There have been two great periods of economic upheaval in our recent history – the Long Depression of 1873 and the Great Depression of the 1930s. After each reset, the cultural landscape changed in significant ways. The Long Depression ushered in three decades of economic innovation including national infrastructure, systemized innovation production and manufacturing. The Great Depression’s legacy of suburbanization created a new car culture, and demand for appliances, furnishings, and other products contributed to the age of mass consumerism.
So here we are in the third great reset, wondering what this recovery might look like, how long it might last and whether there’s any silver lining this time around.
As one economist wrote about this latest crisis, “Our excesses have been so great that there is no way out of this that doesn’t lead to a general fall in living standards.”
And since we as marketers have traditionally appealed to a more aspirational way of life to convince people to buy what we’re selling, understanding this shift is of critical importance.
Author Richard Florida, in his latest book The Great Reset: How New Ways of Living and Working Drive Post-Crash Prosperity, writes that resets are characterized by three core elements: changes in consumption patterns, development of new/different infrastructure, and geographic realignment. Let’s take a quick look at each.
We’re already seeing changes in consumption patterns. The virtual collapse of the financial system has made credit hard to get, sending our over-extended culture into credit rehab. Personal savings rates are up for the first time in decades. Luxury brands have taken a hit. McMansions have become unfashionable albatrosses. Buying simply for the sake of buying is no longer the sport it once was. Sharing services like ZipCar are gaining traction as individual ownership isn’t the priority it once was.
Our national infrastructure, from crumbling bridges and leaking pipes, is well beyond the need for incremental upgrades. It needs a major overhaul – it needs an injection of innovation. New forms of energy need to be made affordable and accessible, new forms of transportation need to quickly move goods, people and ideas. New schools need to equip children with the analytical skills needed in the new jobs market.
Florida predicts the rise of mega-regions such as the Washington, D.C., to New York corridor where educated, creative change agents fuel urban growth, re-invent service jobs to be more innovative, and propel the economy towards creating sustainable work and prosperity. This migration will cause cities like Detroit, once the nation’s 11th largest city and now decimated by the implosion of the auto industry, to re-imagine and re-engineer a future not based on manufacturing jobs. So will the entire country.
If this reset is anything like the previous two, it will take our economy about 30 years to fully recover. And if this reset holds true to its predecessors, the silver lining is that imagination and innovation will lead us out of this economic crisis.
If marketers can understand these changes, there are huge opportunities to help redefine and reshape our economy into a more sustainable future.