Thought Starters: Pokémon Go, Complexion Reduction and Brexit

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 why there’s so much noise being made about Pokémon Go, what is Complexion Reduction, the impact of Brexit and whether automation is going to put you out of a job among other things:

Salesforce is the market leader in CRM, so its announcement that its Android mobile app will only support Samsung and Nexus branded handsets is a sign that not everyone is prepared to go along with the fragmented Android landscape.

Unilever and Procter & Gamble are the giants that have dominated the FMCG sector. Whilst neither brands have been afraid of taking over competitors in the past, Ben Thompson suggests that  Unilever’s takeover of the Dollar Shave Club represents something more fundamental:

AWS and Amazon itself, having both normalized e-commerce amongst consumers and incentivized the creation of fulfillment networks, made the creation of standalone e-commerce companies more viable than ever before. This meant that Dollar Shave Club, hosted on AWS servers, could neutralize P&G’s distribution advantage: on the Internet, shelf space is unlimited. More than that, an e-commerce model meant that Dollar Shave Club could not only be cheaper but also better: having your blades shipped to you automatically was a big advantage over going to the store.

That left advertising, and this is why this video is so seminal: for basically no money Dollar Shave Club reached 20 million people. Some number of those people became customers, and through responsive customer service and an ongoing focus on social media marketing, Dollar Shave Club created an army of brand ambassadors who did for free what P&G had to pay billions for on TV: tell people that their razors were worth buying for a whole lot less money than Gillette was charging.

The net result is that thanks to the Internet every P&G advantage, save inertia, was neutralized, leading to Dollar Shave Club capturing 15% of U.S. cartridge share last year.

Simply Measured’s survey of American marketers points to the challenges faced managing social media and also points to Faceboook as having the strongest ROI:

Challenges Faced by Social Media Professionals in America

July the 17th was apparently World Emoji Day and the top tweeted emojis give an interesting (if rather nonsensical) window into national psyche of different countries:

Top-tweeted emojos by country

Pokémon Go’s growth has been phenomenal going from nothing to the most popular mobile game in the US in the space of less than a month:

Whilst Pokémon Go got a headstart based on the popularity of the Pokémon franchise, it’s Niantic’s augmented reality technology blending the real and gaming world that got people really excited. Matthew Lynley explores the gameplay and monetisation that has made the game such a huge consumer and commercial success:

Niantic here does such a good job of creating just enough friction that, at the exact moment, it can capture an opportunity for monetization. Players don’t feel compelled to spend money, and instead they’re offered a delightful experience when they elect to spend money. Those eye-popping visuals continue, they keep throwing Pokéballs and they don’t have to wait to see some of the most powerful Pokémon game.

It’s also interesting to see how Pokémon Go is quickly emerging as a promotional opportunity for bricks and mortar businesses with this link further strengthened with Nintendo’s launch of sponsored locations:

The more salient point here is that no marketing channel is evergreen, but businesses that want to win have to keep one eye open for these big shifts-and they have to capitalize on them when it’s time. With Pokemon Go, businesses have an unprecedented opportunity to create strong emotional bonds with new customers, and for very little money.

Even if Pokemon Go isn’t as powerful a tool for driving sales six months or a year from now, the customers that you delight today are going to remember you tomorrow.

Michael Horton provides a look at what he’s describing as Complexion Reduction, pointing to how many traditional design cues are disappearing on mobile in the quest for a better user experience:

1. Bigger, bolder headlines
2. Simpler more universal icons
3. Extraction of color

Google commissioned SOASTA to look at how poor mobile site performance can significantly degrade user experience, providing a valuable reminder that publishers need to keep an eye on the speed dial:

A faster full-site load time leads to a lower bounce rate

Whilst much has been made of the inexorable rise of Amazon, British bookseller Waterstones has provided an interesting counterpoint providing an example of where bricks and mortar retailers can face off against the ecommerce giant. Stephen Heyman profiles James Daunt’s strategy which has seen local store managers taking great control enabling them to act more like a local book shop and less like a one size fits all franchise:

While Barnes & Noble devolves from a bookstore into a thing store, Waterstones, the biggest bookstore chain in Britain, is plotting an entirely different course. In 2011, the company—choked with debt and facing the same existential threat from Amazon and e-books as B&N—nearly declared bankruptcy. Today, however, Waterstones isn’t closing shops but opening a raft of them, both big-box (in suburban shopping centers) and pint-size (in train stations). It has accomplished a stunning turnaround under the leadership of its managing director, James Daunt, who just announced Waterstones’ first annual profit since the financial crisis. How he pulled that off is a long story, involving old-fashioned business cunning, the largesse of a mysterious Russian oligarch, and some unexpected faith in the instincts of his booksellers.

Amazon has been rightly lauded for its move from retailer to platform provider but that’s not to say it has gone without a hitch. There have been growing reports of third party sellers listing counterfeit goods on Amazon upsetting consumers and brands:

Now Amazon is filling up with counterfeits, a term that can mean several things:

* A near-identical (or identical) knock-off, sometimes even made in the same factory as the original goods, and sold out the back door
* Factory rejects that failed inspection
* Low-quality fakes that look like originals, but are made from inferior or defective materials or suffer from defective/shoddy manufacturing

The Brexit referendum now means that Britain’s exit from the European Union is now more than just a Nigel Farage’s pipe dream but the end goal is far from clear.  Ian Dent’s report based on discussions with Dr. Holger P. Hestermeyer, Professor Anand Menon, and Dr James Strong is worth read if you want a closer look at the different options faced by Theresa May.

London’s economy has benefited hugely from being the financial capital of Europe as Ryan Avent details in his book Work, Power and Status in the Twenty-First Century quoted in Marginal Revolution. Given this, it’s no wonder that other European centres are keen to see London’s access to European financial markets curtailed:

London is the richest city in Europe.  Real output per person is central London is nearly four times the average in the European Union, and nearly twice that Europe’s other large, rich metropolitan areas, such as Amsterdam and Paris.  Strikingly, London is more than twice as rich as the next richest region within Britain.  However one slices it, the city is an extraordinary economic outlier.

