MUSEUMS & SOCIETY 2034: TRENDS AND POTENTIAL FUTURES

Prepared by Reach Advisors for the Center for the Future of Museums, an initiative of the American Association of Museums

II. A SMALLER, FLATTER WORLD

Major economic and geopolitical trends that shape the world we live in today were already evident in 1984. The United States was slowly recovering from the OPEC embargo that forced us to confront the limitations of dependence on foreign oil. It took the better part of a decade but, as a result, automotive fuel efficiency started to increase with the introduction of more fuel-efficient cars (e.g., the Ford Escort became the best-selling car in the country)—at least until fuel prices stabilized again. In related shifts, the U.S. economy experienced a period of rapid globalization and American wealth became more concentrated in the hands of its richest citizens and foreign investors.

As we look forward to 2034, these structural shifts provide clues for how the future is likely to play out in the next 25 years. Let’s start with one trend that dominated most Americans’ thoughts during the summer of 2008.

A. Energy price volatility

As gasoline prices began stabilizing in the 1980s, the demand for fuel conservation eased. Sales of fuel-efficient vehicles in America were flat; the memory of the oil shocks faded, and Americans increased their consumption of larger trucks and SUVs. In the current decade, oil prices have destabilized again compared to such other staples as bread.

Worldwide oil consumption is projected to increase by 34% over the next 25 years. How will we plug that gap? Domestic oil production is only a small part of the answer: The largest known reserve in America, the Alaska National Wildlife Refuge, according to best-case projections can produce a total 21 billion barrels of crude oil, the equivalent of just one year of domestic consumption.

What will a gallon of gas cost in 2034? Our projection is based on conservative assumptions (i.e., a stabilized pricing environment rather than the peak prices from the summer of 2008). Extrapolating from a 25-year period of relative price stability when gas prices rose at about the same rate as the historical inflation rate, gasoline could cost $4.91 per gallon in 2034. But if we extrapolate the price increases from just the last five years, when gas price increases far outstripped the inflation rate, then gas could cost $25.47 per gallon in 2034. At either price, we can safely assume that consumer behaviors would change significantly.

Price of gasoline in 25 years?

What this means for society: If we reduce oil consumption significantly or see production increase dramatically, gas price increases may parallel the rate of inflation, in which case, the impact over the long term is not major. It is far more likely, however, that the volatility of the past five years will prevail, and energy costs will play a major role in how the future plays out. This will demand dramatic changes in all aspects of society, including the technology of energy production and distribution, transportation, distribution of the population between suburban and urban areas, work-at-home policies and architectural design.

What this means for museums: Volatile energy prices will have a major effect on museum operating budgets, heightening the tension between conservation and historic preservation standards and energy use. It could play a larger role in decisions about museum expansion. It will also have a major effect on consumer behavior:

·        Two-thirds of car travel is currently discretionary. As energy costs rise, travel costs will become an ever more important factor in Americans’ decisions about how to spend their leisure time and dollars. This effect may be buffered for local museums that are plugged into their communities. “Life list” museums that are distant but major tourist attractions will face challenges with increased gasoline prices, but not fatally as they continue to offer greater value to balance the higher costs of reaching them. Museums that require significant gasoline consumption and are not major tourist destinations will face enormous pressure.

·         Home prices and sales volume in the outer suburbs and exurbs has turned down much more sharply than in close-in suburbs and urban areas, and that trend is likely to continue if gasoline prices continue to rise. Overexpansion of new housing supply in those areas created dramatic oversupply that will take the next decade to absorb, and as those prices continue to drop, they will become increasingly attractive to the growing minority population. Museums in these outer suburb and exurban locations will often find that their almost uniformly Caucasian community has turned significantly minority, due in part to confluence of the home construction bubble and the aftermath of fuel price increases. 

In 2034: Museums will educate the public on how past societies coped and adapted to tectonic shifts in their resources. They will help society learn from history as we cope with a new era of more expensive energy, lower consumption, carbon constraint and climate change. Museums have uniformly adopted green design as a mark of excellence, leading by example and integrating green practices into operations. Some museums operate joint storage facilities designed to minimize energy costs while providing appropriate climate control. More museums establish satellite locations to serve outlying communities, reducing their audiences’ need to travel.

