 million Schwarzkopf Generation (born before 1946) The youngest of this group turned 60 in 2006. Many do not have computers and never will, as my own Mother says “I do not have enough time, I do not know if I would use it.” no matter how much I tell her how easy it is to use, she has no interest. For those that do have a computer, having Internet access is ‘nice’ but not something they would miss. They do not use IM and opening and sending attachments in an email can represent a significant challenge for them. They get their news from newspapers, radio, and TV. Baby Boomers, 61.5 million Baby Boomers (1940-1964) The single largest demographic segment (age 43-67 in 2007) were not first to come online but they have quickly adopted the internet to help them find health, financial, and participate in online support groups. They see Instant Messaging (IM) as a distraction and do not really like to use it and prefer sending and receiving email. Generation X, 43.5 million Generation X (born 1965-1977) Age 27 – 41 in 2005 and are the generation that has lived in the shadow of Baby Boomers. Some have called them the ‘sandwich generation’ as they are sandwiched between the Baby Boomers and Generation Y. They are web savvy, mobile, and have the entrepreneurial bug just like the Echo Boomers (baby boomers children). Sometimes criticized as ‘slackers’, they nevertheless were widely credited with a new growth of entrepreneurship and the resulting dot-com boom. Generation Y (aka. Echo Boomers), 31.5 million Generation Y or Echo Boomers (born 1978-1989) Age 17 – 29 in 2005, this is the generation that has never known life without a persistent internet connection or a life without computers. They love Instant Messaging (IM) and manage a large list of friends via instant messaging. IM was their first social application. Many have been instrumental in innovating Web 2.0 with social applications and tools. This is the ‘Post and Share’ or IM generation and they prefer to get their news from their friends or a trusted source online. They spend 62% of their time reading, listening, and watching user generated content from their friends and trusted sources. Traditional media is dead to this ‘E’ Generation. In The Secret To Recruiting Echo Boomers I document that this net-generation is curious, intelligent, focused, willing to adapt to change, self reliant and confident. They are ready to pursue their dreams via entrepreneurial pursuits. Source: some information from the ‘Who’s Who in the Workforce’. Planning ahead is key to coping with this large change in demographics that will take place over the next decade. Potential Business Issues From my viewpoint the issues for business owners are many. Create a HR Contingency Plan to Keep the Employees You Already Have The brutal reality is that you will need to keep Baby Boomers working longer due to the small number of younger workers. This would also increase the cost of your health care insurance benefits as insurers adjust for the increased costs of providing older workers with full health benefits. Plan for Increased Payroll Costs There is no doubt that one of the major strategies will be to keep baby boomers working as long as possible. Experienced workers tend to get higher salaries than their younger counterparts. Who Will Buy You Out? When you do decide that it is time to exit the business the shortage of skilled and experienced employees who have the necessary skills, experience, and financial potential to buy you out. Lower Net Return When You Do Sell If these trends turn out as expected there will be a lot fewer potential buyers for your business, which could drive down the amount you would get for your business. If you are like many business owners, most of your net worth will be tied up in your business. So you will want to be very conservative in your estimate of how cash you will get from selling the business. Notes About My “Significant Workforce Shortage Looms” Chart The chart in my version is not scientific but represents the general trend and changes in the working population. In late 2004 and early 2005 I was researching my first book and created a chart that illustrated trends related to Baby Boom, Generation X, and Echo Boomer population in North America. My chart shows a real shortage of available younger workers occurring between 2008 – 2020 as a result of low birth rate among Generation X (current age 21-43) and we do not see Echo Boomers (current age 17-29) in significant numbers until around the year 2015 which will create various issues for you to deal with. Share and Enjoy:These icons link to social bookmarking sites where readers can share and discover new web pages. [...]
Anita,
I read this post earlier but could not become clear about EFT and stored value card. For the last few days, I read about Electronic Fund Transfer and Stored Value cards on the net. Now, I understand your map very clearly. You have done a great job Anita; THUMBS UP!!! You have focused a lot on Internet. In a country like USA, where hundreds and thousands of people are now using internet, it is natural that more and more business operations are going to be performed through internet by credit card, electronic fund transfer and other process.