Whilst the coup in Turkey seems to have quickly passed, the impact on the country’s civil society are more wide reaching as Erdoğan pushes the country further away from the foundations of Atatürk, as James Palmer profiles:

Erdoğan’s populist authoritarianism threatens a frightening change in Turkey — a dictatorship with the barest veneer of democracy laid over it as cover, fueled by resentment and religious conviction, and drawing in elements from jihadists to intelligence officers to organized crime to shield itself and assault its enemies.

Will robots put you out of a job? McKinsey have analysed the impact that automation will have on different occupations, with more and more jobs impacted directly or indirectly:

Automation is technically feasible for many types of activities in industry sectors, but some activities can be more affected than others.

The last 30 years has seen substantial gains in income for much of the world’s population, but the middle classes of the US and Western Europe haven’t fared nearly as well. I’d argue that these disparities in incomes between the developed and developing world would inevitably reduce over time as education levels improve and as technologies enable international collaboration. Unfortunately one of the side effects has has been the rise of populist politicians such as Donald Trump and Nigel Farage in the US and Europe:

Who Has Gained from Globalisation

The Brexit referendum has exposed a less tolerant side to British society. Pew Research Center figures enable a comparison between UK and other Western countries suggesting that it’s hardly an outlier:

Americans more likely to say growing diversity makes their country a better place to live

Laurie Penny provides a thoughtful critique of the culture of wellness with its very individualistic view of the world providing a barrier to a more collective view of society:

The wellbeing ideology is a symptom of a broader political disease. The rigors of both work and worklessness, the colonization of every public space by private money, the precarity of daily living, and the growing impossibility of building any sort of community maroon each of us in our lonely struggle to survive. We are supposed to believe that we can only work to improve our lives on that same individual level. Chris Maisano concludes that while “the appeal of individualistic and therapeutic approaches to the problems of our time is not difficult to apprehend . . . it is only through the creation of solidarities that rebuild confidence in our collective capacity to change the world that their grip can be broken.”

The featured image is “Taste” or “В К У С” in Russian is the first big solo mural by Sergey Akramov in his hometown of Yekaterinburg, Russia for the Stenograffia Street Art Festival and published in StreetArtNews.

 

Thought Starters: social media, Apple, banking and changes to employment and income

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 competing social media platforms and their roles, whether Apple can innovate, banking and its relationship with fintech and changes in employment and income among other things. 

Robinson Meyer revisits Reid Hoffman’s look at social networks and the parallels he draws between them and the seven deadly sins:

“Social networks do best when they tap into one of the seven deadly sins,” the LinkedIn co-founder and venture capitalist said. “Zynga is sloth. LinkedIn is greed. With Facebook, it’s vanity, and how people choose to present themselves to their friends.”

Research from Social Fresh, Firebrand Group and Simply Measured points to Facebook being comfortably ahead of other social media platforms in terms of ROI:

Social Media Platforms that Produce the Best ROI According to Social Media Marketers Worldwide March 2016

Whilst Snapchat is making growing inroads among younger audiences in the US, Instagram for the moment is proving a more popular medium for advertisers according to L2 Think Tank’s research:

Snapchat vs Instagram Adoption Among Brands Worldwide by Industry

Twitter recently reclassified its mobile app as a news service rather than social media in Apple’s App Store. Pew Research’s recent findings point to how the services have a different relationship with news content with Facebook driving more traffic whilst users referred by Twitter typically spending more time with the visited content:

On cellphones more visits come from Facebook

Given the increasingly important role that Facebook plays in distributing content, it’s no surprise that commentators cried foul when Gizmodo reported that Facebook was suppressing conservative news. A more careful reading of the news by Tyler Cowen and Ben Thompson suggests this isn’t quite as significant as the headlines suggest:

This, then, is the deep irony of this controversy: Facebook is receiving a huge amount of criticism for allegedly biasing the news via the empowerment of a team of human curators to make editorial decisions, as opposed to relying on what was previously thought to be an algorithm; it is an algorithm, though — the algorithm that powers the News Feed, with the goal of driving engagement — that is arguably doing more damage to our politics than the most biased human editor ever could. The fact of the matter is that, on the part of Facebook people actually see — the News Feed, not Trending News — conservatives see conservative stories, and liberals see liberal ones; the middle of the road is as hard to find as a viable business model for journalism (these things are not disconnected).

James Allworth profiles Apple’s business strategy and suggests that the company’s success is one of the key things holding the company back:

And it appears that Apple has fallen into exactly the same trap. Rather than start anew — with a beginner’s mind—what the above reveals to me is that they’ve tried to take the last paradigm and just jam it into the new one. The old has bled into the new. The result, at least as it stands now: just like Microsoft did, Apple knows what needs to be built — a phone-disrupting device. It’s just that they can’t bring themselves to let go of the past in order to do the job properly.

Whilst the Apple Watch hasn’t proved the breakthrough success for Apple that the iPhone provided, Neil Cybart’s analysis of Apple’s R&D expenditure points to something big coming soon:

Apple R&D Expense (Annual)

At the more nascent end of the technology ecosystem, Jared Friedman’s analysis of applicants to the Y Combinator programme provides a valuable window into the type of startups we’re likely to see more of in the very near future. Think more apps, SAAS businesses and platforms based on messaging, Slack and virtual reality among other things:

Messaging & Communications

For those of you working in startups looking to improve your product and people management, you’d be well advised to read Mike Davidson’s account of life as Vice President of Design at Twitter. He covers a lot of ground so I’m not going to try and summarise it, but it’s well worth checking out.

On the other hand, if you’re looking for a more nuts and bolts approach to improving your digital presence, Nick Kolenda’s 125 easy tweaks provides a good starting point, even if you don’t agree with everything he has to say.

The banking sector won no popularity contests over the last  9 years with its practices fueling the global financial crisis. James Surowiecki reviews moves to reform the sector suggesting improvements have been made but there’s still some way to go:

Of course, there’s much about Wall Street that Dodd-Frank has not changed. Bankers still make absurd amounts of money. Hedge-fund and private-equity managers still benefit from the carried-interest tax loophole. The big banks, though smaller, are still too big. “If you wanted financial reform to radically downsize the financial sector, or thought it was going to make a major dent in income inequality, you’re bound to be disappointed,” Konczal says. And Dodd-Frank’s work is still unfinished: many of the rules it authorized have yet to be written, and the banks are lobbying to have them written in their favor. As Ziegler told me, “The progress that’s been made is precarious. It can be unravelled.” But precarious progress is progress. Regulation involves a constant struggle to keep rules in place and to enforce the ones that are there. Dodd-Frank shows that that struggle is not necessarily a futile one: sometimes government really does regulate business, and not the other way around.

