Sunday, January 3, 2010

50 Trends for 2010 and Beyond. Predictions from

  1. Global warming shifts focus from CO2 to soot. While it's fairly well agreed that CO2 has a warming effect, the frequency absorption effect diminishes for each marginal quantity. Soot has been recognized as a potentially more pressing problem in many recent articles, including those from NASA, Scientific American, BusinessWeek and U.S. News. Soot has a nasty effect of accelerating thawing of ice & snow, as well as inducing precipitation, thus exposing the underlying darker layers to absorb more heat. I even did my own study from GISTEMP data here, showing a potential for soot as a warming accelerator. Perhaps COP16 should be about soot & particulate reduction? Nice health care kicker.
  2. Major GMO crop blights. Some GMO crops will experience catastrophic disease, pest and weed infestations due to lack of genetic diversity. In case you're wondering, in the U.S., GMO accounts for upwards of 90% of soy, 60% of cotton, and 50% of corn. This will send shock-waves through the food-chain, and an enormous backlash against GMO products and companies who produce them.
  3. Continued crop yield downside due to global warming. Not only does warming displace and change weather & precipitation patterns, but it also begins the mountain snow melt earlier in the year than it should, delivering less melt-water in the Spring than expected.
  4. Rare-Earth Elements (REEs) crisis. REEs are used in many interesting products from iPhones to electric motors & generators to catalytic converters. A Toyota Prius has 16kg of REEs. Unfortunately, REE mines are concentrated in China, and they're clamping down on exports. REEs are also the "dirty secret" of clean and other technologies as mining them has some potentially awful externalities such as pollution and radiation. Anywhere they exist and are mined, expect export controls, politics, and hedge funds to play. Small dislocations in politically undiversified REE markets mean huge side effects, and soon at that.
  5. Designer babies will become mainstream. The range of genetic screening tests will increase while the costs of screening will decrease, to the point that designer IVF and prenatal screening will become mainstream. Based on desires of parents to have competitive and healthy children, designer baby screening will be compelling if not feel necessary to parents who can afford it. It may well be incentivized by the health care industry.
  6. Postnatal genetic screening: first incentivized, then mandatory. Genetic screening will similarly be applied after birth, ostensibly to catch potential problems early. At first it will be optional and incentivized. Ultimately, it will be mandatory as a way to holistically "drive down health care costs".
  7. Dating sites will pick up on the genetic screening craze. Have your DNA associated with your dating profile. Potential mates will have far more search criteria to work with.
  8. Online medical records will enable huge wave of discoveries and innovations. A vast reserve of (potentially anonymized) data is a fertile ground of new and more accurate studies. The more normalized and complete the data is, the greater the innovation. Expect a big push for various interests to get wedged in between the data and its consumers. Such "brokering" will likely restrict innovation and tend to favor bigger money and political interests. Without such impediments, new innovations would potentially reduce health care costs by a significant amount and stoke a life sciences boom.
  9. A fat reduction pill will be discovered. Health effects will likely be devastating as people will then continue to do more of what's bad for them without the aesthetic ramifications.
  10. Out with fission, in fusion. I've had a number of researchers tell me that the viability of fusion is a matter of financing more than time. A fusion startup, General Fusion, was already funded a couple years ago with a 5-year horizon. 12-year radiation half life, what's not to like. The edge goes to the country that attracts the most talent and puts in the most financing.
  11. The mutual and hedge fund industry will lose ground to online money managers. A new model of online site (like kaChing) lets money managers with good picks and research float to the top, and you can actively mirror their portfolio in your account. Money managers who are really good can go virtual and use the scalability and network effect to their advantage. The added transparency, real-time reporting and research, and potential interaction between clients and their money managers is very attractive. Additionally, the online model will be supplemented with a trend towards 3rd parties who provide services between clients and money managers, such as rotating between managers as macro climates change, fund-of-fund style management, performance tracking, etc. Add in that an API will allow for algorithmic trading, and things get really interesting.
  12. The room-mate lifestyle will become the norm in countries with over-leveraged housing markets, across all ages. In the U.S. for example, all the inefficiencies have been exploited: the 10-year treasury went from yielding 16% in 1981 to less than 4% today, down-payments went from 20% to negative (cash-out), ARMs, liars loans, you name it. Real estate is tapped. In the age of austerity, the only thing left to do is to have multiple parties per home & apartment. The room-mate lifestyle is in, and will be socially acceptable. The upside is that this will lessen depression and isolation which has swept modern societies. Look to strategic room-mating as a way to reduce the need for other services such as day-care, and to reduce ownership of automobiles and other expenses. Some web2.0 usage will go down as attention spans swing back to dealing with real relationships.
