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I’m not a futurist

The other day, I said that I was confused about the future. Some folks said that seems strange for ‘a futurist’, but I’m not a futurist. I’m just a guy who looks to the future and tries to understand and predict what I can. We often get predictions wrong. The future isn’t what it used to be.

However, having done this for quite a while, there are some things that are certain and some things that are uncertain. What is certain is that technology will continue to progress and be upgraded; financial markets will continue to grow and expand; companies will continue to innovate and compete; humans will continue to learn and challenge; and so on.

The things that are uncertain are things like the future of our planet and the climate; the nature of the next financial crisis; the role of humans and work if everything is automated; whether we will still use cash and cards; and so on.

We can predict some things with relative certainty – we will stop using cash and cards one day – but not with precision – we don’t know when we will stop using cash and cards.

So, when I look to the future I always come back to the PEST model. It’s a simple approach, and easily demonstrates the things that are certain and uncertain.

PEST stands for Political, Economic, Social and Technological change. You can map out these areas and some are more easy to forecast than others. For example, we know today that artificial intelligence, blockchain, quantum computing and other technologies will revolutionise the world; we just aren’t sure how yet.

However, there are other things that are the so-called black swans. The black swan is known to exist but is much harder to forecast. An example was the 2008 global financial crisis. It was predictable – how can everyone buy a house when they have almost no income? – but it was not forecast – no one expected the collapse of Bear Stearns, Lehman Brothers, Northern Rock and co, because we thought their counterparties would always prop them up.

We now live in a world where there are many systemically important institutions, not just banks. Sure, there are many banks that are too big to fail, but what about airlines, pharmaceuticals, manufacturing, technology and so on and so forth. What would we do if Amazon, Facebook, Google, Alibaba or Tencent disappeared overnight?

Of course, we say they won’t. But then we get what some would claim is a black swan event, like the coronavirus, which is not a black swan event. We all knew there would be a pandemic one day. Maybe several pandemics over the next few decades. We had SARS and Ebola, and predicted there would be more. Yet, the black swan part of this is that no one thought there would be a global lockdown, forcing everyone to work at home and stop the world. No one predicted almost every government of every country would cancel Spring 2020.

Now, we live in the age of the coronavirus and everyone has been panicking. We are wearing face masks. We are all avoiding crowds and events. Organisers are cancelling meetings and travel. Conference and media firms and airlines are all collapsing fast. Longer-term, who knows?

A pandemic, a government overthrow, a systemically important company collapse, the death of a founder, the cancellation of your business plans, the loss of a job, the end of a relationship and more are all unpredictable. It means that nothing in life or the future can be forecast with complete certainty. We just try our best to plan our path the best we can.

No one is a futurist. We are just people trying to find our way the best we can.

About Chris M Skinner

Chris Skinner is best known as an independent commentator on the financial markets through his blog, TheFinanser.com, as author of the bestselling book Digital Bank, and Chair of the European networking forum the Financial Services Club. He has been voted one of the most influential people in banking by The Financial Brand (as well as one of the best blogs), a FinTech Titan (Next Bank), one of the Fintech Leaders you need to follow (City AM, Deluxe and Jax Finance), as well as one of the Top 40 most influential people in financial technology by the Wall Street Journal’s Financial News. To learn more click here...

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