In Fintech circles there’s a lot of talk about the power of startups to disrupt the banking sector but Josh Constine suggests that these startups may actually strengthen rather than undermine your relationship with your bank:

But what many of these startups have in common is that they all rely on connecting to your existing bank to fund your accounts with them or receive money. Rather than shun the startups, the incumbents have built bridges to let you hook fintech products into your bank accounts.

The result is that while banking is changing rapidly, you might be more reluctant to change which bank you use, according to several fintech founders and VCs I spoke to.

There’s been increasingly vociferous discussions  about the impact that automation will have on employment over the long term. Josh Zumbrun’s analysis of US figures provides an indication of where things are heading.  Employment among knowledge workers and non-routine manual workers is proving much less susceptible to automation and is showing much stronger rates of growth compared to employment with routinised workflows:

The Rise of the Knowledge Worker

Pew Research figures point to the polarisation of wealth in American society as not simply coming from growing income and assets among the wealthiest but also due to the relative decline of the country’s middle-income households:

The middle class is shrinking nearly everywhere

Ed Hawkins’ data visualisation of climate over the last 150 years provides a valuable reminder that now is not the time for us all to put our heads in the sand:

Global temperature change (1850-2016)

Elisabeth Zerofsky’s profile of Marine Le Pen provides a reminder of the growing tide of nationalism in European politics and attempts to try provide a more “palatable” face on a movement that was previously at the fringe of European politics.

I am keen to hear your thoughts any of the above, whether you vehemently agree or disagree, so please don’t hesitate to use the comments field.

The featured image is a MOMO piece commissioned by the City of Sydney.

Thought Starters: innovation, intellectual capital & circular economy

Thought Starters provides me with a chance to review and highlight the more important or interesting research and opinions that I’ve read over the last week or so. This edition looks at questions over the pace of innovation, the growing portability of intellectual capital, the American presidential nominations and the circular economy among other things, all making for great weekend reading.

David Rotman profiles the work of economist Robert J. Gordon who takes a relatively dim view of the productivity gains over the last ten years. A valuable perspective although one focusing on economic gains doesn’t necessarily encompass other benefits enabled by new technologies and innovations:

Peak innovation

An interesting complement to the Rotman’s article is Prashant Gandhi, Somesh Khanna and Sree Ramaswamy’s review of the levels of digitisation across different parts of the US economy. Information technology inevitably leads the charge but it’s more valuable to look at the laggards where we’re likely to see considerable changes and innovations in the coming years:

How Digitally Advanced is your Sector?

One area that we have seen substantial advances recently is technologies that enable remote teams to more readily collaborate (eg Slack). Samuel Hammond points to a world where intellectual capital is increasingly portable even if immigration barriers mean that this mobility is more virtual than actual:

Consistent with the premature futurism thesis, smart writers have been predicting large and looming social implications from telecommuting and remote work for decades, only to have their visions stymied by some unforeseen technical or psychological barrier. While hiring international freelancers has gotten a lot easier, for many jobs people just prefer face to face contact. Yet we seem to be finally reaching a critical point where video streaming, virtual reality, and collaboration tools are converging to make even the most complex team production viable across borders.

Uber is one of the shining stars of the startup sector with its growth and funding leading many entrepreneurs to pitch their business as ‘Uber for ____’. Farhad Manjoo points out that we should be wary of trying to draw direct parallels between Uber and other business use cases given the particular characteristics the ridesharing:

But Uber’s success was in many ways unique. For one thing, it was attacking a vulnerable market. In many cities, the taxi business was a customer-unfriendly protectionist racket that artificially inflated prices and cared little about customer service. The opportunity for Uber to become a regular part of people’s lives was huge. Many people take cars every day, so hook them once and you have repeat customers. Finally, cars are the second-most-expensive things people buy, and the most frequent thing we do with them is park. That monumental inefficiency left Uber ample room to extract a profit even after undercutting what we now pay for cars.

But how many other markets are there like that? Not many. Some services were used frequently by consumers, but weren’t that valuable — things related to food, for instance, offered low margins. Other businesses funded in low-frequency and low-value areas “were a trap,” Mr. Walk said.

Dan Lyons’ rather humourous account of joining HubSpot provides a valuable antidote to some of the overinflated hubris sometimes associated with startups:

The truth is that we’re selling software that lets companies, most of them small businesses like pool installers and flower shops, sell more stuff. The world of online marketing, where HubSpot operates, though, has a reputation for being kind of grubby. Our customers include people who make a living bombarding people with email offers, or gaming Google’s search algorithm, or figuring out which kind of misleading subject line is most likely to trick someone into opening a message. Online marketing is not quite as sleazy as Internet porn, but it’s not much better either.

A lot of noise has been made about younger consumers fleeing Facebook for the newer social media platforms but comScore data from the US points to the platform maintaining its appeal among millennials – suggest we’d  see teenage audiences telling a rather different story:

Age 18-34 Digital Audience Penetration vs Engagement of Leading Social Networks

Snapchat updated its mobile messaging platform recently providing a richer range of features for users as well as changing its privacy policy which is likely to see a broader array of targeting options for Snapchat advertisers. It’s worth reading Ben Thompson’s piece on Snapchat if you want to take a broader look at how the platform has evolved since its launch in 2011.

Virtual reality is now well and truly out in the open with Oculus Rift now available to the general public. Brian X. Chen’s review of the headset suggests that in its current state, it’s one for the early adopters:

The Rift’s graphics, sound and head tracking, which is the device’s ability to follow where the viewer looks, do feel like something out of science fiction. While the system’s setup is somewhat complex, the smoothness of the graphics and the high-quality design of the headgear make virtual reality feel ready for prime time.

And yet there may be a higher reward for those who wait to buy the Rift.

Soundcloud Go launched on the 29th of March in the US, adding to the list of streaming providers that are offering a subscription service for music consumers. Another route to monetise content might sound great for musicians but Dave Wiskus’ review of the service suggests something much more insidious:

You can slice it, package it, or spin it however you like, but the bare fact is that you’re making money off of songs you aren’t paying for. Worse, you’re doing it while perpetuating an air of exclusivity around the concept of making money. All while you’re pretending to be a friend to the little guy. There’s nothing artist-friendly about this approach.

