As we cross into 2020, we’re not only marking a new year but we’re entering an entirely new decade. And what a decade the past one has been. While you might not feel much different, the world has changed rapidly since 2010.
We thought now would be a good time to pause and reflect on how far we’ve come over the past decade. Here are five economic megatrends that defined the economy over the past 10 years and drove significant change in the world.
TECH GROWS INTO THE HYPE
Ten years ago, vaunted technologies, such as artificial intelligence, autonomous systems, ecommerce and digital currencies held a lot of promise. But today, those promises are now in practice. Take ecommerce, led by Amazon. The ecommerce company employed 24,000 people in 2010, but today more than 647,000 people work full-time at Amazon.
In 2010, ecommerce sales accounted for 4 percent of all retail sales in the U.S. That’s ballooned to 11 percent, or $154 billion, in 2019. And it’s growing at a double-digit rate. Today, robust online marketplaces along with next-day (heck, same-hour shipping) are must-haves for retailers, and companies lacking online muscle are rapidly being left behind.
Artificial intelligence held immense promise in 2010. The past decade saw IBM’s Watson defeat humans on Jeopardy!, Google’s AlphaGo take down the world’s top Go player and a computer system named Aristo pass an 8th-grade science test. Nowadays, artificial intelligence detects cancer, translates languages in real-time, enhances your selfies, generates business insights, recommends your next television show, approves mortgages, composes music, drives cars and even finishes your emails. Ask Alexa, Google Home, Siri or Cortana anything these days, and they’ll probably have an answer for you or do what you ask.
Cryptocurrencies that run on the blockchain, such as bitcoin, altered how money itself is defined and numerous other cryptos have since emerged — central banks have even considered digitizing their currencies using blockchain. For a little perspective, in 2010 one bitcoin was worth $0.05, but by December 2017 a single bitcoin was briefly worth over $19,000. A whole new economic class, known as bitcoin millionaires, were minted in the past decade.
Self-driving vehicles are sharing our roadways — people have even been caught sleeping in their Teslas as they fly down the interstate on autopilot. It’s clear that tech, much of it hyped 10 years ago, has become a reality and is fundamentally reshaping our society in exciting ways. And, despite early fears, tech is creating more jobs than it’s eliminating. The World Economic Forum expects machine learning and AI to create 133 million new jobs by 2022.
SOCIAL MEDIA: FROM FUN TO FRAUGHT
A decade ago, Twitter was a quirky micro-blogging platform where you could follow celebrities and tell the world you just went to the grocery store. Today, it’s where market-moving policies are unveiled, politicians feud, social movements begin, and careers are made or destroyed. Facebook, which now claims a quarter of the planet’s population as users, went from a website that connected college students to an entity so powerful that CEO Mark Zuckerberg has been called to testify before Congress on numerous occasions to explain his company’s role in influencing elections and free speech.
On the other hand, Facebook has revolutionized advertising and marketing by putting old models to pasture while opening new opportunities for businesses large and small. In 2014, accounting firm Deloitte estimated that Facebook alone had generated $227 billion in economic activity and created 4.5 million jobs globally. Think about it: A social media department is now standard in almost every sizable company. Companies can now connect directly to customers all over the world.
Today, more young consumers watch YouTube than traditional television, and they name YouTube stars when talking about celebrities rather than actors on “prime time” shows. Now, teens are becoming millionaires playing video games live for massive audiences. Social media has transformed the way people connect and the way businesses operate.
THE FED’S ABOUT-FACE
Paul Volcker, who passed away at age 92 in December, was chairman of the Federal Reserve from 1979 to 1987 and made his mark in the economic history books after declaring inflation his mortal enemy. As prices continued to rise rapidly in the 1980s, he served the markets a bitter pill and raised interest rates higher and higher to tighten the money supply and kill the dragon that was inflation. His policies pushed the economy into a recession as consumers stopped buying homes and cars, but Volcker ultimately succeeded in exorcising inflation from the economy. His efforts came to define the Fed’s dual mandate for years to come: keep unemployment low and keep inflation in check — no matter the cost to economic growth or employment.
But over the past decade, in the wake of the Great Recession, the Federal Reserve has sharply departed from Volcker’s precedent. Over the past decade the Federal Reserve has kept interest rates at historically low levels to boost spending, open the spigot on the money supply and bolster markets. Notably, for the past year Fed Chairman Jerome Powell has aimed policies at spurring inflation higher. Indeed, in a complete reverse course, the Federal Reserve has now shifted to a very different dual mandate: keep the economy growing and unemployment low – even if inflation shoots higher.
It’s an about face that’s shaped the current record-setting economic expansion in the U.S., and will no doubt continue to define the economy in the decade ahead.
A RETREAT FROM GLOBALIZATION
You could say it all started with Brexit, but that 2016 political movement was simply fruit from seeds that had been planted years ago. Still, waves from this singular political event rippled across the world as leaders increasingly challenged the relationships with other countries and began to look inward.
Here in the United States, tariffs and trade wars have pushed the U.S. into the boxing ring with other economies. Waves of leaders lifted by populist sentiment have taken control of some of the world’s largest economies in Brazil, Japan and Europe. More and more, the effects of a globally interconnected economy are being called to question as nations balance sovereignty with economic interests. In the 1990s, globalization promised a borderless world that tied disparate national economies into a single, functional global economy. But the threads that held it all together have frayed recently. Where we go from here will no doubt be sorted out in the decade ahead.
YOUR GENETIC CODE, DECODED
Costs for mapping the human genome, the entire set of DNA code that makes you uniquely human, have fallen from $100,000 in 2010 to roughly $1,500 per genome in 2019. This prime example of Moore’s Law has allowed researchers to pioneer new drugs and treatments that target the individual – not an “average” population. We are now living in the age of personalized medicine. Today, you can even trace your (or your dog’s) heritage to distant lands with a cheek swab. You can get a read out of your food allergies, gut health and more. Advances in genetics over the past decade have created a niche industry that’s welcomed hundreds of new companies built on unlocking the promise in genomes, from humans to the fruit fly.
These advances have made it possible to snip and swap strands of DNA to coax the body into fighting cancer, malaria, eradicate HIV, restore sight to the blind or engineer new crops that are resistant to drought, heat and other diseases. Yeast, that little organism that converts sugar to alcohol, can be genetically modified to consume sugar and instead convert it into perfume, pain killers, vanilla, spider silk and even cow’s milk.
These new and powerful genetic tools have shifted how we view disease and treatment. It redefined the foods we can grow and materials we can produce. And as the costs for sequencing continue to fall, the price of care could eventually fall in tandem as gene-based therapies help doctors hit the bull’s eye rather than arrive at cures through a costly process of trial-and-error. Food producers could benefit from crops that can be customized to their climate, and industrial products could be produced in more eco-friendly ways.
No matter how you slice it, we’ve all come a long way from 2010 and it’s been an exciting ride. If the past ten years is any indication, the next decade will be fascinating.