Thought Starters: the fallacy of maximising shareholder value, the impact of climate change on your wallet and our responses to ISIS

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.

The following figures presented by DoubleLine Capital’s Jeffrey Gundlach point to the fact that the global economy isn’t out of the woods yet:

Global nominal GDP growth

Steve Denning uses Roger L. Martin’s analysis in Fixing the Game to point out how management’s focus on maximising shareholder value comes at the expense of long term value creation and ultimately society:

“In today’s paradoxical world of maximizing shareholder value, which Jack Welch himself has called “the dumbest idea in the world”, the situation is the reverse. CEOs and their top managers have massive incentives to focus most of their attentions on the expectations market, rather than the real job of running the company producing real products and services.”

Om Malik covers the release of the latest Ericsson Mobility Report, highlighting growing penetration of different technologies (smartphones, mobile internet etc) and the regions where we’re forecasted to see  particularly strong growth:

Connected devices forecast

We’re seeing technology have an increasingly significant role in the employment landscape as machine learning, robotics and a growing array of sensors expand the range of tasks we can automate. The Bank of England’s Chief Economist, Andrew G Haldane recently gave a speech where he explored these changes and their implications which can be found in an abbreviated form on re/code:

Average probability of automation by occupation

Chris Field and Katharine Mach profile the work of Marshall Burke, Solomon Hsiang, and Edward Miguel who have researched the economic impacts of climate change. With the Paris Climate Change Conference fast approaching, now is an important time to make your concerns known about global warming to your local government – not one to stand on the sidelines for:

“Their conclusion delivers two blockbusters. First, in contrast to past studies, they argue that 21st century warming could lead to huge global-scale macroeconomic impacts. The best estimate from Burke and colleagues is that business as usual emissions throughout the 21st century will decrease per capita GDP by 23% below what it would otherwise be, with the possibility of a much larger impact.

Secondly, they conclude that both the size and the direction of the temperature effect depend on the starting temperature. Countries with an average yearly temperature greater than 13°C (55°F) will see decreased economic growth as temperatures rise.”

Before you suggest the issue of climate change is too difficult, it’s worth reviewing research at the Atmosphere/Energy Program at Stanford University which points to the feasibility of a move to a society that doesn’t rely on fossil fuels: 

“In a few decades, the world could be powered by nothing but wind, water, and sunlight. That’s the conclusion of a new study released just before world leaders head to Paris to strike a climate deal.

“These are basically plans showing it’s technically and economically feasible to change the energy infrastructure of all of these different countries,” says Mark Z. Jacobson, director of the Atmosphere/Energy Program at Stanford University, who worked with University of California colleagues to analyze energy roadmaps for 139 countries.”

Chain founder Adam Ludwin is interviewed for Andreessen Horowitz’s podcast focusing on the growing world of blockchain innovation. Among the subjects covered are the merging cultures of finance and tech, the price of bitcoin, the importance of blockchain (rather than bitcoin) and a review of  private and permissioned blockchains and uses for colored coins and sidechains:

Michael Vakulenko looks at at how the movement to self driving cars is likely to unseat traditional manufacturers’ position in the car market. Among the particular technologies and innovations he points to as catalysing change are services and apps, transportation platforms, fleet routing and navigation:

“It’s still too early in the game to say which companies will dominate the future transportation market. One thing is a safe bet: The future transportation ecosystem will look very different from the existing automotive industry. It will resemble modern technology ecosystems with their platform business models, permissionless innovation by developers, and domination of software-centric companies.”

