TF Podcast With a new decade upon us, a lot of people in the construction and agriculture business world are marking this milestone with some uncertainty about what the future may hold. While the last decade was one of slow but uninterrupted economic growth, global trade skirmishes and political instability have given business leaders pause as the calendar turns to 2020. 

So what do the experts expect to happen, and how can the heavy equipment industry be prepared for it? On this edition of the podcast, Harvard lecturer and economist Dr. Vikram Mansharamani weighs in with his take on the future. He’s a global trend hunter, author and equity investor, and his approach to managing risk and recognizing opportunities is the counsel you need as you plan for the next decade.

 

 

 

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SHOW TRANSCRIPT

V. Mansharamani: We are in a chaotic world with lots of cross currents. Change is constant and uncertainty is everywhere, but you can actually identify opportunities and spot risks to your businesses. And by doing so you can turn almost any development from a threat into an opportunity.

Dusty Weis: Hello and welcome to another edition of the AEM Thinking Forward Podcast, advancing the equipment manufacturing industry. I'm Dusty Weis. With a new decade upon us. A lot of people in the business world are marking this milestone with a fair amount of uncertainty about what the future may hold. While the last decade was one of slow but uninterrupted economic growth, global trade skirmishes and political instability have many in the business world and the heavy equipment industry reevaluating their strategies.

Dusty Weis: So what do the experts expect to happen, and how can those of us in the heavy equipment industry be prepared for it? Well, on this episode of the show, we'll ask Dr. Vikram Mansharamani. He's a global Trend Hunter, author and equity investor specializing in managing risk and recognizing opportunities. And his presentation at the AEM annual conference was a real head turner this year. But those are the sorts of critical insights that we aim to deliver here on the AEM Thinking Forward Podcast. Each month, we explore a new subject area to help keep your business on the cutting edge of the heavy equipment industry. If you haven't yet, subscribe to our podcast feed so that you don't miss an episode. We're eager to hear your thoughts on the show. Post a comment, rate us or leave us a review in whatever your favorite podcasting app is.

Dusty Weis: That'll help other industry pros like you find our show, and help us keep it relevant. So here we are about to enter that holiday time of year when a lot of people just unplug from work for a couple of days, maybe a week, and lots of them wind up unplugging from the news as well just to sort of concentrate on spending some time with the family. But unplugging from the news is going to come as a little bit more of a relief than it normally does this year because wherever you turn it feels like there's another story of economic uncertainty or political instability or even volatility. The economic outlook for 2020 is a mixed bag to say the least. So to talk about why, and not to mention how equipment manufacturers should be positioning themselves in these cross winds, we're pleased to welcome Dr. Vikram Mansharamani to the show. Vikram is a global trend watcher, an equity investor specializing in managing risk and recognizing opportunities. He based his book Boombustology: Spotting Financial Bubbles Before They Burst on the content of a seminar that he taught at Yale.

Dusty Weis: And in his remarks at this year's AEM annual conference, he helped drive home the message that the future doesn't have to surprise us... And won't if we adopt a generalists' mindset. Dr Vikram Mansharamani, we're so pleased to have you here on the AEM Thinking Forward Podcast. Thanks for joining us.

V. Mansharamani: Pleased to be here.

Dusty Weis: So how did you enjoy the AEM annual conference? What were your biggest takeaways? What's the most intriguing thing that you saw or heard?

V. Mansharamani: Well, I've really enjoyed the AEM annual conference. This is my second time attending in the past three years. And what I love about it, is it brings together people from all segments of the industry. And you hear of people's perspectives, whether they're in the construction or agricultural equipment business, and you find the similarities and the commonalities. Obviously the one point that was tangible, visible, visceral, if you will, this year was the anxiety over the trade war and the concerns about the global economy of forthcoming recession, et cetera. It was more palpable than in prior years.

Dusty Weis: This is certainly something that I'd actually like to dive deep on in this episode of the podcast, and we're going to get to that in a second here. But before we go there, with all the turmoil that's been in the news lately, there's one big thing that those in the industry might kind of grab onto is a bit of an early Christmas present here. The USMCA is positioned to replace NAFTA finally, as a North American trade agreement. This is something that AEM and its members had been working for, lobbying for in Washington. So how should we be feeling about the fact that a deal appears to be getting done and what does it mean for the outlook in 2020?

