In ancient times, prophets foretold the future. In modern times,
management gurus predict trends--in business, that is. But few
forecasters have had the influence of husband-and-wife futurists
Alvin and Heidi Toffler.
In 1970, the pair sent shock waves around the world with their
prophetic international megaseller Future Shock (Random
House). It foresaw an increasingly consumerist society worldwide in
which everything would be disposable, leading to difficult cultural
changes including the disintegration of family relationships and
the erosion of faith in government and big business, while the
masses would be empowered by personal computers. The Tofflers
forecasted the end of the hegemony of the three television networks
by what was then termed the EVR [electronic video recorder] (now
VCR) and cable TV--indeed, Ted Turner credited the Tofflers with
giving him the idea for CNN. The duo predicted everything from
commercial cloning and the dissolution of the Soviet Union to the
breakup of AT&T and the trend toward working from home.
The Tofflers followed their first book with bestsellers The
Third Wave (William Morrow) and PowerShift (Bantam
Books), and participated in studies on everything from education to
war. They've been invited to confer with world leaders, from
Presidents Reagan and Bush to Mikhail Gorbachev, Indira Gandhi and
China's reform party leader, Zhao Ziyang. In 1995, then House
Speaker Newt Gingrich put their latest book, Creating a New
Civilization (Turner Publishing), on the required-reading list
for fellow representatives, along with the Declaration of
Independence and The Federalist papers.
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Although the Tofflers say projecting the future can't be
based simply on current trends and that any number of chance
elements make a variety of futures possible, for three decades the
world has listened to their predictions. We asked them to peer into
their crystal ball and give us a reading on the first few decades
of the new millennium.
Entrepreneur:What are the fundamental differences
between a Second Wave society, which we're in now, and a Third
Wave society, which you say we're moving toward?
Alvin Toffler: The Second Wave society is industrial and
based on mass production, mass distribution, mass consumption, mass
education, mass media, mass recreation and entertainment, and
weapons of mass destruction. You combine those things with
standardization, centralization, concentration and synchronization,
and you wind up with a style of organization we call
bureaucracy.
In the Third Wave civilization we're moving toward, the
primary factor of production is knowledge. We're customizing
not only products but also services, markets and the media. The
entire system becomes more diversified, complex and
fast-changing.
Heidi Toffler: The industrial model is based on economies
of scale: The more units that are produced, the cheaper they cost.
With CAD/CAM [computer aided design/computer aided manufacturing],
it became possible to produce one-of-a-kind variations at almost
zero extra cost. In a way, we're returning to the First Wave,
when artisans produced items one at a time, but now we can do it
with high tech. Now you can go on the Internet and feed in your
measurements and have clothing made just for you. Labor, land and
capital are being replaced by information as the basis of the
economy.
Entrepreneur:What is the mindset business owners need
to have to succeed during the transition?
Heidi: Expect the unexpected, and look for constant
change.
Alvin: Demassification is the best friend of
entrepreneurs today. Consultants and writers who tell entrepreneurs
what the trends are going to be generally do so by extrapolating
from what has already happened. But we're living in a
revolutionary moment, so trends are often upset. They discontinue,
explode or even reverse themselves. Trend projection is the weakest
way to find out what could happen. It doesn't tell you about
countertrends or why things are happening. We use sophisticated
models of social change that [evaluate] the interaction of
political, social environmental and other factors with
business--factors most economists and even many entrepreneurs
ignore.
Entrepreneur:What industries will flourish during the
next decades?
Alvin: Computers and everything related to them,
obviously, since this will be an exploding, if extremely
competitive, field for a long time to come.
Biotechnology is another. No one believed us when we talked
about cloning animals and possibly humans, and we now know the
pharmaceutical companies and a lot of biotechnology [firms] are
working furiously in this direction. This will impact our
health-care system.
Heidi: The flaw in straight-line projections for
health-care costs is that they don't account for cures
developed biogenetically, which could cause costs to decline. I
think an area where there will be tremendous growth is home health
care and elder care in general, as well as services beyond health
needs, from walking dogs to mowing lawns--services which
individuals or microcompanies could provide.
Alvin: Education is another field where you can expect a
vast number of entrepreneurial opportunities for niche ideas on how
to encourage better learning. The current factory system is going
to crack, no matter how strong the teachers unions, bureaucracies
and some parents resist, because it is so out of sync with what the
emerging economy and society will require.
Another sector where there should be many opportunities is in
the environmental area. We have real problems and must develop ways
to cope. And you don't have to be a big corporation to
participate.
Heidi: I would also point to opportunities for local
delivery. The Internet will demand alternatives to the current
system [of product delivery].
Alvin: I was just in Japan at a multibillion-dollar
company that started out as a small service firm and now has a
hundred different small businesses. They're very creative in
finding extremely small niches. While I was there, they bought
16,000 small trucks for $3,500 each, so you can see that a delivery
service using something like that would be very feasible.
Entrepreneur:What can the government do to encourage
the emergence of the new economy?
Alvin: The accounting and tax system needs to be changed
from the current one that favors high capital investments--buying
big machines that are depreciated over a long period of time--while
providing no recognition when you buy brains. The current system
doesn't help small businesses or information-intensive
businesses. Your computer is obsolete long before it's been
depreciated.
Entrepreneur:How can entrepreneurs help bring about
those changes?
Alvin: You need to bring together information-intensive
companies to confront the problems faced by small business in the
emerging economy. The Net is a great tool. You can get data to
support your position and invite others with similar problems to
join you.
Entrepreneur:What do you see happening in Japan and
China?
Alvin: Japan is divided between those who want to focus
on Asia and those who recognize that their economy is global. This
administration made a big mistake by focusing our foreign policy
relations with Japan almost exclusively on trade. We ourselves have
undermined the pro-American Liberal Democratic Party (LDP). We
pressured the Japanese to open their borders to Toys "R"
Us and chain stores, threatening the livelihood of the 70 percent
of the Japanese economy that is small business and a primary
support for the LDP.
Japan has to completely rethink its political system, which is
very feudalistic--barons who gather money for their followers.
Entrepreneur:What about Mexico?
Heidi: We supported NAFTA, and if it works out, the
theory is that it will be good for both [the United States and
Mexico].
Alvin: We've argued that our biggest national
security problem is Mexico. There are tremendous fissures in that
society, with near-guerrilla warfare in some areas and a government
so corrupt, it's threatened with being taken over by drug
lords. If Mexico explodes, the violence is likely to spill over
into our Southwest, possibly fomented by other countries for
anti-American reasons. We need to be less provincial and help build
a decent Mexican economy for our own good.
Entrepreneur:What is your outlook for energy?
Heidi: At one time, there were strong incentives provided
by the government and utilities for using solar power. Now it seems
we're back to waiting until a crisis occurs because we have so
much coal, oil and gas.
Alvin: We haven't yet seen the benefits of electrical
deregulation [or the emergence of] consumers who will push for
choice--what I call a more informed electricate.
Entrepreneur:What are you working on now?
Alvin: We're helping build a multimedia company
called FutureNet. We decided not to come out with a book in 2000.
We want to let the chaos settle down, so we probably won't
[write a book] until the following year.
Entrepreneur:You're referring to the Y2K
crisis?
Alvin: Among other things. As Kevin Kelly [executive
editor of Wired magazine] said: "It will be a disaster
but not Armageddon." Probably like a couple of Hurricane
Andrews.
Heidi: It's a perfect illustration of man's
inability to think ahead. But coming out with a book a year later
than some might expect doesn't make much difference when
you're always 10 or 20 years too early.
Scott S. Smith writes about business issues for a variety of
publications, including Investor's Business Daily.