Social and Economic Trends that affect Home Networks

What is driving and enabling the Networked Home?

I wrote this article back in 2001 with a look 10-15 years into the future, just half way through a typical home mortgage. I republish it here, because it’s still relevant today and applicable to home healthcare and the aging-in-home market. [2011 updates are added in italics.]

Homebuyers often ask this question if they’re concerned that their new home might be obsolete before they sell and move out (or if they’re starting to think about home healthcare).  Builders also ask it, since they don’t want to add new features until customers demand them but want to plan for shifting attitudes.  And companies that make the products, services, and technologies want to understand the market opportunities, leverage points, alliances and risks.  Although the question is simple enough to ask, the answer can be complex and involves a discussion of many technology, market and social trends.

This was the last of a three-part series exploring trends driving digital home technologies. The first article covered Science and Technology Trends, and the second focused on Market and Consumer Trends.  As always, your comments and suggestions are encouraged.

Demographic Trends - Live births per year, in millions

After the 2nd World War, there was a boom in live births: the Baby Boom, and now these Boomers are nearing retirement age.  This will have a significant effect on consumer technologies because Boomers are expected to live longer than their parents and will surely strain our country’s social and medical programs.  Boomers are more affluent than their parents but expect a better quality of life.  They will reject elder care and instead demand technology solutions to let them stay home longer.  This is driving demand for home healthcare, health monitoring, security systems, and similar technologies.


Builders, product makers, technology suppliers, and service providers all need an understanding of the various trends driving the Networked Home, including the social and demographic trends covered in this article.

The following social trends will all help shape the home networking market and the timing of its mainstream debut.

  1. Changing Attitudes – Some 20 years after the Baby Boom, when the Boomers married and started raising their own families, the U.S. population saw an Echo Boom.  Now called the X-Generation, these young adults went through much of their school years with technology, and they’re not afraid of new gadgets.  Even as kids, some had enough disposable income to buy technology products, while all influenced their parents’ spending.  What is significant about this group is that they are now starting to get out of college.  As they move into apartments and homes, they expect the same kind of broadband communications as in dorm rooms.  They enter the job market at relatively high salaries and are into all forms of entertainment, including Home Theater systems and digital music downloaded from Napster.This contrasts with the retiring Boomers who mostly want comfort and convenience.  And then there’s the Y-Generation: kids that are growing up with smart toys and Internet even before entering school.
  2. Time Pressures – Partially because of competition and our perceived need to “keep up with the Joneses,” there are more dual-income families and people are working longer hours.  And because of the increasing divorce rate, there are more single parent families.  At the same time, we want our kids to have a rich childhood, so they are enrolled in all sorts of activities that only add to the time pressures.My wife and I have just one child, a 17-year old son.  Even though my wife only works part-time to build up Adrian’s college fund, it’s hard to find time for just the two of us.  I can only imagine what it must be like for single parents or busy families with two or more kids.Because of today’s time pressures, people are willing to pay for technology solutions that help them do a better job at managing time and communicating with family. [2011: Our son is now a 27-year old band director, married, living 3 hours away, and starting his own family, so I’ll soon be a grandpa.]
  3. Competitive Pressures – Just as competition in the workforce has employees competing for the same jobs and working longer hours, competition in business has companies working on Internet Time, where new products must come out every quarter instead of every year.  One result of this trend is an investor climate that gives company executives performance incentives based on stockholder value.  Another result of this trend is Mega Mergers that give companies greater economies of scale for competing on a global scale.  But a negative side effect of this is to artificially encourage executives to manage quarter by quarter instead of investing strategically for the long term. [2011: This short-term thinking seems to have contributed to the economic crisis we face today, and the crisis in healthcare.]
  4. Global E-conomy – Broadband communications makes the world seem smaller, and the Internet lets small companies compete with larger ones worldwide.  But going global means 24x7x365 operations and the need to deal in multiple languages and currencies.  That’s no easy feat for a small company, so outsourced service organizations have popped up to help. [2011: Broadband is a catalyst for telemedicine, but even with impressive growth, our nation has fallen behind as others have grown faster and our Congress continues to debate national broadband policy.]
  5. Deregulation – Worldwide, the deregulation of industries such as telecommunications and electric utilities has helped drive this increase in competition, alliances, and acquisitions.  In theory, the consumer will eventually benefit, but that same consumer is often the one who is laid off due to a merger or corporate downsizing.  But as we’ve seen with electric deregulation in California, if it’s not done right, deregulation can lead to economic disaster. [2011: And now 10 years later see what we’ve got.]
  6. Corporate Downsizing – Companies are finding that deregulated and new-economy competition requires that they focus more on their core competencies, so they outsource other tasks to smaller and more specialized companies.  As they do, they lay off workers who then join smaller companies or start home-based businesses, often working on a contract basis for the same firm that laid them off.  This helps drive the increase in home offices and the need for infrastructures and products supporting them.  That’s why builders now feature home offices in their model homes and include advanced wiring systems to support them. [2011: Knowledge-based workers, including attorneys and radiologists are finding their jobs outsourced overseas, and this trend is affecting home healthcare for better AND worse.]
  7. Career Volatility – I was fortunate enough to work for IBM for 30 years, but the days of working for the same company for your entire career are over.  Professionals must now continually retrain to remain competitive, but they lack the time and easy access to universities.  As a result, colleges now have distance-learning programs so people can earn degrees from home and participate in the lifelong learning process.
  8. Service Bundling– Deregulation and network upgrades to efficient digital technologies combine to provide service providers the incentive and means to offer bundled services at competitive prices.  Bundles make it easier to retain customers because it’s more difficult to switch to a competitor.  And with digital networks, service providers can deliver any kind of information that can be carried in digital form:  phone calls, music, television, Internet, books, alerts from security or health monitors, and more.
    Commoditization of Bandwidth

