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The Information Revolution

Has Entered Its Prosperity-Enhancing Phase



Life-Styles Editor



Prepared for the December, 1999, Issue of DEVELOPMENTS Magazine

The Journal of the American Resorts Development Association

Revised March 2000



The resort, recreation and leisure business is about to catch the wave.

And it’s not the 'age wave' they usually think about – i.e. the

socio-demographics of maturing baby boomers. It is a different and more

profound wave: the prosperous phase of the information revolution.



Things in the U.S. have been going very nicely lately. But, things

hadn't been going all that well in the recent past. Why are things better

now than they were in the 1980's and early 1990's? It's because we have

finally achieved that stage in the information revolution where high-tech

innovations in the workplace consistently lead to greater productivity,

profitability and prosperity throughout all sectors of the economy.

Historically, technological revolutions take two generations – about 70

to 80 years – to evolve from the stage of first practical demonstration to

the point at which the new technology's benefits are generalized throughout

the economy. The computer was invented 53 years ago, so we are about

two-thirds of the way through this transition. Economic historians tell us

that during its first 25 years a new technology is so costly and clunky and

unreliable that it has no effect on the economy whatsoever. During the next

25 years, purposeful applications are found and many people buy the new

technology to apply to specific tasks or operations, but it is still

expensive, still unreliable and still clunky. During this

"counter-productive" period of a new technology's adoption, a nation's

productivity and prosperity both fall.

This is what happened in the United States after 1970. From 1970 to

1995, average weekly wages in America fell 15.5%. For men it was worse.

Men's wages fell 22.0%. Women's wages fell only 7.0%. The gender gap in

wages closed during the last 25 years not because the women caught up but

because the men lost so much ground. To make up that loss, married women

entered the marketplace in unprecedented numbers. In the late 60's one-third

of married couples both worked full-time. By the mid-80's it was two-thirds.

Today in America, over 70% of all married couples between the ages of 19-55

both work full-time to maintain middle class lifestyles without middle income

jobs. The underlying cause of this remarkable adaptive behavior has been the

decline in our productivity improvement rate.

Fortunately, after about 50 years, the economic historians go on to say,

a technology finally becomes good enough – and cheap enough – to produce

significant economic gains across all industries, trades and professions. In

1994, U.S. productivity and wages began to rise. Currently, productivity is

rising at more than twice the average rate of the last 25 years. This is not

a short-term fluke; it is mature information technology. Historically,

seven-eighths of the benefits from a technologic discovery occur two-thirds

of the way through the transition. The cornucopia is here. At current

productivity-improvement rates, the Commerce Department says average family

income will rise from $43,000 a year today to over $70,000 a year by 2020.



In order to fully appreciate what the impending surge in prosperity may

mean for resorts of the future, it is important to reflect upon how society's

adaptation to the dramatic changes of the past quarter century has already

powerfully shaped the resorts' market. For example, rising numbers of

working wives and mothers kept U.S. household income up even as average wages

were falling. One consequence of this adaptive behavior was a substantial

loss of discretionary time by the "domestic manager" – i.e. wife/mother – and

ultimately, by the entire household. Thus, the purchase of recreational/

resort property remained fiscally affordable for a relatively stable share of

all households throughout the 1970's, '80's and early 1990's. For the

rapidly growing numbers of time-short, two income families, however,

year-round ownership of a second home was simply not "temporally" affordable.

The surging demand for time-share resort accommodations – and the

concomitant stagnation in the sale of freehold recreational properties –

correlates directly with the rise in 2-wage-earner households.

Indeed, the rise of the overall consumer service economy has closely

paralleled the rise in 2-income households, plus increases in the average

workweek among managerial, technical and professional employees, and a near

doubling of average commute time in the past 25 years. Time-short U.S.

households have, in turn, begun to contract out a wide range of domestic

services they don't have time for, including lawn care, home and auto

maintenance, housekeeping, child care, laundry and meal preparation. Today,

over half of all meals in America are eaten in restaurants and another 10%

are commercially prepared – e.g. carry-out, frozen entrees, etc. – to be

eaten in the home. As the ultimate service for a time-short clientele,

top-of-the-line urban condominiums are bringing back a hallmark feature of a

more gracious age, the classic concierge, who will make restaurant

reservations, book airline tickets, arrange accommodations for visiting

relatives, pick up and deliver shopping, and find a plumber on Sunday.



