Forecasting Net

Observe the new digital natives! Babies easily learn how to work on an iPad but have a hard time figuring out a magazine. It will be very difficult to explain our world to them when they grow up. A new trend is rising, as Apple has managed to “recode” babies’ “OS” and ours as well. Well, that’s the triumph of Steve Jobs as seen from the eyes of a baby!

Observe the shift of power from Western to Asian economies, in this "journey" of global economic dominance, starting after World War II all the way up to 2010. Find out why this is a long term trend and how we could have predicted it decades ago.

Download the full analysis here

It came out of “nowhere” in a world of “giants”. Established social media players like Facebook, Twitter, and LinkedIn already count more than 1 billion users worldwide. A great challenge even for another big internet player. Apparently, Google had one more ace up its sleeve, Google+. It took just 16 days for the new social network to reach 10 million users, in a closed, by invitation only, version. By comparison, Facebook and Twitter got there in 852 and 780 days respectively. According to new-just released-research, Google+ users may have already exceeded 20m users.

Just to be fair, existing social networks and especially Facebook did a fine job educating the market. Before some years, many of us didn’t have a social media account and didn’t know what they were about. Now we do! And I think that FB has to take the credit for it. Well, perhaps also David Fincher for the “Social Network” movie but that’s another story…

In an already established “playground” now, Google+ is making its grand appearance. Leveraging all means available, from the millions gmail accounts to the rapidly increasing android community, G+ made an excellent entrance. So, could it be the next Facebook?

Despite its current success, I think it’s just too soon to make any valid projection yet. Don’t forget that today G+ still operates in a controlled, by invitation only, environment. What will happen when the millions of spammers, fake accounts, and usual internet garbage invade its space? Also we should expect a counterattack from Facebook. They already ban G+ related ads.

Well, we certainly have to wait for the real thing, the open to everyone version of G+, to be released and see what happens. Until then it’s nice to know that today we have at least one excellent candidate to challenge Facebook’s dominance and change the social media market once more.

Henry Kissinger, former Secretary of State under Nixon, made two trips to China, in July and October 1971. That was just a few years before the Chinese miracle began, when Deng Xiaoping succeeded Mao Zedong in the late 1970s.

When asked, during a recent TV appearance in CNN, Kissinger replied that at the time, the potential rise of China as the key competitor to the United States would have been inconceivable. He added though that the US has been dominant for 50 years, where China has been dominant in 1800 of the last 2000 years! So, perhaps China’s rise wasn’t such a great surprise after all...

Indeed, if we take a closer look to the last 200 years of our history, we will discover that China, at its peak near 1820, accounted for almost 1/3 of the global GDP. Following the lost Opium wars and the subsequent deterioration of the Chinese Empire, its contribution fell rapidly to just 5% at 1950. It remained near this level until Deng Xiaoping assumed power and began growing ever since. Now this contribution exceeds 17% and is expected to reach the previous 1820 maximum levels near the mid-2020s. After that, it is possible that the Chinese economy will have reached its maximum potential and that we will possibly witness a new “challenger” rising as history will be repeating itself once more...

Following the 2008 credit crunch, the global economy entered a serious recession, marking negative growth rates at 2009, for the first time in 60 years. The initial efforts of the G20 to reinitiate the economy by the deployment of extensive stimulus packages, although successful in the beginning, resulted in the significant rise of public debts challenging the credibility of even the largest economies. Beyond any doubt, this is the most severe economic slowdown that we faced since the Great Depression, with lasting repercussions in the following years. But was this a random incident in our history or could we have predicted it and take the necessary steps to minimize losses?

This will probably be a matter of debate for some time, however, I for one believe that we could. To be more specific, in an article published just a few days prior to the collapse of the Lehman Brothers, evidence was presented about an upcoming economic downfall, near the end of the first decade of the millennium. The analysis was based on a simple logistic growth fit against actual real GDP data.

Fig. 1. Reprinted from Technological Forecasting and Social Change, 76 (3), G.P. Boretos, The future of the global economy, 316–326, Copyright (2009), with permission from Elsevier

According to this model, the global economy follows a two-century growth wave, from 1917 to 2112, attributed to globalization (Fig 1). This period is equally divided into five phases called “seasons” that last nearly 40 years and constitute successive periods of growth, saturation, and decline.

Almost every forty years, near the middle of each season, there is a peak point that initiates a cyclical slowdown of the global economy (Fig 2). The cyclical downtrend occurs when the economy “overshoots” i.e. when the ratio between actual and estimated GDP is at maximum.

Fig. 2. Reprinted from Technological Forecasting and Social Change, 76 (3), G.P. Boretos, The future of the global economy, 316–326, Copyright (2009), with permission from Elsevier

The first two cyclical slowdowns occurred at 1937, near the start of World War II and at 1975, near the outburst of the oil crisis. The next cyclical peak point occurs at 2013, very close to the still raging global economic crisis.