V. Mansharamani: Well look, I think that's a fabulous question. And let me begin with the conclusion which is, it is in fact a very good thing. It's part of a much bigger dynamic that I think is underway in the world today and it has to do with a reversal, I would argue of globalization. One very viable trajectory, very possible trajectory for the world economy is that globalization is now in reverse and we have the rise of regionalization, and we have effectively the formation of two global economies, when there previously had been one. Of course in one corner will be the Western led world, predominantly around the US and Europe and in the other corner or the other ring if you will because I don't think it's necessarily going to emerge to be in all competition in fact maybe two separate economies ,is the China-centric question of the world economy.

V. Mansharamani: And I do think the trade war that the US and China have been having is sort of the tip of the iceberg when it comes to this US-China rivalry. Deeper still is a technology rivalry, a space race, a military arms race, a currency war, an economic war, and of course the trade war we all hear about. What I do think is fascinating, is I think the USMCA fits into that narrative pretty well. And it fits in well for this reason, this is a deepening of ties in all region of the world. This is an enablement of greater economic activity here. And so I think it's consistent with this de-globalization and regionalization theme that I've been discussing and doing work on for quite a time.

Dusty Weis: I know it's really reductionist for us to look at a trade agreement like the USMCA and say, okay, well who are the winners and who are the losers? But can I be reductionist for a second? Can I ask you, who are the big winners under the USMCA? And is this a signal that perhaps there are any broader trade deals that could happen on a global scale here?

V. Mansharamani: Sure. I'd start with the last part of your question here is the say global scale agreement, and I'm not sure it is in that sense, but I do think it may enable global scale movement of supply chains. So one of the things that's emerged from this US-China rivalry, and the trade frictions and other tensions that have risen with the people's Republic of China, is that corporate boardrooms, specifically American corporate boardrooms are now rethinking their whole supply chain philosophy and their whole supply chain geography. The manufacturing of geography is switching. And I think in that sense it's going to move towards the United States, and if and when it does that, the USMCA makes global manufacturing more likely to come to North America. And so as a result of that, I would say it does have the possibility of having global impact, even if it is a regional, trade deal if you will.

Dusty Weis: So if you're an executive sitting in a corporate boardroom right now and trying to plan ahead for 2020 when you look at a deal like the USMCA getting done, is this a signal that you should be looking perhaps to re-shore some of your manufacturing as well and is that the best course of action going forward here?

V. Mansharamani: What's interesting, the question about manufacturing I think raises yet another complexity to this discussion which is probably worth highlighting. And it brings into play the dynamics of technology, which is another of the lenses I use to analyze developments and how they may impact us in the future. But let's begin with this basic premise, which is the labor component of manufactured goods, has been falling and continues to fall as automated manufacturing and robotics play a larger role in manufacturing. The result is delivery, transportation, freight costs tend to be a larger component of a final goods cost than does labor in many markets. As a result, the geography of manufacturing would naturally shift just because of technological development and economic pressures away from cheap labor geographies towards the end user markets.

V. Mansharamani: Just that simple dynamic would imply a reassuring logic should make sense. It means going away from manufacturing in far away places with lots of people that then costs us a lot of money to ship those final goods here, and bringing it without technologically sophisticated manufacturing footprint more locally to manufacture and deliver products here. And does that mean reassuring here into the United States versus Mexico or Canada? I don't think that necessarily matters because the freight costs and relative friction to move final goods between Canada, Mexico and the United States is relatively less than it would be to move it from an India to the United States for instance. But I do think there's a double whammy if you will.

V. Mansharamani: The US-China rivalry, which is forcing regionalization and reorganization of manufacturing towards a regional model, i.e North America in our case, but there's also that technologically enabled, robotics enabled catalyst to move manufacturing back towards our markets as well

Dusty Weis: It's fascinating to me because as we're talking about regionalization here too, I think that so much of the way in which you respond to news like this has to do with where you are geographically on the planets. As for instance, you just got back from an event in Dubai where I understand you were speaking to a middle Eastern audience, and what do you tell an audience like that when they're kind of stuck between the US and China both geographically and in a figurative sense?

V. Mansharamani: Sure. I thought it was a fascinating place to visit at this time in the world economic and political dynamic that we're currently facing and it's a great question. What I would say is, this is how I presented it and I was in Dubai and I was speaking at the Arab strategy forum. And what I pose to the audience was, look, if the world develops as I think it may, where there are two global economies that emerge, well at some point the United Arab Emirates or those in the middle East, would be fundamentally asked to make a choice and they'll be asked to make a choice of which ecosystem they want to be part of. And you might not think that's a choice that you'd have to make. Let's use an example of, let's not use 5G, but let's go to 6G telecom equipment. If and when we are developing 6G technologies, it's my belief that there will be a choice that virtually every country around the world will need to make.

