Forecasting Net

As we found out in Part I and Part II, although economic power has been shifting from the West to the East for many decades, income inequality still holds strong around the World. In Part IIIa we discovered what drives the economic growth of different regions and, now, in Part IIIb we do the same for the largest countries in the world. The outcome is quite surprising...

Download the full analysis here

As we found out in Part I and Part II, although economic power has been shifting from the West to the East for many decades, income inequality, in terms of GDP per capita, still holds strong around the World. In Part IIIa we discover what drives the economic growth of different regions, population vs. income per capita improvement, and the outcome is quite surprising...

Download the full analysis here

It’s been four years since the still raging global economic crisis begun in 2008. Although our understanding of the crisis is getting better, we still don’t have a clear idea where the global economy is heading and what kind of growth (if any) we should be expecting in the future.

According to an article published by Elsevier in early 2011, based on the Interaction Systems’ model of the global economy, global GDP is expected to almost double by the end of 2030 compared to its current level (see Fig.1). However, growth will be moderate and below the high rates of the pre-crisis period. In fact, for the remaining of the decade, from 2013 to 2020, the model estimates an average global GDP growth rate around 3.8%. For the next decade, growth is expected to decline even more to approximately 3.1% by 2030.

So far, the IS model’s predictions, using actual data only up to 2005 for the fitting process, followed quite well actual global GDP values for the years 2006 to 2012, offering a seven year “look” into the future of the global economy. If the prediction of the IS model also proves right for 2013-onwards, then we should expect a mild recovery of the economy in the following years. However, this is a delicate, fragile growth that could be easily overturned by hasty or erroneous decisions …

Contrary to popular belief that increased lending, first in the financial and corporate sector and then on a country level, is the key source of Europe’s problems, it turns out that this may be just the tip of the iceberg in a series of many structural problems, namely: reduced global influence, low growth, population ageing, reduced competitiveness against developing countries, increasing energy dependency, and loose coordination among participating countries. Overall, Europe is quickly losing momentum in the global economy, as it becomes more and more “yesterday’s news”. However, the solution may exist in what we call the “large” Europe scenario.

Find more about the future of Europe here

*This post has also been published, in an adapted form, in a recent issue of the GeoPolitica journal (http://www.geopolitic.ro). You can download the full article here.

** UPDATE June 2013 **

Evidence in favour of our “Large Europe” scenario is coming from everywhere!

Following the admission of IMF’s officials of the errors involved in the estimation of the impact of the austerity measures to the Greek economy and the recent IMF mea culpa, now, the EU political leadership is moving towards the "large" Europe scenario, described in this discussion, involving less austerity and more growth initiatives.

First, Schauble argues in favour of a multi-billion stimulus to boost growth in the European South. And then Barroso urges EU leaders to be more bold on so-called structural reforms that can deliver growth and jobs. He also underlined the need to spend smarter on research and innovation, also a key recommendation of our “Large Europe” scenario.

European Council’s President, Herman Van Rompuy, in his keynote opening speech at the European Business Summit 2013, also mentions many of the recommendations of the “Large Europe” scenario, including the need to focus on growth initiatives, competitiveness, and selected high potential areas like the energy sector.

Admittedly, all these are easier said than done; however, this is definitely a start towards a different direction with more focus on development and growth.

You are walking on the street, en-route for meeting your girlfriend. You are late and should have already made reservations for lunch. Disaster? Not really! Your sunglasses-your latest gadget-takes care of everything: spotting the closest Italian restaurant-your girlfriend loves Italian cuisine, making reservations on-line and giving directions to you and your girlfriend-you both bought the same pair! One more thing to take care of and everything should be in order. You instruct your sunglasses to send a message that you will be a few minutes late. You still haven’t used to actually talk to your sunglasses, but heck that might be the normal way of doing things soon. Lunch is over now and you should get back to work. You really like the new screen they set up in your office lately. It’s like what Tom Cruise used in Minority Report. Just point and click, but without actually clicking on anything. You just use gestures to control what’s happening on screen and talking at the same time instead of typing. It was about time to get rid of that clumsy keyboard. It was a thing of the past…

If you think that all of this is Science Fiction, then welcome to the future of Human Computer Interaction …

Download the full article here

In this article*, published in Marketing Research Association’s Alert! magazine, Roger’s Diffusion of Innovations model, based on a simple s-curve, is explored as well as its numerous applications in marketing, business, and the economy. A case study of application to the global economy is offered as a proof of concept for the famous model.

Download the article here

Or download the entire Alert! Feb 2012 issue here

* Alert! Magazine, Marketing Research Association, February 2012, Vol. 52, No. 2, p.34-39, Reprinted with permission from Marketing Research Association, 1156 15th Street NW, Suite 302 Washington, DC 20005, © 2012, MRA, 860-257-4008, www.mra-net.org

As we found out in Part I, economic power has been shifting from the West to the East for many decades. In Part II we explore the dynamics of income inequality through the years. We discover that it still holds strong, as full convergence is far away, despite considerable improvements in narrowing the income gap, especially between Asia and the West.

