Happy New Year! Before we get too far into 2021, I wanted to share a short list of predictions for the year ahead.
Before I dive in, a few ground rules:
1) These are projections about what will happen, not what should happen. I’m not advocating, just stating what I think will happen and why.
2) The subjects of these predictions are important, but they aren’t necessarily the most important things that will happen in 2021. For example, I think next week’s Senate runoff election in Georgia is equally (if not more) consequential than any of these predictions but I don’t have enough information to make a reasonable projection.
3) As a marketer (and former journalist), I like to think in headlines. It’s important to consider not just what will happen, but how people will interpret and respond to those events and trends. Therefore, I’m presenting my predictions with that context.
4) Finally, each of these predictions will have a degree of certainty / uncertainty attached to it. I’m hoping to refine my thinking on each of these topics in the coming months, so these are starting point projections that I plan to revisit based on continued research and your feedback.
Now let’s look into the crystal ball!
The economic recovery becomes an Uppercase K and lowercase k
I’m relatively certain that the K-shaped economic recovery trends we began to see in 2020 will continue into 2021.
On the one hand, assets such as stock and residential real estate are likely to continue soaring in price thanks to loose monetary policy and, in the case of real estate, constrained supply. That’s great news for everyone who owns a home or receives equity-based compensation (401k’s, RSUs, etc.).
At the same time, more people will join this fortunate cohort on the upward swing of economic recovery as retail, hospitality, transportation, and other service industries rebound throughout the year. Unemployment will decline and wages may increase for everyone from restaurant staff to hotel workers.
Yet the economic recovery for these folks will be more like a lowercase k rather than the Capital K experienced by white-collar workers in industries such as tech and finance. The wealth gap will continue to increase between these groups because wealthier, white-collar Americans will accumulate additional highly-priced assets that will grow in value much faster than the wages of frontline, service economy workers.
And an even wider gap will emerge between these two groups and those who remain stuck on the K’s downward slope. With state and local governments likely to face massive budget cuts in 2021, the next year will be even tougher than 2020 for the least fortunate among us — such as the homeless, adopted children, and those who rely upon public assistance for housing or transportation.
Certainty level: 85%, with the biggest unknown variable being the outcome of next week’s Senate runoff election in Georgia. If Democrats win those races, I would predict that state and local budget cuts won’t be quite as severe because of additional federal aid.
More money, more problems for big business
In 2020, there was a surge of corporate activism in response to public and employee pressure following several high-profile incidents of police violence and racial discrimination.
Yet many companies struggled to go as far on these issues as their employees and stakeholders demanded. The tensions between “focused” capitalism and stakeholder capitalism will continue in 2021, but will take on a new and more complex dimension.
The ongoing K-shaped recovery will lead to some massive windfalls for corporate America, but it will also exacerbate the existing wealth and income gaps between white Americans and minorities. This will push employee and community activists to go beyond advocating that companies take a stand on issues of social and legal equality such as policing, criminal justice, and diversity/equity/inclusion workplace initiatives. I’ll predict that corporate entities in 2021 face increasing pressure to deploy some of their extensive (and increasing) financial resources toward driving economic equality for minority groups.
Here are a few specific ideas that I suspect will become more prominent parts of the discussion around stakeholder capitalism in 2021:
Placing corporate funds in black-owned banks to increase their lending capacity (PayPal, Netflix, and others began this trend in 2020).
Creating stock endowments (a la Airbnb) that are set aside for part-time, gig, or contract workers, who currently lack access to the incredible wealth building opportunities that many full-time workers gain through their employee stock plans.
Putting corporate PR and money toward advocating for public policies such as wealth taxes, first-time homebuyer tax credits, student loan debt relief, and birthright equity index funds that could reduce the racial wealth gap.
Certainty level: 75% certain that activist pressure increases (but not at all certain that major changes in corporate policy ensue)
Fans, festivals, and flying return, but questions remain
Even though the initial COVID-19 vaccine rollout in the US is going slower than expected, I would bet that it picks up steam in the first half of 2021. That prediction combined with my sense that many powerful entities (concert promoters, professional sports leagues, airlines, etc.) will want a rapid resumption of live entertainment and travel leads me to believe we’ll see large-scale gatherings of people at sporting events, music festivals, and transportation hubs before the end of the year.
I’m predicting we’ll move quickly toward a system where these events and activities are open to people on the condition they prove they have been vaccinated against COVID-19. This will likely take the form of a digital passport, perhaps one that you store on a smartphone alongside your boarding pass or concert ticket.
But this approach will lead to some thorny questions as we start to gather together in large groups once again:
Should masks and/or social distancing be required for these public gatherings of vaccinated people? Until we can determine whether the COVID vaccines prevent transmission rather than simply illness, it seems the answer will be yes — but those policies will likely be even harder to enforce than they are currently.
Will COVID-19 testing and/or quarantines still be necessary before and after events or travel? Again, it seems like these would be necessary conditions for resuming public gatherings until we can say definitively that they won’t lead to the rapid spread of COVID-19 among vaccinated attendees who might then pass the disease along to non-vaccinated people who could become severely ill. This will pose another compliance challenge.
Will non-US/European vaccines be accepted? I think this may be the most interesting question facing the vaccine rollout in 2021, as it remains unclear to what extent the US will recognize the validity of vaccines produced in Russia, China, and elsewhere that may end up serving most of the world outside of the US and Europe.
Certainty level: 50% certain that events and travel resume, given all the outstanding questions
Vaccine diplomacy becomes a big priority for Biden
Doubling down on the question of US/European versus non-US/European vaccines, I think we’ll see the Biden administration focus heavily on promoting the former for both practical and patriotic reasons.
On the practical side, it may be easier for the US government to know the true efficacy of US/European vaccines given the initial reticence of China and Russia to release data about their own vaccine effectiveness. Better visibility into US/European vaccine efficacy will allow the Biden administration to more accurately adjust policies around immigration and travel to the US among vaccinated foreigners. In addition, it may be easier to secure public acceptance of inbound travel and immigration if the people coming into the country are vaccinated with a US or European vaccine.
On the patriotic side, the broad adoption of US vaccines will allow the country to bolster its standing in the world by helping other nations put the pandemic behind them. This is particularly important vis-a-vis China, which is making its own push to distribute its vaccines throughout much of the world and has much to gain in terms of global influence if it’s successful.
Certainty level: 60% certain that the US will seek to promote US/European companies’ vaccines, especially if additional vaccines (e.g., Johnson & Johnson) are approved and data about Chinese and Russian vaccine efficacy remains scarce.
Twitter suspends @realDonaldTrump
As tech platforms continue trending toward increased moderation and Donald Trump continues to share controversial content, this seems possible if not probable.
Until now, most of Trump’s tweets have been protected under Twitter’s policy of granting broad latitude to content posted by world leaders. On January 20, however, Trump will no longer be President and that policy will no longer apply to him.
I suspect this will lead to two things happening:
Freed from the responsibilities of the Presidency, Trump will express and promote even more controversial opinions on Twitter. These could easily veer into personal harassment or messages that appear to incite violence.
Freed from its world leaders policy and the political considerations around suspending a US president’s account, Twitter will at some point suspend Trump in response to a violation of its platform policies.
If this happens, I bet it will lead to significant backlash against Twitter and a renewed push for the repeal of Section 230 protections for social media. But I also predict that @realDonaldTrump will be restored before things boil over, and we will continue to debate the proper approach to online content moderation until it becomes an election issue (again) in 2022 and 2024.
Certainty level: 50% that Trump is suspended from Twitter; given that, 90% that he’ll be restored