Providers of all service-intensive products – including resort and

recreational properties – must now consider their future in light of a

long-term rise in average individual wages, and the growing likelihood that,

from now on, fewer and fewer households will require 2 wage-earners to

maintain middle-income life styles. At various times in U.S. history – i.e.

major wars, economic depressions, etc. – America's wives and mothers have

entered the commercial workforce to augment household income and/or increase

national output. In every case, however, the great majority of women have

left gainful employment as soon as peace and prosperity have been

re-established. In the next 10 to 20 years, as individual wages soar, it is

entirely reasonable to expect that substantial numbers of women – and men –

will elect to leave gainful work to become full-time domestic managers. A

number of surveys of working women suggest that at least half would leave

commercial employment if financially able to do.

The return of full-time managers to millions of American households will

almost certainly reduce the marketplace demand for some time-saving services,

from child and lawn care, to home maintenance and restaurant dining. It also

seems plausible that households who invest in the careful management of

family time and finances will find outright purchase of vacation property to

be more appealing than time-sharing arrangements. On the other hand,

time-sharing appears to be perfectly suited to the circumstances of another

prosperous and rapidly growing segment of the leisure property market –




The great majority of Americans retire between the ages of 55 and 65;

this age group will be the fastest-growing portion of the U.S. population

between now and the year 2010, increasing from 10% to nearly 16% of all U.S.

adults. What's more, today's retirees are largely in good health, with

reasonable expectations of a long, active leisure life. In 1950, the average

age at time of retirement was 67, and the average age at time of death was

68. In a very real sense, there was essentially no life after retirement 50

years ago. A prolonged life of retirement wasn't even a realistic concept.

By 1990, the average age at retirement had dropped to 57.5, while the average

U.S. life-span had increased to 77, offering the average individual the

reasonable promise of 20 healthy, financially stable years after leaving work.

As might be imagined, this new perspective on life-after-work is

provoking a variety of adaptive social behaviors. To begin with, roughly

one-third of all retirees go right on working, often for their former

employer, or as free-lance practitioner/consultants. Another 10% to 15%

start brand-new careers in new fields. Meanwhile, a growing number of

employers are adopting "gradual retirement" polices that permit employees to

gradually reduce their work schedules to fewer and fewer days per week over 2

or 3 years. Whether retirement is gradual or all-at-once, new retirees today

are less likely than their predecessors to relocate to retirement communities

immediately after the end of formal employment. More than 40% of retirees

report involvement in community activities that make them less likely to

move. In addition to community activity, for most post-retirement

households, much of their newly-available discretionary time is spent in

explicitly recreational activities, including travel and tourism.

With their awareness of the world broadened by a life-time of exposure to

the mass-media, today's retirees are much less likely than previous

generations to be easily guided to choose from a "menu" of standard

recreational "packages," or to be content with the traditional array of

leisure activities. The popularity of spectator sports, especially among

mature Americans, is declining. The popularity of participatory sports is on

the rise. The doctor says "stay active," so that is what they want to do.

They don't want to settle down. They want to move around. Many sell the big

house, put the furniture in storage, and spend several years moving around.

They rent in places they always wanted to visit. They are willing to give

lots of places a try. "Let's go to the seashore and then to the mountains,

or even overseas." Prosperous and healthy, the new retiree is not interested

in settling down. They are seekers of experiences.

The travel/transport industry is the biggest in the world and the fastest

growing. Now at three and one-half trillion dollars a year, the industry

will double in the next ten years. But for today's retirees, just plain

off-the-shelf tourism won't cut it. They want eco-tourism. They want

agri-tourism. Or histo-tourism, edu-tourism and adven-tourism. Free of what

they had to do – i.e. work and raise a family – fresh and healthy retirees

are eager to do what they want to do. They are candidates for sophisticated

travel for its own sake. They will ride the Orient Express. They'll take a

cruise ship to six European cities so that they'll only have to unpack their

bags once. They will go back to school, not just for a hobby, but for a new

career. And perhaps most surprising, a growing number of 21st Century

retirees will get divorced. The 55 to 64 year olds have the most rapidly

rising divorce rate in America today. With the kids launched and their work

years completed, more and more couples look at each other and decide that

they have become different people. These divorces are often compatible; the

couples remain friends with a shared past but with differing desires for the




When they finally settle down and get serious about retiring, the current

crop of retirees continues to march to a "different drummer" from their

parents. Fewer express a desire to relocate from their existing communities

than retirees of the 1970's and 1980's. While about one-third of retirees

who change primary residences choose to relocate to the "sun belt," nearly

half simply move to a smaller residence in their existing community, while

roughly one-fourth choose to move to a rural area within 2 or 3-hours drive

from where their adult kids live; i.e. close enough to see their

grandchildren on weekends, but not close enough to be baby-sitters.

