Thought Starters: Uber, Machine Learning, “Alt-Right” Democracy and Globalisation

Thought Starters provides me with a chance to review and highlight some of the more  interesting (and hopefully well informed) opinions that I’ve read over the last few weeks. This edition is dominated by the fallout from the American elections with people looking at the reasons for the rise of such an unconventional candidate and a look at what we might expect from Donald Trump’s presidency:

Is the tide turning on Uber? There’s no disputing that the ridesharing model has become a key plank of our transport infrastructure. Question is will Uber’s pool of cash be enough to keep the company going until self driving cars arrive? Yves Smith and Eric Newcomer weigh in:

Published financial data shows that Uber is losing more money than any startup in history and that its ability to capture customers and drivers from incumbent operators is entirely due to $2 billion in annual investor subsidies. The vast majority of media coverage presumes Uber is following the path of prominent digitally-based startups whose large initial losses transformed into strong profits within a few years.

This presumption is contradicted by Uber’s actual financial results, which show no meaningful margin improvement through 2015 while the limited margin improvements achieved in 2016 can be entirely explained by Uber-imposed cutbacks to driver compensation. It is also contradicted by the fact that Uber lacks the major scale and network economies that allowed digitally-based startups to achieve rapid margin improvement.

Benedict Evans released the latest version of his Mobile is Eating the World presentation which looks at the growing synergies between mobile and machine learning, with a particularly focus on retail or automotive:

Lighting everything up with machine learning

Benedict’s presentation points to mobile apps as the dominant means for consumers to interacting with the digital world. As mobile becomes ubiquitous, we’re seeing consumers sticking to the apps they know according to research from Adobe in the US:

App abandoment is on the rise as consumers stick to the apps they know

Amazon is taking advantage of mobile technology to further automate the process of shopping with their soon to launch AmazonGo offering. Better experience for consumers, less employment for retail workers:

As mobile matures, we’re seeing the next gold rush emerging in machine learning. Sam DeBrule has pulled together a valuable collection of information sources if you’re keen to track developments in the sector as they increasingly spill over into the real world:

Machine Intelligence Startups & Tools

Providing a counterpoint to Silicon Valley boosterism is Om Malik’s column warning that technology doesn’t exist in a vacuum and that the startup sector needs to be more aware of these changes if it’s to avoid a major backlash:

“It is not just Facebook. It is time for our industry to pause and take a moment to think: as technology finds its way into our daily existence in new and previously unimagined ways, we need to learn about those who are threatened by it. Empathy is not a buzzword but something to be practiced. Let’s start by not raging on our Facebook feeds but, instead, taking a trip to parts of America where five-dollar lattes and freshly pressed juices are not perks but a reminder of haves and have-nots. Otherwise, come 2020, Silicon Valley will have become an even bigger villain in the popular imagination, much like its East Coast counterpart, Wall Street.”

Ryan Broderick tracks the rise of the “alt-right” in the US and Europe and how social media provides fertile ground for its growth.

“Facebook doesn’t want to challenge you, they don’t want to upset you, because they know that if you’re challenged on their platform, you wouldn’t want to use it as much,” Derakhshan said. “The very fact that you cannot show your reaction to anything you see on Facebook by saying that you agree or disagree or that it’s true or false and you can only show your emotions to it is very telling.”

UK’s telecommunications regulator regularly releases research looking at Britons’ use of media and technology. Their most recent report covers media use and attitudes among children and young people aged 5-15, providing a valuable window into where media is heading in the future:

Media used by children aged 5-14 at home

Pew Research’s research from the US point to ebooks market share as stabilising with a similar story for printed books. Another valuable finding is that consumers are now increasingly reading e-books on tablets, PCs and smartphones rather than just dedicated e-book readers:

Print books continue to be more popular than e-books or audio books

Americans have traditionally been strong believers in economic progress with the expectation that they will be better financially positioned than their parents. Research from Raj Chetty profiled by David Leonhardt points to this no longer being the case, a situation which is presumably leading to growing dissatisfaction with the political status quo:

Chance of making more money than your parents by age cohort in the US

Much has been made of Donald Trump’s call for bringing manufacturing back to the US with suggestions that he’ll bring in more protectionist trade policy. Mark Muro in his coverage of the American manufacturing points to how automation is seeing the sector become increasingly divorced from its blue colour labour roots:

More Output, Less Employment

Another initiative Donald Trump has been touting is investment in America’s infrastructure which is one area where the Democrats and Republicans could potentially find common ground…but the devil is in the details. Ronald A Klain’s analysis of the initiative suggests that it’s more likely to line the pockets of those already working on projects rather than providing a boost to employment:

First, Trump’s plan is not really an infrastructure plan. It’s a tax-cut plan for utility-industry and construction-sector investors, and a massive corporate welfare plan for contractors. The Trump plan doesn’t directly fund new roads, bridges, water systems or airports, as did Hillary Clinton’s 2016 infrastructure proposal. Instead, Trump’s plan provides tax breaks to private-sector investors who back profitable construction projects. These projects (such as electrical grid modernization or energy pipeline expansion) might already be planned or even underway. There’s no requirement that the tax breaks be used for incremental or otherwise expanded construction efforts; they could all go just to fatten the pockets of investors in previously planned projects.