Sven Skafisk’s overlaying of smartphone sales on top of traditional camera sales illustrates how much mobile phones have come to dominate how the majority of consumers experience photography – click through for the full length chart which really puts things in perspective:

CIPA camera production

The success of Amazon’s Alexa highlights the significant market opportunity for user friendly smart home solutions, which has even led to religious authorities offering advice on its use during Shabbos. What consumers may be less aware of is that in many cases they are buying into a service rather than a piece of hardware with the demise of Revolv leaving consumers in the lurch (although it looks like Nest may be stepping in to address some of these concerns now).

With the release of the Panama Papers, it’s worth revisiting which countries enable financial secrecy. One of the interesting insights to come out of the reports is the relatively limited number of Americans caught up in reports reflecting relatively lax controls in some states. The US falls in third place in the Tax Justice Network’s Financial Secrecy Index.

NPR’s Planet Money (well worth subscribing to their podcast) has looked at the changing structure of employment in the US where you can see changes both in terms of the number of jobs and as percent of the total. No huge surprises but it will be interesting to see how the chart changes as machine learning and artificial intelligence make inroads into white collar professions which have traditionally proven more immune to automation:

The Decline of Farming and the Rise of Everything Else

Another podcast worth recommending is Vox’s The Weeds, providing a valuable window into American politics and policy. A recent episode looks at the tax implications of Donald Trump, Ted Cruz, Hillary Clinton and Bernie Sanders’ policies (from 34:20). One of the interesting conclusions is how comparatively robust both Democratic candidates proposals are compared to the leading Republican candidates despite Clinton and Sanders taking rather different policy approaches:

One area where Bernie Sanders and Donald Trump do seem to have something in common is their relatively protectionist approach to trade. Whilst I am all for ensuring employees gets appropriate protection around the world, it could put a real dampener on emerging markets’ economies as Jordan Weissmann points out:

With those last few words, Sanders has effectively written off trade with any country that is not already rich and prosperous—which is simply inhumane.

Encouraging the circular economy is likely to be a more appropriate way of encouraging local employment. Walter R. Stahel profiles this closed loop approach to production which offers benefits in terms of reduced emissions, increasing in employment and reduction in waste:

Closing Loops

As UK fast approaches the Brexit referendum, immigration and the country’s health system lead concerns facing Briton’s – issues not unrelated given the reliance Britain’s NHS has on foreign born staff:

What do you see as the most important issues facing Britain

Potentially allaying the concerns of immigration opponents is research from Mette Foged and Giovanni Peri in Denmark which points to the benefits of immigration, even for the low skilled populations:

Instead of a small negative effect on the local native-born — as most studies in the U.S. tend to find — Foged and Peri found a positive effect. That’s right — low-skilled immigrants actually raised the wages of their less-educated native-born counterparts in the surrounding area. The data followed the native-born workers for a long time, letting the authors confirm that the change was durable.

The featured image is a Nelio mural made for the Marion gallery in Panama.

Thought Starters: young people’s media and device use, Facebook Messenger’s evolution, grey zone conflicts and the gender pay gap

Thought Starters provides me with a chance to look through articles, research and opinion pieces, highlighting interesting trends, developments and changes in the world you and I live in.  Among the stories and research we look at in this edition are the habits of children and young adults, the growth of Facebook Messenger, grey zone conflicts, the gender pay gap and lots more.

There’s been growing speculation that Twitter may increase the character length of its posting as it looks to get ahead of Facebook in its user growth stakes (see below).  Shira Ovide gives a strong argument for retaining it as it is, although I would argue there’s definitely scope for excluding links, images and video URLs from tweets’ character limit:

Comparison growth monthly active users of Facebook and Twitter

Younger audiences given an indication of future habits of  the general population. Dan Kopf analysis young adults habits in the American Time Use Survey which unsurprisingly points to growing gaming, computer use and reading and decline in time spent watching television:

Which leisure activities are twentysomethings spending more time on?

Benedict Evans on the other hand has used Ofcom’s Children and parents: Media use and attitudes report to look at the habits of British children which points to the substantial transition to mobile phones and tablets:

What would children miss

Flurry has released their analysis of Europeans’ use of smartphones and tablets based on their app data which shows wide variations in device penetration as well as giving clues on how mobile devices are being used:

Smart device penetration in Europe

Facebook has done a great job of transitioning to a mobile world with 78% of its ad revenues now coming from mobile. Facebook though is not one to rest on its laurels, with Facebook Messenger seen as a key component in strengthening its hold on mobile consumers. Facebook has just published a review of highlights for Messenger from 2015 which gives an indication of the social network’s ambitions for the mobile messaging service:

Facebook Messenger 2015 highlights

As mobile phones approach market saturation in developed markets, consumer electronics brands are looking to new categories for a boost in their revenues. Unfortunately for the brands, Accenture‘s global research profiled by Matt Rosoff  suggests that consumers aren’t getting caught up in the hype for new products despite a growing array of offerings:

Consumers are bored with today's tech and nervous about tomorrow's

Gartner’s CMO Spend Survey points to growing marketing budgets and an emphasis on digital commerce, innovation, sales conversion and customer retention. You can find further analysis of the survey results from Simon Yates who points among things to the blurring distinction between offline and online marketing:

Marketing budgets continue to grow

Interested in knowing what jobs are likely to keep you employed into the future? The Federal Reserve Bank of St Louis has analysed employment and unemployment rates for jobs on the basis of how routinised and levels of cognition which might give you some pointers whether you need to be retraining:

Routine vs Non Routine Cognitive vs Manual EmploymentFigures from Bloomberg point to the substantial cuts in employment some banks have taken post financial crisis. It might be rather too optimistic to hope that those people whose actions fueled the crisis might have been among the first to leave:

Staff cuts at the World's biggest banks

Cass R. Sunstein profiles Gabriel Zucman’s The Hidden Wealth of Nations: The Scourge of Tax Havens, examining the growing role that tax havens play in enabling corporations and the wealthy to avoid paying their fair share of taxes. Zucman’s analysis provides a guide to the scale of the problem and also points to the successes and failures different institutions have had in addressing the problem of tax evasion:

In the aftermath of the financial crisis, you might expect that there would be an international crackdown on the use of tax havens, and as we shall see, international attention is indeed growing. But the numbers demonstrate that no crackdown has occurred. In Luxembourg, offshore wealth actually increased from 2008 to 2012 (by 20 percent). In Switzerland, the increase has been comparable; foreign holdings are now close to an all-time high. Disturbingly, the new wealth is coming mostly from developing countries, which poses a serious problem in light of the severe strains on their limited budgets.

