A look ahead into 2013

So the world did not end in December 2012. Maybe the Mayans just got bored with producing stone calendars. It has been a momentous year with many changes and events including the continued Arab Spring the Queen's Jubilee, the Olympics and Paralympics as well as a USA presidential election.

Technology - 3D Printing

3D printing will become much accessible to the home user and the small business. The effect of this will an increase in the number UK based companies producing their own metal and plastic parts. This in turn will provide a way to endlessly customise standard mass produced items but also allow new entrants into markets where innovation rather than cost is key.

The Wallace version of RepRap 3D printer. Designed for simplicity

The current low cost MakerBot and RepRap hobbyist products will be joined by more semi-professional 3D printers in the sub £5000 category; this in turn may well provide a basis for small service based bureau style start-ups who can become expert in helping people get started in this new area.

There are some interesting problems beginning to surface in this are. Who owns the rights to a particular design file for a product? If you can download a design as easily as an MP3 file then copyright lawyers will be big winners here. We have also seen groups attempting to design a 3D printable gun. Materials will limit its usefulness to just a few shots but how will gun control be managed in this context?

Technology - Robotics

We are still waiting for the universal robot helper as portrayed in Hollywood films, but each year we get a little closer. We have robot vacuum cleaners, lawn mowers and military bots to disable bombs. New materials technology that emulates the human tendons, better battery capacity and improved computer power will bring us closer to the kind of being seen in the film i.Robot.

i, Robot

Look out for many news stories in this area as demographics in Japan, Europe and the Russia (ageing populations and too few births) means that older citizens will need increasing amounts of help.

Economy

A long grinding, remorseless year is what I see. The UK (Government) is still spending more than it earns; in spite of Government spending cuts we are still increasing the total amount on the UK's credit card. This can only continue as long as the Government can borrow money at a relatively low interest rate. The rest of us are gradually paying down our debts and so the banks are making less money out of us.

The UK High Street

With the high street economy still suffering after 5 years of no growth or contraction there will be no joy in this area. Many of the lease agreements written 5 years ago were defined as upwards only rental. When high street sales are falling and other costs (including wages) are rising, there can only be one outcome. Recent victims can be seen here http://www.bbc.co.uk/news/business-13977255. Many more shop closures and more chains going into administration. Who looks shaky in 2013? HMV, WHSmith, electrical retailers and perhaps Marks & Spencer too.

I also foresee a move by some to change the rateable status of charity shops. Many now appear to have an unfair advantage over regular owner managed shops who pay normal rates.

The Web

This market space will continue to grow as more discretionary spending moves from the high street to the web. There will also be a high degree of 'churn' in this space with many new start-ups and many failures as new models are trialled. Money will be made...and some investors will lose their shirts.

Don't be surprised if some people start demanding new on-line taxes to compensate the Government for loss of Corporation tax and business rates.

Inflation

The Bank of England and the Government would have us believe that inflation is around 2.7%. I'm not sure what fudge factors are being applied to keep it that low because most people's experience is that inflation is nearer 10% than 3%. Fuel bills, road fuels, food items and insurance all seem to have gone up markedly. I see no end to this, inflation both real and reported will continue to rise.

The Euro

I have been amazed by the way the Euro has been kept going. The ever more ingenious methods adopted by the EU to keep the Euro alive have been amazing to watch. But, those paying the price are the ordinary people of Greece, Spain, Portugal and Ireland. The vast majority of the 'funny' money provided to Greece is being spun around and channelled back to the banks in Germany, France and Italy to repay interest. In other words the Greek debt is getting bigger, the people are getting poorer and the economy is shrinking. There really is no way out of this terrible situation except through debt forgiveness and letting go of the Euro to allow Greece to get back to a sensible footing.

Spain may make it through whilst staying in the Euro, but the pain for ordinary people is already great and will become worse. For more information about the finance markets check out www.zerohedge.com.

Currency Wars

The Central Banks like the US Federal Reserve, The Bank of England and the Bank of Japan are all engaged in some form of money printing as a way of sustaining Government spending and to prop up their respective economies. All this money eventually ends up somewhere; for the last year this has been in the stock markets and in some property markets (look at how disconnected the London property market is from the rest of the UK with prices that are simply unsustainable anywhere else.)