China’s economic growth is unprecedented, but a darkening political climate has led to growing suggestions that this trend may be derailed in the future as the country adopts a more authoritarian stance:

% of world GDP from year 1700 to 2008

The rise of Donald Trump, Nigel Farage and Marie Le Pen among others points to a backlash against globalisation, but analysis from The Economist point to this trend not being shared by all countries:

Attitudes towards globalisation against change in GDP per person

Amanda Taub profiles Yascha Mounk’s research pointing to declining support for democracy among many developed countries, coinciding with the growth of the “Far Right”…Although Erik Voeten’s analysis suggests it’s not quite as severe as the graph below suggest:

Percentage of people who say it is “essential” to live in a democracy

Given the rise of the far right, Yale history professor Timothy Snyder’s 20 lessons from 20th century provides valuable advice on fighting a rise in authoritarianism  (even if it is aimed at an American readership):

1. Do not obey in advance. Much of the power of authoritarianism is freely given. In times like these, individuals think ahead about what a more repressive government will want, and then start to do it without being asked. You’ve already done this, haven’t you? Stop. Anticipatory obedience teaches authorities what is possible and accelerates unfreedom.

The Danish concept of hygge has become very much of the moment with its harking back to a simpler age but Charlotte Higgins suggests that the UK’s reinterpretation of the idea is not quite so healthy:

If, for Danes themselves, hygge has an element of fantasy – through the way it draws back from difficulties, difference and debate – then the British import is a fantasy of a fantasy. Hygge may be quintessentially Danish, but there is something utterly British about the nostalgic longing for the simple accoutrements of an earlier time – especially if it can be bought. At the same time, it is hard to deny that just at the moment, the most natural thing in the world is to want to huddle round the fire and wish the outside away. Settle in: it’s going to be a long winter.

The featured image is a MOMO mural from Sicily.

Thought Starters: mobile internet, adblockers, sexism in the workplace and the developing world

Thought Starters provides me with a chance to look through the articles, research and opinion pieces I’ve read over the last week or so, highlighting the more interesting trends, developments and changes in the world we live in. This time we’re looking at the growth of mobile, the role of adblockers, the impacts and origins of sexism in the workplace and the internet in the developing world among other things. Happy reading.

The growth of mobile has seen the emergence of a whole new range of digital channels, but Visual Capitalist’s research points to the largest platforms all being controlled by Microsoft, Google or Facebook. That being said, there are range of platforms (WeChat, Snapchat, Slack, Netflix, Spotify) that fall short of a billion users but dominate within their respective sectors or geographies and could present a challenge to the market incumbents:

Apps or programmes with more than one billion active users

The IAB (US) recently released research which profiles how American consumers are using their PCs and smartphones. What is apparent is the continuing move to mobile  although the same research points to computers still registering a higher volume of internet views pointing to the different ways these devices are used:

Nearly Two-Thirds of All Internet Time is Spent on a Mobile Device

Google and Facebook have responded well to consumers’ growing use of smartphones, taking more than half of the available mobile ad revenues and leaving the remaining players fighting over the scraps in the US. eMarketer’s forecast suggests this isn’t going to change any time soon:

Net US mobile ad revenue share by company forecast

A continuing note of concern for media operators is the growth of adblocking with 22% of Britons using the software with this rising to 47% among 18-24 year olds according to Internet Advertising Bureau (UK) commissioned research.

Dean Dubley’s analysis suggests the introduction of mobile adblocking services won’t decimate the online media sector but is likely to further strengthen the hand of Google and Facebook:

The bottom line is that screaming headlines in stories like those from ZeroHedge (link) about “the risk to Internet companies’ business models” are nonsense. Ironically, it’s Google and Facebook’s approach to advertising that is safe. Small online publications using other advertising channels may not be so lucky. I noticed this tweet referencing mobile advertising growth forecasts from Goldman Sachs (link) which seems to suggest that Wall St is sanguine about the adblocking “threat” and that rapid growth in revenues will continue.

Among the likely responses by media operators to growing adblocker usage is a growing reliance on native advertising which is reflected in Enders Analysis’ recent forecast for Yahoo:

Forecast for the growth of native advertising in Europe

Whilst a few apps such as Facebook are nearly universal in their appeal, others give a clearer indicator as to who the user might be. Researchers have looked to profile the correlation between the ownership of different mobile apps and various demographic characteristics and income to develop profiles of mobile users. You can check out who they think you are in quiz – they got my gender and age wrong (I’m definitely male and over the age of 32) although I’m guessing not being a US resident probably didn’t help the profiling process.