In fact, rural areas are giving rise to "NORC's," (Naturally Occurring

Retirement Communities). Life in small towns is more predictable, more

manageable, and more affordable. In small town America, rush hour lasts 15

minutes, and there's never any gridlock. The cost of living in rural areas

is also 15% to 20% lower than in adjacent urban and suburban communities. In

fact, high-tech employers began moving into small towns in growing numbers

during the 1990's, searching for under-employed, low cost, high quality

workers in the face of tightening urban labor markets. Overall, the

metropolitan regions of America are now losing half-a-million people a year

to rural communities, reversing a 100-year trend and creating an economic

renaissance in much of rural America, in spite of an ongoing crisis in


For the first time in the 20th Century, rural areas are growing faster

than cities or suburbs. While this rural renaissance rests upon a variety of

factors that differ from region to region around the nation, the in-migration

of retirees – who bring their income with them – represents the single

largest source of the new rural prosperity. As the retiree population

swells, rural communities will compete as ferociously for retirement

developments as they do now for chip plants, theme parks, and prisons.

Within 20 years, millions of retiring baby boomers will have changed the

population and the economics of rural America.



Meanwhile, cities are also coming back. Originally built to provide huge

pools of cheap labor for manufacturers, cities subsequently prospered as

homes for labor intensive information work. But if you have computers, you

don't need skyscrapers full of white collar workers. So, what do you do with

an idle and empty skyscraper? In 1994, Donald Trump suggested the answer.

How about creating a condominium communities? How about having 30 floors of

condominiums, five floors of offices, five floors of shops plus adequate

in-door parking, all under one roof? Commute to work, go shopping and

dining, all by elevator.

Following Mr. Trump's proposals, most U.S. cities – starting with the

Borough of Manhattan – have adopted mixed-use zoning codes down town, plus

tax incentives for converting office to residential space. In New York City

alone, 7,000 residential units have been created in the Wall Street financial

district in just the past 5 years. And if you have middle class housing,

sports arenas, cultural centers, restaurants and shops, will downtown America

become attractive again? Of course it will. And would such central cities

be nice places to visit? You bet! Resort developers are already building

timeshares in urban locations.

Urban resorts are convenient to the 70% of Americans who live in cities

and suburbs, most of whom are members of two-income households with two work

schedules to coordinate for a vacation, plus school schedules. As a result,

the recent trend in vacations has been away from 10-14 days once or twice a

year, and toward 3-4 days six or seven times a year. Increasingly, one or

more of those "short break" holidays will involve visiting a revitalized


Finally, since the high tech revolution is here, e-commerce is here.

Over one-half of all the households in America now have a computer. Over

one-third are on the Internet, and shortly, over one-half of all households

with children will be on the Internet. Since computer buyers are generally

middle and upper income families, the computerized half of all households

represent virtually all of the resort market.

The growth of Internet retail sales has been startling: one billion

dollars in 1995. Two billion in '96. Four billion in '97. Last year it was

13 billion. At current rates, e-tailing will reach $125 billion by 2003.

And where will the principal growth be? Insurance, banking, brokerage and

real estate!

If you think that panics the insurance agents and stock brokers, you are

correct. There is even more reason to panic if you are a tenured professor

in a small college. From now on, most post-secondary education will be

acquired at local community colleges, or at home, over the Internet, and not

on a distant campus. Voice recognition software will be standard on all PC's

within two years. Within five years, our computers will chat with us. And,

within a decade, you will be able to converse in real time with someone who

doesn't speak your language, using instant electronic translation.

So here is my final thought. Go buy up those small town, small college

campuses and convert them to "living and learning" centers for retirees.