B. The threat of recession

The current recession might prove to be a blip that doesn’t impact our world in 2034—most recessions tend to run far shorter courses. But could this time be different?

As we trace back the steps leading to the current crisis, we find relaxed credit standards … leading to overheated real estate and stock markets … leading to increased consumer spending and debt growth … leading to a collapse of a bubble … leading to trillions of dollars of assets lost … leading to a slowdown in consumer and corporate spending ... dragging the country into recession … followed by the government subsidizing failing banks and industries.

Did we just describe America in the fall of 2008? Actually, this same scenario played out in Japan in 1989, followed by a deflationary economy that lasted the entire decade of the 1990s. The Nikkei stock index finally bottomed out in 2003. That recession was not a short-term cycle—it had decades-long impact.

What this means for society: Any recession creates some dislocation, but a Japan-scenario recession would be particularly painful for the United States. In Japan, the prolonged recession drove fundamental restructuring of traditional employment and career expectations and resulted in a significant increase in the poverty rate. A recession extending a decade or more might have even greater social impact in America as the nation’s largest generation of adults approaches retirement. More than half of Baby Boomers will retire without the benefit of a pension and hence are more vulnerable to the effects of a long-term downturn on their retirement savings.  

What this means for museums: A recession extending well beyond a decade would turn everything upside down. Admissions revenue would be at risk if museums aren’t able to provide greater value amidst declining household budgets. Donations, pledges, endowments and government support would be in jeopardy as well. School field trips are already being eliminated in states hit hard by the current fiscal crisis, and this could become the norm rather than a temporary round of budget cutting.

In 2034: Museums are stable oases in the midst of turmoil. Building on their tradition of offering low-cost or free access and programming, museums play an even greater role in sustaining the well-being of their communities during a prolonged downturn. Whether for the retiree managing a lower post-retirement income than anticipated, or for schools with fewer enrichment opportunities for their students, museums are there for their communities—even in periods when financial support from the community wanes.

C. It’s a small world after all

In 1984, the United States was in the midst of transformational change. At the start of the 1980s, the global market was disproportionately U.S. dominated. But the U.S. trade imbalance quickly grew five-fold, driven primarily by an exchange rate imbalance that fueled a rapid increase in Japanese auto imports and consumer preference for Japanese electronics. Today, the U.S. trade imbalance is six times higher than in 1984, and the U.S. is just one of many players in the global economy. We are now seeing a dramatic increase in the prominence of oil-producing countries and the growing economic powers of Brazil, Russia, India, China (the BRIC nations). Looking forward 25 years, it is clear that the OPEC and BRIC nations will play an even greater role in our lives here in the United States.

What this means for society: As the U.S. trade deficit continues to grow and other countries expand their presence in the American economy, more high-wage jobs will flow out of the country. As the dollars earned by foreign entities are reinvested in the U.S., more of the nation’s most prominent assets and companies end up with foreign owners (e.g., the IBM PC division is now owned by the Chinese firm Lenovo, while the Abu Dhabi sovereign wealth fund holds significant U.S. assets ranging from the Chrysler Building to AMD’s computer chip fabrication division). As wealth continues to increase in oil-producing and BRIC nations, 43% of the national debt is now held by foreign investors and governments. While the global economy is not necessarily bad for the United States, an increasing percentage of profits will continue to flow overseas.

What this means for museums: As a result of these ongoing trends, the increasing pace of globalization could continue to erode the current base of corporate philanthropic support. At the same time, larger museums will see the opportunities to ride the tide by going global themselves, opening more outposts in rapidly developing countries with an appetite for museums. The increase of wealth abroad (and among émigrés) may create new sources of funding for exhibits and programs about cultures growing in global prominence.

In 2034: Museums play an important role in helping communities with job losses reinvent themselves in the new knowledge-based economy. Responding to society’s need for greater global awareness, museum increase their efforts to promote dialog and understanding about other cultures and our place in the global economy. Some museums serve as ambassadors to the rest of the world not just through overseas outposts but through traveling exhibits and more directed Web presence, helping interpreting U.S. culture to countries of growing influence.

