Over the Thanksgiving holiday, friends debated what we would name the past decade. I argued that we must understand the changes from the last 10 years in order to anticipate and shape the direction of our global economy for the next few years. I believe the zeitgeist is the Decade of Disillusionment. The dictionary defines disillusionment as the condition of being free from illusion; having lost naive faith and trust.
In the beginning of the decade, technology and the internet enabled many people to believe the dot-com business model in which sales revenue and number of visitors would replace the traditional business model of cash flow and generating returns above the cost of capital. As the CFO of a supermarket chain, we had clicks and bricks, the best of both worlds. Some believed the internet business (the "clicks") represented more shareholder value than the hard asset business (the "bricks"). It did not.
Americans were untouched by the extreme terrorist bombings that had occurred in Europe and Asia in the prior decade. They believed eliminating the nuclear arms threat after the fall of the Soviet political structure would eliminate the need to protect our borders. It did not. The Islamic terrorists in 2001 changed the false sense of security to disbelief.
Then, in the middle of the decade, we thought our domestic security and emergency procedures would prevent any major tragedy. It did not. When Hurricane Katrina revealed the pitiful organization and lack of life-saving emergency infrastructure, we started to doubt our bureaucrats' and leaders' ability to respond.
We prided ourselves on the best-educated college and university students in the world, the envy of many. We thought the college system could compensate for the decades of neglect and poor teachers at the Kindergarten through Grade 12 to create competitive talent in many schools, not just the elite private ones. It did not. Instead, competencies in reading, writing, math and science in many college students have declined compared to prior generations. A national survey by the American Institutes for Research (AIR) released in January 2006 showed 20 percent of U.S. college students completing 4-year degrees -- and 30 percent of students earning 2-year degrees -- have only basic quantitative literacy skills, meaning they are unable to estimate if their car has enough gasoline to get to the next gas station or calculate the total cost of ordering office supplies.
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