We are at an inflection point in the developed world, and the fate of your standard of living rests either in the your own hands (if you are an entrepreneur) or in the wisdom (or lack thereof) of a few key politicians.
The question is will the direction be up or down?
Economic factors in our newly globalized world dictate that individuals in lesser developed countries like China and India will experience rising wages and an increasing standard of living while individuals in the developed world experience flat or declining wages and standard of living in a race to the middle.
This began happening some time ago, but has been buried under a pile of easy credit.
Housing costs have increased, food and fuel prices are surging upwards along with commodity prices as demand grows faster than supply. Meanwhile, real wages are declining. Sounds like a depressing situation, right?
Well, all is not lost. If we can’t avoid the inevitable decline in the developed world, then as individuals–and even as states and nation–we can seek to slow its decline or reverse the trend completely.
How do we do this?
As states and nations, we must invest in improving our ability to efficiently provide the basics, while at the same time reducing our demand for scarce commodities.
Our businesses must move from being product-led or even customer-led organizations to maintain their lead by transforming into innovation-led organizations that can move faster than competing organizations overseas with lower costs that seek to copy their innovations.
As individuals we can either go along for the ride as employees and hope that our government and business leaders make these adjustments faster than foreign competition, or help to lead the charge as entrepreneurs.
The entrepreneurs among us must recognize this new reality in the world and identify ways to profit from it. We must uncover the new or amplified business and consumer pains and the solutions to them. These truths will exist across the developed world and thus will scale for entrepreneurs or businesses bold enough to pursue them internationally.
What does this look like you might ask?
Well, one example would be satisfying the need for consumers to increasingly downgrade from restaurants to other types of less-expensive prepared foods when time is scarce. UK supermarkets like Tesco and their ready meals offer a great example that could be replicated in fast-paced American cities like New York, Seattle, and San Francisco.
Another would be exporting used American SUVs to take advantage of their rapid depreciation in the era of $4 gasoline to places that benefit from the weak dollar and/or lower fuel prices.
There are a million more ideas and innovations out there for people to find and put to work even as developed economies crest.
So are you going to let this new wave pummel you or are you going to find a way to ride it?
That answer is up to you…