China’s economy is going through a rough patch, with the share market in a nose dive.  Given the over inflated valuation of many of the assets. Given the overinflated value of many of the assets in the country’s equity markets, this trend is unlikely to change (unless the government chooses to prop it up):

China Battles to Shore Up World's Priciest Stock Market

High profile Silicon Valley venture capitalist Paul Graham’s recent blog posting in which he argues that income inequality per se is not a bad has inevitably kicked up a storm of reactions. Among the more nuanced responses is Ben Thompson’s analysis who points to the risks and benefits associated with a more deregulated economy and calls out for the need for a strong social safety net that is independent of our employers:

Technology is changing the world, and it is naive to not expect the world to begin to push back. Rather than always be reactionary, it is past time for the technology industry broadly and Silicon Valley in particular to get serious about what that world will look like in the future, especially given the fact there is actually a way forward that is a win for not just technology companies and their investors, but for those who are impacted — i.e. everyone. Just as we should separate the means by which Uber allocates drivers from the ability to pay for a ride, it makes sense to separate work from the provision of a social safety net, and those most able to capitalize on this new world order should be the most willing to pay.

The conflict in Syria and the resulting flood of refugees fleeing to Europe is unfortunately leading to an anti immigration backlash in many European countries. Victims aside from the refugees fleeing harm in the middle of a European winter include the Schengen Agreement which previously allowed the free flow of people across much of mainland Europe:

Recent changes to crossing Europe's borders

Peter Pomerantsev uses the examples of China in the South China Sea, Russia in Crimea and Syria and ISIS with its terrorist attacks to highlight the growing importance of messy grey zone conflicts around the world:

It’s a brave new war without beginning or end, where the borders of peace and war, serviceman and civilian have become utterly blurred—and where you and I are both a target and a weapon.

Whilst we’re on the subject of globalisation and its impacts, The Economist has updated its Big Mac Index, pointing to who is paying over the odds for their guilty pleasure:

The Big Mac Index

The Freakonomics podcast is one of my regular listening appointments and this week’s edition looking at the causes and effects of the gender pay gap is well worth downloading.

The featured mural is by eko from his Flickr page.

Thought Starters: children’s media use, app streaming, Dribbbilisation and privacy

The following is a look through articles, research and opinion pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology.

Ofcom released Children and Parents: Media Use and Attitudes Report this month which provides a detailed look at the media consumption and device usage of children and teenagers in the UK. Among the interesting statistics are changes in the social media usage and inevitably high penetration of smartphones:

Main social media site used by children

Consumers movement from a browser to an increasingly app based interactive experience poses a significant threat to Google’s business model where the majority of income continues to come from search.  Among the ways that Google is looking to address this threat is the deeper indexing of content from apps and the launching of app streaming smoothing the transition from search to app usage.  You can see an example of it in action below with a search for a hotel in Chicago leading to the Hotel Tonight Android app below:

Google App Streaming

A further indication of the growing importance of mobile can be seen in the growing share mobile is taking of ecommerce revenues in the US according to figures from comScore:

Mobile commerce as share of total ecommerce revenues

An interesting companion piece to comScore’s forecast are figures from the Wall Street Journal which point to a decline in retail space per capita in the US which is no doubt fueled by growing ecommerce sales:

Retail space decline

WeChat provides an interesting case study in how we might see the mobile ecosystem developing in the West with mobile messaging becoming a hub for an increasingly diverse range of services. Edith Yeung profiles some of the different services currently offered in China – we’re beginning to see this with Facebook Messenger’s expansion of functionality and there’ll no doubt be plenty more to come in the near future.

Paul Adams criticises many designers for paying too much attention to aesthetics and not enough attention to purpose in what he describes as the Dribbbilisation of Design (referencing design showcase site Dribbble).  Adams argues that designers need to give greater consideration to outcomes, structure and interaction, particularly as we move to an environment where interactive design permeates everything:
The Dribbblisation of Design

Tony Aube points to the move to an increasingly messaging based world driven by artificial intelligence as making the traditional model of visual user interfaces irrelevant:

“What I do believe, however, is that these new technologies are going to fundamentally change how we approach design. This is necessary to understand for those planning to have a career in tech. In a future where computers can see, talk, listen and reply to you, what good are your awesome pixel-perfect Sketch skills going to be?

Let this be fair warning against complacency. As UI designers, we have a tendency to presume a UI is the solution to every new design problem. If anything, the AI revolution will force us to reset our presumption on what it means to design for interaction. It will push us to leave our comfort zone and look at the bigger picture, bringing our focus on the design of the experience rather than the actual screen. And that is an exciting future for designers.”

Benedict Evans reviews the competition for control of the television which he characterises as a ultimately a sideshow to the broader battles for the PC and more recently the smartphone and tablet:

“Games consoles’ closed ecosystem delivered huge innovation in games, but not in much else. The web’s open, permissionless innovation beat the closed, top-down visions of interactive TV and the information superhighway. The more abstracted, simplified and closed UX model of smartphones and especially iOS helps to take them to a much broader audience than the PC could reach, and the relative safety of installing an app due to that ‘closed’ aspect enables billions of installs and a new route to market for video. It’s not that open or closed win, but that you need the right kind of open in the right place.”

GroupM has released its forecast for the UK media sector, with a continuation in the trend of decline in print advertising and robust growth from television and interactive advertising:

Media Spend Forecast

The Flexport blog looks at the overinvestment in freight shipping capacity where the impact has been compounded by a decline in Chinese exports leading to some unintended consequences:

“It costs $300 to move a 40-foot container from Rotterdam to Shanghai, which is barely enough to cover the cost of fuel, handling, and Suez Canal fees. Here’s some more context. Let’s say that you want to travel for a year; it’s cheaper to put your personal belongings in a shipping container as it sails around the world than to keep it at a local mini-storage facility.”