V. Mansharamani: Are you going to go with Western produced 6G telecom equipment to enable your network to have that technology, or are you going to go with a Chinese centric model that uses Huawei or other services? Now I don't have enough understanding or insight to tell you whether there'd be technical differences or what capabilities are going to be enabled in one versus the other or whether one of the services would enable surveillance or non-service. I just don't have that knowledge or insight. But what I can tell you is from a political perspective, it's highly likely that choice will be forced on various countries and those choices will come with large baggage of other choices that will accompany them. Now that's obviously in the scenario where the world bifurcates into these two global economies that may not happen.

V. Mansharamani: It's conceivable that we just Trump and Xi shakes hands, we move forward, we sort of deescalate, we use some confidence building measures such as this phase one deal, we moved towards a phase two deal, we moved towards intellectual property protection, we moved towards greater transparency. We sort of overcome the issue when we stay reglobalizing in one integrated global economy. That doesn't appear likely to me today, but that doesn't mean it's not possible.

Dusty Weis: The reason that, that doesn't appear likely to you. And you cited this during your presentation at the AEM annual conference. But there's a lot of volatility in the markets right now, there's a lot of uncertainty as we head into 2020. And you trace a lot of this back to four major transitions that are taking place in the world today. What are those and what do they mean for our folks in the heavy equipment industry?

V. Mansharamani: Sure. So the four transitions I highlighted at the annual conference were, number one, the transition in China from an investment led economy towards a consumption led economy. That has resulted in a lot of over capacity being exposed in sectors such as steel, but also in dynamics such as construction workers. In fact, I might argue that's been one reason for the Belt and Road Initiative that the Chinese have been pursuing, which is their plan to rebuild the Silk road, connecting Beijing to the middle East, into Africa and up to Europe. And so that's a massive infrastructure spending plan which all else equal would result in greater demand for construction in agricultural equipment. So all those equal the belt and road is a positive development.

V. Mansharamani: It may also take the competition foreign manufactured equipment and send it towards belt and road countries leaving less competition here in our domestic markets for US manufacturers. So there's a couple of positive possibilities that come from the Belt and Road Initiative. But on the whole, let's just argue China has overbuilt and therefore until they start building their consumer society and growing quickly, there's overcapacity, so that leaves too much supply. The second transition I talked about was what was happening in the energy markets. And here because of hydraulic fracturing and alternative energy developments, we have an explosion in the availability of energy, that's a lot more supply.

V. Mansharamani: So combined with the oversupply of China's transition in their economy, the more supply from energy, and the third transition of technology where we're able to produce more from the same or fewer inputs, which is equating to high productivity but also a lot more supply. Those three transitions all point to more supply in the world. And again, I'm speaking in a global aggregate economic sense, but more supply, more supply, more supply. The fourth transition I discussed was the demographic transition in which the world's largest economies are all aging. And as economies or as populations age, their populations tend to spend less money. So again, all else equal, this implies a reduction in demand. And so those four transitions point to more supply, more supply, more supply, less demand, and the result is an environment of deflation.

V. Mansharamani: A deflationary environment is one in which countries will use their currencies to compete for the little demand that exists. Now this has big implications for equipment manufacturers, right? If the dollar strengthens because everybody else depreciates more rapidly, it means our products in export markets are less competitive. The other thing is, foreign products coming into our markets become more competitive. So there's also more competition locally if these dynamics happen. Now that all comes down to what happens with the US dollar ultimately, and that's a separate topic which we can come to. But the implications of deflationary pressure and currency Wars are pretty dramatic and will affect the world regardless of what sector you're in.

Dusty Weis: And what kind of drives me up the wall about is, this is something that you could forecast through a one on one level economics class. Too much supply, too much supply, too much supply and declining demand is going to put you in a bad spot every time. So ultimately when you look at the 10 to 20 years that led us up to this position that we're in now, is there something that could have been done differently on a global scale to put us on a more stable path and are there policies that manufacturers can support going forward in order to stabilize the economy of the future?

