Nine Forecasts for Twenty Oh Nine

Some trends I see either emerging or solidifying in the year 2009. I have restricted myself to only areas of financial markets/economics and software – the two domains that professionally interest me

  •  Touch will become the most important metaphor through which computer hardware will interact with humans. Mobile phones have already evolved to it and now laptops, desktops, media players and media/game controllers will catch up. A vast number of application software will have to be rewritten to better leverage this touch-trend to provide a completely different user experience than before. The lead in this will be taken by software newbies because legacy software applications would not have been architected to handle this stage of evolution
  •  Cloud computing will truly open up Software as a Service (SaaS). Traditional businesses that never contemplated this business model will warm up to it. Data Center Management skills will suddenly be in demand
  • Remote communication paradigms will continue to evolve dramatically, especially in countries where production and consumption (of any kind) is widely dispersed. Personally, I would be extremely keen to see this evolve into a robust telemedicine infrastructure for India
  • User generated content, crowdsourcing and such other metaphors of freely associating a larger population of professionals to embellish what earlier would be done internally by a handful will gain traction. Focus on cost containment will drive this phenomenon forward and some companies will evolve truly clever mechanisms of exploiting this trend, finding applications to functions that will be truly disruptive
  • 2009 will be no better than 2008 in terms of financial asset performance. Excesses, inflated both in terms of intensity and duration, will take substantial time to unwind. Irrationally exuberant optimists may call for a V shaped recovery, but that is not coming. The much ignored asset class – Treasuries – will provide the best returns (both in absolute terms and most definitely in the risk-adjusted measure) amongst all asset classes.
  • The United States of America will undergo changes that will impact its very fundamental structure – mostly the economic mindset at a micro level. The nation needed a wake-up call and the current crisis has provided it. The solid foundation of the economic and entrepreneurial structure of the country will more than adequately ensure that it comes out stellar after the storm weathers out. Pulp economists extrapolating historic growth rates and wealth creation statistics to hypothesize that India/China will overtake the USA as an economic power will have to revisit those flippant analyses. Throughout 2009, we will see the USA metamorphosizing itself through impeccable fiscal and economic prudence, something that the current generation never thought it will have to practice but will thank this crisis two decades down
  • Two businesses will be redefined – one positively and the other negatively. Exchanges that trade financial instruments will see a move from OTC instruments to exchange traded instruments, which will impact their businesses profitably. Additionally, these exchanges will spend a fair amount of resources in building investible indices, which will become their high-margin products. On the negative side, Credit Rating Agencies with their battered reputation will see a lot of competition from hitherto unanticipated quarters. The buy-side will either invest in or will copiously consume services from independent agencies providing credit-rating-like services but without the conflict mired association with the sell-side
  • Mainstream media companies will start on their journey to oblivion. Ad revenue, subscription revenue will move to the blogs as the difference between mainstream media and the consumer media will be further blurred. Media houses know this as much as everyone else does but their very business models – and mindsets – are very deeply buried in the past for the organizations to quickly adapt to this nimble challenge.