Germany has long been a manufacturing powerhouse (see below). What The Economist asks is whether the country can adapt to an environment where a greater share of the value added comes from outside the traditional domains of designing and assembling goods:

Manufacturing as percentage of GDP

Turkey’s recent shooting down of a Russian air force plane has raised serious concerns about a further escalation of the conflict in Syria. Liam Denning argues the conflict reflects the increasingly embattled position Russia faces as oil prices decline (I wouldn’t paint Turkey’s role as necessarily benevolent given its support for anti Kurdish forces in Syria):

“Two things flow from this. First, Syria may represent just one front in a many sided struggle by resource-dependent countries such as Russia to maintain their position in oil and gas markets that suddenly look more like actual competitive markets than they did just a few years ago as new supply has entered the scene. That, rather than a Turkish border dispute, is the central geopolitical drama affecting energy.”

We’re seeing privacy at the centre of debates around online advertising and state surveillance but Greg Ferenstein explains that the concept of privacy is a relatively new one. He explores the emergence of privacy and looks at how we’re likely to see it further evolve in years to come:

The History of Privacy

The Economist has produced a valuable interactive infographic (it’s worth visiting The Economist for the interactive version) allowing viewers to examine which countries are doing a better job of empowering women in the workplace. Britain seemingly doesn’t do well in any of the measures:

The glass-ceiling index

The US is often characterised as deeply religious which has an inevitable impact on national and ultimately international politics. Given this, it’s interesting to see Pew Research Center’s latest recent research into religion and faith pointing to the country becoming more secular:

How the U.S. public became less religious

The featured image is Pistache, Bleu Gris et Noir by eko.

Thought Starters: Chinese digital media, iPhone’s dominance, Holacracy and Europe’s lagging digital innovation

The following is a look through articles, research and opinion pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology.

We are seeing Chinese businesses increasingly innovate and excel, providing business models that set themselves apart from businesses in the West. Digital media and communications have been a particularly fertile ground illustrated by the following table which illustrates how diversified the revenue streams of Tencent and YY are compared to their American counterparts:

Tencent Facebook YY and Youtube Monetisation

Apple is carving an increasingly dominant place in the world’s smartphone marketplace in terms of market share and profit. Some critics have questioned whether Apple can continue this growth trajectory, but Ben Thompson provides a strong defence for why we’re not likely to see this train derailing in the near future:

Smartphone Marketshare

Closely tied to the issue of smartphone ownership is the penetration of different mobile browsers. Here again Akamai’s figures point to Apple’s Mobile Safari browser dominating globally:

Global Mobile Browser Share

Roger D. Hodge looks at the ups and downs of Zappos’ introduction of the Holacracy system for self-organisation. It’s a long article but provides a valuable window into the challenges (and some of the opportunities) of introducing radical organisational change:

Zappos' Models of Organisation

As we embed the internet in an more aspects of  our lives, countries’ digital readiness provides an increasingly important measure of future economic health. Tufts University created the Digital Evolution Index to measure the building of digital capacity and many European countries don’t come out particularly well according to Bhaskar Chakravorti and Ravi Shankar Chaturvedi:

Digital Evolution Index

One digital innovation with its roots in Europe is the blockchain platform Ethereum (although there’s definitely an argument for it being a global project). Vinay Gupta provides a valuable look at the development of blockchain and smart contracts within the wider context of the evolution of databases and the internet.

Christina Farr looks at the rise and fall of the home cleaning service Homejoy, providing important lessons for startups aiming for growth at all costs.

A lot of media attention has focused on the rapid rise in San Francisco property prices, so it’s interesting to see UBS’ comparison of how overvalued the city’s real estate is compared to other leading cities:

Global Real Estate Bubble Index

Eric Jaffe’s analysis of trends in working hours over the last 130 years points to a downward trend – lets hope that we see this trend continue without leaving us all unemployed:

Annual Hours of Work

The featured image is a mural in Covilhã, Portugal by Pantonio and published in StreetArtNews.

Thought Starters: looking critically at mobile apps, venture capital, how Volkswagen ***ked up and the decline of pornography

The following is a look through articles, research and opinion pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology.

Consumers are spending more of their time on their smartphones in mobile apps which inevitably leads many media owners to see the development of their own as a means of increasing consumer engagement. Priya Ganapati warns that this approach is flawed in many cases with the development of mobile web offering providing a much better use of resources:

“Apps aren’t magical universes. They are part of a platform that is not viral, resource-hungry and hard to grow. So why not bet on the mobile web instead?”

Sam Altman and Paul Graham look critically at the financial fundamentals of startups in a market where valuations don’t necessarily match up with future prospects:

“Here’s a common way startups die. They make something moderately appealing and have decent initial growth. They raise their first round fairly easily because the founders seem smart and the idea sounds plausible. But because the product is only moderately appealing, growth is ok but not great. The founders convince themselves that hiring a bunch of people is the way to boost growth. Their investors agree. But (because the product is only moderately appealing) the growth never comes. Now they’re rapidly running out of runway. They hope further investment will save them. But because they have high expenses and slow growth, they’re now unappealing to investors. They’re unable to raise more, and the company dies.”

Also looking at the startup universe is Ben Thompson who points to less successful venture capitalists as being increasingly squeezed between angel investors below and more traditional investors above:

“So it is with venture capital: once startup funding requirements were reduced, the superior information and the willingness to hustle of angels and incubators earned the trust of the big companies of tomorrow, reducing more and more venture capitalists to dumb money hardly worth the 20% premium. The inputs to the Silicon Valley system have been changed, and we’re only now seeing the effects, and that should be a cautionary tale for just about everyone who thinks they and their industry are safe from the Internet’s impact.”

Matt Roskoff contrasts the falling prices of consumer electronic hardware with the rising price of television and radio services:

Prices for Electronic Goods and Services

Paul Kedrosky suggests that the Volkswagen emissions scandal may have been the result of cultural norms within the engineering department rather than a deliberate move on the automotive manufacturers management:

“It is still possible, of course, that we will learn that the engineers were under orders from management to beat the tests by any means necessary, but based on what we now know, that seems implausible. It’s more likely that the scandal is the product of an engineering organization that evolved its technologies in a way that subtly and stealthily, even organically, subverted the rules.”

