While the economy is recovering from the worst recession in 70 years, my firm, SPG Trend Advisors, is forecasting dramatic changes in the U.S. economy going forward. These developments will entail equally dramatic changes in the structure and practices of business in the future.

The greatest change we see in the recovered U.S. economy is a lower secular level of consumer spending. The reasons for this will center largely on a higher secular level of unemployment, lower growth in consumer incomes, more restrictive and expensive credit and an aging population. There is pent-up demand from both businesses and consumers for goods and services that have been deferred during the recent recession and we expect that pent-up demand to be addressed once there is an improvement in unemployment from the current severe levels later this year and in 2011. However, once this pent-up demand is met, spurring a cyclical economic recovery in 2011-12, the longer term growth in U.S. consumption is expected to be significantly below the historical 3-4% annual growth in final sales.

In a slower demand and more restrictive credit environment, businesses can cope by taking the following actions:

Tighter and more expensive credit will force businesses to pay more attention to cash flow and increasing asset turnover to improve working capital. This has been a requirement in the recession and will be a staple of increased management of a firm's balance sheet going forward. Companies will move to achieve higher liquidity, efficient asset management, lower debt and higher equity levels to be more flexible and self sustaining in growing their businesses.

From an income statement perspective, companies will have to employ stringent cost control and planning, also a requirement from the recession, to compensate for lower unit volume sales growth and a more competitive pricing environment we envision in the future.

In controlling costs, we believe companies will have to revamp their process and distribution systems and strategic plans. We believe companies going forward will continue to emphasize outsourcing and technology to reduce labor and distribution costs. More and more companies will migrate to online marketing to increase sales efficiency.

Innovative partnerships with other firms to share costs and augment product and service offerings will be created. Leverage existing employees and fixed investment by seeking horizontal business opportunities to generate incremental revenue with modest increases in investment. Increasingly companies will have to be more complete solutions providers to garner increased market share and demonstrate real value to customers.

Management structures will become "flatter" and more vertical in an attempt to reduce pure management expense and shorten the lines of communication and responsibility. In addition, more companies will be establishing teams of essentially SBU's within their organizations. These teams will include a leader, COO, and members encompassing design, development, production, marketing and administration. These teams will have all the components of product and service offerings and will be responsible for revenue and profit generation for their activities with incentives for team success. Additionally, more and more job classifications will be incentivized to achieve individual AND entity goals thus aligning worker achievement with company success.

Coincident with changes in management style and organization will be an implicit emphasis on worker training. Companies will be forced to do more with less workers. In order to do that, companies have to train workers to be more productive in their jobs AND be able to do more than a narrow job description. Successful firms will find workers that can be more complete in their functions are more productive and are better informed to help with product and process improvements AND generally do a better job in customer service. Going forward first rate customer service and customer service initiatives will define successful companies versus "also rans".

Being a more productive and efficient firm is not the entire solution. There are opportunities in industries and sectors that offer revenue growth potential that will be necessary to cultivate to offset slower growth in a firm's traditional business lines. Such growth opportunities we believe will come from:

reforms in health care and public education that will encompass increased technical applications and policy and process revisions

innovative new processes and scientific applications in agriculture to produce more food on less arable land with less water

water development and conservation to face increasing shortage of potable water worldwide

further development and expansion of energy conservation and environmental technologies

expansion and modernization of electric power grid and mass transit systems

increase in exports to fast growing overseas economies

increase in U.S. Government spending programs and procurement

increase in real estate rehabilitation and recycling in a shift away from traditional and more costly new development

increase in state and local government outsourcing of services

increase government and corporate spending on worker retraining

The new economy will require innovation, renewed commitment to customer service and solutions, and, above all, every business owner and manager will have to be an entrepreneur to steer their businesses to success.

Morris Segall is the president of SPG Trend Advisors, a boutique consultancy that provides global economic research for business and other decision makers through its monthly newsletter, "SPG Advance." Morris is also an expert resource speaker for Vistage International.

The article can be viewed at vistage.com