Technology based disruption hasn’t received the same level of media attention in education as it has in other sectors with the possible exceptions MOOCs reflecting a more constrained funding pool and the comparatively complex web of different stakeholders. The NMC Horizon Report: 2015 K-12 Edition provides a valuable review of emerging innovations in the primary and secondary education sector, with technologies typically augmenting rather than replacing current ways of working:

Edtech Trends

The New York Times‘ experiment with Google Cardboard has gained lots of plaudits for pushing the boundary for online journalism at scale. Whilst the experiment has catalysed interest in these new formats, Will Smith stresses the need for fully featured virtual reality platforms such as Oculus Rift to differentiate themselves from Google Cardboard:

“In the meantime, if you enjoyed your first taste of VR, courtesy of Cardboard and 360 video, that’s great! Welcome to the future! But if that first taste of VR turned your stomach, please know that it doesn’t have to be this way. The problems that affected you have been solved—you just need better hardware than comes free with the Sunday paper.”

Steve Albini wrote the essay The Problem with Music in 1994 critiquing the music industry and its ability to both give musicians money and then take it back with a litany of expenses. Albini gave an update of sorts last year at the Face the Music conference where he saw musicians as now being in a better position to take control of their own destiny:

The Socio-Economic Segregation in European Capital Cities project has been looking at levels of inequality and the proximity of the rich and poor in 12 different cities across Europe. Richard Florida’s summary of the research points to a general trend of increasing income inequality (measured by Gini coefficient) and residential segregation (measured by index of dissimilarity) across Europe, although Tallinn and Oslo make for interesting outliers:

European Cities Economic Segregation and Inequality

ISIS’ attack on Paris on the 13th of November was a tragedy which has led to some important discussions about how we deal with the threat of terrorism. The Economist’s look at global deaths from terrorism puts the deaths in perspective, pointing to how much the West has in many cases been spared the worst effects of terrorism:

Global deaths from terrorism

The attacks have led to renewed calls for backdoors in secure products and encryption software. Kim Zetter provides a valuable rebuttal starting with the lack of evidence to support the view that the terrorists used encryption technology.  She then goes on to point out that there will always be homebrewed encryption alternatives, encryption doesn’t hide metadata and weakening existing products ultimately makes everyone vulnerable:

“If Snowden has taught us anything, it’s that the intel agencies are drowning in data,” EFF Attorney Nate Cardozo says. “They have this ‘collect it all mentality’ and that has led to a ridiculous amount of data in their possession. It’s not about having enough data; it’s a matter of not knowing what to do with the data they already have. That’s been true since before 9/11, and it’s even more true now.”

Adam Shatz writing for the London Review of Books reports more broadly on ISIS’ aims with the terrorist attacks and the options the West has in reducing chances of future incidents:

“Now IS is unrivalled among jihadist groups, and no one knows quite what to do that won’t make the problem worse. Anything that can be done now risks being too little, too late. It’s true that IS is no match, militarily, for the West. The attacks of 13 November were in the anarchist tradition of the ‘propaganda of the deed’, and we shouldn’t fall for it: the social order of Europe isn’t in jeopardy. But it would also be a mistake to underestimate the problem. IS has managed to insert itself, with no small amount of cunning, and with acute sensitivity to feelings of humiliation, into two of the most intractable conflicts of our time: the relationship of European societies to their internal, Muslim ‘others’ and the sectarian power struggles that have engulfed the lands of Iraq and Syria since 2003.”

One of my real concerns is that the attacks could further marginalise Muslim populations already living in Western Europe and USA and lead to the closing of borders to refugees fleeing turmoil in places like Syria and Afghanistan. By doing this, the West would essentially be handing ISIS a victory of sorts as Adam Taylor reports:

“The very same refugees entering Europe are often the very same civilians who face the indiscriminate violence and cruel injustice in lands controlled by the Islamic State in Iraq and Syria (though, it should be noted, many in Syria are also threatened by the brutal actions of the Syrian government). Globally, studies have shown that Muslims tend to make up the largest proportion of terror victims, with countries such as Syria and Iraq registering the highest toll.

If Muslim refugees come to Europe and are welcomed, it deeply undercuts the Islamic State’s legitimacy. Aaron Zelin, a fellow at the Washington Institute for Near East Policy, has helpfully catalogued some of the Islamic State’s messages on the refugees pouring into Europe from the Middle East. The messages give the impression of deep discomfort and even jealousy that the Muslim population the Islamic State so covets for its self-proclaimed “caliphate” would rather live in “infidel” Western lands.”