D. The growing divide

Wealth has never been distributed evenly in the United States but rarely as unevenly as today: The top 5% of households generate a third of all earned income in the United States and the top 0.5% (roughly 500,000 American households) generate 14% of earned income. These are the highest ratios of income concentration since 1929, another auspicious year in American economic history. 

The current concentration of wealth may be fundamentally unsustainable. Or it may simply reflect that well-educated people with a global outlook have significantly more ways to generate large incomes than those with less education and a more parochial perspective. And this is unlikely to change by 2034. Either way, the distribution of wealth in the U.S. will have an impact on museums.

What this means for society: The political effects of an economic divide are a wild card in any speculation about the future. During the past decade, the mean income in America has increased but the median income has declined; in other words, almost all the growth in American income occurred on the highest end of the spectrum. If this trend continues, some Americans will have much more wealth but most will have relatively less. But if the concentration of wealth reverses, it might lead to an erosion of the base of philanthropic support for nonprofits, undermining the independent sector that currently performs so many vital functions. Extreme polarization of wealth may destabilize society and erode the civic process.

What this means for museums: A growing segment of society with relatively less money could result in fewer discretionary purchases like museum admissions, reinforcing the perception that museums exist only to serve the elite. Concentration of wealth also affects the potential size of the donor base. The recent wave of museum expansion was funded, in large part, by the accumulation of wealth among the highest earners rather than an increase in the number of wealthy Americans. In the wake of the recent economic crisis, many nonprofits are already concerned about their ability to collect on pledged donations. When Japan suffered a long-duration economic downturn in the 1980s, it led to a dissipation of corporate and individual support for the arts. Will the same happen in the United States? Museums may have to reconsider their funding models either way, relying more on donations from the economic elite if wealth continues to concentrate or on earned income and a wide base of donor support if the concentration of wealth reverses.

In 2034: Museums are among the few institutions that bring together people of all economic classes. They are increasingly valued for their ability to redistribute wealth in the form of access to scientific, cultural and artistic resources, mitigating the culture gap that arises from income disparities. Museums promote global education for the nation’s children and global perspectives for all Americans. In the process, museums literally enrich America, because income is correlated with education and the ability to profit from economic globalization.

III. PERMANENT REVOLUTION IN COMMUNICATIONS

By 1984, the first signs of a technological revolution were already evident with structural changes that continue to shape how we communicate and engage with others and will still shape our interactions in 2034. Traditionally, newspapers were the glue of most local communities but the total circulation for daily newspapers reached its peak in 1984 and started down the path of permanent decline. In part due to the rise of cable television, viewership for the three major television networks also started its descent, as cable TV took root. A wider range of entertainment and information options meant that fewer families were starting the morning with the newspaper and ending the evening by watching the same television programs. As a result, the common knowledge of Americans became much less universal and much more fragmented.

As traditional mass communications shifted, a new form of information management emerged, and America entered the golden quarter-century of personal computing. In 1981, IBM introduced the PC and hired Microsoft to develop the operating system. In 1982, two software companies released the first mainstream personal productive applications, the word processor (WordPerfect) and the spreadsheet (Lotus 1-2-3). In 1983, the Department of Defense opened up broader access to the ARPANET, a distributed computing network designed to survive nuclear attack, and this network of a few hundred connected computers would eventually become known as the Internet.

Just over 25 years ago, TIME magazine named the PC as “person” of the year, marking the start of a truly seismic shift in how we work, play and interact with the world. We can’t provide a crystal ball regarding technological advances 25 years from now, but there’s one area in which we can see the seeds of change. Most of us reading this report learned to use technology as a productivity tool and continue to accept new technology as it marches forward. But as we examine the generation of young adults that grew up knowing nothing other than a connected world, we see major structural shifts underway that will reshape the expectations and behaviors of the American adult population in 2034.

A. Digital = practically free

The trend of near-zero variable cost for storage and distribution has bypassed some museums, many of which continually race to catch up with technology. But this trend has already enabled companies such as Google and YouTube to emerge as dominant repositories for digital assets. As a result, we have witnessed a dramatic structural shift in the expectations of the public (particularly among young adults), which now expects anything that can be digitized to be digital—and usually free.

