“All good things must come to an end.”, at least that’s the old saying, but perhaps it would be more accurate to say that the idea of what is and is not a “good thing” can change between one generation and another and that the pace of this change has increased over recent decades thanks to the great advances in technology. It can often be helpful for investors to keep an eye on trends and try to identify which ones are likely to be around for a long time and which are likely to fade out over the near future. With that in mind, here are some trends which could end with the baby-boomer generation
Even though banks themselves are nothing remotely new, the relationship between banks and the public has changed significantly over recent decades. For most of history, workers have been paid in cash and paid their bills in cash. They might have had a bank account for their savings, but it was unlikely to be a necessity. Now, however, having access to a bank account is, if not essential, then at least highly beneficial. This has allowed banks to grow and grow and, in some cases to reach a size where their failure could cause serious problems. It seems very likely that even if governments are prepared to allow the current behemoths to continue to exist, post-boomer generations may be less inclined to use their local, high-street bank (assuming they even have one) and more inclined to vote with their feet (and wallets) and look for smaller, niche banks with which they feel a stronger level of connection and trust.
While the banking giants were seen by governments as being too big to be allowed to fail, the social-media giants may be seen as too big to be allowed to succeed. The crux of the problem is that organisations of any sort can only keep going if they are able to cover their costs and profit-making companies can only stay in business if they actually turn a profit. The problem for the social-media giants is that their business model is largely based on generating advertising revenue. This means that they have to ensure that their platforms are “business-friendly”. Their problem is that their users do not necessarily want “business-friendly” content and even if they do, they may object, on principle, to the social-media giants trying to clean up their platforms by imposing sanctions (or banning) edgier content creators. That’s even before you get to the issue of whether or not these platforms are now so big that they are considered public spaces and hence required to uphold freedom of speech (at least in certain jurisdictions, notably the U.S.). The major social media companies need to find a way either to square this circle (quickly) and thus convince both governments and the public that they can be trusted or face the prospect of going out of business as independent content creators move to different platforms, taking their audiences with them.
The globalisation of manufacturing and agriculture
This may be a bit of a controversial one, but it is definitely possible. While there is nothing to stop knowledge-based and/or digital industries from operating on a global basis, the large-scale transportation of manufactured goods and foods brings all kinds of environmental issues and can also lead to social problems. Because of this, future years may see the globalisation trend partially reversed so that as much as possible products are manufactured near where they are to be used and food is grown near where it is needed. Only niche industries would centralise and transport their products or produce globally.