  13. Flight from the suburbs, into the cities. Public transportation will be increasingly important. Austerity will also drive a trend to go car-less and seek densities within walking distances.
  14. 3D computer desktops and multi-media will be dominate trends for the next 10 years. If you've seen the recent movie Avatar in 3D, you'll have a good idea just how amazing 3D is. That experience will be popularized for consumer video in the home and will drive a refresh of consumer equipment which is not 3D capable. However, there is also an incredible amount of innovation yet to come in the computer desktop, which already has some 3D effects mapped to the 2D monitor. New ways of visualizing windows and content, and manipulating them will dominate desktop innovation for the next decade.
  15. Prostitution will go on-line. The age of the e-hooker is near. 3D consumer equipment supplemented by tactile feedback input-output devices will enable more than just the adult film industry; it will enable sexual services. Once again, the adult industry will drive technology trends. E-prostitutes may be real "service providers" or computer programs, confusing the matter of regulation and morality even further.
  16. Social prizes (Nobel, Emmy, Academy, etc) will be increasingly given to political & popular figures in attempts to influence their future actions and make populist statements. Look for the next Nobel prize to be targeted somewhere in what used to be called the "axis of evil". Similarly, awards will be given for films, songs and actors who portray and expose populist themes.
  17. Growth and innovation will trend in countries with favorable Intellectual Property environments. An IP environment in which there is unlimited financial exposure to IP litigation does not favor small companies, because there is unlimited risk. It is nearly impossible to do proper diligence (say at $50+k per patent) of each idea that a complex technology product uses. The cost of such diligence could far outweigh a given startup's total financing. Lack of transparency of U.S. patents (the 18-month window before a patent app is published, 12-month window from provisional to regular patent filing, and the first-to-invent opaqueness) translate to an incredible risk for small and innovative companies. Small companies are the engine of job growth and innovation. Thus, this growth and innovation will be stymied in IP unfriendly regions and flourish in IP friendly regions. A balanced and sensible patent system might look something like as follows, which let's a small company have known infringement downside costs and still stay competitive if it is innovative. Note that the IP owner is incentivized to strike licensing deals instead of file law suits as follows:
    1. First to file gets patent rights.
    2. Applications are published immediately.
    3. Infringement pay outs never total more than 20% of related revenue.
    4. Multiple infringement claims vie for a weighted piece of the 20% pie (each new claim reduces the pay outs of the others).
    5. Infringement claims only go back to the initial date of the litigation.
  18. "Organic Gate". Crowd-sourced testing of organic products will reveal a substantial amount of fraud and heighten awareness of how lax the organic standards are. Commoditized testing will enable crowd-sourcing and extensive databases.
  19. A Cloud Computing marketplace will be the next exchange boom. The enabler will be standardized inter-modal data transport ("FedEx net") which will allow tapes/disks to rapidly transfer huge data sets between sites without tapping network bandwidth. Expect an ecosystems of arbitrageurs, futures, derivatives and market makers to materialize. There will be many specialty cloud providers offering unique angles such as "carbon neutral datacenters", scientific computing centric, render farms (for movie animations and gaming), analytic databases, and more.
  20. The next Pixar-class animation studio startup will use the cloud marketplace instead of owning it's own render farm.
  21. The cure for a number of types of cancer and other maladies will come from the cloud marketplace. Genetic, drug discovery and other life science startups will use the cloud marketplace, followed by established players.
  22. Deep video & audio search based on captioning and voice recognition. You will search for keywords, possibly refine by media source, and link directly to a scene in a video or time-frame in audio where the text appears. This will make searching media far more powerful, and will open up new advertising and search revenue opportunities.
  23. A global tip-jar based news and media payment system will emerge. Too many one-off accounts and payment sytems are untenable for consumers. A micro-payment based tip-jar system will allow consumers to sponsor various content, potentially anonymize the consumer's identity, and fast forward through video pre-roll and interstitial adverts on-demand. Once popularized, blogging will become a very viable profession for a broader group of bloggers, as tipping will be viable & simplified for free articles as well.
