Economist Jeff Rubin, author of Why your world is about to get a whole lot smaller: Oil and the end of globalization was interviewed on CNN’s “Your Money” this past weekend… and guess what? Our lives are about to change. “Our cars, our homes, our whole world has been getting bigger in the cheap-oil era. Now it is about to get smaller, And, greener. Much greener,” he said.
Rubin is the former CIBC World Markets’ chief strategist and chief economist until he suddenly resigned in late March after 20 years at the bank’s investment arm. According to the Toronto Star, “His conclusions were frequently controversial and certainly unconventional, particularly in a country [Canada] so dependent on the global trade of its oil and other natural resources.”
Rubin predicts that within 12 months of an economic recovery, we’ll encounter triple-digit oil prices. The fallout? The transportation costs of importing products from distant countries will erase other advantages, such as low-cost labor. This means denser communities, less driving, and dependency on what we produce locally. Economic growth will come to a crawl and inflation will rise.
So, where will that leave the marketers? What will we be marketing and how? How will this affect the way we do our jobs? How will this affect all our lives?
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Tags: business, economy, globalization, Jeff Rubin, Marketing, oil
Elaine, good thought provoking questions asked here. There is so much oil right now that companies are buying tankers and holding it offshore, and US strategic petroleum reserve is nearly at max. If oil does get above $100 in next 12 months it will likely be due to speculators and not demand. Of course, if oil does rise above $100, it’s going to hurt an already fragile global economy.
With $100 oil, for many companies – and their product marketers- Mexico as a manufacturing base is going to look a lot more compelling…
Loved your questions, Elaine.
“So, where will that leave the marketers? What will we be marketing and how? How will this affect the way we do our jobs? How will this affect all our lives?”
These are questions we should be asking. In order to do that, we have to step back as marketers and assess what’s happening so we can help our clients in the face of rapidly changing times.
Paul Barsch raised a number of issues related to the recent economic meltdown. He suggested many saw warning signs, but chose to ignore them. In commenting on his excellent post, I raised a number of issues that are on the horizon but haven’t even hit us yet in the economy. Today, you’ve raised another, Elaine.
http://www.mpdailyfix.com/2009/06/perishing_for_lack_of_vision.html
It is no longer business as usual. Marketers need to help our companies or our clients, as the case may be, to become educated and aware; then, to prepare to meet new challenges if we are going to be truly effective.
This will be a win for sustainability, which is going to receive a major boost. Small and local will mean we’ll see more and more examples of community, increasing diversity in all aspects of life, and a rise in real quality of life as measured by satisfaction or happiness. Cause for concern? Doesn’t sound like it…
@Paul, thanks for your comments. I agree with you that we will need to look closer to home for manufacturing as well as agriculture. I suppose that means there won’t be any bananas on grocery store shelves in February!
@Claire, thanks. I agree that we will need to prepare for new challenges. The question remains… what will the picture look like? Do we really know? Can we speculate? We’re heading into unknown territory – somewhat familiar to the scarcity of the 1940s but with technology added to the mix.
@Peter, Yes, sustainability and the green movement are the winners here, which in turn, means we all win. I pray that you are right when you say that we will experience a “real quality of life.”
@Elaine, I agree with everything you’ve said and would take it a bit further. Certainly localization is the trend with all kinds of consumables – groceries, clothing, education etc., but have you considered information? My view is that we’re also going to “local” communities online for trusted information. Even though the physical location may be meaningless in this case, it’s the group of people with something in common who get to know each other and provide valuable information. One down side to this is that we may become too “local” in our thinking and go back to all kinds of tribal warfare as a result.
The oil industries are hoarding oil like diamonds just to increase profits when in reality they might shoot themselves in the foot when disgruntled citizens seek alternative energies. But not everyone is pessimistic. Depends on what source. That’s the hard part to determine the actual economic situation. Opinions?
http://www.newsy.com/videos/oil_slippery_perspectives
Dear Elaine,
Sure we are in a crisis but I have seen similar crisis before (remember when OPEC started) and the same issues come over once again until the economy recovers. Frankly I hope this time the world will get into the “reality” track with sound measures (sure small cars, small houses, alternative energy systems, etc) otherwise in a few years the same orchestra will play again the same melody. Of course in the meanwhile the earth deteriorates and the next generations get closer to a contaminated future. Not until the leading nations take things seriously (not momentarily) will the world tackle the energy issue and the vicious circle reach an end.
Interesting post, but where was Rubin a year or so ago when we had triple digit oil prices? He makes it sound like that would be a new thing.
I seem to remember oil hitting $150, but I didn’t see any “end of globalization.” Still plenty of “made in China” goods at the stores.
It did have a big impact on truckers, though.
@John, thanks for your comments. I suppose it’s possible that we’ll become more focused on our own backyards, but if we still have energy to turn on computers and other connected devices, we’ll be communicating with others worldwide. We just won’t be visiting them anytime soon.
@Jms, thank you. I believe that Rubin looks at this situation as a positive for the green movement. So, you’re right. It all depends on one’s perspective.
@Juan, thanks. I remember the 70s “oil crisis.” It came and went and unfortunately, we went back to “normal.” This time it’s not just about oil, but about the west’s security and ability to kiss off some of the nasty oil-rich nations we depend on. Of course, that excludes Canada and Mexico, from which America imports the majority of its supply.
@Chris, Rubin has been singing this tune for eons. You just haven’t heard about him until his book was recently published and he’s doing the U.S. media circuit. He’s very well known in Canada and in American financial circles. Thanks for your post!
With the shrinking world and emphasis on local, I see marketers with weak internet marketing skills left at the post. Everything needs to tie with a hard-working website and other key communications.
A while back I saw on LinkedIn a question posted in the Pro Marketers Group by a gal with the title Brand Director. It read,
“Does your business card include social media contact info? Do you include twitter, linkedin and others?”
As of this writing there are 26 comments, the majority of which are a “No.”
One reason given is that “it confuses people who don’t know what those addresses are for.”
I am floored.
We marketers are operating in a 2.0 world, and need to be accessible to colleagues and customers in more ways than traditional email and tel etc. We need to meet people in the ways and places they prefer. And we need to guide employers and clients in doing this too.
Cone’s 2008 Business in Social Media Study Fact Sheet says that sixty percent of Americans use social media, and of those, 59 percent interact with companies on social media Web sites. One in four interacts more than once per week.
According to the survey, 93 percent of social media users believe a company should have a presence in social media, while an overwhelming 85 percent believe a company should not only be present but also interact with its consumers via social media. I’ve posted one of their charts here: http://tinyurl.com/4wdgt7
– Rebekah Donaldson
http://twitter.com/b2bcommunicate
http://www.linkedin.com/in/b2bcommunications
http://blog.b2bcommunications.com/