My idea of "The Big Transition" - in a nutshell

The late futurist, thinker, and writer, Alvin Toffler, explaining the "Third Wave" idea that he and his wife Heidi discovered, and then explained in their 1980 book, The Third Wave.  This interview is for their 2006 book, Revolutionary Wealth.

"The Big Transition" is a concept of mine, which is based on, and piggybacks on, the Third Wave idea put forth by futurists Alvin and Heidi Toffler in their 1980 book by that name.  Yes, that's a long time ago, but the Tofflers were looking far into our collective future.  We are now in the middle of "the future" that the Tofflers were thinking about, trying to figure out, and writing about.  To get to my concept, let's first get into the Toffler's "Third Wave" concept.

Originally, for somewhere around 200,000 years ago, human beings lived primarily as nomadic tribes of people, hunting wild animals, and picking fruits and vegetables that grew naturally.  We generally refer to these people as "hunter/gatherers" these days.  After thousands of years, there came some huge changes in human society and life, these are the three waves.

The First Wave
About 10,000 years ago, most likely in or near the country of Turkey, people started planting crops.  Agriculture, as we know it, was born.  It spread very slowly.  As it spread, people settled down, stayed in one location, started villages and small towns, grew crops, and fed their families.  Wealth came from owning the land the crops were grown on.  This was the Agricultural Age.

The Second Wave
About 350 years ago, new technology emerged, and machines began to get more important.  This transition happened faster, and villages and small towns grew into cities, as people left their farms, and moved into the towns and cities, because factories were being built.  It was a new economy, wealth came from owning the factories, and jobs were invented.  Before that, people worked on family farms, often on land owned by kings or barons.  The change to living in larger cities and working in factories was a complete change in the way human beings lived in society.  This was the Industrial Age.

The Third Wave
The third wave the Tofflers saw coming was another transition, from the industrial-based society to an information-based society.  They put the start of this era as 1956, the year there were more "white collar workers" (office people) than there were "blue collar workers" (factory people).  This change was fueled by an incredible series of new technologies, which began to fundamentally change society.  Radio, TV, video, computers, biological tech, medicines, all the way up to today's smartphones, A.I., and the like.  There were more and more new technologies that began to change how we communicated, how we built things, and eventually technology took many of the factory jobs humans performed during the Industrial Age.  This change to an "information-based society," the Tofflers realized, was as big and powerful as the changes between the other waves, like society moving from agriculture to factories.  But this change is happening much, much faster. This massive transition in how we live and work and communicate is basically happening in a single human lifetime.  This "information-based society" has been referred to as the "post-industrial society," or "the digital age." I use the term "The Information Age."

In their 2006 book, Revolutionary Wealth, Alvin and Heidi Toffler shared one idea, in particular, that got me thinking.  That idea was that different aspects of our current society are adapting to this new technology at different rates of speed.  For example, "Silicon Valley" our high tech businesses, are surging quickly ahead in using, and bringing, this new high technology into their daily lives.  The military has adapted and uses a lot of new technology, obviously.  But other areas of society, like our school system, our legal system, and our government agencies, among other institutions, have barely begun to really adapt to new technology and the many types of changes it has caused.

That idea, that we have different parts of society working with new technology at very different speeds, intrigued me, and I started thinking about this concept in a deeper way.  One main thought was the idea that we had many different parts of society, which were all in transition from the industrial-based society to the information-based society, which led me to a simple understanding.  We're actually not in the Industrial Age anymore, and we're not fully into the Information Age, we're actually still in the transition in between the two.  This long process of changing from one age into another, is "The Big Transition."  The Tofflers set the start of it in 1956, and my rough guestimate is that it will continue until at least 2040.  So instead of being in either age, industrial or information, we are all living in the in between time.  If you think of our current society that way, it's much easier to understand why things seem so chaotic in so many ways.

My next line of thought after that understanding was, "Is there any part of society that will not have to make the transition from an Industrial Age institution to an Information Age institution?"  I could not think of any part of society that would skip this change.  There may be some aspect I don't see, but I can't think of one.  So that means every single aspect of society has to change, at some point, from an Industrial Age model, to an Information Age model. So that puts us in an era, roughly 85-90 years long (maybe longer), where every single part of society has to be re-invented.  That's big.  That's scary.

"How does an industry or business or institution actually change from the Industrial Age to the Information Age?" became the next, obvious question.  I saw two ways.  1) A visionary person or group intentionally re-invents a business or institution, bringing it into alignment with not only the new technology available, but the new business and social environment created by these technologies, and new social standards, adapted to the world of new technologies.  2) A visionary person or group invents a new model for the business or industry or institution that completely disrupts the older, established Industrial Age model, and build the new, Information Age model, for that business or industry or institution.

In practice, this DISRUPTION, the second form of change, is the way most of these changes are happening.  And that's freaking all kinds of people out all across our society.  For example, in June of 1999, Shawn Fanning and Sean Parker uploaded the Napster file sharing program onto the internet.  Using that program, suddenly people all over could share digital music files for free, in large numbers.  That act completely destroyed the business model for the entire music industry, immediately.  It took years ot fully shake out, but the initial change happened overnight.

That's Disruption, with a capital "D."  That really pissed off a lot of people, it put companies out of business eventually, fotunes were lost, and new fortunes were eventually built based on the larger change.  One more thing, it was INEVITABLE that a change like this would happen in the music industry, at some point, because of the new technology that had been developed.  It sucks for the Industrial Age music industry power structure, but it was going to happen at some point.  The same goes for Amazon, eBay, Etsy, Shopify and other online stores, which have disrupted Sears, J.C. Penney's, dozens of major chain retailers, shopping malls, and have lead to what's now often called the "Retail Apocalypse."  This caused major disruption to many businesses, many power structures, and thousands and thousands of people's lives.  But in a world where technology is going to keep evolving, like it or not, these huge Disruptions will keep happening.

The Big Transition began slow, and largely unnoticed, marked at 1956 by the Tofflers.  It's going to keep happening, like it or not.  It's accelerating, and more and more industries and institutions are being disrupted, and changing from the Industrial Age to the Information Age, at the same time, now.  These changes are happening faster, and these major changes are interacting with each other, and also creating major social backlashes.  It's a chaotic world these days.  It will get more chaotic.  But it's not going to stop until all of our human institutions are working with Information Age models, or until society collapses.  Hopefully, it will be the first one.  But it's not going to stop, and it's not going to slow down, until nearly all aspects of society are part of the Information Age.

That's my concept, "The Big Transition." In my mind, this is the overall contest, the macro explanation, for Western Society, and huge parts of other societies around the world.  As I write this, in August of 2019, the retail system is being disrupted.  The economic system is being disrupted.  both main political parties are being disrupted, many other industries are being disrupted.  The music industry, the publishing industry, and the video/TV industry, and the taxi/limo industry, to name a few, have already endured their main phase of disruption, and are moving forward. 

Many things have not hit their main Disruption point yet, or at least haven't hit the critical mass Disruption.  Our higher education system is just beginning to hit disruption, our K-12 education system hasn't been disrupted, our legal system hasn't been disrupted, and our government (in the way I'm speaking) hasn't been disrupted.  So there's A LOT of societal disruption still to come.

The Big Transition is a huge concept.  There could be dozens, likely hundreds, of books, written on the various aspects of it.  I see it as the background theory encompassing all kinds of smaller, but still very large, and very important, changes of all kinds.  I'm just beginning to share and spread this idea, and a book on this concept isn't in the works yet, because of my own personal issues I'm dealing with right now.  Hopefully I'll be able to put more effort into this idea, and provide a much more in depth look into this concept, before too long.

-Steve Emig, 8/26/2019

The Retail Apocalypse continues- 8/13/2019

A Retail Archeology video, "The Deader Side of Sears."

 The "Retail Apocalypse," for any not familiar with the term, is the name given to the closing down of THOUSANDS of retail stores over the last several years.  This has been happening at scale since The Great Recession of 2007-2009.  It really took off about 2016, and the name was dubbed around then.  In an article this past spring, a count of 20,000 retail stores was listed as either closed in 2017, 2018, and closed or scheduled to close in 2019.  There were probably another 20,000 stores that closed from 2008 to 2016.  These counts are major chain stores, and generally don't include all the mom and pop stores, and smaller regional chains, that may have also closed.

This article today on CNBC, "We are in the Middle of the Great Department Store Shakeout-and There's No Stopping It," focuses on the larger department stores.  Among other things, it says that 1,000 actual department stores have closed, many the anchor stores in malls, which used to draw in foot traffic for all the smaller stores that have been closing.  In the department store world, Bon Ton and Gordman's (and Toy-R-Us, though technically not a department store), are gone, Sears is bankrupt, J.C. Penney's is working to restructure its debt, trying to avoid bankruptcy, and sales at Nordstrom's and Macy's are down 35% or more in 2017- 2018.  The market is rough, and getting rougher, for department stores, it's definitely not getting better yet.  Keep in mind this collapse in traditional retail stores happened during the long uptrend in the economy and stock markets.  Now that talk of a coming recession is common, things are likely to get worse faster.

Why is all this happening?  From my own reading, research, and thinking, it seems pretty obvious.  The big shopping mall and shopping center world was the Industrial Age distribution of goods network.  That's how we did it, mass market brands, advertised on the three TV channels, distributed through big warehouses to big stores in big malls.  Hey, it worked well for 60 years or so.  And then the internet came along, and then became a commercial tool, and made shopping online and getting goods shipped direct much more efficient.  Buying products and getting them shipped direct did happen in the 20th century, but it was through mail order catalogs, which is slower and less efficient.

