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Paradigms are shifting all around us - in business and the global economy, to the
ways we look at energy and the environment. Institutions and industries are being
forced to rethink traditional business models considered sacred. World leaders are
asking countries and cultures to reevaluate their very ways of life. Never before
in our lifetime has there been such a tectonic shift in, well… everything. Such a
shift has indeed occurred before in the life of our nation though - and among the
lessons it taught was that for the creative and the bold, these sweeping changes
can open the doors to amazing opportunity.
A New Birth
Perhaps until now America’s most profound economic and cultural transformation
occurred in the Reconstruction era of the 1860s and 1870s. Then, a tattered nation
emerged from the crucible of civil war into “a new birth of freedom” and an
industrial revolution of unprecedented wealth creation that Twain dubbed “The
Gilded Age”. As Malcolm Gladwell says in his recent book, Outliers, “This is when
the railroads were being built, and when Wall Street emerged. It was when all the
rules by which the traditional economy had functioned were broken and remade”.
Then, as now, everything was changing. And, it was the age when nearly 20% of the
75 wealthiest individuals in human history took advantage of those changes and
built their fortunes… all in America. They are (by rank of wealth):
Runaway Locomotives
These fortunes were made during turbulent times of boom and bust not unlike our
own. The “Golden Spike” connecting the Union Pacific and Central Pacific railroads
was driven at Promontory Summit, Utah in 1869, creating the nation’s first
transcontinental railroad – and billions of dollars for the economy. America road
the rails of success until 1873. That’s when European financial instability caused
the collapse of the Vienna stock market, then swept across the continent and on to
London, finally hopping “the Pond” to crash upon American shores on September
18th. Banking firm Jay Cooke, which was heavily leveraged in rail construction
loans, went belly-up, and ignited a financial panic in the railroad industry that
staggered the country.
The railroad bubble burst. The New York Stock Exchange closed its doors for the
first time, going dark for 10 days. One quarter of the nation’s 360 railroad
companies declared bankruptcy, and a full one-sixth of the American workforce was
unemployed with dizzying speed (and without unemployment insurance). Yet, in those
dark days of uncertainty, great opportunity existed for entrepreneurs and business
leaders with the vision to see it, and the boldness to reach for it.
For steel magnate Andrew Carnegie the depression offered unexpected opportunity.
The financial downturn resulted in decreased demand for labor and materials, which
translated into a 25% savings on Carnegie’s projected costs. Carnegie took
advantage of the opportunity to diversify beyond the railroad industry that had
been his bread and butter. Rather than bury his head in the sand, he boldly
invested in additional labor and materials, expanding his operations into new
sectors. Carnegie sought, and won, contracts to supply steel for buildings and
bridges - including, eventually, all of the steel for the Brooklyn Bridge. When
everybody else zigged, he zagged. Instead of playing it safe to avoid failure, he
made daring moves to achieve success. Carnegie said it was one of the most
valuable business lessons he learned: The best time to expand was when no one else
dared to take risks. In volatile economic times he risked it all, and he won.
So are we.
Today, we face similar economic uncertainties. We also find ourselves in the midst
of a changing world rife with possibilities. Carnegie’s revolution was industrial.
Ours is energy. Our new President campaigned on a promise to make energy a focus
of his administration. We are moving to improve the ways we power our world, and
the government will marshal resources and money to advance research in this field.
As part of the proposed economic recovery America’s energy infrastructure will be
beefed up. From wind to solar to smart grids and beyond, business opportunities
will blossom within, and because of, the expanding energy sector.
There will surely be opportunity created from the unexpected new technologies
developed as a result of this energy revolution. Just as Cold War competition with
the Soviet Union inadvertently spawned the creation of the Internet (an
“accidental discovery” resulting from government-funded radar systems research),
unintended and amazing technologies often unfold wherever government focuses so
much money and attention. All of this, combined with the changing paradigms of
business practices, regulation, and finance, may be setting the stage for some of
the greatest opportunities for innovation, business, investing, and wealth
creation in American history.
What will your role be?
Ken Peters is the owner and Creative Director of nationally acclaimed Nocturnal
Graphic Design Studio LLC, a Phoenix-based strategic branding firm specializing in
brand development for companies of all sizes in all industries worldwide.
www.nocturnaldesign.com.