Download the full analysis here

Recently, Frog, a well-known company in the high tech design market, released a list with the top 15 tech trends for 2012, according to the forecasting gurus of the company. This is an excellent link covering many aspects of our digital lives. My personal favorites are the following:

No 2 / 6: Taking Computers out of computing / Interaction choreography

That’s about the new ways of interacting with machines from using voice commands and voice dictation to using control gestures. In other words, it is about interacting with digital equipment in a more natural way than the current input devices can offer.

If you think about it, we have already witnessed this trend in the making, when Apple introduced the revolutionary iOS, for the iPhone and the iPad, changing forever the way we interact with machines through touch screens. Later on, Apple used the same basic principles to enhance the Mac OS with the extensive use of the touchpad. As competition, especially Android, jumped in to exploit the opportunity, Apple decided to move further on the innovation ladder by introducing Siri. Siri, by incorporating a little bit of Artificial Intelligence, understands what you are saying and transforms your voice to text or performs the designated action.

The other breakthrough of human computer interaction started when Microsoft introduced Kinect for the Xbox game console. The fundamental difference between the Kinect and the wireless game controllers used by rival consoles such as Nintendo Wii and Sony Playstation is that there is no wireless controller, just the Kinect camera that continuously monitors the player’s motion and interprets it to meaningful game commands. As Microsoft says in the official Kinect page … all you need is you... One can only imagine the numerous applications of Kinect-like devices to other areas apart from gaming. For instance, we could use a motion detection camera reading the user’s gestures to eliminate the need for a pointing device like the mouse. Furthermore, through this technology we could literally point to a 3D environment opening the way for 3D desktops and user interfaces. Microsoft is aware of the huge potential that this new technology has and that’s why it started promoting the creation of a strong developers’ network through incentive programs like the “Kinect Accelerator”.

No 3: Quantified selves

Imagine a world where almost everything you do can be measured and shared at your discretion. Where you are, what you drink or eat, your travels, your habits, your health status, the route you follow when cycling, running, or climbing a mountain, and many other things from your business or personal live. We’ve seen the first signs of this trend with services like dailymile, foursquare, and tripcase. The next step is to achieve a critical mass of users and combine data from different sources to provide a more comprehensive user profile and deliver more valuable insights about the users’ habits and actions. For instance, based on your location you could search for a restaurant nearby that is highly recommended by users of the same lifestyle with you. Or you could search for a recreational activity based on other people recommendations with similar health status. And your doctor could monitor your health from a distance and if an emergency occurs, he could direct you to the nearest hospital with the right infrastructure for your health condition. The different options and applications of such a system are practically endless. However, we should also consider the threat of volunteering having our lives continuously monitored by an electronic “Big Brother”.

No 12: Biomimicry

This trend is about using natural or biological systems to describe or design new systems in other areas. For instance, in the Forecasting Net, we extensively use competitions systems, s-curves, and other modeling methods inspired by population ecology, to describe the dynamics of systems from a diverse set of fields from technology, the environment, business, the economy, and other areas. As an example, by using the logistic curve (the well known s-curve), developed by Verlhust in 1838 as a model of population growth, we were able to model the evolution of active users of popular social media networks such as Facebook and LinkedIn, the CO2 level increase and temperature rise of our planet, and global GDP. Many other examples and more information about biomimicry can be found in the Internet.

You can see all the top 15 tech trends for 2012 here 

Recently, LinkedIn released user statistics from as back as 2004 up to 2011. Apparently, the successful professional network has now more than 135 million accounts and keeps on growing at high rates. Since the number of users is one of the most important measures of the success of a social network, the obvious question that comes in mind is how large will LinkedIn get in the future.

Once more, I used the Forecasting Tool to perform the forecast. I just entered the data and the result came back instantly:

It seems that LinkedIn's growth curve is now half way through its completion at a level near 260 million users. Undoubtedly, a large number! But, how impressive is this, given that Facebook has already reached 800 million users? To answer this, we have to consider that these networks target different audiences, so, they have different addressable markets to capture. Facebook aims at all individuals and professionals, i.e. all the 7 billion persons living in our planet. On the other hand, LinkedIn targets mainly the 640 million professionals around the world. Therefore, Facebook with its 800 million users captures 11% of its market, where LinkedIn with 135 million users has a much bigger penetration, near 21%. That’s an impressive performance for LinkedIn, which still has a lot of potential for growth in the future.

Of course, we should keep in mind that this forecast is just an indicator of users’ evolution, since the data provided by LinkedIn are approximations of the actual user count per year and the 135 m figure for 2011 could be even higher by the end of the year. Moreover, the forecast is based on the current underlying trend, which may change to an upward or a downward direction, if something new occurs; for instance, if a new competitor appears (Facebook is striving to attract new business pages although at the time it doesn’t pose a significant threat), new offerings / policies are launched by LinkedIn (the same happened when LinkedIn launched the open discussion groups in 2011), or if LinkedIn decides to expand geographically (as it recently did in Korea). In any case, I believe that LinkedIn has a long way to go and a lot of nice surprises to offer to the professional world in the future.

You can download the LinkedIn users case study here.

UPDATE DEC 2012: Apparently, LinkedIn's has already reached 187 million users, which is very close to what we predicted a year ago by using the forecasting tool!