Economic trends at both the macro and the micro level will create change across industries, including in the association sector. Governments and large corporations are driving change from the top, while consumers’ purchasing and philanthropic choices suggest individual responses to economic conditions. The drivers of change below explore how economic shifts could affect diverse industries, the workforce, and the associations that represent them.
Mergers and acquisitions have caused a growing number of industries to be dominated by a smaller number of companies, while in the tech industry, network effects have led to the dominance of firms like Apple, Amazon, and Google. While these firms benefit from economies of scale that cut costs, their dominance can reduce competitiveness and economic dynamism. Additionally, by attracting the best talent, these world-beating firms capture a disproportionate share of productivity growth, contributing to stagnation in the rest of the economy.
Global Power Shifts
Existing global power structures are breaking down, as new centers arise and power diffuses. Power is shifting among nation-states and flowing to several kinds of transnational and sub-national organizations and groups. This will change the operating environment for associations, especially those with cross-border reach.
Demographic and political changes, loss of trust in institutions, and the growth of donor-advised funds and impact investing will drive shifts in the channels, targets, and geographic focus of American philanthropy. These shifts will offer opportunities for associations to access new resources, engage new members, and create new partnerships.
The Sharing Economy
The sharing economy—a peer-to-peer exchange of goods or services—will continue to grow globally and expand into new areas of commerce, although regulatory issues constitute a key uncertainty. The sharing economy portends a shift in the balance between access and ownership, from ownership of resources to access to goods and services. Organizations that broker exchanges between owners and users play a pivotal role in this economy.
The Stagnation Economy
U.S. economic growth is slowing—the recovery since 2007 has been steady, but it is the slowest recovery since World War II. Productivity growth is also slowing, and there are concerns that innovation may be decelerating as well. The result is a contracting middle class, with weak job and wage growth and no clear solutions in sight. Lackluster economic growth may linger throughout the rest of the decade, despite an economic environment that seems generally stable and healthy.
Trade in Transition
The rules of global trade are up in the air, with growing uncertainty about whether the trend toward global trade harmonization will be maintained. The United Kingdom and the United States have begun renegotiation of once-settled trade policies that supported economic globalization, pushing the world trade system toward economic nationalism.
To help staff and volunteer leaders explore what these drivers of change might mean for your association and industry, ASAE ForesightWorks offers the Economic Conditions Action Set. The set contains all six briefs in this topic area and an introduction designed to help you work with the briefs, both on your own and with a group.