    Commoditization of Bandwidth, chart by Parks Associates


  9. Traffic Congestion – Across the country, population growth and urbanization has lead to traffic jams that rob us of the precious time that we already have too little of.  Congestion also pollutes our environment.   Solutions include telecommuting and smarter cars with traffic monitoring, GPS navigation with traffic awareness, and collision avoidance systems.  [2011: And now 10 years later we finally see hybrid and electric cars become mainstream options.]
  10. Environmental Awareness – A very small part of the world’s population own cars.  What will happen when the others catch up?  And when will we deplete the world supply of fossil fuels?  An increased awareness of environmental issues prompts these questions and helps fuel the trend toward Telework [and TeleHealth].
  11. Telecommuting – Even without formal Telework programs, employers get more productivity from salaried employees when they give them access to office systems from home.  These employees often put in a few extra hours before dinner, or bedtime, or on weekends.  Companies with formal Telework programs are able to access a larger pool of skilled workers, including moms who want to stay home with the kids and others who can’t move from distant cities or countries.  And by encouraging employees to work from home offices full time, companies save on office expenses.  They can even be better positioned to receive favors from local governments that are struggling with traffic and environmental problems.
  12. Widening Gap – The difference between the “haves” and “have-nots” is widening, and the problem goes way beyond income.  It also includes many factors that affect one’s ability to generate income. People without computing skills, access to PCs, or broadband Internet connections have a long-term disadvantage since they have less access to the information, education, jobs, and government programs.  And even with government incentives, it can be difficult getting broadband to everyone.  While it is fairly easy to connect the inner-city poor, because communications infrastructures are nearby, logistics make it much more difficult and expensive to get broadband to people in rural areas. [2011: The gap has widened more. Top U.S. CEOs in the 1970’s made 39 times more than the average worker. That seems reasonable, but by 1988 it rose to 191 times, and now the differential is a whopping 1039 times more.]
  13. Information Overload – Technology makes it easier to create and distribute information of all types. Through a home PC and the Internet we can now access company information, community information, personal information, health information, and more.  But there’s so much information that the problem is now Overload.  We are flooded with information but starved for meaning.This information overload is so overwhelming that a backlash seems inevitable.  In the case of PCs, microprocessor technology has advanced faster than applications to absorb it, so very few people need more than a low-end system.  In the case of information, so much of it is available online that adding more offers no value if we can’t find it.  Product developers must anticipate this problem and find easier ways to navigate through the sea of information and to turn it into useful knowledge. [2011: An objective of Modern Health Talk is to address this problem by making it easier to find health information that matters. Our success will largely depend on the community sharing needs and ideas with each other and with us.]
  14. Downsizing & Simplifying – Frustrated by the increasingly fast pace we live, and asking, “What is the meaning of life,” a small but growing number of people have concluded, “enough is enough.”  They have taken steps to downsize their homes and simplify their lives.  Rather than working ever-longer hours to keep up with Joneses and Johnsons, they are trading in their large mortgages for smaller homes that are paid for.  They are also getting rid of technologies they perceive as robbing them of time and togetherness – their TVs, stereos, computers, and more.  Although it is too early to tell if this trend will grow or be fueled by a mild recession, it is an example the technology backlash that can result from complexity. [2011: The trend will accelerate  as baby boomers are empty-nested and retire, and economic conditions add to the incentive.]
  15. Ethnographic Research – Because social and demographic trends can have so much impact on product acceptance, leading companies like Intel are taking a different approach to market research.  They send ethnographic research teams of anthropologists, psychologists, and sociologists to visit consumers in their homes, where they discuss lifestyles, problems facing families, the role of technology, and the barriers to adopting it. 

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