The Economist’s analysis of health spending and life expectancy point to the fact that there’s a far from direct correlation between the two with the United States’s poor performance in particular standing out:

Health spending and life expectancy at birth

Raffi Khatchadourian has written a thought provoking profile of Nick Bostrom for the New Yorker profiling the latter’s research into whether developments in artificial intelligence and other technologies will lead to human extinction. His approach is definitely more thoughtful than your average Hollywood blockbuster.

The featured image is Phoenix by DALeast in Penang, Malaysia and published in StreetArtNews.

Thought Starters: Content that has got me thinking 17

A lot of noise is being made about the rapid growth of ecommerce and the  effect this is having on bricks and mortar retail. Forrester analyst Sucharita Mulpuru provides an alternative view,  pointing to the continuing growth in the traditional retail sector and the need to distinguish between retailers making the right (and wrong) decisions.

Geoffrey Moore gives a rather sobering view on the effect that technology is having on America’s middle class and suggests some potential avenues to address this.

Marc Andreessen is interviewed in the Washington Post providing commentary on the impact of revelations on NSA surveillance, net neutrality and bitcoin. His commentary on the latter is particularly interesting and marks out why Andreessen Horowitz are investing heavily in the sector.

E-commerce would’ve gotten built on top of this, instead of getting built on top of the credit card network. We knew we were missing this; we just didn’t know what it was. There is no reason on earth for anybody to be on the Internet today to be typing in a credit card number to buy something. It’s insane, because — which is why you have all these security problems, the Target hack and all this crazy…. And these high fees, this high fraud rate. It doesn’t make sense online to have a payment mechanism that requires you to hand over your credentials to make a payment. That’s just an invitation to fraud and identity theft. It’s just stupid.

But we didn’t have the better way of doing it. So we didn’t know what else to do, and now we have the better way of doing it. Now, it’s going to take time. We’re quite confident that when we’re sitting here in 20 years, we’ll be talking about Bitcoin the way we talk about the Internet today. We just need time for it to play out.

Moving customers over to a subscription model of payments may provide companies with a valuable regular income stream but Brian S Hall points out that this is   not necessarily in the consumer’s best interests.

Timothy B Lee looks at the New York Times’s Innovation report which identifies new disruptive players, but also suggests that the organisation like many incumbents is poorly placed to meet the challenge of new entrants.

Game Oven recently wrote a piece looking at the difficulties in writing software for Android given the fragmented hardware and software environment. Benedict Evans built on this post , pointing to the problems of Android fragmentation but also suggesting that the movement to a more cloud based environment may alleviate many of the current problems associated with developing for Android.

Deloitte has released its latest Media Consumer report looking at changes in media consumption patterns in the UK. Among the areas covered are device ownership, television consumption, trust in journalism, use of social media, cinema viewing, gaming and streaming of music.

Percentage of households that have at least one of these devices

 Julie Ask looks at the role of disintermediaries in an increasingly mobile centred environment, with social media, mapping, entertainment, commerce and payments growing in strategic importance.

Today, a third crop of platforms are laying the groundwork to step into the powerful position of “owning the customer,” by serving them in mobile moments. Consumers expect to be able to get what they want in their immediate context and moment of need. They will reach for their phone for information and services. The issue is, most brands aren’’t yet there for their customers in this moment, challenged to even get customers to visit their mobile website or download the brand’s mobile app.

That’s where the platforms that dominate minutes of use, such as popular messaging and social media apps, come into play. It’s not hard to imagine a future where a small set of highly contextual and curated disintermediaries offer consumers a portal to the universe of services on mobile devices. Companies should consider the possibility of a future where their access to consumers is through this small set of disintermediaries

JWT Intelligence has a look at the mobile payments sector which is encumbered by the chicken and egg scenario. Consumers won’t use a service if they’re not familiar with it but retailers won’t invest in a platform if it’s not widely adopted. Efforts are being made to increase adoption and Apple is a potentially disruptive player waiting in the wings.

