Thought Starters provides me with a chance to review and highlight some of the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at the Marc Andreessen’s forecast for the future of tech, Google’s recent keynote address and launch of Google Assistant, an update on Brexit and a look at how the wealth differ between countries among other matters.
The advertising industry has seen a lot of change over the last 15 years with the growth of online advertising, social media and smartphones all impacting how brands reach consumers. What Eric Chemi’s analysis of DB5’s figures suggests is that these changes haven’t really enabled the marketing industry to take a greater share of the pie with advertising budgets staying constant as a proportion of GDP:
One more recent window into how the world of marketing is changing can be seen in product discovery. Amazon is now where more than half of online US consumers begin their product searches according to Spencer Soper’s report on Bloomreach research, with the online retail behemoth strengthening its hold on consumers thanks to its low prices, growing delivery network and Amazon Prime offering.
Marc Andreessen in an interview with Timothy B. Lee gives his view on where technology and innovation will be sending us next. This sees him cast his opinion on artificial intelligence, drones, employment and autonomous cars:
To me the problem is clear: The problem is insufficient technological adoption, innovation, and disruption in these high-escalating price sectors of the economy. My thesis is that we’re not in a tech bubble — we’re in a tech bust. Our problem isn’t too much technology or people being too excited about technology. The problem is we don’t have nearly enough technology. These cartel-like legacy industries are way too hard to disrupt.
Google’s I/O 2016 keynote saw the company launch various new offerings including the Pixel smartphone, Daydream virtual reality headset, Chromecast Ultra streaming device, Google Wifi router and Google Home smart home assistant. The most interesting feature from the Pixel smartphone is Google Assistant, offering a real step forward from Google Now and Apple’s Siri:
Ben Thompson’s analysis of the launch of Google Assistant points to it as signalling a real change in Google’s mobile strategy, with its move to limit the service to Pixel rather than all Android handsets:
Google has a business-model problem: the “I’m Feeling Lucky Button” guaranteed that the search in question would not make Google any money. After all, if a user doesn’t have to choose from search results, said user also doesn’t have the opportunity to click an ad, thus choosing the winner of the competition Google created between its advertisers for user attention. Google Assistant has the exact same problem: where do the ads go?
After all, if a user doesn’t have to choose from search results, said user also doesn’t have the opportunity to click an ad, thus choosing the winner of the competition Google created between its advertisers for user attention.
Sony is in the throes of releasing its Playstation VR headset which is expected to be a frontrunner in the race to get virtual reality in consumers’ living room. Brian X. Chen’s review suggests we’re still a long way off from having virtual reality in most of our homes:
Virtual reality is still in its early days, and it’s unclear whether it will ever catch on with people beyond gamers. If you already own a PlayStation, spending a few hundred dollars for the headgear and accessories is a worthwhile purchase to get started on virtual reality.
But for the average consumer, the thrill of virtual-reality gaming with PlayStation VR may be fleeting. Initially, virtual reality will probably mesmerize you because it’s so unlike any gaming experience you have ever had. But the scarce number of good games available today, combined with the fatigue you will experience after 30 minutes of game play, may drive you back to gaming on your smartphone or television screen.
Another area that might not live up to the current hype is self driving cars. We’re seeing Google and Uber trying out live experiments but there’s little sign of these being available to consumers (Tesla’s Autopilot is a much more limited version of self driving) and Tom Simonite suggests we’re not likely to have this situation change anytime soon:
But don’t expect to toss out your driver’s license in 2021. Five years isn’t long enough to create vehicles good enough at driving to roam extensively without human input, say researchers working on autonomous cars. They predict that Ford and others will meet their targets by creating small fleets of vehicles limited to small, controlled areas.
One area where we have seen real change is in consumers’ growing adoption of digital photography, fueled by the now ubiquitous smartphone. It’s been interesting to watch is how smartphone software is increasingly giving high end cameras a run for their money in their picture quality as Michael Zhang’s comparison of the iPhone 7 and Leica M9-P attests to:
Diane Coyle provides a valuable refresher on how the move into the digital age is changing our conceptions of property ownership:
Conceptions of property seem to be evolving again with the rise of the “sharing economy”. The ease of using digital matching platforms make the consumer’s decision to buy or rent less stark than in the past ; the legal ownership rights are clear but the economic choices and consequences are changing.
The wider point is that technology and the law have between them significant effects on the kinds of market transactions that take place. Some consequences might seem minor. Others concern land grabs for economic assets.
Brexit has been thrust back into the spotlight by British Prime Minister Theresa May’s announcement that the country will start formal negotiations for Britain to leave the EU by March 2017. Gideon Rachman criticises May for essentially giving away one of the few bargaining chips that the country has in its negotiations with the European Union:
So why has Mrs May been so reckless? The short answer is politics. If the prime minister had delayed triggering Article 50 any longer she might have faced a revolt from Conservative MPs, who would have feared that she was backsliding on Brexit. By making her announcement just before the Tory party conference, she has also guaranteed herself some favourable headlines and applause in the conference hall. She may have bought herself another couple of years in 10 Downing Street. But she has also significantly increased the chances that Brexit will cause severe damage to the British economy.
Theresa May and British foreign secretary Boris Johnson would be well advised to give an ear to Centre for European Reform director Charles Grant who provides some valuable advice on how we would best negotiate Brexit.
There’s been a lot of talk of protecting manufacturing jobs in both the US and UK but does this really reflect problems of contemporary society? Binyamin Appelbaum suggests it might be more a case of reflecting the group that shouts the loudest rather than those most worthy of support:
The enduring political focus on factory workers partly reflects the low profile of the new working class. Instead of white men who make stuff, the group is increasingly made up of minority women who serve people. “That transformation really has rendered the working class invisible,” says Tamara Draut, the author of “Sleeping Giant,” a recent book about this demographic transformation and its political consequences.
The old working class still controls the megaphone of the labor movement, in part because unions have struggled to organize service workers. Manufacturing was, logistically speaking, easier to organize. There were lots of workers at each factory, and most knew one another. Service work is more dispersed and done in smaller crews. Workers living in the same city and employed by the same retail chain, for example, would likely know only a handful of their compatriots. Fostering a sense of trust and shared purpose under these conditions is difficult.
Tyler Cowen draws on Jonathan Wai and David Lincoln’s research into the global wealthy to point out differences between countries with some counterintuitive results:
Our World in Data provides a reassuring forecast of the growing levels of education we can expect in the coming years. This should go someway to addressing the issue of global population growth and increasing standards of living:
The Economist has collated Nobel laureates’ age at the date of their award and the trend is definitely older (with the exception of the Peace category). Now if only I’d achieved half as much as Malala Yousafzai had by the age of 17:
Amnesty International has released the following map which points to the disproportionate load that some countries are bearing in the hosting of the world’s refugees. What makes this even more concerning is the state of many of these countries’ economies leaving them ill placed to host refugees compared to the countries of Western Europe and North America: