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The Evolution of Normal

As we plow through the second quarter of 2011, there remain signs of progress tempered with counter-admonitions ranging from the end of days to a return to deep recession. As always, nothing is ever as gloomy as some would have us believe, and facts indicate a cautious return to equilibrium. The country is still on a course that will generate around 3% GDP, unemployment is inching downward, and concern over federal debt and deficits seems to be getting genuine attention.

There is less financial leverage in the overall system, but there is also less foolish risk taking and more oversight. It would also appear that there is less fraud, but it remains to be seen if that particular pattern will continue. Government and industry are both concentrating on realities associated with greater productivity, fiscal accountability and innovation. And, there are signs that new seeds of innovation and creativity are being sown in virtually every sector, with the promise of significant returns just around the corner.

For those who do not understand the role of government, this has been an especially trying period. While it built enormous debt, the federal government has also been the great stabilizer. Through various means, it has stabilized financial services, brought elements of the auto industry back from the brink, and opened new dialogue on the subjects of fraud and misrepresentation. The result since 2007 has been less systemic leverage and more government…both of which must slowly seek an evolved state of balance that will accommodate the requirements of a revitalizing economy. Some news here, folks: With a growing population, demand for federal, state and local government services will increase – not decline. So, it is not the size of government that matters most, but its ability to operate efficiently while providing essential services. (And who defines essential?)

Overall, we are seeing more people begin to understand that there will be no return to any previous ‘normal’ but an evolution to a new economy – parts of which will seem alien and contrary to historic American capitalism. But for those who study such things, it is clear that levels of U.S. consumerism were unsustainable, as were income growth patterns, the number of new businesses and new jobs, and the range of entitlements demanded by the majority of citizens. Something had to give.

For the remainder of this decade, America’s GDP will be tied to the growth of global partners and its ability to both compete and collaborate on the world stage. Brazil, China, Argentina, Mexico, India, Canada, and many other countries are seeking global enterprise partners. After so long at the top, there is real concern whether the U.S. can strategically cooperate to take advantage of emerging markets, new enterprises, and the global thirst for development. Science, engineering, agriculture, communications technology, energy, education and healthcare can all be engines of community prosperity. Enterprise is a global and local driver…not politics or military strength. It is not capitalism so much as it is the advent of ‘free market democracy,’ that drives all nations and people to seek betterment and progress. It is happening; it is accelerating; and, it is impacting every community in the United States.

There will be other crises. However, as a society, we will be better prepared as debt is reduced, people become more cautious, savings increase, and accountability is restored. More critically, as young people join the workforce and mid-career professionals begin to more actively seek their fortunes, a new era of creativity will emerge. Watch carefully as other cultures adopt social media, cell phones and the Internet…then really begin communicating. Enormous change at the state and local level is occurring every day and will gain momentum. Now is not the time to pout and demand a return to the good old days. Now is the time to embrace opportunity, engage in new pursuits, and become fully open to new possibilities. As always, I ask, ‘Is your community fully Prepared for Challenge?’  

With over three decades working in and with federal, state and local government, John Luthy understands public agencies.  Known for his real world, straight talking style, he is a leading futurist specializing in city, county, state, and federal long-range thinking and planning. John is the author of Operations Planning: A Guide for Public Officials and Managers in Troubled Times, and The Strategic Planning Guide, both published by the International City/ County Management Association (ICMA). His new book, Planning the Future – A Guide to Strategic Thinking and Planning