  24. What will push big companies to use cloud computing is overcapacity mitigation. Over-planning is necessary for private data centers, generally by a 2x normal load factor, to handle load spikes and future growth. Allowing marginal loads to spill over to public clouds during high demand periods means avoidance/delay of building new datacenter capacity (which is very expensive). Once this trend becomes more commonplace, it will be exploited for energy cost optimizations (using cheaper electricity rates in different areas or time-zones). Ultimately, companies who do not do this will not be as cost competitive.
  25. Fault tolerance of data center software will become mainstream. Fault tolerance for virtualization will become commoditized and will drive a trend for increasingly cheaper hardware. Error detection will remain important, but error correction and redundancies (like dual power supplies) will be irrelevant & unnecessary.
  26. Pay to enable hardware features will become popular. Processors, hard drives, smart phones and other techie equipment have become more powerful than is generally required. To cut costs of producing many SKUs and to motivate up-sells, pay-to-enable hardware will prevail. Want to enable another 2 processor cores, or another terabyte of disk, or enable 3D video on your smart phone -- pay up.
  27. The dirty side of Green will receive more press. The sustainability movement talks about reducing externalities. But nitrogen trifluoride (NF3) is created in the manufacturing of thin-film photovoltaic cells and its 17,000 times more potent at global warming than carbon. As mentioned previously, rare-earth mining has some nasty toxic and radioactive externalities as well as large political risks. We'll here many more aspects of the dirty side of green. These inconvenient truths will be used along with Climate Gate as fodder against clean technology. The clean technology side will botch this debate.
  28. Thin computing will rule. Devices which act as a remote display and input/output but harbor no data or real computing capability will be very popular. They can be extremely cheap (slim bill of materials), are great for security because the data does not exist on the device, can't be searched at the airport, and are much more data compliance friendly. Thin computing devices will enable the modernization of education in developing nations due to their low unit and IT costs (centralized management) and are interesting for home users who want a tablet like device but don't want to deal with data syncing issues between their laptops and PC.
  29. Cloud computing security will be the new anti-virus.
  30. E-book readers will converge with tablet computers. And will be used heavily for news and netbook like uses. They should also act as a bigger screen for your smart phone.
  31. Pushback against RFID on personal items. Apparently Las Vegas casinos have very advanced RFID sensing technologies to identify customers and prevent fraud. And to know what drink to comp you with. For the rest of the world, people will push back hard on RFID embedded in things they commonly carry on their person. If there was one last bit of privacy left in the World, it goes out the door with RFID.
  32. Air filtration will become popular in the home & office. With rising awareness of soot's health issues, and sizable growth in emerging economies, air filtration will enjoy significant growth. Offices and homes should be fitted with high-tech filtration systems which filter ultra-small particles, first as a differentiator and then as a necessity to stay competitive.
  33. Data centers will go subterranean. Under ground is always cool and as computing moves to the cloud, more compute will be concentrated into large data centers. These "nerve centers" will be subject to more physical attack risk. Desert locations will ironically be interesting, as free sun energy on top and cooling below make a good combination. Similarly, locations near oceans (wave energy) will be interesting.
  34. Every form of governmental fee will increase in the US. None of these increases will be included in the cost of living benchmarks. Parking tickets and moving violations will sky rocket.
  35. Populist sites will arise to punish stocks of corporations, banks, and politicians who are not aligned with the people. Think, the Huffington Post's "Move Your Money" on steroids.
  36. Defined benefit pension plans will die. They have to, as many pension plans are broken in future terms. That's what happens to Ponzi Schemes, they don't last forever.
  37. The retirement age for Social Security will become floating and be keyed to demographics & average life expectancy. This won't totally fix things, until retirement is keyed to when you have enough money stored to stop working.
  38. The Federal Reserve will pay an increasing interest rate on deposits. It has to entice depositors (banks) from withdrawing their deposits and dumping the dollars into the economy (inflation). The interest rate will need to be continually bumped up to stave off an inflationary death spiral, because if inflation exceeds the interest rate, banks will yank their money out and do something else with it.
