Implications for hospitality and travel: Fliers increasingly will expect quality service to go with their cheap seats. Airlines therefore will have to do a better job of getting their planes into the air on time, even if that means scheduling them for odd hours. Meals can remain optional, but if customers choose to buy them, they had better be good. And so on. We believe the consumerism of the past will prove to have been no more than prologue for the greater demands to come.
A good example is the new Terminal 5 at Heathrow, where nearly everything is bigger, better, and more luxurious. Check-in kiosks scattered throughout the spacious facility mean that waiting lines are no more than two or three deep. There are six lounges, a luxurious travel spa, more bathrooms than in older terminals, even showers for travelers.
There are 22 places to eat, from simple snack shops to high-end restaurants. There are designer clothing stores, a luggage shop and a luxury leather store, a computer shop, bookstore, six newsstands, and even a Harrod’s. When Terminal 5 is fully operational, 80 percent of passengers at Heathrow will pass through it. Chances are that they will be glad to do so. Travelers are likely to be happier still when other air terminals are as convenient and comfortable as Terminal 5.
Cruise lines increasingly face similar pressures. The prestige-oriented days of booking through a travel agent are coming to an end. Today’s consumers want value and convenience when buying a cruise package just as they do in any other form of shopping. That means picking through all the tours that seem appealing, selecting the one that gives the best possible value for the price, and buying it then and there.
In a networked, consumerist society, a respected brand is any chain’s most important asset. This will be particularly significant for hotels and restaurants. A reputation for comfortable accommodations, pleasant surroundings, and top-notch service requires constant effort to establish and maintain. It can be lost in moments if a disappointed customer complains in the Internet’s many forums and chat rooms. More than ever before, quality and service are all-important.
Consumer legislation and “bills of rights” are no more than reminders of business basics. The travel and hospitality industries exist to serve their guests. Companies that do it brilliantly will continue to prosper. Those that do not will find many new, fast-growing competitors eager to build a customer base at their expense. The essence of a consumer society turns out to be intense, endless competition to be the best in the industry.
22. Research and development play a growing role in the world economy.
Total U.S. outlays on R&D have grown steadily in the past three decades. In 2006, the United States spent about $330 billion on R&D. China has taken second place in the world’s R&D spending, with a budget estimate at $136 billion in 2006. China says it will raise its R&D spending from about 1.23 percent of GDP in 2004 to 2.5 percent in 2020. R&D outlays in Japan have risen almost continuously, to nearly 3 percent of GDP, some $130 billion in 2006. R&D spending in the European Union (EU-15) amounted to $230 billion in 2006, about 1.9 percent of GDP. The European Commission has set a goal of raising R&D spending to 3 percent of GDP by 2010. In Russia, R&D funding is roughly 1.5 percent of GDP, up from just 0.7 percent in 1997; this amounted to about $26.25 billion in 2006. These figures do not include whatever clandestine military research escapes notice.
Assessment: This trend is stabilizing as developed nations, particularly the United States, devote more of their resources to less productive activities. We believe this is a temporary phenomenon. The trend will regain momentum in the years ahead. It will not fall off this list before the middle of this century.
Implications: This is a significant factor in the acceleration of technological change. The demand for scientists, engineers, and technicians will continue to grow, particularly in fields where research promises an immediate business payoff.
Low-wage countries such as China once took only low-wage jobs from advanced industrialized countries such as the United States. Today higher-paid jobs in science, technology, and the professions also are at risk.
Countries like India, China, and Russia once suffered a brain drain as those with high-tech skills emigrated to highdemand, high-wage destinations. Today, many students and professionals spend time in the West to learn cutting-edge skills, and then return to their native lands to work, start companies, and teach. This promotes the growth of some developing countries while reducing the competitive advantages of the developed world.