As I've written in my idea, The Big Transition, I see this as the inevitable collapse of the Industrial Age way of distributing goods, while a new, Information Age way of distributing goods, is being built.  The new way is led by Amazon, Walmart, Target, retail brand direct websites, but also includes tens of thousands of smaller Amazon resellers, eBay stores, thousands of Shopify and other small online stores, discount sites like Wish.com, and millions of other retail websites around the world.

  Hell, I'm a homeless guy at the moment, and I've sold my artwork in 9 states and 3 countries, starting on half a shoestring.  It's not that Jeff Bezos and Amazon killed traditional retail, it's just that there was a technology enabled paradigm shift, and most old companies simply didn't keep up.  They were big and entrenched and used to kicking butt in sales, and didn't see the possibilities coming in the online world.  So now they're dying.  Hey, that's capitalism.  Retail natural selection.  If you lose your competitive edge, you go out of business.  Bezos and several others saw the potential of online sales early on, and took advantage of the opportunities.  Sears itself did the same thing itself in the late 1800's, ushering in catalog sales and shipping of goods.

So several major retailers, most of whom should have died off already, are hanging on to the old days, and trying to keep alive a bit longer.  There's still a place for bricks-and-mortar retail, but it will be a different model, and there will far fewer stores across the country.  TJ Maxx is a good example of a retail business that will likely keep going for a long time to come, focusing on really good deals on major brands.  So that's where this is at the moment.  In my opinion, as we head into the next recession, the Retail Apocalypse will accelerate even more.  

Why I think highly creative small businesses are the future of America

These two are old friends of mine, and BMX freestyle pioneers from the NorCal scene, Mike Golden and Chris Rothe.  They are flipping through the brand new, second edition, of The Birth of the Freestyle Movement, a catalog-sized book chronicling the rise of BMX freestyle, now a worldwide  series of recreational and competitive sports.  In the background, you see huge photos, iconic in our little world, from 1980's BMX magazines.  Mike, Chris, myself, and a few hundred other weird kids in the mid 1980's, were drawn into the obscure new sport we expected to go nowhere.  Thousands more joined us over the next few years.  By learning and inventing tricks on "little kids bicycles," we inadvertently became part of the action sports movement, one of many sprouts that have grown into worldwide sports and industries, in about 35 years.  We are a part of the huge cultural changes that have shaken and reformed human society in our lifetimes.

The biggest changes over the last 40 or 50 years are due primarily to new technology.  As we all know, this technology now allows an average person access to most of the information collected in all of human history, at any time, with a small device we carry in our pockets.  With this same device, we can instantly communicate, by text, by voice, and even by live video, to much of the human population, anywhere in the world.  This technology, and all the associated technologies, have changed everything in our world... in our lifetimes. 

The original Apple computer, shown off at the Home Brew Club in San Jose, and the birth of Microsoft, were 44 years ago.  These massive changes in human society have happened in the lifetimes of The Greatest Generation, the Baby Boomers, and most of Generation X, my age group.  We've watched this happen.  We've seen massive disruption spawned by these technologies and related social changes.

Think about going to a financial advisor back in 1989, just before the 90's recession.  He (it was a traditionally male industry then) would have advised investing in the blue chip stocks, mutual funds, and maybe real estate.  All of those things crashed in price in the few years after 1989.  What he would not have advised investing in was a BMX or mountain bike company, a snowboard company, a tattoo and piercing shop, a custom-built motorcycle business, or even Google.  Google didn't exist for several more years, and the other things were weird, fringe activities then, not something a person should invest in.  Yet any one of those businesses, properly run and managed, could have made you wealthy in the time between 1989 and now.  And those "blue chip" stocks?  There is a single person, Jeff Bezos of Amazon, worth more than many of those entire blue chip companies are now.  Think about that one for a minute.  That's serious change.

But, a huge number of people, well over a hundred million in the United States alone, are being left behind, by the changes to everyday life, to work, to business, to social norms, to housing, to education, and to our world at large.  Most people use their smart phones to communicate, yet most don't use that same technology to anywhere near its full potential to earn a living.  Whether shackled by insurmountable college debt, or balancing family with two service jobs, MOST of our population is struggling to survive day to day.  Poverty and homelessness are soaring, at a time where there are grade school kids making million dollars a year with a YouTube channel, and high school age millionaires in the social media influencer, entrepreneurial, and high tech worlds.