What this means for society: While these expectations are not quite as extreme for older audiences, they are inevitable for younger audiences simply because they have come to expect it from every single entity that they encounter. And that expectation has toppled industries and economic models in many information and entertainment fields from record labels, rock bands, telephone companies, Yellow Pages publishers, classified ads, stock brokerages and travel agencies. It’s unlikely that the progression will stop.

What this means for museums: It is highly probable that this structural shift will change expectations for museum engagement as well.

·         Already, Google, YouTube and Flickr have established themselves as museums of the digital world and are actively trying to redefine the idea of curating content. Who knows what emerging entities (Web 3.0? Web 10.0?) will encroach even further on the traditional (and future) functions of museums?

·         According to research by the Institute for Museum and Library Services, 43% of museum visits in 2006 were remote, predominately via museum websites. This percentage is likely to rise, and the content of remote visits to museums will continue to shift from basic information gathering to more complicated forms of engagement.

·         Museums and exhibit planners already confront questions about whether some aspects of the museum experience should be delivered entirely in digital format, if only to reach different audiences. These questions will not go away. Digitizing collections and other assets is a relatively simple challenge compared to what’s ahead. While it is hard to predict the likelihood and impact of technical breakthroughs, our interviews with technology visionaries point to advances in processing power and virtual rendering that will push us to view and engage with representations in entirely different ways.

In 2034: Museums confront many decisions about the collection, presentation and preservation of new forms of virtual objects. Meanwhile, as the world continues to go digital (and progressively virtual)—and as the cost of storage, distribution and processing power continues to plummet—people find themselves further divorced from the real. Yet the fundamental human condition responds to a variant of Newton’s Third Law of Motion: The prevalence of the digital, virtual world raises public awareness of the increasingly rare world of non-digital assets that help tell the story of how humans got where we are. Museums play a more critical role than ever as purveyors of the authentic, addressing a human desire for the real as the wonders of technology march us towards the opposite path.

B. Fragmented consumption and distribution of digital information

With the advance of technology across the media landscape, Americans today consume a personalized entertainment diet. Long gone are the days when the entire country shared a collective conversation about slavery while watching Alex Haley’s mini-series Roots on ABC. Under more pressure than even the television networks, newspapers have become an endangered species as the Internet ether continues to seep into the air we breathe. Profound structural shifts can be seen in a little-noticed Facebook byproduct. In Facebook’s quest to serve as the operating system for a new generation, it has created a tool that generates the first truly personalized newspaper, with almost perfect editorial decisions, edited by a cloud of the members’ peers and personal affiliations. Most people under 25 have never learned to pick up a daily newspaper, but consumer surveys by Reach Advisors show that members of this generation still feel pretty well informed.

What this means for society: The role of the expert that has existed for decades or centuries is quickly eroding and has been supplanted in many fields: sometimes by a network of peers (Facebook news instead of newspaper editors), sometimes by the digital masses (Yelp instead of the published Zagat guide), sometimes by a new set of collective experts (Wikipedia instead of the ml:namespace prefix = istyle='mso-bidi-font-style />Encyclopaedia Britannica). This trend has led to an explosion of accessible information; in its own way, it has even expanded civic engagement. But it has diminished the role and responsibility of prior generations of experts (Walter Cronkite, Bob Woodward, Alex Haley) who used to help shape the collective experience of Americans. It becomes increasingly difficult for average users to assess the credibility of information accessed via the Web. Due to self-selection of sources of information and social networks, people rarely engage with those who hold opposing views. This further polarizes society and makes it more difficult to achieve political consensus regarding crucial policies.

What this means for museums: The effects of this structural shift are already emerging, even in some of the most expert-driven areas like medicine. The decline of the expert is already being played out in museums as well with multiple challenges to the authority of the curator. Will curators become irrelevant, like many of the other public expert roles? Or can museums rethink how they curate and interpret their collections, how they make those collections more accessible and how they involve diverse audiences in the meaningful work of museums?

In 2034: The collective experience is more fragmented than ever. But museums provide common experiences for diverse audiences, serving as safe public spaces for civic dialogue. As one of the most trusted sources of information, museums help people navigate the vast new world of information by filtering and validating credible content.