V. Mansharamani: Look, the question about what we could have done to prevent us from being in a situation of too much supply, not enough demand, I don't know that we could've done much to prevent that because that's just technological innovation, that's progress, there's cyclical economic developments. I don't think we're going to be able to put the technology genie back in the model. So those developments maybe, I don't think were manageable. The impact of those developments I think could have been managed differently. I think some of the implications are even more dire than I've discussed here on this podcast but I discussed in my presentation. One of the things that happens when you have currency wars and not enough demand is, with winner take all markets, you get greater inequality.

V. Mansharamani: And greater inequality results in a fertile ground for political leaders to enter the sphere and say it's not your fault to the masses and point their finger at someone else as being the source of the anxiety and problems of the day. And in the case when you point that finger outside the country, we refer to that as a nationalist leader. But if you point that finger inside the country to the 1% or the elite, if you will, that's populism. And we have nationalism and populism alive and well today. And I think that is something we could have mitigated over the last 20 years. The way to have done that, capitalism should have been more inclusive. We should have had greater safety nets, we shouldn't have allowed the ratios of CEO pay to average worker pay to explode in the way they have.

V. Mansharamani: And so we've had lots of developments like that over the past 20 years that have really, really impacted the implications of these developments of too much supply, not enough demand. So to summarize really quickly, I don't think we could have prevented the economic and technological progress that we've seen taken place over the last 20 plus years. But I think we could have managed the implications and ramifications of those developments a little bit better.

Dusty Weis: So all that of course is a very good point then to kind of transition into, maybe not necessarily gazing into the crystal ball, but just looking ahead to 2020 and beyond, you've envisioned three scenarios for the future of the global economy. What are those and how can our AEM members, the equipment manufacturers, position themselves to thrive in each of these scenarios?

V. Mansharamani: Sure. So that's a great question as well. The three scenarios that I talked about at the AEM annual conference were, number one, a demand shock. And so if you think about the ailments the world currently faces or is struggling through those that I described that emerge from those four transitions, which is more supply, more supply, more supply, less demand, we basically need more demand. And so, one scenario is a large middle class emerges in the developing world to produce a huge consumer class that starts demanding goods and services, and that is a demand shock, which would make the world a lot better. Now, how would that affect the association of equipment manufacturing members? AEM members would find that world a lot better than the world we're currently in. Why is that? They'd find it better because suddenly agriculture would see a huge upsurge in demand as a middle class around the world starts consuming more protein and that more protein goes into the demand for grains going through the roof.

V. Mansharamani: And the demand for grains means higher prices for greens and higher grain prices means richer farmers in America who upgrade their equipment, et cetera. So that's the first scenario, a demand shock. The second scenario really is no worse than where we currently are. It's effectively status quo or you could continue with the excess supply scenario. And that's really, technology continues to go forth faster than consumption can keep up. And so even though demand grows, supply grows faster and it leaves us with the current ailments of the day and we sort of just stumble along in the world we're in and this is the new normal, so to say. And the third scenario is one that we've already talked a little bit about here in this conversation, which is the scenario of conflict where you get a second global economy emerging or a bifurcation of our existing global economy into one economy that's US-centric, Western world and another economy that's basically China-centric or Eastern world.

V. Mansharamani: And the result is in that scenario, that it could be actually quite beneficial to US and North American manufacturers because basically we would see half the competition, or at least the Asian competition might choose another ecosystem to go into and we might have less competition here. Likewise, however, the offsetting impact is some export markets for manufactured goods here might disappear. And so how does that ultimately play out? I think that's unclear and it's yet to be seen. But I do think that is the scenario that's hardest to understand what would transpire and it's also the one that has the most crosscurrents to decipher and that's not an easy task.

Dusty Weis: Yeah, certainly. And it sounds like sort of the best road forward for a lot of equipment manufacturers is to, see you supply chain and sort of take that hunker down mentality and just be prepared to be agile and jump on opportunities where they present themselves.

V. Mansharamani: I think that's right.

Dusty Weis: I'm not an economist. I don't know if that's been abundantly apparent as we've had this discussion here. I certainly never will be an economist and I don't try to do a lot of the ... Reading of the tea leaves myself. But there is one sort of unconventional economic indicator that you point to that I love, because I get it. People like me can see it with our own eyes. So tell me Vikram, how do skyscrapers indicate economic uncertainty?