But all this money comes with a price, interest must be paid and the debt is only serviceable whilst the interest rate is low enough. If the interest rates go up, the debt service burden on Government Bonds becomes impossible (as in Greece) and Government and or banking collapse will follow.

The only real alternative to this mess seems to be to allow inflation to deal with the problem. Keep kicking the can down the road and eventually the debt load won't seem so large. Maybe.

Real Wars

All too often currency wars and Government difficulties lead to real wars. Look how Argentina fell apart in the late 1970s. In a coup d'etat the Military came to power and eventually General Galtieri become supreme leader and invaded the Falkland Islands. In the last 12 months we have seen the so called 'Arab Spring' change the whole of North Africa but has it been for the better? I think the jury is still out on this.

Now we see a full blown civil war in Syria where foreign fighters and Syrians combined are being recognised by other countries (including the UK) as the legitimate Government of that country; even while Assad is still in power.

If Assad has looked at what happened in Iraq, Libya and Egypt he will do all he can to avoid being caught and I have a feeling he still has some last desperate cards to play. In the meanwhile, the mainstream TV channels almost completely ignore the unrest in some of the Gulf states. There will be more trouble here. Listen out for reports from Oman, Bahrain and Yemen in 2013. Africa will not be quiet either, Mali, Sudan, Somali and Libya will all hit the headlines.

Also look out for asymmetric conflicts like that in Afghanistan. Here a local well motivated fighting force has been able to keep the finest forces from the USA, UK and NATO tied up for years. In the process inflicting heavy casualties and great financial costs to all those involved.

Through the use of suicide bombers, rogue Policemen (and women), and low technology improvised explosive devices, the manpower and resources of the Western forces have been bogged down in a non-traditional, asymmetric, un-winable war. The Taliban know this and so do similar groups in Yemen.

The response?

The Western response to these wars is to increase the use of drone technology both in the air and on the ground. The Reaper drone delivers Hellfire missiles to enemy targets without being seen or heard and with almost no danger that its operation team will be hurt. It is war by remote control and its use will increase dramatically, just as it has over the last few years.

Mental Health

We have seen some dreadful stories in 2012 including a number where medication seems to have been part of the disaster. From school shootings in the USA, rising divorce rates and suicides in the UK, it's clear there are many deeply unhappy people who feel unable to go on.

Talk based therapy can do a lot to reduce the number of people stuck in depressive illness but it's expensive; highly variable in its outcome and difficult to administer. As a consequence we get an ever increasing use of drug based therapies that often inflict side effects (suicide for example) that are worse than the dis-ease being treated.

Unfortunately I do not see a big change happening here.  Drug companies will continue to market medications that have marginal effectiveness for the conditions they are being prescribed for. Family Doctors will continue to diagnose and prescribe these drugs and new mental health conditions will be described that many of us would consider normal human emotions.

DSM-5, the American Psychiatric Manual is nearing completion and with its launch several new conditions are specified. Previously grief was included as depression only if the feeling persisted for more than 2 months, now the drive is to reduce this to a few weeks. This of course will help drug sales but not help the person through the stages of their grief which in the ordinary course of events might take 6 months to 1 year.

Do you have a stroppy child? No actually you have a child with 'oppositional defiance disorder'; more drugs please! (Or maybe look at the type of diet the child is eating and the home environment before going down the drug path.)

Although this manual is drafted by Americans, the contents do filter into the UK healthcare arena and I fear for a generation of children who will be drugged from 5 years up because...they are acting like children. I hope I am so wrong on this.

Growth Areas

People to people lending (Peer to Peer) where the banks do not loan the money but would be investors get a better return than the current savings rates. Check http://uk.zopa.com/ (there are others).

Business' being started with crowdfunding. Check http://www.crowdfunding.com and http://www.kickstarter.com. It's been big in the USA for a while and now it's come to the UK. Small investors put a variable amount of money into a project and get some form of return when the project completes. That may be a film release or a technology product or a T-shirt. There are some amazing projects out there looking for funding.

The Black economy. If the Government of any country makes it too difficult to abide by the normal rules then people will just ignore them or find loop holes to avoid them (Starbucks tax anyone?). So I expect to see many more people simply ignoring the cascade of complex regulations from Government or the EU and just getting on with their own thing. Creating value and making a living. The Government will of course respond by drafting new rules and attempting to ban cash transactions above a certain value (as has been applied in Italy). Personally I hope they fail miserably in this little ruse.

What about you? What do you think?