Coming again to the original question, I believe the answer to be a plain yes! Both the two century growth wave and the cyclical forty year trend have been saturating as we are approaching their peak points, 2015 and 2013 respectively. Therefore, if this analysis is right, we should have expected a deceleration of the economy as we were getting closer to the end of the first decade of the millennium. The first signs were there all along and we could have started preparing early on instead of trying to find a last minute solution.

In my opinion, the most important challenge that our economy is facing today is not the recession itself but the absence of suitable “tools” to deal with it, the same situation that we faced during the Great Depression when the economic theory of Keynes appeared. So, should we use the model of the economy presented here to solve all our problems? Well, probably not. I consider this a mere demonstration of how helpful even simple forecasting models can be in addressing critical situations about the economy. Perhaps it was pure luck that the model made a rather accurate prediction of a coming crisis. Or perhaps, it’s no luck at all and this is a good approximation of the economy offering some rough estimates and qualitative insights. Let’s be honest, at this point we cannot really be certain. After all, the inherent problem with all macro level models is that you cannot really experiment with any of these, unless of course you are an elected politician. But what about the existing theories and models? Well, either they failed to foresee the forthcoming crisis so they need to be refined or replaced, or perhaps nobody wanted to disclose the “ugly” truth, or even worse nobody listened. I don’t know which option is worse but I do think that we need to work hard on our forecasting “conscience” and techniques if we are to improve our “visibility” and optimize the impact of different government policies on a macroeconomic level.

I’ve written before about the future of computer interaction based on MS Kinect like interfaces. I always thought that it would be one of the big IT players, perhaps Microsoft, to launch something to replace the mouse and provide the means for 3D, gesture based, computer navigation. It seems though that another not so big player, Oblong Industries, has been working towards this direction for some time. Could this be the future of computer interaction?

Find out more here

According to Joseph Schumpeter, innovation follows cycles and currently we are at the peak of the most recent one. Despite our continuing technological advancements, we are in a desperate need for a new big idea of a magnitude comparable to the Industrial Revolution or the invention of the transistor that set the foundations of the modern Computer Industry. Perhaps, the recent collapse of the global economy, starting with the 2008 credit crunch, is a first strong sign that the economy is losing momentum due to lack of sufficient innovation to boost further growth.

In that context, could the colonization of space be the next big thing? Could this be the modern version of the discovery of the Americas that changed our world in so many ways? Imagine the effort and investment needed for such a great endeavor but also the incredible gains, if successful! That’s undoubtedly great news but how close are we in achieving our dream?

Find out more here

Today’s clear winner is tomorrow’s obvious mistake. It's no news that our world is changing rapidly, sometimes in directions that we do not anticipate. And that's good because it gives the opportunity to newcomers to advance quickly and introduce new ideas and concepts thus changing the competitive landscape forever. Take social media, for instance. It's no secret today that Myspace is washed-out. But it wasn't always like this...

Find out more about the Rise and Inglorious Fall of Myspace here

An excellent article about innovation dynamics based on Kondratiev long waves theory (http://en.wikipedia.org/wiki/Kondratiev_wave).

Could it be that we are at the peak of the innovation cycle, facing a possible downfall in the future? Just consider the implications for our technology driven world…

Click here for more

Check out the facts in this link and see the "rising" economy from a different angle.

Discover how deep is Facebook, YouTube, LinkedIn, Twitter, and other social media networks, attached to our personal and professional lives. Learn why they are so important, by comparing their average number of Google searches per month against celebrities, IT giants, and dream gadgets.

You can download the PowerPoint file here

Following a previous entry about global CO2 concentration level and a suggestion by a LinkedIn group member, I used the Forecasting Tool to forecast the global temperature rise. I used actual data from the National Oceanic and Atmospheric Administration (NOAA)* for 1950 up to 2010. The final actual figures were calculated as differences from the base year 1950.

The generated forecast gives a 2.16 ºC temperature rise estimate between 2000 and 2100. This is near the middle of IPCC projections**, predicting a 1.8-4.0 ºC temperature increase by 2100. This new forecast is in accordance with the previous forecast about CO2 level in the atmosphere, predicting a CO2 concentration of more than 450 parts per million coupled with a temperature increase of more than 2 ºC.

Note that IPCC’s forecasts are based on different scenarios for various parameters such as CO2 emissions in the future, where on the other hand this forecast is based on the current trend as it unfolds from 1950 onwards without taking into account any new policies, measures, or other actions that may alter temperature levels in the future. Hence, the model of global temperature presented here is a simple conceptualization of this process that serves well as a quick, first approximation of the current trend as it unfolds in the future.