  39. Commodity speculation will meet controls to prevent "melt-ups" as nearly all commodities reach peak production. As soon as its known that a given commodity has reached a peak status, speculation and contango are nearly guaranteed to make money outside of short-term gyrations. Yet they add no real value and boost prices. Controls will be applied. One such example is to disallow buying and selling of commodity and futures except to real producers and consumers of the commodity. This will be circumvented one way or the other. Already, hedge funds own a lot of farm land.
  40. ARM loans will dominate now that Freddie Mac / Fannie Mae have a blank check. Given an increasing interest rate environment, this will be another attempt at bailing out the housing market, ostensibly predicated on rates which will increase later "when the housing market returns to normal". This will prove to be a bail out for housing sellers, a sucker punch for housing buyers (a purchase price lift followed by a slump), and a form of bail-out meets indirect quantitative easing as the government sponsored entities crowd out the mortgage market and effectively set mortgage rates.
  41. Upon another economic leg down, gold will surge first, then commodities. Commodities will outlast. Gold is a call option on credit and fiat currency instabilities with a strike price somewhat above $0 (it's intrinsic value) and an expiration of the time that commodity stockpiles stop being plentiful and people need to start trading/bartering. With peak everything in site, the last part is worrisome about gold. Gold is under-owned by many countries who produce valuable things that other countries need. When the crap hits the fan, countries who have something with tangible value will want something else of tangible value in return. At that point, you'd be better off owning copper, steel, wheat, cotton etc. Before that point, the premium in gold will likely sky rocket while the commodities take a dive following economic activity.
  42. Reserve nations, not reserve currencies. A cascade of nations will eliminate derivatives, use of leverage and deficit spending. Money will flow into those nations as safe havens as fiscal sustainability will be the new reserve currency. Elimination of the fractional reserve system will also boost a nation's status. If these nations are smart, they'll buy up and stockpile commodities.
  43. Some American influential states (also the ones in the most debt/trouble) will negotiate back-room bailouts and special deals. This will create tension which will evolve into inter-state protectionism in terms of commerce, taxes, power and water distribution, etc. This will not end pretty.
  44. Incomes will continue to decline in over-extended economies. As the real estate markets correct and the room-mate society progresses, some areas will begin to be cost effective again by way of lower salaries necessary for employees to support the cost of living. This will not be good news for the auto industry or big appliances which can be shared when people double up in apartments/homes.
  45. Many derivatives will be voided out. Once a few parties walk away from derivatives contracts, a cascade of parties will do the same. A quadrillion of notional derivatives will vanish.
  46. Web-services-wide transactional engine will be the new Oracle. Whereas the focus was on transactional processing within a database engine, the new frontier is orchestrating transactionality across a disparate set of web services.
  47. A new VC or startup funding model using many small non-accredited sums will emerge. It will use the collective (crowd-sourced) power of participants to do diligence, finance, and valuate startups. Many participants will also find interesting work this way.
  48. ARM Holdings will rise to become interesting in the server market. Thus far it has focused highly on power efficient chips for small devices. However, it has pulled out the stops to create a high performance server design. Server software design is moving to higher level languages where underlying architecture (traditionally x86) is less relevant. Even on consumer devices, ARM based netbook designs are coming with an Android OS. Ultimately, compute per watt and per dollar will reign. And that's where ARM lives.
  49. Death of the monolithic consumer OS, rise of the "swarm OS". Software components/applications of the new order of OS will pop out of your notebook and onto your car's in-dash GPS system. Or snap to a server somewhere on the cloud to keep running while you power the device down. Or snap to your TV. Etc. Ultimately, you can re-convene all the software on your desktop. Think application Legos meets a swarm of bees. Flexibility and mobility are the future. Monolithic is last decade.
  50. The value of vision will rule. MBA skills will be thought of as commodity. The Stone Age lasted about 2 million years, the Bronze Age about 2000 years. Twitter is 2.5 years old. The accelerating rate-of-change of technology will continue. The margin of time for jumping on markets after they have materialized is gone. The ability to be fast followers has mostly vanished. When a technology generation lasted 10 years, you could spare 2 years to wait. Now markets have to co-materialize with the enabling technology. In a number of cases, multiple technology and startup plays have to co-materialize together. This is not your father's startup/innovation environment. Going forward, visionary skills reign supreme. Most VC firms will perish without them. Ditto for companies of all sizes. There will be a CVO (Chief Visionary Officer) role, and they'll be more revered and better paid than any other position.
Disclosure: related IP, no positions

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