V. Mansharamani: Dusty, thanks for asking this question. It's one of my personal favorite indicators as well. As luck would have it, it turns out that when the world's tallest skyscrapers are built, it's usually at a time of excess confidence, easy money, and lots of speculative instincts running wild. And so the indicator tends to work. So let me just give you a little history on the indicator because there aren't many data points so I can run through them quickly, and then we can talk more interestingly about what the indicator says going forward. So historically, the world's tallest skyscrapers were put up right as we entered a period of economic or financial chaos. And we can go back to the late 18 hundreds but I'll just start with the great depression. And in 1929, we actually had three towers in New York city competing to be the world's tallest tower.

V. Mansharamani: We had 40 wall street, which was outdone by the Chrysler Building, only to be outdone by the Empire State Building, and then we had the Great depression. Later in 1973 and '74, we had the Sears Tower in Chicago and the World Trade Centers in New York city. And then we had a decade of stagflation to oil price shocks, et cetera, a real time of economic chaos. The title was kept in the United States really all the way up until 1997 when the world's tallest tower status moved to Malaysia with the Petronas Towers. And at that point they took that title in 1997 really ground zero at the precipice months before the Asian financial crisis really got going. And so they Telegraph the Asian financial crisis. In 1999 the tallest tower status was going to be moved to Taiwan.

V. Mansharamani: There were some construction delays, but Taipei 101 was going to take the title and did take the title and Taipei 101 was the home of the tech boom, or at least in a hardware sense, that's where all the semiconductor foundries were in Taiwan. And so that Telegraph, the technology bubble. And then in July, of 2007 within weeks of global equity markets peaking, the Burj Dubai uncompleted, by the way at the time, took the title of the world's tallest freestanding structure, and then we had the global financial crisis. And so like I said, this indicator seems to work-

Dusty Weis: It's almost uncanny and there's certainly a correlation. Can we say there's causation here? What's causing what's effect?

V. Mansharamani: Yeah, that's the thing I can't say, with academic rigor couldn't result in a causation dynamic here. But what we can say is, the conditions that enable world's tallest skyscrapers to be built are likely similar conditions under which financial or economic bubbles are being blown. That's something we can say that there's a commonality in the conditions. So that's all history and that's interesting and it's fun cocktail party conversation. But my suspicion is that many of the listeners on this podcast are going to say, "Well, what does the future hold? Can you look at what's being built now? And tell me what the future will hold." And in fact, there are some skyscrapers that are being built taller than the Burj Dubai now relabel the Burj Khalifa.

Dusty Weis: So that's a bad sign. Perhaps.

V. Mansharamani: Yes. In fact, the building of higher or even taller buildings suggests that the conditions are ripe for speculative instincts, which is not good, easy money, which can be misallocated that's also not good and it's also hubris and overconfidence, which usually results in missteps. And so that's not good. And so right now, the world's tallest tower under construction that will take the title away from the Burj Khalifa is also in Dubai with the Dubai Creek Tower that will be 1.3 kilometers straight up-

Dusty Weis: [inaudible 00:27:11]

V. Mansharamani: ... into the sky. So that's the building that will take the title. However, there were two buildings that were going to be built that were on the drawing boards that were supposed to be taller than the Burj Khalifa that are no longer being built, they've been temporarily put on hold. One of them was in China and the other one was in Saudi Arabia. And so those two buildings being put on hold really indicates that maybe the conditions have changed in those two countries. And now that sort of raises alarm bells of potential economic or financial chaos.

Dusty Weis: Or perhaps, maybe cooler heads are prevailing and we're stepping back from the precipice of a building too tall and overextending ourselves as well.

V. Mansharamani: That is indeed a perspective one could take.

Dusty Weis: It's fascinating to me because this is a tale as old as time going all the way back to Icarus flying too close to the sun, but it doesn't seem like we ever learn.

V. Mansharamani: Unfortunately that's the case.

Dusty Weis: So using then this skyscraper theorem or any more reliable economic indicators that you prefer, it sounds like you've figured that the odds or that there's another recession in the very near term horizon right now. When is that going to hit and how are we going to feel it?

V. Mansharamani: Sure. So it depends what you mean by very near term. Dusty, I don't think very near term is how I would characterize the risk of a recession, but I think there's one coming. Economies don't grow to the moon. They never have and they'd probably never will. There are some cyclical dynamics that I think are kicking in and we are long in the tooth in several ways. I think the uncertainty that's gripped US corporations has resulted in less capital expenditures over the last year and a half or so. And that's going to ripple through the economy and probably result in a little bit less economic activity. We've already seen a corporate profit slow down, so in fact we may even be in a profit recession, where profits are year over year lower definitely for some segments if not a major segments of the US economy. And so, the question is what happens with the US consumer? And so there, I would tell you the indicator to watch is probably jobs and how US unemployment is doing as long as Americans have jobs, they tend to spend money.

