The decades of innovation and expansion are soon to be a thing of the past, if they aren’t already, Wells Fargo Co. Senior Economist Eugenio Aleman said in the San Francisco Business Times, and it’s likely to stay that way.

“Forget about everything you have become accustomed to during the last 20 years, because things are going to be very different going forward,” Aleman cautioned in a report. “Today, we are witnessing the start of a new era for the U.S. economy and U.S. businesses, an era that will be very different from the 1990s and early 2000s, because the effects of the knowledge revolution have started to hit a wall. And this wall has a name: the U.S. consumer.”

Instead of pulling out the plastic to buy the latest innovations, technology and retail goodies, consumers – especially Baby Boomers who are preparing for retirement and curtailing spending to pay off debt – are expected to be more frugal with their money. This tightening of purse strings, is not just a temporary trend, Aleman stressed. It’s an adjustment by consumers that will transform the economy.

“Even if the housing market comes back from the deep depression it has been in for the last two-plus years – and it will come back – the economic environment will remain very weak,” Aleman said. “It will be the consumer calling the shots rather than producers and marketing and sales people.

“Innovation – be it real or presumed – won’t determine when it is time to replace or change your gadget.”

Aleman said consumers will hold on to their durable goods instead of rushing to buy the latest and greatest, and investors will shift away from growth stocks simply because there will be so few real “growth” stocks.

“With the U.S. consumer adjusting to this new reality, foreign consumers will drive growth in the years to come,” he said.