I'm a pretty smart guy.  Futurist thinking, real world economics, and big picture social dynamics are the things that really fascinate me.  I've spent most of my life reading about these things, observing what is predicted, and then what actually happens, and working to understand this huge transition period we're in now.  I literally wake up in the morning, even on my worst days, thinking about these things.  Yes, I'm weird, even in today's weird world.  

I've come to the conclusion that our best hope in these fast changing and and highly turbulent times, is huge growth in the number of small businesses.  

We need MILLIONS of new small businesses.  Here are the main large trends I think lead to this conclusion:

-An Oxford study 2013 said 47% of American jobs could be replaced by new technologies by about 2035 or 2040.  That's roughly 92 million MORE jobs that will likely disappear.  Yes, other new jobs will be created in that time, but not near enough to employ everyone who loses a job.

-With the research of Richard Florida and his team, we've learned about the Creative Class, and that high tech businesses are clustering in about ten major metro areas, which causes a couple of huge shifts.
     -The huge salaries and stock wealth in the tech world lead to surging real estate prices in those tech hub metros.  This leads to massive wealth inequality, and a struggle for affordable housing by most of the people, from lower end tech workers, those with massive college debt, and the large number of service workers, in the tech hub cities.
     -In the huge expanses of land where mid-sized cities, small towns, and rural areas are, most of the United States by area, civic leaders are struggling to attract businesses that can create living wage jobs for their populations. 

-The esteemed futurists, the late Alvin Toffler and his wife Heidi, described "The Third Wave," (title of their 1980 book), the shift from an industrial-based society to an information-based society.  They describe this shift as being as massive as the shift from hunter/gatherer society to agriculture, or from agriculture to industrial society.  But this big transition is happening much, much quicker than those transitions did.  The disruption, as we can see nearly everywhere, is causing most of the population to struggle on low or mid-level paying jobs.

-The massive wealth inequality, the loss of high paying manufacturing jobs over the last 30 years, the continuing loss of jobs to new technology, and the resistance to new ideas by local leaders, has led to the huge populist movements on both the Right and the Left, and political polarization.  This political polarization has led to gridlock and downright incompetence in the the political realm, at the very time when we most need smart, fast, effective change to help people, and society at large, to adapt to the rapid technological and social change.

-The huge rise in student debt is due, in large part, to the fact that Wall Street has structured, packaged, and resold much of the $1.5 trillion in U.S. student debt in SLABS, Student Loan Asset Backed Securites, nearly identical to the CDO's that triggered the 2008 economic collapse.  In the next major economic downturn, the faucet flowing money into colleges and universities will be hit incredibly hard. That cheap money to enable students will slow down dramatically.  This will mean college towns, much of the U.S., and most of the "Red State" economy, will be hit incredibly hard.  The concept of college itself is about to be disrupted, and will have to be re-invented for the 21st century, over the next decade or so.

-All this is in the economic/social dynamic sphere.  I'm not even talking about massive disruption caused by global warming, and the more intense storms, hurricanes, and floods that will disrupt tens of thousands of lives at a very fundamental level.  Losing your home or business to a major weather event is another massive form of disruption happening at the same time all these other things are happening.

I've been thinking many years about these things, and I'm always looking towards the future.  We're looking at some really intense and really tough challenges ahead.  With all these things in my mind, after many years of thinking, I think a massive surge of people going from an employee mentality to a small business/entrepreneurial mentality, is really our only long term hope.  I'm not talking about having an idea and finding an angel investor whose money you can burn for two years.  I'm talking functional, PROFITABLE, small businesses, high tech and other kinds.  There will not be major top down changes happening quick enough.  The true answer to all these massive changes will have to be D.I.Y. and grassroots responses.

I believe that there are people in every rural area, every small town, and every mid-sized city who already have the ideas needed in those areas.  But those people are fighting against their own personal fears, people resistant to new ideas, entrenched local power structures, and at least a few, powerful local curmudgeons.  If we can empower the people throughout the country, who already  have the good ideas, to make the leap from being an employee to being a FUNCTIONAL small business person, to build what their local area needs, we rebuild America, and the economy, from the ground up.  These millions of new small businesses are the only hope I see to put the remaining employees to work in the future that we're heading into.
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A month ago, I got tapped to use my blogging and social media skills to help promote an old friend's bike business, and help it transition from upscale bike shop to viable online bike business.  At the same time, I'm now back in Southern California, I have to rebuild my own life, and build my own income back up to a reasonable level.  I'm actually doing what I'm talking about here, on a day to day level. 

This is where I'm putting my effort, building my own small business while sharing what I've learned to help other small businesses.  The biggest thing holding back our economy, in my opinion, is the mindset that kids (and adults who've lost jobs) need to learn to "find a good job."  Half of the jobs may be gone by the time today's infants hit working age.  Kids, and all the older people left behind for one reason or another, need to find meaningful work, much of which will not be traditional jobs in the future.