Dusty Weis: We've been lucky enough to experience about 10 years of steady economic growth now and that's fairly unprecedented in its own right. But, do you think that this has lulled us into almost a sense of complacency both as business leaders and as consumer?

V. Mansharamani: Certainly. I definitely think that's the case. I think what ends up happening, I'm a big fan of an economist who's since passed away by the name of Hyman Minsky, who among other things wrote about what he calls a financial instability hypothesis. And his belief is that stability itself generated instability, and he showed this economically and quantitatively and it's definitely works when it comes to things like credit conditions. And I believe it probably has brought applicability even to economic conditions. And so I think what ends up happening is, we do get lulled into complacency. We think that times will continue as they have in the past. There's good behavioral psychological decision making biases that we all are aware of and availabilities one of them.

V. Mansharamani: We tend to think the past is exactly what the future will be like. We know that's not true intellectually, but emotionally we tend to believe and tend to extrapolate what's just recently happened. And so the longer we've had a nice steady economic expansion is the longer we expect it's going to continue. So I do think that stability itself generates instability, and the mechanism by which that happens tends to be complacency.

Dusty Weis: So in addition to the economic factors that might cause disruptions in business, you note that there are some other disruptions on the horizon with which equipment manufacturers will have to contend. And you note that they can view these as a threat or as an opportunity. So let's pick a few of these disruptions then take a look at them and see how we can go about approaching them as opportunities.

V. Mansharamani: Sure. So let's just take the current dynamic that's underway in corporate America, the real shift on the purpose of a corporation. Historically, it had been focused on shareholders, focus on shareholders, focus on shareholders. And there's recently been covers of the economist magazine, covers of fortune magazine, the business round table issued a statement, et cetera, all about the purpose of a corporation. And the idea here is that America needs to shift its corporate philosophy away from one that is shareholder focused, towards one that is stakeholder focused. So companies, the argument goes, should worry more about their employees, worry more about their community's, worry more about their environment and shareholders are one of many entities we should worry about, but they're not the sole entity.

V. Mansharamani: And so that is something that business leaders might naturally say, "Oh my God, this is a threat less for my shareholders. That seems horrible." Actually the whole point of it is for the owners of the business, we pay what we need to, but the market dictates those prices and we sort of maximize return for shareholders. That's a threat oriented way of thinking about it. An opportunity oriented way to think about it is, okay, I'm going to use this as an opportunity to actually change how I describe what I do. In fact, if you are more longterm oriented, which I think is a healthy development regardless, then these debates between shareholders and stakeholders almost become irrelevant, right? Because in the longer run and if you take this opportunistic longer run thinking process, what you conclude is, of course I need to take the care of invest in and develop my people because they're my future leaders, of course I have to do that.

V. Mansharamani: Of course I need to take care of the environment in which I operate because that's the environment which I'm living for the next 10, 20, 30 years. Of course, I need to take care of my community because these are my neighbors. I'm in this community for a long term relationship. And so suddenly all of these trade-offs are no longer trade-offs actually. By being opportunistic and longer term oriented, what you find is that you can use this new social dynamic around shareholder versus stakeholder and actually change it to one that's longterm versus short term and take advantage of it. So that's how I would suggest AEM members could take advantage of and use what could be seen as disruptive as an opportunity.

Dusty Weis: We've covered a lot of topics in this podcast and there's a myriad of takeaways for listeners, but if there's one key takeaway, one piece of advice for the equipment manufacturing industry as a whole that you would have them take to heart at this moment, what would that be?

V. Mansharamani: Well, there'd be two things actually, so I'm not going to take the one thing and stick with it, but I'll say two things, but I'll be quick. The first thing is this US-China rivalry is real, and you cannot dismiss it as a mere trade war. It is a lot more than a trade war, and once we see president Trump and Xi Jinping shaking hands and saying, we've got this phase one deal done or we're moving onto phase two and it's just a trade deal, that is not the all clear for the global super power rivalry to sort of simmer down to a normal course. I think we have a new world on our hands and the US-China rivalry is a major part of it, so that's number one. And number two is, the mindset logic of threat versus opportunities. We are in a chaotic world with lots of crosscurrents. Change is constant and uncertainty is everywhere.

