2020 was a difficult and unusual year in almost every aspect. Yet out of this turmoil rose many societal trends, inventions, and changes in government that are destined to shape the United States in the years to come. Winthrop Partners has identified seven trends that we believe will be the most impactful on business and society. Like any predictive process, we can be blindsided by unforeseen events or trends we believe to be an impactful fizzle. For instance, last year, we missed COVID-19 and thought that meat alternatives would be a big game-changer. However, over the years, we have highlighted a number of key trends that have propelled industry and driven societal changes.
Here is a quick synopsis of the trends we identified as being the most impactful for 2021.
- China Relations: Our relations with China have dramatically shifted under the Trump administration. Biden will likely take an aggressive stance by trying to enlist multilateral support of his trade policies, but he may be hampered by his family’s financial transactions with Communist China.
- The Specter of Inflation: Inflation is out there, but it can be easy to ignore right now. However, price increases in many consumer products and commodities have been increasing, and economic anchors such as energy, travel, and entertainment are expected to rebound in 2021. Furthermore, one out of every five dollars in circulation today was created in 2020. If excess currency creates inflation, this fact should give you pause.
- Increased Government Regulation: President-Elect Biden has pledged to re-regulate America. Biden’s purported regulatory focus will be on eight sectors and 21 key areas, including the Pandemic, Economy (taxes unionization, buy American), Civil Rights (Equality Act, Diversity and Inclusion, gun control), Immigration (pathway to immigration, DACA, halt deportations), International Relations (rejoin WHO, The Paris Climate Accord, and the Joint Comprehensive Plan of Action, aka the Iran nuclear deal), Environment (create Dept. of Climate Justice, increase regulations on all fossil fuels, ban on coal and natural gas), and Consumer Protections (revive the CPB and crack down on financial firms).
- Infrastructure Projects – Leaning Green: Biden Proposes a $2 trillion “Build Back Better” infrastructure, which will focus on greener aspects of infrastructure, including the production, storage, and distribution of green energy, environmentally retrofitting existing buildings, constructing new buildings to much higher environmental standards, providing broadband for all, as well as public works projects addressing rising sea levels and flood-prone areas.
- Energy Storage: The issue with Green energy is storing the excess energy produced at peak times. Green liquid hydrogen and solid-state batteries are emerging as two answers to the problem of storing excess green energy and powering large-scale mobility (e.g., trucks, buses, ships, airplanes).
- Synthetic Messenger RNA: Messenger ribonucleic acid (“mRNA”) contains the instructions for creating and managing the processes of every cell in every living organism. Because of its unique role, mRNA is considered the “Software of Life”. Both the Pfizer and the Moderna vaccines use synthetic (man-made) mRNA to inoculate the population. It is the first time that the FDA has approved the application of this new technology.
- Tech Acceleration: Analysts have said that the world has undergone five years of technology transformation in six months due to COVID-19. Part of that transformation is due to the introduction of new technologies, but most of the transformation has been due to the rapid adoption of newer, but existing technologies. Ultimately the use of these technologies might slightly abate as the virus comes under control and people revert to their pre-COVID habits, but COVID and new technologies have served to accelerate long-term shifts in retail, office, entertainment, medical, fitness, advertising/news reporting, and restaurant sectors.
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Thomas Saunders is the Managing Partner of Winthrop Partners. Prior to founding Winthrop Partners, Tom was Senior Vice President at what is now JP Morgan. His career includes senior and executive roles at Brown Brothers Harriman and First Niagara Bank, a top 25 Bank. Click here to contact Thomas Saunders about your investment and planning requirements.