A growing amount of attention has been given to the mobile messaging sector lately, particularly in light of Facebook’s recent acquisition of WhatsApp. Line and WeChat are similar (provide text and photo messaging but different from the more traditional mobile messaging players  with Mark Bivens and Jerry Yang comparing the two Asian powerhouses on Bivens’ blog.

I am a strong believer that we will see some version of enhanced eyewear make inroads in the future  but Matt Lake’s review points to  Google Glass being some way from the medium’s end goal.

There’s been a lot of talk lately of a cooling in tablet sales with commentators suggesting that the smartphone can more than adequately fulfill many of the use cases. Providing a counterpoint to these suggestions is research from Flurry which point to growing usage by tablet owners.

Tablet usage

Matthew Yglesias looks critically at the content that Facebook looks to share among its users following Director of Product at Facebook’s recent rant about the state of the media.

Relationship status is one of those sensitive areas that users aren’t always willing to make public on Facebook. In an attempt to overcome consumers’ reluctance (and provide another data source), Facebook is providing consumers with the opportunity to directly ask fellow users what their current relationship status is.

Relationship Status

Facebook has added song and television show identification (à la Shazam) to its iOS and Android app, providing the opportunity to further enrich its collection of consumer data.

Facebook Music and TV Id

Whilst digital technologies such as HTML5 and WebGL are enabling a richer array of experiences online, the majority of online spend is still very much on direct response advertising in the US according to eMarketer figures.

Digital Ad Spending ShareThe featured image is Reliefs by Evgeniy Dikson

 

New containers: A look at the growth of new formats in web journalism

The majority of news content we receive from mainstream news organisations comes in relatively standard containers supported by text, images and increasingly video content. The use of standard format by news organisations fits in with news organisation’s needs to deliver a constant stream of output and an attempt to keep consumers within their own ecosystem.

Typhoon Haiyan: UN launches $301m Philippines aid appeal, BBC News
Typhoon Haiyan: UN launches $301m Philippines aid appeal, BBC News

Recently we have seen a willingness on the part of a few news media organisations to experiment with different containers. The New York Times in particular is one of the pioneers with feature articles on a deadly avalanche, the neglected corners of Russia, race horse jockey Russell Baze, the fighting of wildfires and the geopolitics of the South China Sea. Other media outlets have engaged in similar efforts with leading examples including Rolling Stone on white hat hackers and the melting Greenland glaciers, the Guardian on the role of the NSA and a wildfire in Tasmania, Wired’s profile of Richard Branson, Grantland on the Iditarod Trail Sled Dog Race, ESPN’s profile of Dock Ellis, Seattle Times on ocean acidification, the NRC on the Kunsthal robbery and Pitchfork profiling Daft Punk.

Alaska Media Lab points to the use of larger images, parallax scrolling, full width pages, plentiful white space, video and scroll based events as being characteristic of these new forms.

But the new formats are as much about what has been left out. Content extraneous to the subject is typically removed including links to other content and in most cases advertising. This increases the impact of the story for readers and removes the temptation for viewers to browse to another story.

A Game of Shark and Minnow, New York Times
A Game of Shark and Minnow, New York Times

These stories though are not without their burdens. The pioneering nature of these formats mean that they typically require hosting outside media organisation’s traditional content management systems. The rich media content environment that makes many of these stories so compelling typically requires more resources from photographers, videographers, illustrators and web designers on top of the the usual diet of news reporters and editors.

The lack of links to unrelated content within the container raises the likelihood that consumers will navigate off site content when they have finished consuming the article. Finally the lack of advertising means that these containers don’t currently present a viable business model, particularly when weighed against the costs of their production.

Hopefully as these new containers become more commonplace, we will see media organisations find ways of making them pay without undoing the features that make them so attractive for the readers.