V. Mansharamani: But that does not mean you should be paralyzed and stuck in your heels. That means that actually with a little extra effort and thinking through scenarios as to how the world may transpire, that you can actually identify opportunities and spot risks to your businesses. And by doing so, you can turn almost any development from a threat into an opportunity. And so those are the two tidbits I'd leave them with.

Dusty Weis: We were able to open on a positive note with the news of the USMCA deal that happens to be pending at this point. Sometimes with the holidays coming up, it'd be nice to end on a positive note as well. So from your view, what's the good news that nobody's talking about as we head into 2020 here?

V. Mansharamani: I don't really have much.

Dusty Weis: You're a glass half empty kind of guy, is what I'm getting here.

V. Mansharamani: All right. Well, in terms of positive news that no one's really talking about, you know, Dusty, I am actually at a loss for positive news that people aren't talking about. When I look at the economic headlines, people talk about the strength and the jobs in America. They talk about the stock market hitting all new highs, they talk about the phase one trade deal is done, they talk about the USMCA is going to be put to bed, they talk about how economic progress is moving forward. I see a lot of good news out there already. And so to find good news that nobody's talking about I think is actually pretty hard, and in some ways it's actually kind of disturbing, right? If there's not lots of good news that people aren't talking about and people are so focused on good news, that sort of makes for a riskier forward view than I would personally like, or one that I would've had before you asked me this question.

Dusty Weis: Perhaps we're all just forcing our optimism a little bit here. Well, that's as good a note to end on as any here. And we had mentioned a what a relief it will be to unplug from the news for a couple of weeks during the holidays here. That's the reason why right there. You actually have a new book out, it's called Think for Yourself: Restoring Common Sense in an Age of Experts and Artificial Intelligence. What can you tell us about that real quick?

V. Mansharamani: Yes. Dusty, I am really excited about this new book of mine that'll be coming out in 2020. It's really my attempt to help the ordinary person in the world interact when there are experts and technologies constantly telling us how to think. And so I use examples from diverse domains such as, navigation devices telling you to go down a particular road, you happen to know that it's a school holiday today. It's telling you to go down this road because there's a school on the other road and it believes that the school is being let out, which road do you take and why? More often than not, we find people take the road that doesn't go near the school because they think the technology knows more than they do. That's an example for instance, but I have lots of examples from the medical sphere, from the business world, from the military and defense domains and it's a popular book that should be an entertaining read to help people learn to think for themselves again, which is really the point of the book.

Dusty Weis: Well, and based on this conversation here, it sounds like a healthy serving of something that we can really use going forward here. Dr. Vikram Mansharamani, global trend watcher, equity investor, author of Think for Yourself and a lecturer at Harvard, thanks for joining us on the AEM Thinking Forward Podcast.

V. Mansharamani: Thanks for having me.

Dusty Weis: We heard there from Vikram about how equipment manufacturers could turn technology disruption to their advantage. Well, if that's a topic about which you'd like to learn more, I hope you've got 2020s CONEXPO-CON/AGG trade show in Las Vegas marked on your calendar. And the tech experience pavilion, AEM is going to be unveiling a 10 by 22 foot model of the smart city of the future, complete with sensor networks, data processing, and the ability to respond to changing conditions. It's a very cool chance to see how all of the big ideas that we talk about on this show can come together and form a functioning system.

Dusty Weis: And if you haven't made your arrangements to attend CONEXPO-CON/AGG yet, it's worth noting you're running out of time to dawdle, it's March 10th, to the 14th. Visit conexpoconagg.com to learn more. Also, make sure to mark your calendar for the AEM product safety seminar, that's April 27th to the 30th in the Chicago land area. Meet and network with other professionals like you and of course learn about business strategies that drive safety in our industry. And that is going to wrap up this edition of the AEM Thinking Forward Podcast for more valuable industry insights, make sure you're signed up for the AEM industry advisor. Our twice weekly e-newsletter visit aem.org/subscribe. If you need to get in touch with me, shoot me an email at podcast@aem.org.

Dusty Weis: The AEM Thinking Forward Podcast is brought to you by the Association of Equipment Manufacturers and produced by Podcamp Media: branded podcast production for businesses. PodcampMedia.com. Little Glass Men does the music for this show. For AEM, thanks for listening. I'm Dusty Weis.

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