Wednesday, August 21, 2019

A Series, Part 3: What Does the Future of Jewelry Look Like? Climate Change.

Last time, we wrote about the Millennials, and how we might need to plan for the social environment they might be building.  Well, they and GenZ, the super-techies that follow hot on their heels, will be dealing full bore with that other environment, the Earth, that is about to throw another wrench into life as we know it.
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Here is the list of issues we have been covering — were are up to number 3.
  1. The Gig Economy
  2. Millennials
  3. Climate Change
  4. Consolidation and/or Decline
  5. Natural Diamonds vs Lab-Grown
  6. Banking
  7. Image 
  8. Demographics
  9. Retail Evolution
  10. Industry Structure
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Climate Change.  The subject is the undercurrent for everything we do today.  We do not know how to handle it personally, as it represents a huge looming threat to life as we know it, and that in itself leaves us feeling unmoored and anxious.  There is international agreement that the threats may be existential.  This is not a cyclic occurrence, unless we are dealing in eons.  The solutions, if attainable, may well be epic in scale. It appears that there will not be any aspect of human activity and life that will not be impacted, no matter what actions the nations of the world take.


As it is, recent United Nations reports already show nearly a billion people in the world dangerously exposed to water and food shortages.  Unlike the "green revolution" that averted great famines in the last century, we are not possessed at present of powerful new approaches that will adequately avert these rising catastrophes.  Many countries are having difficulty meeting the targets agreed to in the Paris Accords on environmental remediation, only demonstrating the magnitude of the issue.  In the US, quite aside of the current administration's rejection of the accord, many states and cities have started their own programs on minimizing the effects of fires, droughts, storms and rising seas.  At least that.

We have already seen the passion with which young people have come out in public to demand vigorous action to protect their future.  Is there any doubt that young people are fully aware of what the world is facing?  Is there any question that their actions are tempered by this awesome undercurrent in their lives?  No, certainly not.  It is their thinking and outlook that we need to understand and react to.

I believe that one aspect of people's psychological reaction to the potential for severe environmental degradation is to go and see as much of it as possible before it disappears or becomes unaccessible.  (Another might be to hide and look away.)  So there is an increase in travel, including expensive visits to Antartica, Easter Island, the jungles of Indonesia and Amazonia - Eco-tours.  Cruise travel is booming.  Not that such travel is not seriously polluting!

One investigator recently calculated that the energy consumed by a single person flying round trip between London and Cape Town is enough to heat an average home for a year.  We may be staggered by such factoids, but we are not modifying our behavior....yet.  Will the time come when we have to, or will be forced to?  Probably, but we do not know when, or how, or with what cumulative impact on our lives and our futures.

Still, it strikes one that people will spend many thousands on travel, but not consider that kind of expenditure for jewelry.  Could that be a telling valuation of what jewelry might mean under this clouded outlook?  We could make a similar comparison with other luxuries, and weigh whether it is the climate outlook that is a cause, or a simpler change in preferences, in views on categories, brands and images.

We can look back a hundred years or so, to a time when possessions were a mark of wealth and success.  In the intervening years we have found ways to expand that "privilege" to the greater public — thank you American Express for inventing the credit card.  Enjoy today by mortgaging the future.  Enjoy today, because tomorrow may never arrive.  We are, after all, a country with an economy that is about 70% driven by consumerism.  Wealth today is measured in money.  Possessions may be a hinderance when one has to move.  Welcome to the age of sharing and renting.  Who needs to buy an evening dress when you can go to Rent the Runway, a booming business; or maybe Rent a Riviera?  Some of that is already with us.

In itself, all of that is not bad if it indicates a strong economy that has allowed many people to enjoy the fruits of hard labor, and are serving a consuming public.  We are witnessing that phenomenon in China over the last year especially, where average income has risen about twenty times (admittedly over a low base) in the last two decades or so, while US wages have barely gone up by 3%.  The Chinese, in some ways have replicated the US boom in personal acquisition that we saw after WWII.  They may not have the good fortune of having as long a run.

By now, we are painfully discovering that our consumption of the Earth's output cannot go on much longer without paying a heavy price.  If we are lucky, we will turn the need to preserve, conserve and recycle into the big new businesses of the future, where repairing the Earth will make us heroes.  We can only hope.

That presents the possibility that the jewelry business will return with a vengeance as people reward themselves for escaping extinction.  Again, we can only hope.  In the meantime, we do face a transition of unknown scale, as I noted, that will include restraints on the business we have known.

In the short run, everyone will look to sustain the business we know.  We will all try to adapt to changing realities while also trying to apply evolving technologies wherever possible.  The availability of raw materials — most of which are mined — may be curtailed by governmental restraint, demographic changes, political upheaval, and the availability of resources such as fuel, food, and manufactured products.  This may seem obvious, but even minor changes in each could combine to have serious effect on a particular business.

In sum, we are facing a threat we cannot fully comprehend.  But that uncertainty is bound to have an effect on our thinking and spending.