Credit Suisse in their annual Global Wealth Report looks at the current spread of financial wealth across countries and regions including the disparities between the wealthy and the poor:

Global Wealth Pyramid

We are seeing a broader array of jobs affected by technology, as smarter systems enable more technically complex tasks to be automated. MIT Professor David Autor looks at the costs and benefits of these changes, suggesting that the opportunities will outweigh the threats if societies ameliorate the negative effects with education, taxation and transfer programmes.

The migrants pouring into Europe has focused largely on the plight of refugees fleeing civil war in Syria. What Alex Tabarrok points to is that by focusing on the plight of refugees, we fail to acknowledge the benefits that more open borders would provide both to people trapped in less developed societies and to global society as a whole:

“Closed borders are one of the world’s greatest moral failings but the opening of borders is the world’s greatest economic opportunity. The grandest moral revolutions in history—the abolition of slavery, the securing of religious freedom, the recognition of the rights of women—yielded a world in which virtually everyone was better off. They also demonstrated that the fears that had perpetuated these injustices were unfounded. Similarly, a planet unscarred by iron curtains is not only a world of greater equality and justice. It is a world unafraid of itself.”

Pornography has been getting plenty of column inches lately thanks to Playboy’s announcement that it will no longer be publishing full nudity, reflecting falling profitability of ‘legitimate’ operators (no tears shed here). Whilst the industry has long been pointed to as technological leader, recent changes mean that the sector is becoming something of a technological laggard according to Cade Metz:

“With the rise of mobile devices and platforms from the likes of Apple and Google, not to mention the proliferation of free videos on YouTube-like porn sites, the adult industry is in a bind. Money is hard to come by, and as the industry struggles to find new revenue streams, it’s facing extra competition from mainstream social media. Its very identity is being stolen as the world evolves both technologically and culturally.”

Another area where technology has changed the balance of power is music where we’ve seen a democratisation of the tools of production. Art Tavana looks at GarageBand’s role as a stepping stone for many budding musicians looking to get their music out and about.

If you find yourself in London between now and the start of January, I’d definitely recommend visiting Ann Veronica Janssens’ yellowbluepink installation at the Wellcome Collection. A great exercise in disorientation:

The featured image is the SatOne mural Insomnia in Mannheim, Germany and published in Graffuturism.

Thought Starters: innovation, incomes, employment and happiness

The following is a collection of articles and thought pieces highlighting interesting trends, developments and changes in the world you and I live in, with an emphasis on technology:

The Global Innovation Report as the name suggests ranks the innovation levels of various countries. The Economist recently published the following which points to Britain doing strongly:

Global Innovation Ranking

Figures from the US Census Bureau indicate growth in jobs but no commensurate increase in median incomes as represented in the following graph from the Economic Policy Institute:

Real Median Household Income

Whilst there’s been a lot of noise about the growing wealth of the top 1%, analysis by the Brookings Institute points to the relative success of the upper middle class in the US in recent years:

“While the rise in income and wealth at the very top is eye-catching, it also distracts attention from the action a little lower down the income distribution. The idea that the real divide is between ordinary members of the bottom 99 percent and the rich 1 percent is a dangerous one, since it makes it easier for those in the upper middle class to convince themselves they are in the same economic boat as the rest of America; they’re not.”

Maintaining overall income is not going to get any easier in the future due to an ageing population, with Morgan Stanley figures point to a decline in the total working population since 2005:

Working Age Population

There’s been lots of speculation recently on the effect that technology is having on the labour market. James Bessen suggests that we’re looking at a process of displacement rather than replacement of labour with a need for a labour force that is more adept at using technology:

“While technology takes over some tasks, it also increases demand for goods and services and hence increases demand for workers performing the remaining tasks. Instead of just eliminating jobs, new jobs are also created, sometimes in different occupations.”

Eurostat figures point to where Europeans spend comparatively more (or less) of their income on proportionately. Rather surprised to find UK’s spend on alcohol and tobacco to be lower than the European average:

European Household Spending

Marco Arment’s launch and then pulling of the Peace adblocker for iOS has led to renewed focus on the plight of the online media industry. Ben Thompson takes a look at some of the key pressures facing the industry and comes up with some recommendations if they want to be profitable.

Among the recent announcements at Apple’s Special Event on the 0th of September was the launch of the iPhone Upgrade Programme. Benedict Evans‘ takes a closer look at the initiative and how it shifts the balance of power from the mobile networks to Apple.

It’s also worth reading Benedict Evans’ piece critiquing talk of the  mobile internet given that internet access via mobile devices is increasingly the norm rather than the exception

Facebook has updated its Pages offering as it looks to provide a more relevant platform  for small businesses’ which includes an ecommerce offering and better design for mobile users:

Facebook Pages Update

Adam Piore writing for Nautilus looks at the role of human contact in making us happy and the impact that social networks are having on these relationships.

The featured image is a piece called Huemul produced by Pastel in Buenos Aires and published in StreetArtNews.

 

Thought Starters: China, Twitter, startups and the role of food

The following is a collection of articles and thought pieces highlighting interesting trends and changes in the world you and I live in, with an emphasis on technology.

China’s digital media sector has developed its own distinct characteristics with unique properties and innovations that set it apart from many markets in the West. WeAreSocial profile key digital, social and mobile benchmark statistics for the Chinese that give a taste for the key players:

The markets have not responded kindly to Twitter’s performance with one of the company’s largest investors Chris Sacca pitching in with what he feels Twitter should be doing. James Gleich provides a contrasting opinion, suggesting that it’s doing a great job as it is and leadership should be wary of turning the service on its head (even if the returns don’t satisfy investors):

“Twitter doesn’t just want to make it easy for users to find tweets. They want to make it easier for marketers to find users. Everyone wants to know the secret of how to use Twitter to reach their million potential customers. I will tell you the secret. You can’t do it. Twitter is not a giant megaphone. There is no mouthpiece. Those 300 million people, that glistening prize, are not waiting for your message. They’re not tuning to your channels. They’re choosing their own.”

Research from Branch Metrics points to the benefits of contextual deep linking, something that will become increasingly important as we move more toward an app based world:

Advantages of Contextual Deep LinkingThere’s been growing speculation about Apple’s development of their own car as the company looks to expand its footprint outside its heartland of computers and portable devices. Benedict Evans takes  an  insightful look at the market opportunity for the likes of Apple and also how new technologies and business models are likely to see the market evolve.

