Futurist and trend spotter Magnus Lindkvist sees trends everywhere he looks. Forces shaping the future include an entrepreneurship boom sweeping the world, mega corporations growing at an exponential rate, household formation focusing on singles rather than couples, millisecond markets that react instantly to economic news, and the shift from inherited fortunes to self-made millionaires.
Among the trends he focuses on, however, some are likely to affect investment markets more than others. For example, everyone talks about globalization, but Linkvist puts it into concrete terms by defining it as the speed at which goods, services and ideas can travel. In the 1800s, it took six weeks to travel between Chicago and New York City, so the flow of goods and ideas was limited. Now, ideas and data can be exchanged within seconds via the Internet and cloud-based services. Goods can be shipped anywhere in the world and arrive in less than 24 hours, typically much less. The differences and inefficiencies within and among markets are being smoothed as global interactions bring uniform best practices and ideas to every corner of the world. The good news for investors is that globalization opens up the entire, well, globe to investment because it is so much easier to conduct due diligence. The downside is that it makes it harder to find exploitable inefficiencies that offer higher returns.
Lindkvist believes time is becoming our most precious commodity. Thus, the future of any business will depend on how you “design your customer’s time” — by enriching it or by saving it — in a better way than your competitors do.
The future is also about precision consumption. People no longer are willing to settle for off-the-rack products. 3D printers, which basically put a factory in every home, are a prime example of how selling to these “markets of one” is playing out. Individually designed investment portfolios is another example. Those who generate the most value will be those who help customers find exactly what they’re looking for, in the shortest possible time, and at the lowest possible cost — think Google. Power is moving from the corporation to the individual.
Dematerialization is another trend to watch. As life has gotten more complicated, demand for the simplification of everyday objects and processes is growing. In this context, Linkvist talks about Ikea-fication, “where what was once expensive and exclusive becomes cheap and for everyone — like what Ikea has done with furniture.” For example, if you wanted to make a movie with global distribution 50 years ago, you needed hundreds of people, millions of dollars and a giant movie studio. Today, you need a smart phone and an upload link to YouTube. And on the investment front, what was once the province of investment advisers has become available to all. Investors now have a myriad of inexpensive, at-their-fingertips, online programs to help them weigh and explore investment choices.
Life in the future might or might not involve flying cars, ala The Jetsons. But if the trends spotted by Lindkvist play out, investors and their advisers will be working in a global world of individualized products and simplified processes. Those who plan ahead and adapt best will prosper.