Slack has been touted as the solution to the problem of information overload in the workplace with over 2 million daily active users. Samuel Hulick provides a more sceptical view warning that this “asynchronish” is in many cases compounding rather than addressing the problem:

Maybe you will say I’m afraid of commitment, but I’m just not interested in a relationship that seems to want to swallow up more and more of my time and attention, and demand that more and more of my interactions with other people go through you first.

Jeff Goodell has written an extended feature article on artificial intelligence and machine learning. Worth a read if you’re keen to get up to speed with what’s happening in the sector:

Despite advances like smarter algorithms and more capable robots, the future of superintelligent machines is still more sci-fi than science. Right now, says Yann LeCun, the director of Facebook AI Research, “AIs are nowhere near as smart as a rat.” Yes, with years of programming and millions of dollars, IBM built Watson, the machine that beat the smartest humans at Jeopardy! in 2011 and is now the basis for the company’s “cognitive computing” initiative. It can read 800 million pages a second and can digest the entire corpus of Wikipedia, not to mention decades of law and medical journals. Yet it cannot teach you how to ride a bike because its intelligence is narrow – it knows nothing about how the world actually works

Developments in software technology including artificial intelligence are rapidly expanding the scope of what computers can do. Nathaniel Popper profiles Kensho’s role in automating some of Goldman Sach’s research roles, highlighting how automation is increasingly emerging as a threat to white collar jobs:

The lead author on the Oxford paper, Carl Benedikt Frey, told me that he was aware that new technologies created jobs even as they destroyed them. But, Frey was quick to add, just because the total number of jobs stays the same doesn’t mean there are no disruptions along the way. The automation of textile work may not have driven up the national unemployment rate, but vast swathes of the American South suffered all the same. When it comes to those A.T.M.s, there has, in fact, been a recent steady decline in both the number of bank branches and the number of bank tellers, even as the number of low-paid workers in remote call centers has grown.

This points to a disconcerting possibility: Perhaps this time the machines really are reducing overall employment levels. In a recent survey of futurists and technologists, the Pew Research Institute found that about half foresee a future in which jobs continue to disappear at a faster rate than they are created.

Virtual reality is another technology that’s spilling out of the lab. Whilst it’s great to see the technology in the real world, Daniel Harvey profiles how a lack of diversity is leading to accidental sexism reflecting wider problems in the tech sector:

Based on that pattern it should come as no surprise that VR suffers from much the same. Motion sickness in VR has plagued the format since its inception. Women have shown a greater tendency toward VR-induced nausea than men. But why? It’s all about unconscious bias and technology’s notorious self-selection bias.

Discrimination is certainly not something exclusive to the tech sector. The absence of women in the boardrooms of many FTSE 100 or Fortune 500 companies reflects a range of barriers and will hold back their performance given they’re less able to reflect the needs of half the world’s consumers. It’s worth heading over to The Economist site where you can play with an interactive version of the following:

http://www.economist.com/blogs/graphicdetail/2016/03/daily-chart-0?fsrc=scn/tw/te/bl/ed/thebestandworstplacestobeaworkingwoman&%3Ffsrc%3Dscn/=tw/dc

Facebook recently released its State of Connectivity report which profiles barriers to internet access for the developing world as part of its internet.org initiative. The key barriers to access highlighted in the report are the state of connectivity, availability of infrastructure, affordability, relevance and readiness of the population:

Barriers to internet access for developing world consumers

A valuable complement to Facebook’s report is Pew Research Center’s recently released research which looks at smartphone ownership and internet usage around the world including developing countries:

Percent of adults who use the internet at least occasionally or report owning a smartphone

With Britain’s Brexit referendum coming up on the 23rd of June, The Economist has profiled the regions that are europhile and eurosceptic:

UK regions' attitudes to Brexit

Whilst Europe is generally becoming more urbanised, this process (like technology) is unevenly distributed with different cities experiencing significant growth (Istanbul, Brussels, Amsterdam) or decline (Katowice, Ruhr, Katowice, Ostrava, Bucharest):

Europe cities growth and decline

Claire Cain Miller and Quoctrung Bui profile changes in patterns of relationships and marriage in the US, highlighting the role of assortative mating in reinforcing social class and undermining social mobility:

Assortative mating is the idea that people marry people like themselves, with similar education and earnings potential and the values and lifestyle that come with them. It was common in the early 20th century, dipped in the middle of the century and has sharply risen in recent years — a pattern that roughly mirrors income inequality in the United States, according to research by Robert Mare, a sociologist at the University of California, Los Angeles. People are now more likely to marry people with similar educational attainment — even after controlling for differences between men and women, like the fact that women were once less likely to attend college.

The featured image is a mural by ecb / Hendrik Beikirch for the St+Art India event in New Delhi and published in StreetArtNews