You can download the Global warming- Temperature increase case study here.

*Source of actual data (global temperature anomalies-degrees C):

National Oceanic and Atmospheric Administration, National Climatic Data Center, Global Surface Temperature Anomalies, The Annual Global (land and ocean combined) Anomalies (degrees C)

http://www.ncdc.noaa.gov/cmb-faq/anomalies.html#mean

Final actual figures calculated as differences from base year 1950

**Intergovernmental Panel on Climate Change (IPCC)

http://www.ncdc.noaa.gov/faqs/climfaq11.html

Check out this link regarding ultra fast data transmission based on quantum teleportation!

Visit www.growth-dynamics.com, a valuable resource, for everyone interested in forecasting. Theodore Modis, an acclaimed scientist and futurist, is largely responsible for making S-curve fitting, the same methodology that I used in developing the Forecasting Tool application, known to a broader audience.

Check out my favorites from Theodore Modis:

• Conquering Uncertainty: Understanding Corporate Cycles and Positioning Your Company to Survive the Changing Environment (Businessweek Books)
• Urban Guerilla Activities in Greece

In this excellent video, Arthur Clarke predicts our future back in 1964! Makes us all feel “envy” of this incredible man and futurist…

The increased CO2 concentration level due to human activity contribute to global warming with significant repercussions to our planet. At 2008, the CO2 level was 385.34* ppm (parts per million). According to recent research**, if we reach the 450 ppm limit, this will result in an increase of the global temperature by more than 2°C (3.6°F) with catastrophic repercussions for the environment. This is the limit that usually most developed countries take into account when drawing their environmental policies.

Well, the interesting question is if this is an actual threat or if the 450 ppm limit is unreachable in the following decades, based on the existing historical growth patterns of CO2 concentration.

In order to find out, I used the Forecasting Tool application to analyze the global CO2 concentration levels from 1900 up to 2008*. As an initial displacement, I used the year 1899 CO2 concentration from the same data set. The forecast unveils a two century growth process that is currently half way to completion leading to 17% higher CO2 levels in the atmosphere, by the year 2050:

According to this forecast, the 450 ppm limit will be reached, by 2048, posing a serious and tangible threat to our environment that needs to be addressed from now if we want to be effective.

You can download the Global warming-CO2 level case study here.

*Source of actual data (CO2 concentration-parts per million):

EarthTrends ( http://earthtrends.wri.org) Searchable Database Results

Provided by the World Resources Institute (http://www.wri.org)

Data downloaded 8 Mar 2011

Data before 1958: Neftel, Friedli, Moore et al. 1994. Historical Carbon Dioxide Record from the Siple Station Ice Core (reported on-line by the Carbon Dioxide Information Analysis Center at http://cdiac.esd.ornl.gov/ftp/trends/co2/siple2.013). Bern, Switzerland: University of Bern.

Data after 1958: Keeling, C.D., Whorf, T.P., and the Scripps Institute of Oceanography. 2005. Atmospheric CO2 Concentrations (ppmv) derived from in-situ air samples collected at Mauna Loa Observatory, Hawaii (reported on-line by the Carbon Dioxide Information Analysis Center at http://cdiac.ornl.gov/ftp/trends/co2/maunaloa.co2. Mauna Loa: Scripps Institute of Oceanography.

Content licensed under a Creative Commons License

http://creativecommons.org/licenses/by-sa/2.5/ 

** http://timeforchange.org/CO2-cause-of-global-warming

UPDATE JULY 2013:

This forecast, based on data up to 2008, follows accurately actual values for CO2 emissions for 2009-2012

When I show the Social Network movie, I was intrigued by the way that Facebook came out of nothing and gradually evolved to the most successful social media site today. It launched on 2004 and reached the first million active users by the end of the same year. After 2004, it really went sky high, reaching 500 million active users, in less than 6 years! Naturally, I was amazed and asked myself the obvious question: how far this could go on without stopping. Will it reach 1 billion users and when?

To make this forecast, I used the Forecasting Tool application. I punched in the active users data starting from the end of 2004 up to July of 2010 (the latest data from Facebook timeline), and pressed the SOLVE button.

The result came back in a few seconds:

Facebook, according to the forecast, has already exceeded 600 million users, by the beginning of 2011 (It will be interesting to wait for the first official 2011 data from Facebook to verify this!). It will continue to grow-but at decelerating rates-reaching its maximum value near 750 million users by the end of 2012. So, if the current trend continuous, and no significant new decisions or policies emerge from Facebook’s headquarters to further enhance user acquisition, then Facebook will not reach 1 billion but near 750 million instead. Even so, an extraordinary achievement!

You can download the Facebook active users case study here.

*Source of active users: http://www.facebook.com/press/info.php?timeline