Mark Suster looks at the dangers of pouring investment into early stage startups where capital inflows can undo the hunger that makes startups so dangerous to the status quo. An interesting complement to this is Andreessen Horowitz’s compilation of startup metrics which provide a guide for those of you looking to assess which opportunities are really in a healthy financial position.

There’s been a lot of talk about unbundling in the cable television industry, particularly in the US which will impact what shows are produced and how they’re distributed in the future. Jan Dawson looks at the factors which will impact on whether consumers will stay with the incumbents or move to the new players such as Netflix and HBO Now.

There’s no denying there’s been a real change in what media consumers are interacting with, particularly among the younger generations. David Pakman takes a closer look, pointing to the growth in media forms which enable self expression and communication:

Media Consump

Tim Wu writing for the New Yorker takes a closer look at the growing hours faced by America’s more educated, as the age of leisure moves further off into the distance:

“What counts as work, in the skilled trades, has some intrinsic limits; once a house or bridge is built, that’s the end of it. But in white-collar jobs, the amount of work can expand infinitely through the generation of false necessities—that is, reasons for driving people as hard as possible that have nothing to do with real social or economic needs.”

The jury is still out on the ultimate effect that the digitisation of culture is having on the careers of artists and other cultural makers. Steven Johnson provides a convincing case of the benefits for musicians, filmmakers and authors with a blurring of the boundaries between professionals and interested amateurs.

We’ve seen food’s profile grow in terms of contemporary culture providing an intersection of material and experiential culture. Eugene Wei profiles this move, drawing on a recent Econtalk podcast feature Rachel Laudan:

“Food has replaced music at the heart of the cultural conversation for so many, and I wonder if it’s because food and dining still offer true scarcity whereas music is so freely available everywhere that it’s become a poor signaling mechanism for status and taste.”

You can see this issue explored further with Joe Pinsker’s interview of Eve Turow focusing on the Millennials’ obsession with food in The Atlantic.

The featured image is Rage & Fury by Nootk! in Moscow, Russia.

Thought Starters

A mixed collection of materials looking at societal trends and the impact of technology on the way we live.

The McKinsey Quarterly profiles technological disruption, emerging markets growth and ageing population as trends that will have a substantial effect on business in the coming 50 years:

Workers per Dependent

Going on public confidence, we’ve still got a long way to go before the world pulls out of the recession according to research from Pew Research, although reassuringly, UK is among the more confident:

Economic mood

Americans are seemingly chain to their desks, followed not too far behind by the UK according to research from the National Bureau of Economic Research. Salon’s reporting of the research also highlights willingness of Americans and Britons to work weekends and evenings:

Working hours

The Economist profiles  the world  of real time bidding for online advertising which has gained a strong foothold in US and UK markets and looks likely to rapidly spread to the rest of the world:

Real time bidding

Research from Harvard Business School profiled in Forbes contrasts the ROI from search and display advertising. I won’t giveaway who came out on top.

Much has been made of the impact that Amazon is having on the retail sector with effects particularly felt in the book sector. Zachary Karabell’s reporting points to the independents rather than the larger book store chains as proving best able to respond to Amazon’s encroachment.

The Guardian has avoided adding paywalls to its website unlike competitors The Times and the New York Times. What the organisation has done is follow the lead of other move media organisations and establish a membership led events programme offering that will bring its staff more into face to face contact with its readers:

Guardian

The New Statesman profiles bellingcat which looks to use a citizen based journalism model to shed light on conflict zones, with successful reporting from Ukraine and Syria among other locations.

There’s been no shortage of coverage of Apple’s launch event for Apple Pay, iPhone 6 and Apple Watch. Marco Arment looks at what we would like to see with the Apple Watch but then goes on to praise Apple for its ability to produce best in class product design:

The ideal smartwatch would have a high-resolution, color, self-illuminated but not too bright, highly visible yet completely subtle screen that’s always on, but isn’t tacky and doesn’t draw much attention to itself from others. The screen must be as large as possible so you can read and touch it nicely, but as small as possible so it isn’t ostentatious and doesn’t look out of proportion on a wrist. This screen, and all of the other components, must use as close to zero power as possible because the battery needs to last at least a week (ideally much longer), weigh as little as possible, and occupy almost no space.

So it needs to be bright, dim, bold, subtle, large, and small, with a battery that lasts a month with zero mass, and some compelling everyday applications beyond telling time and showing phone notifications. The true design challenge isn’t making it pretty — it’s making it good.

Horace Dediu in his analysis points to Apple’s presentation which highlighting the Watch’s role as timepiece, communicator and health and fitness device but he goes on to suggest that we will see lots more use cases emerge in the coming years.

Whilst much of the consumer attention was on the iPhone and Apple Watch launch, we may well find that it’s Apple Pay that will have the most substantial long term effect  on our society, giving the mobile payments sector an important boost.

For those of you wanting to find out more about the wearable technology sector outside of Apple’s launch, you might want to try PSFK’s recently released presentation:

Tinder has reshaped the way that many people approach dating and relationships. If you’re interested in finding out more about the site, I’d suggest you try Kiera Feldman’s oral history or for a more analytical approach try Anne Helen Petersen looking at how race and social class affects people’s choices on the platform.

Tinder

A lot of noise has been made about the disruptive forces of Silicon Valley. Airbnb founder and CEO Brian Chesky argues that the tech sector should be more selective in their use of the phrase and suggests that Airbnb is more a return to older ways of doing business rather than something totally new:

 Dougald Hine highlights the need for reflection as consumers are faced with an ever expanding hosepipe of information:

The latter requires, among other things, space for reflection – allowing what we have already absorbed to settle, waiting to see what patterns emerge. Find the corners of our lives in which we can unplug, the days on which it is possible to refuse the urgency of the inbox, the activities that will not be rushed. Switch off the infinity machine, not forever, nor because there is anything bad about it, but out of recognition of our own finitude: there is only so much information any of us can bear, and we cannot go fishing in the stream if we are drowning in it. As any survivor of the 1960s counterculture could tell us, it is best to treat magic substances with respect – and to be careful about the dosage.

The featured image is by Ben Slow in Vitry, Paris and was found on vitostreet’s Flickr stream.