Since 2000, I’ve offered prognostications on what was coming at small businesses in the New Year. Then, at the end of each year, I’ve reconciled my predictions against what actually happened and gave myself a score.
Through the 20 editions prior to 2020, my accuracy record was 73%. That might not impress you, but in the Major Leagues, batting .730 would get you into Cooperstown on the first ballot. Just saying …
As the third decade of the 21st century dawned, my 21st set of predictions, published on January 5, were heavily influenced by three-years of Main Street optimism about the momentum of the U.S. economy. But then, in less than 90 days, everything changed. An organic invader turned our reality from halcyon to horrific in a way that only Chinese President Xi Jinping could have anticipated.
In our history, never have American business owners had to simultaneously fear that a deadly disease would attack their families and the political response to that pathogen might kill their businesses.
Because of the unprecedented weirdness of this year, scoring my 2020 predictions as I have in the past isn’t possible. Reading the list will either produce a wry smile, a cringe, or an expletive. Consequently, this year I’ll follow each prediction with appropriate commentary without a score – even when I was right. Some of my predictions have been omitted from the original list because the pandemic either made them irrelevant or moved them forward. Buckle up for a bumpy ride.
Small Business
Prediction: Small business optimism will remain strong for the fourth consecutive year, exceeding the NFIB Index’s half-century average.
Actual: Optimism held through March, took a dive in Q3 and began recovering in the second half.
Prediction: For the 13th straight year, small businesses will continue to limit borrowed capital and rely on organic resources to fund growth.
Actual: This happened in a parallel universe with the Paycheck Protection Program anomaly.
Prediction: The USMCA trade deal will deliver benefits for U.S. Main Street businesses.
Actual: USMCA passage and ironically, the coronavirus will help the U.S. rethink our lack of supply chain redundancy, which will be good for Main Street.
Prediction: More states will increase minimum wage.
Actual: Add Florida to the 24 states on course to a $15 minimum wage.
Prediction: California Assembly Bill 5 will hurt startups, the gig economy, and the franchise industry.
Actual: Passage of Prop 22 on the California 2020 ballot by an almost 3 million vote margin was a stinging rebuke to AB-5 and any national expansion of such regulations. Kamala Harris, call your office.
Prediction: The qualified-employee-prospect crisis extends into another year with little abatement.
Actual: Even during a pandemic, good people continue to be in short supply. Protect your winners from poachers. Do it today.
Prediction: The strength of small business balance sheets will receive due respect in 2020.
Actual: Ironically, the pandemic proved this as, even with all the losses, millions of small businesses have survived because they’ve deleveraged and retained earnings since 2008.
Prediction: The impeachment process will not diminish small business-sector support of President Trump in November.
Actual: Seventy percent of small business owners continued to support Trump right through the election.
Economy
Prediction: Continuing to expand, the U.S. economy will average 2.5% GDP in 2020.
Actual: This was interrupted in Q2 by the shutdowns. Second half recovery reveals our underlying economic strength, however the 2020 GDP record, like my scoring, must be moved to the outlier record book.
Prediction: No fundamental economic weakness in evidence will cause a 2020 recession.
Actual: There was nothing fundamentally economic about the preventable Chinese Wuhan coronavirus that unleashed a global pandemic.
Prediction: The Federal Reserve will continue accommodative monetary policies (low rates, print money).
Actual: The Fed’s discount rate and printing press were key to the government’s support during the early response to the pandemic.
Prediction: Crude and natural gas prices will hold close to 2019 levels.
Actual: The pandemic caused crude to drop by a third over 2019, while natural gas rose about 20%.
Technology
Prediction: You’ll hear more about mobile 5G, but it won’t be available to most of us in 2020.
Actual: This played out as predicted.
Prediction: Big Tech can no longer hide behind “the algorithms did it” cop-out for breaching expectations of ethics, trust, and values.
Actual: Big Tech and social media platforms became the poster children for this prediction based on their admitted election interference. Section 230 will be in play in 2021.
Prediction: Social media usage will be increasingly associated with rising levels of anxiety and societal dysfunction across all generations.
Actual: It’s becoming clear to many that the societal benefit of social media platforms is increasingly out of balance.
Prediction: Crypto-interfaces will be more prominent for blockchain applications, especially smart contracts.
Actual: While the pandemic accelerated many tech applications, blockchain wasn’t one of them.
Demographics
Prediction: Gen Y, aka Millennials (largest generation in U.S. history), will supplant Baby Boomers in areas such as electoral results, economic trends, workplace practices, and societal norms.
Actual: With the Gen Y upper quartile now in their 40s, 2020 was the pivot point of this demographic shift.
Prediction: Baby Boomers divesting of businesses they founded in the 20th century will find it increasingly difficult to sell to younger, 21st-century buyers.
Actual: The pandemic made this worse.
Prediction: Millennial women and Black voters will be the most consequential voting cohorts in the 2020 election.
Actual: Check.
Geopolitics
Prediction: Iran’s leadership will be challenged by a coalition of regional neighbors and the U.S.
Actual: Three Trump-led Israel peace deals – UAE, Bahrain, Sudan. Saudi Arabia is next.
Prediction: China’s President Jinping will not abide Hong Kong resistance to his illegitimate takeover.
Actual: He did not.
Prediction: World War III in cyberspace continues, and the U.S. is still losing, badly.
Actual: Bio-weaponry is now added to China’s WWIII ordinance array.
U.S. Politics
Prediction: President Trump will nominate – and the Senate will confirm – one Supreme Court Justice in 2020.
Actual: Amy Coney Barrett made Chief Justice Roberts irrelevant.
Prediction: President Trump will announce several reforms.
Actual: The pandemic occupied this energy, manifesting in multiple COVID vaccines available in months, not years.
Prediction: The Democratic presidential nominee will not be Bloomberg, or anyone named Obama or Clinton.
Actual: On February 29, James Clyburn delivered for Biden in South Carolina.
Prediction: The Republican Senate majority will resolve the Trump impeachment trial with all deliberate speed.
Actual: Check.
Prediction: U.S. Attorney John Durham’s probe will result in several indictments.
Actual: With this report at least 18 months late, is Durham part of The State (it’s no longer deep)?
Prediction: Republicans will maintain majority control in the Senate and gain House seats.
Actual: Who else saw this coming? Don’t worry about Georgia.
Prediction: President Trump will be re-elected.
Actual: 77% of Trump voters – 57 million Americans – still think he won.
Football
Prediction: In the 2020 NCAA Championship Game, LSU will defeat Clemson.
Actual: LSU 42 – Clemson 25. Check.
Write this on a rock … The coronavirus disrupted my reconciling process this year, but I’ll be back in January with 2021 predictions and a prayer that we avoid COVID-21.