Sell the nostalgia but don't ever try to fund the football team.


o During the decade ahead, techno-economic restructuring will give Americans

a rising level of prosperity; 60% of all newly created jobs will pay

above-average salaries between now and 2010.

o The time-short culture will last another five to ten years; by 2010, more

than two-thirds of all U.S. jobs will offer middle to upper income salaries

and benefits, and the numbers of 2-wage-earner households will fall.

o This prosperous marketplace will fall into three life stage segments; 40

million Pre-Family Households (unmarried young adults, aged 19-35); 100

million Family Households; and 40 million Post-Family Households (adults

over 55, two-thirds of whom live alone.)

o Multiple generation households will increase. "Extendable" families began

to replace nuclear households in the 1980’s, when young adults (19-24) found

that falling wages kept them from earning enough money to maintain

independent households. So they quit leaving home. In 1980, half of this

age group lived with their parents. Today it is two-thirds. In 1980, seven

percent of the 25-34 year olds lived with their parents. Today it is 17.5

percent. What's worse, when young adults finally do leave home, fully

one-half return within 30 months, often bringing spouses or offspring with

them. (Demographers call

this phenomenon the "Baby Boom-erang.")

o Now that wages are rising and general prosperity has returned, America’s

adult children are finally leaving their parents homes for good, and their

parents are busy building granny flats and mother-in-law wings to accommodate

their own aging parents. So long as seniors remain in good health, most

prefer to live on their own. But, as the elderly become infirm, most are

cared for by their adult children, rather than by an institution. By 2020,

1/4 of all U.S.

households will include at least one elderly relative.

o Home-based salaried workers will increase to 15 million in the next five

years. Home-based self-employed will be 15% of all workers within a decade.

Therefore, 25-30% of all gainful employment will take place in the home by


o Nearly one-quarter of all jobs will be part-time, temporary or intermittent

positions in less than 10 years, but they will receive the pay and benefits

proportional to their full-time counterparts.

o Congress will create a fully-portable personal pension system to reflect

increased sequential careers and self-employment.

o During the first decade of the 21st century, all large private and public

sector organizations will "unbundle" themselves, outsourcing most

administrative overhead and support functions – e.g. facilities, computer

services, payroll, training, benefits management, etc. – in order to

concentrate on excelling at the core competencies by which they add greater

value at less cost than alternative providers.

o Decision-making in the workplace will devolve. For large public and

private sector institutions to survive, they will transform themselves from

pyramids to networks. Hierarchical authoritarian bureaucracies will be

replaced by authoritative decision-making at the team level by "info-mated"

rank and file workers.

o Internet consumer sales will top $100 billion, surpassing catalogue sales

of $90 billion within three years. In ten years, e-commerce will capture up

to one-third of the retail trade, including most business and tourist travel,

and almost all consumer banking, insurance, investments and real-estate, much

of which will be handled by a dozen or so integrated financial giants who

will provide their clientele a full range of financial/investment/ insurance


o Information products and services will generate over 50% of our GNP, and we

will all need a Personal Digital Appliance (PDA) to keep up. (A PDA is a

hand-held device combining the features of a cell-phone, interactive pager, a

fax machine and a palm-top computer.) Already on sale in Europe, PDA’s will

offer wireless access to the Internet. Employees will be able to inter-face

with on-line data bases, expert systems and simulations, and take advantage

of main-frame computing power. Consumers will use their PDA’s to access

traffic and weather reports, book theater tickets and make restaurant

reservations, buy and sell stocks, pay highway tolls and parking meter

charges. Within 5 years,

everyone reading this article will be hopelessly dependent upon their PDA.

o In 10 years or less, conversational computers with friendly personalities

will handle most routine information-based transactions, including booking

airline flights and hotel rooms, making theater and restaurant reservations,

searching data bases, keeping inventories and accounts, cyber-shopping and

bill-paying. In less than 20 years, most of us will have chatty personal

cyber-assistants programmed to be amiable, trustworthy and collegial, with

whom we will develop meaningful relationships. Home appliances, and

automobiles will be verbally inter-active, as well.


Source: Dr. Gregg Edwards &

David Pearce Snyder

The Snyder Family Enterprise, Bethesda, MD

e-mail: snyderfam1@AOL.com

Call For Information 301.530.5807 

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