The Shift Age

By Ilene Denton April 30, 2009

 David Houle is a former media executive (MTV, Nickelodeon, VH1, CNN Headline News) who advises CEOs on “forward-thinking growth strategies” that can prepare them to take advantage of developing trends. (Houle, who splits his time between Sarasota and Chicago, has a longtime local connection. His late father was born in Sarasota in 1913, and after a career as a professor at the University of Chicago, he returned here to retire in 1987.) Houle recently published his first book, The Shift Age.

“In the last several months, CEOs tell me they’re all worried about the economy, and small business owners even more so because for them it may be a matter of survival,” Houle told us. “I have a different view of what’s going on than the talking heads on CNBC; I am a futurist.” Houle likens this decade to the disruptive 1970s, with its stagflation and the high cost of energy that led to the Information Age of the 1980s. “Each time we transition to a new age there’s disruption,” he says. “The Great Recession of 2008-2010 is the painful economic part of this transition to The Shift Age, which is nothing less than the global stage of human evolution. And 2006-2011—the five-year period right now in which we’re between ages—isn’t a depression, it is reorganization.”

Q. We’ve been hearing about the global marketplace for some time. Is that what you mean by this global stage of human evolution? No. Most people equate globalism with the global economy. When you have 6.8 billion people on the planet and this accelerated electronic connectivity, you are creating a global culture. If you go to a Best Buy in Sarasota, you’ll see 20 feet of shelf space devoted to world music that wasn’t there 10 years ago. Or go to YouTube. You might see a video from Sarasota, another from Rio de Janeiro, one from Mumbai and another from Shanghai, all on the same page. Our consciousness is changing. Go back to last May and the earthquake in China. If you went online, you lived with the trauma of those parents waiting for one child to come out of those collapsed buildings. Ten years ago it would have been on page 16 of the Sarasota Herald-Tribune. Hurricane Katrina was like that, too. There is a global consciousness now.

Q. What future trends do you see? Thomas Friedman [New York Times columnist and Pulitzer Prize-winning author] is right on. Renewable energy is the greatest opportunity of our age. Between 2010 and 2015 the cost of wind and solar will come close to petroleum and coal. There are people working on taking CO2 and converting it into energy. Once that happens, that will be the Holy Grail.

The second greatest transformational event will be in medicine and health. By 2010, for $1,000, a mother, before her baby comes home from the hospital, can get her baby’s entire genetic code mapped. The parents can tell if that baby is going to have a genetic propensity for asthma or for Parkinson’s. If you know that, where are you going to live? Where are you going to put your money, your charitable giving? It’s going to make the entire healthcare industry about preventative care. If you have a genetic tendency for heart disease, you’ll need to eat a low-fat diet and exercise three times a week if you want insurance. In 10 years, your 27-year-old daughter might come home and say, “I think I met the guy.” And you might ask, “But have you seen his genetic mapping?” There will be an incredible amount of moral dilemma. Do genetics trump love?

The third transformation event will be a formalization of the global stage of finance. Between 2010 and 2020, we will see a global version of Bernanke [the Federal Reserve chairman], of the U.S. money supply and a form of global government.

Q. How will the workplace change? It will be much more collaborative. Think about your 17-year-old on Facebook. Teens interact and go out in groups. They have a group consciousness. Right now a third of our workplace does collaborative interaction. That’s going to go up as millennials and digital natives [kids under 15] get into the workplace. A 12-year-old doesn’t talk about multitasking, because they were born doing it.

Q. Our region is predominantly small business. What do small business owners need to understand about this uncertain economy? The first thing they need to know is this recession is going to last a couple of years. We’re not going to get out until 2010, [although] some businesses will get out sooner. But coming out of it won’t mean we’ll be going back to the boom years.

Q. What can they do to survive? Consumer spending has collapsed. Thrift is the new cool. For small business owners, it’s incredibly important to deepen the relationships you have with existing customers. Intensify that relationship with technology; ask them, “May I get your e-mail address?” “Would you like me to text message you with specials?” If you’re a fine dining restaurant, for example, and it’s Friday, and you’re looking at your Saturday reservation book and it’s empty, send out a special “tomorrow night only specials” text message. Having a connectivity through these new forms of technology is even more important in down times.

Q. So resourcefulness is vital? You need to see the opportunity rather than see the negativity. What is it you can provide that your competition can’t? Maybe it’s some kind of barter; if people don’t want to pay cash, they still need services—if you’re a restaurant and you need plumbing, for example. For anyone in the used or recycling business it’s a good time, because [recycling] goes from being green to being economical.

There’s a quote that opens my book: “We should be the parents of our future rather than the offspring of our past.” Everybody can tell you how they did last year, but it doesn’t matter, it’s your future that matters. Tell yourself, “Tomorrow I’m going to be the CEO of my future.” Small businesspeople live and die by how they approach their businesses—whether you think you can or can’t, you’re right. Face the future and look for opportunity rather than look backwards and see how down you are.

Q. Give us some examples. One dynamic at play in the business world is the unbundling of capital assets. In 2006, [Amazon CEO] Jeff Bezos started renting out his company’s excess [computer data storage] capacity to smaller companies. Ten thousand of them signed on. I know of a screw manufacturing company that recalibrated some of its machines so that another noncompeting company could come in and use them for a fee.

Q. How could our local businesses try this? Be resourceful and think outside your normal transactional model. What assets do you have—excess computer capacity, excess storage space, excess transportation—that other, totally different businesses can use? Do you have hard assets that you’ve already spent money on? Is there a way to create a revenue stream? Maybe you’re a restaurant with excess kitchen capacity because business is down, for example. Maybe you find a caterer to use the kitchen.

Small business owners should carry much less inventory than they used to, [and make] inventory relative to sales—if a restaurant isn’t selling something, don’t carry it on the menu. And don’t think about raising prices over the next year; the percentage you increase prices is related to the percentage of business you will lose.

Create perceptions of value. Value, however, is sometimes other than price; it’s any kind of service business where the value proposition is, “I’ll do it so you won’t have to spend the time doing it yourself.”

Q. Everyone here is talking about economic development—that we have to get away from tourism and real estate. What types of industries do you think will be our future in Southwest Florida? The development of intellectual property around new technologies with a focus on alternative energy and renewable energy. That will be the single greatest wealth creator in the history of humanity—the wealth of The Shift Age. The new entrepreneurs will be the people who come up with intellectual property behind technology and innovation. It’s not manufacturing, it’s not development. [To that end] Ringling College and New College are more important to this region than any more real estate developers.

Q. What types of businesses would you avoid? If Sarasota wants to succeed, its focus should not be on real estate development of any sort. We need to get through the [current] inventory of residential real estate and not build any more retail. All that new stuff going up near the Interstate and

University Parkway
is greed gone amok.

Q. Do you see a slowdown in population growth as a problem for Florida? I can’t imagine why it would be. The only reason is greedy real estate developers wanting people to move in and buy their property.

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